ash-8k_20200505.htm
false 0001674862 0001674862 2020-05-05 2020-05-05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  May 5, 2020

ASHLAND GLOBAL HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation) 

 

333-211719

 

81-2587835

(Commission File Number)

 

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

 

8145 Blazer Drive

Wilmington, DE 19808

Registrant’s telephone number, including area code (302) 995-3000

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

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

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

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

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

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

Emerging growth company  

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock (par value $.01)

 

ASH

 

NYSE

 

 

 


 

 

Item 2.02.  Results of Operations and Financial Condition

 

On May 5, 2020, Ashland Global Holdings Inc. (“Ashland”) announced preliminary second quarter results, which are discussed in more detail in the news release (the “News Release”) attached to this Current Report on Form 8-K (“Form 8-K”) as Exhibit 99.1, which is incorporated herein by reference into this Item 2.02.

 

Item 7.01.  Regulation FD Disclosure

 

On May 5, 2020, Ashland will make available the News Release on the “Investor Center” section of Ashland’s website located at http://investor.ashland.com.  

 

Item 9.01.  Financial Statements and Exhibits

 

 

(d)

Exhibits

 

 

 

 

99.1

News Release dated May 5, 2020.

 

 

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL Document).

 

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

 

2


 

SIGNATURES

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

 

 

ASHLAND GLOBAL HOLDINGS INC.

 

(Registrant)

 

 

May 5, 2020

/s/ J. Kevin Willis

 

J. Kevin Willis

 

Senior Vice President and

Chief Financial Officer

 

3

ash-ex991_6.htm

 

Exhibit 99.1

 

News Release

 

Ashland reports preliminary financial results for second quarter of fiscal 2020 consistent with previous update

 

 

Sales of $610 million, down 9% versus prior-year quarter

 

Net loss of $582 million, or -$9.61 per diluted share

 

Loss from continuing operations of $575 million, or -$9.48 per diluted share

 

Adjusted income from continuing operations of $52 million, or $0.84 per diluted share

 

Adjusted income from continuing operations excluding intangibles amortization expense of $69 million, or $1.12 per diluted share

 

Adjusted EBITDA of $142 million

 

WILMINGTON, Del., May 5, 2020 – Ashland Global Holdings Inc. (NYSE: ASH) today announced preliminary1 financial results for the second quarter of fiscal 2020 ended March 31, 2020. The global specialty materials company serves customers in a wide range of consumer and industrial markets.

 

As expected, the Ashland portfolio performed well during the quarter, despite the global macroeconomic uncertainty brought on by the COVID-19 pandemic. Sales were $610 million, down 9 percent versus the prior-year quarter, with the legacy Pharmachem business and previously communicated prior-year business losses in oral care representing approximately half of this decline. Unfavorable foreign currency contributed an additional one percent to the decline. Net loss was $582 million compared to net income of $76 million in the prior-year quarter, driven primarily by the previously-disclosed non-cash goodwill impairment charge following the business unit realignment that occurred during the quarter. Loss from continuing operations was $575 million compared to income of $45 million in the prior-year quarter, or -$9.48 per diluted share compared to income of $0.71 in the prior-year quarter. Adjusted income from continuing operations was $52 million, consistent with the prior-year quarter, or $0.84 per diluted share, up from $0.83 in the prior-year quarter. Adjusted income from continuing operations excluding intangibles amortization expense was $69 million, consistent with the prior-year quarter, or $1.12 per diluted share, up from $1.08 in the prior-year quarter. Adjusted EBITDA was $142 million, consistent with the prior-year quarter, as the impact of lower sales was offset by lower operating expense.

 

“Results in the second quarter were consistent with the update we issued on April 16,” said Guillermo Novo, chairman and chief executive officer, Ashland. “I am pleased with the leadership demonstrated by our teams and the continued progress we have made transforming the company, particularly in light of the challenges that arose from the COVID-19 pandemic. Many of the important end markets we serve are demonstrating their resilience despite the global-economic uncertainly.”

 

“The majority of the portfolio continues to perform well. We expect Consumer Specialties and certain end markets within Industrial Specialties to demonstrate continued relative

 


 

strength in the second half of the year as we are a critical technology and solutions provider to our customers in these key end markets,” added Novo. “While increased global uncertainty is expected to impact demand in more industrial-focused businesses, we are confident that our continued self-help actions will offset many of these temporary demand dynamics. We are excited about the rapid progress we have made advancing our strategy and transforming the company. I want to thank everyone at Ashland for their dedication and leadership during these dynamic times. I look forward to sharing additional thoughts on our plans and the progress we have made during the conference call with securities analysts tomorrow morning.”

 

Reportable Segment Performance

To aid in the understanding of Ashland’s ongoing business performance, the results of Ashland’s reportable segments are described below on an adjusted basis. In addition, EBITDA, or adjusted EBITDA, is reconciled to operating income in Table 4, free cash flow and adjusted operating income are reconciled in Table 6, and adjusted income from continuing operations adjusted diluted earnings per share and adjusted diluted earnings per share excluding intangible amortization expense are reconciled in Table 7 of this news release. These adjusted results are considered non-GAAP financial measures.  For a full description of the non-GAAP financial measures used, see the “Use of Non-GAAP Measures” section that further describes these adjustments below.

 

Consumer Specialties

 

Sales were $343 million, down 9 percent from the prior-year quarter, with the legacy Pharmachem business and previously communicated prior-year business losses in oral care representing approximately 6 percentage points of the decline. Unfavorable foreign currency also reduced sales by an additional 1 percent. Excluding these items, the Life Sciences and Personal Care & Household business units performed well during the quarter, demonstrating the important market positions Ashland holds in end markets that are performing well in spite of the weak overall economy.

 

Operating loss was $300 million, compared to income of $58 million in the prior-year quarter, due primarily to the goodwill impairment charge within Personal Care & Household. Adjusted EBITDA was $91 million, down 1 percent from the prior-year quarter, as lower sales volumes and unfavorable foreign currency were nearly offset by favorable price/mix and lower operating costs.

 

Industrial Specialties

 

Sales were $240 million, down 7 percent from the prior-year quarter, due primarily to lower demand in certain industrial end markets and reduced pricing partially reflecting lower raw-material costs. Unfavorable foreign currency also reduced sales by 1 percent.

 

Operating loss was $145 million, compared to income of $15 million in the prior-year quarter, due primarily to the goodwill impairment charge within Specialty Additives. Adjusted EBITDA was $53 million, down 10 percent from the prior-year quarter, driven by lower volume and unfavorable fixed-cost absorption, partially offset by favorable price/mix in both Performance Adhesives and Specialty Additives.

 

 

 


 

Intermediates & Solvents

 

Sales were $37 million, down 16 percent from the prior-year quarter, due primarily to lower pricing and lower intercompany volume reflecting inventory-management initiatives within Consumer Specialties. Volumes of derivatives sold to third-party customers grew by approximately 1 percent compared to the prior year.

 

Operating loss was $2 million, down from income of $9 million in the prior-year quarter. Adjusted EBITDA was $5 million, down from $12 million in the prior-year quarter, due primarily to unfavorable price/mix and operating costs.

 

Unallocated & Other

 

Unallocated and Other expense was $21 million, compared to $38 million in the prior-year quarter, primarily due to lower restructuring-related expenses and the elimination of stranded costs. Adjusted Unallocated and Other expense was $7 million, compared to $21 million in the prior-year quarter, primarily due to the benefits of cost reductions achieved during the previous fiscal year.

 

Outlook

 

Chairman and CEO Guillermo Novo will provide commentary on the outlook for Ashland during the conference call with securities analysts on Wednesday, May 6, 2020.

 

Conference Call Webcast

Ashland will host a live webcast of its second-quarter conference call with securities analysts at 10:00 a.m. ET Wednesday, May 6, 2020. The webcast will be accessible through Ashland’s website at http://investor.ashland.com and will include a slide presentation. Following the live event, an archived version of the webcast and supporting materials will be available for 12 months.

 

Use of Non-GAAP Measures

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

 

 


 

Key items, which are set forth on Table 7 of this release, are defined as financial effects from significant transactions that, either by their nature or amount, have caused short-term fluctuations in net income and/or operating income which Ashland does not consider to most accurately reflect Ashland’s underlying business performance and trends.  Further, Ashland believes that providing supplemental information that excludes the financial effects of these items in the financial results will enhance the investor’s ability to compare financial performance between reporting periods.

 

Tax-specific key items, which are set forth on Table 7 of this release, are defined as financial transactions, tax law changes or other matters that fall within the definition of key items as described above.  These items relate solely to tax matters and would only be recorded within the income tax caption of the Statement of Consolidated Income.  As with all key items, due to their nature, Ashland does not consider the financial effects of these tax-specific key items on net income to be the most accurate reflection of Ashland’s underlying business performance and trends.

 

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

 

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

 

Adjusted diluted earnings per share, excluding intangibles amortization expense metric enables Ashland to demonstrate the impact of non-cash intangibles amortization expense on earnings per share, in addition to key items previously mentioned. Ashland’s management believe this presentation is helpful to illustrate how previous acquisitions impact applicable period results.

 

About Ashland 
Ashland Global Holdings Inc. (NYSE: ASH) is a premier global specialty materials company serving customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, nutraceuticals, personal care and pharmaceutical. At Ashland, we are approximately 4,700 passionate, tenacious solvers – from renowned scientists and research chemists to talented engineers and plant operators – who thrive on developing practical, innovative and elegant solutions to complex problems for customers in more than 100 countries. Visit ashland.com to learn more.  

 


 


 

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “objectives,” “may,” “will,” “should,” “plans” and “intends” and the negative of these words or other comparable terminology. Ashland may from time to time make forward-looking statements in its annual reports, quarterly reports and other filings with the SEC, news releases and other written and oral communications. These forward-looking statements are based on Ashland’s expectations and assumptions, as of the date such statements are made, regarding Ashland’s future operating performance, financial condition, and expected effects of the COVID-19 pandemic on Ashland’s business, as well as the economy and other future events or circumstances. These statements include but may not be limited to Ashland’s expectations regarding its ability to drive sales and earnings growth and realize further cost reductions.

 

Ashland’s expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following: the impact of acquisitions and/or divestitures Ashland has made or may make (including the possibility that Ashland may not realize the anticipated benefits from such transactions); Ashland’s substantial indebtedness (including the possibility that such indebtedness and related restrictive covenants may adversely affect Ashland’s future cash flows, results of operations, financial condition and its ability to repay debt); severe weather, natural disasters, public-health crises (including the current COVID-19 pandemic), cyber events and legal proceedings and claims (including product recalls, environmental and asbestos matters); the effects of the COVID-19 pandemic on the geographies in which we operate, the end markets we serve and on our supply chain and customers, and without limitation, risks and uncertainties affecting Ashland that are described in Ashland’s most recent Form 10-K (including Item 1A Risk Factors) filed with the SEC, which is available on Ashland’s website at http://investor.ashland.com or on the SEC’s website at http://www.sec.gov. Various risks and uncertainties may cause actual results to differ materially from those stated, projected or implied by any forward-looking statements. The extent and duration of the COVID-19 pandemic on our business and operations is uncertain. Factors that will influence the impact on our business and operations include the duration and extent of the pandemic, the extent of imposed or recommended containment and mitigation measures, and the general economic consequences of the pandemic. Ashland believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, Ashland undertakes no obligation to update any forward-looking statements made in this news release whether as a result of new information, future events or otherwise.

 

1Financial results are preliminary until Ashland’s Form 10-Q is filed with the SEC

 

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

 

FOR FURTHER INFORMATION:

 

Investor Relations:

 

Media Relations:

Seth A. Mrozek

 

Carolmarie C. Brown

+1 (302) 594-5010

 

+1 (302) 258-5549

samrozek@ashland.com 

 

ccbrown@ashland.com

 

 

 

 

  

 

 


 

Ashland Global Holdings Inc. and Consolidated Subsidiaries

STATEMENTS OF CONSOLIDATED INCOME (LOSS)

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

Table 1

 

 

Three months ended

 

 

Six months ended

 

 

 

March 31

 

 

March 31

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

 

610

 

 

$

 

667

 

 

$

 

1,143

 

 

$

 

1,243

 

 

Cost of sales

 

 

413

 

 

 

 

469

 

 

 

 

793

 

 

 

 

893

 

 

GROSS PROFIT

 

 

197

 

 

 

 

198

 

 

 

 

350

 

 

 

 

350

 

 

Selling, general and administrative expense

 

 

103

 

 

 

 

115

 

 

 

 

202

 

 

 

 

236

 

 

Research and development expense

 

 

18

 

 

 

 

17

 

 

 

 

34

 

 

 

 

34

 

 

Intangibles amortization expense

 

 

21

 

 

 

 

21

 

 

 

 

42

 

 

 

 

43

 

 

Equity and other income (loss)

 

 

7

 

 

 

 

(1

)

 

 

 

7

 

 

 

 

-

 

 

Goodwill impairment

 

 

530

 

 

 

 

-

 

 

 

 

530

 

 

 

 

-

 

 

OPERATING INCOME (LOSS)

 

 

(468

)

 

 

 

44

 

 

 

 

(451

)

 

 

 

37

 

 

Net interest and other expense (income)

 

 

117

 

 

 

 

(3

)

 

 

 

127

 

 

 

 

52

 

 

Other net periodic benefit income (loss)

 

 

-

 

 

 

 

(1

)

 

 

 

-

 

 

 

 

17

 

 

Net gain (loss) on divestitures

 

 

-

 

 

 

 

-

 

 

 

 

3

 

 

 

 

(3

)

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BEFORE INCOME TAXES

 

 

(585

)

 

 

 

46

 

 

 

 

(575

)

 

 

 

(1

)

 

Income tax expense (benefit)

 

 

(10

)

 

 

 

1

 

 

 

 

(34

)

 

 

 

25

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

(575

)

 

 

 

45

 

 

 

 

(541

)

 

 

 

(26

)

 

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

 

 

(7

)

 

 

 

31

 

 

 

 

(9

)

 

 

 

54

 

 

NET INCOME (LOSS)

$

 

(582

)

 

$

 

76

 

 

$

 

(550

)

 

$

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

 

(9.48

)

 

$

 

0.71

 

 

$

 

(8.93

)

 

$

 

(0.41

)

 

Income (loss) from discontinued operations

 

 

(0.13

)

 

 

 

0.48

 

 

 

 

(0.15

)

 

 

 

0.86

 

 

Net income (loss)

$

 

(9.61

)

 

$

 

1.19

 

 

$

 

(9.08

)

 

$

 

0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE DILUTED COMMON SHARES OUTSTANDING (a)

 

 

61

 

 

 

 

64

 

 

 

 

61

 

 

 

 

63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life Sciences

 

 

184

 

 

 

 

196

 

 

 

 

340

 

 

 

 

366

 

 

Personal Care and Household

 

 

159

 

 

 

 

183

 

 

 

 

296

 

 

 

 

337

 

 

Consumer Specialties

 

 

343

 

 

 

 

379

 

 

 

 

636

 

 

 

 

703

 

 

Specialty Additives

 

 

155

 

 

 

 

169

 

 

 

 

294

 

 

 

 

316

 

 

Performance Adhesives

 

 

85

 

 

 

 

89

 

 

 

 

159

 

 

 

 

171

 

 

Industrial Specialties

 

 

240

 

 

 

 

258

 

 

 

 

453

 

 

 

 

487

 

 

Intermediates & Solvents

 

 

37

 

 

 

 

44

 

 

 

 

64

 

 

 

 

77

 

 

Intersegment Sales

 

 

(10

)

 

 

 

(14

)

 

 

 

(10

)

 

 

 

(24

)

 

 

$

 

610

 

 

$

 

667

 

 

$

 

1,143

 

 

$

 

1,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life Sciences

 

 

36

 

 

 

 

33

 

 

 

 

58

 

 

 

 

56

 

 

Personal Care and Household

 

 

(336

)

 

 

 

25

 

 

 

 

(326

)

 

 

 

42

 

 

Consumer Specialties

 

 

(300

)

 

 

 

58

 

 

 

 

(268

)

 

 

 

98

 

 

Specialty Additives

 

 

(161

)

 

 

 

(2

)

 

 

 

(152

)

 

 

 

(24

)

 

Performance Adhesives

 

 

16

 

 

 

 

17

 

 

 

 

27

 

 

 

 

26

 

 

Industrial Specialties

 

 

(145

)

 

 

 

15

 

 

 

 

(125

)

 

 

 

2

 

 

Intermediates & Solvents

 

 

(2

)

 

 

 

9

 

 

 

 

(14

)

 

 

 

11

 

 

Unallocated and other

 

 

(21

)

 

 

 

(38

)

 

 

 

(44

)

 

 

 

(74

)

 

 

$

 

(468

)

 

$

 

44

 

 

$

 

(451

)

 

$

 

37

 

 

 

 

(a)

As a result of the loss from continuing operations for the three and six months ending March 31, 2020 and six months ending March 31, 2019, the effect of the share-based awards convertible to common shares would be anti-dilutive. In accordance with U.S. GAAP, these shares have been excluded from the diluted earnings per share calculation for the applicable periods.

 


 

Ashland Global Holdings Inc. and Consolidated Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions - preliminary and unaudited)

Table 2

 

 

 

March 31

 

 

September 30

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 

 

353

 

 

$

 

 

232

 

Accounts receivable

 

 

 

498

 

 

 

 

 

481

 

Inventories

 

 

 

611

 

 

 

 

 

597

 

Other assets

 

 

 

119

 

 

 

 

 

64

 

Held for sale

 

 

 

64

 

 

 

 

 

59

 

Total current assets

 

 

 

1,645

 

 

 

 

 

1,433

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent assets

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

3,172

 

 

 

 

 

3,165

 

Accumulated depreciation

 

 

 

1,608

 

 

 

 

 

1,588

 

Net property, plant and equipment

 

 

 

1,564

 

 

 

 

 

1,577

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

1,723

 

 

 

 

 

2,253

 

Intangibles

 

 

 

1,044

 

 

 

 

 

1,088

 

Operating lease assets, net

 

 

 

144

 

 

 

 

 

-

 

Restricted investments

 

 

 

277

 

 

 

 

 

310

 

Asbestos insurance receivable

 

 

 

145

 

 

 

 

 

157

 

Deferred income taxes

 

 

 

24

 

 

 

 

 

23

 

Other assets

 

 

 

402

 

 

 

 

 

410

 

Total noncurrent assets

 

 

 

5,323

 

 

 

 

 

5,818

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 

 

6,968

 

 

$

 

 

7,251

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Short-term debt

$

 

 

471

 

 

$

 

 

166

 

Trade and other payables

 

 

 

255

 

 

 

 

 

313

 

Accrued expenses and other liabilities

 

 

 

218

 

 

 

 

 

271

 

Current operating lease obligations

 

 

 

23

 

 

 

 

 

-

 

Held for sale

 

 

 

5

 

 

 

 

 

7

 

Total current liabilities

 

 

 

972

 

 

 

 

 

757

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

1,535

 

 

 

 

 

1,501

 

Asbestos litigation reserve

 

 

 

530

 

 

 

 

 

555

 

Deferred income taxes

 

 

 

250

 

 

 

 

 

264

 

Employee benefit obligations

 

 

 

151

 

 

 

 

 

150

 

Operating lease obligations

 

 

 

131

 

 

 

 

 

-

 

Other liabilities

 

 

 

416

 

 

 

 

 

453

 

Total noncurrent liabilities

 

 

 

3,013

 

 

 

 

 

2,923

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

2,983

 

 

 

 

 

3,571

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

 

 

6,968

 

 

$

 

 

7,251

 

 

 


 

Ashland Global Holdings Inc. and Consolidated Subsidiaries

STATEMENTS OF CONSOLIDATED CASH FLOWS

(In millions - preliminary and unaudited)

Table 3

 

 

Three months ended

 

 

Six months ended

 

 

 

March 31

 

 

March 31

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

 

(582

)

 

$

 

76

 

 

$

 

(550

)

 

$

 

28

 

 

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

 

 

7

 

 

 

 

(31

)

 

 

 

9

 

 

 

 

(54

)

 

Adjustments to reconcile income from continuing operations to

    cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

61

 

 

 

 

82

 

 

 

 

122

 

 

 

 

163

 

 

Original issue discount and debt issuance cost amortization

 

 

10

 

 

 

 

2

 

 

 

 

12

 

 

 

 

4

 

 

Deferred income taxes

 

 

(16

)

 

 

 

(1

)

 

 

 

(28

)

 

 

 

2

 

 

Stock based compensation expense

 

 

4

 

 

 

 

6

 

 

 

 

8

 

 

 

 

13

 

 

Excess tax benefit on stock based compensation

 

 

1

 

 

 

 

1

 

 

 

 

1

 

 

 

 

2

 

 

Loss on early retirement of debt

 

 

59

 

 

 

 

-

 

 

 

 

59

 

 

 

 

-

 

 

(Income) loss from restricted investments

 

 

29

 

 

 

 

(30

)

 

 

 

16

 

 

 

 

(2

)

 

Net (income) loss on divestitures

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

3

 

 

Impairments

 

 

530

 

 

 

 

5

 

 

 

 

530

 

 

 

 

5

 

 

Pension contributions

 

 

(2

)

 

 

 

(2

)

 

 

 

(3

)

 

 

 

(3

)

 

Loss (gain) on pension and other postretirement plan remeasurements

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(18

)

 

Change in operating assets and liabilities (a)

 

 

(54

)

 

 

 

(93

)

 

 

 

(163

)

 

 

 

(137

)

 

Total cash flows provided by operating activities from continuing operations

 

 

47

 

 

 

 

15

 

 

 

 

13

 

 

 

 

6

 

 

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(37

)

 

 

 

(37

)

 

 

 

(66

)

 

 

 

(70

)

 

Proceeds from disposal of property, plant and equipment

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

4

 

 

Purchase of operations - net of cash acquired

 

 

-

 

 

 

 

(1

)

 

 

 

-

 

 

 

 

(1

)

 

Net purchase of funds restricted for specific transactions

 

 

(1

)

 

 

 

-

 

 

 

 

(2

)

 

 

 

(2

)

 

Reimbursements from restricted investments

 

 

9

 

 

 

 

12

 

 

 

 

19

 

 

 

 

20

 

 

Proceeds from sale of securities

 

 

6

 

 

 

 

156

 

 

 

 

10

 

 

 

 

156

 

 

Purchases of securities

 

 

(6

)

 

 

 

(156

)

 

 

 

(10

)

 

 

 

(156

)

 

Proceeds from the settlement of derivative instruments

 

 

-

 

 

 

 

1

 

 

 

 

-

 

 

 

 

2

 

 

Payments for the settlement of derivative instruments

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(2

)

 

Total cash flows used by investing activities from continuing operations

 

 

(29

)

 

 

 

(25

)

 

 

 

(49

)

 

 

 

(49

)

 

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES

   FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

804

 

 

 

 

-

 

 

 

 

804

 

 

 

 

-

 

 

Repayment of long-term debt

 

 

(767

)

 

 

 

(7

)

 

 

 

(767

)

 

 

 

(8

)

 

Proceeds from (repayment of) short-term debt

 

 

292

 

 

 

 

37

 

 

 

 

306

 

 

 

 

11

 

 

Premium on long-term debt repayment

 

 

(59

)

 

 

 

-

 

 

 

 

(59

)

 

 

 

-

 

 

Debt issuance costs

 

 

(11

)

 

 

 

-

 

 

 

 

(11

)

 

 

 

-

 

 

Cash dividends paid

 

 

(17

)

 

 

 

(15

)

 

 

 

(33

)

 

 

 

(31

)

 

Stock based compensation employee withholding taxes paid in cash

 

 

(1

)

 

 

 

(1

)

 

 

 

(6

)

 

 

 

(8

)

 

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

 

 

241

 

 

 

 

14

 

 

 

 

234

 

 

 

 

(36

)

 

CASH PROVIDED (USED) BY CONTINUING OPERATIONS

 

 

259

 

 

 

 

4

 

 

 

 

198

 

 

 

 

(79

)

 

Cash provided (used) by discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows

 

 

(62

)

 

 

 

17

 

 

 

 

(79

)

 

 

 

(41

)

 

Investing cash flows

 

 

(1

)

 

 

 

(6

)

 

 

 

1