Net property, plant and equipment

$ 601

$ 566

Accounts receivable

^[1]

597

612

Inventories - Note F

674

634

Other assets

Total current assets

1,964

1,903

Property, plant and equipment

Cost

3,795

3,762

Accumulated depreciation

1,850

1,792

1,945

1,970

Goodwill - Note G

2,475

2,465

Intangibles - Note G

1,298

1,319

Restricted investments - Note E

315

302

Asbestos insurance receivable - Note K

205

209

Accrued expenses and other liabilities

Other assets

425

422

Total noncurrent assets

6,691

6,715

Total assets

8,655

8,618

Current liabilities

Short-term debt - Note H

355

235

Trade and other payables

382

409

266

324

Total current liabilities

1,003

968

Noncurrent liabilities

Long-term debt - Note H

2,584

Asbestos litigation reserve - Note K

676

694

Employee benefit obligations - Note J

390

375

194

191

Other liabilities

409

400

Total noncurrent liabilities

4,253

4,244

Commitments and contingencies - Note K

Stockholders' equity

3,399

3,406

Total liabilities and stockholders' equity

$ 8,655

$ 8,618

[1]	Accounts receivable includes an allowance for doubtful accounts of $9 million at December 31, 2017 and September 30, 2017

STATEMENT OF CONSOLIDATED EQUITY (unaudited) - 3 months ended Dec. 31, 2017 - USD ($)
$ in Millions

Total

Common stock [Member]

Paid-in capital [Member]

Retained earnings [Member]

Accumulated other comprehensive income (loss) [Member]

Beginning Balance at Sep. 30, 2017

$ 3,406

$ 1

$ 931

$ 2,696

$ (222)

Net loss

(4)

Other comprehensive income

Regular dividends, $0.225 per common share

(14)

Common shares issued under stock incentive and other plans

^[1]

Ending Balance at Dec. 31, 2017

$ 3,399

$ 1

$ 931

$ 2,678

$ (211)

^[2]

[1]

Common shares issued were 111,400 for the three months ended December 31, 2017.

[2]

At December 31, 2017 and September 30, 2017, the after-tax accumulated other comprehensive loss attributable to Ashland of $211 million and $222 million, respectively, was comprised of net unrealized translation losses of $243 million and $246 million, respectively, net unrealized gains on available-for-sale securities of $29 million and $21 million, respectively, and unrecognized prior service credits as a result of certain employee benefit plan amendments of $3 million for each period.

STATEMENT OF CONSOLIDATED EQUITY (unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017
Statement of Stockholders' Equity [Abstract]
Dividends on common stock	$ 0.225
Accumulated other comprehensive loss	$ (211)	$ (222)
Unrecognized prior service credits	3	3
Net unrealized translation loss	(243)	(246)
Available-for-sale securities unrealized gain	$ 29	$ 21
Common shares issued (in shares)	111,400

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (unaudited) - USD ($)
$ in Millions

3 Months Ended

Dec. 31, 2017

Dec. 31, 2016

CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS

Net income (loss)

$ (4)

$ 10

Income from discontinued operations (net of tax)

(3)

(75)

Adjustments to reconcile income from continuing operations to cash flows from operating activities

Depreciation and amortization

Original issue discount and debt issuance cost amortization

Stock based compensation expense

Gain on early retirement of debt

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

(3)

Net loss on divestitures

Pension contributions

(2)

(1)

Gain on post-employment plan remeasurement

(2)

Change in operating assets and liabilities

^[1]

(109)

(156)

Total cash flows used by operating activities from continuing operations

(24)

(60)

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES FROM CONTINUING OPERATIONS

Additions to property, plant and equipment

(24)

(33)

Proceeds from Sale of Property, Plant, and Equipment

Proceeds from sale of operations or equity investments

Net purchase of funds restricted for specific transactions

(5)

(2)

Reimbursements from restricted investments

Proceeds from Sale of Available-for-sale Securities

Payments to Acquire Available-for-sale Securities

Proceeds from the settlement of derivative instruments

Payments for Hedge, Investing Activities

Total cash flows used by investing activities from continuing operations

(24)

(31)

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS

Repayment of long-term debt

(2)

(239)

Premium on long-term debt repayment

(5)

Proceeds (repayment) from short-term debt

120

(154)

Debt issuance costs

(4)

Cash dividends paid

(14)

(24)

Excess Tax Benefit from Share-based Compensation, Financing Activities

(5)

(8)

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

(434)

CASH USED BY CONTINUING OPERATIONS

(525)

Cash provided (used) by discontinued operations

Operating cash flows, net

(16)

Investing cash flows, net

(10)

Financing cash flows, net

(10)

Total cash provided (used) by discontinued operations

(16)

Effect of currency exchange rate changes on cash and cash equivalents

(9)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(484)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

566

1,017

Change in cash and cash equivalents held by Valvoline

(65)

CASH AND CASH EQUIVALENTS - END OF PERIOD

$ 601

$ 468

[1]	Excludes changes resulting from operations acquired or sold.

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Additionally, certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation, as further described in this section. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Results of operations for the period ended December 31, 2017 are not necessarily indicative of the expected results for the remaining quarters in the fiscal year. On May 12, 2017, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. which represented approximately 83% of the total outstanding shares of Valvoline Inc.'s common stock. This separation from Valvoline represented a strategic shift in Ashland's business and qualified as a discontinued operation. Accordingly, Valvoline's operating results and cash flows for the three months ended December 31, 2016 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. Subsequent to completing the separation from Valvoline Inc., Ashland's operations are managed within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. Use of estimates, risks and uncertainties The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets (including goodwill and other intangible assets), income taxes and liabilities and receivables associated with asbestos litigation and environmental remediation. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters. New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In May 2014, the FASB issued accounting guidance outlining a single comprehensive five step model for entities to use in accounting for revenue arising from contracts with customers (ASC 606 Revenue from Contracts with Customers). The new guidance supersedes most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance also requires entities to disclose certain quantitative and qualitative information regarding the nature, amount, timing and uncertainty of qualifying revenue and cash flows arising from contracts with customers. Entities have the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. Ashland has identified an implementation team that is currently evaluating the impact of the new standard on the Condensed Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. The assessment process consists of categorizing Ashland’s revenue streams and reviewing the current internal accounting policies and practices to determine potential differences that would result from applying the requirements of the new standard to revenue contracts. Additional discussions and meetings with each revenue stream team have occurred to solicit input, identify potential impacts and appropriate changes to Ashland’s business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. Based on various preliminary assessments conducted to date, Ashland has identified agreements with distributors and customers that are subject to rebate and incentive programs that could contain elements of material rights and/or variable consideration. Ashland does not currently believe that these elements would result in a material change to how revenue would be recognized for these agreements. Ashland currently intends to adopt this standard using the modified retrospective approach and does not believe the impact will be material to the Condensed Consolidated Financial Statements but does expect there to be significant additional disclosures within the Notes to Condensed Consolidated Financial Statements. This guidance becomes effective for Ashland on October 1, 2018. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income (Loss). This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Statement of Consolidated Comprehensive Income (Loss) as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively. Ashland elected to early adopt this guidance on October 1, 2017, which resulted in a reclassification of $2 million in income from the selling, general and administrative expense and cost of sales captions to the other net periodic benefit income caption in the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016. The components of net periodic benefits income (costs) reclassified primarily relate to interest cost, expected return on assets, curtailments, settlements and actuarial gains and losses. Ashland did not have to adjust the classification of service cost since it previously was recorded within the caption required by the new guidance. See Note J for additional information on net periodic benefit costs. In March 2016, the FASB issued new accounting guidance for certain aspects of share-based payments to employees. This guidance requires all excess tax benefits and tax deficiencies related to share-based payments to be recognized as income tax expense in the Statements of Consolidated Comprehensive Income (Loss) instead of additional paid-in capital, and changes the classification of excess tax benefits from a financing activity to an operating activity within the Statements of Condensed Consolidated Cash Flows. This guidance also allows entities to make an accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, this guidance increases the amount an employer can withhold to cover income taxes on awards and still qualify for equity classification and requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity within the Statements of Condensed Consolidated Cash Flows. The guidance became effective for Ashland and was adopted on October 1, 2017. The guidance specifically related to the Statements of Consolidated Comprehensive Income (Loss) was adopted prospectively while the guidance related to the Statements of Condensed Consolidated Cash Flows was adopted retrospectively, as required by the guidance. Upon adoption, the overall impact on Ashland's Condensed Consolidated Financial Statements was not significant.

VALVOLINE

3 Months Ended

Dec. 31, 2017

ACQUISITION AND DIVESTITURE [Abstract]

VALVOLINE

Ashland Separation of Valvoline

On September 22, 2015, Ashland announced that the Board of Directors approved proceeding with a plan to separate Ashland into two independent, publicly traded companies comprising of the new Ashland (now known as Ashland Global Holdings Inc.) and Valvoline Inc. The initial step of the separation, the initial public offering (IPO) of Valvoline Inc., closed on September 28, 2016. As discussed further within the Final Separation section of this Note, Ashland completed the distribution of its remaining shares in Valvoline Inc. on May 12, 2017. The new Ashland is a premier global leader in providing specialty chemical solutions to customers in a wide range of consumer and industrial markets. Key markets and applications include pharmaceutical, personal care, food and beverage, architectural coatings, adhesives, automotive, construction and energy.

After completing the IPO on September 28, 2016 and before the distribution of its remaining shares on May 12, 2017, Ashland owned 170 million shares of Valvoline Inc.’s common stock which represented approximately 83% of the total outstanding shares of Valvoline Inc.’s common stock. As a result, Ashland continued to consolidate Valvoline within the Condensed Consolidated Financial Statements up until the distribution of the remaining shares. The resulting outside stockholders’ interests in Valvoline Inc., which was approximately 17%, was presented separately as a noncontrolling interest within Ashland’s equity in the Condensed Consolidated Balance Sheets up until the distribution of the remaining shares. The amount of consolidated net income attributable to these minority holders is presented as a separate caption on the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

Final Separation

Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. as a pro rata dividend on shares of Ashland common stock outstanding at the close of business on the record date of May 5, 2017. Based on the shares of Ashland common stock outstanding as of May 5, 2017, the record date for the distribution, each share of Ashland common stock received 2.745338 shares of Valvoline common stock in the distribution. The distribution was recorded at the carrying amount of Valvoline Inc.'s net assets which was a deficit of $187 million as of May 12, 2017, as follows:



	May 12
(In millions)	2017
ASSETS
Current assets
Cash	179
Accounts receivable, net	385
Inventories	153
Other current assets	24
Total current assets	741
Noncurrent assets
Net property, plant and equipment	357
Goodwill	329
Equity and other unconsolidated investments	31
Deferred income taxes	391
Other noncurrent assets	93
Total noncurrent assets	1,201
Total assets	$	1,942
LIABILITIES AND EQUITY
Current liabilities
Short-term debt	75
Current portion of long-term debt	16
Trade and other payables	353
Other current liabilities	34
Total current liabilities	478
Noncurrent liabilities
Long-term debt	662
Employee benefit obligations	826
Other long-term liabilities	163
Total noncurrent liabilities	1,651
Total liabilities	$	2,129
Net deficit	$	(187	)

A Tax Matters Agreement between Ashland and Valvoline Inc. governs the rights and obligations after the separation regarding certain income taxes and other taxes, including certain tax liabilities and benefits, attributes, returns and contests.

Discontinued Operations Assessment

Valvoline met the criteria to qualify as a discontinued operation and accordingly, its operating results and cash flows for the three months ended December 31, 2016 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note D for more information.

Costs of transaction

Ashland recognized separation costs of $6 million and $28 million for the three months ended December 31, 2017 and 2016, respectively. Of these amounts, $6 million of separation costs directly related to Valvoline and were included within the discontinued operations caption of the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016. Otherwise, separation costs are recorded within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).

ACQUISITIONS

3 Months Ended

Dec. 31, 2017

ACQUISITIONS

Pharmachem

Background

On May 17, 2017, Ashland completed its acquisition of the stock of Pharmachem Laboratories, Inc. (Pharmachem), a leading provider of quality ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses. With annual revenues of approximately $300 million and 14 manufacturing facilities in the United States and Mexico, New Jersey-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products. Ashland has included Pharmachem within the Specialty Ingredients reporting segment.

Purchase price allocation

The acquisition was recorded by Ashland using the purchase method of accounting in accordance with applicable U.S. GAAP whereby the total purchase price was allocated to tangible and intangible assets and liabilities acquired based on respective fair values.

The all-cash purchase price of Pharmachem was $680 million which included working capital adjustments of approximately $20 million. The following table summarizes the current preliminary values of the assets acquired and liabilities assumed at the date of acquisition.



	At
	May 17, 2017
Preliminary purchase price allocation (in millions)	As Adjusted
Assets:
Accounts receivable	52
Inventory	74
Other current assets	4
Intangible assets	330
Goodwill	287
Property, plant and equipment	97
Other noncurrent assets	20
Liabilities:
Accounts payable	(32		)
Deferred tax - net	(138		)
Other noncurrent liabilities	(14		)
Total purchase price	$	680

As of December 31, 2017, the purchase price allocation for the acquisition was preliminary. Adjustments to the current fair value estimates in the above table may occur as the process conducted for various valuations and assessments, including certain tangible and intangible assets, are finalized. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were based on strategic benefits that are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes.

Intangible assets identified

The purchase price allocation included $330 million of certain definite-lived intangible assets which are being amortized over the estimated useful life in proportion to the economic benefits consumed. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future cash flows of the combined company. In addition, Ashland reviewed certain technological trends and also considered the relative stability in the current Pharmachem customer base.

The following details the total intangible assets identified as of May 17, 2017.



			Weighted-average
			amortization period
Intangible asset type (in millions)	Value		(years)
Trademarks and trade names	$	26	15
Intellectual property	68		22
Customer and supplier relationships	236		20
Total	$	330

DISCONTINUED OPERATIONS

3 Months Ended

Dec. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

In previous periods, Ashland has divested certain businesses that have qualified as discontinued operations. The operating results from these divested businesses and subsequent adjustments related to ongoing assessments of certain retained liabilities and tax items have been recorded within the discontinued operations caption in the Statements of Consolidated Comprehensive Income for all periods presented and are discussed further within this note.

As previously discussed in Notes A and B, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. on May 12, 2017. Ashland determined that the Valvoline separation qualified as a discontinued operation, in accordance with U.S. GAAP, since it represents a strategic shift for Ashland and has a major effect on Ashland's operations and financial results. Accordingly, Valvoline's operating results and cash flows for the three months ended December 31, 2016 have been classified as discontinued operations within the Condensed Consolidated Financial Statements.

Components of amounts reflected in the Statements of Consolidated Comprehensive Income (Loss) related to discontinued operations are presented in the following table for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017		2016
Income from discontinued operations (net of tax)
Valvoline	$	3	$	75
Total income from discontinued operations (net of tax)	$	3	$	75

The following table presents a reconciliation of the historically reported captions within Ashland's Statements of Consolidated Income (Loss) for the income from discontinued operations attributable to Valvoline for the three months ended December 31, 2016.



	Three months ended
(In millions)	December 31, 2016
Income from discontinued operations
attributable to Valvoline
Sales	$	489
Cost of sales	(293		)
Selling, general and administrative expense	(82		)
Research and development expense	(3		)
Equity and other income	9
Operating income of discontinued operations	120
Net interest and other financing expense	(10		)
Pretax income of discontinued operations	110
Income tax expense	(35		)
Income from discontinued operations	$	75

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

As required by U.S. GAAP, Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows.

Level 1 – Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect Ashland’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include Ashland’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment.

For assets that are measured using quoted prices in active markets (Level 1), the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs (Level 2) are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable.

The following table summarizes financial instruments subject to recurring fair value measurements as of December 31, 2017.



(In millions)	Carrying value		Total fair value		Quoted prices in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3
Assets
Cash and cash equivalents	$	601	$	601	$	601	$	—	$	—
Restricted investments (a)	345		345		345		—		—
Deferred compensation investments (b)	160		160		—		160		—
Investments of captive insurance company (b)	3		3		3		—		—
Foreign currency derivatives	4		4		—		4		—
Total assets at fair value	$	1,113	$	1,113	$	949	$	164	$	—

Liabilities
Foreign currency derivatives	$	13	$	13	$	—	$	13	$	—


(a)	Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.


(b)	Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.

The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2017.



(In millions)	Carrying value		Total fair value		Quoted prices in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3
Assets
Cash and cash equivalents	$	566	$	566	$	566	$	—	$	—
Restricted investments (a)	332		332		332		—		—
Deferred compensation investments (b)	158		158		—		158		—
Investments of captive insurance company (b)	3		3		3		—		—
Foreign currency derivatives	2		2		—		2		—
Total assets at fair value	$	1,061	$	1,061	$	901	$	160	$	—

Liabilities
Foreign currency derivatives	$	36	$	36	$	—	$	36	$	—


(a)	Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.


(b)	Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.

Restricted investments

During 2015, Ashland and Hercules entered into a comprehensive settlement agreement related to certain insurance coverage for asbestos bodily injury claims with Underwriters at Lloyd’s, certain London Companies and Chartis (AIG) member companies, along with National Indemnity Company and Resolute Management, Inc., under which Ashland and Hercules received a total of $398 million (the January 2015 asbestos insurance settlement). Ashland placed $335 million of the settlement funds from the January 2015 asbestos insurance settlement into a renewable annual trust restricted for the purpose of paying ongoing and future litigation defense and claim settlement costs incurred in conjunction with asbestos claims. These funds were classified primarily as noncurrent restricted investment assets, with $30 million classified within other current assets, in the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

During 2015, Ashland diversified the restricted investments received from the January 2015 asbestos insurance settlement into primarily equity and corporate bond mutual funds that are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related deferred income taxes, included in the stockholders' equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI). Investment income and realized gains and losses on the available-for-sale securities are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income. The following table provides a summary of the available-for-sale securities portfolio as of December 31, 2017 and September 30, 2017:



	December 31			September 30
(In millions)	2017			2017
Original cost	$	335		$	335
Accumulated adjustments, net (a)	(38		)	(24		)
Adjusted cost, beginning of year	297			311
Investment income (b)	2			9
Unrealized gain	45			35
Realized gain	1			2
Settlement funds	5			2
Disbursements	(5		)	(27		)
Fair value	$	345		$	332


(a)	The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods.


(b)	Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.

The following table presents gross unrealized gains and losses for the restricted investment available-for-sale securities as of December 31, 2017 and September 30, 2017:



			Gross		Gross
(In millions)	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
As of December 31, 2017
Demand Deposit	$	17	$	—	$	—	$	17
Equity Mutual Fund	163		45		—		208
Corporate bond Mutual Fund	120		—		—		120
Fair value	$	300	$	45	$	—	$	345

As of September 30, 2017
Demand Deposit	$	9	$	—	$	—	$	9
Equity Mutual Fund	168		34		—		202
Corporate bond Mutual Fund	120		1		—		121
Fair value	$	297	$	35	$	—	$	332

The unrealized gains and losses as of December 31, 2017 and September 30, 2017 were recognized within AOCI. Ashland invests in highly-rated investment grade mutual funds. No other-than-temporary impairment was recognized in AOCI during the three months ended December 31, 2017 and 2016.

The following table presents the investment income and disbursements related to the investments within the portfolio for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017			2016
Investment income	$	2		$	3
Realized gains	1			—
Disbursements	(5		)	—

Deferred compensation investments

Deferred compensation investments consist of Level 2 measurements within the fair value hierarchy which are comprised primarily of a guaranteed interest fund, a common stock index fund and an intermediate government bond fund. Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income (Loss).

Foreign currency derivatives

Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects on certain assets and liabilities, including short-term inter-company loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies. The following table summarizes the net gains and/or losses recognized during the three months ended December 31, 2017 and 2016 within the Statements of Consolidated Comprehensive Income (Loss).



	Three months ended
	December 31
(In millions)	2017			2016
Foreign currency derivative loss	$	(11	)	$	(8	)

The following table summarizes the fair values of the outstanding foreign currency derivatives as of December 31, 2017 and September 30, 2017 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.



	December 31		September 30
(In millions)	2017		2017
Foreign currency derivative assets	$	4	$	2
Notional contract values	425		79

Foreign currency derivative liabilities	$	13	$	36
Notional contract values	810		1,601

Other financial instruments

At December 31, 2017 and September 30, 2017, Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $2,614 million and 2,615 million, respectively, compared to a fair value of $2,755 million and $2,768 million, respectively. The fair values of long-term debt are based on quoted market prices or, if market prices are not available, the present values of the underlying cash flows discounted at Ashland’s incremental borrowing rates, which are deemed to be Level 2 measurements within the fair value hierarchy.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Goodwill and Intangible Assets Disclosure [Abstract]

INVENTORIES

3 Months Ended

Dec. 31, 2017

Inventory Disclosure [Abstract]

INVENTORIES

Inventories are carried at the lower of cost or market. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain inventories are valued at cost using the last-in, first-out (LIFO) method.

The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates.



	December 31			September 30
(In millions)	2017			2017
Finished products	$	421		$	390
Raw materials, supplies and work in process	256			245
LIFO reserves	(3		)	(1		)
	$	674		$	634

GOODWILL AND OTHER INTANGIBLES

3 Months Ended

Dec. 31, 2017

GOODWILL AND OTHER INTANGIBLES

Goodwill

Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2017 assessment, Ashland determined that its reporting units for the allocation of goodwill are its three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. At that time, Ashland determined no additional impairment existed.

The following is a progression of goodwill by reportable segment for the three months ended December 31, 2017.



	Specialty				Intermediates
(In millions)	Ingredients		Composites		and Solvents		(a)	Total
Balance as of September 30, 2017	$	2,315	$	150	$	—		$	2,465
Currency translation adjustment	10		—		—			10
Balance as of December 31, 2017	$	2,325	$	150	$	—		$	2,475


(a)	As of December 31, 2017, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment.

Other intangible assets

Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years.

Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

Intangible assets were comprised of the following as of December 31, 2017 and September 30, 2017.



	December 31, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	758		(340		)	418
Customer and supplier relationships	780		(246		)	534
Total definite-lived intangible assets	1,605		(608		)	997

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,906	$	(608	)	$	1,298



	September 30, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	757		(326		)	431
Customer and supplier relationships	777		(235		)	542
Total definite-lived intangible assets	1,601		(583		)	1,018

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,902	$	(583	)	$	1,319

Amortization expense recognized on intangible assets was $24 million and $19 million for the three months ended December 31, 2017 and 2016, respectively, and is included in the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). Estimated amortization expense for future periods is $94 million in 2018 (includes three months actual and nine months estimated), $90 million in 2019, $89 million in 2020, $89 million in 2021 and $87 million in 2022. The amortization expense for future periods is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions and divestitures, potential impairment, accelerated amortization, or other events.

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

Compensation and Retirement Disclosure [Abstract]

DEBT

3 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

DEBT

The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets.



	December 31			September 30
(In millions)	2017			2017
4.750% notes, due 2022	$	1,082		$	1,082
Term Loan B, due 2024	597			599
6.875% notes, due 2043	376			376
Revolving Credit Facility	285			173
Term Loan A, due 2022	250			250
Term Loan A, due 2020	250			250
Accounts receivable securitization	64			56
6.50% junior subordinated notes, due 2029	51			51
Medium-term notes, due 2019, interest of 9.4% at December 31, 2017	5			5
Other (a)	(21		)	(23		)
Total debt	2,939			2,819
Short-term debt (includes current portion of long-term debt)	(355		)	(235		)
Long-term debt (less current portion and debt issuance cost discounts)	$	2,584		$	2,584


(a)	Other includes $24 million and $25 million of debt issuance cost discounts as of December 31, 2017 and September 30, 2017, respectively.

The scheduled aggregate maturities of long-term debt by year (including the current portion and excluding debt issuance costs) are as follows: $5 million remaining in 2018, $11 million in 2019, $269 million in 2020, $56 million in 2021 and $1,279 million in 2022.

Ashland Financing Activities

2017 Credit Agreement

On May 17, 2017, in conjunction with the closing of the Pharmachem acquisition, Ashland entered into a secured credit agreement (the 2017 Credit Agreement) with a group of lenders. The 2017 Credit Agreement provided for (i) a $250 million three-year term loan A facility (the Three-Year TLA Facility), (ii) a $250 million five-year term loan A facility (the Five-Year TLA Facility and together with the Three-Year TLA Facility, the TLA Facilities) and (iii) a $680 million five-year revolving credit facility (including a $125 million letter of credit sublimit) (the 2017 Revolving Credit Facility). Proceeds of borrowings under the TLA Facilities were used solely to finance the acquisition of Pharmachem, while the proceeds of the 2017 Revolving Credit Facility were used to finance, in part, the acquisition of Pharmachem, to refinance the 2015 Senior Credit Agreement and for general corporate purposes. On May 19, 2017, Ashland entered into Amendment No. 1 to the 2017 Credit Agreement, which increased the aggregate commitments under the 2017 Revolving Credit Facility from $680 million to $800 million.

At Ashland’s option, loans issued under the 2017 Credit Agreement bear interest at either LIBOR or an alternate base rate, in each case plus the applicable interest rate margin. Loans bear interest at LIBOR plus 1.75% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.75%, in the alternative, through and including the date of delivery of a quarterly compliance certificate and thereafter the interest rate will fluctuate between LIBOR plus 1.375% per annum and LIBOR plus 2.500% per annum (or between the alternate base rate plus 0.375% per annum and the alternate base rate plus 1.500% per annum), based upon Ashland’s secured facilities ratings or the consolidated net leverage ratio (as defined in the 2017 Credit Agreement) (whichever yields a lower applicable interest rate margin) at such time. In addition, Ashland was required to pay fees of 0.25% per annum on the daily unused amount of the 2017 Revolving Credit Facility through and including the date of delivery of a compliance certificate, and thereafter the fee rate will fluctuate between 0.175% and 0.40% per annum, based upon Ashland’s secured facilities rating or the consolidated net leverage ratio (whichever yields a lower applicable rate). The TLA Facilities may be prepaid at any time without premium. The Three-Year TLA Facility will not amortize and will be due on May 17, 2020. The Five-Year TLA Facility will not amortize in each of the first, second and third years and will amortize at a rate of 20% per annum in each of the fourth and fifth years (payable in equal quarterly installments), with the outstanding balance of the Five-Year TLA Facility to be paid on May 17, 2022.

On June 14, 2017, Ashland entered into Amendment No. 2 to the 2017 Credit Agreement, which provided for a new $600 million seven-year senior secured term loan B facility (the 2017 TLB Facility). At Ashland’s option, loans issued under the 2017 TLB Facility bear interest at either (x) LIBOR plus 2.00% per annum or (y) an alternate base rate plus 1.00% per annum. The 2017 TLB Facility may be prepaid at any time. The 2017 TLB Facility amortizes at a rate of 1.00% per annum (payable in equal quarterly installments) with the outstanding balance to be paid on May 17, 2024.

6.50% junior subordinated notes due 2029

In December 2016, Hercules LLC (Hercules) (formerly Hercules Incorporated), an indirect wholly-owned subsidiary of Ashland, repurchased, through a cash tender offer (the Tender Offer), $182 million of the aggregate principal par value amount of its 6.50% junior subordinated notes due 2029 (2029 notes) for an aggregate purchase price of $177 million. As a result of the Tender Offer, the carrying value of the 2029 notes was reduced by $90 million and Ashland recognized a $92 million charge related to accelerated accretion of the recorded debt discount (compared to the total par value) and $5 million of a net gain related to the repayment of the debt. The charge and net gain are included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

Open market repurchases of 4.750% notes due 2022 and 3.875% notes due 2018

During the three months ended December 31, 2016, Ashland executed open market repurchases of its 4.750% notes due 2022 (2022 notes) and its 3.875% notes due 2018 (2018 notes). As a result of these repurchases, the carrying values of the 2022 notes and 2018 notes were reduced by $36 million and $29 million, respectively. Ashland recognized a $2 million charge related to premiums paid in the open market repurchases and accelerated amortization of previously capitalized debt issuance costs, which is included in the net interest and other financing expense caption of the Statements of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

Remaining borrowing capacity

The borrowing capacity remaining under the 2017 Revolving Credit Facility was $467 million due to an outstanding balance of $285 million, as well as a reduction of $48 million for letters of credit outstanding at December 31, 2017. Ashland's total borrowing capacity at December 31, 2017 was $498 million, which included $31 million of available capacity from the accounts receivable securitization facility.

Covenants related to current Ashland debt agreements

Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of December 31, 2017, Ashland is in compliance with all debt agreement covenant restrictions.

The maximum consolidated net leverage ratio permitted under Ashland's most recent credit agreement (the 2017 Credit Agreement) is 4.5. At December 31, 2017, Ashland’s calculation of the consolidated net leverage ratio was 3.9.

The minimum required consolidated interest coverage ratio under the 2017 Credit Agreement during its entire duration is 3.0. At December 31, 2017, Ashland’s calculation of the interest coverage ratio was 4.6.

INCOME TAXES

3 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

Tax Law Changes

The Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, Ashland has not completed the internal accounting assessment for the tax effects of enactment of the Tax Act; however, Ashland determined a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. Ashland recognized a provisional amount for the three months ended December 31, 2017, which is included as a component of income tax expense from continuing operations. Ashland recorded net unfavorable tax adjustments of $16 million primarily related to deferred tax rate changes and a one-time transition tax assessed on foreign cash and unremitted earnings.

Provisional amounts - Deferred and other income tax assets and liabilities

Ashland remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, Ashland is still analyzing certain aspects of the Tax Act and refining certain calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the deferred tax balance was a favorable tax adjustment of $126 million.

Provisional amounts - Foreign tax effects

The one-time transition tax is based on Ashland's total post-1986 earnings and profits (E&P) of foreign subsidiaries that were previously deferred from U.S. income taxes. Ashland recorded a provisional amount for this one-time transition tax liability of $142 million. Ashland has not yet completed its calculation of the total post-1986 E&P for these foreign subsidiaries. In addition, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when Ashland finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Ashland determined that the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable at this time.

Current fiscal year

Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was 200% for the three months ended December 31, 2017 and was primarily impacted by income mix and net unfavorable tax discrete adjustments of $16 million related to the Tax Act.

Prior fiscal year

The overall effective tax benefit rate was 39% for the three months ended December 31, 2016 and was primarily impacted by income mix.

Unrecognized tax benefits

Changes in unrecognized tax benefits are summarized as follows for the three months ended December 31, 2017.



(In millions)
Balance at October 1, 2017	$	194
Increases related to positions taken on items from prior years	2
Increases related to positions taken in the current year	3
Balance at December 31, 2017	$	199

From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount accrued for uncertain tax positions of between $22 million and $32 million for continuing operations. It is reasonably possible that there could be other material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues or the reassessment of existing uncertain tax positions; however, Ashland is not able to estimate the impact of these items at this time.

EMPLOYEE BENEFIT PLANS

3 Months Ended

Dec. 31, 2017

EMPLOYEE BENEFIT PLANS

For the three months ended December 31, 2017, Ashland contributed $2 million to its non-U.S. pension plans and zero to its U.S. pension plans. Ashland expects to make additional contributions of approximately $5 million to its non-U.S. plans and $1 million to its U.S. plans during the remainder of 2018.

Plan Remeasurements

Effective January 1, 2017, Ashland discontinued certain post-employment health and life insurance benefits. The effect of these plan changes resulted in a remeasurement gain of $2 million recorded within the other net period benefit cost (income) caption on the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016.

Components of net periodic benefit costs (income)

The following table details the components of pension and other postretirement benefit costs for continuing operations.



							Other postretirement
	Pension benefits						benefits
(In millions)	2017			2016			2017		2016
Three months ended December 31
Service cost (a)	$	2		$	2		$	1	$	—
Interest cost (b)	3			2			—		1
Expected return on plan assets (b)	(3		)	(3		)	—		—
Actuarial gain (b)	—			—			—		(2		)
Total net periodic benefit costs (income)	$	2		$	1		$	1	$	(1	)


(a)	Service cost was not impacted by new accounting guidance adopted in the current quarter and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information.


(b)	These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information.

For segment reporting purposes, service cost for continuing operations is proportionately allocated to each segment, excluding the Unallocated and other segment, while all other costs for continuing operations are recorded within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss).

LITIGATION, CLAIMS AND CONTINGENCIES

3 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

LITIGATION, CLAIMS AND CONTINGENCIES

Asbestos litigation

Ashland and Hercules have liabilities from claims alleging personal injury caused by exposure to asbestos. To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A). The methodology used by HR&A to project future asbestos costs is based largely on recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims and litigation defense. The claim experience of Ashland and Hercules are separately compared to the results of previously conducted third party epidemiological studies estimating the number of people likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population expected to have been exposed to asbestos. Using that information, HR&A estimates a range of the number of future claims that may be filed, as well as the related costs that may be incurred in resolving those claims. Changes in asbestos-related liabilities and receivables are recorded on an after-tax basis within the discontinued operations caption in the Statements of Consolidated Comprehensive Income.

Ashland asbestos-related litigation

The claims alleging personal injury caused by exposure to asbestos asserted against Ashland result primarily from indemnification obligations undertaken in 1990 in connection with the sale of Riley Stoker Corporation, a former subsidiary. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Ashland asbestos claims activity, excluding Hercules claims, follows.



	Three months ended
	December 31				Years ended September 30
(In thousands)	2017		2016		2017		2016		2015
Open claims - beginning of period	54		57		57		60		65
New claims filed	1		—		2		2		2
Claims settled	—		—		(1	)	—		—
Claims dismissed	(1	)	(1	)	(4	)	(5	)	(7	)
Open claims - end of period	54		56		54		57		60

Ashland asbestos-related liability

During the most recent annual update of this estimate completed during the June 2017 quarter, it was determined that the liability for Ashland asbestos-related claims should be increased by $36 million. Total reserves for asbestos claims were $409 million at December 31, 2017 compared to $419 million at September 30, 2017.

A progression of activity in the asbestos reserve is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Asbestos reserve - beginning of period	$	419		$	415		$	415		$	409		$	438
Reserve adjustment	—			—			36			37			—
Amounts paid	(10		)	(9		)	(32		)	(31		)	(29		)
Asbestos reserve - end of period (a)	$	409		$	406		$	419		$	415		$	409


(a)	Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Ashland asbestos-related receivables

Ashland has insurance coverage for certain litigation defense and claim settlement costs incurred in connection with its asbestos claims, and coverage-in-place agreements exist with the insurance companies that provide substantially all of the coverage that will be accessed.

For the Ashland asbestos-related obligations, Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. Substantially all of the estimated receivables from insurance companies are expected to be due from domestic insurers, all of which are solvent.

At December 31, 2017, Ashland’s receivable for recoveries of litigation defense and claim settlement costs from insurers amounted to $151 million (excluding the Hercules receivable for asbestos claims) compared to $155 million at September 30, 2017. During the June 2017 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $15 million increase in the receivable for probable insurance recoveries.

A progression of activity in the Ashland insurance receivable is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Insurance receivable - beginning of period	$	155		$	151		$	151		$	150		$	402
Receivable adjustment	—			—			15			16			(3		)
Insurance settlement	—			—			(5		)	(4		)	(227		)
Amounts collected	(4		)	(2		)	(6		)	(11		)	(22		)
Insurance receivable - end of period (a)	$	151		$	149		$	155		$	151		$	150


(a)	Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Hercules asbestos-related litigation

Hercules has liabilities from claims alleging personal injury caused by exposure to asbestos. Such claims typically arise from alleged exposure to asbestos fibers from resin encapsulated pipe and tank products which were sold by one of Hercules’ former subsidiaries to a limited industrial market. The amount and timing of settlements and number of open claims can fluctuate from period to period. A summary of Hercules’ asbestos claims activity follows.



	Three months ended
	December 31		Years ended September 30
(In thousands)	2017	2016	2017		2016		2015
Open claims - beginning of period	12	15	15		20		21
New claims filed	—	—	1		1		1
Claims dismissed	—	—	(4	)	(6	)	(2	)
Open claims - end of period	12	15	12		15		20

Hercules asbestos-related liability

From the range of estimates, Ashland records the amount it believes to be the best estimate of future payments for litigation defense and claim settlement costs, which generally approximates the mid-point of the estimated range of exposure from model results. Ashland reviews this estimate and related assumptions quarterly and annually updates the results of a non-inflated, non-discounted approximate 50-year model developed with the assistance of HR&A. As a result of the most recent annual update of this estimate, completed during the June 2017 quarter, it was determined that the liability for Hercules asbestos-related claims should be increased by $16 million. Total reserves for asbestos claims were $315 million at December 31, 2017 compared to $323 million at September 30, 2017.

A progression of activity in the asbestos reserve is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Asbestos reserve - beginning of period	$	323		$	321		$	321		$	311		$	329
Reserve adjustment	—			—			16			25			4
Amounts paid	(8		)	(3		)	(14		)	(15		)	(22		)
Asbestos reserve - end of period (a)	$	315		$	318		$	323		$	321		$	311


(a)	Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Hercules asbestos-related receivables

For the Hercules asbestos-related obligations, certain reimbursement obligations pursuant to coverage-in-place agreements with insurance carriers exist. As a result, any increases in the asbestos reserve have been partially offset by probable insurance recoveries. Ashland has estimated the value of probable insurance recoveries associated with its asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage, including an assumption that all solvent insurance carriers remain solvent. The estimated receivable consists exclusively of solvent domestic insurers.

As of December 31, 2017 and September 30, 2017, the receivables from insurers amounted to $68 million. During the June 2017 quarter, the annual update of the model used for purposes of valuing the asbestos reserve and its impact on valuation of future recoveries from insurers was completed. This model update resulted in a $5 million increase in the receivable for probable insurance recoveries.

A progression of activity in the Hercules insurance receivable is presented in the following table.



	Three months ended
	December 31				Years ended September 30
(In millions)	2017		2016		2017		2016		2015
Insurance receivable - beginning of period	$	68	$	63	$	63	$	56	$	77
Receivable adjustment	—		—		5		7		1
Insurance settlement	—		—		—		—		(22		)
Insurance receivable - end of period	$	68	$	63	$	68	$	63	$	56

Asbestos litigation cost projection

Projecting future asbestos costs is subject to numerous variables that are extremely difficult to predict. In addition to the significant uncertainties surrounding the number of claims that might be received, other variables include the type and severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, mortality rates, dismissal rates, costs of medical treatment, the impact of bankruptcies of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, and the impact of potential changes in legislative or judicial standards. Furthermore, any predictions with respect to these variables are subject to even greater uncertainty as the projection period lengthens. In light of these inherent uncertainties, Ashland believes that the asbestos reserves for Ashland and Hercules represent the best estimate within a range of possible outcomes. As a part of the process to develop these estimates of future asbestos costs, a range of long-term cost models was developed. These models are based on national studies that predict the number of people likely to develop asbestos-related diseases and are heavily influenced by assumptions regarding long-term inflation rates for indemnity payments and legal defense costs, as well as other variables mentioned previously. Ashland has currently estimated in various models ranging from approximately 40 to 50 year periods that it is reasonably possible that total future litigation defense and claim settlement costs on an inflated and undiscounted basis could range as high as approximately $660 million for the Ashland asbestos-related litigation (current reserve of $409 million) and approximately $510 million for the Hercules asbestos-related litigation (current reserve of $315 million), depending on the combination of assumptions selected in the various models. If actual experience is worse than projected, relative to the number of claims filed, the severity of alleged disease associated with those claims or costs incurred to resolve those claims, or actuarial refinement or improvements to the assumptions used within these models are initiated, Ashland may need to further increase the estimates of the costs associated with asbestos claims and these increases could be material over time.

Environmental remediation and asset retirement obligations

Ashland is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively environmental remediation) at multiple locations. At December 31, 2017, such locations included 82 waste treatment or disposal sites where Ashland has been identified as a potentially responsible party under Superfund or similar state laws, 118 current and former operating facilities (including certain operating facilities conveyed as part of the MAP Transaction) and about 1,225 service station properties, of which 36 are being actively remediated.

Ashland’s reserves for environmental remediation and related environmental litigation amounted to $168 million at December 31, 2017 compared to $163 million at September 30, 2017, of which $125 million at December 31, 2017 and $121 million at September 30, 2017 were classified in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. The remaining reserves were classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets.

The following table provides a reconciliation of the changes in the environmental remediation reserves during the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017			2016
Reserve - beginning of period	$	163		$	177
Disbursements	(8		)	(7		)
Revised obligation estimates and accretion	13			4
Reserve - end of period	$	168		$	174

The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. At December 31, 2017 and September 30, 2017, Ashland’s recorded receivable for these probable insurance recoveries was $14 million and $15 million, respectively, of which $13 million and $14 million at December 31, 2017 and September 30, 2017, respectively, were classified in other noncurrent assets on the Condensed Consolidated Balance Sheets.

Components of environmental remediation expense included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income are presented in the following table for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017		2016
Environmental expense	$	12	$	4
Accretion	1		—
Legal expense	1		2
Total expense	14		6

Insurance receivable (a)	—		—
Total expense, net of receivable activity	$	14	$	6


(a)	Activity of $0 denotes value less than $1 million.

Environmental remediation reserves are subject to numerous inherent uncertainties that affect Ashland’s ability to estimate its share of the costs. Such uncertainties involve the nature and extent of contamination at each site, the extent of required cleanup efforts under existing environmental regulations, widely varying costs of alternate cleanup methods, changes in environmental regulations, the potential effect of continuing improvements in remediation technology, and the number and financial strength of other potentially responsible parties at multiparty sites. Although it is not possible to predict with certainty the ultimate costs of environmental remediation, Ashland currently estimates that the upper end of the reasonably possible range of future costs for identified sites could be as high as approximately $412 million. The largest reserve for any site is approximately 15% of the remediation reserve.

Other legal proceedings and claims

In addition to the matters described above, there are other various claims, lawsuits and administrative proceedings pending or threatened against Ashland and its current and former subsidiaries. Such actions are with respect to commercial matters, product liability, toxic tort liability, and other environmental matters, which seek remedies or damages, some of which are for substantial amounts. While Ashland cannot predict with certainty the outcome of such actions, it believes that adequate reserves have been recorded and losses already recognized with respect to such actions were immaterial as of December 31, 2017 and September 30, 2017. There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions; however, Ashland believes that such potential losses were immaterial as of December 31, 2017.

EARNINGS PER SHARE

3 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

EARNINGS PER SHARE

The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 0.7 million and 0.9 million at December 31, 2017 and 2016, respectively. Earnings per share is reported under the treasury stock method.



	Three months ended
	December 31
(In millions except per share data)	2017			2016
Numerator
Numerator for basic and diluted EPS –
Loss from continuing operations	$	(7	)	$	(65	)
Denominator
Denominator for basic EPS – Weighted-average
common shares outstanding	62			62
Share-based awards convertible to common shares (a)	—			—
Denominator for diluted EPS – Adjusted weighted-
average shares and assumed conversions	62			62

EPS from continuing operations attributable to Ashland
Basic	$	(0.12	)	$	(1.05	)
Diluted	(0.12		)	(1.05		)


(a)	As a result of the loss from continuing operations attributable to Ashland during the three months ended December 31, 2017 and 2016, the effect of the share-based awards convertible to common shares would be antidilutive. In accordance with U.S. GAAP, they have been excluded from the diluted EPS calculation.

EQUITY ITEMS

3 Months Ended

Dec. 31, 2017

EQUITY ITEMS

Stock repurchase programs

In April 2015, Ashland's Board of Directors approved a $1 billion share repurchase authorization that was set to expire on December 31, 2017 (the 2015 stock repurchase program). This authorization allows for Ashland’s common shares to be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans.

During 2017, Ashland's Board of Directors extended the 2015 stock repurchase program indefinitely. As of December 31, 2017, $500 million of share repurchase authorization remains under the 2015 stock repurchase program.

Stockholder dividends

In May 2017, subsequent to the final distribution of Valvoline Inc.'s common stock, the Board of Directors of Ashland announced a quarterly cash dividend of 22.5 cents per share to eligible shareholders at record which was paid for quarterly dividends in the first quarter of fiscal 2018 and the third and fourth quarters of fiscal 2017. This represented a reduction from the previous quarterly dividend of 39 cents per share which was paid for quarterly dividends in the first and second quarters of fiscal 2017.

Accumulated other comprehensive income (loss)

Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income (Loss) are presented below, before tax and net of tax effects.



	2017									2016
				Tax									Tax
	Before			(expense)			Net of			Before			(expense)		Net of
(In millions)	tax			benefit			tax			tax			benefit		tax
Three months ended December 31
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	3		$	—		$	3		$	(150	)	$	4	$	(146	)
Pension and postretirement obligation adjustment:
Amortization of unrecognized prior service
credits included in net income (a)	—			—			—			(3		)	2		(1		)
Net change in available-for-sale securities:
Unrealized gains during period	11			(2		)	9			—			—		—
Reclassification adjustment for realized gains
included in net income	(1		)	—			(1		)	—			—		—
Total other comprehensive income (loss)	$	13		$	(2	)	$	11		$	(153	)	$	6	$	(147	)


(a)	For the three months ended December 31, 2016, the amortization of unrecognized prior service credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified in the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss).

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK INCENTIVE PLANS

3 Months Ended

Dec. 31, 2017

STOCK INCENTIVE PLANS

Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance awards or nonvested stock awards. Each program is typically a long-term incentive plan designed to link employee compensation with increased shareholder value or reward superior performance and encourage continued employment with Ashland. Ashland recognizes compensation expense for the grant date fair value of stock-based awards over the applicable vesting period.

The components of Ashland’s pretax stock-based compensation expense included in continuing operations are as follows:



	Three months ended
	December 31
(In millions)	2017 (a)		2016 (b)
SARs	$	1	$	1
Nonvested stock awards	6		4
Performance awards	4		2
	$	11	$	7


(a)	The three months ended December 31, 2017 included $2 million of expense related to cash-settled nonvested restricted stock awards and $2 million of expense related to cash-settled performance units.


(b)	The three months ended December 31, 2016 included $1 million of expense related to cash-settled nonvested restricted stock awards and $1 million of expense related to cash-settled performance units.

SARs

SARs are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and typically become exercisable over periods of one to three years. Unexercised SARs lapse ten years and one month after the date of grant. SARs granted for the three months ended December 31, 2017 and 2016 were 470 thousand and 422 thousand, respectively. As of December 31, 2017, there was $13 million of total unrecognized compensation costs related to SARs. That cost is expected to be recognized over a weighted-average period of 2.4 years. Ashland estimates the fair value of SARs granted using the Black-Scholes option-pricing model. This model requires several assumptions, which Ashland has developed and updates based on historical trends and current market observations. The accuracy of these assumptions is critical to the estimate of fair value for these equity instruments.

Nonvested stock awards

Nonvested stock awards are granted to employees or directors at a price equal to the fair market value of the stock on the date of grant and generally vest over a one-to-five-year period. However, such shares or units are subject to forfeiture upon termination of service before the vesting period ends. Only nonvested stock awards granted in the form of shares entitle employees or directors to vote the shares. Dividends on nonvested stock awards granted are in the form of additional units or shares of nonvested stock awards, which are subject to vesting and forfeiture provisions.

Stock-settled nonvested stock awards

Nonvested stock awards granted in the form of shares were 142 thousand and 81 thousand for the three months ended December 31, 2017 and 2016, respectively. As of December 31, 2017, there was $12 million of total unrecognized compensation costs related to these nonvested stock awards. That cost is expected to be recognized over a weighted-average period of 2.0 years.

Cash-settled nonvested stock awards

Certain nonvested stock awards are granted to employees and are settled in cash upon vesting. As of December 31, 2017, 220 thousand cash-settled nonvested stock awards were outstanding. The value of these cash-settled nonvested stock awards changes in connection with changes in the fair market value of the Ashland Common Stock. These awards generally vest over a period of three years. The expense recognized related to cash-settled nonvested stock awards was $2 million and $1 million during the three months ended December 31, 2017 and 2016, respectively.

Executive performance incentive and retention program

During 2016, certain executives were granted performance-based restricted shares of Ashland in order to provide an incentive to remain employed in the period after the full separation. At December 31, 2017, there were 60 thousand shares outstanding in connection with these awards, which includes forfeitures and the cumulative value of forfeitable dividends. The expense recognition for these awards commenced upon completing the full separation of Valvoline which occurred on May 12, 2017, as discussed further in Note B, and resulted in $2 million of expense for the three months ended December 31, 2017. As of December 31, 2017, there was $8 million of total unrecognized compensation costs related to these awards.

Performance awards

Ashland sponsors a long-term incentive plan that awards performance shares/units to certain key employees that are primarily tied to Ashland’s overall financial performance relative to internal targets. Additionally, certain outstanding performance awards are tied to Ashland's overall financial performance relative to the financial performance of selected industry peer groups. Awards are granted annually, with each award covering a three-year vesting period.

For awards granted in fiscal 2016, each performance share/unit is convertible to one share of Ashland Common Stock. These plans are recorded as a component of stockholders’ equity in the Condensed Consolidated Balance Sheets. Performance measures used to determine the actual number of performance shares issuable upon vesting include an equal weighting of Ashland’s total shareholder return (TSR) performance and Ashland’s return on investment (ROI) performance as compared to the internal targets. TSR relative to peers is considered a market condition while ROI is considered a performance condition under applicable U.S. GAAP.

For awards granted in fiscal 2017 and 2018, the performance measure used to determine the actual number of performance shares/units issuable upon vesting is the financial performance of Ashland compared to award targets. The financial performance award metric is considered a performance condition under applicable U.S. GAAP. Additionally, the actual number of performance shares/units issuable upon vesting can be potentially increased or decreased based on a TSR performance modifier relative to peers of Ashland. For awards granted in fiscal 2017, each performance unit will be settled in cash based on the fair value of Ashland common stock. For awards granted in fiscal 2018, each performance share/unit is convertible to one share of Ashland Common Stock.

Nonvested performance shares/units do not entitle employees to vote the shares or to receive any dividends thereon. Performance shares/units granted for the three months ended December 31, 2017 and 2016 were 101 thousand and 56 thousand, respectively. As of December 31, 2017, there was $17 million of total unrecognized compensation costs related to performance shares/units. That cost is expected to be recognized over a weighted-average period of 2.2 years.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

REPORTABLE SEGMENT INFORMATION

REPORTABLE SEGMENT INFORMATION

3 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, which includes determining resource allocation methodologies used for reportable segments. Operating income is the primary measure on the Statements of Consolidated Comprehensive Income (Loss) that is reviewed by the chief operating decision maker in assessing each reportable segment's financial performance. Ashland does not aggregate operating segments to arrive at these reportable segments.

Change in Reportable Segments

Subsequent to completing the separation from Valvoline Inc. on May 12, 2017, Ashland's operations are managed by the chief operating decision maker within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. As a result, the financial information for the new reportable segments (Composites and Intermediates and Solvents) has been disclosed for all periods presented. Prior to the separation from Valvoline Inc., Composites and Intermediates and Solvents were reporting units included within the previous Ashland Performance Materials reportable segment.

Reportable segment business descriptions

Specialty Ingredients is a global leader in cellulose ethers, vinyl pyrrolidones and biofunctionals. It offers industry-leading products, technologies and resources for solving formulation and product-performance challenges. Specialty Ingredients uses natural, synthetic and semisynthetic polymers derived from cellulose ethers, vinyl pyrrolidones, acrylic polymers, polyester and polyurethane-based adhesives, and plant and seed extract. Specialty Ingredients’ end markets offer comprehensive and innovative solutions for today’s demanding consumer and industrial applications. Key customers include: pharmaceutical companies; makers of personal care products, food and beverages; makers of nutraceuticals and supplements; manufacturers of paint, coatings and construction materials; packaging and converting; and oilfield service companies. On May 17, 2017, Ashland completed its acquisition of the stock of Pharmachem, a leading provider of quality ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses. With 14 manufacturing facilities in the United States and Mexico, New Jersey-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products. See Note C for more information.

Composites is a global leader in unsaturated polyester resins, vinyl ester resins and gelcoats. The Composites business manufactures and sells a broad range of general-purpose and high-performance grades of unsaturated polyester and vinyl ester resins, gelcoats and low-profile additives for the reinforced plastics industry. The products in the Composites business provide an array of functional properties including corrosion resistance, fire retardance, ultraviolet resistance, water and chemical resistance, high mechanical strength, impact and scratch resistance and high strength-to-weight ratios. Key end markets include transportation, construction, marine and infrastructure. In addition, the business manufactures and sells molten maleic anhydride for the manufacture of a variety of products such as unsaturated polyester resins, copolymers, lubricating oil additives, alkenyl succinic anhydrides, malic acid, fumaric acid and numerous derivative chemicals. Key markets include composites, personal care, dispersants and paper sizing.

Intermediates and Solvents is a leading producer of 1,4 butanediol (BDO) and related derivatives, including tetrahydrofuran and n-methylpyrrolidone. These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, pharmaceuticals, water filtration membranes and more. Butanediol is also supplied to Ashland’s Specialty Ingredients business for use as a raw material.

Unallocated and Other generally includes items such as certain significant company-wide restructuring activities, including internal separation costs, and legacy costs or adjustments that relate to divested businesses that are no longer operated by Ashland.

Reportable segment results

Results of Ashland’s reportable segments are presented based on its management and internal accounting structure. The structure is specific to Ashland; therefore, the financial results of Ashland’s reportable segments are not necessarily comparable with similar information for other comparable companies. Ashland allocates all costs to its reportable segments except for certain significant company-wide restructuring activities and other costs or adjustments that relate to former businesses that Ashland no longer operates. The service cost component of pension and other postretirement benefits costs is allocated to each reportable segment on a ratable basis; while the remaining components of pension and other postretirement benefits costs are recorded within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss). Ashland refines its expense allocation methodologies to the reportable segments from time to time as internal accounting practices are improved, more refined information becomes available and the industry or market changes. Significant revisions to Ashland’s methodologies are adjusted for all segments on a retrospective basis.

The following table presents various financial information for each reportable segment for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions - unaudited)	2017			2016
SALES
Specialty Ingredients	$	550		$	482
Composites	218			165
Intermediates and Solvents	74			57
	$	842		$	704
OPERATING INCOME (LOSS)
Specialty Ingredients	$	42		$	40
Composites	18			15
Intermediates and Solvents	8			(7		)
Unallocated and other	(29		)	(33		)
	$	39		$	15

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Securities and Exchange Commission (SEC) regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Additionally, certain prior period data, primarily related to discontinued operations, have been reclassified in the Consolidated Financial Statements and accompanying notes to conform to the current period presentation, as further described in this section. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with Ashland’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. Results of operations for the period ended December 31, 2017 are not necessarily indicative of the expected results for the remaining quarters in the fiscal year. On May 12, 2017, Ashland completed the distribution of its remaining 170 million shares of common stock of Valvoline Inc. which represented approximately 83% of the total outstanding shares of Valvoline Inc.'s common stock. This separation from Valvoline represented a strategic shift in Ashland's business and qualified as a discontinued operation. Accordingly, Valvoline's operating results and cash flows for the three months ended December 31, 2016 have been classified as discontinued operations within the Condensed Consolidated Financial Statements. See Note B for additional information on the separation of Valvoline Inc. Subsequent to completing the separation from Valvoline Inc., Ashland's operations are managed within the following three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents.
Use of Estimates, Risk and Uncertainties	Use of estimates, risks and uncertainties The preparation of Ashland’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets (including goodwill and other intangible assets), income taxes and liabilities and receivables associated with asbestos litigation and environmental remediation. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions. Ashland’s results are affected by domestic and international economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of certain key raw materials, can have a significant effect on operations. While Ashland maintains reserves for anticipated liabilities and carries various levels of insurance, Ashland could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings relating to asbestos, environmental remediation or other matters.
New Accounting Standards	New accounting standards A description of new U.S. GAAP accounting standards issued or adopted during the current year is required in interim financial reporting. A detailed listing of new accounting standards relevant to Ashland is included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The following standards relevant to Ashland were either issued or adopted in the current period, or will become effective in a subsequent period. In May 2014, the FASB issued accounting guidance outlining a single comprehensive five step model for entities to use in accounting for revenue arising from contracts with customers (ASC 606 Revenue from Contracts with Customers). The new guidance supersedes most current revenue recognition guidance, in an effort to converge the revenue recognition principles within U.S. GAAP. This new guidance also requires entities to disclose certain quantitative and qualitative information regarding the nature, amount, timing and uncertainty of qualifying revenue and cash flows arising from contracts with customers. Entities have the option of using a full retrospective or a modified retrospective approach to adopt the new guidance. Ashland has identified an implementation team that is currently evaluating the impact of the new standard on the Condensed Consolidated Financial Statements and the adoption method options available as well as the overall impact the new guidance will have on the organization. The assessment process consists of categorizing Ashland’s revenue streams and reviewing the current internal accounting policies and practices to determine potential differences that would result from applying the requirements of the new standard to revenue contracts. Additional discussions and meetings with each revenue stream team have occurred to solicit input, identify potential impacts and appropriate changes to Ashland’s business processes, systems and controls to support the revenue recognition and disclosure requirements under the new standard. Based on various preliminary assessments conducted to date, Ashland has identified agreements with distributors and customers that are subject to rebate and incentive programs that could contain elements of material rights and/or variable consideration. Ashland does not currently believe that these elements would result in a material change to how revenue would be recognized for these agreements. Ashland currently intends to adopt this standard using the modified retrospective approach and does not believe the impact will be material to the Condensed Consolidated Financial Statements but does expect there to be significant additional disclosures within the Notes to Condensed Consolidated Financial Statements. This guidance becomes effective for Ashland on October 1, 2018. In March 2017, the FASB issued accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Statement of Consolidated Comprehensive Income (Loss). This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Statement of Consolidated Comprehensive Income (Loss) as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively. Ashland elected to early adopt this guidance on October 1, 2017, which resulted in a reclassification of $2 million in income from the selling, general and administrative expense and cost of sales captions to the other net periodic benefit income caption in the Statement of Consolidated Comprehensive Income (Loss) for the three months ended December 31, 2016. The components of net periodic benefits income (costs) reclassified primarily relate to interest cost, expected return on assets, curtailments, settlements and actuarial gains and losses. Ashland did not have to adjust the classification of service cost since it previously was recorded within the caption required by the new guidance. See Note J for additional information on net periodic benefit costs. In March 2016, the FASB issued new accounting guidance for certain aspects of share-based payments to employees. This guidance requires all excess tax benefits and tax deficiencies related to share-based payments to be recognized as income tax expense in the Statements of Consolidated Comprehensive Income (Loss) instead of additional paid-in capital, and changes the classification of excess tax benefits from a financing activity to an operating activity within the Statements of Condensed Consolidated Cash Flows. This guidance also allows entities to make an accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, this guidance increases the amount an employer can withhold to cover income taxes on awards and still qualify for equity classification and requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity within the Statements of Condensed Consolidated Cash Flows. The guidance became effective for Ashland and was adopted on October 1, 2017. The guidance specifically related to the Statements of Consolidated Comprehensive Income (Loss) was adopted prospectively while the guidance related to the Statements of Condensed Consolidated Cash Flows was adopted retrospectively, as required by the guidance. Upon adoption, the overall impact on Ashland's Condensed Consolidated Financial Statements was not significant.

FAIR VALUE MEASUREMENTS (Policies)	3 Months Ended
FAIR VALUE MEASUREMENTS (Policies)	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments Policy	As required by U.S. GAAP, Ashland uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The three levels within the fair value hierarchy are described as follows. Level 1 – Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect Ashland’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include Ashland’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. For assets that are measured using quoted prices in active markets (Level 1), the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs (Level 2) are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability. For all other assets and liabilities for which unobservable inputs are used (Level 3), fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models that Ashland deems reasonable.
Marketable Securities, Available-for-sale Securities, Policy	During 2015, Ashland diversified the restricted investments received from the January 2015 asbestos insurance settlement into primarily equity and corporate bond mutual funds that are designated as available-for-sale securities, classified as Level 1 measurements within the fair value hierarchy. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related deferred income taxes, included in the stockholders' equity section of the Condensed Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI). Investment income and realized gains and losses on the available-for-sale securities are reported in the net interest and other financing expense caption in the Statements of Consolidated Comprehensive Income.
Marketable Securities, Trading Securities, Policy	Gains and losses related to deferred compensation investments are immediately recognized within the Statements of Consolidated Comprehensive Income (Loss).
Derivatives, Methods of Accounting, Derivatives Not Designated or Qualifying as Hedges, Policy	Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects on certain assets and liabilities, including short-term inter-company loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies.

Disclosure of accounting policy for investments in debt and equity securities that are classified as available-for-sale. This policy also may describe the entity's accounting treatment for transfers between investment categories, how the entity determines whether impairments of available-for-sale securities are other than temporary, and how the fair values of such securities are determined.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Condensed Balance Sheet, Valvoline at Date of Distribution

INVENTORIES (Policies)	3 Months Ended
INVENTORIES (Policies)	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory Policy	Inventories are carried at the lower of cost or market. Inventories are primarily stated at cost using the weighted-average cost method. In addition, certain inventories are valued at cost using the last-in, first-out (LIFO) method.

GOODWILL AND OTHER INTANGIBLES (Policies)	3 Months Ended
GOODWILL AND OTHER INTANGIBLES (Policies)	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets, Goodwill, Policy	Ashland reviews goodwill and indefinite-lived intangible assets for impairment annually or when events and circumstances indicate an impairment may have occurred. This annual assessment is performed as of July 1 and consists of Ashland determining each reporting unit’s current fair value compared to its current carrying value. For its July 1, 2017 assessment, Ashland determined that its reporting units for the allocation of goodwill are its three reportable segments: Specialty Ingredients, Composites and Intermediates and Solvents. At that time, Ashland determined no additional impairment existed.
Finite-Lived Intangible Asset Policy	Intangible assets principally consist of trademarks and trade names, intellectual property and customer and supplier relationships. Intangible assets classified as finite are amortized on a straight-line basis over their estimated useful lives. The cost of trademarks and trade names is amortized principally over 3 to 25 years, intellectual property over 5 to 25 years, and customer and supplier relationships over 3 to 24 years.
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy	Ashland annually reviews indefinite-lived intangible assets for possible impairment or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

LITIGATION, CLAIMS AND CONTINGENCIES (Policies)	3 Months Ended
LITIGATION, CLAIMS AND CONTINGENCIES (Policies)	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Policy	Ashland and Hercules have liabilities from claims alleging personal injury caused by exposure to asbestos. To assist in developing and annually updating independent reserve estimates for future asbestos claims and related costs given various assumptions, Ashland retained Hamilton, Rabinovitz & Associates, Inc. (HR&A). The methodology used by HR&A to project future asbestos costs is based largely on recent experience, including claim-filing and settlement rates, disease mix, enacted legislation, open claims and litigation defense. The claim experience of Ashland and Hercules are separately compared to the results of previously conducted third party epidemiological studies estimating the number of people likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population expected to have been exposed to asbestos. Using that information, HR&A estimates a range of the number of future claims that may be filed, as well as the related costs that may be incurred in resolving those claims. Changes in asbestos-related liabilities and receivables are recorded on an after-tax basis within the discontinued operations caption in the Statements of Consolidated Comprehensive Income.
Environmental Cost Policy	The total reserves for environmental remediation reflect Ashland’s estimates of the most likely costs that will be incurred over an extended period to remediate identified conditions for which the costs are reasonably estimable, without regard to any third-party recoveries. Engineering studies, probability techniques, historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in determining the estimated reserves for environmental remediation. Ashland continues to discount certain environmental sites and regularly adjusts its reserves as environmental remediation continues. Ashland has estimated the value of its probable insurance recoveries associated with its environmental reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage.

EARNINGS PER SHARE (Policies)	3 Months Ended
EARNINGS PER SHARE (Policies)	Dec. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share Policy	The following is the computation of basic and diluted earnings per share (EPS) from continuing operations attributable to Ashland. Stock appreciation rights (SARs), stock options and warrants available to purchase shares outstanding for each reporting period whose grant price was greater than the average market price of Ashland Common Stock for each applicable period were not included in the computation of income from continuing operations per diluted share because the effect of these instruments would be antidilutive. The total number of these shares outstanding was approximately 0.7 million and 0.9 million at December 31, 2017 and 2016, respectively. Earnings per share is reported under the treasury stock method.

STOCK INCENTIVE PLANS (Policies)	3 Months Ended
STOCK INCENTIVE PLANS (Policies)	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Incentive Plan Policy	Ashland has stock incentive plans under which key employees or directors are granted stock appreciation rights (SARs), performance awards or nonvested stock awards. Each program is typically a long-term incentive plan designed to link employee compensation with increased shareholder value or reward superior performance and encourage continued employment with Ashland. Ashland recognizes compensation expense for the grant date fair value of stock-based awards over the applicable vesting period.

VALVOLINE Valvoline (Tables)

7 Months Ended

May 12, 2017

Valvoline [Abstract]

The distribution was recorded at the carrying amount of Valvoline Inc.'s net assets which was a deficit of $187 million as of May 12, 2017, as follows:



	May 12
(In millions)	2017
ASSETS
Current assets
Cash	179
Accounts receivable, net	385
Inventories	153
Other current assets	24
Total current assets	741
Noncurrent assets
Net property, plant and equipment	357
Goodwill	329
Equity and other unconsolidated investments	31
Deferred income taxes	391
Other noncurrent assets	93
Total noncurrent assets	1,201
Total assets	$	1,942
LIABILITIES AND EQUITY
Current liabilities
Short-term debt	75
Current portion of long-term debt	16
Trade and other payables	353
Other current liabilities	34
Total current liabilities	478
Noncurrent liabilities
Long-term debt	662
Employee benefit obligations	826
Other long-term liabilities	163
Total noncurrent liabilities	1,651
Total liabilities	$	2,129
Net deficit	$	(187	)

ACQUISITIONS (Tables)

3 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Business Combination, Separately Recognized Transactions

The following table summarizes the current preliminary values of the assets acquired and liabilities assumed at the date of acquisition.



	At
	May 17, 2017
Preliminary purchase price allocation (in millions)	As Adjusted
Assets:
Accounts receivable	52
Inventory	74
Other current assets	4
Intangible assets	330
Goodwill	287
Property, plant and equipment	97
Other noncurrent assets	20
Liabilities:
Accounts payable	(32		)
Deferred tax - net	(138		)
Other noncurrent liabilities	(14		)
Total purchase price	$	680

Schedule of Finite-Lived Intangible Assets as Part of Business Combination

The following details the total intangible assets identified as of May 17, 2017.



			Weighted-average
			amortization period
Intangible asset type (in millions)	Value		(years)
Trademarks and trade names	$	26	15
Intellectual property	68		22
Customer and supplier relationships	236		20
Total	$	330

DISCONTINUED OPERATIONS (Tables)

3 Months Ended

Dec. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups Including Discontinued Operations, Income Statement and Balance Sheet Additional Disclosures



	Three months ended
	December 31
(In millions)	2017		2016
Income from discontinued operations (net of tax)
Valvoline	$	3	$	75
Total income from discontinued operations (net of tax)	$	3	$	75



	Three months ended
(In millions)	December 31, 2016
Income from discontinued operations
attributable to Valvoline
Sales	$	489
Cost of sales	(293		)
Selling, general and administrative expense	(82		)
Research and development expense	(3		)
Equity and other income	9
Operating income of discontinued operations	120
Net interest and other financing expense	(10		)
Pretax income of discontinued operations	110
Income tax expense	(35		)
Income from discontinued operations	$	75

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721659-107760

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721671-107760

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721677-107760

Fair Value of Financial Instruments

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

The following table summarizes financial instruments subject to recurring fair value measurements as of December 31, 2017.



(In millions)	Carrying value		Total fair value		Quoted prices in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3
Assets
Cash and cash equivalents	$	601	$	601	$	601	$	—	$	—
Restricted investments (a)	345		345		345		—		—
Deferred compensation investments (b)	160		160		—		160		—
Investments of captive insurance company (b)	3		3		3		—		—
Foreign currency derivatives	4		4		—		4		—
Total assets at fair value	$	1,113	$	1,113	$	949	$	164	$	—

Liabilities
Foreign currency derivatives	$	13	$	13	$	—	$	13	$	—


(a)	Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.


(b)	Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.

The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2017.



(In millions)	Carrying value		Total fair value		Quoted prices in active markets for identical assets Level 1		Significant other observable inputs Level 2		Significant unobservable inputs Level 3
Assets
Cash and cash equivalents	$	566	$	566	$	566	$	—	$	—
Restricted investments (a)	332		332		332		—		—
Deferred compensation investments (b)	158		158		—		158		—
Investments of captive insurance company (b)	3		3		3		—		—
Foreign currency derivatives	2		2		—		2		—
Total assets at fair value	$	1,061	$	1,061	$	901	$	160	$	—

Liabilities
Foreign currency derivatives	$	36	$	36	$	—	$	36	$	—


(a)	Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.


(b)	Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.

Available-for-sale Securities

The following table provides a summary of the available-for-sale securities portfolio as of December 31, 2017 and September 30, 2017:



	December 31			September 30
(In millions)	2017			2017
Original cost	$	335		$	335
Accumulated adjustments, net (a)	(38		)	(24		)
Adjusted cost, beginning of year	297			311
Investment income (b)	2			9
Unrealized gain	45			35
Realized gain	1			2
Settlement funds	5			2
Disbursements	(5		)	(27		)
Fair value	$	345		$	332


(a)	The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods.


(b)	Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.

The following table presents gross unrealized gains and losses for the restricted investment available-for-sale securities as of December 31, 2017 and September 30, 2017:



			Gross		Gross
(In millions)	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
As of December 31, 2017
Demand Deposit	$	17	$	—	$	—	$	17
Equity Mutual Fund	163		45		—		208
Corporate bond Mutual Fund	120		—		—		120
Fair value	$	300	$	45	$	—	$	345

As of September 30, 2017
Demand Deposit	$	9	$	—	$	—	$	9
Equity Mutual Fund	168		34		—		202
Corporate bond Mutual Fund	120		1		—		121
Fair value	$	297	$	35	$	—	$	332

Investment Income

The following table presents the investment income and disbursements related to the investments within the portfolio for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017			2016
Investment income	$	2		$	3
Realized gains	1			—
Disbursements	(5		)	—

Summary of gains (losses) on foreign currency derivatives

The following table summarizes the net gains and/or losses recognized during the three months ended December 31, 2017 and 2016 within the Statements of Consolidated Comprehensive Income (Loss).



	Three months ended
	December 31
(In millions)	2017			2016
Foreign currency derivative loss	$	(11	)	$	(8	)

Summary of fair values on foreign currency derivatives



	December 31		September 30
(In millions)	2017		2017
Foreign currency derivative assets	$	4	$	2
Notional contract values	425		79

Foreign currency derivative liabilities	$	13	$	36
Notional contract values	810		1,601

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

Goodwill and Intangible Assets Disclosure [Abstract]

INVENTORIES (Tables)

3 Months Ended

Dec. 31, 2017

Inventory Disclosure [Abstract]

Inventories

The following table summarizes Ashland’s inventories as of the reported Condensed Consolidated Balance Sheet dates.



	December 31			September 30
(In millions)	2017			2017
Finished products	$	421		$	390
Raw materials, supplies and work in process	256			245
LIFO reserves	(3		)	(1		)
	$	674		$	634

GOODWILL AND OTHER INTANGIBLES (Tables)

3 Months Ended

Dec. 31, 2017

Goodwill by Segment

The following is a progression of goodwill by reportable segment for the three months ended December 31, 2017.



	Specialty				Intermediates
(In millions)	Ingredients		Composites		and Solvents		(a)	Total
Balance as of September 30, 2017	$	2,315	$	150	$	—		$	2,465
Currency translation adjustment	10		—		—			10
Balance as of December 31, 2017	$	2,325	$	150	$	—		$	2,475


(a)	As of December 31, 2017, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment.

Intangible Assets

Intangible assets were comprised of the following as of December 31, 2017 and September 30, 2017.



	December 31, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	758		(340		)	418
Customer and supplier relationships	780		(246		)	534
Total definite-lived intangible assets	1,605		(608		)	997

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,906	$	(608	)	$	1,298



	September 30, 2017
	Gross					Net
	carrying		Accumulated			carrying
(In millions)	amount		amortization			amount
Definite-lived intangible assets
Trademarks and trade names	$	67	$	(22	)	$	45
Intellectual property	757		(326		)	431
Customer and supplier relationships	777		(235		)	542
Total definite-lived intangible assets	1,601		(583		)	1,018

Indefinite-lived intangible assets
Trademarks and trade names	301		—			301
Total intangible assets	$	1,902	$	(583	)	$	1,319

DEBT (Tables)

3 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of Debt

The following table summarizes Ashland’s current and long-term debt as of the dates reported in the Condensed Consolidated Balance Sheets.



	December 31			September 30
(In millions)	2017			2017
4.750% notes, due 2022	$	1,082		$	1,082
Term Loan B, due 2024	597			599
6.875% notes, due 2043	376			376
Revolving Credit Facility	285			173
Term Loan A, due 2022	250			250
Term Loan A, due 2020	250			250
Accounts receivable securitization	64			56
6.50% junior subordinated notes, due 2029	51			51
Medium-term notes, due 2019, interest of 9.4% at December 31, 2017	5			5
Other (a)	(21		)	(23		)
Total debt	2,939			2,819
Short-term debt (includes current portion of long-term debt)	(355		)	(235		)
Long-term debt (less current portion and debt issuance cost discounts)	$	2,584		$	2,584


(a)	Other includes $24 million and $25 million of debt issuance cost discounts as of December 31, 2017 and September 30, 2017, respectively.

EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Dec. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

The following table details the components of pension and other postretirement benefit costs for continuing operations.



							Other postretirement
	Pension benefits						benefits
(In millions)	2017			2016			2017		2016
Three months ended December 31
Service cost (a)	$	2		$	2		$	1	$	—
Interest cost (b)	3			2			—		1
Expected return on plan assets (b)	(3		)	(3		)	—		—
Actuarial gain (b)	—			—			—		(2		)
Total net periodic benefit costs (income)	$	2		$	1		$	1	$	(1	)


(a)	Service cost was not impacted by new accounting guidance adopted in the current quarter and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information.


(b)	These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information.

LITIGATION, CLAIMS AND CONTINGENCIES (Tables)

3 Months Ended

Dec. 31, 2017

Loss Contingencies [Line Items]

Reconciliation of Changes in the Environmental Contingencies and Asset Retirement Obligations Reserve

The following table provides a reconciliation of the changes in the environmental remediation reserves during the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions)	2017			2016
Reserve - beginning of period	$	163		$	177
Disbursements	(8		)	(7		)
Revised obligation estimates and accretion	13			4
Reserve - end of period	$	168		$	174

Components of Environmental Remediation Expense



	Three months ended
	December 31
(In millions)	2017		2016
Environmental expense	$	12	$	4
Accretion	1		—
Legal expense	1		2
Total expense	14		6

Insurance receivable (a)	—		—
Total expense, net of receivable activity	$	14	$	6


(a)	Activity of $0 denotes value less than $1 million.

Ashland [Member]

Loss Contingencies [Line Items]

Summary of Asbestos Claims Activity

A summary of Ashland asbestos claims activity, excluding Hercules claims, follows.



	Three months ended
	December 31				Years ended September 30
(In thousands)	2017		2016		2017		2016		2015
Open claims - beginning of period	54		57		57		60		65
New claims filed	1		—		2		2		2
Claims settled	—		—		(1	)	—		—
Claims dismissed	(1	)	(1	)	(4	)	(5	)	(7	)
Open claims - end of period	54		56		54		57		60

Progression of Activity in the Asbestos Reserve Accounts

A progression of activity in the asbestos reserve is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Asbestos reserve - beginning of period	$	419		$	415		$	415		$	409		$	438
Reserve adjustment	—			—			36			37			—
Amounts paid	(10		)	(9		)	(32		)	(31		)	(29		)
Asbestos reserve - end of period (a)	$	409		$	406		$	419		$	415		$	409


(a)	Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Progression of Insurance Receivable

A progression of activity in the Ashland insurance receivable is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Insurance receivable - beginning of period	$	155		$	151		$	151		$	150		$	402
Receivable adjustment	—			—			15			16			(3		)
Insurance settlement	—			—			(5		)	(4		)	(227		)
Amounts collected	(4		)	(2		)	(6		)	(11		)	(22		)
Insurance receivable - end of period (a)	$	151		$	149		$	155		$	151		$	150


(a)	Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Hercules [Member]

Loss Contingencies [Line Items]

Summary of Asbestos Claims Activity

A summary of Hercules’ asbestos claims activity follows.



	Three months ended
	December 31		Years ended September 30
(In thousands)	2017	2016	2017		2016		2015
Open claims - beginning of period	12	15	15		20		21
New claims filed	—	—	1		1		1
Claims dismissed	—	—	(4	)	(6	)	(2	)
Open claims - end of period	12	15	12		15		20

Progression of Activity in the Asbestos Reserve Accounts

A progression of activity in the asbestos reserve is presented in the following table.



	Three months ended
	December 31						Years ended September 30
(In millions)	2017			2016			2017			2016			2015
Asbestos reserve - beginning of period	$	323		$	321		$	321		$	311		$	329
Reserve adjustment	—			—			16			25			4
Amounts paid	(8		)	(3		)	(14		)	(15		)	(22		)
Asbestos reserve - end of period (a)	$	315		$	318		$	323		$	321		$	311


(a)	Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

Progression of Insurance Receivable

A progression of activity in the Hercules insurance receivable is presented in the following table.



	Three months ended
	December 31				Years ended September 30
(In millions)	2017		2016		2017		2016		2015
Insurance receivable - beginning of period	$	68	$	63	$	63	$	56	$	77
Receivable adjustment	—		—		5		7		1
Insurance settlement	—		—		—		—		(22		)
Insurance receivable - end of period	$	68	$	63	$	68	$	63	$	56

EARNINGS PER SHARE (Tables)

3 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Share



	Three months ended
	December 31
(In millions except per share data)	2017			2016
Numerator
Numerator for basic and diluted EPS –
Loss from continuing operations	$	(7	)	$	(65	)
Denominator
Denominator for basic EPS – Weighted-average
common shares outstanding	62			62
Share-based awards convertible to common shares (a)	—			—
Denominator for diluted EPS – Adjusted weighted-
average shares and assumed conversions	62			62

EPS from continuing operations attributable to Ashland
Basic	$	(0.12	)	$	(1.05	)
Diluted	(0.12		)	(1.05		)


(a)	As a result of the loss from continuing operations attributable to Ashland during the three months ended December 31, 2017 and 2016, the effect of the share-based awards convertible to common shares would be antidilutive. In accordance with U.S. GAAP, they have been excluded from the diluted EPS calculation.

EQUITY ITEMS (Tables)

3 Months Ended

Dec. 31, 2017

Schedule of Comprehensive Income (Loss) [Table Text Block]

Components of other comprehensive income (loss) recorded in the Statements of Consolidated Comprehensive Income (Loss) are presented below, before tax and net of tax effects.



	2017									2016
				Tax									Tax
	Before			(expense)			Net of			Before			(expense)		Net of
(In millions)	tax			benefit			tax			tax			benefit		tax
Three months ended December 31
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	3		$	—		$	3		$	(150	)	$	4	$	(146	)
Pension and postretirement obligation adjustment:
Amortization of unrecognized prior service
credits included in net income (a)	—			—			—			(3		)	2		(1		)
Net change in available-for-sale securities:
Unrealized gains during period	11			(2		)	9			—			—		—
Reclassification adjustment for realized gains
included in net income	(1		)	—			(1		)	—			—		—
Total other comprehensive income (loss)	$	13		$	(2	)	$	11		$	(153	)	$	6	$	(147	)


(a)	For the three months ended December 31, 2016, the amortization of unrecognized prior service credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified in the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss).

STOCK INCENTIVE PLANS Stock Incentive Plans (Tables)

3 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The components of Ashland’s pretax stock-based compensation expense included in continuing operations are as follows:



	Three months ended
	December 31
(In millions)	2017 (a)		2016 (b)
SARs	$	1	$	1
Nonvested stock awards	6		4
Performance awards	4		2
	$	11	$	7


(a)	The three months ended December 31, 2017 included $2 million of expense related to cash-settled nonvested restricted stock awards and $2 million of expense related to cash-settled performance units.


(b)	The three months ended December 31, 2016 included $1 million of expense related to cash-settled nonvested restricted stock awards and $1 million of expense related to cash-settled performance units.

REPORTABLE SEGMENT INFORMATION (Tables)

3 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Reportable Segment Information

The following table presents various financial information for each reportable segment for the three months ended December 31, 2017 and 2016.



	Three months ended
	December 31
(In millions - unaudited)	2017			2016
SALES
Specialty Ingredients	$	550		$	482
Composites	218			165
Intermediates and Solvents	74			57
	$	842		$	704
OPERATING INCOME (LOSS)
Specialty Ingredients	$	42		$	40
Composites	18			15
Intermediates and Solvents	8			(7		)
Unallocated and other	(29		)	(33		)
	$	39		$	15

SIGNIFICANT ACCOUNTING POLICIES (Details) shares in Millions, $ in Millions	3 Months Ended		7 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	May 12, 2017 shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Valvoline Shares Owned by Ashland \| shares			170
Sale of Stock, Percentage of Ownership after Transaction			83.00%
Number of reportable segments	3
Other net periodic benefit income \| $	$ 0	$ 2

VALVOLINE (Details) - USD ($)
shares in Millions, $ in Millions

3 Months Ended

7 Months Ended

Dec. 31, 2017

Dec. 31, 2016

May 12, 2017

Sep. 30, 2017

May 17, 2017

Sep. 30, 2016

Valvoline Shares Owned by Ashland

170

Sale of Stock, Percentage of Ownership after Transaction

83.00%

Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners

17.00%

Stockholders' Equity Note, Stock Split, Conversion Ratio

2.745338

Accounts receivable, net

^[1]

$ 597

$ 612

Inventories

674

634

Other current assets

Total current assets

1,964

1,903

Net property, plant and equipment

1,945

1,970

Goodwill

2,475

2,465

$ 287

Other current liabilities

Other noncurrent assets

425

422

Total noncurrent assets

6,691

6,715

Total assets

8,655

8,618

Short-term debt

355

235

Trade and other payables

382

409

266

324

Total current liabilities

1,003

968

Long-term debt

2,584

Employee benefit obligations

194

191

Other long-term liabilities

409

400

Total noncurrent liabilities

4,253

$ 4,244

Selling, General and Administrative Expenses [Member]

Discontinued Operations [Member]

Separation costs

$ 6

$ 28

Separation costs

$ 6

Valvoline [Member]

Cash Equivalents, at Carrying Value

$ 179

Accounts receivable, net

385

Inventories

153

Other current assets

Total current assets

741

Net property, plant and equipment

357

Goodwill

329

Equity and other unconsolidated investments

Current portion of long-term debt

391

Other noncurrent assets

Total noncurrent assets

1,201

Total assets

1,942

Short-term debt

Trade and other payables

353

Other current liabilities

Total current liabilities

478

Long-term debt

662

Employee benefit obligations

826

Other long-term liabilities

163

Total noncurrent liabilities

1,651

Total liabilities

2,129

Net deficit

$ (187)

[1]	Accounts receivable includes an allowance for doubtful accounts of $9 million at December 31, 2017 and September 30, 2017

ACQUISITIONS (Details) $ in Millions		12 Months Ended
ACQUISITIONS (Details) $ in Millions	May 17, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period		$ 300
Number of manufacturing facilities	14
Business acquisiton, purchase price	$ 680
Working capital adjustments	20
Accounts receivable	52
Inventory	74
Other current assets	4
Intangible assets	330
Goodwill	287		$ 2,475	$ 2,465
Property, plant and equipment	97
Other noncurrent assets	20
Accounts payable	(32)
Deferred tax - net	(138)
Other noncurrent liabilities	(14)
Trademarks and Trade Names [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Finite-lived Intangible Assets Acquired	$ 26
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	15 years
Intellectual Property [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Finite-lived Intangible Assets Acquired	$ 68
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	22 years
Customer and supplier relationships [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Finite-lived Intangible Assets Acquired	$ 236
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	20 years

DISCONTINUED OPERATIONS (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		7 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	May 12, 2017
Discontinued Operations [Line Items]
Valvoline Shares Owned by Ashland			170
Income from discontinued operations (net of tax)	$ 3	$ 75
Research and development expense	21	20
Income tax expense	14	(41)
Valvoline [Member]
Discontinued Operations [Line Items]
Income from discontinued operations (net of tax)	$ 3	75
Sales		489
Cost of sales		(293)
Selling, general and administrative expense		(82)
Research and development expense		(3)
Equity and other income		9
Operating income of discontinued operations		120
Net interest and other financing expense		(10)
Pretax income of discontinued operations		110
Income tax expense		$ (35)

FAIR VALUE MEASUREMENTS (Recurring Basis) (Details) - USD ($)
$ in Millions

Dec. 31, 2017

Sep. 30, 2017

ASSETS

Restricted Investments, Current

$ 30

Fair Value, Measurements, Recurring [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]

ASSETS

601

566

^[1]

345

332

^[2]

160

158

^[2]

1,113

1,061

Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]

ASSETS

601

566

^[1]

345

332

^[2]

160

158

^[2]

1,113

1,061

Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]

ASSETS

601

566

^[1]

345

332

^[2]

^[2]

949

901

Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]

ASSETS

^[1]

^[2]

160

158

^[2]

164

160

Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]

ASSETS

^[1]

^[2]

^[2]

Schedule of Available-for-sale Securities [Line Items]

$ 0

[1]	Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.
[2]	Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.

FAIR VALUE MEASUREMENTS (Available-for-sale Securities) (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2017

Sep. 30, 2017

Dec. 31, 2016

Sep. 30, 2017

Sep. 30, 2015

Litigation Settlement, Amount

$ 398

Increase (Decrease) in Restricted Cash

$ 335

Restricted Investments, Current

$ 30

Original cost

335

Accumulated investment income, settlement funds and disbursements, net

(38)

(24)

Equity mutual fund, unrealized loss

^[1]

297

311

Investment income

^[2]

$ 3

^[2]

(5)

$ 0

(27)

Total, fair value

345

332

Corporate bond mutual fund, unrealized loss

Other than Temporary Impairment Losses, Investments, Available-for-sale Securities

Demand Deposits [Member]

Schedule of Available-for-sale Securities [Line Items]

Demand Deposit

Equity mutual fund [Member]

Schedule of Available-for-sale Securities [Line Items]

Equity mutual fund, unrealized gain

163

168

Equity mutual fund, Fair value

208

202

Corporate bond mutual fund [Member]

Schedule of Available-for-sale Securities [Line Items]

Corporate bond mutual fund, unrealized gain

120

Corporate bond mutual fund, unrealized loss

Corporate bond mutual fund, Fair value

120

121

Available-for-sale Securities [Member]

Schedule of Available-for-sale Securities [Line Items]

300

297

Unrealized gain

Unrealized loss

Total, fair value

$ 345

$ 332

[1]	The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods.
[2]	Investment income for the demand deposit includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.

FAIR VALUE MEASUREMENTS (Currency Hedges) (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Accounts Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative assets	$ 4		$ 2
Notional amounts, foreign currency derivatives	425		79
Accrued Expenses and Other Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative liabilities	13		36
Notional amounts, foreign currency derivatives	810		$ 1,601
Not Designated as Hedging Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative gain (loss)	$ (11)	$ (8)

FAIR VALUE MEASUREMENTS (Other Financial Instruments) (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Other financial instruments [Abstract]
Long-term Debt, Carrying Value	$ 2,614	$ 2,615
Long-term Debt, Fair Value	$ 2,755	$ 2,768

INVENTORIES (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 30, 2017
Inventory Disclosure [Abstract]
Finished products	$ 421	$ 390
Raw materials, supplies and work in process	256	245
LIFO reserve	(3)	(1)
Inventory, Net	$ 674	$ 634

GOODWILL AND OTHER INTANGIBLES (Goodwill) (Details)
$ in Millions

3 Months Ended

Dec. 31, 2017

USD ($)

$ 2,465

Specialty Ingredients [Member]

2,475

2,315

2,325

Composites [Member]

150

Intermediates and Solvents [Member]

150

Goodwill, Impaired, Accumulated Impairment Loss

^[1]

$ 171

[1]	As of December 31, 2017, there was accumulated impairment of $171 million related to the Intermediates and Solvents reportable segment.

GOODWILL AND OTHER INTANGIBLES (Other Intangible Assets) (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Intangible Assets, Net [Abstract]
Intangible Assets, Gross (Excluding Goodwill)	$ 1,906		$ 1,902
Intangibles	1,298		1,319
Finite-Lived Intangible Assets, Net [Abstract]
Gross carrying amount	1,605		1,601
Accumulated amortization	(608)		(583)
Net carrying amount	997		1,018
Amortization expense recognized on intangible assets	24	$ 19
Expected future amortization expense [Abstract]
2018 (includes three months actual and nine months estimated)	94
2019	90
2020	89
2021	89
2022	87
Trademarks and Trade Names [Member]
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract]
Indefinite-lived intangible assets (excluding goodwill)	301		301
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross carrying amount	67		67
Accumulated amortization	(22)		(22)
Net carrying amount	45		45
Intellectual Property [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross carrying amount	758		757
Accumulated amortization	(340)		(326)
Net carrying amount	418		431
Customer and supplier relationships [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross carrying amount	780		777
Accumulated amortization	(246)		(235)
Net carrying amount	$ 534		$ 542
Minimum [Member] \| Trademarks and Trade Names [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	3 years
Minimum [Member] \| Intellectual Property [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	5 years
Minimum [Member] \| Customer and supplier relationships [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	3 years
Maximum [Member] \| Trademarks and Trade Names [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	25 years
Maximum [Member] \| Intellectual Property [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	25 years
Maximum [Member] \| Customer and supplier relationships [Member]
Intangible Assets, Net [Abstract]
Useful life (in years)	24 years

DEBT (Schedule of Long-term Debt) (Details) - USD ($)
$ in Millions

3 Months Ended

Dec. 31, 2017

Sep. 30, 2017

Unamortized Debt Issuance Expense, Long-Term Debt

$ 2,939

$ 2,819

Short-term debt

(355)

(235)

Long-term debt

2,584

Scheduled aggregate debt maturities by fiscal year [Abstract]

269

1,279

Notes due 2022 [Member]

$ 1,082

1,082

4.75%

Term Loan B due 2024 [Member]

Aug. 15, 2022

$ 597

599

Notes due 2043 [Member]

$ 376

376

6.875%

2017 Revolving Credit Facility [Member]

May 15, 2043

Term Loan A due 2022 [Member]

$ 285

173

Term Loan A due 2020 [Member]

250

Accounts Receivable Securitization [Member]

250

Junior Subordinated Debt [Member]

$ 51

6.50%

Medium-term Notes [Member]

Dec. 31, 2029

$ 5

9.40%

Dec. 31, 2019

Other Notes [Member]

Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]

^[1]

$ (21)

$ (23)

[1]	Other includes $24 million and $25 million of debt issuance cost discounts as of December 31, 2017 and September 30, 2017, respectively.

DEBT (Financing Activity and Covenants) (Details) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	May 17, 2017 USD ($)
Debt Instrument [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity			$ 498
Debt instrument, outstanding amount		$ 2,819	$ 2,939
Covenant restrictions [Abstract]
Maximum consolidated leverage ratio			4.50
Calculated leverage ratio			3.9
Minimum required consolidated interest coverage ratio			3.0
Calculated consolidated interest coverage ratio			4.6
Term Loan A due 2020 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount			$ 250
Debt instrument, outstanding amount		250	250
Term Loan A due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount			250
Debt instrument, outstanding amount		$ 250	250
2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			800	$ 680
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.25%
Line of credit facility, letter of credit sublimit			125
Line of Credit Facility, Remaining Borrowing Capacity			467
Letters of Credit Outstanding, Amount			48
Debt instrument, outstanding amount		$ 173	285
Term Loan B due 2024 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount			600
Debt instrument, outstanding amount		599	$ 597
Notes due 2022 [Member]
Debt Instrument [Line Items]
Repayments of Debt	$ 36
Debt Instrument, Interest Rate, Stated Percentage			4.75%
Debt instrument, outstanding amount		1,082	$ 1,082
Notes due 2018 [Member]
Debt Instrument [Line Items]
Repayments of Debt	29
Debt Instrument, Interest Rate, Stated Percentage			3.875%
Notes due 2018 and 2022 [Member]
Debt Instrument [Line Items]
Gain (Loss) on Repurchase of Debt Instrument	(2)
Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Aggregate purchase price of debt	177
Repayment of debt, accelerated accretion	92
Par value of debt repurchases	182
Reduction in carrying value of debt	90
Gain (Loss) on Repurchase of Debt Instrument	$ 5
Debt Instrument, Interest Rate, Stated Percentage			6.50%
Debt instrument, outstanding amount		51	$ 51
Accounts Receivable Securitization [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity			31
Debt instrument, outstanding amount		$ 56	$ 64
London Interbank Offered Rate (LIBOR) [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate			1.75%
Alternate base rate [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate		0.75%
Minimum [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.175%
Minimum [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate		1.375%
Minimum [Member] \| Alternate base rate [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate		0.375%
Maximum [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.40%
Maximum [Member] \| London Interbank Offered Rate (LIBOR) [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate		2.50%
Maximum [Member] \| Alternate base rate [Member] \| 2017 Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instruments, percentage points added to variable rate		1.50%

INCOME TAXES (Effective Tax Rate) (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	35.00%
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount	$ 16
Increase (Decrease) in Deferred Income Taxes	126
Increase (Decrease) in Deferred Liabilities	$ 142
Effective tax rate (in hundredths)	200.00%	39.00%

INCOME TAXES (Unrecognized Tax Benefits) (Details) $ in Millions	3 Months Ended
	Dec. 31, 2017 USD ($)
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance	$ 194
Increases related to positions taken on items from prior years	2
Increases related to positions taken in the current year	3
Balance	199
Minimum [Member]
Income Tax Contingency [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	22
Maximum [Member]
Income Tax Contingency [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 32

EMPLOYEE BENEFIT PLANS (Details) - USD ($)
$ in Millions

3 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Actuarial gain

$ 0

$ 2

Total net periodic benefit cost

(2)

United States Pension Plans of US Entity, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Actual contributions to benefit plans in period

Estimated future contributions in current fiscal year

Foreign Pension Plans, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Actual contributions to benefit plans in period

Estimated future contributions in current fiscal year

Pension Plan [Member]

Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]

Service cost

^[1]

Interest cost

^[2]

Expected return on plan assets

^[2]

(3)

Actuarial gain

^[2]

Total net periodic benefit cost

Other Postretirement Benefit Plan, Defined Benefit [Member]

Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]

Service cost

^[1]

Interest cost

^[2]

Expected return on plan assets

^[2]

Actuarial gain

^[2]

(2)

Total net periodic benefit cost

$ 1

$ (1)

[1]	Service cost was not impacted by new accounting guidance adopted in the current quarter and is therefore still classified within the selling, general and administrative expense and cost of sales captions on the Statements of Consolidated Comprehensive Income (Loss). See Note A for additional information.
[2]	These components are now classified within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss) due to the adoption of new accounting guidance in the current quarter. See Note A for additional information.

LITIGATION, CLAIMS AND CONTINGENCIES (Asbestos Litigation) (Details)
claim in Thousands, $ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2017

USD ($)

claim

Dec. 31, 2016

USD ($)

claim

Sep. 30, 2017

USD ($)

claim

Sep. 30, 2016

USD ($)

claim

Sep. 30, 2015

USD ($)

claim

Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward]

Insurance settlement

$ 0

Minimum [Member]

Number of Years Included in Asbestos Assumption

40 years

Maximum [Member]

Number of Years Included in Asbestos Assumption

50 years

Ashland [Member]

Asbestos claims [Roll Forward]

Open claims - beginning of period | claim

New claims filed | claim

Claims settled | claim

(1)

Claims dismissed | claim

(1)

(4)

(5)

(7)

Open claims - end of period | claim

$ 419

^[1]

$ 415

$ 409

$ 438

Reserve adjustment

Amounts paid

(10)

(9)

(32)

(31)

(29)

Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward]

409

^[1]

406

419

^[1]

415

409

Insurance receivable - beginning of period

155

^[2]

151

150

402

Receivable adjustment

(3)

Insurance settlement

(5)

(4)

(227)

Amounts collected

(4)

(2)

(6)

(11)

(22)

Insurance receivable - end of period

151

^[2]

$ 149

$ 155

^[2]

$ 151

$ 150

Possible total future litigation defense and claim settlement costs

$ 660

Hercules [Member]

Asbestos claims [Roll Forward]

Open claims - beginning of period | claim

New claims filed | claim

Claims dismissed | claim

(4)

(6)

(2)

Open claims - end of period | claim

$ 323

^[3]

$ 321

$ 311

$ 329

Reserve adjustment

Amounts paid

(8)

(3)

(14)

(15)

(22)

Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward]

315

^[3]

318

323

^[3]

321

311

Insurance receivable - beginning of period

Receivable adjustment

Insurance settlement

(22)

Insurance receivable - end of period

$ 63

$ 56

Possible total future litigation defense and claim settlement costs

510

Other Current Liabilities [Member] | Ashland [Member]

Other Current Liabilities [Member] | Hercules [Member]

Accounts Receivable [Member] | Ashland [Member]

Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward]

Insurance receivable - beginning of period

Insurance receivable - end of period

$ 14

[1]	Included $34 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.
[2]	Included $14 million classified in accounts receivable on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.
[3]	Included $14 million classified in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2017 and September 30, 2017.

LITIGATION, CLAIMS AND CONTINGENCIES (Environmental Remediation and Asset Retirement Obligations) (Details) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2017 USD ($) service_station_property disposal_site waste_treatment_or_disposal_sites	Dec. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)
Environmental contingencies and asset retirement obligation [Roll Forward]
Environmental remediation reserve - beginning of period	$ 163	$ 177	$ 177
Disbursements	(8)	(7)
Revised obligation estimates and accretion	13	4
Environmental remediation reserve - end of period	168	174	163
Accrued Environmental Loss Contingencies, Noncurrent	125		121
Recorded Third-Party Environmental Recoveries Receivables	14		15
Recorded Third-Party Environmental Recoveries, Noncurrent	$ 13		$ 14
Environmental Remediation Costs Recognized [Abstract]
Number of waste treatment or disposal sites were company is identified as a potentially responsible party under the superfund or similar state laws \| waste_treatment_or_disposal_sites	82
Number of current and former operating facilities subject to various environmental laws. \| disposal_site	118
Total number of service station properties subject to various environmental laws \| service_station_property	1,225
Number of service stations being actively remediated \| service_station_property	36
Environmental expense	$ 14	6
Accretion Expense	1	0
Legal Fees	1	2
Insurance receivable	0	0
Total environmental remediation expense, net of receivable activity	14	6
Site Contingency [Line Items]
Environmental Expense	$ 12	$ 4
Maximum reserve for remediation reserve related to any one site (in hundredths)	15.00%
Maximum [Member]
Site Contingency [Line Items]
Environmental Exit Costs, Reasonably Possible Additional Loss	$ 412

EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

3 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Earnings Per Share [Abstract]

Antidilutive securities excluded from calculation of earnings per share

0.7

0.9

Numerator [Abstract]

Numerator for basic and diluted EPS - Loss from continuing operations

$ (7)

$ (65)

Denominator [Abstract]

Denominator for basic EPS - Weighted-average common shares outstanding

62.0

Share based awards convertible to common shares

^[1]

0.0

Denominator for diluted EPS - Adjusted weighted-average shares and assumed conversions

62.0

EPS from continuing operations [Abstract]

Basic (in usd per share)

$ (0.12)

$ (1.05)

Diluted (in usd per share)

$ (0.12)

$ (1.05)

[1]

As a result of the loss from continuing operations attributable to Ashland during the three months ended December 31, 2017 and 2016, the effect of the share-based awards convertible to common shares would be antidilutive. In accordance with U.S. GAAP, they have been excluded from the diluted EPS calculation.

EQUITY ITEMS Stock Repurchase Programs and Stockholder Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2015
Accelerated Share Repurchases [Line Items]
Stock Repurchase Program, Authorized Amount						$ 1,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 500
Common Stock, Dividends, Per Share, Declared	$ 0.225	$ 0.225	$ 0.225	$ 0.390	$ 0.39

EQUITY ITEMS Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Millions

3 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Unrealized translation gain (loss), before tax

$ 3

$ (150)

Unrealized translation gain (loss), tax

Unrealized translation gain (loss), net of tax

(146)

Amortization of unrecognized prior service credits included in net income, before tax

(3)

^[1]

Amortization of unrecognized prior service credits included in net income, tax

Amortization of unrecognized prior service credits included in net income, net of tax

(1)

Unrealized gain on available-for-sale securities, before taxes

Unrealized gain on available-for-sale securities, tax

(2)

Unrealized gain on available-for-sale securities, net of tax

Reclassification adjustment for gains on available-for-sale securities included in net income, before tax

(1)

Reclassification adjustment for gains on available-for-sale securities included in net income, tax

Reclassification adjustment for gains on available-for-sale securities included in net income, net of tax

(1)

Other comprehensive income (loss), before tax

(153)

Other comprehensive income (loss), tax

(2)

Other comprehensive income (loss)

$ 11

$ (147)

[1]

For the three months ended December 31, 2016, the amortization of unrecognized prior service credits was related to pension and other postretirement benefit plans that transferred to Valvoline and was classified in the discontinued operations caption on the Statements of Consolidated Comprehensive Income (Loss).

STOCK INCENTIVE PLANS (Details) - USD ($)
$ in Millions

3 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock Appreciation Rights (SARs) [Member]

$ 11

^[1]

$ 7

^[2]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Unexercised SARs lapse expiration period

$ 1

10 years 1 month

Grants of share-based payment awards in period

470,000

422,000

Model to fair value share-based payment awards

$ 13

Black-Scholes option-pricing model

Unrecognized cost expected to be recognized over a weighted-average period (in years)

2 years 4 months 24 days

Stock Appreciation Rights (SARs) [Member] | Minimum [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock Appreciation Rights (SARs) [Member] | Maximum [Member]

1 year

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Nonvested Stock Awards [Member]

3 years

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Grants of share-based payment awards in period

$ 6

$ 4

142,000

81,000

Unrecognized cost expected to be recognized over a weighted-average period (in years)

$ 12

2 years

Nonvested Stock Awards [Member] | Minimum [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Nonvested Stock Awards [Member] | Maximum [Member]

1 year

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Performance Shares [Member]

5 years

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

$ 4

$ 2

Grants of share-based payment awards in period

3 years

101,000

56,000

Unrecognized cost expected to be recognized over a weighted-average period (in years)

$ 17

2 years 2 months 12 days

Number of common shares for each converted performance share

Cash-settled Nonvested Stock Awards [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

$ 2

$ 1

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number

3 years

220,000

Cash-settled Performance Shares [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Restricted Stock [Member]

$ 2

$ 1

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]