ASHLAND INC.
For the period ended Jun 30, 2025. Filed Jul 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 30, 2025
ASH$77.70+1.4%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061809
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-30.
0000950170-25-100270
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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145 unchanged; 102 reworded; 41 added; 30 removed; 1 previous and 1 current paragraphs rearranged.
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A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
Goodwill impairment
Current report
During the third quarter fiscal 2025, Ashland experienced a continued decline in the market price of its Common
Current report
Stock. Ashland also experienced slowing growth due to weakening macroeconomic environment that is dampening consumer sentiment and demand globally which resulted in lower growth and lower margins for the Life Sciences and Specialty Additives reportable segments (and reporting units) than what was previously reported. These factors led Ashland to determine that triggering events occurred, and a quantitative goodwill impairment assessment was performed during the three months ended June 30, 2025. Following the aforementioned quantitative analysis, the carrying value of the Life Sciences and the Specialty Additives reporting units exceeded their fair value, resulting in non-cash goodwill impairment charges of $375 million and $331 million, respectively, for a total goodwill impairment charge of $706 million, which was recorded during the three and nine months ended June 30, 2025, within the goodwill impairment caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the both three and nine months ended June 30, 2025. No subsequent indicators of impairment have been identified.
Current report
The following table provides a reconciliation of the change in sales for the three and nine months ended June 30, 2025 and 2024:
Current report
Lower variable compensation expense, the favorable impact of divestitures, and realized cost reductions associated with restructuring actions partially offset by unfavorable currency exchange between periods.
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Lower variable compensation expense, the favorable impact of divestitures, and the realized cost reductions associated with restructuring actions between periods.
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Current Quarter - Ashland recorded a $706 million goodwill impairment charge in the current quarter. See Note G of the Notes to the Condensed Consolidated Financial Statements for more information.
Current report
Year-to-date - Ashland recorded a $706 million goodwill impairment charge in the current year. See Note G of the Notes to the Condensed Consolidated Financial Statements for more information.
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Other net periodic benefit loss for the nine months ended June 30, 2024 primarily included interest cost of $12 million which was partially offset by expected return on plan assets of $6 million. See Note K of the Notes to the Condensed Consolidated Financial Statements for more information.
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Goodwill impairment – Ashland recorded a non-cash goodwill impairment charge of $706 million within the goodwill impairment caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2025. See Note G of the Notes to the Condensed Consolidated Financial Statements for more information;
Current report
Nutraceutical impairment – During the three months ended June 30, 2024, Ashland entered into an agreement to sell substantially all of the net assets of its Nutraceuticals business. As a result, Ashland recorded a $99 million impairment charge within the loss on acquisitions and divestitures, net caption of the Statements of Consolidated Comprehensive Income (Loss) for the three and nine months ended June 30, 2024. See Note B of the Notes to Condensed Consolidated Financial Statements for more information;
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Restructuring and separation activity – represents the tax impact of the held for sale classification for the Nutraceuticals business; and
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Other and tax reform related activity – primarily impacted by jurisdictional income mix, the tax impact of cash repatriation, and changes in uncertain tax positions for the three and nine months ended June 30, 2025, while the three and nine months ended June 30, 2024 were mostly impacted by foreign tax reform related activity.
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Includes goodwill impairment of $375 million for Life Sciences for the three and nine months ended June 30, 2025.
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Includes goodwill impairment of $331 million for Specialty Additives for the three and nine months ended June 30, 2025.
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Depreciation includes accelerated depreciation of $8 million and $21 million for Life Sciences for the three and nine months ended June 30, 2025, respectively.
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Depreciation includes accelerated depreciation of $1 million for Personal Care for both the three and nine months ended June 30, 2024.
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Depreciation includes accelerated depreciation of $19 million for Specialty Additives for both the three and nine months ended June 30, 2025, respectively, and $7 million and $55 million for the three and nine months ended June 30, 2024.
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(h)
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Depreciation and amortization excludes accelerated depreciation of $8 million and $21 million for Life Sciences for the three and nine months ended June 30, 2025, respectively, and includes $1 million associated with the Nutraceuticals business held for sale assets for both the three and nine months ended June 30, 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
Current report
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, 2025 and 2024. These items are listed below and described within the "Use of Non-GAAP Financial Measures" section above.
Current report
Depreciation and amortization for Specialty Additives excludes accelerated depreciation of $19 million for the three and nine months ended June 30, 2025, and $7 million and $55 million for the three and nine months ended June 30, 2024, respectively, which is included as a key item within this table as a component of Adjusted EBITDA.
Current report
Specialty Additives sales, operating income (loss) and Adjusted EBITDA for the quarter decreased as a result of lower volume, higher costs, including the effects of portfolio optimization activities and accelerated depreciation partially offset by favorable foreign currency exchange. The three months ended June 30, 2025 included a goodwill impairment charge of $331 million.
Current report
Specialty Additives sales, operating income (loss) and Adjusted EBITDA for the current period decreased primarily due to lower volume offset by lower costs, including the effects of portfolio optimization activities and accelerated depreciation. The nine months ended June 30, 2025 included a goodwill impairment charge of $331 million.
Current report
The prior year quarter included a $99 million loss on acquisitions and divestitures, net due to an impairment charge within the Nutraceuticals business. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
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Cash and cash equivalents decreased $93 million for the nine months ended June 30, 2025 and $18 million for the nine months ended June 30, 2024.
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(f)
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(g)
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(a)
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Capital expenditures were $64 million for the nine months ended June 30, 2025, compared to $99 million for the nine months ended June 30, 2024.
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Goodwill
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Ashland reviews goodwill for impairment annually as of July 1 or when events and circumstances indicate an impairment may have occurred. Ashland tests goodwill for impairment by comparing the estimated fair value of the reporting units to the related carrying value. If the fair value of the reporting unit is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. Reporting units are defined as either operating segments or one level below the operating segments for which discrete financial information is available and reviewed by the business management. Ashland determined that its reporting units are Life Sciences, Personal Care, Specialty Additives and Intermediates.
Current report
Ashland makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. Discounted cash flow models are reliant on various assumptions, including projected business results, long-term growth factors and weighted-average cost of capital. Management judgment is involved in estimating these variables, and they include uncertainties since they are forecasting future events. Ashland performs sensitivity analyses by using a range of inputs to confirm the reasonableness of the long-term growth rate and weighted average cost of capital estimates. Additionally, Ashland compares the indicated equity value to Ashland’s market capitalization and evaluates the resulting implied control premium/discount to determine if the estimated enterprise value is reasonable.
Current report
During the third quarter fiscal 2025, Ashland experienced a continued decline in the market price of its Common Stock. Ashland also experienced slowing growth due to weakening macroeconomic environment that is dampening consumer sentiment and demand globally which resulted in lower growth and lower margins for the Life Sciences and Specialty Additives reporting units then what was previously forecasted. These factors led Ashland to determine that triggering events occurred, and a quantitative goodwill impairment assessment was performed as of June 30, 2025.
Current report
Following the completion of this quantitative analysis, Ashland concluded that the fair value of Personal Care reporting unit exceeded its carrying value by more than 100%. The Intermediates reporting unit has no associated goodwill. The carrying values of the Life Sciences and Specialty Additives reporting units exceeded their respective fair values, resulting in non-cash goodwill impairment charges of $375 million and $331 million, respectively, for a total goodwill impairment charge of $706 million, which was recorded within the goodwill impairment caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the both three and nine months ended June 30, 2025. Remaining goodwill after impairment was $466 million for Life Sciences and $112 million for Specialty Additives. For further information, see Note G of the Notes to the Condensed Consolidated Financial Statements.
Current report
The below table provides a sensitivity analysis for Life Sciences and Specialty Additives reporting units remaining goodwill, utilizing reasonably possible changes in the assumptions for the shorter term and residual growth rates and the discount rate, to demonstrate the potential impacts to the estimated fair values. The below table provides, in isolation, the estimated fair value impacts related to a 25-basis point increase to discount rate or a 25-basis point decrease to residual growth rates, both of which would result in incremental impairment charges to the Life Sciences and Specialty Additives reporting units.
Current report
Assumptions inherent in the valuation methodologies include estimates of future projected business results (principally sales and EBITDA), long-term growth rates, and the weighted-average cost of capital. Ashland performed sensitivity analyses by using a range of inputs to confirm the reasonableness of long-term growth rate and weighted average cost of capital estimates. Significant assumptions utilized in the impairment analysis included the weighted-average cost of capital, ranging between 12.50% and 13.75%, and terminal growth rate, ranging between 2.0% and 4.0% depending on the reporting unit. Based on sensitivity analysis performed on two key assumptions in the discounted cash flow model at June 30, 2025, a 1% decrease in the long-term growth factor assumption or a 1% increase in the weighted average cost of capital assumption for the Personal Care reporting unit would not have resulted in a fair value below the carrying value. For further information, see Note G of the Notes to the Condensed Consolidated Financial Statements.
Current report
Ashland is updating its full-year fiscal 2025 outlook to reflect a stable but subdued macroeconomic environment and continued caution across customer channels. Demand trends remain mixed: pharma continues to recover and show resilience, Personal Care is stable with early signs of company-specific momentum, while Specialty Additives and Intermediates remain under pressure. Ashland maintains a measured outlook, supported by innovation tracking ahead of plan, early signs of recovery in its “globalize” platforms, and the execution of high-impact self-help initiatives. These strategic levers are helping to mitigate near-term volume pressure and position the company for improved performance going forward.
Current report
Tariff-related uncertainty persists, and the company continues to monitor the evolving regulatory landscape. While long-term rules are still being finalized, Ashland does not expect a material direct impact to fiscal year 2025.
Current report
At the same time, Ashland is benefiting from an FX tailwind, while other input costs and pricing dynamics remain stable. Raw material costs are steady, and year-over-year pricing pressure is easing as the company laps prior actions. These conditions are expected to support margin performance through the fourth quarter.
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Removed paragraphs (30)
Previous report
The following table provides a reconciliation of the change in sales for the three and six months ended March 31, 2025 and 2024:
Previous report
Lower stock-based compensation expense, favorable currency exchange and the favorable impact of divestitures between periods.
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Favorable currency exchange and the favorable impact of divestitures between periods.
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Other and tax reform related activity – primarily represents tax specific key items associated with final tax regulations and tax reform related activity for the three and six months ended March 31, 2025 and 2024.
Previous report
Depreciation includes accelerated depreciation of $13 million for Life Sciences for the three and six months ended March 31, 2025.
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Depreciation includes accelerated depreciation of $27 million and $49 million for Specialty Additives for the three and six months ended March 31, 2024, respectively.
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Depreciation and amortization excludes accelerated depreciation of $13 million for Life Sciences for the three and six months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA.
Previous report
The following table provides a reconciliation of the change in operating loss for the Specialty Additives reportable segment.
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The following EBITDA and Adjusted 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. The key items during the three and six months ended March 31, 2025 related to $3 million and $5 million of other plant optimization costs, respectively. The key items during the three months ended March 31, 2024 related to $27 million of accelerated depreciation and $1 million of other plant optimization costs. The key items during the six months ended March 31, 2024 related to $49 million of accelerated depreciation and $1 million of other plant optimization costs.
Previous report
Depreciation and amortization excludes accelerated depreciation of $27 million and $49 million for Specialty Additives for the three and six months ended March 31, 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
Previous report
Specialty Additives sales for the quarter decreased primarily as a result of lower volume and unfavorable pricing while operating income increased primarily due to lower costs as a result of higher production volumes when compared to the inventory corrective actions in the prior year which included accelerated depreciation associated with portfolio optimization actions. Adjusted EBITDA remained relatively consistent compared to the prior quarter.
Previous report
Specialty Additives sales for the current period decreased primarily due to lower volume and unfavorable pricing while operating income and Adjusted EBITDA increased mainly due to lower costs as a result of higher production volumes when compared to the inventory corrective actions in the prior year which included accelerated depreciation associated with portfolio optimization actions.
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The current quarter also includes gains of $18 million from acquisitions and divestitures primarily related to the sale of the Avoca business and excess corporate land property. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
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Cash and cash equivalents decreased $132 million for the six months ended March 31, 2025 compared to an increase of $22 million for the six months ended March 31, 2024.
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(b)
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Capital expenditures were $44 million for the six months ended March 31, 2025, compared to $70 million for the six months ended March 31, 2024.
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Tariffs
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Ashland recognizes the current economic headwinds and uncertainties created by tariffs and global trade policies. The company is closely monitoring changes in tariff policies and adjusting its strategies to optimize performance. To navigate this evolving landscape, Ashland is focused on maintaining flexible operations and actively managing risks for financial resilience while pursuing growth opportunities.
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Key tariff exposures (as of April 30th):
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Raw materials: Ashland has limited direct exposure to US or China tariffs on raw materials due to the company’s localized sourcing strategy. Ashland’s estimated tariff impact for fiscal year 2025 is $3 to $5 million for the second half, modestly increasing to $5 to $7 million annually after mitigation actions;
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US finished goods: The vast majority of Ashland’s US sales are domestically sourced. A small portion is imported from the European Union and mostly benefits from current Annex II exemptions. Ashland is closely monitoring the recently initiated Section 232 investigation to assess potential future impacts. For context, without the current Annex II exemptions, the annual tariff exposure is projected to be $4 to $6 million, and approximately $1 million in fiscal year 2025;
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China finished goods: While most China sales are produced outside the US, approximately $70 million of US-produced China sales, generating company average gross profit, are mostly in scope for tariffs. The primary exposure within these exports is in the Life Sciences and Personal Care segments, with the majority being intercompany transactions. Ashland’s tariff response plan includes measures to offset a significant portion of this business-at-risk. Approximately one-third of Ashland's gross profit is derived from products where the company is the sole supplier. With approximately 90 days of finished goods inventory currently held in China, any potential impact on fiscal year 2025 is anticipated to occur in the fourth quarter;
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Tariff response plan: Ashland is evaluating and executing several mitigation strategies, including optimizing production, sourcing, logistics, intercompany trading strategies, relative competitive positioning, share gain opportunities, customer and vendor negotiations, and pricing actions where appropriate.
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Financial Outlook
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Ashland is adjusting its full-year fiscal 2025 outlook to reflect a weakening macroeconomic environment that is dampening consumer sentiment and demand globally. This shift is evident in the following key areas:
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Reduced consumer sentiment: growing global macroeconomic and geopolitical uncertainties are negatively impacting consumer confidence, leading to decreased demand from Ashland’s customer base, particularly for architectural coatings;
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Challenging intermediates market: a persistent supply-demand imbalance continues to pressure the intermediates market. Despite ongoing pricing adjustments, overall pricing remains below expectations;
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Subdued European demand: while European markets have stabilized at a low level, the anticipated moderate recovery has not yet materialized.
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Ashland now anticipates flattish organic sales volume growth for the full fiscal year. This revision reflects the company’s expectation of a positive inflection in organic sales volumes in the second half, led by Life Sciences, which Ashland anticipates will offset the organic sales volume declines experienced in the first half. Year-over-year pricing headwinds are expected to lessen in the second half of the fiscal year as the company moves beyond comparable periods with prior pricing actions.
Previous report
Excluding the tariff impact detailed earlier above, overall raw material costs are expected to remain generally stable year-over-year. The outlook reflects Ashland’s assessment of the direct financial impact from global trade policies in the second half of fiscal 2025. In response to this evolving demand landscape, Ashland is proactively focusing on its strategic priorities. The completed portfolio optimization initiative and accelerating cost savings programs are expected to enhance business mix and improve profitability throughout the remainder of the fiscal year.
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Previous wording
Ashland is a global additives and specialty ingredients company with a conscious and proactive mindset for environmental, social and governance ("ESG"). 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 3,200 employees worldwide, Ashland serves customers in more than 100 countries.
Current wording
Ashland is a global additives and specialty ingredients company with a conscious and proactive mindset for environmental, social and governance ("ESG"). 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 2,960 employees worldwide, Ashland serves customers in more than 100 countries.
Previous wording
Ashland’s sales generated outside of North America were 72% for both the three and six months ended March 31, 2025, and 69% and 68% for the three and six months ended March 31, 2024, respectively. Sales by region expressed as a percentage of total consolidated sales were as follows:
Current wording
Ashland’s sales generated outside of North America were 73% and 72% for the three and nine months ended June 30, 2025, respectively, and 69% and 68% for the three and nine months ended June 30, 2024, respectively. Sales by region expressed as a percentage of total consolidated sales were as follows:
Previous wording
The March quarter saw increased regulatory activity, including the imposition of tariffs and evolving global trade policies, which have resulted in retaliatory measures on U.S. goods. The extent and duration of the tariffs and the resulting impact on general economic conditions and on Ashland are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions that may be granted, availability and cost of alternative sources of supply and demand for Ashland's products in affected markets. Additionally, the uncertainty about trade policy, tariff rates, and other changes in practices affecting international trade, including whether such tariffs or other measures will be withdrawn, or modified in the future, may make it difficult to operate optimally. Ashland continues to monitor the rapidly evolving tariff and global trade policies and is working to mitigate potential impacts on its business.
Current wording
The first nine months of the fiscal year saw increased regulatory activity, including the imposition of tariffs and evolving global trade policies, which have resulted in retaliatory measures on U.S. goods. The extent and duration of the tariffs and the resulting impact on general economic conditions and on Ashland are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions that may be granted, availability and cost of alternative sources of supply and demand for Ashland's products in affected markets. Additionally, the uncertainty about trade policy, tariff rates, and other changes in practices affecting international trade, including whether such tariffs or other measures will be withdrawn, or modified in the future, may make it difficult to operate optimally. Ashland continues to monitor the rapidly evolving tariff and global trade policies and is working to mitigate potential impacts on its business.
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Uncertainty relating to the ongoing Ukraine/Russia and Israel/Hamas conflicts
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Uncertainty relating to the ongoing Israel/Iran, Ukraine/Russia and Israel/Hamas conflicts
Previous wording
Business disruptions, including those related to the ongoing conflicts between Ukraine/Russia or Israel/Hamas 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.
Current wording
Business disruptions, including those related to the ongoing conflicts between Israel/Iran, Ukraine/Russia and Israel/Hamas continue to impact businesses around the globe. While it is impossible to predict the effects of the conflicts 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.
Previous wording
Ashland does not have manufacturing operations in Russia, Ukraine, or Belarus. Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications. Sales to Russia and Belarus were previously limited and our products were primarily used in products and applications that are essential to the population's well-being and currently support our customers' humanitarian efforts. We have sales controls in place to ensure that future potential sales into the region are only to support critical pharmaceutical or personal hygiene products which are essential for the general population and in accordance with any applicable sanctions. Sales to Ukraine, Russia, and Belarus represent less than 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable).
Current wording
Ashland does not have manufacturing operations in Iran, Israel, Russia, Ukraine, or Belarus. Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications. Sales to Russia and Belarus were previously limited and our products were primarily used in products and applications that are essential to the population's well-being and currently support our customers' humanitarian efforts. We have sales controls in place to ensure that future potential sales into the region are only to support critical pharmaceutical or personal hygiene products which are essential for the general population and in accordance with any applicable sanctions. Sales to Israel, Ukraine, Russia, and Belarus represent less than 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable).
Previous wording
As previously announced, Ashland initiated a new $30 million pre-tax restructuring plan to offset the impact from the Nutraceuticals sale, completed in fiscal 2024, and other portfolio optimization actions, which are expected to be realized 50 percent in fiscal 2025 and 50 percent in fiscal 2026.
Current wording
As previously announced, Ashland initiated a new $30 million pre-tax restructuring plan to offset the impact from the Nutraceuticals business sale, completed in fiscal 2024, and other portfolio optimization actions, which were expected to be realized 50 percent in fiscal 2025 and 50 percent in fiscal 2026. Ashland's current expectations include greater than 50 percent realization in fiscal 2025 of approximately $20 million.
Previous wording
Ashland is also advancing a multi-year manufacturing optimization restructuring plan to improve operational cost and strengthen its competitive position. This optimization plan is expected to generate pre-tax savings of $60 million once fully achieved, including savings of $5 million in fiscal 2025.
Current wording
Ashland is also advancing a multi-year manufacturing optimization restructuring plan to improve operational cost and strengthen its competitive position. This optimization plan is expected to generate pre-tax savings of $60 million once fully achieved, including savings of approximately $5 million in fiscal 2025.
Previous wording
Ashland is also continuing to execute its fiscal 2024 portfolio and plant optimization actions to further strengthen Ashland’s resilience and improve margins and returns. These previously announced actions include initiatives focused on carboxymethylcellulose (CMC), methylcellulose (MC), Nutraceuticals and Avoca portfolio optimization (collectively, Portfolio Optimization). Overall, these portfolio optimization actions reduced sales and operating income (loss) by approximately $67 million and $9 million, respectively, for the three months ended March 31, 2025 and approximately $117 million and $14 million, respectively, for the six months ended March 31, 2025 as compared to the prior year. Adjusted EBITDA was also reduced by $13 million and $21 million for the three and six months ended March 31, 2025, respectively, as compared to the prior year.
Current wording
Ashland is also continuing to execute its fiscal 2024 portfolio and plant optimization actions to further strengthen Ashland’s resilience and improve margins and returns. These previously announced actions include initiatives focused on carboxymethylcellulose (CMC), methylcellulose (MC), Nutraceuticals and Avoca Portfolio Optimization (collectively, Portfolio Optimization). Overall, these portfolio optimization actions reduced sales and operating loss by approximately $53 million and $8 million, respectively, for the three months ended June 30, 2025 and approximately $170 million and $22 million, respectively, for the nine months ended June 30, 2025 as compared to the prior year. Adjusted EBITDA was also reduced by $13 million and $34 million for the three and nine months ended June 30, 2025, respectively, as compared to the prior year.
Previous wording
Recorded within the selling, general and administrative caption within the Statements of Condensed Consolidated Comprehensive Income (Loss).
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Recorded within the selling, general and administrative expense caption within the Statements of Condensed Consolidated Comprehensive Income (Loss).
Previous wording
Ashland recorded an impairment charge of zero for the three months ended March 31, 2025 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) for the six months ended March 31, 2025, within the income (loss) on acquisitions and divestitures, net caption of the Statements of Condensed Consolidated Comprehensive Income (Loss). The tax benefit associated with the sale is included within the income tax expense (benefit) caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2025. See Note J of the Notes to the Condensed Consolidated Financial Statements for additional details. Ashland also recorded a pre-tax gain on sale of $8 million following the completion of this sale, mainly related to working capital movements, within the income (loss) on acquisitions and divestitures, net caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2025.
Current wording
Ashland recorded an impairment charge of $183 million ($1 million allocated to goodwill, $134 million to other intangible assets, $33 million to property, plant and equipment, $14 million to operating lease assets, net and $1 million to other current assets) for the nine months ended June 30, 2025, within the loss on acquisitions and divestitures, net caption of the Statement of Condensed Consolidated Comprehensive Income (Loss). 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. See Note J of the Notes to the Condensed Consolidated Financial Statements for tax details associated with the transaction. Ashland also recorded a pre-tax gain on sale of $8 million following the completion of this sale, mainly related to working capital movements, within the loss on acquisitions and divestitures, net caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the nine months ended June 30, 2025.
Previous wording
As a result of the loss from continuing operations attributable to Ashland during the six months ended March 31, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.
Current wording
As a result of the loss from continuing operations attributable to Ashland during the three and nine months ended June 30, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.
Previous wording
Ashland's net income of $31 million ($0.65 diluted earnings per share) and $120 million ($2.39 diluted earnings per share) included income from discontinued operations of $1 million ($0.02 diluted earnings per share) and a loss from discontinued operations of $1 million (loss of $0.01 diluted earnings per share) in the three months ended March 31, 2025 and 2024, respectively.
Current wording
Ashland's net loss of $742 million (loss of $16.21 diluted earnings per share) and income of $6 million ($0.12 diluted earnings per share) included loss from discontinued operations of $23 million (loss of $0.51 diluted earnings per share) and a loss from discontinued operations of $25 million (loss of $0.48 diluted earnings per share) in the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Results for Ashland’s continuing operations, diluted earnings per share from continuing operations and operating income for the three months ended March 31, 2025 and 2024 included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section below. These pre-tax key items totaled expense of $6 million and $42 million for the three months ended March 31, 2025 and 2024, respectively, impacting continuing operations. Continuing operations was also impacted by favorable tax specific key items for discrete tax items totaling $1 million and $105 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Results for Ashland’s continuing operations, diluted earnings per share from continuing operations and operating loss for the three months ended June 30, 2025 and 2024 included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of Non-GAAP Financial Measures” section below. These pre-tax key items totaled expense of $754 million and $147 million for the three months ended June 30, 2025 and 2024, respectively, impacting continuing operations, including a non-cash goodwill impairment charge of $706 million in the current quarter ($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 $13 million and favorable tax specific key items for discrete tax items totaling $106 million for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Excluding these key items, the decrease in continuing operations, diluted earnings per share from continuing operations and operating income was primarily driven by portfolio optimization actions, which includes volume impacts, and lower organic sales. This was partially offset by favorable production costs and lower selling, administrative, research and development costs. In addition, diluted earnings per share from continuing operations was also impacted by common stock reductions from repurchases of Ashland common stock over the last twelve months. These common stock repurchases reduced the number of weighted average shares from 51 million diluted shares at March 31, 2024 to 47 million diluted shares at March 31, 2025.
Current wording
Excluding these key items, the decrease in continuing operations, diluted earnings per share from continuing operations and operating loss was primarily driven by portfolio optimization actions, lower volume, and unfavorable production costs. This was partially offset by lower selling, administrative, research and development costs. In addition, diluted earnings per share from continuing operations was also impacted by common stock reductions from repurchases of Ashland common stock over the last twelve months. These common stock repurchases reduced the number of weighted average shares from 51 million diluted shares at June 30, 2024 to 46 million diluted shares at June 30, 2025.
Previous wording
Ashland’s Adjusted EBITDA was $108 million for the three months ended March 31, 2025 compared to $126 million for the three months ended March 31, 2024 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial Measures” below). The $18 million decrease in Adjusted EBITDA was primarily driven by portfolio optimization actions, which includes volume impacts, and lower organic sales. This was partially offset by favorable production costs and lower selling, administrative, research and development costs. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these key factors along with the impact of common stock repurchases noted above.
Current wording
Ashland’s Adjusted EBITDA was $113 million for the three months ended June 30, 2025 compared to $139 million for the three months ended June 30, 2024 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial Measures” below). The $26 million decrease in Adjusted EBITDA was primarily driven by portfolio optimization actions, lower volume, and unfavorable production costs. This was partially offset by lower selling, administrative, research and development costs. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these key factors along with the impact of common stock repurchases noted above.
Previous wording
Current Quarter - Sales for the current quarter decreased $96 million compared to the prior year quarter. The decrease was driven by the unfavorable impact of divestitures, lower volume, unfavorable pricing and unfavorable foreign currency exchange. Portfolio optimization initiatives had an approximate $67 million impact on sales compared to the prior year quarter, primarily within divestiture and volume caption changes.
Current wording
Current Quarter - Sales for the current quarter decreased $81 million compared to the prior year quarter. The decrease was driven by the unfavorable impact of divestitures, lower volume, and unfavorable pricing which was partially offset by favorable foreign currency exchange. Portfolio optimization initiatives had an approximate $53 million impact on sales in the current quarter compared to the prior year quarter, primarily within divestitures and volume caption changes.
Previous wording
Year-to-date - Sales for the current year decreased $164 million compared to the prior year period. The decrease was driven by the unfavorable impact of divestitures, lower volume, unfavorable pricing and unfavorable foreign currency exchange. Portfolio optimization initiatives had an approximate $117 million impact on sales compared to the prior year period, primarily within divestiture and volume caption changes.
Current wording
Year-to-date - Sales for the current year decreased $244 million compared to the prior year period. The decrease was driven by the unfavorable impact of divestitures, lower volume, and unfavorable pricing. Portfolio optimization initiatives had an approximate $170 million impact on sales in the current year period compared to the prior year period, primarily within divestitures and volume caption changes.
Previous wording
The following table provides a reconciliation of the change in cost of sales between the three and six months ended March 31, 2025 and 2024:
Current wording
The following table provides a reconciliation of the change in cost of sales between the three and nine months ended June 30, 2025 and 2024:
Previous wording
Current Quarter - Cost of sales for the current quarter decreased $82 million compared to the prior year quarter. The decrease was primarily driven by the favorable impact of divestitures, lower sales volume, lower operating costs, and favorable foreign exchange currency, partially offset by unfavorable pricing. The current period operating costs were affected by $13 million of accelerated depreciation for product line optimization activities at a Life Sciences manufacturing plant and $6 million of other plant optimization costs while the prior year quarter included $27 million of accelerated depreciation for product line optimization activities at two Speciality Additives manufacturing plants and $1 million of other plant optimization costs. Gross profit as a percentage of sales increased 2.7% primarily due to production volume recovery versus inventory corrective actions and decreased accelerated depreciation compared to the prior year quarter.
Current wording
Current Quarter - Cost of sales for the current quarter decreased $27 million compared to the prior year quarter. The decrease was primarily driven by the favorable impact of divestitures, lower sales volume, and favorable pricing, partially offset by higher operating costs and unfavorable foreign exchange currency. The current period operating costs were affected by $27 million of accelerated depreciation for product line optimization activities at manufacturing facilities within the Life Sciences, Personal Care and Specialty Additives reportable segments and $3 million of other plant optimization costs while the prior year quarter included $8 million of accelerated depreciation for product line optimization activities at two Speciality Additives manufacturing plants and one Personal Care manufacturing plant, and $4 million of other plant optimization costs. Gross profit as a percentage of sales decreased 5.7% primarily due to lower sales volume, higher operating costs and increased accelerated depreciation compared to the prior year quarter.
Previous wording
Year-to-date - Cost of sales for the current year decreased $163 million compared to the prior year period. The decrease was primarily driven by the favorable impact of divestitures, lower operating costs, lower sales volume, and favorable foreign exchange currency, partially offset by unfavorable pricing. The current period operating costs were affected by $13 million of accelerated depreciation for product line optimization activities at a Life Sciences manufacturing plant and $9 million of other plant optimization costs while the prior year period included $49 million of accelerated depreciation for product line optimization activities at two Speciality Additives manufacturing plants and $1 million of other plant optimization costs. Gross profit as a percentage of sales increased 4.5% primarily due to production volume recovery versus inventory corrective actions and decreased accelerated depreciation compared to the prior year period.
Current wording
Year-to-date - Cost of sales for the current year decreased $190 million compared to the prior year period. The decrease was primarily driven by the favorable impact of divestitures, lower sales volume, and lower operating costs, partially offset by unfavorable pricing. The current period operating costs were affected by $40 million of accelerated depreciation for product line optimization activities at manufacturing facilities within the Life Sciences, Personal Care and Specialty Additives reportable segments and $12 million of other plant optimization costs while the prior year period included $56 million of accelerated depreciation for product line optimization activities at two Speciality Additives manufacturing plants and one Personal Care manufacturing plant, and $5 million of other plant optimization costs. Gross profit as a percentage of sales increased 1.1% primarily due to production volume recovery versus inventory corrective actions and decreased accelerated depreciation compared to the prior year period.
Previous wording
Current Quarter - Selling, general and administrative expense for the current quarter decreased $21 million compared to the prior year quarter with expenses as a percent of sales decreasing 0.7%. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year quarter were:
Current wording
Current Quarter - Selling, general and administrative expense for the current quarter decreased $8 million compared to the prior year quarter with expenses as a percent of sales increasing 1.9%. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year quarter were:
Previous wording
$2 million and $3 million in net environmental-related expenses during the current and prior year quarter, respectively (see Note L of the Notes to the Condensed Consolidated Financial Statements for more information);
Current wording
$30 million and $35 million in net environmental-related expenses during the current and prior year quarter, respectively (see Note L of the Notes to the Condensed Consolidated Financial Statements for more information);
Previous wording
Expense of $8 million and $20 million comprised of key items for severance, lease abandonment and other restructuring costs during the current and prior year quarter, respectively; and
Current wording
Expense of $7 million and $3 million comprised of key items for severance, lease abandonment and other restructuring costs during the current and prior year quarter, respectively; and
Previous wording
Year-to-date - Selling, general and administrative expense for the current year decreased $27 million compared to the prior year period with expenses as a percent of sales increasing 0.3%. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year period were:
Current wording
Year-to-date - Selling, general and administrative expense for the current year decreased $35 million compared to the prior year period with expenses as a percent of sales increasing 0.9%. Key drivers of the fluctuation in selling, general and administrative expense compared to the prior year period were:
Previous wording
$3 million and $7 million in net environmental-related expenses during the current and prior year quarter, respectively (see Note L of the Notes to the Condensed Consolidated Financial Statements for more information);
Current wording
$33 million and $41 million in net environmental-related expenses during the current and prior year period, respectively (see Note L of the Notes to the Condensed Consolidated Financial Statements for more information);
Previous wording
Expense of $11 million and $24 million comprised of key items for severance, lease abandonment and other restructuring costs during the current and prior year quarter, respectively;
Current wording
Expense of $18 million and $28 million comprised of key items for severance, lease abandonment and other restructuring costs during the current and prior year period, respectively;
Previous wording
Current Quarter - Research and development expense is generally consistent with the prior year quarter.
Current wording
Current Quarter - Research and development expense decreased mostly due to lower incentive compensation.
Previous wording
Current Quarter - The lower intangibles amortization expense in the current quarter is driven by the impact of amortization related to the divested Avoca business in the current quarter and Nutraceuticals business in the prior year quarter.
Current wording
Current Quarter - The lower intangibles amortization expense in the current quarter is driven by the impact of amortization related to the divested Avoca business in the prior quarter and Nutraceuticals business in the prior year quarter.
Previous wording
Year-to-date - Equity and other income is generally consistent with the prior year period.
Current wording
Year-to-date - Equity and other income is lower than the prior year period, which included $2 million in China subsidies.
Previous wording
Current Quarter - Ashland recorded a pre-tax gain on sale of $8 million associated with the sale of the Avoca business and a pre-tax gain on sale of a land property of $11 million during the current period. Additionally, Ashland incurred $1 million of charges related to the Nutraceuticals business sale completed in fiscal 2024. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
Current Quarter - The prior year quarter included $99 million of charges related to the Nutraceuticals business sale completed in fiscal 2024. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
Previous wording
Year-to-date - Ashland recorded a $183 million impairment charge and a pre-tax gain on sale of $8 million associated with the Avoca business during the current year. In addition, Ashland recorded a pre-tax gain on sale of a land property of $11 million during the current year. Additionally, Ashland incurred $1 million of charges related to the Nutraceuticals business sale completed in fiscal 2024. Prior period primarily related to legal fees associated with ongoing divestiture activity and acquisitions related due diligence costs. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
Year-to-date - Ashland recorded a $183 million impairment charge and a pre-tax gain on sale of $8 million associated with the Avoca business during the current year. In addition, Ashland recorded a pre-tax gain on sale of a land property of $11 million during the current year. Additionally, the prior year period included $99 million of charges related to the Nutraceuticals business sale completed in fiscal 2024 as well as legal fees associated with ongoing divestiture activity and acquisitions related due diligence costs. See Note B of the Notes to the Condensed Consolidated Financial Statements for more information.
Previous wording
Current Quarter - Net interest and other expense (income) increased by $9 million during the current quarter compared to the prior year quarter. Interest expense and interest income remained primarily consistent during the current quarter compared to the prior year quarter. Restricted investments income of $6 million and $12 million included realized gains of $3 million compared to $9 million for the three months ended March 31, 2025 and 2024, respectively, and was the primary change between quarters. See Note E of the Notes to the Condensed Consolidated Financial Statements for more information on the restricted investments.
Current wording
Current Quarter - Net interest and other expense (income) decreased by $12 million during the current quarter compared to the prior year quarter. Interest expense increased primarily related to lower capitalized interest on capital projects in the current year quarter while interest income decreased primarily due to the decrease in cash equivalents during the current quarter compared to the prior year quarter. Restricted investments income of $22 million and $4 million included realized gains of $19 million compared to $1 million for the three months ended June 30, 2025 and 2024, respectively, and was the primary change between quarters. See Note E of the Notes to the Condensed Consolidated Financial Statements for more information on the restricted investments.
Previous wording
Year-to-date - Net interest and other expense (income) increased by $60 million during the current year compared to the prior year period. Interest expense and interest income remained primarily consistent during the current quarter compared to the prior year quarter. Restricted investments expense of $7 million and income of $48 million included realized losses of $14 million compared to gains of $39 million for the six months ended March 31, 2025 and 2024, respectively, and was the primary change between periods. See Note E of the Notes to the Condensed Consolidated Financial Statements for more information on the restricted investments.
Current wording
Year-to-date - Net interest and other expense (income) increased by $48 million during the current year compared to the prior year period. Interest expense increased primarily related to lower capitalized interest on capital projects in the current year period while interest income decreased primarily due to the decrease in cash equivalents during the current year period compared to the prior year. Restricted investments income of $15 million and $51 million included realized gains of $5 million compared to $39 million for the nine months ended June 30, 2025 and 2024, respectively, and was the primary change between periods. See Note E of the Notes to the Condensed Consolidated Financial Statements for more information on the restricted investments.
Previous wording
Current Quarter - Other net periodic benefit loss for the three months ended March 31, 2025 primarily included interest cost of $4 million which was partially offset by expected return on plan assets of $3 million. Other net periodic benefit loss for the three months ended March 31, 2024 primarily included interest cost of $3 million which was partially offset by expected return on plan assets of $1 million. See Note K of the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
Current Quarter - 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. Other net periodic benefit loss for the three months ended June 30, 2024 primarily included interest cost of $3 million which was partially offset by expected return on plan assets of $1 million. See Note K of the Notes to the Condensed Consolidated Financial Statements for more information.
Previous wording
Year-to-date - Other net periodic benefit loss for the six months ended March 31, 2025 primarily included interest cost of $7 million and a $1 million curtailment loss partially offset by expected return on plan assets of $5 million. Other net periodic benefit loss for the six months ended March 31, 2024 primarily included interest cost of $8 million which was partially offset by expected return on plan assets of $4 million. See Note K of the Notes to the Condensed Consolidated Financial Statements for more information.
Current wording
Year-to-date - 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 partially offset by expected return on plan assets of $7 million.
Previous wording
Current Quarter - 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 overall effective tax rate was 23% for the three months ended March 31, 2025 and was primarily impacted by jurisdictional income mix.
Current wording
Current Quarter - 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 overall effective tax rate was an expense of 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.
Previous wording
The overall effective tax rate was a benefit of 610% for the six months ended March 31, 2024 and was primarily impacted by jurisdictional income mix, as well as net favorable discrete items of $126 million primarily related to changes in foreign tax reform related activity.
Current wording
The overall effective tax rate was 144% for the three months ended June 30, 2024 and was primarily impacted by jurisdictional income mix, as well as net favorable discrete items of $104 million primarily related to the tax impact of the held for sale classification for the Nutraceuticals business.
Previous wording
Year-to-date - 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 overall effective tax rate was 20% for the six months ended March 31, 2025 and was primarily impacted by jurisdictional income mix as well as a net $7 million from unfavorable tax discrete items primarily related to final regulations issued in the United States during the year impacting the recognition of deferred taxes on certain unrealized foreign exchange gains and losses.
Current wording
Year-to-date - 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 overall effective tax rate was a benefit of 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 return to provision adjustments and changes to uncertain tax positions.
Previous wording
The overall effective tax rate was a benefit of 612% for the three months ended March 31, 2024 and was primarily impacted by jurisdictional income mix, as well as net favorable discrete items of $102 million primarily related to changes in foreign tax reform related activity.
Current wording
The overall effective tax rate was 467% for the nine months ended June 30, 2024 and was primarily impacted by jurisdictional income mix, as well as net favorable discrete items of $231 million primarily related to changes in foreign tax activity and the tax impact of the held for sale classification for the Nutraceuticals business.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The following table provides a reconciliation of the change in operating income (loss) for the Specialty Additives reportable segment.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Ashland does not have manufacturing operations in Israel. Sales to Israel represent approximately 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable).