ash-8k_20180731.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  July 31, 2018

ASHLAND GLOBAL HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation) 

 

333-211719

 

81-2587835

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

50 E. RiverCenter Boulevard

Covington, Kentucky 41011

Registrant’s telephone number, including area code (859) 815-3333

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


 


 

Item 2.02.  Results of Operations and Financial Condition

 

On July 31, 2018, Ashland Global Holdings Inc. (“Ashland”) announced preliminary third quarter results, which are discussed in more detail in the news release (the “News Release”) attached to this Current Report on Form 8-K (“Form 8-K”) as Exhibit 99.1, which is incorporated herein by reference into this Item 2.02.

 

Item 7.01.  Regulation FD Disclosure

 

On July 31, 2018, Ashland will make available the News Release and a slide presentation on the “Investor Center” section of Ashland’s website located at http://investor.ashland.com.  A copy of the slide presentation is attached to this Form 8-K as Exhibit 99.2, and is incorporated herein by reference solely for purposes of this Item 7.01 disclosure.

 

Item 9.01.  Financial Statements and Exhibits

 

 

(d)

Exhibits

 

 

 

 

99.1

Earnings News Release dated July 31, 2018.

 

 

 

 

99.2

Slide Presentation dated July 31, 2018.

 

In connection with the disclosures set forth in Items 2.02 and 7.01 above, the information in this Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Form 8-K, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing. This Form 8-K will not be deemed an admission as to the materiality of any information in this Form 8-K that is required to be disclosed solely by Regulation FD.

2


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ASHLAND GLOBAL HOLDINGS INC.

 

(Registrant)

 

 

July 31, 2018

/s/ J. Kevin Willis

 

J. Kevin Willis

 

Senior Vice President and

Chief Financial Officer

 

3

ash-ex991_6.htm

Exhibit 99.1

 

        News Release

 

Ashland reports preliminary financial results for third quarter of fiscal 2018 that exceed previous guidance and increases outlook for the full year

 

Broad-based growth in Specialty Ingredients sales, margins and adjusted earnings drove strong results in the quarter

 

Company expects to capture initial $20 million in annualized run-rate savings by end of September quarter as part of previously announced plan to accelerate EBITDA margin expansion

 

COVINGTON, KENTUCKY, July 31, 2018 – Ashland Global Holdings Inc. (NYSE: ASH), a premier global specialty chemicals company serving customers in a wide range of consumer and industrial markets, today announced preliminary(1) financial results for the third quarter of fiscal 2018:

 

 

Sales grew 12 percent year-over-year to $971 million;

 

Reported net income was $36 million, compared to a loss of $30 million last year, while income from continuing operations was $36 million, or $0.56 per diluted share;

 

On an adjusted basis, income from continuing operations was $72 million, or $1.13 per diluted share, compared to Ashland’s previous guidance of $0.95-$1.05 per share, driven by stronger operating results and a lower effective tax rate;

 

Adjusted EBITDA was $189 million, up 17 percent from the year-ago period.  

 

“The Ashland team continued building momentum in the third quarter on our path to becoming a premier specialty chemicals company, with all three operating segments delivering strong sales and earnings growth,” said William A. Wulfsohn, Ashland chairman and chief executive officer. “Our Specialty Ingredients team executed at a high level. The commercial team produced another quarter of strong organic sales growth through our more differentiated product mix, while the manufacturing team executed on our asset utilization strategy to generate improved gross margins. The teams also demonstrated good cost discipline, with adjusted selling, general and administrative (SG&A) expenses as a percentage of sales declining 70 basis points compared to prior year. Specialty Ingredients’ operating income grew 57 percent in the quarter. Adjusted EBITDA climbed 18 percent, with Pharmachem contributing over $16 million. Adjusted EBITDA margin rose 210 basis points, to 24.3 percent, marking good progress toward our margin target. Meanwhile, the Composites team continued to deliver strong sales and earnings growth from volume/mix improvements and price over raw materials. Within Intermediates and Solvents, the team delivered a 19 percent increase in sales through strong pricing and favorable currency.”

 

Update on EBITDA Margin Acceleration Plan

In early May, Ashland announced a program to accelerate EBITDA margin growth by creating a leaner, more cost competitive company with improved operating


efficiency, faster decision making and a stronger customer focus. Under this program, Ashland intends to eliminate a total of $120 million of existing allocated costs, direct expenses within Specialty Ingredients SG&A, and facility-related costs as follows:

 

Approximately $70 million of costs allocated to the Composites business and to the butanediol manufacturing facility in Marl, Germany, are expected to be offset or eliminated through transfers and reductions. This reduction is intended to eliminate stranded costs.

 

Approximately $50 million of costs are expected to be eliminated to drive improved profitability in Specialty Ingredients and accelerate achievement of its adjusted EBITDA margin target of 25-27 percent.

 

Ashland continues to expect to achieve the full $120 million in run-rate savings by the end of calendar year 2019. An initial $20 million in annualized run-rate savings under this program is expected by the end of the September 2018 quarter. An additional $30 million in run-rate savings is expected in the December 2018 quarter, bringing the total annualized run-rate to $50 million by the end of calendar 2018.  

 

“We are pleased with the progress our teams are making under this program. We have already begun executing on the initial phase of actions, and we expect the full redesign plan to be completed in early November and ready for full implementation,” Wulfsohn said.  

 

Reportable Segment Performance and Outlook

To aid in the understanding of Ashland’s ongoing business performance, the results of Ashland’s reportable segments are described below on an adjusted basis. In addition, EBITDA, or adjusted EBITDA, is reconciled to operating income in Table 5 of this news release.  In addition, free cash flow is reconciled in Table 7 and adjusted earnings per share is reconciled in Table 8 of this news release. (For a more detailed review of the segment results, please refer to the Investor Relations section of ashland.com to review the slides filed with the Securities and Exchange Commission in conjunction with this earnings release.) These adjusted results are considered non-GAAP financial measures.  For a full description of the non-GAAP financial measures used, see the “Use of Non-GAAP Measures” section that further describes these adjustments on page 4.

 

Specialty Ingredients

 

Sales increased 8 percent, to $638 million, driven by strong volumes, improved product mix and pricing.

 

Pharma grew 12 percent; Personal Care, Adhesive and Coatings all climbed 5 percent; and Construction/Energy gained 13 percent. Nutrition sales were flat year-over-year following an exceptionally strong second quarter. Favorable currency contributed 2 percentage points to the top-line growth.

 

Gross profit as a percentage of sales expanded by 190 basis points, to 34.9 percent, as the ongoing asset utilization program drove better absorption, higher production and lower operating costs.

 

SG&A, as a percentage of sales, declined by 70 basis points compared to the prior year, reflecting ongoing cost discipline.  

 

Adjusted EBITDA rose 18 percent, to $155 million, and adjusted EBITDA margin grew 210 basis points, to 24.3 percent.

 


Composites

 

Sales climbed 20 percent, to $250 million, as the team generated strong organic growth from continued pricing discipline as well as business growth in nearly all regions.

 

Adjusted EBITDA grew 4 percent, to $28 million.

 

Intermediates & Solvents

 

Sales increased 19 percent, to $83 million, driven by continued strong pricing.

 

Adjusted EBITDA in the quarter was $17 million, compared to $10 million a year ago.

 

Balance Sheet and Cash Flow

 

Total debt was $2.5 billion.

 

Net debt was $2.4 billion.

 

During the quarter, cash provided by operating activities from continuing operations totaled $130 million compared to $133 million in the prior-year period.

 

Free cash flow was $88 million compared to $80 million in the prior-year quarter. These figures include $8 million in restructuring payments in the third quarter of fiscal 2018, and $21 million in the year-ago period.

 

Outlook

Although Ashland provides forward-looking guidance for adjusted EBITDA, free cash flow and adjusted diluted earnings per share, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP-reported financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure. Such reconciliations have not been included because Ashland is unable, without unreasonable efforts, to estimate and quantify the most directly comparable U.S. GAAP components, largely because predicting future operating results is subject to many factors not in Ashland’s control and not readily predictable and that are not part of Ashland’s routine operating activities, including various domestic and international economic, political, legislative, regulatory and legal factors.

 

For the fourth quarter of fiscal 2018, Ashland expects adjusted earnings in the range of $0.90-$1.00 per diluted share, compared to $0.78 in the prior-year period. This estimate assumes an effective tax rate of 19 percent for the fourth quarter.

 

For the full 2018 fiscal year Ashland now expects adjusted earnings per share in the range of $3.50 to $3.60, which would represent growth of 43 – 48 percent compared to the previous year. The company expects free cash flow of $170 million in fiscal 2018. This figure includes approximately $50 million of separation and restructuring-related payments. Please see the table below for additional details related to the company’s fiscal 2018 financial outlook.  



 

 

Prior FY2018 Outlook

Updated

Adjusted EBITDA

 

 

-Specialty Ingredients

$565 - $585 million

$570 - $580 million

-Composites

$90 - $100 million

$95 - $100 million

-Intermediates & Solvents

$50 - $60 million

$55 - $60 million

-Unallocated and other

($35 - $45 million)

No change

 

 

 

Key Operating Metrics

 

 

-Free cash flow

>$170 million*

No change*

-Adjusted earnings per share (EPS)

$3.30 - $3.50

$3.50 - $3.60

 

 

 

Corporate Items

 

 

-Depreciation & amortization

~$300 million

No change

-Interest expense

$123 - $128 million

$123 - $125 million

-Effective tax rate

13 - 17%

No change

-Capital expenditures

$195 - $205 million

$195 - $200 million

-Diluted share count

~64 million

No change

*This figure includes approximately $50 million of separation and restructuring-related payments.

 

For additional information on Ashland’s third-quarter financial results, please see the slide presentation accompanying this news release.  

 

Conference Call Webcast

Ashland will host a live webcast of its third-quarter conference call with securities analysts at 9 a.m. EDT Wednesday, August 1, 2018. The webcast will be accessible through Ashland’s website at http://investor.ashland.com. Following the live event, an archived version of the webcast and supporting materials will be available for 12 months.

 

Use of Non-GAAP Measures

Ashland believes that by removing the impact of depreciation and amortization and excluding certain non-cash charges, amounts spent on interest and taxes and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide Ashland’s investors with performance measures that reflect the impact to operations from trends in changes in sales, margin and operating expenses, providing a perspective not immediately apparent from net income and operating income. The adjustments Ashland makes to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in net income and operating income and which Ashland does not consider to be the fundamental attributes or primary drivers of its business. EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by Ashland’s management to evaluate financial performance on a consolidated and reportable segment basis and provide consistency in our financial reporting, facilitate internal and external comparisons of Ashland’s historical operating performance and its business units and provide continuity to investors for comparability purposes.

 


Key items are defined as financial effects from significant transactions that, either by their nature or amount, have caused short-term fluctuations in net income and/or operating income which Ashland does not consider to most accurately reflect Ashland’s underlying business performance and trends.  Further, Ashland believes that providing supplemental information that excludes the financial effects of these items in the financial results will enhance the investor’s ability to compare financial performance between reporting periods.

 

Tax-specific key items are defined as financial transactions, tax law changes or other matters that fall within the definition of key items as described above.  These items relate solely to tax matters and would only be recorded within the income tax caption of the Statement of Consolidated Income.  As with all key items, due to their nature, Ashland does not consider the financial effects of these tax-specific key items on net income to be the most accurate reflection of Ashland’s underlying business performance and trends.

 

The free cash flow metric enables Ashland to provide a better indication of the ongoing cash being generated that is ultimately available for both debt and equity holders as well as other investment opportunities. Unlike cash flow provided by operating activities, free cash flow includes the impact of capital expenditures from continuing operations, providing a more complete picture of cash generation. Free cash flow has certain limitations, including that it does not reflect adjustment for certain non-discretionary cash flows such as mandatory debt repayments. The amount of mandatory versus discretionary expenditures can vary significantly between periods.

 

Adjusted diluted earnings per share is a performance measure used by Ashland and is defined by Ashland as earnings (loss) from continuing operations, adjusted for identified key items and divided by the number of outstanding diluted shares of common stock.  Ashland believes this measure provides investors additional insights into operational performance by providing the diluted earnings per share metric that excludes the effect of the identified key items and tax specific key items.

 

About Ashland 
Ashland Global Holdings Inc. (NYSE: ASH) is a premier global specialty chemicals company serving customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, personal care and pharmaceutical. At Ashland, we are approximately 6,500 passionate, tenacious solvers – from renowned scientists and research chemists to talented engineers and plant operators – who thrive on developing practical, innovative and elegant solutions to complex problems for customers in more than 100 countries. Visit 
ashland.com to learn more.  

 

C-ASH

 

 

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “objectives,” “may,” “will,” “should,” “plans” and “intends” and the negative of these words or other comparable terminology. Ashland may


from time to time make forward-looking statements in its annual reports, quarterly reports and other filings with the SEC, news releases and other written and oral communications. These forward-looking statements are based on Ashland’s expectations and assumptions, as of the date such statements are made, regarding Ashland’s future operating performance and financial condition, as well as the economy and other future events or circumstances. Ashland’s expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following: the program to eliminate certain existing corporate and Specialty Ingredients expenses (including the possibility that such cost eliminations may not occur or may take longer to implement than anticipated), the expected divestiture of its Composites segment and the butanediol (BDO) manufacturing facility in Marl, Germany, and related merchant Intermediates and Solvents (I&S) products (including, in each case, the possibility that a transaction may not occur or that, if a transaction does occur, Ashland may not realize the anticipated benefits from such transaction), the impact of acquisitions and/or divestitures Ashland has made or may make, including the acquisition of Pharmachem (including the possibility that Ashland may not realize the anticipated benefits from such transactions); Ashland’s substantial indebtedness (including the possibility that such indebtedness and related restrictive covenants may adversely affect Ashland’s future cash flows, results of operations, financial condition and its ability to repay debt); Ashland’s ability to generate sufficient cash to finance its stock repurchase plans; the potential that Ashland does not realize all of the expected benefits of the separation of its Valvoline business; the potential that the Tax Cuts and Jobs Act enacted on December 22, 2017, will have a negative impact on Ashland’s financial results; and severe weather, natural disasters, cyber events and legal proceedings and claims (including product recalls, environmental and asbestos matters). Various risks and uncertainties may cause actual results to differ materially from those stated, projected or implied by any forward-looking statements, including, without limitation, risks and uncertainties affecting Ashland that are described in Ashland’s most recent Form 10-K (including Item 1A Risk Factors) filed with the SEC, which is available on Ashland’s website at http://investor.ashland.com or on the SEC’s website at http://www.sec.gov. Ashland believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, Ashland undertakes no obligation to update any forward-looking statements made in this news release whether as a result of new information, future events or otherwise.

 

 

(1) Preliminary Results

Financial results are preliminary until Ashland’s Form 10-Q is filed with the SEC.

 

™ Trademark, Ashland or its subsidiaries, registered in various countries.

 

FOR FURTHER INFORMATION:

 

Investor Relations:

Seth A. Mrozek

+1 (859) 815-3527

samrozek@ashland.com

Media Relations:

Gary Rhodes

+1 (859) 815-3047

glrhodes@ashland.com

 

 

 

 

  

 


Ashland Global Holdings Inc. and Consolidated Subsidiaries

STATEMENTS OF CONSOLIDATED INCOME (LOSS)

(In millions except per share data - preliminary and unaudited)

Table 1

 

 

Three months ended

 

 

Nine months ended

 

 

June 30

 

 

June 30

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

 

971

 

 

$

 

870

 

 

$

 

2,787

 

 

$

 

2,380

 

Cost of sales

 

 

681

 

 

 

 

635

 

 

 

 

1,993

 

 

 

 

1,729

 

GROSS PROFIT

 

 

290

 

 

 

 

235

 

 

 

 

794

 

 

 

 

651

 

Selling, general and administrative expense

 

 

203

 

 

 

 

182

 

 

 

 

537

 

 

 

 

494

 

Research and development expense

 

 

21

 

 

 

 

20

 

 

 

 

64

 

 

 

 

61

 

Equity and other income

 

 

-

 

 

 

 

4

 

 

 

 

7

 

 

 

 

9

 

OPERATING INCOME

 

 

66

 

 

 

 

37

 

 

 

 

200

 

 

 

 

105

 

Net interest and other financing expense

 

 

33

 

 

 

 

51

 

 

 

 

93

 

 

 

 

203

 

Other net periodic benefit income

 

 

-

 

 

 

 

-

 

 

 

 

1

 

 

 

 

3

 

Net loss on acquisitions and divestitures

 

 

(2

)

 

 

 

(6

)

 

 

 

(3

)

 

 

 

(7

)

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BEFORE INCOME TAXES

 

 

31

 

 

 

 

(20

)

 

 

 

105

 

 

 

 

(102

)

Income tax expense (benefit)

 

 

(5

)

 

 

 

(4

)

 

 

 

10

 

 

 

 

(49

)

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

36

 

 

 

 

(16

)

 

 

 

95

 

 

 

 

(53

)

Income (loss) from discontinued operations (net of taxes)

 

 

-

 

 

 

 

(14

)

 

 

 

9

 

 

 

 

138

 

NET INCOME (LOSS)

 

 

36

 

 

 

 

(30

)

 

 

 

104

 

 

 

 

85

 

Net income attributable to noncontrolling interest

 

 

-

 

 

 

 

3

 

 

 

 

-

 

 

 

 

27

 

NET INCOME (LOSS) ATTRIBUTABLE TO ASHLAND

$

 

36

 

 

$

 

(33

)

 

$

 

104

 

 

$

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

 

0.56

 

 

$

 

(0.26

)

 

$

 

1.49

 

 

$

 

(0.85

)

Income (loss) from discontinued operations attributable to Ashland

 

 

-

 

 

 

 

(0.28

)

 

 

 

0.15

 

 

 

 

1.78

 

Net income (loss) attributable to Ashland

$

 

0.56

 

 

$

 

(0.54

)

 

$

 

1.64

 

 

$

 

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE DILUTED COMMON SHARES OUTSTANDING (a)

 

 

64

 

 

 

 

62

 

 

 

 

64

 

 

 

 

62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Ingredients

$

 

638

 

 

$

 

591

 

 

$

 

1,834

 

 

$

 

1,617

 

Composites

 

 

250

 

 

 

 

209

 

 

 

 

706

 

 

 

 

561

 

Intermediates and Solvents

 

 

83

 

 

 

 

70

 

 

 

 

247

 

 

 

 

202

 

 

$

 

971

 

 

$

 

870

 

 

$

 

2,787

 

 

$

 

2,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Ingredients

$

 

91

 

 

$

 

58

 

 

$

 

222

 

 

$

 

172

 

Composites

 

 

22

 

 

 

 

22

 

 

 

 

59

 

 

 

 

50

 

Intermediates and Solvents

 

 

9

 

 

 

 

2

 

 

 

 

22

 

 

 

 

(8

)

Unallocated and other

 

 

(56

)

 

 

 

(45

)

 

 

 

(103

)

 

 

 

(109

)

 

$

 

66

 

 

$

 

37

 

 

$

 

200

 

 

$

 

105

 

(a)

As a result of the loss from continuing operations for the three and nine months ended June 30, 2017, the effect of the share-based awards convertible to common shares would be anti-dilutive.  In accordance with U.S. GAAP, they have been excluded from the diluted earnings per share calculation.

 

 


Ashland Global Holdings Inc. and Consolidated Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions - preliminary and unaudited)

Table 2

 

 

 

June 30

 

 

September 30

 

 

2018

 

 

2017

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 

 

182

 

 

$

 

 

566

 

Accounts receivable

 

 

 

690

 

 

 

 

 

612

 

Inventories

 

 

 

656

 

 

 

 

 

634

 

Other assets

 

 

 

144

 

 

 

 

 

91

 

Total current assets

 

 

 

1,672

 

 

 

 

 

1,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent assets

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

3,826

 

 

 

 

 

3,762

 

Accumulated depreciation

 

 

 

1,933

 

 

 

 

 

1,792

 

Net property, plant and equipment

 

 

 

1,893

 

 

 

 

 

1,970

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

2,447

 

 

 

 

 

2,465

 

Intangibles

 

 

 

1,249

 

 

 

 

 

1,319

 

Restricted investments

 

 

 

304

 

 

 

 

 

302

 

Asbestos insurance receivable

 

 

 

181

 

 

 

 

 

209

 

Deferred income taxes

 

 

 

28

 

 

 

 

 

28

 

Other assets

 

 

 

450

 

 

 

 

 

422

 

Total noncurrent assets

 

 

 

6,552

 

 

 

 

 

6,715

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 

 

8,224

 

 

$

 

 

8,618

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

$

 

 

82

 

 

$

 

 

235

 

Trade and other payables

 

 

 

397

 

 

 

 

 

409

 

Accrued expenses and other liabilities

 

 

 

263

 

 

 

 

 

324

 

Total current liabilities

 

 

 

742

 

 

 

 

 

968

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

2,450

 

 

 

 

 

2,584

 

Asbestos litigation reserve

 

 

 

631

 

 

 

 

 

694

 

Deferred income taxes

 

 

 

243

 

 

 

 

 

375

 

Employee benefit obligations

 

 

 

186

 

 

 

 

 

191

 

Other liabilities

 

 

 

573

 

 

 

 

 

400

 

Total noncurrent liabilities

 

 

 

4,083

 

 

 

 

 

4,244

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

3,399

 

 

 

 

 

3,406

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

 

 

8,224

 

 

$

 

 

8,618

 

 

 


Ashland Global Holdings Inc. and Consolidated Subsidiaries

STATEMENTS OF CONSOLIDATED CASH FLOWS

(In millions - preliminary and unaudited)

Table 3

 

 

Three months ended

 

 

Nine months ended

 

 

June 30

 

 

June 30

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

 

36

 

 

$

 

(30

)

 

$

 

104

 

 

$

 

85

 

Loss (income) from discontinued operations (net of taxes)

 

 

-

 

 

 

 

14

 

 

 

 

(9

)

 

 

 

(138

)

Adjustments to reconcile income from continuing operations to

    cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

76

 

 

 

 

83

 

 

 

 

236

 

 

 

 

218

 

Original issue discount and debt issuance cost amortization

 

 

4

 

 

 

 

11

 

 

 

 

7

 

 

 

 

108

 

Deferred income taxes

 

 

(7

)

 

 

 

(4

)

 

 

 

(3

)

 

 

 

(4

)

Distributions from equity affiliates

 

 

-

 

 

 

 

1

 

 

 

 

1

 

 

 

 

1

 

Stock based compensation expense

 

 

7

 

 

 

 

5

 

 

 

 

20

 

 

 

 

14

 

Excess tax benefit on stock based compensation

 

 

1

 

 

 

 

-

 

 

 

 

4

 

 

 

 

2

 

Loss on early retirement of debt

 

 

-

 

 

 

 

11

 

 

 

 

-

 

 

 

 

9

 

Realized gains and investment income on available-for-sale securities

 

 

(2

)

 

 

 

(2

)

 

 

 

(10

)

 

 

 

(9

)

Net loss on acquisitions and divestitures

 

 

-

 

 

 

 

3

 

 

 

 

-

 

 

 

 

4

 

Pension contributions

 

 

(1

)

 

 

 

(2

)

 

 

 

(8

)

 

 

 

(6

)

Gain on post-employment plan remeasurement

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(2

)

Change in operating assets and liabilities (a)

 

 

16

 

 

 

 

43

 

 

 

 

(213

)

 

 

 

(152

)

Total cash provided by operating activities from continuing operations

 

 

130

 

 

 

 

133

 

 

 

 

129

 

 

 

 

130

 

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(42

)

 

 

 

(53

)

 

 

 

(102

)

 

 

 

(126

)

Proceeds from disposal of property, plant and equipment

 

 

-

 

 

 

 

4

 

 

 

 

1

 

 

 

 

4

 

Purchase of operations - net of cash acquired

 

 

-

 

 

 

 

(680

)

 

 

 

(11

)

 

 

 

(680

)

Proceeds from sale of operations

 

 

-

 

 

 

 

5

 

 

 

 

1

 

 

 

 

4

 

Life insurance payments

 

 

-

 

 

 

 

-

 

 

 

 

(37

)

 

 

 

-

 

Net purchase of funds restricted for specific transactions

 

 

(1

)

 

 

 

-

 

 

 

 

(10

)

 

 

 

(2

)

Reimbursements from restricted investments

 

 

7

 

 

 

 

7

 

 

 

 

25

 

 

 

 

19

 

Proceeds from sales of available-for-sale securities

 

 

-

 

 

 

 

-

 

 

 

 

17

 

 

 

 

19

 

Purchases of available-for-sale securities

 

 

-

 

 

 

 

-

 

 

 

 

(17

)

 

 

 

(19

)

Proceeds from the settlement of derivative instruments

 

 

1

 

 

 

 

1

 

 

 

 

1

 

 

 

 

5

 

Payments for the settlement of derivative instruments

 

 

-

 

 

 

 

-

 

 

 

 

(3

)

 

 

 

(3

)

Total cash used by investing activities from continuing operations

 

 

(35

)

 

 

 

(716

)

 

 

 

(135

)

 

 

 

(779

)

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

-

 

 

 

 

1,100

 

 

 

 

-

 

 

 

 

1,100

 

Repayment of long-term debt

 

 

(132

)

 

 

 

(659

)

 

 

 

(135

)

 

 

 

(913

)

Premium on long-term debt repayment

 

 

-

 

 

 

 

(11

)

 

 

 

-

 

 

 

 

(17

)

Proceeds from (repayment of) short-term debt

 

 

23

 

 

 

 

220

 

 

 

 

(158

)

 

 

 

69

 

Debt issuance costs

 

 

(1

)

 

 

 

(14

)

 

 

 

(1

)

 

 

 

(15

)

Cash dividends paid

 

 

(16

)

 

 

 

(14

)

 

 

 

(44

)

 

 

 

(62

)

Stock based compensation employee withholding taxes paid in cash

 

 

-

 

 

 

 

(1

)

 

 

 

(8

)

 

 

 

(14

)

Total cash provided (used) by financing activities from continuing operations

 

 

(126

)

 

 

 

621

 

 

 

 

(346

)

 

 

 

148

 

CASH PROVIDED (USED) BY CONTINUING OPERATIONS

 

 

(31

)

 

 

 

38

 

 

 

 

(352

)

 

 

 

(501

)

Cash provided (used) by discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows

 

 

(11

)

 

 

 

63

 

 

 

 

(34

)

 

 

 

123

 

Investing cash flows

 

 

-

 

 

 

 

(215

)

 

 

 

-

 

 

 

 

(293

)

Financing cash flows

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(17

)

Effect of currency exchange rate changes on cash and cash equivalents

 

 

(1

)

 

 

 

1

 

 

 

 

2

 

 

 

 

(8

)

DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(43

)

 

 

 

(113

)

 

 

 

(384

)

 

 

 

(696

)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

 

 

225

 

 

 

 

470

 

 

 

 

566

 

 

 

 

1,017

 

Change in cash and cash equivalents held by Valvoline

 

 

-

 

 

 

 

135

 

 

 

 

-

 

 

 

 

171

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

$

 

182

 

 

$

 

492

 

 

$

 

182

 

 

$

 

492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION AND AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Ingredients

$

 

63

 

 

$

 

70

 

 

$

 

189

 

 

$

 

178

 

Composites

 

 

5

 

 

 

 

5

 

 

 

 

16

 

 

 

 

16

 

Intermediates and Solvents

 

 

8

 

 

 

 

8