Life Sciences

Personal Care

Specialty Additives

Intermediates

Intersegment Sales

- Cellulosics

- PVP

- Adhesives

- Actives

- Vinyl ethers

- Pharmachem

- Other

Total Revenue

0065317049365b2ae921e6a8d2bdf6411dbb01a13a69b6dcd91031e1e6f2d673

Ashland’s Q2 2024 operating cash flow was lower due to a mix of factors. The key reasons include **a smaller decrease in operating assets and liabilities** compared to the previous period (**$37 million** versus **$88 million**), **lower income from restricted investments** (**$12 million** versus **$22 million**), and **slightly higher stock-based compensation** expenses (**$6 million** versus **$5 million**). Additionally, while the impact of favorable Accounts Receivable Sales Programs helped, it did not fully offset these changes, resulting in the relatively low operating cash flow observed in Q2 2024.  **[0000950170-24-050629_ash-ex99_1.htm:1]** **[0000950170-24-050629_ash-ex99_1.htm:12]** 

Why was Operating Cash Flow so low in Q2 2024?

The operating cash flow was driven negative in Q1 2025 by two main factors. First, the **U.S. and Foreign Accounts Receivable Sales Program activity** resulted in a **$130 million negative impact**. Second, **unfavorable working capital changes**—primarily due to shifts in inventory and incentive compensation payouts—added approximately **$113 million in negative impact**. This combination of factors led to the overall negative operating cash flow result in Q1 2025.  **[0000950170-25-010377_ash-20241231.htm:3]** **[0000950170-25-009944_ash-ex99_1.htm:12]** **[0000950170-25-010377_ash-20241231.htm:47]** 

What drove Operating Cash Flow negative in Q1 2025?

The available documents do not provide any information on the free cash flow performance or why it turned negative in Q1 2025. The documents only address changes in capital expenditures (additions to property, plant, and equipment).  **[0000950170-24-009280_ash-20231231.htm:2]** **[0000950170-25-010377_ash-20241231.htm:3]** **[ASH_3413550_1]**  Therefore, a definitive answer regarding free cash flow turning negative cannot be determined from the provided documents.

Why did Free Cash Flow turn negative in Q1 2025?

62344a8cadd3ef691b77a6bae3f211d9edea3f7cb67d3103f028a0c353c17d78

The decline to **219** in Q1 2025 resulted from several factors that collectively reduced the cash balance by **$81 million**. In Q1 2025, there was a **$30 million** outflow from operating activities driven by a **$130 million negative impact** from the U.S. and Foreign Accounts Receivable Sales Program and an **unfavorable working capital impact of approximately $113 million**. Additionally, cash was used in investing activities by **$18 million**—which included **$23 million** in additions to property, plant, and equipment—**$22 million** was used in financing activities for dividend payments, there was a **$10 million** outflow from discontinued operations, and a **$1 million** negative impact arose from currency exchange rate changes.  **[0000950170-25-010377_ash-20241231.htm:47]** **[0000950170-25-010377_ash-20241231.htm:2]** 

Why did cash and cash equivalents fall to 219 in Q1 2025?

Ashland's total assets declined to **$5,231 million** in Q1 2025 primarily because of a **$414 million** reduction driven by decreases in both current and noncurrent assets. The decline in current assets included a drop in **cash and cash equivalents** by **$81 million** (from **$300 million** to **$219 million**), a decrease in **accounts receivable, net** by **$80 million** (from **$243 million** to **$163 million**), and a reduction in **inventories** by **$17 million** (from **$545 million** to **$528 million**). In noncurrent assets, **goodwill** fell by **$51 million** (from **$1,381 million** to **$1,330 million**), and **intangibles** decreased by **$163 million** (from **$751 million** to **$588 million**), likely reflecting amortization or impairment adjustments.  **[0000950170-25-009944_ash-ex99_1.htm:11]** **[0000950170-25-010377_ash-20241231.htm:2]** 

Why did total assets decline to 5,231 in Q1 2025?

The **deferred income taxes surged to $150 million in Q2 2024** because favorable discrete tax items totaling **$105 million** were recorded during the three months ended March 31, 2024, which propelled the deferred tax asset from **$22 million** as of September 30, 2023 to **$150 million** in Q2 2024.  **[0000950170-24-051148_ash-20240331.htm:2]** **[0000950170-24-051148_ash-20240331.htm:31]** 

Why did deferred income taxes surge to 150 in Q2 2024?

The drop in accounts receivable to **$163 million in Q1 2025** was due to several factors. First, the company realized significant cash inflows of **$104 million** from its **U.S. and Foreign Accounts Receivable Sales Program**. Additionally, **pharmaceutical customers** actively reduced their inventory through stringent **customer inventory control actions**, and this was compounded by **soft demand** in Europe along with overcapacity in China, all of which contributed to lower sales volumes and a rapid reduction in accounts receivable balances.  **[0000950170-25-009944_ash-ex99_1.htm:11]** **[0000950170-25-010377_ash-20241231.htm:2]** **[0000950170-24-128009_ash-20240930.htm:97]** **[ASH_3413550_1]** **[0000950170-25-009944_ash-ex99_1.htm:1]** 

Why did accounts receivable drop to 163 in Q1 2025?

6168b1294926a610b6f53bfd6bd5050bedda22aabee18ace1dc7e2c3ff3076e1

Ashland’s net income was exceptionally high in Q2 2024 mainly because **discrete tax items increased significantly** and there was a **reduction in the share count due to share repurchases**. Specifically, while Q2 2023 saw tax benefits of only **$20 million**, Q2 2024 benefited from **$105 million** in discrete tax items, which substantially boosted income from continuing operations.  **[0000950170-24-051148_ash-20240331.htm:31]** **[0000950170-24-051148_ash-20240331.htm:32]**  Additionally, the decrease in the diluted share count from **55 million** to **51 million** further enhanced earnings per share, contributing to the higher net income despite facing some operating headwinds.  **[0000950170-24-051148_ash-20240331.htm:31]** **[0000950170-24-051148_ash-20240331.htm:32]** 

Why was Net income so high in Q2 2024?

The large loss on acquisitions and divestitures in Q3 2024 was primarily driven by an **impairment charge** related to the Nutraceuticals business. **Ashland recorded this impairment charge** as it entered into an agreement to sell substantially all of the net assets of its Nutraceuticals business to Turnspire Capital Partners LLC.  **[0000950170-24-091991_ash-ex99_1.htm:10]** **[0000950170-24-092587_ash-20240630.htm:47]** **[0000950170-24-092587_ash-20240630.htm:33]** **[0000950170-24-092587_ash-20240630.htm:5]** 

What drove the large loss on acquisitions and divestitures in Q3 2024?

The decline in Q1 2025 sales was primarily driven by **portfolio optimization initiatives**, which involved the divestiture of the Nutraceutical business and the addition of a low-margin nutrition business, reducing overall sales by about **$50 million (11%)** compared to the prior-year quarter.  **[0000950170-25-009944_ash-ex99_1.htm:0]** **[ASH_3413550_1]** **[0000950170-25-009944_ash-ex99_1.htm:1]** **[ASH_3413550_3]**  Additionally, **market conditions** such as a softening in European demand and precautionary inventory control actions by pharmaceutical customers, as well as a **2% decline in overall pricing**, further contributed to the **14% decline in sales**.  **[0000950170-25-009944_ash-ex99_1.htm:0]** **[ASH_3413550_1]** **[0000950170-25-009944_ash-ex99_1.htm:1]** **[ASH_3413550_3]** 

Why did Sales decline in Q1 2025?

The operating performance shifted to a loss in Q1 2025 due to several factors, including a **$183 million non-cash impairment on the Avoca business** and additional **portfolio optimization costs** related to the divestiture of lower-margin products. This was accompanied by a **14% year-over-year decline in sales**—with portfolio optimization actions reducing sales by about **$50 million**—and **unplanned Q1 maintenance costs of $5 million**. In addition, increased **selling, administrative, and R&D expenses of $104 million** and a **2% decline in pricing** further contributed to turning operating income into a significant loss.  **[0000950170-25-009944_ash-ex99_1.htm:14]** **[0000950170-25-009944_ash-ex99_1.htm:4]** **[0000950170-25-009944_ash-ex99_1.htm:0]** **[0000950170-25-009944_ash-ex99_1.htm:1]** **[ASH_3413550_3]** 

What caused the operating performance to shift to a loss in Q1 2025?

The significant change in Q2 2024 was driven by **net favorable discrete tax items**—primarily related to **foreign tax activity**—which led to a much larger tax benefit (a jump to **$104 million benefit** compared to a much smaller benefit in Q2 2023). Additionally, a shift in the **jurisdictional income mix** and adjustments to **tax-specific key items** (such as changes in uncertain tax positions and tax reform activities) substantially impacted the effective tax rate, contributing to the adverse deterioration of the tax expense profile.  **[0000950170-24-051148_ash-20240331.htm:34]** **[0000950170-24-051148_ash-20240331.htm:36]** **[0000950170-24-051148_ash-20240331.htm:31]** 

Why did the income tax expense worsen significantly in Q2 2024?

f9e680cab42db9a20c55e55aa9f09570fb8e18b6a269a43119d3cb8eaaaf94f4

Sales (USD, millions)

Cost of sales (USD, millions)

Gross profit (USD, millions)

Selling, general and administrative expense (USD, millions)

Research and development expense (USD, millions)

Intangibles amortization expense (USD, millions)

Equity and other income (USD, millions)

Loss on acquisitions and divestitures, net (USD, millions)

Operating loss / income (USD, millions)

Net interest and other expense (income) (USD, millions)

Other net periodic benefit loss (USD, millions)

Income (loss) from continuing operations before income taxes (USD, millions)

Income tax benefit / expense (USD, millions)

Income (loss) from continuing operations (USD, millions)

Income (loss) from discontinued operations, net of income taxes (USD, millions)

Net income (loss) (USD, millions)

84bce90773afc67c1e78642a5381d0990131bddfc1b34c3270e75c3f8af4a1da

Cash and cash equivalents (USD, millions)

Accounts receivable, net (USD, millions)

Inventories (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Cost of property, plant and equipment (USD, millions)

Accumulated depreciation (USD, millions)

Net property, plant and equipment (USD, millions)

Goodwill (USD, millions)

Intangible assets (USD, millions)

Operating lease assets, net (USD, millions)

Restricted investments (USD, millions)

Asbestos insurance receivable, net (USD, millions)

Deferred income taxes (asset) (USD, millions)

Other noncurrent assets (USD, millions)

Total noncurrent assets (USD, millions)

Total assets (USD, millions)

Short-term debt (USD, millions)

Trade and other payables (USD, millions)

Accrued expenses and other liabilities (USD, millions)

Current operating lease obligations (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Asbestos litigation reserve (USD, millions)

Deferred income taxes (liability) (USD, millions)

Employee benefit obligations (USD, millions)

Operating lease obligations (USD, millions)

Other liabilities (USD, millions)

Total noncurrent liabilities (USD, millions)

Total equity (USD, millions)

Total liabilities and stockholders' equity (USD, millions)

00c48988ef2b219111f2d27ae7c8eb2f7965d316ef39d9fb02dda64d50cc57ff

Net income (loss) from continuing operations [USD, millions]

Loss (income) from discontinued operations, net of income taxes [USD, millions]

Depreciation and amortization [USD, millions]

Original issue discount and debt issuance costs amortization [USD, millions]

Income from affiliates [USD, millions]

Stock based compensation expense [USD, millions]

Loss (income) from restricted investments [USD, millions]

Impairment charges [USD, millions]

Pension contributions [USD, millions]

Loss on pension plan remeasurements [USD, millions]

Change in operating assets and liabilities [USD, millions]

Total cash flows provided (used) by operating activities from continuing operations [USD, millions]

Additions to property, plant and equipment [USD, millions]

Company-owned life insurance payments [USD, millions]

Reimbursements from restricted investments [USD, millions]

Proceeds from sale of securities [USD, millions]

Purchases of securities [USD, millions]

Total cash flows used by investing activities from continuing operations [USD, millions]

Repurchase of common stock [USD, millions]

Cash dividends paid [USD, millions]

Stock based compensation employee withholding taxes paid in cash [USD, millions]

Total cash flows used by financing activities from continuing operations [USD, millions]

Cash provided (used) by continuing operations [USD, millions]

Operating cash flows from discontinued operations [USD, millions]

Total cash used by discontinued operations [USD, millions]

Effect of currency exchange rate changes on cash and cash equivalents [USD, millions]

Increase (decrease) in cash and cash equivalents [USD, millions]

Deferred income taxes [USD, millions]

Funds restricted for specific transactions [USD, millions]

Cash and cash equivalents - beginning of period [USD, millions]

Cash and cash equivalents - end of period [USD, millions]

3d3e7e898d44e7088e0ace3d11c1757f4c16a53e4e95f09157e2f4e52990fd2a

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

72eabc0a1334578df41295cc23e9e83d1f3466c4e9610081acde6b0673932dc5

c7cba4a0371e6ce3207b677eb72207112b1c383bbd8110f5cadd290060aeb91e

a87d18839b58a07e241f969b71b2cd6d8d9ed5e6d8e9ecaa0ccfe57342a04956

ee17444e26af7e6ebbbba8d9381638cd925526349f38d54139a33925c52cf220

ASHLAND (ASH)

Financials