ASHLAND INC. (ASH)
SIC breadcrumb: Wholesale Trade > Wholesale Trade - Nondurable Goods > SIC 5160 Wholesale-Chemicals & Allied Products
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1674862. Latest filing source: 0001193125-25-289248.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 5,000,000 | USD | 2025 | 2025-11-20 |
| Net income | -845,000,000 | USD | 2025 | 2025-11-20 |
| Assets | 4,611,000,000 | USD | 2025 | 2025-11-20 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-11-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001674862.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 5,000,000 | 1,000,000 | 5,000,000 | |||||||
| Net income | -28,000,000 | 28,000,000 | 114,000,000 | 505,000,000 | -508,000,000 | 220,000,000 | 927,000,000 | 178,000,000 | 169,000,000 | -845,000,000 |
| Operating income | -50,000,000 | 49,000,000 | 102,000,000 | 86,000,000 | -461,000,000 | 192,000,000 | 333,000,000 | 172,000,000 | -26,000,000 | -775,000,000 |
| Gross profit | 887,000,000 | 729,000,000 | 863,000,000 | 651,000,000 | 599,000,000 | 670,000,000 | 830,000,000 | 668,000,000 | 618,000,000 | 549,000,000 |
| Diluted EPS | -0.47 | 0.01 | 1.79 | 8.15 | -8.39 | 3.59 | 16.41 | 3.31 | 3.36 | -18.23 |
| Assets | 10,000,000,000 | 8,618,000,000 | 8,259,000,000 | 7,251,000,000 | 6,877,000,000 | 6,612,000,000 | 6,213,000,000 | 5,939,000,000 | 5,645,000,000 | 4,611,000,000 |
| Stockholders' equity | 3,347,000,000 | 3,406,000,000 | 3,406,000,000 | 3,571,000,000 | 3,036,000,000 | 2,752,000,000 | 3,220,000,000 | 3,097,000,000 | 2,868,000,000 | 1,904,000,000 |
| Cash and cash equivalents | 1,017,000,000 | 566,000,000 | 294,000,000 | 232,000,000 | 454,000,000 | 210,000,000 | 646,000,000 | 417,000,000 | 300,000,000 | 215,000,000 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001674862.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-06-30 | 0.65 | reported discrete quarter | ||
| 2023-Q1 | 2022-12-31 | 0.73 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 1.67 | reported discrete quarter | ||
| 2023-Q3 | 2023-06-30 | 546,000,000 | 50,000,000 | 0.94 | reported discrete quarter |
| 2023-Q4 | 2023-09-30 | 517,000,000 | -4,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2023-12-31 | 473,000,000 | 26,000,000 | 0.51 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | 575,000,000 | 120,000,000 | 2.39 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 | 544,000,000 | 6,000,000 | 0.12 | reported discrete quarter |
| 2024-Q4 | 2024-09-30 | 522,000,000 | 16,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2024-12-31 | 405,000,000 | -165,000,000 | -3.50 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 479,000,000 | 31,000,000 | 0.65 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 | 463,000,000 | -742,000,000 | -16.21 | reported discrete quarter |
| 2025-Q4 | 2025-09-30 | 477,000,000 | 32,000,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2025-12-31 | 386,000,000 | -12,000,000 | -0.26 | reported discrete quarter |
| 2026-Q2 | 2026-03-31 | 482,000,000 | 16,000,000 | 0.34 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001193125-26-191380.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements herein.
BUSINESS OVERVIEW
Ashland profile
Ashland is a global additives and specialty ingredients company with a conscious and proactive mindset for sustainability. The Company serves customers in a wide range of consumer and industrial markets, including architectural coatings, construction, energy, food and beverage, personal care and pharmaceutical. With approximately 2,900 employees worldwide, Ashland serves customers in more than 100 countries.
Ashland’s sales generated outside of North America were 73% for both the three and six months ended March 31, 2026, and 72% for both the three and six months ended March 31, 2025. Sales by region expressed as a percentage of total consolidated sales were as follows:
Three months ended
Six months ended
March 31
March 31
Sales by Geography
2026
2025
2026
2025
North America(a)
27
%
28
%
27
%
28
%
Europe(a)
37
%
38
%
36
%
36
%
Asia Pacific
26
%
25
%
27
%
26
%
Latin America & other
10
%
9
%
10
%
10
%
100
%
100
%
100
%
100
%
(a)
Ashland includes only U.S. and Canada in its North America designation and includes Europe, the Middle East and Africa in its Europe designation.
Reportable segments
Ashland’s reportable segments include Life Sciences, Personal Care, Specialty Additives and Intermediates. Unallocated and other includes corporate governance activities and certain legacy matters. The contribution to sales by each reportable segment expressed as a percentage of total consolidated sales were as follows:
Three months ended
Six months ended
March 31
March 31
Sales by Reportable Segment
2026
2025
2026
2025
Life Sciences
36
%
35
%
36
%
36
%
Personal Care
31
%
31
%
31
%
30
%
Specialty Additives
28
%
28
%
27
%
28
%
Intermediates
5
%
6
%
6
%
6
%
100
%
100
%
100
%
100
%
KEY DEVELOPMENTS
Uncertainty related to tariffs and global trade policy changes
The three months ended March 31, 2026, saw continuing regulatory activity involving notable changes to U.S. and foreign trade policy, leading to significant uncertainty in the macroeconomic and geopolitical environments. Beginning in the second quarter of fiscal 2025, the U.S. instituted a series of tariffs on imports from China, the E.U., India, and other countries which has resulted in the imposition of retaliatory measures against U.S. goods. As a global business, we are exposed to risks associated with tariffs and other trade conflicts. Such risks may include, but are not limited to, (i) changes to and strains on the global supply chain and our ability to source materials; (ii) increased sourcing and manufacturing costs; (iii) decreased demand for Ashland’s products in affected markets; and (iv) other impacts on Ashland’s ability to operate optimally.
32
The ultimate impact of these recent tariffs and trade disputes on general economic conditions, and on Ashland’s business, financial performance, and results of operations, is uncertain and depends on various factors, including the duration of the tariffs and disputes, negotiations between the U.S. and affected countries, whether additional or incremental tariffs are imposed and the responses of other countries or regions, and the potential for trade restriction-related exemptions including recent tariff reversal developments. Given the dynamic nature of the situation, Ashland continues to monitor tariff developments as well as the broader global trade landscape and is working to mitigate potential impacts on its business.
Uncertainty relating to the ongoing United States, Israel/Iran, Ukraine/Russia and Israel/Hamas conflicts and other political events
Business disruptions, including those related to the ongoing conflicts between the United States, Israel/Iran, Ukraine/Russia and Israel/Hamas, as well as the recent political events in Venezuela, continue to impact businesses around the globe. While it is impossible to predict the effects of the conflicts such as possible escalating geopolitical tensions (including the imposition of existing and additional sanctions by the U.S. and the European Union on Russia), worsening macroeconomic and general business conditions, supply chain interruptions and unfavorable energy markets, the impact could be material. Ashland is closely monitoring these situations and maintains business continuity plans that are intended to continue operations or mitigate the effects of events that could disrupt its business.
Ashland does not have manufacturing operations in Iran, Israel, Russia, Ukraine, Venezelua or Belarus. Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications. Sales to Russia and Belarus were previously limited and our products were primarily used in products and applications that are essential to the population's well-being and currently support our customers' humanitarian efforts. We have sales controls in place to ensure that future potential sales into the region are only to support critical pharmaceutical or personal hygiene products which are essential for the general population and in accordance with any applicable sanctions. Sales to Israel, Ukraine, Russia, and Belarus represent less than 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable). Ashland has no sales activity with Iran.
Other items
Restructuring programs
As previously announced, Ashland initiated a $30 million pre-tax restructuring plan to offset the impact from the Nutraceuticals business sale completed in fiscal 2024, the Avoca business sale completed in fiscal 2025, and other portfolio optimization actions, which were expected to be realized 50 percent in fiscal 2025 and 50 percent in fiscal 2026. See Note D of the Notes to Condensed Consolidated Financial Statements for severance reserves associated with this program.
Ashland also executed its portfolio optimization actions to further strengthen Ashland’s resilience and improve margins and returns. These previously announced actions include initiatives focused on carboxymethylcellulose ("CMC"), methylcellulose ("MC"), the Nutraceuticals business sale and the Avoca business sale (collectively, "Portfolio Optimization"). Overall, these Portfolio Optimization actions reduced sales and Adjusted EBITDA by approximately $2 million and zero, respectively, for the three months ended March 31, 2026, and approximately $11 million and $1 million, respectively, for the six months ended March 31, 2026, compared to the prior year periods. Operating income (loss) was positively impacted by $2 million and $4 million for the three and six months ended March 31, 2026, respectively, compared to the prior year periods.
Ashland is also advancing a multi-year manufacturing network optimization to improve operational cost and strengthen its competitive position. This optimization plan is expected to generate pre-tax savings of $50 million to $55 million with $60 million being achievable as market conditions improve, particularly within China. Ashland realized savings of approximately $10 million and $15 million during the three and six months ended March 31, 2026, compared to the prior year periods.
33
The following table summarizes the expense impact of these actions:
Three months ended
Six months ended
March 31
March 31
(In millions)
2026
2025
2026
2025
Accelerated depreciation(a)
$
—
$
13
$
3
$
13
Restructuring, separation and other costs(b)
3
8
7
11
Other plant optimization costs(a)
10
6
15
9
$
13
$
27
$
25
$
33
(a)
Recorded within the cost of sales caption within the Statements of Condensed Consolidated Comprehensive Income (Loss).
(b)
Recorded within the selling, general and administrative expense caption within the Statements of Condensed Consolidated Comprehensive Income (Loss).
RESULTS OF OPERATIONS – CONSOLIDATED REVIEW
Consolidated review
Overview
Key financial results included the following:
Three months ended
Six months ended
March 31
March 31
(In millions except per share data)
2026
2025
Change
2026
2025
Change
Net income (loss)
$
16
$
31
$
(15
)
$
4
$
(135
)
$
139
Diluted earnings per share (EPS) net income (loss)(a)
0.34
0.65
(0.31
)
0.08
(2.88
)
2.96
Income (loss) from continuing operations
15
30
(15
)
1
(136
)
137
Diluted EPS income (loss) from continuing operations(a)
0.32
0.63
(0.31
)
0.02
(2.91
)
2.93
Operating income (loss)
39
51
(12
)
33
(128
)
161
EBITDA(b)
84
100
(16
)
124
(30
)
154
Adjusted EBITDA(b)
98
108
(10
)
156
169
(13
)
Adjusted Diluted EPS from Continuing Operations Excluding Intangibles Amortization Expense(b)
0.91
0.99
(0.08
)
1.17
1.26
(0.09
)
(a)
As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.
(b)
These are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures" section below for reconciliations to U.S. GAAP.
Business results
Ashland's net income of $16 million ($0.34 diluted EPS) and $31 million ($0.65 diluted EPS) included income from discontinued operations of $1 million ($0.02 diluted EPS) and $1 million ($0.02 diluted EPS) in the three months ended March 31, 2026 and 2025, respectively.
Results for Ashland’s continuing operations, diluted EPS from continuing operations and operating income for the three months ended March 31, 2026 and 2025, included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section below. These pre-tax key items totaled expense of $20 million and $6 million for the three months ended March 31, 2026 and 2025, respectively, impacting continuing operations. Continuing operations was also impacted by favorable tax specific key items for discrete tax items totaling zero and $1 million for the three months ended March 31, 2026 and 2025, respectively.
Excluding these key items, the decrease in continuing operations, diluted EPS from continuing operations and operating income was primarily driven by softer pricing, the Calvert City startup delay and weather-related operational disruptions during the quarter, partially offset by favorable foreign exchange currency and lower selling, general and administrative expenses. In addition, diluted EPS from continuing operations was also impacted by common stock reductions from repurchases of Ashland common stock over the last twelve months. These common stock repurchases reduced the number of weighted average shares from 47 million diluted shares at March 31, 2025 to 46 million diluted shares at March 31, 2026.
Ashland’s Adjusted EBITDA was $98 million for the three months ended March 31, 2026 compared to $108 million for the three months ended March 31, 2025 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial
34
Measures” below). The $10 million decrease in Adjusted EBITDA was primarily driven by softer pricing, the Calvert City startup delay and weather-related operational disruptions during the quarter, offset by favorable foreign exchange currency and lower selling, general and administrative expenses. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these factors along with the impact of common stock repurch
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements for the years ended September 30, 2025, 2024 and 2023.
BUSINESS OVERVIEW
Ashland profile
Ashland is a global additives and specialty ingredients company with a conscious and proactive mindset for sustainability. The Company serves customers in a wide range of consumer and industrial markets, including architectural coatings, construction, energy, food and beverage, personal care and pharmaceutical. With approximately 2,900 employees worldwide, Ashland serves customers in more than 100 countries.
Ashland’s sales generated outside of North America were 73%, 69% and 69% in 2025, 2024 and 2023, respectively. Sales by region expressed as a percentage of total consolidated sales for the years ended September 30, were as follows:
Sales by Geography
2025
2024
2023
North America(a)
27
%
31
%
31
%
Europe(a)
37
%
35
%
36
%
Asia Pacific
26
%
25
%
23
%
Latin America & other
10
%
9
%
10
%
100
%
100
%
100
%
(a)
Ashland includes only U.S. and Canada in its North America designation and includes Europe, the Middle East and Africa in its Europe designation.
Reportable segments
Ashland’s reportable segments include Life Sciences, Personal Care, Specialty Additives and Intermediates. Unallocated and Other includes corporate governance activities and certain legacy matters. The contribution to sales by each reportable segment expressed as a percentage of total consolidated sales for the years ended September 30, were as follows:
Sales by Reportable Segment
2025
2024
2023
Life Sciences
35
%
38
%
40
%
Personal Care
32
%
30
%
27
%
Specialty Additives
28
%
27
%
28
%
Intermediates
5
%
5
%
5
%
100
%
100
%
100
%
KEY DEVELOPMENTS
Uncertainty related to tariffs and global trade policy changes
Fiscal 2025 saw increased and continuing regulatory activity involving notable changes to U.S. and foreign trade policy, leading to significant uncertainty in the macroeconomic and geopolitical environments. Beginning in the second quarter of 2025, the U.S. instituted a series of tariffs on imports from China, the E.U., India, and other countries which has resulted in the imposition of retaliatory measures against U.S. goods. As a global business, we are exposed to risks associated with tariffs and other trade conflicts. Such risks may include, but are not limited to, (i) changes to and strains on the global supply chain and our ability to source materials; (ii) increased sourcing and manufacturing costs; (iii) decreased demand for Ashland’s products in affected markets; and (iv) other impacts on Ashland’s ability to operate optimally.
The ultimate impact of these recent tariffs and trade disputes on general economic conditions, and on Ashland’s business, financial performance, and results of operations, is uncertain and depends on various factors, including the duration of the tariffs and disputes, negotiations between the U.S. and affected countries, whether additional or incremental tariffs are imposed and the responses of other countries or regions, and the potential for trade restriction-related exemptions. Given the dynamic nature of the situation, Ashland continues to monitor tariff developments as well as the broader global trade landscape and is working to mitigate potential impacts on its business.
M-1
Uncertainty relating to the ongoing Israel/Iran, Ukraine/Russia and Israel/Hamas conflict
Business disruptions, including those related to the ongoing conflicts between Israel/Iran, Ukraine/Russia, and Israel/Hamas continue to impact businesses around the globe. While it is impossible to predict the effects of the conflicts, they may include escalating geopolitical tensions (including the imposition of existing and additional sanctions by the U.S. and the EU on Russia), worsening macroeconomic and general business conditions, supply chain interruptions and unfavorable energy markets, and the impact to Ashland could be material. Ashland is closely monitoring these situations and maintains business continuity plans that are intended to continue operations and mitigate the effects of events that could disrupt its business.
Ashland does not have manufacturing operations in Israel, Russia, Ukraine, or Belarus. Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications. Sales to Russia and Belarus were previously limited and our products were primarily used in products and applications that are essential to the population's well-being and currently support our customers' humanitarian efforts. We have sales controls in place to ensure that future potential sales into the region are only to support critical pharmaceutical or personal hygiene products which are essential for the general population and in accordance with any applicable sanctions. Sales to Israel, Ukraine, Russia, and Belarus represent less than 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable).
Other significant items
Stock repurchase program agreements
During fiscal 2025, under the Company's current common share repurchase program (the "2023 Stock Repurchase Program"), Ashland initiated and completed a number of Rule 10b5-1 trading plan agreements. Ashland paid a total of $100 million and repurchased a total of 1.5 million shares. During the most recent three fiscal years, Ashland paid a total of $780 million and received a total of 8.9 million shares. See Note N of the Notes to Consolidated Financial Statements for more information.
Restructuring programs
As previously announced, Ashland initiated a new $30 million pre-tax restructuring plan to offset the impact from the Nutraceuticals business sale, completed in fiscal 2024, and other portfolio optimization actions, which were expected to be realized 50 percent in fiscal 2025 and 50 percent in fiscal 2026. Ashland realized approximately $20 million or 67% of the total targeted savings in fiscal 2025.
Ashland is also advancing a multi-year manufacturing optimization restructuring plan to improve operational cost and strengthen its competitive position. This optimization plan is expected to generate pre-tax savings of $50 million to $55 million with $60 million being achievable as market conditions improve, particularly within China. Ashland realized approximately $5 million in savings in fiscal 2025.
Ashland is also continuing to execute its fiscal 2024 portfolio and plant optimization actions to further strengthen Ashland’s resilience and improve margins and returns. These previously announced actions include initiatives focused on carboxymethylcellulose (CMC), methylcellulose (MC), Nutraceuticals and Avoca Portfolio Optimization (collectively, Portfolio Optimization). Overall, these Portfolio Optimization actions reduced sales and operating income (loss) by approximately $208 million and $29 million, respectively, for fiscal 2025, as compared to the prior year. Adjusted EBITDA was also reduced by $45 million in fiscal 2025, as compared to the prior year.
The following table summarizes the expense impact of the Portfolio Optimization actions for the years ended September 30:
(In millions)
2025
2024
2023
Accelerated Depreciation
$
41
$
57
$
—
Restructuring, separation and other costs
22
30
9
Other plant optimization costs
22
10
—
$
85
$
97
$
9
Avoca business sale
M-2
During fiscal 2025, Ashland completed the sale of its Avoca business to Mane SA. Proceeds from the sale were $16 million, net of transaction costs. The Avoca business was included within Ashland's Personal Care reportable segment. Ashland determined this transaction did not qualify for discontinued operations treatment since it neither represented a strategic shift nor did it have a major effect on Ashland's operations and financial results.
Ashland recorded an impairment charge of $183 million ($1 million allocated to goodwill, $134 million to other intangible assets, $33 million to property, plant and equipment, $14 million to operating lease assets, net and $1 million to other current assets) during the year ended September 30, 2025, within the income (loss) on acquisitions and divestitures, net caption of the Statement of Consolidated Comprehensive Income (Loss). The tax benefit associated with the sale is included within the income tax expense (benefit) caption of the Statement of Consolidated Comprehensive Income (Loss) for the year ended September 30, 2025. See Note K of the Notes to Consolidated Financial Statements for tax details associated with the transaction. Ashland also recorded a pre-tax gain on sale of $8 million following the completion of this sale, mainly related to working capital movements, within the income (loss) on acquisitions and divestitures, net caption of the Statement of Consolidated Comprehensive Income (Loss) during the year ended September 30, 2025.
Goodwill impairment
During the third quarter of fiscal 2025, Ashland experienced a continued decline in the market price of its Common Stock. Ashland also experienced slowing growth due to a weakening macroeconomic environment that is dampening consumer sentiment and demand globally which resulted in lower growth and lower margins for the Life Sciences and Specialty Additives reportable segments (and reporting units) than what was previously expected. These factors led Ashland to determine that triggering events occurred, and a quantitative goodwill impairment assessment was performed during the third quarter of fiscal 2025. Following the aforementioned quantitative analysis, the carrying value of the Life Sciences and the Specialty Additives reporting units exceeded their fair value, resulting in non-cash goodwill impairment charges of $375 million and $331 million, respectively, for a total goodwill impairment charge of $706 million, which was recorded during the year ended September 30, 2025, within the goodwill impairment caption of the Statement of Consolidated Comprehensive Income (Loss). No subsequent indicators of impairment have been identified.
RESULTS OF OPERATIONS – CONSOLIDATED REVIEW
Consolidated review
Overview
Key financial results for fiscal 2025, 2024 and 2023 included the following:
2025
2024
(In millions except per share data)
2025
2024
2023
change
change
Net income (loss)
$
(845
)
$
169
$
178
$
(1,014
)
$
(9
)
Diluted earnings per share (EPS) net income (loss)(a)
(18.23
)
3.36
3.31
(21.59
)
0.05
Income (loss) from continuing operations
(822
)
199
168
(1,021
)
31
Diluted EPS income (loss) from continuing operations(a)
(17.74
)
3.95
3.13
(21.69
)
0.82
Operating income (loss)
(775
)
(26
)
172
(749
)
(198
)
EBITDA(b)
(601
)
142
419
(743
)
(277
)
Adjusted EBITDA(b)
401
459
459
(58
)
-
Adjusted Diluted EPS from Continuing Operations Excluding Intangibles Amortization Expense(b)
3.38
4.45
4.07
(1.07
)
0.38
(a)
As a result of the loss from continuing operations attributable to Ashland during fiscal 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.
(b)
These are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures" section below for reconciliations to U.S. GAAP.
Ashland’s net loss of $845 million (loss of $18.23 diluted earnings per share) in 2025, and net income of $169 million ($3.36 diluted earnings per share) in 2024 and $178 million ($3.31 diluted earnings per share) in 2023 included a loss from discontinued operations of $23 million, (loss of $0.49 diluted earnings per share) in 2025, and $30 million ($0.59 diluted earnings per share) in 2024, and a net income from discontinued operations of $10 million ($0.18 diluted earnings per share) in 2023.
M-3
Results for Ashland’s continuing operations, diluted earnings (loss) per share from continuing operations and operating income (loss) for fiscal 2025, 2024 and 2023 included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section of this Annual Report on Form 10-K. These pre-tax key items totaled expense of $959 million, $227 million and $21 million in fiscal 2025, 2024 and 2023, respectively, impacting continuing operations, including a non-cash goodwill impairment charge of $706 million in fiscal 2025 ($375 million for the Life Sciences and $331 million for the Specialty Additives reportable segments). Continuing operations was also impacted by unfavorable discrete tax items totaling $31 million in 2025 and favorable discrete items totaling $234 million and $44 million in 2024 and 2023, respectively, for various tax specific key items for uncertain tax positions, valuation allowances, restructuring and separation activity and tax reform related activity. The pre-tax key items impacting operating income (loss) totaled expense of $982 million, $273 million, and $52 million in fiscal 2025, 2024 and 2023, respectively. Excluding these key items, continuing operations, diluted earnings per share from continuing operations and operating income (loss) decreased from fiscal 2024 to 2025, driven by Portfolio Optimization actions, reduced volume, and lower pricing. This was partially offset by lower selling, administrative, research and development costs. The increase in income from continuing operations, diluted earnings per share from continuing operations and operating income (loss) from fiscal 2023 to 2024 was primarily due to deflationary raw materials offset by unfavorable pricing and lower volume. In addition, diluted earnings per share from continuing operations was also impacted by common share reductions from repurchases of Ashland common stock in the amount of $100 million in 2025, $380 million in 2024 and $300 million in 2023. These common stock repurchases reduced the number of weighted average shares from 54 million diluted shares in 2023 to 50 million diluted shares in 2024 and to 47 million diluted shares in 2025.
Ashland’s Adjusted EBITDA was $401 million for 2025 and $459 for both 2024 and 2023 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial Measures” below). Adjusted EBITDA decreased from fiscal 2024 to 2025 primarily due to Portfolio Optimization actions, reduced volume, and lower pricing. This was partially offset by lower selling, administrative, research and development costs. Adjusted EBITDA remained consistent from fiscal 2023 to 2024 primarily due to deflationary raw materials, unfavorable product mix and favorable foreign exchange currency, offset by unfavorable pricing and lower volume. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these key factors along with the impact of common share repurchases noted above.
For further information on the items reported above, see the discussion in the comparative Statements of Consolidated Comprehensive Income (Loss) caption review.
Statements of Consolidated Comprehensive Income (Loss) – caption review
A comparative analysis of the Statements of Consolidated Comprehensive Income (Loss) by caption is provided as follows for the years ended September 30:
2025
2024
(In millions)
2025
2024
2023
change
change
Sales
$
1,824
$
2,113
$
2,191
$
(289
)
$
(78
)
The following table provides a reconciliation of the change in sales between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Sales change
Divestitures
$
(153
)
$
(3
)
Volume
(98
)
1
Price/mix
(46
)
(78
)
Foreign currency exchange
8
2
Change in sales
$
(289
)
$
(78
)
Sales for 2025 decreased $289 million, or 14%, compared to 2024. The decrease was driven by the unfavorable impact of divestitures, lower volume, and unfavorable pricing, which was partially offset by favorable foreign currency exchange. Portfolio optimization initiatives had an approximate $208 million impact on sales in the current year compared to the prior year, primarily within divestitures and volume caption changes.
M-4
Sales for 2024 decreased $78 million, or 4%, compared to 2023 primarily from unfavorable pricing. Pricing was softer as compared to the prior year in a moderately deflationary raw material environment. CMC and MC portfolio optimization initiatives and the Nutraceuticals business sale reduced sales by approximately $30 million during fiscal year 2024.
2025
2024
(In millions)
2025
2024
2023
change
change
Cost of sales
$
1,275
$
1,495
$
1,523
$
(220
)
$
(28
)
Gross profit as a percent of sales
30.1
%
29.2
%
30.5
%
Fluctuations in cost of sales were impacted by product line and plant optimization costs in 2025 and 2024 and the effects of challenges in shipping and logistics in 2023. In addition, divestitures and other certain charges incurred relating to restructuring activities contributed to a significant impact in 2025.
The following table provides a reconciliation of the changes in cost of sales between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Cost of sales change
Divestiture
$
(123
)
$
(2
)
Volume
(81
)
10
Operating costs
(37
)
17
Foreign currency exchange
5
3
Price/mix
16
(56
)
Change in cost of sales
$
(220
)
$
(28
)
Cost of sales for 2025 decreased $220 million compared to 2024. The decrease was primarily driven by the favorable impact of divestitures, lower sales volume, and lower operating costs, partially offset by unfavorable pricing and unfavorable foreign exchange currency. The current year operating costs were affected by $41 million of accelerated depreciation for product line optimization activities at manufacturing facilities within the Life Sciences, Personal Care and Specialty Additives reportable segments and $22 million of other plant optimization costs while the prior year period included $57 million of accelerated depreciation for product line optimization activities at two Specialty Additives manufacturing plants and one Personal Care manufacturing plant, and $10 million of other plant optimization costs. Gross profit as a percentage of sales increased 0.9 percentage points primarily due to production volume recovery versus inventory corrective actions and decreased accelerated depreciation compared to the prior year period.
Cost of sales for 2024 decreased $28 million compared to 2023. Favorable product price/mix was the primary factor for the decrease. This decrease was partially offset by higher operating costs driven by higher unit manufacturing costs associated with decreased plant loading to produce to demand in the first half of fiscal 2024, $57 million of accelerated depreciation for product line optimization activities associated with two Specialty Additives manufacturing facilities and one Personal Care manufacturing facility, $10 million of other plant optimization costs, and higher volume compared to inventory control measures in the prior year. Gross profit as a percentage of sales decreased 1.3 percentage points primarily as a result of higher operating costs including higher unit manufacturing cost and product line optimization activities.
2025
2024
(In millions)
2025
2024
2023
change
change
Selling, general and administrative expense
$
344
$
404
$
365
$
(60
)
$
39
As a percent of sales
18.9
%
19.1
%
16.7
%
M-5
Selling, general and administrative expense for 2025 decreased $60 million compared to 2024, while expenses as a percent of sales decreased 0.2 percentage points. Key drivers of the fluctuation in selling, general and administrative expense compared to 2024 were:
•
Expense of $22 million and $30 million comprised of key items for severance, lease abandonment and other restructuring costs during 2025 and 2024, respectively;
•
$34 million and $45 million in net environmental-related expenses during 2025 and 2024, respectively (see Note M of the Notes to Consolidated Financial Statements for more information);
•
$11 million capital project impairment charge in 2024;
•
A $5 million charge associated with the impact of a currency devaluation in Argentina during 2024;
•
A $4 million legal settlement during 2024;
•
A $3 million benefit related to domestic tax credits in 2025; and
•
Decreases associated with the following:
o
Lower variable compensation and stock based compensation expense;
o
The favorable impact of divestitures in the current year;
o
The realized cost reductions associated with restructuring actions ; and
o
Favorable foreign currency exchange of $2 million.
Selling, general and administrative expense for 2024 increased $39 million compared to 2023, while expenses as a percent of sales increased 2.4 percentage points. Key drivers of the fluctuation in selling, general and administrative expense compared to 2023 were:
•
Expense of $30 million and $9 million comprised of key items for severance, lease abandonment and other restructuring costs during 2024 and 2023, respectively;
•
$45 million and $54 million in net environmental-related expenses during 2024 and 2023, respectively (see Note M of the Notes to Consolidated Financial Statements for more information);
•
$11 million capital project impairment charge in 2024 and a $4 million impairment charge in 2023 associated with the sale of a Specialty Additives manufacturing facility;
•
$12 million gain associated with ICMS Brazil tax credit in 2023;
•
A $5 million charge associated with the impact of a currency devaluation in Argentina during 2024;
•
A $4 million legal settlement during 2024; and
•
Increases associated with the following:
o
Higher variable compensation expense, partially offset by lower stock based compensation;
o
Higher salary, benefits and travel expenses of $10 million; and
o
Partially offset by favorable foreign currency exchange of $5 million.
2025
2024
(In millions)
2025
2024
2023
change
change
Research and development expense
$
54
$
55
$
51
$
(1
)
$
4
Research and development expense decreased $1 million in 2025 compared to 2024 primarily due to lower compensation costs. In 2024, the $4 million increase compared to 2023 was primarily due to higher compensation costs.
M-6
2025
2024
(In millions)
2025
2024
2023
change
change
Intangibles amortization expense
$
63
$
76
$
93
$
(13
)
$
(17
)
Amortization expense decreased $13 million in 2025 compared to 2024 primarily due to the impact of fully amortized intangibles in prior periods and the impact of the Avoca business divested during 2025. Amortization expense decreased $17 million in 2024 compared to 2023 primarily due to the impact of fully amortized intangibles in prior periods and the impact of the Nutraceuticals business divested during 2024.
2025
2024
(In millions)
2025
2024
2023
change
change
Equity and other income
$
4
$
6
$
7
$
(2
)
$
(1
)
Equity and other income decreased in 2025 compared to 2024 primarily related to lower China financial cash subsidies in 2025. Equity and other income remained relatively consistent in 2024 compared to 2023.
2025
2024
(In millions)
2025
2024
2023
change
change
Goodwill impairment
$
706
$
—
$
—
$
706
$
—
Ashland recorded a $706 million goodwill impairment charge in 2025. See Note G of the Notes to Consolidated Financial Statements for more information.
2025
2024
(In millions)
2025
2024
2023
change
change
Income (loss) on acquisitions and divestitures, net
$
(161
)
$
(115
)
$
6
$
(46
)
$
(121
)
Income (loss) on acquisitions and divestitures, net during 2025 primarily relates to a net $175 million impairment and sale of the Avoca business. In addition, Ashland recorded a pre-tax gain on sale of excess corporate real estate of $14 million during 2025. See Note B of the Notes to Consolidated Financial Statements for more information.
Income (loss) on acquisitions and divestitures, net during 2024 primarily relates to $107 million impairment charge and loss on sale associated with the divestiture of the Nutraceuticals business. In addition, a $7 million reserve for foreign VAT taxes was also recorded in 2024 associated with the divested Nutraceuticals business legal entities. See Note B of the Notes to Consolidated Financial Statements for more information.
Income (loss) on acquisitions and divestitures, net during 2023 primarily relates to a $7 million gain on the sale of excess corporate real estate.
2025
2024
(In millions)
2025
2024
2023
change
change
Net interest and other expense (income)
Interest expense
$
61
$
53
$
54
$
8
$
(1
)
Interest income
(5
)
(10
)
(12
)
5
2
Loss on the accounts receivable sale programs
8
6
3
2
3
Investment securities income
(33
)
(75
)
(42
)
42
(33
)
Other financing costs
2
2
3
—
(1
)
$
33
$
(24
)
$
6
$
57
$
(30
)
Net interest and other expense (income) increased by $57 million during 2025 compared to 2024. Interest expense increased primarily related to lower capitalized interest on capital projects in 2025 while interest income decreased primarily due to the decrease in cash equivalents during the 2025 compared to 2024. Restricted investments gains of $33 million and $75 million included realized gains of $20 million compared to $60 million for 2025 and 2024, respectively. See Note E of the Notes to Consolidated Financial Statements for more information on the restricted investments.
Net interest and other expense (income) decreased by $30 million in 2024 compared to 2023. Interest expense and interest income remained primarily consistent to the prior year. Restricted investments gains of $75 million and $42 million included
M-7
realized gains of $60 million compared to $29 million for 2024 and 2023, respectively. See Note E of the Notes to Consolidated Financial Statements for more information on the restricted investments.
2025
2024
(In millions)
2025
2024
2023
change
change
Other net periodic benefit loss
$
1
$
22
$
6
$
(21
)
$
16
Other net periodic benefit expense during 2025 primarily included interest cost of $14 million offset by expected return on plan assets of $10 million and a $3 million gain on pension postretirement plan remeasurements.
Other net periodic benefit expense during 2024 primarily included interest cost of $16 million and a $14 million loss on pension postretirement plan remeasurements offset by expected return on plan assets of $8 million.
Other net periodic benefit expense during 2023 primarily included interest cost of $15 million offset by expected return on plan assets of $7 million and a $2 million gain on pension and other postretirement plan remeasurements.
2025
2024
(In millions)
2025
2024
2023
change
change
Income tax expense (benefit)
$
13
$
(223
)
$
(8
)
$
236
$
(215
)
Effective tax rate
(2
)%
929
%
(5
)%
The 2025 effective tax rate was impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million, as well as unfavorable discrete items of $36 million primarily related changes in state and foreign tax activity and uncertain tax positions.
The 2024 effective tax rate was impacted by jurisdictional income mix, as well as favorable discrete items of $231 million primarily related to changes in foreign tax activity and the tax impact of the Nutraceuticals business divestiture.
The 2023 effective tax rate was impacted by jurisdictional income mix, as well as favorable discrete items of $49 million primarily related to uncertain tax positions.
Adjusted income tax expense
Key items are defined as the financial effects from significant transactions that may have caused short-term fluctuations in net income (loss) and/or operating income (loss) which Ashland believes do not accurately reflect Ashland’s underlying business performance and trends. Tax specific key items are defined as the financial effects from tax specific financial transactions, tax law changes or other matters that fall within the definition of key items as previously described. The Effective Tax Rate, Excluding Key Items, which is a non-GAAP measure, has been prepared to illustrate the ongoing tax effects of Ashland’s operations. Management believes investors and analysts use this financial measure in assessing Ashland's business performance and that presenting this non-GAAP measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance and enhancing their ability to compare period-to-period financial results.
The effective tax rates during 2025, 2024 and 2023 were significantly impacted by the following tax specific key items:
•
Uncertain tax position – Includes the impact from the settlement of uncertain tax positions with various tax authorities;
•
Valuation allowances – Includes the impact from the release of certain foreign tax credit valuation allowances;
•
Restructuring and separation activity – Includes the tax impact of the Nutraceuticals business divestiture and company-wide restructuring activities; and
•
Other and tax reform related activity – Includes miscellaneous state and foreign statute adjustments.
M-8
The following table is a calculation of the effective tax rate, excluding the impact of these key items for the years ended September 30:
(In millions)
2025
2024
2023
Income (loss) from continuing operations before income taxes
$
(809
)
$
(24
)
$
160
Key items (pre-tax)(a)
959
227
21
Adjusted income from continuing operations before income taxes
$
150
$
203
$
181
Income tax expense (benefit)
13
(223
)
(8
)
Income tax rate adjustments:
Tax effect of key items(b)
62
31
1
Tax specific key items:(c)
Uncertain tax positions
—
(9
)
32
Valuation allowance
(9
)
(5
)
6
Restructuring and separation activity
—
115
—
Other and tax reform related activity
(22
)
133
6
Total income tax rate adjustments
31
265
45
Adjusted income tax expense
$
44
$
42
$
37
Effective tax rate
(2
)%
929
%
(5
)%
Effective Tax Rate, Excluding Key Items (Non-GAAP)(d)
29
%
20
%
21
%
(a)
See Adjusted EBITDA reconciliation table disclosed below in this Management, Discussion and Analysis of Financial Condition and Results of Operation for a summary of the key items, before tax.
(b)
The tax rate specific to the jurisdiction in which the key item originates is used to calculate the tax effect of key items.
(c)
For additional information on the effect that these tax specific key items had on EPS, see the Adjusted Diluted EPS table disclosed below in this Management Discussion and Analysis of Financial Condition and Results of Operation.
(d)
Due to rounding conventions, the effective tax rate presented may not recalculate precisely based on the numbers disclosed within this table.
The following table provides a reconciliation of tax specific key items within the statutory federal income tax with the provision for income taxes summary disclosed in Note K of the Notes to Consolidated Financial Statements for the years ended September 30:
(In millions)
2025
2024
2023
Tax effect of key items computed at applicable statutory rate(a)
$
62
$
31
$
1
Uncertain tax positions
—
(9
)
32
Valuation allowance changes
(9
)
(5
)
6
Basis difference on stock sale
—
115
—
Tax law changes
—
49
—
Non US restructuring
(10
)
84
—
Deemed inclusions, foreign dividends and other restructuring
(12
)
—
6
$
31
$
265
$
45
(a)
The tax rate specific to the jurisdiction in which the key item originates is used to calculate the tax effect of key items.
2025
2024
(In millions)
2025
2024
2023
change
change
Income (loss) from discontinued operations, net of income taxes
Performance Adhesives
$
(2
)
$
(2
)
$
5
$
—
$
(7
)
Composites/Marl Facility
—
(2
)
(1
)
2
(1
)
Asbestos-related litigation
(13
)
(18
)
(5
)
5
(13
)
Water Technologies
—
(4
)
—
4
(4
)
Distribution
(10
)
(6
)
(4
)
(4
)
(2
)
Valvoline
2
2
15
—
(13
)
$
(23
)
$
(30
)
$
10
$
7
$
(40
)
M-9
In 2025, 2024 and 2023, the Performance Adhesives activity represents subsequent adjustments that were made in conjunction with the post-closing disputes and tax reserves.
Asbestos-related activity during 2025, 2024 and 2023 included after-tax net expense adjustments to the asbestos reserves and receivables including the adjustments for the annual update for each of these years.
The Valvoline activity within 2025, 2024 and 2023 primarily represents subsequent adjustments that were made in conjunction with post-closing disputes and the Tax Matters Agreement with Valvoline.
The activity for Water Technologies, Composites/Marl Facility and Distribution were primarily related to post-closing adjustments associated with environmental remediation reserves associated with these businesses.
See Note C of the Notes to Consolidated Financial Statements for more information related to discontinued operations.
Other comprehensive income (loss)
A comparative analysis of the components of other comprehensive income (loss) is provided below for the years ended September 30:
2025
2024
(In millions)
2025
2024
2023
change
change
Other comprehensive income (loss), net of tax
Unrealized translation gain
$
45
$
54
$
72
$
(9
)
$
(18
)
Unrealized gain (loss) on commodity hedges
2
1
(6
)
1
7
$
47
$
55
$
66
$
(8
)
$
(11
)
Total other comprehensive income (loss), net of tax, decreased $8 million in 2025 as compared to 2024, as a result of the following components:
•
In 2025, the change in unrealized gain from foreign currency translation adjustments resulted in a gain of $45 million, compared to a gain of $54 million during 2024. The fluctuations in unrealized translation gains and losses were primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars; and
•
In 2025, a $2 million unrealized gain on commodity hedges was recorded compared to a gain of $1 million during 2024. See Note E of the Notes to Consolidated Financial Statements for more information.
Total other comprehensive income (loss), net of tax, decreased $11 million in 2024 as compared to 2023 as a result of the following components:
•
In 2024, the change in unrealized gain from foreign currency translation adjustments resulted in a gain of $54 million, compared to a gain of $72 million during 2023. The fluctuations in unrealized translation gains and losses were primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars; and
•
In 2024, a $1 million unrealized gain on commodity hedges was recorded compared to a loss of $6 million during 2023. See Note E of the Notes to Consolidated Financial Statements for more information.
Use of Non-GAAP Financial Measures
Ashland has included within this document the following non-GAAP financial measures, on both a consolidated and reportable segment basis, which are not defined within U.S. GAAP and do not purport to be alternatives to net income (loss) or cash flows from operating activities as a measure of operating performance or cash flows:
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA is defined as net income (loss), plus income tax expense (benefit), net interest and other expense (income), and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for discontinued operations and key items (including
M-10
remeasurement gains and losses related to pension and other postretirement plans). Adjusted EBITDA margin is Adjusted EBITDA divided by sales.
Management believes the use of EBITDA and Adjusted EBITDA measures on a consolidated and reportable segment basis assists investors in understanding the ongoing operating performance by presenting comparable financial results between periods. Ashland believes that by removing the impact of depreciation and amortization and excluding certain non-cash charges, amounts spent on interest and taxes and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide Ashland’s investors with performance measures that reflect the impact to operations from trends in changes in sales, margin and operating expenses, providing a perspective not immediately apparent from net income (loss) and operating income (loss). The adjustments Ashland makes to derive the non-GAAP financial measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in net income (loss) and operating income (loss) and which Ashland does not consider to be the fundamental attributes or primary drivers of its business. EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by Ashland’s management to evaluate financial performance on a consolidated and reportable segment basis and provide consistency in our financial reporting, facilitate internal and external comparisons of Ashland’s historical operating performance and its segments and provide continuity to investors for comparability purposes.
Adjusted Diluted Earnings Per Share (EPS)
Adjusted Diluted EPS is defined as income (loss) from continuing operations, adjusted for key items, net of tax, divided by the average outstanding diluted shares for the applicable period. The Adjusted Diluted EPS metric enables Ashland to demonstrate what effect key items have on EPS by taking income (loss) from continuing operations, adjusted for key items after tax that have been identified in the Adjusted EBITDA table, and dividing by the average outstanding diluted shares for the applicable period. Ashland’s management believes this presentation is helpful to illustrate how the key items have impacted this metric during the applicable period.
Adjusted Diluted Earnings Per Share (EPS) Excluding Intangibles Amortization Expense
The Adjusted Diluted EPS Excluding Intangible Amortization Expense is Adjusted Diluted EPS adjusted for intangibles amortization expense net of tax, divided by the average outstanding diluted shares for the applicable period. The Adjusted Diluted EPS, Excluding Intangibles Amortization Expense metric enables Ashland to demonstrate the impact of non-cash intangibles amortization expense on EPS, in addition to the key items previously mentioned. Ashland’s management believes this presentation is helpful to illustrate how previous acquisitions impact applicable period results.
Free Cash Flow, Ongoing Free Cash Flow and Ongoing Free Cash Flow Conversion
Free Cash Flow is defined as operating cash flows less capital expenditures while Ongoing Free Cash Flow is operating cash flows less capital expenditures and certain other adjustments as applicable. Ongoing Free Cash Flow Conversion is Ongoing Free Cash Flow divided by Adjusted EBITDA. These Free Cash Flow metrics enable Ashland to provide a better indication of the ongoing cash being generated that is ultimately available for both debt and equity holders as well as other investment opportunities. Unlike cash flow provided by operating activities, Free Cash Flow and Ongoing Free Cash Flow includes the impact of capital expenditures from continuing operations and other significant items impacting cash flow, providing a more complete picture of current and future cash generation. Free Cash Flow, Ongoing Free Cash Flow, and Free Cash Flow Conversion are non-GAAP liquidity measures that Ashland believes provide useful information to management and investors about Ashland's ability to convert Adjusted EBITDA to Ongoing Free Cash Flow. These liquidity measures are used regularly by Ashland's stakeholders and industry peers to measure the efficiency at providing cash from regular business activity. Free Cash Flow, Ongoing Free Cash Flow, and Ongoing Free Cash Flow Conversion have certain limitations, including that they do not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments. The amount of mandatory versus discretionary expenditures can vary significantly between periods.
Other disclosures on non-GAAP financial measures
Although Ashland may provide forward-looking guidance for Adjusted EBITDA, Adjusted Diluted EPS and Ongoing Free Cash Flow, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP-reported financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because
M-11
it is unable to predict with reasonable certainty the ultimate outcome of certain significant items that affect these metrics such as domestic and international economic, political, legislative, regulatory and legal actions. In addition, certain 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 and are difficult to predict with certainty.
These non-GAAP financial measures should be considered supplemental in nature and should not be construed as more significant than comparable measures defined by U.S. GAAP. Limitations associated with the use of these non-GAAP financial measures include that these measures do not present all of the amounts associated with our results as determined in accordance with U.S. GAAP. The non-GAAP financial measures provided are used by Ashland management and may not be determined in a manner consistent with the methodologies used by other companies. EBITDA and Adjusted EBITDA provide a supplemental presentation of Ashland’s operating performance on a consolidated and reportable segment basis. Adjusted EBITDA generally includes adjustments for items that impact comparability between periods. In addition, certain financial covenants related to Ashland’s 2022 Credit Agreement are based on similar non-GAAP financial measures and are defined further in the sections that reference this metric.
In accordance with U.S. GAAP, Ashland recognizes actuarial gains and losses for defined benefit pension and other postretirement benefit plans annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for a remeasurement during a fiscal year. Actuarial gains and losses occur when actual experience differs from the estimates used to allocate the change in value of pension and other postretirement benefit plans to expense throughout the year or when assumptions change, as they may each year. Significant factors that can contribute to the recognition of actuarial gains and losses include changes in discount rates used to remeasure pension and other postretirement obligations on an annual basis or upon a qualifying remeasurement, differences between actual and expected returns on plan assets and other changes in actuarial assumptions, for example, the life expectancy of plan participants. Management believes Adjusted EBITDA, which includes the expected return on pension plan assets yet excludes both the actual return on pension plan assets and the impact of actuarial gains and losses, provides investors with a meaningful supplemental presentation of Ashland’s operating performance (see the Adjusted EBITDA reconciliation table for additional details on exact amounts included within this non-GAAP measure related to pension and other postretirement plans). Management believes these actuarial gains and losses are primarily financing activities that are more reflective of changes in current conditions in global financial markets (and in particular interest rates) that are not directly related to the underlying business. For further information on the actuarial assumptions and plan assets referenced above, see Note L of the Notes to Consolidated Financial Statements.
EBITDA and Adjusted EBITDA
EBITDA totaled loss of $601 million for 2025, and income of $142 million and $419 million for 2024 and 2023, respectively. EBITDA and Adjusted EBITDA results in the following table have been prepared to illustrate the ongoing effects of Ashland’s operations, which exclude certain key items previously described. Management believes the use of such non-GAAP financial measures on a consolidated and reportable segment basis assists investors in understanding the ongoing operating performance by presenting the financial results between periods on a more comparable basis.
These operating key items for the applicable periods are summarized as follows:
•
Goodwill impairment – Ashland recorded a non-cash goodwill impairment charge of $706 million within the goodwill impairment caption of the Statement of Consolidated Comprehensive Income (Loss) in 2025. See Note G of the Notes to Consolidated Financial Statements for more information;
•
Avoca business impairment and sale – During 2025, Ashland sold substantially all of the net assets of its Avoca business. As a result, Ashland recorded an impairment charge and gain on sale within the income (loss) on acquisitions and divestitures, net caption of the Statement of Consolidated Comprehensive Income (Loss) in 2025. See Note B of the Notes to Consolidated Financial Statements for more information;
•
Accelerated depreciation – As a result of product line optimization activities at manufacturing facilities within the Life Sciences, Specialty Additives and Personal Care reportable segments, Ashland recorded accelerated depreciation due to changes in the expected useful life of certain property, plant and equipment during 2025 and 2024. See Note D of the Notes to Consolidated Financial Statements for more information;
M-12
•
Environmental reserve adjustments – 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. As a result of these activities, Ashland recorded adjustments during each year to its environmental remediation reserves and receivables primarily related to previously divested businesses or non-operational sites. See Note M of the Notes to Consolidated Financial Statements for more information;
•
Restructuring, separation and other costs – Ashland periodically implements company-wide and targeted cost reduction programs related to acquisitions, divestitures and other cost reduction programs in order to enhance profitability through streamlined operations and an improved overall cost structure. Ashland often incurs severance, facility and integration costs associated with these programs. See Note D of the Notes to Consolidated Financial Statements for further information on the restructuring activities;
•
Other plant optimization costs – During 2025 and 2024, Ashland incurred inventory adjustment and production costs associated with product line optimization actions;
•
Nutraceuticals business impairment and sale – During 2024, Ashland sold substantially all of the net assets of its Nutraceuticals business. As a result, Ashland recorded an impairment charge and loss on sale within the income (loss) on acquisitions and divestitures, net caption of the Statements of Consolidated Comprehensive Income (Loss) in 2024 and post-closing adjustments in 2025. See Note B of the Notes to Consolidated Financial Statements for more information;
•
Asset impairments – Ashland recognized impairment charges to certain assets during 2024 and 2023. See Note D of the Notes to Consolidated Financial Statements for more information;
•
Nutraceuticals VAT reserve – During 2024, Ashland incurred a Value-Added Tax ("VAT") reserve associated with the sale of the Nutraceuticals business;
•
Argentina foreign currency devaluation – Following the enactment by the Argentina government of a 50% peso devaluation against the dollar, Ashland recorded a currency devaluation charge within the selling, general and administrative expense caption of the Statement of Consolidated Comprehensive Income (Loss) during 2024;
•
Legal settlement – During 2024, Ashland incurred $4 million in costs associated with a legal settlement;
•
ICMS Brazil tax credit – In 2017, the Federal Supreme Court of Brazil ruled in a leading case that a Brazil value-added tax (ICMS) should not be included in the base used to calculate a taxpayer's federal contribution on total revenue known as PIS/COFINS (2017 Decision). Following favorable court rulings from lawsuits previously filed by two of Ashland's Brazilian subsidiaries challenging the inclusion of ICMS in Ashland's calculation of PIS/COFINS, Ashland received acknowledgment from the Brazilian tax authorities that allows Ashland to begin the process to recover the taxes. See Note M of the Notes to Consolidated Financial Statements for more information;
•
Held for sale depreciation and amortization – Represents the depreciation and amortization for the Avoca business assets during fiscal 2025 and the Nutraceuticals business assets during fiscal 2024. See Note B of the Notes to Consolidated Financial Statements for more information;
•
Tax credit – During 2025, Ashland recorded a $3 million benefit related to domestic tax credits; and
•
Income on divestitures, net – Ashland recorded income of $14 million and $6 million during 2025 and 2023, respectively. The income was related to the pre-tax gains in connection with the sale of excess corporate property.
Non-operating key items affecting EBITDA
During the current and prior years, there were certain key items that were not included in operating income (loss) but were excluded to arrive at Adjusted EBITDA. These non-operating key items for the applicable periods are summarized as follows:
•
Loss (gain) on pension and other postretirement plan remeasurements – Ashland recognized actuarial gains and losses for defined benefit pension and other postretirement benefit plans annually in the fourth quarter of each fiscal year and
M-13
whenever a plan is determined to qualify for a remeasurement during a fiscal year. See Note L of the Notes to Consolidated Financial Statements for more information.
(In millions)
2025
2024
2023
Net income (loss)
$
(845
)
$
169
$
178
Income tax expense (benefit)
13
(223
)
(8
)
Net interest and other financing expense (income)
33
(24
)
6
Depreciation and amortization(a)
198
220
243
EBITDA
(601
)
142
419
Loss (income) from discontinued operations, net of income taxes
23
30
(10
)
Key items included in EBITDA:
Goodwill impairment
706
—
—
Avoca business impairment and sale
175
—
—
Accelerated depreciation
41
57
—
Environmental reserve adjustments
34
45
56
Restructuring, separation and other costs
22
30
10
Other plant optimization costs
22
10
—
Nutraceuticals business impairment and sale
1
107
—
Asset impairments
—
11
4
Nutraceuticals VAT reserve
—
7
—
Argentina currency devaluation impact
—
5
—
Legal settlement
—
4
—
ICMS Brazil tax credit
—
—
(12
)
Loss (gain) on pension and other postretirement plan remeasurements(b)
(3
)
14
(2
)
Held for sale depreciation and amortization
(2
)
(3
)
—
Tax credit
(3
)
—
—
Income on divestitures, net
(14
)
—
(6
)
Total key items included in EBITDA
979
287
50
Adjusted EBITDA(b)
$
401
$
459
$
459
Total key items included in EBITDA
$
979
$
287
$
50
Unrealized gains on securities
(20
)
(60
)
(29
)
Total key items, before tax
$
959
$
227
$
21
(a)
Depreciation and amortization excludes accelerated depreciation of $21 million for Life Sciences for fiscal 2025, $1 million and $2 million for Personal Care for fiscal 2025 and 2024, respectively, and $19 million and $55 million for Specialty Additives for fiscal 2025 and 2024, respectively, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business assets for fiscal 2025 and $3 million for Life Sciences associated with the Nutraceuticals business assets for fiscal 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
(b)
Includes $7 million during 2025, and $12 million each during 2024 and 2023, respectively, of net periodic pension and other postretirement expense recognized ratably through the fiscal year. These expenses are comprised of service cost, interest cost, expected return on plan assets, and amortization of prior service credit and are disclosed in further detail in Note L of the Notes to Consolidated Financial Statements.
Diluted EPS and Adjusted Diluted EPS
The following table reflects the U.S. GAAP calculation for the income (loss) from continuing operations adjusted for the cumulative diluted EPS effect for key items after tax that have been identified in the Adjusted EBITDA table in the previous section. Key items are defined as the financial effects from significant transactions that may have caused short-term fluctuations in net income (loss) and/or operating income (loss) which Ashland believes do not accurately reflect Ashland’s underlying business performance and trends. The Adjusted Diluted EPS for the income (loss) from continuing operations and Adjusted Diluted EPS from Continuing Operations Excluding Intangibles Amortization Expense in the following table have been prepared to illustrate these ongoing effects on Ashland’s operations. Management believes investors and analysts use this financial measure in assessing Ashland's business performance and that presenting this non-GAAP measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance and enhancing their ability to compare period-to-period financial results.
M-14
In addition to the operating key items previously described, additional non-operating key items for the applicable periods are summarized as follows:
•
Unrealized gains on securities – represents gains recognized on restricted investments related to the Asbestos trust and Environmental trust for each period. See Note E of the Notes to Consolidated Financial Statements for more information;
•
Uncertain tax positions – represents the impact from the settlement of uncertain tax positions with various tax authorities for fiscal 2025, 2024 and 2023;
•
Valuation allowance – represents the impact from the release of certain foreign tax credit valuation allowances;
•
Restructuring and separation activity – represents the tax impact of the held for sale classification for the Nutraceuticals business; and
•
Other and tax reform related activity – represents tax specific key items associated with foreign tax related activity for fiscal 2025 and 2024.
2025
2024
2023
Diluted EPS from continuing operations (as reported)
$
(17.74
)
$
3.95
$
3.13
Key items, before tax:
Goodwill impairment
15.22
—
—
Avoca business impairment and sale
3.75
—
—
Accelerated depreciation
0.89
1.14
—
Environmental reserve adjustments
0.76
0.90
1.04
Restructuring, separation and other costs
0.48
0.60
0.19
Other plant optimization costs
0.48
0.20
—
Nutraceuticals business impairment and sale
0.02
2.14
—
Asset impairments
—
0.22
0.08
Nutraceuticals VAT reserve
—
0.14
—
Argentina currency devaluation impact
—
0.10
—
Legal settlement
—
0.08
—
ICMS Brazil tax credit
—
—
(0.22
)
Loss (gain) on pension and other postretirement plan remeasurements
(0.07
)
0.29
(0.04
)
Held for sale depreciation and amortization
(0.04
)
(0.06
)
—
Tax credit
(0.07
)
—
—
Income on divestitures, net
(0.30
)
—
(0.11
)
Unrealized gains on securities
(0.42
)
(1.20
)
(0.54
)
Key items, before tax
20.70
4.55
0.40
Tax effect of key items(a)
(1.37
)
(0.62
)
(0.02
)
Key items, after tax
19.33
3.93
0.38
Tax specific key items:
Uncertain tax positions
—
0.18
(0.60
)
Valuation allowance
0.21
0.10
(0.12
)
Restructuring and separation activity
—
(2.30
)
—
Other tax reform related activity
0.48
(2.66
)
(0.11
)
Tax specific key items(b)
0.69
(4.68
)
(0.83
)
Total key items
20.02
(0.75
)
(0.45
)
Adjusted Diluted EPS from Continuing Operations (non-GAAP)
$
2.28
$
3.20
$
2.68
Amortization expense adjustment (net of tax)(c)
1.10
1.25
1.39
Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense
$
3.38
$
4.45
$
4.07
(a)
Represents the diluted EPS impact from the tax effect of the key items that are previously identified above.
(b)
Represents the diluted EPS impact from tax specific financial transactions, tax law changes or other matters that fall within the definition of tax specific key items. For additional explanation of these tax specific key items, see the income tax expense (benefit) discussion within the following caption review section.
(c)
Amortization expense adjustment (net of tax) tax rates were 20% for each of the fiscal years 2025, 2024 and 2023.
M-15
RESULTS OF OPERATIONS – REPORTABLE SEGMENT REVIEW
Ashland's reportable segments include Life Sciences, Personal Care, Specialty Additives, and Intermediates. Unallocated and Other includes corporate governance activities and certain legacy matters.
Results of Ashland’s reportable segments are presented based on its management and internal accounting structure. The structure is specific to Ashland; therefore, the financial results of Ashland’s reportable segments are not necessarily comparable with similar information for other companies. Ashland allocates all significant costs to its reportable segments except for certain significant company-wide restructuring activities, certain corporate governance costs and other costs or activities that relate to former businesses that Ashland no longer operates. The service cost component of pension and other postretirement benefits costs is allocated to each reportable segment on a ratable basis; while the remaining components of pension and other postretirement benefits costs are recorded within the other net periodic benefit loss caption on the Statements of Consolidated Comprehensive Income (Loss). Ashland refines its expense allocation methodologies to the reportable segments from time to time as more refined information becomes available and the industry or market changes. Significant revisions to Ashland’s methodologies are adjusted for all reportable segments on a retrospective basis. There were no material changes in methodology for the years ended September 30, 2025, 2024 or 2023.
M-16
The following table shows sales, operating income (loss), depreciation expense, amortization expense and EBITDA by reportable segment for the years ended September 30:
2025
2024
(In millions)
2025
2024
2023
change
change
Sales
Life Sciences
$
641
$
810
$
869
$
(169
)
$
(59
)
Personal Care
577
634
598
(57
)
36
Specialty Additives
511
572
600
(61
)
(28
)
Intermediates
137
144
185
(7
)
(41
)
Intersegment sales(a)
(42
)
(47
)
(61
)
5
14
$
1,824
$
2,113
$
2,191
$
(289
)
$
(78
)
Operating income (loss)
Life Sciences(b)
$
(262
)
$
168
$
172
$
(430
)
$
(4
)
Personal Care(c)
90
73
52
17
21
Specialty Additives(d)
(338
)
(32
)
10
(306
)
(42
)
Intermediates
8
29
50
(21
)
(21
)
Unallocated and Other(e)
(273
)
(264
)
(112
)
(9
)
(152
)
$
(775
)
$
(26
)
$
172
$
(749
)
$
(198
)
Depreciation expense
Life Sciences(f)
$
57
$
38
$
41
$
19
$
(3
)
Personal Care(g)
30
36
38
(6
)
(2
)
Specialty Additives(h)
75
111
58
(36
)
53
Intermediates
12
13
13
(1
)
—
Unallocated and Other
—
—
—
—
—
$
174
$
198
$
150
$
(24
)
$
48
Amortization expense
Life Sciences
$
18
$
23
$
28
$
(5
)
$
(5
)
Personal Care
35
43
47
(8
)
(4
)
Specialty Additives
9
10
18
(1
)
(8
)
Intermediates
1
—
—
1
—
Unallocated and Other
—
—
—
—
—
$
63
$
76
$
93
$
(13
)
$
(17
)
EBITDA(i)
Life Sciences
$
(187
)
$
229
$
241
$
(416
)
$
(12
)
Personal Care
155
152
137
3
15
Specialty Additives
(254
)
89
86
(343
)
3
Intermediates
21
42
63
(21
)
(21
)
Unallocated and Other
(273
)
(264
)
(112
)
(9
)
(152
)
$
(538
)
$
248
$
415
$
(786
)
$
(167
)
(a)
Intersegment sales from Intermediates are accounted for at prices that approximate market value. All other intersegment sales are accounted for at cost.
(b)
Includes goodwill impairment of $375 million for Life Sciences in 2025.
(c)
Includes a capital project impairment charge of $11 million for Personal Care in 2024.
(d)
Includes goodwill impairment of $331 million in 2025 and a $4 million impairment charge related to a facility in 2023 for Specialty Additives.
(e)
Includes a $8 million gain on sale and a $183 million impairment charge related to the divestiture of the Avoca business in 2025, and a $8 million loss on sale and a $99 million impairment charge related to the divestiture of the Nutraceuticals business in 2024 within the income (loss) on acquisitions and divestitures, net.
(f)
Depreciation includes accelerated depreciation of $21 million for Life Sciences in 2025.
(g)
Depreciation includes accelerated depreciation of $1 million and $2 million for Personal Care in 2025 and 2024, respectively.
(h)
Depreciation includes accelerated depreciation of $19 million and $55 million for Specialty Additives in 2025 and 2024, respectively.
(i)
Excludes income (loss) from discontinued operations, net of income taxes and other net periodic benefit loss. See the Statements of Consolidated Comprehensive Income (Loss) for applicable amounts excluded.
M-17
Life Sciences
Life Sciences is comprised of pharmaceuticals, nutrition, agricultural chemicals, diagnostic films (formerly known as advanced materials) and fine chemicals. Pharmaceutical solutions include controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers and tablet binders. Nutrition solutions include thickeners, stabilizers, emulsifiers and additives for enhancing mouthfeel, controlling moisture migration, reducing oil uptake and binding structured foods. Customers include pharmaceutical, food, beverage, hospitals and radiologists manufacturers. The Nutraceuticals business was sold in August 2024. See Note B of the Notes to Consolidated Financial Statements for more information.
The following table provides a reconciliation of the change in sales for Life Sciences between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Sales change
Divestiture
$
(109
)
$
—
Volume
(40
)
(46
)
Price/mix
(21
)
(14
)
Foreign Currency
1
1
$
(169
)
$
(59
)
The following table provides a reconciliation of the change in operating income (loss) for Life Sciences between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Operating income (loss) change
Goodwill impairment
$
(375
)
$
—
Cost
(21
)
8
Price/mix
(20
)
4
Volume
(9
)
(20
)
Divestiture
(7
)
—
Foreign Currency
2
4
$
(430
)
$
(4
)
EBITDA and Adjusted EBITDA reconciliation
The EBITDA and Adjusted EBITDA amounts presented within this business section are provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for each segment. Each of these non-GAAP financial measures is defined as follows: EBITDA (operating income (loss) plus depreciation and amortization), Adjusted EBITDA (EBITDA adjusted for key items as applicable), and Adjusted EBITDA margin (Adjusted EBITDA divided by sales). Ashland does not allocate items to each reportable segment below operating income (loss), such as interest expense and income taxes. As a result, reportable segment EBITDA and Adjusted EBITDA are reconciled directly to operating income (loss) since it is the most directly comparable Statements of Consolidated Comprehensive Income (Loss) caption.
The following EBITDA presentation for the years ended September 30, 2025, 2024 and 2023, is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Life Sciences. There were key items for the years ended September 30, 2025, 2024 and 2023. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
M-18
2025
2024
(In millions)
2025
2024
2023
change
change
Operating income (loss)
$
(262
)
$
168
$
172
$
(430
)
$
(4
)
Depreciation and amortization(a)
54
64
69
(10
)
(5
)
EBITDA
(208
)
232
241
(440
)
(9
)
Goodwill impairment
375
—
—
375
—
Accelerated depreciation
21
—
—
21
—
Other plant optimization costs
5
—
—
5
—
Restructuring and other costs
—
—
4
—
(4
)
Environmental reserve adjustments
—
1
2
(1
)
(1
)
Held for sale depreciation and amortization
—
(3
)
—
3
(3
)
Adjusted EBITDA
$
193
$
230
$
247
$
(37
)
$
(17
)
Operating income (loss) as a percent of sales
-40.9
%
20.7
%
19.8
%
Not meaningful
90 bps
Adjusted EBITDA as a percent of sales
30.1
%
28.4
%
28.4
%
170 bps
0 bps
(a)
Depreciation and amortization for Life Sciences excludes accelerated depreciation of $21 million in 2025 and includes $3 million associated with the Nutraceuticals business held for sale assets in 2024 which is included as a key item within this table as a component of Adjusted EBITDA.
2025 compared to 2024
Life Sciences' sales, operating income (loss) and Adjusted EBITDA decreased in 2025 primarily due to the divestiture of the Nutraceuticals business, lower volume, and unfavorable pricing, partially offset by favorable foreign currency exchange. Operating income (loss) for 2025 also included a goodwill impairment charge of $375 million and higher costs of $26 million for portfolio optimization activities.
2024 compared to 2023
Life Sciences' sales decreased in 2024 due to lower volume and pricing, while operating income and Adjusted EBITDA decreased in 2024 due to lower volume partially offset by favorable product price/mix, deflationary raw materials, and favorable foreign currency exchange. The CMC portfolio optimization initiative and the Nutraceuticals business sale had an approximate $12 million negative sales impact during the year.
Personal Care
Personal Care is comprised of biofunctionals, microbial protectants (preservatives), skin care, sun care, oral care, hair care and household solutions. These businesses have a broad range of natural, nature-derived, biodegradable, and high-performance ingredients for customer driven solutions to help protect, renew, moisturize and revitalize skin and hair, and provide solutions for toothpastes, mouth washes and rinses, denture cleaning and care for teeth. Personal Care supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers for household, industrial and institutional cleaning products. Customers include formulators at large multinational branded consumer products companies and smaller, independent boutique companies. The Avoca business was sold in March 2025. See Note B of the Notes to Consolidated Financial Statements for more information.
The following table provides a reconciliation of the change in sales for Personal Care between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Sales change
Divestiture
$
(44
)
$
—
Price/mix
(9
)
(6
)
Volume
(8
)
42
Foreign Currency
4
—
$
(57
)
$
36
M-19
The following table provides a reconciliation of the change in operating income for Personal Care between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Operating income change
Costs
$
26
$
(7
)
Foreign Currency
2
4
Price/mix
(9
)
10
Volume
(1
)
14
Divestiture (site closure)
(1
)
—
$
17
$
21
EBITDA and Adjusted EBITDA reconciliation
The following EBITDA presentation (as defined and described in the section above) for the years ended September 30, 2025, 2024 and 2023, is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Personal Care. There were key items for the years ended September 30, 2025, 2024 and 2023. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
2025
2024
(In millions)
2025
2024
2023
change
change
Operating income
$
90
$
73
$
52
$
17
$
21
Depreciation and amortization(a)
66
77
85
(11
)
(8
)
EBITDA
156
150
137
6
13
Other plant optimization costs
3
1
—
2
1
Accelerated depreciation
1
2
—
(1
)
2
Held for sale depreciation and amortization
(2
)
—
—
(2
)
—
Asset impairment
—
11
—
(11
)
11
Adjusted EBITDA
$
158
$
164
$
137
$
(6
)
$
27
Operating income as a percent of sales
15.6
%
11.5
%
8.7
%
410 bps
280 bps
Adjusted EBITDA as a percent of sales
27.4
%
25.9
%
22.9
%
150 bps
300 bps
(a)
Depreciation and amortization for Personal Care includes $2 million associated with the Avoca business assets in 2025 and excludes accelerated depreciation of $1 million in 2025 and $2 million in 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
2025 compared to 2024
Personal Care's sales and Adjusted EBITDA decreased in 2025 primarily due to lower volume, including the divestiture of the Avoca business and other portfolio optimization actions, and unfavorable price/mix, partially offset by lower costs and favorable foreign exchange currency. Operating income increased due to lower costs and favorable foreign exchange currency, partially offset by unfavorable price/mix.
2024 compared to 2023
Personal Care's sales increased in 2024 primarily due to higher volume partially offset by unfavorable pricing. Sales growth for Personal Care reflects improved demand in most regions for skin care and hair care. Personal Care’s globalization initiatives for biofunctionals and microbial protection also contributed to sales growth. As expected, oral care sales were adversely impacted by order timing with a key customer. Operating income and Adjusted EBITDA increased primarily due to higher volume, favorable product mix and foreign currency exchange, partially offset by higher cost including $11 million for a capital impairment charge and $2 million of accelerated depreciation for product line optimization activities associated with a manufacturing facility. The CMC portfolio optimization initiative had an approximate $7 million negative sales impact during the year.
M-20
Specialty Additives
Specialty Additives is comprised of rheology and performance-enhancing additives serving the architectural coatings, construction, energy, automotive and various industrial markets. Solutions include coatings additives for architectural paints, finishes and lacquers, cement- and gypsum-based dry mortars, ready-mixed joint compounds, synthetic plasters for commercial and residential construction, and specialty materials for industrial applications. Products include rheology modifiers (cellulosic and associative thickeners), foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, and environmental filters, ingredients that aid the manufacturing process of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals and alloys for welding. Products help improve desired functional outcomes through rheology modification and control, water retention, workability, adhesive strength, binding power, film formation, deposition and suspension and emulsification. Customers include, but are not limited to, global paint manufacturers, electronics and automotive manufacturers, textile mills, the construction industry and welders.
The following table provides a reconciliation of the change in sales for Specialty Additives between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Sales change
Volume
$
(56
)
$
6
Price/mix
(7
)
(32
)
Foreign Currency
2
1
Divestiture
—
(3
)
$
(61
)
$
(28
)
The following table provides a reconciliation of the change in operating income for Specialty Additives between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Operating income (loss) change
Goodwill impairment
$
(331
)
$
—
Price/mix
(10
)
(9
)
Volume
(10
)
1
Foreign Currency
(1
)
1
Costs
46
(34
)
Divestiture
—
(1
)
$
(306
)
$
(42
)
EBITDA and Adjusted EBITDA reconciliation
The following EBITDA presentation (as defined and described in the section above) for the years ended September 30, 2025, 2024 and 2023 below is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Specialty Additives. There were key items for the years ended September 30, 2025, 2024 and 2023. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
M-21
2025
2024
(In millions)
2025
2024
2023
change
change
Operating income (loss)
$
(338
)
$
(32
)
$
10
$
(306
)
$
(42
)
Depreciation and amortization(a)
65
66
76
(1
)
(10
)
EBITDA
(273
)
34
86
(307
)
(52
)
Goodwill impairment
331
—
—
331
—
Accelerated depreciation
19
55
—
(36
)
55
Other plant optimization costs
15
9
—
6
9
Environmental reserve adjustments
2
1
4
1
(3
)
Asset impairment
—
—
4
—
(4
)
Adjusted EBITDA
$
94
$
99
$
94
$
(5
)
$
5
Operating income (loss) as a percent of sales
-66.1
%
-5.6
%
1.7
%
Not meaningful
-730 bps
Adjusted EBITDA as a percent of sales
18.4
%
17.3
%
15.7
%
110 bps
160 bps
(a)
Depreciation and amortization for Specialty Additives excludes accelerated depreciation of $19 million and $55 million in 2025 and 2024, respectively, which is included as a key item within this table as a component of Adjusted EBITDA.
2025 compared to 2024
Specialty Additives sales and EBITDA in 2025 decreased primarily due to lower volume and unfavorable price/mix partially offset by favorable foreign exchange currency. Operating income (loss) and Adjusted EBITDA in 2025 decreased primarily due to lower volume and unfavorable price/mix partially offset by lower costs, including the effects of portfolio optimization activities and accelerated depreciation. Operating income (loss) for 2025 included a goodwill impairment charge of $331 million.
2024 compared to 2023
Specialty Additives' sales in 2024 decreased primarily due to unfavorable pricing, while operating income (loss) and EBITDA decreased primarily due to higher costs, including $55 million of accelerated depreciation and $9 million of other costs for product line optimization activities associated with two Specialty Additives manufacturing facilities, and unfavorable price/mix partially offset by higher volume and favorable foreign currency exchange. The unfavorable pricing was primarily in coatings with the largest impact related to China. The CMC and MC portfolio optimization initiatives had an approximate $11 million negative sales impact during the year.
Intermediates
Intermediates is comprised of the production of 1,4 butanediol ("BDO") and related derivatives, including n-methylpyrrolidone. These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, agriculture, pharmaceuticals, water filtration membranes and more. BDO is also supplied to Life Sciences, Personal Care, and Specialty Additives for use as a raw material.
The following table provides a reconciliation of the change in sales for Intermediates between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Sales change
Price/mix
$
(15
)
$
(34
)
Volume
7
(7
)
Foreign Currency
1
—
$
(7
)
$
(41
)
M-22
The following table provides a reconciliation of the change in operating income for Intermediates between fiscal years 2025 and 2024 and between fiscal years 2024 and 2023.
(In millions)
2025 change
2024 change
Operating income change
Price/mix
$
(23
)
$
(27
)
Cost
(1
)
10
Volume
3
(4
)
$
(21
)
$
(21
)
EBITDA reconciliation
The following EBITDA presentation (as defined and described in the section above) for the years ended September 30, 2025, 2024 and 2023 is provided as a means to enhance the understanding of financial measurements that Ashland has internally determined to be relevant measures of comparison for the results of Intermediates. Intermediates had no key items for the years ended September 30, 2025, 2024 and 2023.
2025
2024
(In millions)
2025
2024
2023
change
change
Operating income
$
8
$
29
$
50
$
(21
)
$
(21
)
Depreciation and amortization
13
13
13
—
—
EBITDA
21
42
63
(21
)
(21
)
Operating income as a percent of sales
5.8
%
20.1
%
27.0
%
-1430 bps
-690 bps
EBITDA as a percent of sales
15.3
%
29.2
%
34.1
%
-1390 bps
-490 bps
2025 compared to 2024
Intermediates' sales, operating income and EBITDA for 2025 decreased primarily due to unfavorable price/mix partially offset by higher volume.
2024 compared to 2023
Intermediates' sales, operating income and EBITDA for 2024 decreased primarily due to unfavorable pricing and lower volume, partially offset by lower costs.
Unallocated and other
The following table summarizes the key components of the Unallocated and other's operating income (loss) for each of the years ended September 30:
2025
2024
(In millions)
2025
2024
2023
change
change
Restructuring activities
$
(22
)
$
(30
)
$
(9
)
$
8
$
(21
)
Environmental expenses
(32
)
(43
)
(49
)
11
6
ICMS Brazil tax credit
—
—
12
—
(12
)
Income (loss) on acquisitions and divestitures, net
(161
)
(115
)
6
(46
)
(121
)
Argentina currency devaluation impact
—
(5
)
—
5
(5
)
Tax credit
3
—
—
3
—
Other expenses (primarily governance and legacy expenses)
(61
)
(71
)
(72
)
10
1
Total expense
$
(273
)
$
(264
)
$
(112
)
$
(9
)
$
(152
)
Unallocated and other included expense of $273 million, $264 million and $112 million for 2025, 2024 and 2023, respectively. The charges for restructuring activities of $22 million, $30 million and $9 million during 2025, 2024 and 2023, respectively, were primarily comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.
M-23
Environmental expenses of $32 million, $43 million and $49 million during 2025, 2024 and 2023, respectively, primarily driven by specific remediation site reserve increases during the period.
The remaining items included: loss on divestitures of $161 million (primarily related to the $183 million impairment of the Avoca business, $8 million pre-tax gain on the final sale of the Avoca business, and $14 million gain on sale of a property) and a tax credit of $3 million in 2025, expense of $5 million related to the devaluation of the currency in Argentina and loss on divestiture of $115 million (primarily related to the $107 million impairment charge and loss on sale associated with the Nutraceuticals business as well as a $7 million charge related to Nutraceutical VAT reserves) in 2024, and income of $6 million on acquisitions and divestitures related to excess corporate property sales and income of $12 million for ICMS tax credits in Brazil in 2023.
Other expenses between periods were driven by increases and decreases in governance and legacy expenses associated with foreign currency, deferred compensation, stock compensation and incentive compensation.
M-24
FINANCIAL POSITION
Liquidity
Ashland had $215 million in cash and cash equivalents as of September 30, 2025, of which $194 million was held by foreign subsidiaries and had no significant limitations that would prohibit remitting the funds to satisfy corporate obligations. In certain circumstances, if such amounts were repatriated to the United States, additional withholding taxes might need to be accrued and paid depending on the source of the earnings remitted. Ashland currently has no plans to repatriate any amounts for which additional taxes would need to be accrued.
Ashland has taken actions and may continue to take actions intended to increase its cash and cash equivalents position and preserve financial flexibility. At September 30, 2025, Ashland has total remaining borrowing capacity of $596 million available under the Revolving Credit Facility. Ashland had no available liquidity under the U.S. and Foreign Accounts Receivable Sales Program, as of September 30, 2025. Ashland has no maturities related to revolving credit facilities or bonds until fiscal 2027.
On October 19, 2023, Ashland entered, through an Ireland based, wholly-owned, bankruptcy-remote consolidated special purpose entity (SPE), into a three-year agreement with a group of entities (buyers) to sell certain trade receivables, without recourse beyond the pledged receivables, of certain wholly-owned Ashland subsidiaries (Foreign Accounts Receivable Sales Program) primarily in Europe. Under the agreement, Ashland can transfer whole receivables up to a limit established by the buyer, which is currently set at a maximum of €125 million subject to other limitations as applicable. Ashland accounts for receivables transferred to buyers as part of this agreement as sales. See Note H of the Notes to Consolidated Financial Statements for more information on the Foreign Accounts Receivables Sale Program.
During April 2024, Ashland authorized a financing program offered through JP Morgan and Taulia Alliance. Under this program, JP Morgan and its affiliates may purchase certain confirmed receivables directly from suppliers pursuant to the terms of a separate arrangement entered into between JPMorgan and Taulia Alliance and such suppliers. There were no changes to Ashland's standard payment terms with its suppliers in connection with this program. Ashland provides no guarantees to JP Morgan and Taulia Alliance under this program. The program was implemented during June 2025 and has been actively offered to suppliers. As of September 30, 2025, participation in the program was not significant. There were less than $1 million of confirmed invoices under this program for the year ended September 30, 2025.
Ashland believes that cash flow from operations, availability under existing credit facilities and arrangements, current cash and investment balances and the ability to obtain other financing, if necessary, will provide adequate cash funds for Ashland’s foreseeable working capital needs, capital expenditures at existing facilities, dividend payments and debt service obligations. Ashland’s cash requirements are subject to change as business conditions warrant and opportunities arise. The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements.
Ashland’s cash flows from operating, investing and financing activities, as reflected in the Statements of Consolidated Cash Flows, are summarized as follows, for the years ended September 30:
(In millions)
2025
2024
2023
Cash provided (used) by:
Operating activities from continuing operations
$
134
$
462
$
294
Investing activities from continuing operations
(3
)
(51
)
(109
)
Financing activities from continuing operations
(179
)
(479
)
(371
)
Discontinued operations
(40
)
(51
)
(51
)
Effect of currency exchange rate changes on cash and cash equivalents
3
2
8
Net decrease in cash and cash equivalents
$
(85
)
$
(117
)
$
(229
)
Ashland paid income taxes of $33 million during 2025 compared to $53 million in 2024 and $63 million in 2023 (of which $16 million related to discounted operations). Cash receipts for interest income were $5 million in 2025, $10 million in 2024, and $12 million in 2023, respectively, while cash payments for interest expense amounted to $54 million in 2025, $52 million in 2024 and $53 million in 2023.
M-25
Operating activities
The following summarizes the cash flows associated with Ashland’s operating activities for the years ended September 30:
(In millions)
2025
2024
2023
Cash flows provided by operating activities from continuing operations
Net income (loss)
$
(845
)
$
169
$
178
Loss (income) from discontinued operations, net of income taxes
23
30
(10
)
Adjustments to reconcile income (loss) from continuing operations to cash flows from operating activities
Depreciation and amortization
237
274
243
Original issue discount and debt issuance cost amortization
7
6
6
Deferred income taxes
73
(302
)
(32
)
Gain from sales of property and equipment
(16
)
—
(1
)
Stock based compensation expense
14
15
22
Benefit (loss) from excess tax deduction on stock based compensation
(3
)
—
2
Income from restricted investments
(33
)
(74
)
(43
)
Loss (income) on acquisitions and divestitures, net
177
107
(7
)
Goodwill impairment
706
—
—
Asset impairments
—
11
4
Pension contributions
(12
)
(15
)
(8
)
Loss (gain) on pension and other postretirement plan remeasurements
(3
)
14
(2
)
Change in operating assets and liabilities(a)
(191
)
227
(58
)
Total cash flows provided by operating activities from continuing operations
$
134
$
462
$
294
(a)
Excludes changes resulting from operations acquired or sold.
Operating Activities - Operating Assets and Liabilities
The cash results during each year were primarily driven by net income (loss), excluding discontinued operation results, adjusted for certain non-cash items including depreciation and amortization (including debt issuance cost amortization), income (loss) on acquisitions and divestitures, net as well as changes in working capital, which are fluctuations within accounts receivable, inventory, trade payables and accrued expenses.
The following details certain changes in key operating assets and liabilities for the years ended September 30:
(In millions)
2025
2024
2023
Cash flows from assets and liabilities(a)
Accounts receivable
$
(3
)
$
96
$
58
Inventories
(28
)
79
(7
)
Trade and other payables
(63
)
56
(112
)
Other assets and liabilities
(97
)
(4
)
3
Change in operating assets and liabilities
$
(191
)
$
227
$
(58
)
(a)
Excludes changes resulting from operations acquired or sold.
M-26
Changes in net working capital accounted for outflows of $94 million in 2025, inflows of $231 in 2024, and outflows of $61 million in 2023, and were driven by the following:
•
Accounts receivable – Changes in accounts receivable resulted in outflows of $3 million, and inflows of $96 million and $58 million in 2025, 2024 and 2023, respectively. The U.S. Accounts Receivable Sales Program contributed to outflows of $12 million, inflows of $1 million, and outflows of $40 million 2025, 2024 and 2023, respectively. The Foreign Accounts Receivable Sales Program contributed to outflows of $6 million and inflows of $104 million in 2025 and 2024, respectively. Sales volumes in each period and activity from the U.S. and Foreign Accounts Receivable Sales Program were the main drivers of changes between periods.
•
Inventory – Changes in inventory resulted in cash outflows of $28 million in 2025, inflows of $79 million in 2024 and outflows of $7 million in 2023 and were primarily driven by inventory production levels and volumes.
•
Trade and other payables – Changes in trade and other payables resulted in cash outflows of $63 million in 2025, cash inflows of $56 million in 2024, and outflows of $112 million in 2023, respectively, and primarily related to restructuring activity, divestitures and the timing of certain other payments, most notably lower incentive plan payments for 2023 paid in 2024.
The remaining cash outflows of $97 million and $4 million, and inflows of $3 million in 2025, 2024 and 2023, respectively, were primarily due to income taxes paid or income tax refunds, interest paid, and adjustments to certain accruals and other long-term assets and liabilities such as payments associated with environmental remediation. 2025 includes the impact of refundable income taxes recorded within the current year that will be received in early fiscal 2026 in the amount of $103 million.
Investing activities
The following summarizes the cash flows associated with Ashland’s investing activities for the years ended September 30:
(In millions)
2025
2024
2023
Cash flows provided (used) by investing activities from continuing operations
Additions to property, plant and equipment
$
(98
)
$
(137
)
$
(170
)
Proceeds from disposal of property, plant and equipment
16
—
11
Proceeds from sale or restructuring of operations
16
26
—
Proceeds from settlement of company-owned life insurance contracts
12
1
6
Company-owned life insurance payments
(5
)
(5
)
(5
)
Funds restricted for specific transactions
(8
)
(5
)
(9
)
Reimbursement from restricted investments
62
79
58
Proceeds from sale of securities
56
53
47
Purchase of securities
(54
)
(53
)
(47
)
Other investing cash flows
—
(10
)
—
Total cash flows used by investing activities from continuing operations
$
(3
)
$
(51
)
$
(109
)
The significant cash investing activities for 2025 primarily related to cash outflows of $98 million for capital expenditures and $8 million restricted for investment trust purposes for environmental remediation. Additionally, there were inflows of $16 million from proceeds from the sale of the Avoca business, $16 million of proceeds from the sale of land property, $12 million of proceeds from settlement of company-owned life insurance contracts and reimbursements of $62 million from the restricted renewable annual investment trusts.
The significant cash investing activities for 2024 primarily related to cash outflows of $137 million for capital expenditures, $10 million for lease asset acquisition and $5 million restricted for investment trust purposes for environmental remediation. Additionally, there were inflows of $26 million from the sale of the Nutraceuticals business and reimbursements of $79 million from the restricted renewable annual investment trusts.
The significant cash investing activities for 2023 primarily related to cash outflows of $170 million for capital expenditures and $9 million restricted for investment trust purposes for environmental remediation. Additionally, there were inflows of $11 million from the disposal of excess corporate property, which were used to provide additional funding to the environmental trust, and reimbursements of $58 million from the restricted renewable annual investment trusts.
M-27
Financing activities
The following summarizes the cash flows associated with Ashland’s financing activities for the years ended September 30:
(In millions)
2025
2024
2023
Cash flows provided (used) by financing activities from continuing operations
Proceeds from (repayment of) short-term debt
—
(16
)
16
Repurchase of common stock
(100
)
(380
)
(300
)
Cash dividends paid
(76
)
(78
)
(76
)
Stock based compensation employee withholding taxes paid in cash
(3
)
(5
)
(11
)
Total cash flows used by financing activities from continuing operations
$
(179
)
$
(479
)
$
(371
)
Significant cash financing activities for 2025 included outflows of $100 million for common stock repurchases and cash dividends paid of $1.64 per share, for a total of $76 million. See Note N of the Notes to Consolidated Financial Statements for additional information.
Significant cash financing activities for 2024 included outflows of $380 million for common stock repurchases, short-term debt repayment of $16 million, and cash dividends paid of $1.58 per share, for a total of $78 million. See Note N of the Notes to Consolidated Financial Statements for additional information.
Significant cash financing activities for 2023 included outflows of $300 million for common stock repurchases and cash dividends paid of $1.44 per share, for a total of $76 million. See Note N of the Notes to Consolidated Financial Statements for additional information.
Cash provided (used) by discontinued operations
The following summarizes the cash flows associated with Ashland’s discontinued operations for the years ended September 30:
(In millions)
2025
2024
2023
Cash provided (used) by discontinued operations
Operating cash flows
$
(40
)
$
(51
)
$
(51
)
Total cash provided (used) by discontinued operations
$
(40
)
$
(51
)
$
(51
)
Cash outflows for discontinued operations in 2025, 2024 and 2023 primarily related to retained liabilities for asbestos and environmental claims directly related to divested businesses that have qualified as discontinued operations. Asbestos net payments were $36 million, $39 million and $42 million in 2025, 2024 and 2023, respectively. Environmental net payments were $4 million, $6 million and $7 million, respectively. The remaining net cash outflows in each period primarily relate to tax and other post closing adjustments.
M-28
Free Cash Flow and other liquidity resources
The following represents Ashland’s calculation of Free Cash Flow and Ongoing Free Cash Flow for the periods presented. Free Cash Flow does not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.
Years Ended September 30
(In millions)
2025
2024
2023
Total cash flows provided by operating activities from continuing operations
$
134
$
462
$
294
Less:
Additions to property, plant and equipment
(98
)
(137
)
(170
)
Free Cash Flow
36
325
124
Cash (inflows) outflows from U.S. Accounts Receivable Sales Program(a)
12
(1
)
40
Cash (inflows) outflows from Foreign Accounts Receivable Sales Program(b)
6
(104
)
—
Restructuring-related payments(c)
34
14
8
Environmental and related litigation payments(d)
39
36
45
Ongoing Free Cash Flow
$
127
$
270
$
217
Net income (loss)
(845
)
169
178
Adjusted EBITDA(e)
401
459
459
Operating Cash Flow Conversion(f)
Not meaningful
273
%
165
%
Ongoing Free Cash Flow Conversion(g)
32
%
59
%
47
%
(a)
Represents activity associated with the U.S. Accounts Receivable Sales Program impacting each period presented.
(b)
Represents activity associated with the Foreign Accounts Receivable Sales Program impacting each period presented.
(c)
Restructuring payments incurred during each period.
(d)
Represents cash outflows associated with environmental and related litigation payments which will be reimbursed by the environmental trust.
(e)
See Adjusted EBITDA reconciliation.
(f)
Operating Cash Flow Conversion is defined as Cash flows provided by operating activities from continuing operations divided by net income (loss).
(g)
Ongoing Free Cash Flow Conversion is defined as Ongoing Free Cash Flow divided by Adjusted EBITDA.
Working capital (current assets minus current liabilities, excluding long-term debt due within one year) amounted to $782 million and $705 million as of September 30, 2025 and 2024, respectively. The $77 million increase in working capital was driven by a higher trade working capital (accounts receivable and inventories minus trade and other payables and accrued expenses and other liabilities), including sales of foreign accounts receivables under the Foreign Accounts Receivable Sales Program, and other assets, partially offset by a reduction in cash and cash equivalent. The $143 million decrease in Ongoing Free Cash Flows between periods was primarily a result of increased trade working capital compared to the prior year. Liquid assets (cash, cash equivalents and accounts receivable) amounted to 108% and 111% of current liabilities as of September 30, 2025 and 2024, respectively.
The following summary reflects Ashland’s cash, cash equivalents, investment securities and unused borrowing capacity as of:
September 30
(In millions)
2025
2024
2023
Cash, cash equivalents and investment securities
Cash and cash equivalents
$
215
$
300
$
417
Restricted investments(a)
347
368
367
Unused borrowing capacity
Revolving credit facility
$
596
$
596
$
594
2018 accounts receivable securitization (foreign)
NA
NA
104
U.S Accounts Receivable Sales Program
—
—
—
Foreign Accounts Receivable Sales Program
—
—
—
(a)
Includes $231 million, $248 million and $243 million related to the Asbestos trust and $116 million, $120 million and $124 million related to the Environmental trust as of September 30, 2025, 2024 and 2023 respectively.
M-29
The borrowing capacity remaining under the 2022 Credit Agreement was $596 million, which reflects the full $600 million Revolving Credit Facility less a reduction of $4 million for letters of credit outstanding at September 30, 2025. In total, Ashland’s available liquidity position, which includes cash and cash equivalents, the revolving credit facility, and accounts receivable securitization facilities, was $811 million at September 30, 2025, $896 million at September 30, 2024, and $1,115 million at September 30, 2023. Ashland had zero available liquidity under the U.S. and Foreign Accounts Receivable Sales Program as of September 30, 2025. Ashland also maintained $347 million of restricted investments at September 30, 2025 to pay for future asbestos claims and environmental remediation and related litigation.
Capital resources
Debt
The following summary reflects Ashland’s debt as of:
September 30
(In millions)
2025
2024
Short-term debt
$
—
$
—
Long-term debt (less debt issuance cost discounts)(a)
1,384
1,349
Total debt
$
1,384
$
1,349
(a)
Includes $10 million and $12 million of debt issuance cost discounts as of September 30, 2025 and 2024, respectively.
Ashland continues to maintain the 2022 Credit Agreement which provides for a $600 million five-year revolving credit facility. Proceeds of borrowings under the 2022 Revolving Credit Facility provide ongoing working capital and are used for other general corporate purposes.
Debt as a percent of capital employed was 42% at September 30, 2025 and 32% at September 30, 2024. At September 30, 2025, Ashland’s total debt had an outstanding principal balance of $1,419 million, discounts of $25 million and debt issuance costs of $10 million. Ashland has no long-term debt (excluding debt issuance costs) maturing within the next year, $4 million due in fiscal 2027, $586 million due in fiscal 2028, $97 million in 2029, and zero in 2030.
Credit Agreements and Refinancing
2022 Credit Agreement
During July 2022, Ashland, through two of its subsidiaries, enacted an amendment to the 2020 credit agreement. The amended credit agreement (the 2022 Credit Agreement) provides for a $600 million five-year revolving credit facility (the 2022 Revolving Credit Facility). The 2022 Credit Agreement and the obligations of Ashland Services B.V. under the 2022 Revolving Credit Facility are guaranteed by Ashland.
At Ashland’s option, loans issued under the 2022 Credit Agreement will bear interest at (a) in the case of loans denominated in U.S. dollars, either Term SOFR or an alternate base rate and (b) in the case of loans denominated in Euros, EURIBOR, in each case plus the applicable interest rate margin. Loans will initially bear interest at Term SOFR or EURIBOR plus 1.250% per annum, in the case of Term SOFR borrowings or EURIBOR borrowings, respectively, or at the alternate base rate plus 0.250% per annum, in the case of alternate base rate borrowings, through and including the date of delivery of a quarterly compliance certificate and thereafter the interest rate will fluctuate between Term SOFR or EURIBOR plus 1.250% per annum and Term SOFR or EURIBOR plus 1.750% per annum (or between the alternate base rate plus 0.250% per annum and the alternate base rate plus 0.750% per annum), based upon the Consolidated Net Leverage Ratio (as defined in the 2022 Credit Agreement) at such time. Term SOFR borrowings are subject to a credit spread adjustment of 0.10% per annum. In addition, the Company will initially be required to pay fees of 0.125% per annum on the daily unused amount of the 2022 Revolving Credit Facility through and including the date of delivery of a quarterly compliance certificate, and thereafter the fee rate will fluctuate between 0.125% and 0.275% per annum, based upon the Consolidated Net Leverage Ratio. Borrowings under the 2022 Credit Agreement may be prepaid at any time without premiums.
The 2022 Credit Agreement contains financial covenants for leverage and interest coverage ratios akin to those in effect under the 2020 Credit Agreement. The 2022 Credit Agreement contains usual and customary representations, warranties and
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affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional indebtedness, further negative pledges, investments, mergers, sale of assets and restricted payments, and other customary limitations.
Debt repayments and repurchases
Cash repatriation
During 2025 and 2024, Ashland repatriated approximately $403 million and $305 million, respectively, in cash.
Accounts receivable facilities and off-balance sheet arrangements
U.S. accounts receivable sales program
On March 17, 2021, a wholly-owned, bankruptcy-remote special purpose entity and consolidated Ashland subsidiary (SPE) entered into an agreement with a group of entities (buyers) to sell certain trade receivables, without recourse beyond the pledged receivables, of two other U.S. based Ashland subsidiaries. On April 14, 2023, Ashland entered into Second and Third Amendments associated with this current program, whereby the scheduled termination date was extended to April 14, 2025 and the buyer's limits were reduced to allow for transfer of whole receivables up to a limit set at $115 million between February and October of each year and up to $100 million all other times (a level 1 fair value measurement). On September 13, 2024, Ashland entered into a Fourth Amendment associated with this current program, whereby the scheduled termination date was extended to September 11, 2026 and the buyer's limits were reduced to allow for transfer of whole receivables up to a limit set at $80 million between September 13, 2024 to (and including) December 31, 2024 and up to $70 million from January 1, 2025 through the termination date of the agreement. Ashland’s continuing involvement is limited to servicing the accounts receivable, including billing, collections and remittance of payments to the buyers as well as a limited guarantee on over-collateralization.
Ashland determined that any accounts receivable transferred under this agreement are put presumptively beyond the reach of Ashland and its creditors, even in bankruptcy or other receivership. Ashland received a true sale at law and non-consolidation opinions to support the legal isolation of these accounts receivable. Ashland accounts for the accounts receivable transferred to buyers as sales. Ashland recognizes any gains or losses based on the excess of proceeds received net of buyer’s discounts and fees compared to the carrying value of the assets. Proceeds received, net of buyer’s discounts and fees, are recorded within the operating activities of the Statements of Consolidated Cash Flows. Losses on sale of assets, including related transaction expenses are recorded within the net interest and other expense (income) caption of the Statements of Consolidated Comprehensive Income (Loss). Ashland regularly assesses its servicing obligations and records them as assets or liabilities when appropriate. Ashland also monitors its obligation with regards to the limited guarantee and records the resulting guarantee liability when warranted. When applicable, Ashland discloses the amount of the receivable that serves as over-collateralization as a restricted asset.
Ashland recognized a loss of $3 million within the Statements of Consolidated Comprehensive Income (Loss) for 2025, 2024 and 2023, respectively, within the net interest and other expense (income) caption associated with sales under the program. Ashland has recorded $59 million of sales against the buyer’s limit, which was $59 million at September 30, 2025, compared to $71 million of sales against the buyer's limit, which was $71 million at September 30, 2024. Ashland transferred $75 million and $85 million in accounts receivable to the SPE as of September 30, 2025 and 2024, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of September 30, 2025 and 2024 of less than $1 million.
For the years ended September 30, 2025, 2024, and 2023, the gross cash proceeds received for accounts receivable transferred and derecognized were $388 million, $323 million, and $217 million, respectively, of which $400 million, $322 million, $241 million, were collected by Ashland in our capacity as a servicer of the accounts receivable and remitted to the buyer. The difference between accounts receivable transferred and derecognized versus collected of $12 million, $1 million and $24 million for the years ended September 30, 2025, 2024, and 2023, respectively, represents the impact of a net reduction in account receivable sales volume during 2025, a net increase in 2024, and a net decrease during 2023.
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Foreign Accounts Receivable Sales Program
On October 19, 2023, Ashland entered, through an Ireland based, wholly-owned, bankruptcy-remote consolidated special purpose entity (the "SPE"), into a three-year agreement with a group of entities (buyers) to sell certain trade receivables, without recourse beyond the pledged receivables, of certain wholly-owned Ashland subsidiaries (Foreign Accounts Receivable Sales Program) primarily in Europe. Under the agreement, Ashland can transfer whole receivables up to a limit established by the buyer, which is currently set at €125 million (a level 1 fair value measurement). Ashland’s continuing involvement is limited to servicing the accounts receivable, including billing, collections and remittance of payments to the buyers as well as a limited guarantee on over-collateralization.
Ashland determined that any accounts receivable transferred under this agreement are put presumptively beyond the reach of Ashland and its creditors, even in bankruptcy or other receivership. Ashland received true sale at law and non-consolidation opinions from independent qualified legal advisors in the jurisdiction of each originating subsidiary to support the legal isolation of these accounts receivable. Consequently, Ashland accounts for accounts receivable transferred to buyers as part of this agreement as sales.
Ashland recognized a loss of $5 million and $3 million within the Statements of Consolidated Comprehensive Income (Loss) for 2025 and 2024, respectively, within the net interest and other expense (income) caption associated with sales under the program. Ashland has recorded $103 million of sales against the buyer’s limit, which was $103 million at September 30, 2025, compared to $104 million of sales against the buyer's limit, which was $104 million at September 30, 2024. Ashland transferred $142 million and $155 million in accounts receivable to the SPE as of September 30, 2025 and 2024, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of September 30, 2025 and 2024 of less than $1 million.
For the years ended September 30, 2025 and 2024, the gross cash proceeds received for accounts receivable transferred and derecognized were $528 million and $104 million, respectively, of which $534 million and zero were collected by Ashland in our capacity as a servicer of the accounts receivable and remitted to the buyer. The difference between accounts receivable transferred and derecognized versus collected of $6 million and $104 million for the years ended September 30, 2025 and 2024, respectively, represents the impact of a net reduction and a net increase in accounts receivable sales volume during each year, respectively.
Supply Chain Finance Program
During April 2024, Ashland authorized a financing program offered through JP Morgan and Taulia Alliance. Under this program, JP Morgan and its affiliates may purchase certain confirmed receivables directly from suppliers pursuant to the terms of a separate arrangement entered into between JPMorgan and Taulia Alliance and such suppliers. There were no changes to Ashland's standard payment terms with its suppliers in connection with this program. Ashland provides no guarantees to JP Morgan and Taulia Alliance under this program. The program was implemented during June 2025 and has been actively offered to suppliers. As of September 30, 2025, participation in the program was not significant. There were less than $1 million of confirmed invoices under this program for the year ended September 30, 2025.
Other debt
At September 30, 2025 and 2024, Ashland held other debt totaling $76 million and $71 million, respectively, comprised primarily of the 6.50% notes due 2029 and other notes.
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Available borrowing capacity and liquidity
The borrowing capacity remaining under the $600 million 2022 Revolving Credit Facility was $596 million due to a reduction of $4 million for letters of credit outstanding at September 30, 2025. Ashland's total borrowing capacity at September 30, 2025 was $596 million.
Additionally, Ashland has no available liquidity under its current U.S. and Foreign Accounts Receivable Sales Program.
Covenants related to current Ashland debt agreements
Ashland’s debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of September 30, 2025, Ashland was in compliance with all debt agreement covenant restrictions.
The maximum consolidated net leverage ratio permitted under the 2022 Credit Agreement is 4.0. The 2022 Credit Agreement defines the consolidated net leverage ratio as the ratio of consolidated indebtedness minus unrestricted cash and cash equivalents to consolidated EBITDA (Covenant Adjusted EBITDA) for any measurement period. In general, the 2022 Credit Agreement defines Covenant Adjusted EBITDA as net income (loss) plus consolidated interest charges, taxes, depreciation and amortization expense, fees and expenses related to capital market transactions and proposed or actual acquisitions and divestitures, restructuring and integration charges, certain environmental charges, non-cash stock and equity compensation expense, and any other nonrecurring expenses or losses that do not represent a cash item in such period or any future period; less any non-cash gains or other items increasing net income (loss). The computation of Covenant Adjusted EBITDA differs from the calculation of EBITDA and Adjusted EBITDA, which have been reconciled in the "Use of Non-GAAP Financial Measures" section. In general, consolidated indebtedness includes debt plus all purchase money indebtedness, banker’s acceptances and bank guaranties, deferred purchase price of property or services, attributable indebtedness and guarantees. At September 30, 2025, Ashland’s calculation of the consolidated net leverage ratio was 2.8.
The minimum required consolidated interest coverage ratio under the 2022 Credit Agreement is 3.0. The 2022 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to consolidated interest charges for any measurement period. At September 30, 2025, Ashland’s calculation of the consolidated interest coverage ratio was 6.5.
Any change in Covenant Adjusted EBITDA of $100 million would have an approximate 0.5x effect on the consolidated net leverage ratio and a 1.6x effect on the consolidated interest coverage ratio. Any change in consolidated indebtedness of $100 million would affect the consolidated net leverage ratio by approximately 0.2x.
Ashland credit ratings
Ashland’s corporate credit ratings remained unchanged at BB+ by Standard & Poor’s and Ba1 by Moody’s Investor Services. As of September 30, 2025, both Moody’s Investor Services and Standard & Poor’s outlook remained at stable. Subsequent changes to these ratings or outlook may have an effect on Ashland’s borrowing rate or ability to access capital markets in the future.
Additional capital resources
Ashland cash projection
Ashland believes that cash flow from operations, availability under existing credit facilities and arrangements, current cash, cash equivalents, investment balances and the ability to obtain other financing, if necessary, will provide adequate cash funds for the Company’s foreseeable working capital needs, capital expenditures at existing facilities, pending acquisitions, dividend payments and debt service obligations. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. The timing and size of any new business ventures or acquisitions that the Company may complete may also impact its cash requirements.
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Ashland expects the following material cash funding requirements from known contractual obligations at September 30, 2025:
Less than
More than
(In millions)
Total
1 year
1 year
Raw material and service contract purchase obligations(a)
$
74
$
56
$
18
Employee benefit obligations(b)
70
13
57
Operating lease obligations(c)
118
23
95
Interest payments(d)
507
61
446
Unrecognized tax benefits(e)
65
—
65
One-time transition tax(f)
13
13
—
Total contractual obligations
$
847
$
166
$
681
Other commitments
Letters of credit(g)
$
52
$
52
$
—
(a)
Includes raw material and service contracts where minimal committed quantities and prices are fixed.
(b)
Includes estimated funding of Ashland’s qualified U.S. and non-U.S. pension plans for 2025 as well as projected benefit payments through 2031 under Ashland’s unfunded pension and other postretirement benefit plans. Excludes the benefit payments from the pension plan trust funds. See Note L of the Notes to Consolidated Financial Statements for additional information.
(c)
Includes leases for office buildings, transportation equipment, warehouses and storage facilities and other equipment. For further information, see Note J of the Notes to Consolidated Financial Statements.
(d)
Includes interest expense on both variable and fixed rate debt assuming no prepayments. Variable interest rates have been assumed to remain constant through the end of the term at rates that existed as of September 30, 2025.
(e)
Due to uncertainties in the timing of the effective settlement of tax positions with respect to taxing authorities, Ashland is unable to determine the timing of payments related to noncurrent unrecognized tax benefits, including interest and penalties. Therefore, these amounts were included in the “More than 1 year” column.
(f)
As a result of the Tax Act enacted during fiscal year 2017, Ashland has currently recorded a $13 million liability for the one-time transition tax.
(g)
Ashland issues various types of letters of credit as part of its normal course of business.
Total Equity
Total equity was $1,904 million and $2,868 million at September 30, 2025 and September 30, 2024, respectively. During 2025, there were decreases of $845 million for net income (loss), $101 million for repurchases of common stock (which includes $1 million in excise tax on stock repurchases), and $77 million for dividends paid during 2025. The decreases were partially offset by increases of $45 million for deferred translation gains, $12 million for common shares issued under stock incentive plans, and $2 million increase for unrealized gains on commodity hedges.
2023 Stock repurchase program
On June 28, 2023, Ashland's board of directors ("the Board") authorized a new evergreen $1 billion common share repurchase program ("2023 Stock Repurchase Program"). The new authorization terminated and replaced the 2022 Stock Repurchase Program, which had $200 million outstanding at the date of termination. As of September 30, 2025, $520 million remained available for repurchase under the 2023 Stock Repurchase Program
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The following table provides the stock repurchase activity for years ended September 30:
(In millions, except per share amounts)
2025
2024
2023
Number of shares repurchased
1.50
4.30
3.10
Weighted-average price per share(a)
$
64.90
$
88.70
$
97.33
Aggregate purchase price(a)
$
100
$
380
$
300
Program
2023 Stock Repurchase Program
2023 Stock Repurchase Program
2022 Stock Repurchase Program
(a)
Includes transactions costs.
Stockholder dividends
Ashland paid dividends per common share of $1.64, $1.58 and $1.44 during 2025, 2024 and 2023, respectively.
In May 2025, the Board announced a quarterly cash dividend of 41.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 40.5 cents per share. The dividend was paid in the third and fourth quarter of fiscal 2025.
In May 2024, the Board announced a quarterly cash dividend of 40.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 38.5 cents per share. The dividend was paid in the third and fourth quarter of fiscal 2024.
In May 2023, the Board announced a quarterly cash dividend of 38.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 33.5 cents per share. The dividend was paid in the third and fourth quarter of fiscal 2023.
In May 2022, the Board announced a quarterly cash dividend of 33.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 30.0 cents per share. This dividend was paid in the third and fourth quarters of fiscal 2022 and the first and second quarters of fiscal 2023.
Capital expenditures
Capital expenditures were $98 million for 2025 and averaged $135 million during the last three years. Ashland expects capital expenditures over the next three years to average approximately $100 million per year. A summary of capital expenditures by reportable segment during the years ended September 30, are as follows:
(In millions)
2025
2024
2023
Life Sciences
$
49
$
61
$
46
Personal Care
7
11
20
Specialty Additives
34
61
99
Intermediates
3
2
3
Unallocated and Other
5
2
2
Total capital expenditures
$
98
$
137
$
170
A summary of the capital employed in Ashland’s current operations, which is calculated by adding equity to capital investment, as of September 30 is as follows.
(In millions)
2025
2024
Capital employed(a)
Life Sciences
$
1,377
$
1,696
Personal Care
703
882
Specialty Additives
904
1,351
Intermediates
97
101
(a)
Excludes the assets and liabilities classified within unallocated and other which primarily includes debt and other long-term liabilities such as asbestos and pension. The net liability in unallocated and other was $1,175 million and $1,162 million as of September 30, 2025 and 2024, respectively.
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OFF-BALANCE SHEET ARRANGEMENTS
As part of its normal course of business, Ashland is a party to various financial guarantees and other commitments. These arrangements involve elements of performance and credit risk that are not included in the Consolidated Balance Sheets. The possibility that Ashland would have to make actual cash expenditures in connection with these obligations is largely dependent on the performance of the guaranteed party, or the occurrence of future events that Ashland is unable to predict. The fair value of these guarantees is not significant.
NEW ACCOUNTING PRONOUNCEMENTS
For a discussion and analysis of recently issued accounting pronouncements and its impact on Ashland, see Note A of the Notes to Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
The preparation of Ashland’s Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, environmental remediation, asbestos litigation, the accounting for goodwill and other indefinite-lived intangible assets and income taxes. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Management has reviewed the estimates affecting these items with the Audit Committee of Ashland’s Board of Directors.
Environmental remediation
Ashland is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively environmental remediation) at multiple locations. At September 30, 2025, such locations included 53 sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 107 current and former operating facilities and about 1,225 service station properties, of which 14 are being actively remediated.
Ashland’s reserves for environmental remediation and related environmental litigation amounted to $226 million at September 30, 2025 compared to $221 million at September 30, 2024, of which $179 million at September 30, 2025 and $164 million at September 30, 2024, were classified in other noncurrent liabilities on the Consolidated Balance Sheets. The remaining reserves were classified in accrued expenses and other liabilities on the Consolidated Balance Sheets.
The 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, 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 regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental remediation reserves based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. At September 30, 2025 and 2024, Ashland’s recorded receivable for these probable insurance recoveries was $14 million and $13 million, respectively, of which $12 million and $11 million was classified in other noncurrent assets on the Consolidated Balance Sheets.
During 2025, 2024 and 2023, Ashland recognized $50 million, $54 million and $56 million of expense, respectively, for certain environmental liabilities related to normal ongoing remediation cost estimate updates for sites, which is consistent with Ashland’s historical environmental accounting policy. See Note M of the Notes to Consolidated Financial Statements for additional information.
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Environmental remediation reserves are subject to 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 and the extent of required cleanup efforts under existing environmental regulations. 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 $495 million. The largest reserve for any site is 21% of the total environmental remediation reserves as of September 30, 2025.
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, Ashland has retained third party actuarial experts Gnarus Advisors, LLC ("Gnarus"). The methodology used by Gnarus to project future asbestos costs is based largely on recent experience, including claim-filing and settlement rates, disease mix, 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, Gnarus 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 litigation reserves liabilities and receivables are recorded on an after-tax basis within the discontinued operations caption in the Statements of Consolidated Comprehensive Income (Loss). See Note M of the Notes to Consolidated Financial Statements for additional information.
Ashland asbestos-related litigation
The claims alleging personal injury caused by exposure to asbestos asserted against Ashland result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley, a former subsidiary. The amount and timing of settlements and number of open claims can fluctuate from period to period.
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. Ashland reviews this estimate and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 40-year model developed with the assistance of Gnarus.
During the most recent update completed during 2025, it was determined that the liability for Ashland asbestos-related claims should be increased by $16 million. Total reserves for asbestos claims were $258 million at September 30, 2025 compared to $274 million at September 30, 2024.
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 litigation reserves based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. Substantially all of the estimated receivables from insurance companies are expected to be due from domestic insurers, all of which are solvent.
At September 30, 2025, Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $95 million (excluding the Hercules receivable for asbestos claims). Receivables from insurers amounted to $97 million at September 30, 2024. During 2025, the annual update of the model used for purposes of valuing the asbestos litigation reserves and its impact on valuation of future recoveries from insurers, was completed. This model update resulted in a $5 million increase in the receivable for probable insurance recoveries.
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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.
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. Ashland reviews this estimate and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 40-year model developed with the assistance of Gnarus. As a result of the most recent annual update of this estimate completed during 2025, it was determined that the liability for Hercules asbestos-related claims should be increased by $10 million. Total reserves for asbestos claims were $177 million at September 30, 2025 compared to $185 million at September 30, 2024.
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 litigation reserves have been partially offset by probable insurance recoveries. Ashland has estimated the value of probable insurance recoveries associated with its asbestos litigation reserves based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. The estimated receivable consists exclusively of solvent domestic insurers.
As of September 30, 2025 and 2024, the receivables from insurers amounted to $48 million and $50 million, respectively. During 2025, the annual update of the model used for purposes of valuing the asbestos litigation reserves and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $4 million increase in the receivable for probable insurance recoveries.
Asbestos litigation cost projection
Projecting future asbestos costs is subject to numerous variables that are difficult to predict. In addition to the uncertainties surrounding the number of claims that might be received, other variables include the type and severity of the disease alleged by each claimant and the related costs incurred in resolving those claims, mortality rates, dismissal rates, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case. 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 litigation 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 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 $382 million for the Ashland asbestos-related litigation (current reserve of $258 million) and approximately $262 million for the Hercules asbestos-related litigation (current reserve of $177 million), depending on the combination of assumptions selected in the various models. While the timeframe used in Ashland's models for projecting asbestos liabilities generally decreases over time based on the expected lifetime of the liabilities, these models have been consistently applied within all periods presented. 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.
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Accounting for goodwill and other indefinite-lived intangible assets
Ashland accounts for goodwill and other indefinite-lived intangible assets acquired in a business combination in conformity with current accounting guidance which does not allow for goodwill and indefinite-lived intangible assets to be amortized.
Goodwill
Ashland reviews goodwill for impairment annually as of July 1 or when events and circumstances indicate an impairment may have occurred. Ashland tests goodwill for impairment by comparing the estimated fair value of its reporting units to the related carrying value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. Reporting units are defined as either operating segments or one level below the operating segments for which discrete financial information is available and reviewed by management. Ashland determined that its reporting units are Life Sciences, Personal Care, Specialty Additives and Intermediates, which is consistent with prior years.
Ashland makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group. Discounted cash flow models are reliant on various assumptions, including projected business results, long-term growth factors and weighted-average cost of capital. Management judgment is involved in estimating these variables, and they include uncertainties since they are forecasting future events. Ashland performs sensitivity analyses by using a range of inputs to confirm the reasonableness of the long-term growth rate and weighted average cost of capital estimates. Additionally, Ashland compares the indicated equity value to Ashland’s market capitalization and evaluates the resulting implied control premium/discount to determine if the estimated enterprise value is reasonable.
During the third quarter of fiscal 2025, Ashland experienced a continued decline in the market price of its common stock. Ashland also experienced slowing growth due to weakening macroeconomic environment that is dampening consumer sentiment and demand globally which resulted in lower growth and lower margins for the Life Sciences and Specialty Additives reporting units than what was previously forecasted. These factors led Ashland to determine that triggering events occurred, and a quantitative goodwill impairment assessment was performed during the third quarter of fiscal 2025.
Following the completion of this quantitative analysis, Ashland concluded that the fair value of Personal Care reporting unit exceeded its carrying value by more than 100%. The Intermediates reporting unit has no associated goodwill. The carrying value of the Life Sciences and the Specialty Additives reporting units exceeded their fair value, resulting in non-cash goodwill impairment charges of $375 million and $331 million, respectively, for a total goodwill impairment charge of $706 million, which was recorded within the goodwill impairment caption of the Statement of Consolidated Comprehensive Income (Loss) for the year ended September 30, 2025.
On July 1, 2025, the date of our annual goodwill impairment assessment, Ashland evaluated each reporting unit using a qualitative approach focusing on any additional changes in market conditions, performances versus forecast and strategic initiatives. Particular attention was given to forward looking macroeconomic trends and forecasts, recent financial results, earnings multiples for guideline public companies in each reporting unit's industry peer group and sensitivity analysis for each reporting units discounted cash flow model. There was no additional impairment identified as part of the July 1, 2025 annual goodwill impairment assessment. No subsequent indicators of impairment had been identified during the fourth quarter of fiscal 2025. For further information, see Note G of the Notes to Consolidated Financial Statements.
The below table provides a sensitivity analysis for Life Sciences and Specialty Additives reporting units remaining goodwill, utilizing reasonably possible changes in the assumptions for the shorter term and residual growth rates and the discount rate, to demonstrate the potential impacts to the estimated fair values. The below table provides, in isolation, the estimated fair value impacts related to a 25-basis point increase to discount rate or a 25-basis point decrease to residual growth rates, both of which would result in incremental impairment charges to the Life Sciences and Specialty Additives reporting units.
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Approximate Percent Change in Estimated Fair Value
+25 bps
-25 bps
Discount Rate
Growth Rate
Life Sciences
-2.5%
-1.3%
Specialty Additives
-2.6%
-1.5%
Assumptions inherent in the valuation methodologies include estimates of future projected business results (principally sales and EBITDA), long-term growth rates, and the weighted-average cost of capital. Significant assumptions utilized in the impairment analysis included the weighted-average cost of capital, ranging between 12.50% and 13.75%, and terminal growth rates, ranging between 2.0% and 4.0% depending on the reporting unit. For further information, see Note G of the Notes to Consolidated Financial Statements.
Other indefinite-lived intangible assets
Other indefinite-lived intangible assets include certain trademarks and trade names. Ashland reviews these intangible assets for possible impairment annually as of July 1 or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, the asset is written down to its fair value and the amount of the write down is the impairment charge.
Ashland tests these assets using a “relief-from-royalty” valuation method to determine the fair value. Assumptions inherent in the valuation methodologies include, but are not limited to, future projected business results, growth rates, the weighted-average cost of capital for a market participant, and royalty rates. In conjunction with the triggering events described above for goodwill, Ashland tested its indefinite-lived intangible assets for impairment during the third quarter of fiscal 2025. Ashland’s quantitative approach models did not indicate any impairment, as each indefinite-lived intangible asset’s fair value exceeded its carrying values. Ashland has two indefinite-lived intangible assets related to trademarks and trade names. Significant assumptions utilized in the impairment analysis included the weight-average cost of capital, ranging between 13.5% and 14.0%, royalty rates of 2.0%, and terminal growth rates, ranging between 3.2% and 3.3%. One of the two indefinite-lived intangible assets fair value exceeded its carrying value by more than 75%, while the second had a fair value slightly above the carrying value. A 25-basis point increase to the discount rate or a 25-basis point decrease to the residual growth rate would have resulted in an impairment for the second indefinite-lived intangible asset.
On July 1, 2025, the date of our annual impairment assessment, Ashland evaluated its indefinite-lived intangible assets for impairment using a qualitative approach focusing on the key assumptions used as part of the third quarter quantitative approach. There was no impairment identified as part of the July 1, 2025 annual other indefinite-lived intangible asset impairment assessment. No subsequent indicators of impairment had been identified during the fourth quarter of fiscal 2025.
Ashland’s assessment of an impairment on any of these assets classified currently as having indefinite lives, including goodwill, could change in future periods if significant events happen and/or circumstances change that affect the previously mentioned assumptions. Assumptions inherent in the valuation methodologies include, but are not limited to, such estimates as future projected business results, growth rates, the weighted average cost of capital for a market participant, and royalty rates. For further information, see Note G of the Notes to Consolidated Financial Statements.
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Income taxes
Ashland is subject to income taxes in the United States and numerous foreign jurisdictions. Judgment in the forecasting of taxable income using historical and projected future operating results is required in determining Ashland’s provision for income taxes and the related assets and liabilities. The provision for income taxes includes income taxes paid, currently payable or receivable, and deferred taxes. Under U.S. GAAP, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss and credit carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the enactment date occurs. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. Deferred taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are indefinitely reinvested. In the event that the actual outcome of future tax consequences differs from Ashland’s estimates and assumptions due to changes or future events such as tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation plans, the resulting change to the provision for income taxes could have a material effect on the Statements of Consolidated Comprehensive Income (Loss) and Consolidated Balance Sheets.
The recoverability of deferred tax assets and the recognition and measurement of uncertain tax positions are subject to various assumptions and judgment by Ashland. If actual results differ from the estimates made by Ashland in establishing or maintaining valuation allowances against deferred tax assets, the resulting change in the valuation allowance would generally impact earnings or other comprehensive income depending on the nature of the respective deferred tax asset. Additionally, the positions taken with regard to tax contingencies may be subject to audit and review by tax authorities, which may result in future taxes, interest and penalties. Positive and negative evidence is considered in determining the need for a valuation allowance against deferred tax assets, which includes such evidence as historical earnings, projected future earnings, tax planning strategies and expected timing of reversal of existing temporary differences.
In determining the recoverability of deferred tax assets, Ashland gives consideration to all available positive and negative evidence including reversals of deferred tax liabilities (other than those with an indefinite reversal period), projected future taxable income, tax planning strategies and recent financial operations. Ashland attaches the most weight to historical earnings due to their verifiable nature. In evaluating the objective evidence that historical results provide, Ashland considers three years of cumulative income or loss. In addition, Ashland has reflected increases and decreases in our valuation allowance based on the overall weight of positive versus negative evidence on a jurisdiction by jurisdiction basis.
EFFECTS OF INFLATION AND CHANGING PRICES
Ashland’s consolidated financial statements are prepared on the historical cost method of accounting in accordance with U.S. GAAP and, as a result, do not reflect changes in the purchasing power of the U.S. dollar. Monetary assets (such as cash, cash equivalents and accounts receivable) lose purchasing power as a result of inflation, while monetary liabilities (such as accounts payable and indebtedness) result in a gain, because they can be settled with dollars of diminished purchasing power. As of September 30, 2025, Ashland’s monetary assets exceed its monetary liabilities, leaving it currently more exposed to the effects of future inflation. While inflation rose significantly during 2022, it has to gradually decreased from fiscal 2023 to fiscal 2025. See Item 1A - Risk Factors for additional information.
Certain of the industries in which Ashland operates are capital-intensive, and replacement costs for its plant and equipment generally would substantially exceed their historical costs. Accordingly, depreciation and amortization expense would be greater if it were based on current replacement costs. However, because replacement facilities would reflect technological improvements and changes in business strategies, such facilities would be expected to be more productive than existing facilities, mitigating at least part of the increased expense.
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OUTLOOK
Ashland is issuing the following guidance for fiscal 2026, Ashland intends to deliver against these commitments with a focus on execution, consistency, and credibility.
Full-year fiscal 2026 guidance
•
Sales: $1,835 million to $1,905 million, reflecting organic growth of approximately one to five percent over the prior year.
•
Adjusted EBITDA: $400 million to $430 million.
•
Adjusted Diluted Earnings Per Share Excluding Intangibles Amortization Expense growth: double-digit-plus; reflecting operating improvement and Portfolio Optimization.
•
Ongoing Free Cash Flow Conversion: approximately 50 percent of Adjusted EBITDA; capital expenditures of approximately $100 million.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements including, without limitation, statements made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operation” ("MD&A"), within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “objectives,” “may,” “will,” “should,” “plans” and “intends” and the negative of these words or other comparable terminology. Ashland may from time to time make forward-looking statements in its Annual Report to Stockholders, quarterly reports and other filings with the Securities and Exchange Commission (SEC), news releases and other written and oral communications. These forward-looking statements are based on Ashland’s expectations and assumptions, as of the date such statements are made, regarding Ashland’s future operating performance and financial condition, as well as the economy and other future events or circumstances.
The risks and uncertainties we face which may cause our actual results to differ materially from the results expressed, projected, or implied in these forward-looking statements include, but are not limited to: Ashland’s aggressive growth goals and the extent to which such goals may be impacted by a failure to optimize our tangible and intangible assets, a failure to identify and integrate acquisition targets, any unexpected costs and liabilities associated with such acquisitions, and goodwill impairment; business disruptions stemming from natural, operational, and other catastrophic events, including disruptions to supply and logistics functions, manufacturing delays, and information technology system and network failures; climate change and related resource impacts; changes in consumer preferences and a reduction in demand for Ashland’s products; risks inherent in operating a global business, including tariffs and other trade policies, geopolitical instability and armed conflict, and challenges associated with hiring and managing a diverse workforce across countries with differing laws, regulations, and cultural practices; economic downturns and disruptions in the financial markets; Ashland’s substantial indebtedness, including the possibility that such indebtedness and related restrictive covenants may adversely affect our future cash flows, limit our ability to repay debt and obtain future financing, place Ashland at a competitive disadvantage, and make us more vulnerable to interest rate increases; our ability to develop and market new products and remain competitive in the markets in which we operate; our ability to pass increases in the costs of energy and raw materials to customers and to fulfill our contractual requirements with customers and vendors; downward pressures on prices and margins; the ability to attract and retain key employees and to provide for effective succession planning; cybersecurity risks, including disruptions to or failures in Ashland’s information technology systems and networks, malicious cyberattacks, and the inadvertent or accidental disclosure or loss of proprietary or sensitive information; Ashland’s ability to effectively protect and enforce its intellectual property rights; exposure to products liability claims; risks related to compliance with environmental, health, and safety regulations, including the potential for costly litigation, remediation, and settlement actions; exposure to pending and threatened asbestos-related litigation; changes in the legal and regulatory landscapes in which we operate; and changes in taxation or adverse tax rulings. These risks and uncertainties also include, but are not limited to, the risk factors set forth in Item 1A. “Risk Factors” to this Annual Report on Form 10-K, elsewhere in this Annual Report on Form 10-K, and in our other periodic reports filed with the SEC. Ashland believes its expectations and
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assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, Ashland undertakes no obligation to update publicly any forward-looking statements made in this Annual Report on Form 10-K whether as a result of new information, future events or otherwise. Information on Ashland’s website is not incorporated into or a part of this Annual Report on Form 10-K.