ASH 10-K & 10-Q changes, risk factors and insider trading

The following discussion of “risk factors” identifies the most significantrisk factors that may adversely affect Ashland’s business, operations, financial position or future financial performance.performance Thisor informationmake shouldan be readinvestment in conjunctionAshland withspeculative Management’sor Discussionrisky. and Analysis and the consolidated financial statements and related notes incorporated by reference into this Annual Report on Form 10-K. The following discussion of risksIt is designed to highlight what Ashland believes are important factors to consider when evaluating its expectations. This information should be read in conjunction with the description of our business, Management's Discussion and Analysis, and the consolidated financial statements and related notes contained in this Annual Report on Form 10-K. These factors could cause future results to differ from those in forward-looking statements and from historical trends.

Ashland has set aggressive growth goals for its businessesreportable segments which may be impacted by such risks as the failure to optimize the use of Ashland’s tangible and intangible assets, the failure to identify and successfully integrate acquisition targets, and/or unexpected costs and liabilities associated with strategic acquisitions. If they materialize, theseThese risks could lead to reduced sales, increased expenses, impairment of goodwill or other intangible assets, and other adverse effects on the Company’s financial condition and results of operations.

Ashland’s failure to fully achieve one or more of its aggressive growth goals or meet its long-term objectives could negatively impact Ashland’s potential value and its businesses.reportable Onesegments. ofSuch thefailure mostmay importantresult risksif Ashland is that Ashland might failunable to adequatelyeffectively execute its business strategy and growth plans by notfailing optimizingto optimize the use of its physical and intangible assets. AspectsSuch ofoptimization thatfailure riskmay includeresult from changes to the global economic environment, changes to the competitive landscape, attraction and retention of skilled employees, the potential failure of product innovation plans, failure to comply with existing or new regulatory schemes, failure to maintain a competitive cost structure and other risks outlined in greater detail in this Item 1A. In addition, Ashland, as part of its growth goals, continuously evaluates acquisition candidates. If Ashland is unable to successfully identify and integrate acquired businesses, Ashland could fail to achieve any expected increases in sales and operating results, which could have a material adverse effect on Ashland’s financial results. Ashland’s ability to achieve the anticipated financial benefits from any acquisition transactions may not be realized due to any number of factors, including, but not limited to, unsuccessful integration efforts, unexpected or underestimated liabilities or increased costs, fees, expenses and charges related to such transactions. Such adverse events could result in a decrease in the estimated fair value of goodwill or other intangible assets established as a result of such transactions, triggering an impairment.impairment as experienced in 2025. These and other factors could have a material adverse effect on our financial condition and results of operations.

Business disruptions,disruptions (including those related to operating hazards inherent with the production of chemicals,chemicals) stemming from events such as natural disasters, severe weather conditions, supply or logistics disruptions, increasing costs for energy, temporary plant and/or power outages, information technology systems and network disruptions, cyber-security breaches, terrorist attacks, armed conflicts, war, public health crises, fires, floods or other catastrophic events, could seriously harm Ashland’s operations, as well as the operations of its customers and suppliers, and may adversely impact Ashland’s financial performance. These events could result in reduced demand for Ashland’s products, make it difficult or impossible for Ashland to manufacture its products or deliver products to its customers or to receive raw materials from suppliers, or create delays and inefficiencies in the supply chain. In addition to leading to a serious disruption of Ashland’s businesses,reportable segments, a catastrophic event at one of our facilities or involving our products or employees could lead to substantial legal liability to or claims by parties allegedly harmed by the event.

Energy availability and pricing has been impacted by geopolitical events and may be impacted by climate relatedclimate-related legislation and regulations. As climate legislation increases in many countries, the availability of conventional and nonrenewable energy may be increasingly limited and prices may continue to increase. Where demand exceeds energy capacity, energy disruptions such as brown out or black out events are possible, leading to business interruption and quality/operational impacts. Failure to respond to or mitigate this risk could lead to increased cost and business impacts.

As part of its commitment to supporting climate change response efforts, Ashland has committed to 2032 targets through the Science Based Targets Initiative ("SBTi") which were approved by SBTi in NovemberOctober of 2023. These targets are aligned with the objective of limiting global warming to no more than 1.5C above preindustrial levels. Ashland’s sustainability commitments are key to stakeholders and a differentiator for Ashland. Failure to meet stated commitments could lead to reputational and business impacts.

Ashland’s substantial global operations subject it to risks ofinherent in doing business in foreign countries, including changes to tariffs and trade policy, geopolitical instability, and challenges in hiring and managing a diverse workforce across jurisdictions with differing labor and employment laws and cultural practices, any of which could adversely affect itsAshland's business, financial condition and results of operations.

Greater than half of Ashland’s net sales for fiscal 20242025 were to customers outside of North America. Ashland expects sales from international markets to continue to represent an even larger portion of the Company’s sales in the future. Also, a significant portion of Ashland’s manufacturing capacity is located outside of the United States. Accordingly, Ashland’s business is subject to risks related to the differing legal, political, cultural, social and regulatory requirements and economic conditions of many jurisdictions.jurisdictions Ashland’s global business operations present a range of challenges, particularly related to tariffs, trade policy, and geopolitical risks. The imposition of new tariffs or trade quotas, or the impairment of existing trade agreements, risks that have become more pronounced amid ongoing global trade tensions and protectionist measures, could significantly impair Ashland’s financial performance. The uncertainty and volatility created by these policies, including heightened trade disputes, renegotiations of major agreements, and the risk of additional withholding taxes or restrictions on foreign trade and investment (such as currency exchange controls), may disrupt supply chains, increase costs, limit market access for Ashland’s products, and adversely affect profitability in U.S. dollars for products and services provided abroad. Ongoing trade disputes between the United States and Europe, Latin America, and the Asia-Pacific region could further negatively impact Ashland if they worsen.

In addition, Ashland may not be able to generate sufficient cash flow from its operations to repay its indebtedness when it becomes due and to meet its other cash needs. If Ashland is not able to pay its debts as they become due, it could be in default under its credit facility or other indebtedness. Ashland might also be required to pursue one or more alternative strategies to repay indebtedness, such as selling assets, refinancing or restructuring its indebtedness or selling additional debt or equity securities. Ashland may not be able to refinance its debt or sell additional debt or equity securities or its assets on favorable terms, if at all, and if Ashland must sell its assets, it may negatively affect its ability to generate revenues.sales.

In all businessreportable segments and especially within Personal Care, there is an increasing awareness of and competition for innovations relating to more sustainable products with increasing attributes such as naturality and biodegradability, or materials sourced from bio-based raw materials. Ashland sees increasing pressure to innovate and provide solutions with these features to stay competitive and to differentiate the Company from competitors in key markets. Failure to innovate could result in a loss of business to competitors who offer similar or improved sustainable product portfolios.

Ashland operates in highly competitive markets which places downward pressure on prices and margins and may adversely affect Ashland’s businessesreportable segments and results of operations.

Ashland operates in highly competitive markets, competing against a number of domestic and foreign companies. Competition is based on several key criteria, including product performance and quality, product price, product availability and security of supply, responsiveness of product development in cooperation with customers and customer service, as well as the ability to bring innovative products or services to the marketplace. Certain key competitors are significantly larger than Ashland and have greater financial resources, leading to greater operating and financial flexibility. As a result, these competitors may be better able to withstand changes in conditions within the relevant industry, changes in the prices of raw materials and energy and changes in general economic conditions. In addition, competitors’ pricing decisions could compel Ashland to decrease its prices, which could negatively affect its margins and profitability. Additional competition in markets served by Ashland could adversely affect margins and profitability and could lead to a reduction in market share. Also, Ashland competes in certain markets that are declining and has targeted other markets for growth opportunities. Competitive and pricing pressures could also impact Ashland’s production volumes, which can in turn reduce cost efficiency. If Ashland’s strategies for dealing with declining markets and leveraging opportunity markets are not successful, its businessesreportable segments and results of operations could be negatively affected.

Ashland’s success depends on its ability to attract and retain key personnel. The inability to recruit, and develop key personnel or the unexpected loss, voluntarily or otherwise, of key personnel may adversely affect Ashland's operations. Ashland relies heavily on its senior management team as these executives are primarily responsible for determining the strategic direction of Ashland’s business and for executing its growth strategy. Therefore, Ashland’s future success depends, in part, on the continued service of its senior management team. The loss of any member of the senior management team could impact the Company’s execution of its growth strategy and also be viewed negatively by investors and analysts, which maycould cause the price of Ashland’s common stock to decline.

In addition, Ashland’s success further depends on the Company’sits ability to identify and develop talent to succeed its senior management team and other key positions throughout the organization. If Ashland fails to identifyengage andin developeffective successors,succession planning, it may inhibit the Companyeffective is at risktransfer of beingknowledge, harmedprevent bysmooth thetransitions departures ofinvolving these key employees. The inability to recruit, retainemployees, and developnegatively keyimpact personnelour orstrategic theplanning unexpectedand loss,long-term voluntarily or otherwise, of key personnel may adversely affect Ashland’s operations.growth.

In addition, theThe nature of our businesses, the markets we serve, and the extensive geographic profile of our operations make Ashland a target of cybersecurity threats. Cybersecurity threats in general are increasing and becoming more advanced and could occur as a result of the activity of hackers, employee error or employee misconduct. In addition, bad actors are becoming more sophisticated in using various techniques and tools, including artificial intelligence, for malicious purposes. We have in the past experienced cybersecurity threats and other incidents, and we expect such incidents to continue in varying degrees. Ashland utilizes various cybersecurity controls and governance procedures to protect against such disruptions; however, these measures may not be sufficient for all eventualities. A failure in these controls and procedures may prevent us from detecting a failure or breach of our information systems and delay our ability to respond. Such failure of our controls and procedures and/or a breach of our IT systems could lead to the loss and destruction of trade secrets, confidential information, proprietary data, intellectual property, customer and supplier data, and employee personal information and we may be required by law to notify the impacted individuals and/or make other disclosures. These events could expose us to customer litigation, regulatory actions and costs related to the reporting and handling of such a failure or breach, all of which could disrupt our business operations and adversely affect Ashland’s relationships with business partners,partners and harm our brands, reputation, and financial results.

Ashland may not be able to effectively protect or enforce its intellectual property rights. Any such failure could, in part, result in loss of valuable proprietary information, harm our competitive position and reputation, and expose us to added liabilities.

Ashland has incurred, and will continue to incur, substantial costs asrelated a result ofto environmental, health and safety, and hazardous substances liabilities and related compliance requirements.compliance. These costs could adversely impact Ashland’s cash flow, and, to the extent they exceed Ashland’s established reserves for these liabilities, its results of operations.

Ashland is subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution, protection of the environment andenvironment, human health and safety, and the generation, storage, handling, treatment, disposal and remediation of hazardous substances and waste materials. Ashland has incurred, and will continue to incur, significant costs and capital expenditures to comply with these laws and regulations.

Ashland is responsible for, and has financial exposure to,to liabilities from pending and threatened claims, including those alleging personal injury caused by exposure to asbestos, which could adversely impact Ashland’s results of operations and cash flow.

New laws or regulations, or changes in existing laws or regulations or the manner of their interpretation or enforcement, could increase Ashland’s cost of doing business and restrict its ability to operate its business or execute its strategies. This includes, among other things, the possible taxation under U.S. law of certain income from foreign operations, the possible taxation under foreign laws of certain income Ashland reports in other jurisdictions, the Pillar Two initiative of the Organization for Economic Co-operation and Development which introducesintroduced a 15% global minimum tax applied on a country-by-country basis to Ashland in many jurisdictions startingwhich took effect on October 1, 2024, tariffs or quotas levied on Ashland products, raw materials or key components by certain countries, regulations related to the protection of private information of Ashland’s employees and customers, regulations issued by the U.S. Food and Drug Administration (and analogous non-U.S. agencies) affecting Ashland and its customers, compliance with the U.S. Foreign Corrupt Practices Act (and analogous non-U.S. laws) and the European Union’sEU’s Registration, Authorization and Restriction of Chemicals ("REACH") regulation (and analogous non-EU initiatives), and potential operational impacts of the EU's General Data Protection Regulation ("GDPR"). Uncertainty associated with the passage of new laws, application of executive authority beyond the legislative process, as well as changes in and enforcement of existing laws, can limit Ashland’s ability to make and execute business plans effectively. In addition, compliance with laws and regulations is complicated by Ashland’s substantial and growing global footprint, which will require significant and additional resources to comprehend and ensure compliance with applicable laws in the more than one hundred countries where Ashland conducts business. Compliance with current and future regulations is further complicated by uncertainty around the reevaluation of international agreements by various countries, including the United States, and the resulting impact on regulatory regimes, customs regulations, tariffs, sanctions, and other transnational protocols.

EmergingEvolving ESG regulationsregulations, inincluding the European Union and globally such as theEU’s Corporate Sustainability Reporting Directive ("CSRD"), Corporate Sustainability Due Diligence Directive (“CSDDD”) and European Union Deforestation Regulations ("EUDR") may also require significant resources and data management systems to continue to support the Company. These regulations have the potential to impact Ashland’s business and ability to manage materials effectively.

Ashland’s products are made, manufactured, distributed or sold in more than 100 countries and territories. A significant portion of Ashland’s revenuessales are generated outside the United States. As such, Ashland is subject to taxes in the United States as well as numerous foreign countries. Ashland’s future effective tax rates could be affected by changes in the mix of earnings in countries with differing tax rates, changes in the valuation of deferred tax assets and liabilities, changes in liabilities for uncertain tax positions, cost of repatriations or changes in tax laws, regulations, administrative practices or their interpretation. Moreover, because Ashland is subject to the regular examination of its income tax returns by various tax authorities, the economic and political pressure to increase tax revenues in these jurisdictions may make resolving tax disputes even more difficult, and the final resolution of tax audits and any related litigation may differ from our historical provisions and accruals resulting in an adverse impact on our business, financial condition, reputation or results of operations. The Tax Cuts and Jobs Act ("the Tax Act"), enacted in December 2017, made significant changes to US tax law; many other countries or organizations, including those where Ashland has significant operations, are actively considering or enacting changes to tax laws which could significantly impact our tax rate and cash flows. The increasingly complex global tax environment, including changes in how United States multinational corporations are taxed, could adversely affect Ashland’s business, financial condition or results of operations.

Ashland is a global additives and specialty ingredients company with a conscious and proactive mindset for environmental, social and governance ("ESG").sustainability. The companyCompany 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 3,2002,900 employees worldwide, Ashland serves customers in more than 100 countries.

Ashland’s sales generated outside of North America were 69%,73%, 69% and 68%69% in 2024,2025, 20232024 and 2022,2023, respectively. Sales by region expressed as a percentage of total consolidated sales for the years ended September 30, were as follows:

Ashland includes only U.S. and Canada in its North AmericanAmerica designation and includes Europe, the Middle East and Africa in its Europe designation.

Ashland’s reportable segments include Life Sciences, Personal Care, Specialty Additives and Intermediates. Unallocated and Other includes corporate governance activities and certain legacy matters. The contribution to sales by each reportable segment expressed as a percentage of total consolidated sales for the yearyears ended September 3030, were as follows:

Uncertainty relating to the ongoing Israel/Iran, Ukraine/Russia conflict and Israel/Hamas conflict

Business disruptions, including those related to the ongoing conflicts between Israel/Iran, Ukraine/RussiaRussia, orand Israel/Hamas continue to impact businesses around the globe. While it is impossible to predict the effects of the conflictsconflicts, suchthey asmay possibleinclude escalating geopolitical tensions (including the imposition of existing and additional sanctions by the U.S. and the European UnionEU on Russia), worsening macroeconomic and general business conditions, supply chain interruptions and unfavorable energy markets, and the impact to Ashland could be material. Ashland is closely monitoring these situations and maintains business continuity plans that are intended to continue operations orand mitigate the effects of events that could disrupt its business.

Ashland does not have manufacturing operations in Israel, Russia, Ukraine, or Belarus. Ashland sells (or previously sold) additives and specialty ingredients to manufacturers in these countries for their use in pharmaceuticals, personal care, and coatings applications. Sales to Russia and Belarus were previously limited and our products were primarily used in products and applications that are essential to the population's well-being and currently support our customers' humanitarian efforts. We have sales controls in place to ensure that future potential sales into the region are only to support critical pharmaceutical or personal hygiene products which are essential for the general population and in accordance with any applicable sanctions. Sales to Israel, Ukraine, Russia, and Belarus represent less than 1% of total consolidated sales and less than 1% of total consolidated assets (related to accounts receivable).

During fiscal year 2024,2025, under the Company's current common share repurchase program (the "2023 Stock Repurchase Program,Program"), Ashland initiated and completed a number of Rule 10b5-1 trading plan agreements. Ashland paid a total of $380$100 million and repurchased a total of 4.31.5 million shares. During the most recent three fiscal yearsyears, Ashland paid a total of $880$780 million and received a total of 10.28.9 million shares. See Note N of the Notes to Consolidated Financial Statements for more information.

NutraceuticalsAvoca business sale

Key financial results for 2024,fiscal 20232025, 2024 and 20222023 included the following:

These are non-GAAP financial measures. See "Use of non-GAAPNon-GAAP measuresFinancial Measures" section below for reconciliations to U.S. GAAP.

Ashland’s net loss of $845 million (loss of $18.23 diluted earnings per share) in 2025, and net income of $169 million ($3.36 diluted earnings per share) in 2024,2024 and $178 million ($3.31 diluted earnings per share) in 2023 and $927 million ($16.41 diluted earnings per share) in 2022 included a loss from discontinued operations of $23 million, (loss of $0.49 diluted earnings per share) in 2025, and $30 million,million ($0.59 diluted earnings per share) in 2024, and a net income from discontinued operations of $10 million ($0.18 diluted earnings per share) in 2023, and $746 million ($13.21 diluted earnings per share) in 2022. Fiscal 2022 included a $726 million gain recorded in discontinued operations associated with the sale of the Performance Adhesives business in February of 2022 and was the largest impact on net income between periods.2023.

Results for Ashland’s continuing operations, diluted earnings (loss) per share from continuing operations and operating income (loss) for 2024,fiscal 20232025, 2024 and 20222023 included certain key items that were excluded to arrive at Adjusted EBITDA and are quantified in the “Use of non-GAAPNon-GAAP measuresFinancial Measures” section of this Annual Report on Form 10-K. These pre-tax key items totaled expense of $959 million, $227 million,million and $21 million and $96 million in 2024,fiscal 20232025, 2024 and 2022,2023, respectively, impacting continuing operations.operations, including a non-cash goodwill impairment charge of $706 million in fiscal 2025 ($375 million for the Life Sciences and $331 million for the Specialty Additives reportable segments). Continuing operations was also impacted by favorableunfavorable discrete tax items totaling $31 million in 2025 and favorable discrete items totaling $234 million,million and $44 million and $9 million in 2024, 20232024 and 2022,2023, respectively, for various tax specific key items for uncertain tax positions, valuation allowances, restructuring and separation activity and tax reform related activity. The pre-tax key items impacting operating income (loss) totaled expense of $273$982 million, $52$273 million, and $16$52 million in 2024,fiscal 20232025, 2024 and 2022,2023, respectively. Excluding these key items, continuing operations, diluted earnings per share from continuing operations and operating income (loss) increaseddecreased from fiscal 20232024 to 20242025, primarilydriven dueby toPortfolio deflationaryOptimization rawactions, materialsreduced volume, and lower pricing. This was partially offset by unfavorablelower pricingselling, administrative, research and lowerdevelopment volume.costs. The decreaseincrease in income from continuing operations, diluted earnings per share from continuing operations and operating income (loss) from fiscal 20222023 to 20232024 was primarily drivendue byto lowerdeflationary salesraw volumes from customer de-stocking, partiallymaterials offset by improvedunfavorable pricing associated with cost inflation pricing actions and favorable selling, general and administrative expense primarily driven by lower incentive compensation.volume. In addition, diluted earnings per share from continuing operations was also impacted by common share reductions from repurchases of Ashland common stock in the amount of $100 million in 2025, $380 million in 2024,2024 and $300 million in 2023 and $200 million in M-3 2022.2023. These common stock repurchases reduced the number of weighted average shares from 56 million diluted shares in 2022 to 54 million diluted shares in 2023 andto 50 million diluted shares in 2024.2024 and to 47 million diluted shares in 2025.

Ashland’s Adjusted EBITDA was $459$401 million for 2025 and $459 for both 2024 and 2023 (see U.S. GAAP reconciliation under “Use of non-GAAPNon-GAAP measuresFinancial Measures” below). Adjusted EBITDA decreased from fiscal 2024 to 2025 primarily due to Portfolio Optimization actions, reduced volume, and lower pricing. This was partially offset by lower selling, administrative, research and development costs. Adjusted EBITDA remained consistent from fiscal 2023 to 2024 primarily due to deflationary raw materials, unfavorable product mix and favorable foreign exchange currency, offset by unfavorable pricing and lower volume in the Life Sciences segment. The $131 million decrease in Adjusted EBITDA from fiscal 2022 to 2023 was primarily driven by lower sales volumes from customer de-stocking, partially offset by improved pricing associated with cost inflation pricing actions and favorable selling, general and administrative expense primarily driven by lower incentive compensation.volume. Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense was also impacted by these key factors along with the impact of common share repurchases noted above.

For further information on the items reported above, see the discussion in the comparative Statements of Consolidated Comprehensive Income (Loss) caption review analysis.review.

A comparative analysis of the Statements of Consolidated Comprehensive Income (Loss) by caption is provided as follows for the years ended September 30, 2024, 2023 and 2022.30:

Sales for 20242025 decreased $78$289 million, or 4%,14%, compared to 20232024. primarilyThe fromdecrease was driven by the unfavorable pricing.impact Pricingof divestitures, lower volume, and unfavorable pricing, which was softerpartially asoffset by favorable foreign currency exchange. Portfolio optimization initiatives had an approximate $208 million impact on sales in the current year compared to the prior yearyear, inprimarily awithin moderately deflationary raw material environment. CMCdivestitures and MCvolume portfoliocaption optimization initiatives and the Nutraceuticals business sale reduced sales by approximately $30 million during the current year.changes.

Cost of sales for 20242025 decreased $28$220 million compared to 2023.2024. Favorable product price/mix was the primary factor for the decrease. ThisThe decrease was primarily driven by the favorable impact of divestitures, lower sales volume, and lower operating costs, partially offset by higherunfavorable pricing and unfavorable foreign exchange currency. The current year operating costs drivenwere affected by higher$41 unitmillion of accelerated depreciation for product line optimization activities at manufacturing costsfacilities associatedwithin withthe decreasedLife Sciences, Personal Care and Specialty Additives reportable segments and $22 million of other plant loadingoptimization tocosts produce to demand inwhile the firstprior halfyear ofperiod the year,included $57 million of accelerated depreciation for product line optimization activities associated withat two Specialty Additives manufacturing facilitiesplants and one Personal Care manufacturing facility,plant, and $10 million of other plant optimization costs, and higher volume compared to inventory control measures in the prior year.costs. Gross profit as a percentage of sales decreasedincreased 1.30.9 percentage points primarily asdue ato resultproduction ofvolume higherrecovery operatingversus costsinventory includingcorrective higher unit manufacturing costactions and productdecreased lineaccelerated optimizationdepreciation activities.compared to the prior year period.

$45 million and $54 million in net environmental-related expenses during 2024 and 2023, respectively (see Note M of the Notes to Consolidated Financial Statements for more information);

Ashland’s sales generated outside of North America were 73% for both the three and sixnine months ended MarchJune 31,30, 2026, and 73% and 72% for both the three and sixnine months ended MarchJune 31,30, 2025.2025, respectively. Sales by region expressed as a percentage of total consolidated sales were as follows:

The three and nine months ended MarchJune 31,30, 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.

Ashland does not have manufacturing operations in Iran, Israel, Russia, Ukraine, VenezeluaVenezuela 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.

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 $2 million and zero, respectively, for the three months ended March 31, 2026, and approximately $11 million and $1 million, respectively,million for the sixnine months ended MarchJune 31,30, 2026, respectively, compared to the prior year periods. Operating income (loss) was positively impacted by $2 million and $4 million for the three and sixnine months ended MarchJune 31,30, 2026, respectively, compared to the prior year periods.

Ashland is also advancing a multi-year manufacturing network optimization to improve operational cost and strengthen its competitive position. This optimization plan is expected to generate pre-tax savings of $50 million to $55 million with $60 million being achievable as market conditions improve, particularly within China. Ashland realized savings of approximately $10$2 million and $15$10 million during the three and sixnine months ended MarchJune 31,30, 2026, respectively, compared to the prior year periods.periods as a result of these multi-year manufacturing network optimizations.

As a result of the loss from continuing operations attributable to Ashland during the sixthree and nine months ended MarchJune 31,30, 2025, the effect of the share-based awards convertible to common stock would be antidilutive and have been excluded from the diluted EPS calculation.

Ashland's net income of $16 million ($0.34$0.35 diluted EPS) and $31net loss of $742 million ($0.65loss of $16.21 diluted EPS) included incomeloss from discontinued operations of $1$25 million ($0.02loss of $0.54 diluted EPS) and $1$23 million ($0.02loss of $0.51 diluted EPS) in the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Results for Ashland’s continuing operations, diluted EPS from continuing operations and operating income (loss) for the three months ended MarchJune 31,30, 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 expenseincome of $20$5 million and $6expense of $754 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, impacting continuing operations.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 favorableunfavorable tax specific key items for discrete tax items totaling zero and $1$13 million for the three months ended MarchJune 31,30, 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 softerunfavorable pricing,production the Calvert City startup delaycosts and weather-related operational disruptions during the quarter, partially offset by favorable foreign exchange currency and lowerhigher selling, general and administrative expenses.expenses, Inpartially addition, diluted EPS from continuing operations was also impactedoffset by commonhigher stocksales reductionsvolumes, fromprice/mix repurchasesand offoreign Ashlandcurrency commonexchange. stock over the last twelve months. These common stock repurchases reduced theThe number of weightedweighted-average averagecommon shares fromoutstanding 47 million diluted shares at March 31, 2025 towas 46 million diluted shares at Marchboth 31,June 2026.30, 2026 and 2025.

Ashland’s Adjusted EBITDA was $98$109 million for the three months ended MarchJune 31,30, 2026 compared to $108$113 million for the three months ended MarchJune 31,30, 2025 (see U.S. GAAP reconciliation under “Use of Non-GAAP Financial Measures” below). The $10$4 million decrease in Adjusted EBITDA was primarily driven by softerunfavorable pricing,production the Calvert City startup delaycosts and weather-related operational disruptions during the quarter, offset by favorable foreign exchange currency and lowerhigher selling, general and administrative expenses.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 along with the impact of common stock repurchases noted above.factors.

Sales for the three months ended MarchJune 31,30, 2026 increased $3$34 million compared to the three months ended MarchJune 31,30, 2025. The increase was driven by higher volume, favorable foreign currency exchange whichand was partially offset by unfavorable pricing. Portfolio Optimization initiatives had a negative $2 million impact on sales in the three months ended March 31, 2026.price/mix.

Sales for the sixnine months ended MarchJune 31,30, 2026 decreasedincreased $16$18 million compared to the sixnine months ended MarchJune 31,30, 2025. The decreaseincrease was driven by favorable foreign currency exchange and higher volume, which was partially offset by unfavorable pricing, lower volumeprice/mix and the impact of the Avoca business sale, which was partially offset by favorable foreign currency exchange.sale. Portfolio Optimization initiatives had a negative $11 million impact on sales in the sixnine months ended MarchJune 31,30, 2026.

Cost of sales for the three months ended MarchJune 31,30, 2026, increaseddecreased $3$4 million compared to the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily driven by alower $10operating million negative combined impact from the Calvert City startup delaycosts and weather-relatedfavorable operational disruptions during the quarter as well as unfavorable foreign exchange currency,price/mix partially offset by favorablehigher price/mix.volumes and unfavorable foreign currency. The three months ended MarchJune 31,30, 2026, operatingincluded costs were affected by $10$3 million of other plant optimization costs while the three months ended MarchJune 31,30, 2025 included $13$27 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life SciencesSciences, Personal Care and Specialty Additives reportable segmentsegments and $6$3 million of other plant optimization costs. Gross profit as a percentage of sales decreasedincreased 0.2% primarily due to higher operating costs5.7% compared to the three months ended MarchJune 31,30, 2025.2025 as a result of the sales and cost of sales factors noted above.

Cost of sales for the sixnine months ended MarchJune 31,30, 2026, decreased $10$14 million compared to the sixnine months ended MarchJune 31,30, 2025. The decrease was primarily driven by favorable price/mix, the impactdivestiture of the Avoca business sale, favorable price/mix and lower salesoperating volume,costs, partially offset by unfavorablehigher foreign exchange currencyvolumes and unfavorable operatingforeign costs.currency. The sixnine months ended MarchJune 31,30, 2026, operating costs were affected by $3$4 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Specialty Additives reportableand segmentPersonal Care and $15$18 million of other plant optimization costs while the sixnine months ended MarchJune 31,30, 2025 included $13$40 million of accelerated depreciation for product line optimization activities at manufacturing facilities within Life SciencesSciences, Personal Care and Specialty Additives reportable segmentsegments and $9$12 million of other plant optimization costs. Gross profit as a percentage of sales decreasedincreased 0.2% primarily due to lower sales volume, higher operating costs and other plant optimization costs1.9% compared to the sixnine months ended MarchJune 31,30, 2025.2025, as a result of the sales and cost of sales factors notes above.

Selling, general and administrative expense for the three months ended MarchJune 31,30, 2026, decreased $6$7 million compared to the three months ended MarchJune 31,30, 2025, with expenses as a percent of sales decreasing 1.3%.3.0%. Key drivers of the fluctuation in selling, general and administrative expense compared to the three months ended MarchJune 31,30, 2025, were:

$12$17 million and $3$30 million in net environmental-related expenses during the sixthree months ended MarchJune 31,30, 2026 and 2025, respectively (see Note L of the Notes to Condensed Consolidated Financial Statements for more information);

Expense of $7$8 million and $11$7 million comprised of key items for severance, lease abandonment and other restructuring costs during the sixthree months ended MarchJune 31,30, 2026 and 2025, respectively; and Higher variable compensation expense, increased bad debt expense, lower transition services income and unfavorable currency exchange partially offset by increased income associated with company-owned life insurance contracs and realized cost reductions, including the Avoca business sale, associated with restructuring actions.

Research and development expense isincreased generallymostly consistentdue to higher incentive compensation between the three months ended MarchJune 31,30, 2026 and 2025.

Research and development expense is generally consistent between the sixnine months ended MarchJune 31,30, 2026 and 2025.

Intangibles amortization expense is generally consistent between the three months ended MarchJune 31,30, 2026 and 2025.

The lower intangibles amortization expense in the sixnine months ended MarchJune 31,30, 2026, is driven by the impact of amortization related to the divested Avoca business in the sixnine months ended MarchJune 31,30, 2025.

Equity and other income is generally consistent between the sixthree months ended MarchJune 31,30, 2026 and 2025.

Income (loss) on divestitures, net for the three months ended MarchJune 31,30, 2025,2026 primarily relates to aincome pre-taxrelated gainto onsales sale of $8 million associated with the Avoca business and a pre-tax gain on saleactivity of excess corporate real estate of $11 million, partially offset by $1 million adjustment related to the Nutraceuticals business sale completed in fiscal 2024.estate. See Note B of the Notes to Condensed Consolidated Financial Statements for more information.

Income (loss) on divestitures, net for the sixnine months ended MarchJune 31,30, 2026, primarily relates to sales activity and a pre-tax gain on sale of excess corporate real estate while the three months ended MarchJune 31,30, 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.

Net interest and other (income) expense increased by $7$3 million during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. Interest expense and interest income are generally consistent between the three months ended MarchJune 31,30, 2026 and 2025. Investment securities expenseincome of $2$23 million and income of $6$22 million included realized lossesgains of $5$20 million and gains of $3$19 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively,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 $13$15 million during the sixnine months ended MarchJune 31,30, 2026, compared to the sixnine months ended MarchJune 31,30, 2025. Interest expense and interest income are generally consistent between the sixnine months ended MarchJune 31,30, 2026 and 2025. Investment securities income of $5$28 million and expense of $7$15 million included realized lossesgains of $3$18 million and $14$5 million for the sixnine months ended MarchJune 31,30, 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 MarchJune 31,30, 2026,2025, 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 March 31, 2025, primarily included interest cost of $4 million, which was partially offset by expected return on plan assets of $3 million. See Note K of the Notes to Condensed Consolidated Financial Statements for more information.

Other net periodic benefit lossincome for the sixnine months ended MarchJune 31,30, 2026, primarily included interestexpected costreturn on plan assets of $7$8 million, an actuarial gain of $3 million and a settlement gain of $2 million, which was partially offset by expectedinterest return on plan assetscost of $5$10 million. Other net periodic benefit loss for the sixnine months ended MarchJune 31,30, 2025, primarily included interest cost of $7$10 million and a $1 million curtailment loss, which was partially offset by expected return on plan assets of $5$7 million. See Note K of the Notes to Condensed Consolidated Financial Statements for more information.

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 25%27% for the three months ended MarchJune 31,30, 2026, and was primarily impacted by jurisdictional income mix and a net $1$3 million from favorableunfavorable tax discrete items primarily related to equitycash compensation adjustmentsrepatriation and changes in uncertain tax positions.

The effective tax rate was 80%negative 2% for the sixthree months ended MarchJune 31,30, 2026,2025, and was primarily impacted by jurisdictional income mixmix, nondeductible goodwill impairment of $706 million charge and a net $1$16 million from unfavorable tax discrete items primarily related to equityreturn compensationto provision adjustments and changes in uncertain tax positions.

The effective tax rate was 20%30% for the sixnine months ended MarchJune 31,30, 2025,2026, and was primarily impacted by jurisdictional income mix as well asand a net $7$4 million from unfavorable tax discrete items primarily related to finalequity regulationscompensation issuedadjustments and changes in theuncertain U.S.tax during the six months ended March 31, 2025, impacting the recognition of deferred taxes on certain unrealized foreign exchange gains and losses.positions.

The effective tax rate during the three and sixnine months ended MarchJune 31,30, 2025 was significantly impacted by the following tax specific key items:

The activity for Performance Adhesives and ValvolineDistribution represents subsequent adjustments that were made in conjunction with taxenvironmental related reserves. Asbestos-related litigation activity primarily relates to Ashland's annual update.

The activity for Performance Adhesives, Distribution, Water Technologies, Performance AdhesivesTechnologies and Valvoline represents 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.

Total other comprehensive income (loss), net of tax, for the three months ended MarchJune 31,30, 2026, decreased $63$88 million compared to the three months ended MarchJune 31,30, 2025, primarily as a result of the following:

For the three months ended MarchJune 31,30, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in lossesgains of $12$4 million and gains of $49$91 million, respectively. The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.

For the three months ended MarchJune 31,30, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities. Commodity hedges resulted in unrealized gainslosses of zero$2 million and $2$1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Total other comprehensive income (loss), net of tax, for the sixnine months ended MarchJune 31,30, 2026, increaseddecreased $32$56 million compared to the sixnine months ended MarchJune 31,30, 2025, primarily as a result of the following:

For the sixnine months ended MarchJune 31,30, 2026 and 2025, the change in unrealized gain (loss) from foreign currency translation adjustments resulted in losses of $10$6 million and $45gains of $46 million, respectively. The fluctuations in unrealized translation gains and losses are primarily due to translating foreign subsidiary financial statements from local currencies to U.S. Dollars.

For the sixnine months ended MarchJune 31,30, 2026 and 2025, the change in commodity hedges is primarily due to the fluctuations of the market prices of the underlying commodities. Commodity hedges resulted in unrealized losses of $2 million and gains of zero and $3$2 million for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

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.

EBITDA totaled $84$69 million and $100loss of $683 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and income of $124$193 million and loss of $30$713 million for the sixnine months ended MarchJune 31,30, 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.

Accelerated depreciation – As a result of product line optimization activities at manufacturing facilities within the Life Sciences and Specialty Additives reportable segment,segments and unallocated and other, Ashland recorded accelerated depreciation due to changes in the expected useful life of certain property, plant and equipment during the sixthree and nine months ended MarchJune 31,30, 2026 and during the three and sixnine months ended MarchJune 31,30, 2025. See Note D of the Notes to Condensed Consolidated Financial Statements for more information;

Avoca businessGoodwill impairment and sale – During March 2025, Ashland sold substantially all of the net assets of its Avoca business. As a result, Ashland recorded ana non-cash goodwill impairment charge andof a$706 gain on salemillion within the incomegoodwill (loss) on divestitures, netimpairment caption of the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three and sixnine months ended MarchJune 31,30, 2025. See Note BG of the Notes to Condensed Consolidated Financial Statements for more information;