Slide 1: 2010 Citi Basic Materials Symposium
® Registered trademark, Ashland or its subsidiaries, registered in various countries * Trademark owned by third party * 2010 Citi Basic Materials Symposium Lamar M. Chambers Senior Vice President and Chief Financial Officer November 30, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward- looking statements are based upon a number of assumptions, including those mentioned
Slide 3: Strong Leadership Positions in Markets We Serve
Ashland Consumer Markets (Valvoline) Ashland Hercules Water Technologies Ashland Distribution Ashland Aqualon Functional Ingredients #1 global leader in unsaturated polyester resins and vinyl ester resins #3 passenger-car motor oil and #2 franchised quick-lube chain in the United States #2 North Ame
Slide 4: Ashland Distribution Divestiture
Ashland Distribution Divestiture · Signed definitive agreement to sell assets of Ashland Distribution to TPG Capital - Gross proceeds of $930 million - All-cash transaction - Net aftertax proceeds of approximately $825 million · Expect transaction to close during March quarter - Contingent upon cust
Slide 5: Ashland Distribution Divestiture (cont.)
Ashland Distribution Divestiture (cont.) · Treated as discontinued operations starting in December 2010 quarter · Stranded costs of approximately $50 million on annual basis - Transition Services Agreement should cover more than half - Roughly $7 million to $8 million negative effect on quarterly re
Slide 6: Corporate Profile – Sales
Ashland Distribution 37% Ashland Consumer Markets 19% FY 2010 1 = $9.2 billion Pro Forma 2 = $5.7 billion Ashland Aqualon Functional Ingredients 10% Ashland Performance Materials 22% Ashland Consumer Markets 31% Ashland Hercules Water Technologies 31% Ashland Aqualon Functional Ingredients 16% Speci
Slide 7: Corporate Profile – Regional Sales
North America 67% Latin America/ Other - 4% Europe 21% Sales from Outside North America Increase to 45% Pro Forma FY 2010 1 = $9.2 billion Pro Forma 2 = $5.7 billion North America 55% Latin America/ Other - 7% Europe 26% North America 67% Europe 21% 1 For fiscal year ended Sept. 30, 2010, including
Slide 8: Corporate Profile – EBITDA
FY2010 1 = $887 million Pro Forma 2 ~ $800 million Ashland Hercules Water Technologies 25% Ashland Aqualon Functional Ingredients 27% Divestiture Has Relatively Small Effect on EBITDA Ashland Consumer Markets 33% Ashland Hercules Water Technologies 23% Ashland Aqualon Functional Ingredients 24% Ashl
Slide 9: Ashland Aqualon Functional Ingredients Business Overview
North America 34% Asia Pacific 20% Europe 38% Coatings Additives 31% Energy & Specialties Solutions 20% Regulated Industries 32% Business Overview Customers · Diversified, global customer base Products · Broad product line based on renewable resources - Water-soluble polymers (cellulose ethers and g
Slide 10: Ashland Hercules Water Technologies Business Overview
North America 49% Europe 34% Growth 50% Base 31% Process 26% Utility 34% Functional 40% Business Overview Customers/ Markets · Growth - Commercial and - Packaging institutional - Tissue and towel - Food and beverage - Pulp - Mining · Base - Printing and writing - Specialty chemicals - General manufa
Slide 11: Ashland Performance Materials Business Overview
Pkg. & Converting 19% North America 58% Europe 25% Trans- portation 19% Industrial Construction 33% Business Overview Customers · Auto manufacturers; foundries; pipe and tank fabricators; packaging and converting; bathware, countertop and window lineal manufacturers; pipe relining contractors; boatb
Slide 12: Ashland Consumer Markets (Valvoline) Business Overview
Lubricants 86% Valvoline Int'l 23% Do-It- Yourself 36% Business Overview Customers · Retail auto parts stores and mass merchandisers who sell to consumers · Installers, such as car dealers and quick lubes; distributors · Fleet owners; manufacturers and users of industrial and power generation equipm
Slide 13: Ashland Distribution
Chemicals 46% Plastics 42% Construction 26% Other 11% Com- posites 9% Chemical Mfg. 24% Business Overview Customers · Diversified customer base in North America and Europe Products/ Services · More than 28,000 packaged and bulk chemicals, solvents, plastics and additives · Comprehensive, hazardous a
Slide 14: Adjusted Results Summary
1 Ashland's earnings releases, dated Oct. 26 and July 23, 2010, available on Ashland's website at http://investor.ashland.com, reconcile adjusted amounts to amounts reported under GAAP. · Strong sales growth versus September 2009 quarter · Margin compression in three of five commercial units primari
Slide 15: Fiscal 2010 Accomplishments
1 Free cash flow is defined as Cash Flows Provided by Operating Activities from Continuing Operations less Additions to Property, Plant and Equipment less Cash Dividends Paid. Ashland's earnings release, dated Oct. 26, 2010, available on Ashland's website at http://investor.ashland.com, reconciles a
Slide 16: December Quarter Update
December Quarter Update · Demand environment showing typical seasonality · Functional Ingredients and Water Technologies continue to implement pricing actions to offset inflationary raw material costs · Performance Materials again facing inflation in number of key raw materials - Pricing actions alr
Slide 17: Midcycle EBITDA Margin Targets of 17% to 18%
Midcycle EBITDA Margin Targets of 17% to 18% Midcycle Targets
Slide 18: Ashland Strategy
1 Brazil, Russia, India and China. Ashland Strategy · Focus on specialty chemicals - Sustainable technologies - Water-intensive industries · Reduce volatility of earnings and cash flow and retain conservative financial position · Leverage formulation and application expertise into adjacent markets t
Slide 19: Investment Thesis
Investment Thesis · Defined long-term strategic vision with discipline to make it reality · Significant growth potential across commercial units · Fiscal conservatism to fully realize benefits of operating leverage · Strong cash generation
Slide 20: Ashland. With good chemistry great things happen.
ASHLAND. With good chemistry great things happen.”
Slide 21: Reconciliation of Non-GAAP Data
1 Excludes intersegment sales of $148 million. Calculation of adjusted EBITDA for each quarter has been reconciled within each quarterly earnings release filed with the SEC and posted on Ashland's website. Quarterly totals may not add to annual amounts due to rounding. Ashland Inc. and Consolidated