Slide 1: Third-Quarter Fiscal 2014 Earnings
Third-Quarter Fiscal 2014 Earnings July 31, 2014 ® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries
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, 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
Slide 3: Fiscal Third Quarter 2014 Highlights
Fiscal Third Quarter 2014 Highlights 1 • Earnings from continuing operations of $0.90 per share - Adjusted EPS of $1.63 vs. $1.31 in prior year • Volumes increased 3% vs. prior year • Sales of $1.6 billion, down 1% from prior year - Excluding guar and Intermediates & Solvents (I&S), sales rose 2% •
Slide 4: Stock Buyback Update
Stock Buyback Update • Sale of Ashland Water Technologies for $1.8 billion in cash expected to be completed later today - After-tax proceeds of ~$1.4 billion, primarily to be used for share buyback • Repurchased ~$80 million of shares - More than 760,000 shares to be retired in Q4 • To initiate $1.0
Slide 5: Adjusted EPS reconciliation by segment
Ashland Ashland ‘Specialty Performance Ingredients Materials Valvoline Legacy environmental reserves Restructuring and integration 'ASK impairment Foreign tax indemnification receivable $ Losses on pension & OPEB remeasurement ‘Tax adjustments ‘Customer receivable claim Restructuring and integration
Slide 6: Adjusted Results Summary
sted Results Summary’ (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, Mar. 31, 2014 2013 Change |] 2014 Change Sales $1,605 $1,624 (1) % |) $1,545 4% Gross profit as a percent of sales 284 % 266 % 180 bp 28.1 % 30 bp Selling, general and admin/R&D costs
Slide 7: Ashland Specialty Ingredients
Ashland Specialty Ingredients Adjusted Results-‘Summary' (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, Mar. 31, 2014 2013 Change || 2014 Change Metric tons sold (in thousands) - Actives basis 95.0 90.7 5% 87.4 9% Sales $ 653 $ 673 (3) % | $ 629 4% Gro
Slide 8: Ashland Performance Materials
Ashland Performance Materials Adjusted Results-‘Summary' (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, Mar. 31, 2014 2013 Change || 2014 Change Metric tons sold (in thousands) 154.7 155.4 -% 153.4 1% Sales $ 420 $ 438 (4) % | $ 413 2% Gross profit as
Slide 9: Valvoline
Valvoline Re (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, Mar. 31, 2014 2013 Change || 2014 Change Lubricant gallons (in millions) 428 41.3 4% 39.6 8% Sales $ 532 $ 513 4% || $ 503 6% Gross profit as a percent of sales 327% 324% 30 bp 32.1 % 60 bp Se
Slide 10: Ashland Water Technologies
Ashland Water Technologies Adjusted Results-‘Summary' (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, Mar. 31, 2014 2013 Change |] 2014 Change Sales $ 441 $ 435 1% || $ 431 2% Gross profit as a percent of sales 346% 33.9 % 70 bp 33.6 % 100 bp Selling, g
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Slide 12: Fiscal Third Quarter 2014 Corporate Items
Fiscal Third Quarter 2014 Corporate Items • Capital expenditures totaled $56 million in third quarter - Full-year forecast remains at $245 million • Effective tax rate of 23% - Expected full-year rate remains at approximately 21% - Q4 rate expected to be 26-27% • Trade Working Capital 1 remains ahea
Slide 13: Global Restructuring Program Update
Global Restructuring Program Update Efficient operating model to drive growth and improved financial performance • Approximately $80 million in annualized costs savings achieved through the third quarter - Continue to expect more than half of run-rate savings by end of FY14 - Estimated book costs re
Slide 14: Creating Shareholder Value
Creating Shareholder Value Continue taking steps to becoming the world’s best specialty chemicals company • Strong underlying catalysts support share price appreciation - ASI growth and margin expansion - Continued strong operating performance leading to earnings growth - Global restructuring progra
Slide 15: Appendix A: EBITDA Bridges
Appendix A: EBITDA Bridges
Slide 16: Ashland Q3 FY 2013 vs. Q3 FY 2014 Adjusted EBITDA Bridge
Ashland Q3 FY 2013 vs. Q3 FY 2014 Adjusted EBITDA Bridge 273 298 Q3 2013 Volume/Mix Q3 2014 Currency Translation Margin SG&A Expenses Other ($ millions) Preliminary · Stronger volumes and improved margins contributed $23 million to EBITDA
Slide 17: Ashland Specialty Ingredients Adjusted EBITDA Bridge
Ashland Specialty Ingredients Adjusted EBITDA Bridge 142 135 Q3 2013 Volume/ Mix Q3 2014 Currency Translation Margin SG&A Expenses Q3 FY 2013 versus Q3 FY 2014 (4) · Improved operating performance drove margin improvement · Benefits from global restructuring contributed to SG&A reduction of $5 milli
Slide 18: Ashland Performance Materials Adjusted EBITDA Bridge
Ashland Performance Materials Adjusted EBITDA Bridge 53 40 Q3 2013 Volume/ Mix Q3 2014 Currency Translation Margin SG&A Expenses Q3 FY 2013 versus Q3 FY 2014 (2) Other (1) · Margin improvement due to prior year lower of cost or market charge within elastomers ($ millions) Preliminary
Slide 19: Valvoline Adjusted EBITDA Bridge
Valvoline Adjusted EBITDA Bridge 99 86 · Strong volume, continued mix upgrade and efficient SG&A spend were key tailwinds to quarter · Foreign exchange presented modest headwind to EBITDA Q3 2013 Volume/ Mix Q3 2014 Currency Translation Margin SG&A Expenses Q3 FY 2013 versus Q3 FY 2014 Other ($ mill
Slide 20: Ashland Water Technologies Adjusted EBITDA Bridge
41 48 Ashland Water Technologies Adjusted EBITDA Bridge Q3 2013 Volume/ Mix Q3 2014 Currency Translation Margin SG&A Expenses Q3 FY 2013 versus Q3 FY 2014 (1) Other ($ millions) Preliminary · Results reflect AWT business as historically reported and are provided for comparative purposes only
Slide 21: Appendix B: Volume Trends and Liquidity and Net Debt
Appendix B: Volume Trends and Liquidity and Net Debt
Slide 22: Normalized Volume Trends
Normalized Volume Trends 1 Period Ended 1 Excludes volumes associated with Casting Solutions and divested Pinova, Synlubes, and PVAc businesses for all periods. Includes volumes associated with ISP and Ara Quimica for all periods. 2 ASI and APM reflect reorganization of adhesives and intermediates a
Slide 23: Liquidity and Net Debt
Liquidity and Net Debt At June 20, Liquidity 2014 Cash s 5T0 ‘Available revolver and AVR facility capacity 4.467 Liquidity S103 Interest ‘At June 30, Debt Expiration Rate Moody's S&P___2014 “4.750% senior notes, farsi t2smition, C8202 475% Bet BB S100 3.875% senior notes, perso nition 042018 -3875%
Slide 24: Appendix C: Business Profiles
Appendix C: Business Profiles 12 Months Ended June 30, 2014
Slide 25: Corporate Profile
Corporate Profile North America 2 53% Asia Pacific 16% Latin America/ Other - 7% Europe 24% Ashland Specialty Ingredients 40% Ashland Performance Materials 26% Valvoline 34% Sales 1 - $6.1 Billion By commercial unit By geography 1 For 12 months ended June 30, 2014. 2 Ashland includes only U.S. and C
Slide 26: Ashland corporate facts and sales mix
Ashland Performance Materials 17% Valvoline 35% NYSE Ticker Symbol: ASH Total Employees: ~11,000 Outside North America ~30% Number of Countries More in Which Ashland : than 100 Has Sales: ASHLAND. 1 For12 months ended June 20, 2014, See Appendix D for reconciliation ta amounts reparted under GAAP. 2
Slide 27: Ashland Specialty Ingredients
Ashland Specialty I ngredients A global leader of cellulose ethers and vinyl pyrrolidones Cellulosics 37% PVP 17% Adhesives 12% North America 40% Asia Pacific 18% Europe 32% Guar - 5% 1 See Appendix D for reconciliation to amounts reported under GAAP. For 12 Months Ended June 30, 2014 Sales: $2.4 bi
Slide 28: Ashland Performance Materials
Ashland Performance Materials Global leader in unsaturated polyester resins and vinyl ester resins Composites 56% Intermediates/ Solvents 27% Elastomers 17% Marine 11% Other Process Industries 13% North America 47% Europe 33% Latin America/ Other 6% Transportation 25% Sales by Geography For 12 Month
Slide 29: Valvoline
Valvoline: A leading worldwide producer and distributor of premium-branded automotive, commercial and industrial lubricants, automotive chemicals and car-care products Lubricants 86% Do-It- Yourself 30% DIFM: Valvoline Instant Oil Change 17% DIFM: Installer Channel 23% Valvoline International 30% As
Slide 30: Appendix D: Reclassifications and Regulation G Reconciliations
Appendix D: Reclassifications and Regulation G Reconciliations
Slide 31: Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2014
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2014 ($ millions, except percentages) 1 Quarterly totals may not sum to actual results due to quarterly rounding conventions. Calculation of adjusted EBITDA for each quarter has been reconciled wi
Slide 32: ASHLAND.
ASHLAND. With good chemistry great things happen.”