UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 333-211719
ASHLAND INC.
(a Delaware corporation)
I.R.S. No. 81-2587835
8145 Blazer Drive
Wilmington, Delaware 19808
Telephone Number (302) 995-3000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, par value $0.01 per share
ASH
New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
At June 30, 2026, there were 45,793,370 shares of Registrant’s Common Stock outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
Three months ended
Nine months ended
June 30
(In millions except per share data - unaudited)
2026
2025
Sales - Note P
$
497
463
1,365
1,347
Cost of sales - Note Q
327
331
943
957
Gross profit
170
132
422
390
Selling, general and administrative expense - Note Q
99
106
264
268
Research and development expense - Note Q
15
13
41
Intangibles amortization expense - Note G and Note Q
46
47
Equity and other income - Note Q
1
—
2
Goodwill impairment - Note G
706
Income (loss) on divestitures, net - Note B and Note Q
3
(165
)
Operating income (loss)
43
(708
76
(836
Net interest and other (income) expense
(8
(5
19
34
Other net periodic benefit (income) loss - Note K
(3
4
Income (loss) from continuing operations before income taxes
56
(704
60
(874
Income tax expense (benefit) - Note J
18
(19
Income (loss) from continuing operations
(719
42
(855
Loss from discontinued operations, net of income taxes - Note C
(25
(23
(22
Net income (loss)
16
(742
20
(877
PER SHARE DATA
Basic earnings (loss) per share - Note M
0.89
(15.70
0.91
(18.39
Loss from discontinued operations
(0.54
(0.51
(0.48
(0.46
0.35
(16.21
0.43
(18.85
Diluted earnings (loss) per share - Note M
COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss), net of tax
Unrealized translation gain (loss)
91
(6
Unrealized (loss) gain on commodity hedges
(2
(1
Other comprehensive income (loss) - Note N
90
48
Comprehensive income (loss)
(652
12
(829
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions - unaudited)
June 302026
September 302025
ASSETS
Current assets
Cash and cash equivalents
440
215
Accounts receivable, net(a) - Note H
256
242
Inventories - Note F
490
568
Other assets
180
Total current assets
1,292
1,205
Noncurrent assets
Property, plant and equipment
Cost
3,377
3,355
Accumulated depreciation
2,228
2,154
Net property, plant and equipment
1,149
1,201
Goodwill - Note G
700
705
Intangibles, net - Note G
513
563
Operating lease assets, net - Note I
100
103
Restricted investments - Note E
285
297
Asbestos insurance receivable, net(b) - Note L
139
127
Deferred income taxes
157
243
253
Total noncurrent assets
3,286
3,406
Total assets
4,578
4,611
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
198
189
Accrued expenses and other liabilities
208
213
Current operating lease obligations - Note I
21
Total current liabilities
424
423
Noncurrent liabilities
Long-term debt - Note H
1,374
1,384
Asbestos litigation reserves - Note L
399
389
31
Employee benefit obligations - Note K
88
96
Operating lease obligations - Note I
84
85
Other liabilities
308
299
Total noncurrent liabilities
2,284
Commitments and contingencies - Note I and L
Equity - Note N
1,870
1,904
Total liabilities and equity
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS
Loss from discontinued operations, net of income taxes
22
Adjustments to reconcile income (loss) from continuing operations to cash flows from operating activities:
Depreciation and amortization
141
187
Original issue discount and debt issuance costs amortization
6
5
Gain from sales of property, plant and equipment
(11
Income from affiliates
Stock based compensation expense
11
Loss from excess tax deduction on stock based compensation
Income from restricted investments
(28
(15
Loss on divestitures, net
176
Goodwill impairment
Pension contributions
(10
(9
(Gain) loss on pension and other postretirement plan remeasurements
Change in operating assets and liabilities
136
(106
Total cash flows provided by operating activities from continuing operations
295
94
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM CONTINUING OPERATIONS
Additions to property, plant and equipment
(51
(64
Proceeds from disposal of property, plant and equipment
Proceeds from sale of operations
Proceeds from settlement of Company-owned life insurance contracts
25
Company-owned life insurance payments
Funds restricted for specific transactions
Reimbursements from restricted investments
52
Proceeds from sale of securities
40
36
Purchases of securities
(40
(36
Total cash flows provided by investing activities from continuing operations
CASH FLOWS USED BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS
Repurchase of common stock
(100
Debt issuance costs
Cash dividends paid
(57
Stock based compensation employee withholding taxes paid in cash
(4
Total cash flows used by financing activities from continuing operations
(60
(161
CASH PROVIDED (USED) BY CONTINUING OPERATIONS
257
(67
CASH USED BY DISCONTINUED OPERATIONS
Operating cash flows
(31
(27
Total cash used by discontinued operations
Effect of currency exchange rate changes on cash and cash equivalents
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
225
(93
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
300
CASH AND CASH EQUIVALENTS - END OF PERIOD
207
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles for interim financial reporting ("U.S. GAAP") and U.S. Securities and Exchange Commission ("SEC") regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. These Condensed Consolidated Financial Statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with the Ashland Inc. and consolidated subsidiaries ("Ashland" or the "Company") Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on November 20, 2025. Results of operations for the three and nine months ended June 30, 2026, are not necessarily indicative of the expected results for the remainder of the fiscal year.
Ashland is comprised of the following reportable segments: Life Sciences, Personal Care, Specialty Additives and Intermediates. Unallocated and other includes corporate governance activities and certain legacy matters. For additional information about Ashland's reportable segments, see Note Q.
Use of estimates, risks and uncertainties
The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, environmental remediation, asbestos litigation, 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.
Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation, income taxes or other matters.
New accounting pronouncements
A description of new U.S. GAAP accounting standards issued or adopted during the current quarter is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2025. There were no new accounting pronouncements recently adopted or issued since then that are expected to have a material impact on the Condensed Consolidated Financial Statements.
NOTE B – DIVESTITURES
Avoca business sale
On March 31, 2025, Ashland completed the sale of its Avoca business to Mane SA. Proceeds from the sale were $16 million, net of transaction costs for the nine months ended June 30, 2025 within the investing activities section of the Statement of Condensed Consolidated Cash Flows. Ashland recorded the final sale proceeds
of $2 million within the investing activities section of the Statement of Condensed Consolidated Cash Flows for the nine months ended June 30, 2026.
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 zero and $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) within the income (loss) on divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2025.
The impairment charge includes the impact of the related inside tax basis differences associated with the impaired assets. The tax benefit associated with the sale is included within the income tax expense (benefit) caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025. 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 divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025.
Other corporate assets
During the nine months ended June 30, 2026, Ashland completed the sale of an excess land property with a net book value of $2 million. Ashland received net proceeds of $4 million and recorded a pre-tax gain of $2 million within the income (loss) on divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2026.
Ashland also recorded a $2 million pre-tax gain related to excess land property termination fee within the income (loss) on divestitures, net caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) during the three and nine months ended June 30, 2026.
During the nine months ended June 30, 2025, Ashland completed the sale of an excess land property with a net book value of zero. Ashland received net proceeds and recorded a pre-tax gain of $11 million within the income (loss) on divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025.
NOTE C – DISCONTINUED OPERATIONS
Ashland has divested certain businesses that have qualified as discontinued operations. The operating results from these divested businesses and subsequent adjustments related to ongoing assessments of certain retained liabilities and income tax items have been recorded within the loss from discontinued operations, net of income taxes caption in the Statements of Condensed Consolidated Comprehensive Income (Loss) for all periods presented.
Due to the ongoing assessment of certain matters associated with previous divestitures, subsequent adjustments to these divestitures may continue in future periods in the loss from discontinued operations, net of income taxes caption in the Statements of Condensed Consolidated Comprehensive Income (Loss).
The following divested businesses represent disposal groups that qualified as discontinued operations in previous periods and impacted discontinued operations for the three and nine months ended June 30, 2026 and 2025:
Components of amounts reflected in the Statements of Condensed Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table:
(In millions)
Performance Adhesives
Water Technologies
Valvoline
Distribution
Asbestos-related litigation
(13
NOTE D – RESTRUCTURING ACTIVITIES
Ashland periodically implements restructuring programs related to acquisitions, divestitures and other cost reduction programs in order to enhance profitability through streamlined operations and an improved overall cost structure.
Restructuring costs
During fiscal 2025, Ashland initiated a 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 ("2025 Restructuring Program"). As a part of the 2025 Restructuring Program, Ashland is also advancing a multi-year manufacturing network optimization to improve operational cost and strengthen its competitive position. The 2025 Restructuring Program continued into fiscal 2026.
During fiscal 2023, Ashland implemented targeted organizational restructuring actions to reduce costs ("2023 Restructuring Program"). The 2023 Restructuring Program is now completed.
The following tables detail the amount of restructuring severance expense related to these programs.
Three months ended June 30, 2026
Three months ended June 30, 2025
Severanceexpense(a)
Utilization(cash paid)
2025 Restructuring Program
2023 Restructuring Program
Total
7
Nine months ended June 30, 2026
Nine months ended June 30, 2025
Severanceexpense(income)(a)
(7
(18
The following table details at June 30, 2026, the amount of restructuring severance liabilities related to these programs.
2025RestructuringProgram
2023RestructuringProgram
Balance at September 30, 2025(a)
Restructuring expense
Utilization (cash paid)
Balance at June 30, 2026(a)
Plant optimization actions
Ashland's portfolio optimization actions have included manufacturing network optimization projects associated with carboxymethylcellulose ("CMC"), industrial methylcellulose ("MC"), vinyl pyrrolidone and derivatives ("VP&D") and hydroxyethylcellulose ("HEC").
During the three and nine months ended June 30, 2026, Ashland incurred zero and $4 million of accelerated depreciation for product line optimization activities associated with a Specialty Additives manufacturing facility, which was recorded within the cost of sales caption of the Statements of Condensed Consolidated Comprehensive Income (Loss).
During the three and nine months ended June 30, 2025, Ashland incurred $27 million and $40 million, respectively, of accelerated depreciation for product line optimization activities associated with Life Sciences, Personal Care and Specialty Additives manufacturing facilities, which was recorded within the cost of sales caption of the Statements of Condensed Consolidated Comprehensive Income (Loss).
NOTE E – FAIR VALUE MEASUREMENTS
As required by U.S. GAAP, Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows.
Level 1 – Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities.
8
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect Ashland’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include Ashland’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment.
For assets that are measured using quoted prices in active markets (Level 1), the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs (Level 2) are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable.
The following table summarizes financial instruments subject to recurring fair value measurements as of June 30, 2026:
Carryingvalue
Totalfair value
Level 1
Level 2
Level 3
Assets
Restricted investments(a)(b)
332
Investment of captive insurance company(c)
Total assets at fair value
779
Liabilities
Foreign currency derivatives(d)
Commodity derivatives(d)
Total liabilities at fair value
9
The following table summarizes financial instruments subject to recurring fair value measurements as of September 30, 2025:
Carrying value
347
567
Foreign currency derivatives(e)
Commodity derivatives(e)
Restricted investments
Ashland maintains certain investments in Company restricted renewable annual trusts for the purpose of paying future asbestos indemnity and defense costs and future environmental remediation and related litigation costs. The financial instruments are designated as investment securities, classified as Level 1 measurements within the fair value hierarchy.
The following table presents gross unrealized gains and losses for the restricted investments as of:
Gross
Adjustedcost
unrealizedgain
unrealizedloss
Fair value
June 30, 2026
Demand deposit
Equity mutual fund
86
162
Fixed income mutual fund
201
(33
168
289
September 30, 2025
67
205
174
311
The following table presents the investment income, net gains realized, funds restricted for specific transactions, and disbursements related to restricted investments:
10
Investment income(a)
Net gains(a)
Disbursements
(17
(52
(41
Foreign currency derivatives
Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects of certain assets and liabilities, including short-term intercompany loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption within the Statements of Condensed Consolidated Comprehensive Income (Loss). The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies. The following table summarizes the gains (losses) recognized within the Statements of Condensed Consolidated Comprehensive Income (Loss):
Foreign currency derivative (losses) gains
17
The following table summarizes the fair values of the outstanding foreign currency derivatives included in accounts receivable, net and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets as of:
September 30
Foreign currency derivative assets(a)
Notional contract values
44
Foreign currency derivative liabilities
228
128
Commodity derivatives
Natural gas derivatives
To manage its exposure to the market price volatility of natural gas consumed by its U.S. plants during the manufacturing process, Ashland regularly enters into forward contracts that are designated as cash flow hedges.
Other commodity derivatives
Ashland utilizes forward contracts to manage its exposure to the market volatility of butane consumed by its U.S. plants during the manufacturing process. These derivative instruments qualify as a hedge of future cash flows, are recognized as either assets or liabilities within the Condensed Consolidated Balance Sheets and are measured at fair value. Gains and losses related to an instrument that qualifies for hedge accounting are either recognized in
the Statements of Condensed Consolidated Comprehensive Income (Loss) immediately to offset the gain or loss on the hedged item, or deferred and recorded in the equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive loss and subsequently recognized in the Statements of Condensed Consolidated Comprehensive Income (Loss) when the hedged item affects net income (loss). Cash flows from derivative financial instruments designated as cash flow hedges are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows for the relevant period.
The following table summarizes the net losses recognized within the cost of sales caption of the Statements of Condensed Consolidated Comprehensive Income (Loss):
Commodity derivative losses
The following table summarizes the fair values of the outstanding commodity derivatives included in accounts receivable, net and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets as of:
Commodity derivative assets(a)
Commodity derivative liabilities
Other financial instruments
At June 30, 2026 and September 30, 2025, Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $1,383 million and $1,394 million, respectively, compared to a fair value of $1,369 million and $1,366 million, respectively. The fair values of long-term debt are based on quoted market prices (level 1 of the fair value hierarchy).
NOTE F – INVENTORIES
Inventories are carried at the lower of cost or net realizable value. Inventories are stated at cost using the weighted-average cost method. This method values inventories using average costs for raw materials and most recent production costs for labor and overhead.
The following table summarizes Ashland’s inventories as of:
Finished products
349
421
Raw materials, supplies and work in process
147
NOTE G – GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Ashland tests goodwill and other indefinite-lived intangible assets for impairment annually as of July 1 or whenever events and circumstances indicate an impairment may have occurred.
No indicators of impairment were identified during the three and nine months ended June 30, 2026.
During the three months ended June 30, 2025, Ashland performed an interim quantitative goodwill impairment assessment following a sustained decline in the market price of its Common Stock and weakened operating performance resulting from a challenging macroeconomic environment. The assessment indicated that the carrying values of the Life Sciences and Specialty Additives reporting units exceeded their estimated fair values.
As a result, Ashland recorded non-cash goodwill impairment charges of $375 million and $331 million for the Life Sciences and Specialty Additives reporting units, respectively, for a total goodwill impairment charge of $706 million. The impairment charge was recorded within goodwill impairment in the Statements of Condensed Consolidated Comprehensive Income (Loss) during the three and nine months ended June 30, 2025.
Prior to the impairment, goodwill balances associated with the Life Sciences and Specialty Additives reporting units were $841 million and $443 million, respectively. The goodwill impairment charges were not deductible for income tax purposes.
The fair value estimates used in the interim quantitative impairment assessment were based on an income approach utilizing Level 3 inputs, including significant assumptions regarding future cash flows, sales growth rates, operating income (loss) before income taxes, depreciation and amortization ("EBITDA") growth rates, terminal growth rates, and discount rates.
The following is a progression of goodwill by reportable segment for the nine months ended June 30, 2026:
Life
Personal
Specialty
Sciences
Care
Additives
Intermediates
466
112
Currency translation
462
126
Other intangible assets
Other intangible assets principally consist of trademarks and trade names, intellectual property and customer lists. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 20 years, intellectual property over 3 to 20 years, and customer lists over 10 to 24 years.
Ashland annually reviews, as of July 1, indefinite-lived intangible assets for impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.
No indicators of impairment were identified for indefinite-lived trademarks and trade names during the three and nine months ended June 30, 2026.
Other intangible assets were comprised of the following as of:
Net
carrying
Accumulated
amount
amortization
Definite-lived intangible assets
Trademarks and trade names
74
(42
32
75
(39
Intellectual property
678
(657
683
(638
45
Customer lists
607
(425
182
614
(410
204
Total definite-lived intangible assets
1,359
(1,124
235
1,372
(1,087
Indefinite-lived intangible assets
278
Total indefinite-lived intangible assets
1,637
1,650
Amortization expense recognized on other intangible assets was $15 million for both the three months ended June 30, 2026 and 2025, and $46 million and $47 million for the nine months ended June 30, 2026 and 2025, respectively, and is included within the intangibles amortization expense caption of the Statements of Condensed Consolidated Comprehensive Income (Loss). Estimated amortization expense for future periods is $60 million in 2026 (includes nine months actual and three months estimated), $37 million in 2027, $34 million in 2028, $27 million in 2029 and $19 million in 2030. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events.
NOTE H – DEBT AND OTHER FINANCING ACTIVITIES
The following table summarizes Ashland’s long-term debt as of:
3.375% Senior Notes, due 2031
450
2.00% Senior Notes, due 2028 (Euro 500 million principal)
571
586
6.875% Notes, due 2043
282
6.50% Junior Subordinated Notes, due 2029
72
Other(a)
Long-term debt (less debt issuance costs)(b)
The scheduled aggregate maturities for long-term debt by year (excluding debt issuance costs) are as follows as of June 30, 2026: zero 2026, $4 million in 2027, $571 million in 2028, $97 million in 2029, zero in 2030 and $450 million in 2031.
Credit agreements and refinancing
On May 28, 2026 (the “Closing Date”), Ashland Inc. and its Swiss subsidiary, Ashland Industries Europe GmbH ("the Swiss Borrower"), entered into a Second Amended and Restated Credit Agreement (the “2026 Credit Agreement”). The 2026 Credit Agreement provides for a $500 million five-year revolving credit facility (including a $125 million letter of credit sublimit) ("The Revolving Facility"), which may be drawn by Ashland or the Swiss Borrower.
The 2026 Credit Agreement amends and restates the Amended and Restated Credit Agreement dated as of July 22, 2022.
14
The obligations of the Swiss Borrower under the 2026 Revolving Facility are guaranteed by Ashland. The Revolving Facility is unsecured.
At Ashland’s option, loans issued under the 2026 Credit Agreement will bear interest at (a) in the case of loans denominated in U.S. dollars, either Term Secured Overnight Financing Rate ("SOFR") or an alternate base rate and (b) in the case of loans denominated in Euros, Euro Interbank Offered Rate ("EURIBOR"), in each case plus the applicable interest rate margin. Loans will initially bear interest at Term SOFR or EURIBOR plus 1.375% per annum, in the case of Term SOFR borrowings or EURIBOR borrowings, respectively, or at the alternate base rate plus 0.375%, 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% annum), based upon the Consolidated Net Leverage Ratio (as defined in the 2026 Credit Agreement) at such time. In addition, Ashland will initially be required to pay fees of 0.175% per annum on the daily unused amount of the Revolving Facility through and including the date of delivery of a compliance certificate, and thereafter the fee rate will fluctuate between 0.125% and 0.275% per annum, based upon the Consolidated Net Leverage Ratio.
The Revolving Facility may be prepaid at any time without premium.
The 2026 Credit Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including limitations on liens, additional subsidiary indebtedness, investments, mergers, dispositions, restricted payments, changes in the nature of business, affiliate transactions, restrictions on distributions by subsidiaries, use of proceeds, accounting changes and other customary limitations, as well as financial covenants (including maintenance of a maximum Consolidated Net Leverage Ratio and a minimum Consolidated Interest Coverage Ratio (as defined in the 2026 Credit Agreement)). The 2026 Credit Agreement also contains usual and customary events of default, including non-payment of principal, interest, fees and other amounts, material breach of a representation or warranty, non-performance of covenants and obligations, default on other material debt, bankruptcy or insolvency, material judgments, incurrence of certain material ERISA liabilities, impairment of loan documentation and change of control.
Ashland incurred and paid $2 million of debt issuance costs in connection with the 2026 Credit Agreement during the three and nine months ended June 30, 2026. These costs are being amortized over the term of the 2026 Credit Agreement using the straight-line method and are included within net interest and other (income) expense in the Statements of Consolidated Comprehensive Income (Loss). This amount was also recorded within debt issuance costs paid in the cash flows used by financing activities from continuing operations section of the Statement of Condensed Consolidated Cash Flows for the nine months ended June 30, 2026.
Accounts receivable facilities and supply chain finance program
Ashland continues to maintain its U.S. Accounts Receivable Sales Program, which was entered into during fiscal 2021, and its Foreign Accounts Receivable Sales Program, which was entered into during fiscal 2024. Under these programs, 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 accounts receivable. Proceeds received, net of buyer’s discounts and fees, are recorded within the operating activities of the Statements of Condensed Consolidated Cash Flows. Losses on sale of accounts receivable, including related transaction expenses are recorded within the net interest and other (income) expense caption of the Statements of Condensed 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 accounts receivable that serves as over-collateralization as a restricted asset.
Accounts Receivable Sales Programs
The following table provides information related to the U.S. and Foreign Accounts Receivable Sales Programs as of:
U.S. Accounts Receivable Sales Program
Buyer limit
68
59
Sales outstanding
Receivables transferred to SPE (Special purpose entity)
Servicing and guarantee liability(a)
Foreign Accounts Receivable Sales Program
109
Receivables transferred to SPE
149
142
The following table provides the impact of the U.S. and Foreign Accounts Receivable Sales Programs on the Statements of Condensed Consolidated Comprehensive Income (Loss).
Loss on sale(a)(b)
The following table provides cash flow activity related to the U.S. and Foreign Accounts Receivable Sales Programs.
June 30, 2025
Gross proceeds received
290
Cash collections
301
Net change in receivables sales volume
57
413
400
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. A rollforward of obligations confirmed and paid is presented below:
Confirmed obligations outstanding at beginning of period
Invoices confirmed during the period
Confirmed invoices paid during the period
Confirmed obligations outstanding at end of period
Available borrowing capacity and liquidity
The borrowing capacity remaining under the 2026 Credit Agreement was $496 million, which reflects the full $500 million Revolving Credit Facility less a reduction of $4 million for letters of credit outstanding as of June 30, 2026.
Ashland had no available liquidity under its current U.S. and Foreign Accounts Receivable Sales Programs as of June 30, 2026.
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 June 30, 2026, Ashland is in compliance with all debt agreement covenant restrictions.
The maximum consolidated net leverage ratio permitted under the 2026 Credit Agreement is 4.0. At June 30, 2026, Ashland’s calculation of the consolidated net leverage ratio was 2.3.
The minimum required consolidated interest coverage ratio under the 2026 Credit Agreement is 3.0. At June 30, 2026, Ashland’s calculation of the consolidated interest coverage ratio was 6.9.
NOTE I – LEASING ARRANGEMENTS
The components of lease cost recognized within the Statements of Condensed Consolidated Comprehensive Income (Loss) are as follows:
Location
Lease cost:
Operating lease cost
Selling, general and administrative
Cost of sales
Variable lease cost
Short-term leases(a)
Total lease cost
26
Right-of-use assets exchanged for new operating lease obligations were $1 million and $3 million for the three months ended June 30, 2026 and 2025, respectively, and $5 million for both the nine months ended June 30, 2026 and 2025.
The following table provides cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
NOTE J – INCOME TAXES
Current fiscal year
Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The effective tax rate was 27% and 30% for the three and nine months ended June 30, 2026, respectively. The tax rate for the three months ended June 30, 2026, was primarily impacted by jurisdictional income mix and a net $3 million from unfavorable tax discrete items primarily related to cash repatriation and changes in uncertain tax positions. The tax rate for the nine months ended June 30, 2026, was primarily impacted by jurisdictional income mix, as well as a net $4 million from unfavorable tax discrete items primarily related to cash repatriation, equity compensation adjustments and changes in uncertain tax positions.
Prior fiscal year
The effective tax rate was negative 2% and 2% for the three and nine months ended June 30, 2025, respectively. The tax rate for the three months ended June 30, 2025, was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million and a net $16 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions. The tax rate for the nine months ended June 30, 2025, was impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million, and a net $23 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions.
Unrecognized tax benefits
Changes in unrecognized tax benefits are summarized as follows for the nine months ended June 30, 2026:
Balance at October 1, 2025
65
Decreases related to positions taken on items from prior years
Increases related to positions taken in the current year
Increases related to positions taken in the prior year
Lapse of statute of limitations
Balance at June 30, 2026
66
From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount of accrual for uncertain tax positions between zero and $1 million for continuing operations. For the remaining balance as of June 30, 2026, it is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions or the expiration of applicable statute of limitations; however, Ashland is not able to estimate the impact of these items at this time.
NOTE K - EMPLOYEE BENEFIT PLANS
Restructuring and plan remeasurement
In June 2026, Ashland completed a buy-out transaction for certain retirees participating in two of its U.S. defined benefit pension plans. Under the buy-out transaction, the pension plans purchased group annuity contracts from an insurance company, which assumed responsibility for future benefit payments to the
affected retirees. As a result, Ashland was relieved of the related pension obligations and derecognized the associated projected benefit obligations and related plan assets from its Condensed Consolidated Balance Sheet. The affected pension plans continue to operate following the transaction, with remaining active, deferred vested and retiree participants. The buy-in transaction triggered a remeasurement of the affected pension plans immediately prior to settlement. Based on the remeasurement and settlement accounting, Ashland recognized a settlement gain of $2 million within the other net periodic benefit (income) loss caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2026. As of June 30, 2026, Ashland transferred approximately $30 million of projected benefit obligations and $28 million of related plan assets associated with the affected retirees to the insurance company. The remaining projected benefit obligations and related plan assets of the two pension plans continue to be reflected in Ashland's Condensed Consolidated Balance Sheet.
During the first quarter of fiscal 2025, as part of its fiscal 2024 restructuring activities, Ashland terminated approximately 40 employees in its Doel, Belgium facility. The postretirement benefits for these employees, all of whom participated in a non-contributory defined benefit plan in Belgium, were frozen. This resulted in a decrease in total expected future years of service within the plan and required Ashland to remeasure the plan during the nine months ended June 30, 2025. As a result, Ashland recorded a $1 million curtailment loss within the other net periodic benefit (income) loss caption of the Statement of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025.
Plan contributions
For the nine months ended June 30, 2026, Ashland contributed $5 million to its U.S. pension plans and $5 million to its non-U.S. pension plans. Ashland expects to make additional contributions of $1 million to its U.S. pension plans and $1 million to its non-U.S. pension plans during the remainder of fiscal 2026.
Components of net periodic benefit costs
The following table summarizes the components of pension and other postretirement benefit costs for continuing operations:
Pension benefits
Other postretirementbenefits
Three months ended June 30
Service cost
Interest cost
Expected return on plan assets
Settlement gain
Actuarial gain
Total net periodic benefit costs
Nine months ended June 30
Curtailment loss
For segment reporting purposes, service cost is proportionately allocated to each segment, excluding Unallocated and other, and is recorded within the selling, general and administrative expense and cost of
sales captions on the Statements of Condensed Consolidated Comprehensive Income (Loss). All other components are recorded within the other net periodic benefit (income) loss caption on the Statements of Condensed Consolidated Comprehensive Income (Loss), which netted to income of $5 million and $3 million for the three and nine months ended June 30, 2026, respectively, and expense of $1 million and $4 million for the three and nine months ended June 30, 2025, respectively.
NOTE L – LITIGATION, CLAIMS AND CONTINGENCIES
Asbestos litigation
Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims result from indemnification obligations undertaken in 1990 in connection with the sale of Riley and the acquisition of Hercules in November 2008. Although Riley, a former subsidiary, was neither a producer nor a manufacturer of asbestos, its industrial boilers contained some asbestos-containing components provided by other companies. Hercules, an indirect wholly-owned subsidiary of Ashland, 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 sold by one of Hercules’ former subsidiaries to a limited industrial market.
To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions for Ashland and Hercules asbestos claims, Ashland retained third party actuarial experts 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 and receivables are recorded on an after-tax basis within the loss from discontinued operations, net of income taxes caption in the Statements of Condensed Consolidated Comprehensive Income (Loss).
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. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Ashland asbestos claims activity, excluding Hercules claims, is as follows:
Years ended September 30
(In thousands)
2024
2023
Open claims - beginning of year
New claims filed
Claims settled
Claims dismissed
Open claims - end of 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 35-year model developed with the assistance of Gnarus.
During the most recent update completed in fiscal 2026, it was determined that the liability for Ashland asbestos-related claims should be increased by $31 million. Total reserves for asbestos claims were $262 million and $258 million at June 30, 2026 and September 30, 2025, respectively.
A progression of activity in the asbestos litigation reserves is presented in the following table.
Asbestos litigation reserves - beginning of year
258
274
281
305
Reserve adjustment
24
Amounts paid
(32
Asbestos litigation reserves - end of period(a)
262
265
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 June 30, 2026 and September 30, 2025, Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers (excluding the Hercules receivable for asbestos claims discussed below) amounted to $103 million and $95 million, respectively. In fiscal 2026, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $15 million increase in the receivable for probable insurance recoveries.
A progression of activity in the Ashland insurance receivable is presented in the following table.
Insurance receivable - beginning of year
95
97
101
Receivable adjustment
Amounts collected
Insurance receivable - end of period(a)(b)
Hercules asbestos-related litigation
Hercules has liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims typically arise from alleged exposure to asbestos fibers from resin encapsulated pipe and tank products which were sold by one of Hercules’ former subsidiaries to a limited industrial market. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Hercules’ asbestos claims activity follows:
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 35-year model developed with the assistance of Gnarus. During the most recent update completed in fiscal 2026, it was determined that the liability for Hercules asbestos-related claims should be increased by $17 million. Total reserves for asbestos claims were $183 million and $177 million at June 30, 2026 and September 30, 2025, respectively.
177
185
191
Reserve adjustments
(20
183
Hercules asbestos-related receivables
For the Hercules asbestos-related obligations, certain reimbursement obligations pursuant to coverage-in-place agreements with insurance carriers exist. As a result, any increases in the asbestos reserve have been partially offset by probable insurance recoveries. Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. The estimated receivable consists exclusively of solvent domestic insurers.
As of June 30, 2026 and September 30, 2025, Ashland’s receivable for recoveries of litigation defense and claims costs from insurers with respect to Hercules amounted to $53 million and $48 million, respectively. In fiscal 2026, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in an increase of $7 million in the receivable for probable insurance recoveries.
A progression of activity in the Hercules insurance receivable is presented in the following table.
50
53
49
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, and 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 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 35-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 $375 million for the Ashland asbestos-related litigation (current reserve of $262 million) and approximately $256 million for the Hercules asbestos-related litigation (current reserve of $183 million), depending on the combination of assumptions selected in the various models. While the timeframe used in Ashland’s models for projecting asbestos litigation reserves generally decreases over time based on the expected lifetime of the reserves, these models have been consistently applied between 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.
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 June 30, 2026, such locations included 52 sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 106 current and former operating facilities and about 1,225 service station properties, of which 15 are being actively remediated.
23
The following table provides a reconciliation of the changes in the environmental remediation reserves:
Environmental remediation reserves - beginning of year(a)
226
221
(29
Revised obligation estimates and accretion
33
Environmental remediation reserves - end of period(a)
231
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 reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. At June 30, 2026 and September 30, 2025, Ashland’s recorded receivables for these probable insurance recoveries were $13 million and $14 million, respectively, of which $12 million at both June 30, 2026 and September 30, 2025, were classified in other noncurrent assets within the Condensed Consolidated Balance Sheets.
Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) are presented in the following table:
Environmental expense
Accretion
Legal expense
Total expense
35
51
Insurance receivable
Total expense, net of receivable activity
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 $480 million. The largest reserve for any site is 21% of the environmental remediation reserves as of June 30, 2026.
Other legal proceedings and claims
In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability, and other environmental matters, which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of June 30, 2026. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were not material as of June 30, 2026.
NOTE M – EARNINGS (LOSS) PER SHARE
The following is the computation of basic and diluted earnings (loss) per share ("EPS") from continuing operations attributable to Ashland. Stock appreciation rights and warrants available to purchase shares outstanding for each reporting period whose exercise price was greater than the average market price of Ashland common stock for each applicable period were not included in the computation of income (loss) from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 2 million at both June 30, 2026 and 2025. The majority of these shares are for warrants with a strike price of $128.66.
(In millions, except per share data)
Numerator
Numerator for basic and diluted EPS - Income (loss) from continuing operations, net of tax
Denominator
Denominator for basic EPS - Weighted-average common shares outstanding
Share based awards convertible to common shares(a)
Denominator for diluted EPS - Adjusted weighted-average shares and assumed conversions
EPS from continuing operations
Basic
Diluted(a)
NOTE N – EQUITY ITEMS
2023 Stock repurchase program
On June 28, 2023, Ashland's board of directors authorized a new evergreen $1 billion common share repurchase program ("2023 Stock Repurchase Program"). As of June 30, 2026, $520 million remained available for repurchase under the 2023 Stock Repurchase Program.
The following table provides the common stock repurchase activity:
Number of shares repurchased
1.50
Weighted-average price per share(a)
64.90
Aggregate purchase price(a)
Stockholder dividends
On May 5, 2026, Ashland's Board declared a quarterly cash dividend of 42.0 cents per share on the Company's common stock representing a 1% increase from the previous quarter. The dividend was paid in the third quarter of fiscal 2026. Dividends of 41.5 cents per share were paid in the first and second quarters of fiscal 2026, and the third and fourth quarters of fiscal 2025. Dividends of 40.5 cents per share were paid in both the first and second quarters of fiscal 2025.
Accumulated other comprehensive loss
Components of other comprehensive income (loss) recorded in the Statements of Condensed Consolidated Comprehensive Income (Loss) are presented below, before tax and net of tax effects:
Before tax
Taxexpense
Net of tax
Tax benefit(expense)
Other comprehensive income
Unrealized translation gain
92
Unrealized loss on commodity hedges
Total other comprehensive income
Other comprehensive income (loss)
Unrealized translation (loss) gain
Total other comprehensive income (loss)
Summary of equity
A reconciliation of changes in equity are as follows:
Common stock and paid in capital
Balance, beginning of period
Common shares issued under stock incentive and other plans(a)
Common shares purchased under repurchase program(b)(c)
Balance, end of period
Retained earnings
2,264
3,048
2,298
3,315
Dividends
(95
Other
2,261
2,286
(411
(490
(401
(448
(409
(400
Total equity
1,889
Cash dividends declared per common share
0.420
0.415
1.250
1.225
NOTE O – STOCK INCENTIVE PLANS
The components of Ashland’s pre-tax stock-based compensation expense included in continuing operations are as follows:
2026(a)
2025(b)
Stock appreciation rights
Nonvested stock awards
Performance share awards
27
NOTE P – REVENUE
Disaggregation of revenue
Ashland disaggregates its revenue by reportable segment and geographical region as Ashland believes these categories best depict how management reviews the financial performance of its operations. Ashland includes only U.S. and Canada in its North America designation and includes Europe, the Middle East and Africa in its Europe designation. See the following tables for details. See Note Q for additional information.
Sales by geography
Life Sciences
North America
Europe
71
188
179
Asia Pacific
155
151
Latin America & other
54
491
468
Personal Care
39
107
116
165
163
38
102
428
426
Specialty Additives
133
130
30
98
131
372
380
69
37
104
28
Ashland has two product categories that represent 10% or greater of Ashland's total consolidated sales, which were cellulosics and polyvinylpyrrolidones ("PVP"). The following table summarizes the percentage of Ashland's total consolidated sales for these products:
Cellulosics
%
PVP
64
Trade receivables
Trade receivables are defined as receivables arising from contracts with customers and are recorded within the accounts receivable, net caption within the Condensed Consolidated Balance Sheets. Ashland’s trade receivables were $203 million and $200 million as of June 30, 2026 and September 30, 2025, respectively. See Note H for additional information on Ashland’s programs to sell certain accounts receivables on a revolving basis to third-party banks up to an aggregate purchase limit (U.S and Foreign Accounts Receivable Sales Programs).
NOTE Q – REPORTABLE SEGMENT INFORMATION
Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by Guillermo Novo, Chair and Chief Executive Officer of the Company, which includes determining resource allocation methodologies used for reportable segments. EBITDA is the primary measures of performance that are reviewed by the chief operating decision maker in assessing each reportable segment's financial performance. Ashland does not aggregate operating segments to arrive at these reportable segments.
Reportable segment business descriptions
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.
Personal Care is comprised of biofunctionals, microbial protectants (preservatives), skin care, sun care, oral care, hair care and household. 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 for additional information.
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
29
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.
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.
Unallocated and other generally includes items such as certain significant company-wide restructuring activities, corporate governance costs and legacy costs or activities that relate to divested businesses that are no longer operated by Ashland.
Reportable segment results
Results of Ashland’s reportable segments are presented based on its management 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 comparable companies. Ashland allocates all 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 (income) loss caption of the Statements of Condensed 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 three and nine months ended June 30, 2026 or 2025.
Ashland determined that disclosing sales by specific product was impracticable due to the highly customized and extensive portfolio of products offered to customers and since no one product or a small group of products could be aggregated together to represent a majority of revenue within a reportable segment.
The following table presents various financial information for each reportable segment:
Sales
Intersegment sales(a)
87
110
123
317
328
93
Intersegment sales
Selling, general and administrative expense
61
58
63
62
Total operating segments
173
Unallocated and other
Research and development expense
Amortization expense
Equity and other income
Goodwill impairment and (income) loss on divestitures, net
375
871
(343
(301
(345
(12
80
(659
158
(574
Unallocated and other(b)
(37
(49
(82
(262
Total operating income (loss)
Other net periodic benefit (income) loss
EBITDA(c)
(321
140
(240
113
(309
(276
(583
298
(387
(81
Total EBITDA
(632
217
(649
Depreciation expense
Life Sciences(d)
Personal Care(e)
Specialty Additives(e)
Unallocated and other(f)
1,454
1,498
751
964
1,020
1,348
1,226
Property, plant and equipment - net
456
481
484
105
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q 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; changes in taxation or adverse tax rulings; and without limitation, risks and uncertainties affecting Ashland that are contained in “Use of estimates, risks and uncertainties” in Note A of Notes to Consolidated Financial Statements and in Item 1A of its most recent Form 10-K filed with SEC. Ashland believes its expectations and 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 any forward-looking statements made in this Form 10-Q 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 Form 10-Q.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 nine months ended June 30, 2026, and 73% and 72% for the three and nine months ended June 30, 2025, respectively. Sales by region expressed as a percentage of total consolidated sales were as follows:
North America(a)
Europe(a)
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:
KEY DEVELOPMENTS
Uncertainty related to tariffs and global trade policy changes
The three and nine months ended June 30, 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. During fiscal 2026, certain previously announced tariff measures have been modified, suspended, challenged, or reversed, while additional trade actions remain under consideration, contributing to continued uncertainty regarding the future trade policy environment and its potential impact on our business. 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 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, Venezuela 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. These actions are substantially complete. 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"). These actions are substantially complete. Overall, these Portfolio Optimization actions had no impact on sales, Adjusted EBITDA and operating income (loss) for the three months ended June 30,
2026, compared to the prior year quarter. These actions reduced sales and Adjusted EBITDA by approximately $11 million and $1 million for the nine months ended June 30, 2026, respectively, compared to the prior year periods. Operating income (loss) was positively impacted by $4 million for the nine months ended June 30, 2026, 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 $2 million and $10 million during the three and nine months ended June 30, 2026, respectively, compared to the prior year periods as a result of these multi-year manufacturing network optimizations.
The following table summarizes the expense impact of these actions:
Accelerated depreciation(a)
Restructuring, separation and other costs(b)
Other plant optimization costs(a)
70
RESULTS OF OPERATIONS – CONSOLIDATED REVIEW
Consolidated review
Overview
Key financial results included the following:
(In millions except per share data)
Change
758
897
Diluted earnings per share (EPS) net income (loss)(a)
16.56
19.28
760
Diluted EPS income (loss) from continuing operations(a)
16.59
19.30
912
EBITDA(b)
(683
752
193
(713
906
Adjusted EBITDA(b)
Adjusted Diluted EPS from Continuing Operations Excluding Intangibles Amortization Expense(b)
1.02
1.04
(0.02
2.19
2.30
(0.11
Business results
Ashland's net income of $16 million ($0.35 diluted EPS) and net loss of $742 million (loss of $16.21 diluted EPS) included loss from discontinued operations of $25 million (loss of $0.54 diluted EPS) and $23 million (loss of $0.51 diluted EPS) in the three months ended June 30, 2026 and 2025, respectively.
Results for Ashland’s continuing operations, diluted EPS from continuing operations and operating income (loss) for the three months ended June 30, 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 income of $5 million and expense of $754 million for the three months ended June 30, 2026 and 2025, respectively, impacting continuing operations, including a non-cash goodwill impairment charge of $706 million in the three months ended June 30, 2025 ($375 million for the Life Sciences and $331 million for the Specialty Additives reportable segments). Continuing operations was also impacted by unfavorable tax specific key items for discrete tax items totaling zero and $13 million for the three months ended June 30, 2026 and 2025, respectively.
Excluding these key items, the decrease in continuing operations, diluted EPS from continuing operations and operating income (loss) was primarily driven by unfavorable production costs and higher selling, general and administrative expenses, partially offset by higher sales volumes, price/mix and foreign currency exchange. The number of weighted-average common shares outstanding was 46 million diluted shares at both June 30, 2026 and 2025.
Ashland’s Adjusted EBITDA was $109 million for the three months ended June 30, 2026 compared to $113 million for the three months ended June 30, 2025 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial Measures” below). The $4 million decrease in Adjusted EBITDA was primarily driven by unfavorable production costs and higher selling, general and administrative expenses, partially offset by higher sales volumes, price/mix and foreign currency exchange. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these factors.
For further information on the items reported above, see the discussion in the comparative Statements of Condensed Consolidated Comprehensive Income (Loss) caption review analysis.
Statements of Condensed Consolidated Comprehensive Income (Loss) – caption review
A comparative analysis of the Statements of Condensed Consolidated Comprehensive Income (Loss) by caption is provided as follows:
The following table provides a reconciliation of the change in sales:
Sales change
Foreign currency exchange
Volume
Avoca business
Price/mix
Change in sales
Three months ended June 30, 2026 compared to three months ended June 30, 2025
Sales for the three months ended June 30, 2026 increased $34 million compared to the three months ended June 30, 2025. The increase was driven by higher volume, favorable foreign currency exchange and price/mix.
Nine months ended June 30, 2026 compared to nine months ended June 30, 2025
Sales for the nine months ended June 30, 2026 increased $18 million compared to the nine months ended June 30, 2025. The increase was driven by favorable foreign currency exchange and higher volume, which was partially offset by unfavorable price/mix and the impact of the Avoca business sale. Portfolio Optimization initiatives had a negative $11 million impact on sales in the nine months ended June 30, 2026.
(14
Gross profit as a percent of sales
34.2
28.5
30.9
29.0
The following table provides a reconciliation of the change in cost of sales:
Cost of sales change
Operating costs
Change in cost of sales
Cost of sales for the three months ended June 30, 2026, decreased $4 million compared to the three months ended June 30, 2025. The decrease was primarily driven by lower operating costs and favorable price/mix partially offset by higher volumes and unfavorable foreign currency. The three months ended June 30, 2026, included $3 million of other plant optimization costs while the three months ended June 30, 2025 included $27 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences, Personal Care and Specialty Additives reportable segments and $3 million of other plant optimization costs. Gross profit as a percentage of sales increased 5.7% compared to the three months ended June 30, 2025 as a result of the sales and cost of sales factors noted above.
Cost of sales for the nine months ended June 30, 2026, decreased $14 million compared to the nine months ended June 30, 2025. The decrease was primarily driven by favorable price/mix, the divestiture of the Avoca business and lower operating costs, partially offset by higher volumes and unfavorable foreign currency. The nine months ended June 30, 2026, operating costs were affected by $4 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Specialty Additives and Personal Care and $18 million of other plant optimization costs while the nine months ended June 30, 2025 included $40 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life Sciences, Personal Care and Specialty Additives reportable segments and $12 million of other plant optimization costs. Gross profit as a percentage of sales increased 1.9% compared to the nine months ended June 30, 2025, as a result of the sales and cost of sales factors notes above.
As a percent of sales
19.9
22.9
19.3
Selling, general and administrative expense for the three months ended June 30, 2026, decreased $7 million compared to the three months ended June 30, 2025, with expenses as a percent of sales decreasing 3.0%. Key drivers of the fluctuation in selling, general and administrative expense compared to the three months ended June 30, 2025, were:
Selling, general and administrative expense for the nine months ended June 30, 2026, decreased $4 million compared to the nine months ended June 30, 2025, with expenses as a percent of sales decreasing 0.6%. Key drivers of the fluctuation in selling, general and administrative expense compared to the nine months ended June 30, 2025 were:
Research and development expense increased mostly due to higher incentive compensation between the three months ended June 30, 2026 and 2025.
Research and development expense is generally consistent between the nine months ended June 30, 2026 and 2025.
Intangibles amortization expense
Intangibles amortization expense is generally consistent between the three months ended June 30, 2026 and 2025.
The lower intangibles amortization expense in the nine months ended June 30, 2026, is driven by the impact of amortization related to the divested Avoca business in the nine months ended June 30, 2025.
Equity and other income is generally consistent between the three months ended June 30, 2026 and 2025.
Equity and other income is generally consistent between the nine months ended June 30, 2026 and 2025.
(706
Ashland recorded a $706 million goodwill impairment charge during the three months ended June 30, 2025. See Note G of the Notes to Condensed Consolidated Financial Statements for more information.
Ashland recorded a $706 million goodwill impairment charge during the nine months ended June 30, 2025. See Note G of the Notes to Condensed Consolidated Financial Statements for more information.
Income (loss) on divestitures, net
Income (loss) on divestitures, net for the three months ended June 30, 2026 primarily relates to income related to sales activity of excess corporate real estate. See Note B of the Notes to Condensed Consolidated Financial Statements for more information.
Income (loss) on divestitures, net for the nine months ended June 30, 2026, primarily relates to sales activity and a pre-tax gain on sale of excess corporate real estate while the three months ended June 30, 2025, primarily relates to a $183 million impairment charge, a pre-tax gain on sale of $8 million associated with the Avoca business and a pre-tax gain on sale of excess corporate real estate of $11 million, partially offset by $1 million adjustment related to the Nutraceuticals business sale completed in fiscal 2024. See Note B of the Notes to Condensed Consolidated Financial Statements for more information.
Interest expense
Interest income
Investment securities income
Other financing costs
Net interest and other (income) expense increased by $3 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Interest expense and interest income are generally consistent between the three months ended June 30, 2026 and 2025. Investment securities income of $23 million and $22 million included realized gains of $20 million and $19 million for the three months ended June 30, 2026 and 2025, respectively. Other financing costs decreased $2 million due to lower losses on receivable sales and was the primary change. See Note E of the Notes to Condensed Consolidated Financial Statements for more information.
Net interest and other (income) expense decreased by $15 million during the nine months ended June 30, 2026, compared to the nine months ended June 30, 2025. Interest expense and interest income are generally consistent between the nine months ended June 30, 2026 and 2025. Investment securities income of $28 million and $15 million included realized gains of $18 million and $5 million for the nine months ended June 30, 2026 and 2025, respectively, and was the primary change. See Note E of the Notes to Condensed Consolidated Financial Statements for more information.
Other net periodic benefit income for the three months ended June 30, 2026, primarily included an actuarial gain of $3 million, expected return on plan assets of $3 million and a settlement gain of $2 million, which was partially offset by interest cost of $3 million. Other net periodic benefit loss for the three months ended June 30, 2025, primarily included interest cost of $3 million, which was partially offset by expected return on plan assets of $2 million. See Note K of the Notes to Condensed Consolidated Financial Statements for more information.
Other net periodic benefit income for the nine months ended June 30, 2026, primarily included expected return on plan assets of $8 million, an actuarial gain of $3 million and a settlement gain of $2 million, which was partially offset by interest cost of $10 million. Other net periodic benefit loss for the nine months ended June 30, 2025, primarily included interest cost of $10 million and a $1 million curtailment loss, which was partially offset by expected return on plan assets of $7 million. See Note K of the Notes to Condensed Consolidated Financial Statements for more information.
Income tax expense (benefit)
Effective tax rate
)%
Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The effective tax rate was 27% for the three months ended June 30, 2026, and was primarily impacted by jurisdictional income mix and a net $3 million from unfavorable tax discrete items primarily related to cash repatriation and changes in uncertain tax positions.
The effective tax rate was negative 2% for the three months ended June 30, 2025, and was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million charge and a net $16 million from unfavorable tax discrete items primarily related to return to provision adjustments and changes in uncertain tax positions.
The effective tax rate was 30% for the nine months ended June 30, 2026, and was primarily impacted by jurisdictional income mix and a net $4 million from unfavorable tax discrete items primarily related to equity compensation adjustments and changes in uncertain tax positions.
The effective tax rate was 2% for the nine months ended June 30, 2025, and was primarily impacted by jurisdictional income mix, nondeductible goodwill impairment of $706 million, and a net $23 million from unfavorable tax discrete items primarily related to cash repatriation, return to provision adjustments and changes to uncertain tax positions.
Adjusted income tax expense (benefit)
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 financial 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 financial measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance enhancing their ability to compare period-to-period financial results.
There were no tax specific key items affecting the three and nine months ended June 30, 2026.
The effective tax rate during the three and nine months ended June 30, 2025 was significantly impacted by the following tax specific key items:
The following table is a calculation of the effective tax rate, excluding these key items.
Key items (pre-tax)(a)
754
968
Adjusted income from continuing operations before income taxes
Income tax rate adjustments:
Tax effect of key items(b)
Tax specific key items:(c)
Uncertain tax positions
Other and tax reform related activity
Total income tax rate adjustments
Adjusted income tax expense
Effective Tax Rate, Excluding Key Items (Non-GAAP)(d)
The activity for Distribution represents subsequent adjustments that were made in conjunction with environmental related reserves. Asbestos-related litigation activity primarily relates to Ashland's annual update.
The activity for Performance Adhesives, Distribution, Water Technologies and Valvoline represents subsequent adjustments that were made in conjunction with environmental and tax related reserves. Asbestos-related litigation activity primarily relates to Ashland's annual update.
(87
(88
(56
Total other comprehensive income (loss), net of tax, for the three months ended June 30, 2026, decreased $88 million compared to the three months ended June 30, 2025, primarily as a result of the following:
Total other comprehensive income (loss), net of tax, for the nine months ended June 30, 2026, decreased $56 million compared to the nine months ended June 30, 2025, primarily as a result of the following:
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 (income) expense, and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for discontinued operations and key items. 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 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 an earnings per diluted share basis by taking 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 Intangibles Amortization Expense is adjusted earnings per share 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 include 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 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 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 2026 Credit Agreement are based on similar non-GAAP financial measures and are defined further in the sections that reference this metric.
EBITDA and Adjusted EBITDA
EBITDA totaled $69 million and loss of $683 million for the three months ended June 30, 2026 and 2025, respectively, and income of $193 million and loss of $713 million for the nine months ended June 30, 2026 and 2025, respectively. EBITDA and Adjusted EBITDA results in the table below 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 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:
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:
Depreciation and amortization(a)
EBITDA
Key items included in EBITDA:
Environmental reserve adjustments
Other plant optimization costs
Restructuring, separation and other costs
Accelerated depreciation
Avoca business impairment and sale
175
Held for sale depreciation and amortization
Income on divestitures, net
Tax credit
(Gain) loss on pension plan remeasurements
Total key items included in EBITDA
773
973
Adjusted EBITDA
Unrealized gains on securities
Total key items, before tax
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 in the following table has been prepared to illustrate the ongoing 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 financial measure on a consolidated basis assists investors in better understanding Ashland’s ongoing business performance and enhances their ability to compare period-to-period financial results.
In addition to the operating key items previously described, additional non-operating key items for the applicable periods are summarized as follows:
Diluted EPS from continuing operations (as reported)
Key items, before tax:
0.36
0.65
0.61
0.71
0.07
0.40
0.26
0.14
0.15
0.30
0.38
0.02
0.59
0.10
0.85
15.41
15.19
3.73
(0.04
(0.21
(0.17
(0.43
(0.41
(0.40
(0.10
Key items, before tax
(0.12
16.46
0.69
20.79
Tax effect of key items(a)
(0.26
(1.36
Key items, after tax
(0.14
16.20
0.48
19.43
Tax specific key items:
0.11
0.03
0.17
Tax specific key items(b)
0.28
Total key items
16.48
19.86
Adjusted Diluted EPS from Continuing Operations (non-GAAP)
0.75
0.78
1.39
1.47
Amortization expense adjustment (net of tax)(c)
0.27
0.80
0.83
Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense
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 (income) loss caption on the Statements of Condensed Consolidated Comprehensive Income (Loss). Ashland refines its expense allocation methodologies to the reportable segments from time to time as internal accounting practices are improved, more refined information becomes available and the industry or market changes. Significant revisions to Ashland’s methodologies are adjusted for all segments on a retrospective basis. There were no material changes in methodology for the three and nine months ended June 30, 2026 or 2025.
The following table discloses sales, operating income (loss), depreciation and amortization and EBITDA by reportable segment:
SALES
OPERATING INCOME (LOSS)
Life Sciences(b)
388
398
Specialty Additives(c)
348
Unallocated and other(d)
DEPRECIATION EXPENSE
Life Sciences(e)
Personal Care (f)
Specialty Additives(f)
(21
Unallocated and other(g)
(45
AMORTIZATION EXPENSE
EBITDA(h)
381
181
722
866
The following table provides a reconciliation of the change in sales for the Life Sciences reportable segment.
The following table provides a reconciliation of the change in operating income for the Life Sciences reportable segment.
Operating income (loss) change
EBITDA and Adjusted EBITDA reconciliation
The following EBITDA presentation 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 each reportable segment. Life Sciences, Personal Care and Specialty Additives had key items in the three and nine months ended June 30, 2026 and 2025. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
Operating income
(329
(261
401
(375
137
Operating income as a percent of sales
25.0
-211.7
Not meaningful
19.8
-64.3
Adjusted EBITDA as a percent of sales
33.3
0 bps
28.7
29.3
-60 bps
Life Sciences sales for the current quarter increased as a result of higher volume and favorable price/mix. Operating income (loss) and Adjusted EBITDA increased in the current quarter as a result of the prior period goodwill impairment, higher volume and favorable price/mix.
Life Sciences' sales increased in the current period due to higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix. Operating income (loss) and Adjusted EBITDA for the current period increased as a result of the prior period goodwill impairment, higher volume, lower cost, favorable foreign currency exchange and favorable price/mix.
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.
The following table provides a reconciliation of the change in sales for the Personal Care reportable segment.
The following table provides a reconciliation of the change in operating income for the Personal Care reportable segment.
Operating income change
The following EBITDA presentation 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 in the three and nine months ended June 30, 2026 and 2025. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
115
114
18.7
17.0
170 bps
15.7
15.0
70 bps
27.9
110 bps
26.6
27.2
Personal Care's sales increased as a result of higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix. Operating income and Adjusted EBITDA for the current quarter increased primarily as a result higher volume, favorable price/mix partially offset by higher costs.
Personal Care's sales increased as a result of higher volume and favorable foreign currency exchange, partially offset by unfavorable price/mix and the impact of the Avoca divestiture. Operating income for the current period increased primarily due to higher volume and favorable foreign currency exchange and the impact of the Avoca divestiture, partially offset by higher costs. Adjusted EBITDA decreased primarily due to higher operating costs, partially offset by higher volume, the positive impact of the Avoca divestiture and favorable foreign exchange currency.
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
55
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 the Specialty Additives reportable segment.
The following table provides a reconciliation of the change in operating income (loss) for the Specialty Additives reportable segment.
Costs
The following EBITDA presentation 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 in the three and nine months ended June 30, 2026 and 2025. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
(328
346
(295
(331
(16
Operating income (loss) as a percent of sales
2.2
-263.4
-3.2
-90.3
14.7
-510 bps
13.7
16.8
-310 bps
Specialty Additives' sales increased as a result of favorable price/mix and higher volume. Operating income (loss) increased in the current quarter due to the prior period goodwill impairment, lower costs, including accelerated depreciation and other plant optimization costs, favorable price/mix and higher volume. Adjusted EBITDA decreased as a result of higher costs, excluding accelerated depreciation and other plant optimization costs, partially offset by higher volume and favorable price/mix.
Specialty Additives sales decreased as a result of lower volume, unfavorable price/mix, partially offset by favorable foreign currency exchange. Operating income (loss) remained constant excluding the impact of the prior period goodwill impairment charge. Adjusted EBITDA decreased in the current period primarily due to higher costs, lower volume and unfavorable price mix, partially offset by favorable foreign currency exchange.
Intermediates is comprised of the production of 1,4 butanediol (BDO) and related derivatives, including nmethylpyrrolidone. 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, 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 the Intermediates reportable segment.
The following table provides a reconciliation of the change in operating income for the Intermediates reportable segment.
The following EBITDA presentation 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 three and nine months ended June 30, 2026 or 2025.
8.1
12.1
-400 bps
5.8
EBITDA as a percent of sales
10.8
21.2
-1040 bps
9.7
15.4
-570 bps
Intermediates' sales increased in the current quarter primarily due to higher volume while operating income and EBITDA decreased primarily due to higher costs.
Intermediates' sales decreased due to lower volume and unfavorable price/mix partially offset by favorable foreign currency exchange. Operating income remained consistent while EBITDA decreased in the current period primarily due to lower volume and higher costs partially offset by favorable foreign currency exchange.
The following table summarizes the key components of the Unallocated and other’s operating loss.
Restructuring activities
Environmental expenses
Other expenses (primarily governance and legacy expenses)
(50
(48
The current and prior year quarter both included expense of $7 million for restructuring activities mainly comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.
The current and prior year quarter included $17 million and $28 million for environmental expenses, respectively.
Other items in the current quarter included accelerated depreciation of $1 million and a tax credit of $8 million.
Other expenses between quarters were driven by changes in governance and legacy expenses primarily associated with fluctuations in foreign currency, deferred compensation, company-owned life insurance contracts and variable incentive compensation, including stock compensation in the current period.
The current and prior year period included expense of $14 million and $18 million, respectively, for restructuring activities mainly comprised of severance, lease abandonment and other restructuring costs related to company-wide cost reduction programs.
The current and prior year period included $28 million and $31 million for environmental expenses, respectively.
Other items in the current year period included accelerated depreciation of $1 million, a tax credit of $8 million, and a $3 million income related to excess corporate real estate sales. See Note B of the Notes to Condensed Consolidated Financial Statements for more information.
The prior year period included a loss on divestiture of $165 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 $11 million gain on the sale of a property. See Note B of the Notes to Condensed Consolidated Financial Statements for more information.
Other expenses between periods were driven by changes in governance and legacy expenses primarily associated with fluctuations in foreign currency, deferred compensation, company-owned life insurance contracts and variable incentive compensation, including stock compensation expense in the current period.
FINANCIAL POSITION
Liquidity
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.
During May 2026, Ashland entered into a Second Amended and Restated Credit Agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement provides for a $500 million five-year revolving credit facility (including a $125 million letter of credit sublimit) (the “Revolving Credit Facility”). Proceeds of borrowings under the 2026 Revolving Credit Facility are intended to provide ongoing working capital and for other general corporate purposes. See Note H of the Notes to Condensed Consolidated Financial Statements for more information.
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. There were $6 million and $16 million, respectively, of confirmed invoices, of which $6 million and $11 million, respectively, were paid during the three and nine months ended June 30, 2026, respectively. There were $5 million and less than $1 million of confirmed invoices remaining under this program at June 30, 2026 and September 30, 2025, respectively.
Cash flows
Ashland’s cash flows from operating, investing and financing activities, as reflected in the Statements of Condensed Consolidated Cash Flows, are summarized as follows:
Cash provided (used) by:
Operating activities from continuing operations
Investing activities from continuing operations
Financing activities from continuing operations
Discontinued operations
Effect of currency exchange rate changes on cash and cash equivalents(a)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents increased $225 million for the nine months ended June 30, 2026 and decreased $93 million for the nine months ended June 30, 2025.
The $225 million increase for the nine months ended June 30, 2026, was primarily driven by favorable changes in working capital (fluctuations within accounts receivable, inventory, trade payables and accrued expenses) and other operating cash flows from continuing operations which amounted to inflows of $295 million. The current period was also affected by inflows of $25 million for the settlement of company-owned life insurance policies and $52 million of reimbursements from restricted investments. These inflows were partially offset from outflows from payment of cash dividends, additions to property, plant and equipment and discontinued operations primarily related to retained liabilities for asbestos and environmental claims of $57 million, $51 million and $31 million, respectively.
The $93 million decrease for the nine months ended June 30, 2025 was primarily driven by payment of cash dividends, additions to property, plant and equipment and stock repurchase activity of $57 million, $64 million and $100 million, respectively, while discontinued operations cash flows were outflows of $27 million. These outflows were partially offset by inflows from operating activities from continuing operations, proceeds from the sale of Avoca and proceeds from the sale of a land property of $94 million, $16 million and $11 million, respectively.
The change in cash flows from operating activities from continuing operations was primarily driven by favorable working capital, including the favorable impact between periods of the U.S. and Foreign Accounts Receivable Sales Program activity.
See the Statements of Condensed Consolidated Cash Flows for additional information.
Free Cash Flow and other liquidity resources
The following represents Ashland’s calculation of Free Cash Flow and Ongoing Free Cash Flow for the disclosed periods. Free Cash Flow does not reflect adjustments for certain non-discretionary cash flows such as mandatory debt repayments.
less:
Free Cash Flow
244
Tax refund(a)
(103
Cash (inflows) outflows from U.S. Accounts Receivable Sales Program(b)
Cash outflows from Foreign Accounts Receivable Sales Program(c)
Restructuring-related payments(d)
Environmental and related litigation payments(e)
Ongoing Free Cash Flow
159
Adjusted EBITDA(f)
Operating Cash Flow Conversion(g)
1475
Ongoing Free Cash Flow Conversion(h)
Working capital (current assets minus current liabilities, excluding long-term debt due within one year) amounted to $868 million and $782 million as of June 30, 2026 and September 30, 2025, respectively. Liquid assets (cash and cash equivalents and accounts receivable) amounted to 164% and 108% of current liabilities as of June 30, 2026 and September 30, 2025, respectively. The increase in Ongoing Free Cash Flows was primarily a result of favorable working capital, lower additions to property, plant and equipment and lower variable compensation payouts between periods.
The following summary reflects Ashland’s cash and cash equivalents, unused borrowing capacity and liquidity as of:
Cash and investment securities
Restricted investments(a)
Unused borrowing capacity and liquidity
Revolving credit facility
496
596
The borrowing capacity remaining under the 2026 Credit Agreement was $496 million, which reflects the full $500 million revolving credit facility less a reduction of $4 million for letters of credit outstanding at June 30, 2026. In total, Ashland’s available liquidity position, which includes cash and cash equivalents and the revolving credit facility, was $936 million at June 30, 2026, compared to $811 million at September 30, 2025. Ashland had no available liquidity under the U.S. and Foreign Accounts Receivable Sales Programs as of June 30, 2026. Ashland also maintained $332 million of restricted investments at June 30, 2026, to pay for future asbestos claims and environmental remediation and related litigation.
Capital resources
Debt
The following summary reflects Ashland’s debt as of:
Short-term debt
Long-term debt (less debt issuance cost discounts)(a)
Total debt
Debt as a percent of capital employed was 42% at both June 30, 2026 and September 30, 2025. At June 30, 2026, Ashland’s total debt had an outstanding principal balance of $1,403 million, discounts of $20 million, and debt issuance costs of $9 million. Ashland has no long-term debt (excluding debt issuance costs) maturing within 2026, $4 million in 2027, $571 million due in fiscal 2028, $97 million due in 2029, zero in 2030, and $450 million in 2031.
Ashland credit ratings
Ashland’s corporate credit rating by Standard & Poor’s was downgraded to BB during the nine months ended June 30, 2026, and Moody’s Investor Services was downgraded to Ba2 during the nine months ended June 30, 2026. As of June 30, 2026, 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.
Ashland debt covenant restrictions
Ashland's 2026 Credit Agreement 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 June 30, 2026, Ashland is in compliance with all debt agreement covenant restrictions under the 2026 Credit Agreement.
The maximum consolidated net leverage ratio permitted under the 2026 Credit Agreement is 4.0. The 2026 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 2026 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, noncash 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 noncash 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 above in the “consolidated review” 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 June 30, 2026, Ashland’s calculation of the consolidated net leverage ratio was 2.3.
The minimum required consolidated interest coverage ratio under the 2026 Credit Agreement is 3.0. The 2026 Credit Agreement defines the consolidated interest coverage ratio as the ratio of Covenant Adjusted EBITDA to consolidated interest charges for any measurement period. At June 30, 2026, Ashland’s calculation of the consolidated interest coverage ratio was 6.9.
Any change in Covenant Adjusted EBITDA of $100 million would have an approximate 0.5x effect on the consolidated net leverage ratio and a 1.7x effect on the consolidated interest coverage ratio. The change in consolidated indebtedness of $100 million would affect the consolidated leverage ratio by approximately 0.2x.
Additional capital resources
Total equity decreased by $34 million since September 30, 2025 to $1,870 million at June 30, 2026. The decrease of $34 million was due to dividends of $57 million, $6 million of translation losses and $2 million for unrealized losses on commodity hedges partially offset by $11 million of common stock issued and $20 million of net income.
2023 Stock Repurchase program
Stock repurchase program agreements
On May 5, 2026, Ashland's Board declared a quarterly cash dividend of 42.0 cents per share on the company's common stock representing a 1% increase from the previous quarter. The dividend was paid in the third quarter of fiscal 2026. Dividends of 41.5 cents per share were paid in the first and second quarters of fiscal 2026, and the third and fourth quarters of fiscal 2025. Dividends of 40.5 cents per share were paid in both the first and second quarters of fiscal 2025.
Capital expenditures
Capital expenditures were $51 million for the nine months ended June 30, 2026, compared to $64 million for the nine months ended June 30, 2025.
CRITICAL ACCOUNTING POLICIES
The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, 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. These accounting policies are discussed in detail in “Management’s Discussion and Analysis – Critical Accounting Policies” in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. 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. No material changes have been made to the valuation techniques during the three and nine months ended June 30, 2026.
OUTLOOK
Ashland is reaffirming its full year fiscal 2026 sales guidance of $1,835 to $1,870 million and its Adjusted EBITDA guidance of $385 to $400 million. Ashland is also revising its adjusted EPS outlook to low-to-mid-single digit growth from mid-to-high-single digit growth, reflecting a higher tax rate associated with unfavorable discrete items. The outlook reflects continued growth across the portfolio, ongoing momentum in higher value applications, increasing realization of recent pricing actions and strong cash generation.
Despite a mixed macroeconomic backdrop, Ashland’s core Life Sciences and Personal Care end markets continue to demonstrate resilient demand, supported by stable fundamentals, continued innovation adoption from customers and strong commercial execution. Specialty Additives trends continue to improve, driven by share gains in coatings and performance specialties.
Ashland continues to benefit from growth in differentiated, higher value applications, including biofunctional actives, microbial protection, injectables and tablet coatings. Recent pricing actions are contributing to results and are expected to provide greater benefit in the fourth quarter as realization increases. Raw material and
freight costs are expected to remain elevated amid geopolitical supply pressures, although Ashland expects pricing actions to offset these impacts over time.
Updated guidance
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Ashland’s market risk exposure at June 30, 2026 is generally consistent with the types of market risk exposures presented in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures - As of the end of the period covered by this quarterly report, Ashland, under the supervision and with the participation of its management, including Ashland’s Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of Ashland’s disclosure controls and procedures pursuant to Rule 13a-15(b) and 15d-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control over Financial Reporting - During the nine months ended June 30, 2026, there were no significant changes in Ashland's internal control over financial reporting, or in other factors, that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, Ashland's internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The following is a description of Ashland’s material legal proceedings. Ashland’s threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.
Asbestos-Related Litigation
Ashland is subject to liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation (Riley), a former subsidiary. Although Riley was neither a producer nor a manufacturer of asbestos, its industrial boilers contained some asbestos-containing components provided by other companies.
Hercules LLC (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland, is also subject to liabilities from asbestos-related personal injury lawsuits involving claims which 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.
Ashland and Hercules are also defendants in lawsuits alleging exposure to asbestos at facilities formerly or presently owned or operated by Ashland or Hercules.
For additional detailed information regarding liabilities arising from asbestos-related litigation, see Note L of the Notes to Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q.
Environmental Proceedings
(a) CERCLA and Similar State Law Sites - Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state laws, Ashland and its subsidiaries may be subject to joint and several liability for cleanup costs in connection with alleged releases of hazardous substances at sites where it has been identified as a “potentially responsible party” (PRP). As of June 30, 2026, Ashland and its subsidiaries have been identified as a PRP by U.S. federal and state authorities, or by private parties seeking contribution, for the cost of environmental investigation and/or cleanup at 52 sites. These sites are currently subject to ongoing investigation and remedial activities, overseen by the United States Environmental Protection Agency (USEPA) or a state agency, in which Ashland or its subsidiaries are typically participating as a member of a PRP group. Generally, the types of relief sought include remediation of contaminated soil and/or groundwater, reimbursement for past costs of site cleanup and administrative oversight and/or long-term monitoring of environmental conditions at the sites. The ultimate costs are not predictable with assurance.
(b) Lower Passaic River, New Jersey Matters - Ashland, through two formerly owned facilities, and ISP, through a now-closed facility, have been identified as PRPs, along with approximately 70 other companies (the Cooperating Parties Group or the CPG), in a May 2007 Administrative Order of Consent (AOOC) with the USEPA. The parties are required to perform a remedial investigation and feasibility study (RI/FS) of the entire 17 miles of the Passaic River. In June 2007, the USEPA separately commenced a Focused Feasibility Study (FFS) as an interim measure. In accordance with the 2007 AOOC, in June 2012 the CPG voluntarily entered into another AOOC for an interim removal action focused solely at mile 10.9 of the Passaic River. The allocations for the 2007 AOOC and the 2012 removal action are based on interim allocations, are immaterial and have been accrued. In April 2014, the USEPA released the FFS. The CPG submitted the Draft RI/FS Report on April 30, 2015. The USEPA has released the FFS Record of Decision for the lower 8 miles and reached an agreement with another chemical company to conduct and pay for the remedial design. This chemical company has sued Ashland, ISP and numerous other defendants to recover past and future costs pursuant to the CERCLA. Ashland and ISP participated in an USEPA allocation process that resulted in a partial settlement with the EPA. Possible future allocation proceedings are not expected to have a significant impact to Ashland.
For additional information regarding environmental matters and reserves, see Note L of the Notes to Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q.
Other Pending Legal Proceedings
In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability and other environmental matters which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded as of June 30, 2026. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of June 30, 2026.
ITEM 1A. RISK FACTORS
During the period covered by this report, there were no material changes from the risk factors previously disclosed in Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Share repurchase activity during the three months ended June 30, 2026 was as follow:
Issuer Purchases of Equity Securities
Q3 Fiscal Periods
Total Numberof SharesPurchased
Average PricePaid Per Share,includingcommission
Total Numberof SharesPurchased asPart of PubliclyAnnouncedPlans orPrograms
Dollar Value ofShares that MayBe PurchasedUnder the Plansor Programs(in millions)(a)
April 1, 2026 to April 30, 2026
520
May 1, 2026 to May 31, 2026
June 1, 2026 to June 30, 2026
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
On February 26, 2026, Dr. Osama M. Musa, Ashland’s Senior Vice President and Chief Technology Officer, entered into a Rule 10b5-1 trading arrangement, to exercise up to an aggregate of 18,443 stock appreciation rights related to Ashland’s common stock and the corresponding sale of the resulting shares. The duration of the trading arrangement is until the earlier of (1) December 31, 2026, (2) the date on which all transactions under the trading arrangement are completed, or (3) at such time as the trading arrangement is otherwise terminated or expires according to its terms.
ITEM 6. EXHIBITS
(a) Exhibits
3.1
Amended and Restated Articles of Incorporation of Ashland Global Holdings Inc. (filed as Exhibit 3.1 to Ashland’s Form 8-K filed on September 20, 2016 (SEC File No. 001-32532)) and incorporated by reference herein).
3.2
Certificate of Ownership & Merger, amending the Company’s Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to Ashland’s Form 8-K filed on August 1, 2022 (SEC File No. 001-32532) and incorporated by reference herein).
3.3
By-laws of Ashland Inc. (Amended and Restated as of September 20, 2022) (filed as Exhibit 3.1 to Ashland’s Form 8-K filed on September 20, 2022 (SEC File No. 333-211719) and incorporated by reference herein).
10.1
Second Amended and Restated Credit Agreement dated as of May 28, 2026, among Ashland Inc., Ashland Industries Europe GmbH, each lender from time to time party thereto, The Bank of Nova Scotia, Houston Branch, as administrative agent, swing line lender and a letter of credit issuer, each other letter of credit issuer from time to time party thereto and Citibank, N.A., as syndication agent, filed as Exhibit 10.1 to Ashland’s Form 8-K filed on May 29, 2026 (SEC File No. 333-211719) and incorporated by reference herein).
31.1*
Certificate of Guillermo Novo, Chief Executive Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certificate of William C. Whitaker, Chief Financial Officer of Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*
Certificate of Guillermo Novo, Chief Executive Officer of Ashland, and William C. Whitaker, Chief Financial Officer of Ashland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**
Inline XBRL Instance Document.
101.SCH**
Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document.
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*
Filed herewith.
**
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2026 and June 30, 2025; (ii) Condensed Consolidated Balance Sheets at June 30, 2026 and September 30, 2025; (iii) Statements of Condensed Consolidated Cash Flows for the nine months ended June 30, 2026 and June 30, 2025; and (iv) Notes to Condensed Consolidated Financial Statements.
SM
Service mark, Ashland or its subsidiaries, registered in various countries.
™
Trademark, Ashland or its subsidiaries, registered in various countries.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Ashland Inc.
(Registrant)
July 29, 2026
/s/ William C. Whitaker
William C. Whitaker
Senior Vice President and Chief Financial Officer (on behalf of the Registrant and as Principal Financial Officer)