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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 333-211719

ASHLAND INC.

(a Delaware corporation)

I.R.S. No. 81-2587835

 

8145 Blazer Drive

Wilmington, Delaware 19808

Telephone Number (302) 995-3000

Securities Registered Pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ASH

New York Stock Exchange

 

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YesNo ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

 

Accelerated Filer

 

Non-Accelerated Filer

 

 

Smaller Reporting Company

 

 

 

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

At March 31, 2024, there were 50,127,444 shares of Registrant’s Common Stock outstanding.

 

 


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

 

 

 

Three months ended

 

 

Six months ended

 

 

 

March 31

 

 

March 31

 

(In millions except per share data - unaudited)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales

 

$

575

 

 

$

603

 

 

$

1,048

 

 

$

1,128

 

Cost of sales

 

 

414

 

 

 

406

 

 

 

789

 

 

 

766

 

Gross profit

 

 

161

 

 

 

197

 

 

 

259

 

 

 

362

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

 

106

 

 

 

79

 

 

 

189

 

 

 

172

 

Research and development expense

 

 

14

 

 

 

12

 

 

 

26

 

 

 

25

 

Intangibles amortization expense - Note F

 

 

20

 

 

 

23

 

 

 

40

 

 

 

46

 

Equity and other income

 

 

 

 

 

 

 

 

2

 

 

 

1

 

Loss on acquisitions and divestitures, net

 

 

 

 

 

 

 

 

(2

)

 

 

 

Operating income

 

 

21

 

 

 

83

 

 

 

4

 

 

 

120

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and other expense (income)

 

 

2

 

 

 

(10

)

 

 

(21

)

 

 

(24

)

Other net periodic benefit loss - Note J

 

 

2

 

 

 

2

 

 

 

4

 

 

 

3

 

Income from continuing operations before income taxes

 

 

17

 

 

 

91

 

 

 

21

 

 

 

141

 

Income tax expense (benefit) - Note I

 

 

(104

)

 

 

(1

)

 

 

(128

)

 

 

7

 

Income from continuing operations

 

 

121

 

 

 

92

 

 

 

149

 

 

 

134

 

Loss from discontinued operations, net of income taxes - Note B

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(2

)

Net income

 

$

120

 

 

$

91

 

 

$

147

 

 

$

132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share - Note L

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.43

 

 

$

1.71

 

 

$

2.95

 

 

$

2.47

 

Loss from discontinued operations

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.04

)

 

 

(0.04

)

Net income

 

$

2.42

 

 

$

1.70

 

 

$

2.91

 

 

$

2.43

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share - Note L

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

2.40

 

 

$

1.68

 

 

$

2.92

 

 

$

2.43

 

Loss from discontinued operations

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.04

)

 

 

(0.04

)

Net income

 

$

2.39

 

 

$

1.67

 

 

$

2.88

 

 

$

2.39

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

120

 

 

$

91

 

 

$

147

 

 

$

132

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized translation gain (loss)

 

 

(27

)

 

 

27

 

 

 

27

 

 

 

109

 

Unrealized gain (loss) on commodity hedges

 

 

1

 

 

 

(3

)

 

 

 

 

 

(7

)

Other comprehensive income (loss) - Note M

 

 

(26

)

 

 

24

 

 

 

27

 

 

 

102

 

Comprehensive income

 

$

94

 

 

$

115

 

 

$

174

 

 

$

234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

2


ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In millions - unaudited)

 

March 31
2024

 

 

September 30
2023

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

439

 

 

$

417

 

Accounts receivable(a) - Note G

 

 

260

 

 

 

338

 

Inventories - Note E

 

 

550

 

 

 

626

 

Other assets

 

 

178

 

 

 

125

 

Total current assets

 

 

1,427

 

 

 

1,506

 

Noncurrent assets

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

Cost

 

 

3,299

 

 

 

3,211

 

Accumulated depreciation

 

 

1,959

 

 

 

1,838

 

Net property, plant and equipment

 

 

1,340

 

 

 

1,373

 

Goodwill - Note F

 

 

1,379

 

 

 

1,362

 

Intangibles - Note F

 

 

851

 

 

 

886

 

Operating lease assets, net - Note H

 

 

117

 

 

 

122

 

Restricted investments - Note D

 

 

306

 

 

 

290

 

Asbestos insurance receivable(b) - Note K

 

 

121

 

 

 

127

 

Deferred income taxes

 

 

150

 

 

 

22

 

Other assets

 

 

257

 

 

 

251

 

Total noncurrent assets

 

 

4,521

 

 

 

4,433

 

Total assets

 

$

5,948

 

 

$

5,939

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Short-term debt - Note G

 

$

 

 

$

16

 

Trade and other payables

 

 

207

 

 

 

210

 

Accrued expenses and other liabilities

 

 

225

 

 

 

208

 

Current operating lease obligations - Note H

 

 

21

 

 

 

22

 

Total current liabilities

 

 

453

 

 

 

456

 

Noncurrent liabilities

 

 

 

 

 

 

Long-term debt - Note G

 

 

1,328

 

 

 

1,314

 

Asbestos litigation reserve - Note K

 

 

399

 

 

 

427

 

Deferred income taxes

 

 

148

 

 

 

148

 

Employee benefit obligations - Note J

 

 

97

 

 

 

100

 

Operating lease obligations - Note H

 

 

101

 

 

 

106

 

Other liabilities

 

 

288

 

 

 

291

 

Total noncurrent liabilities

 

 

2,361

 

 

 

2,386

 

Commitments and contingencies - Note K

 

 

 

 

 

 

Stockholders’ equity - Note M

 

 

3,134

 

 

 

3,097

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,948

 

 

$

5,939

 

 

 

 

 

 

 

 

(a)
Accounts receivable includes an allowance for credit losses of $3 million at both March 31, 2024 and September 30, 2023.
(b)
Asbestos insurance receivable includes an allowance for credit losses of $2 million at both March 31, 2024 and September 30, 2023.

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

3


ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS

 

 

 

Six months ended

 

 

 

March 31

 

(In millions - unaudited)

 

2024

 

 

2023

 

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

 

 

 

 

 

 

Net income

 

$

147

 

 

$

132

 

Loss from discontinued operations, net of income taxes

 

 

2

 

 

 

2

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

160

 

 

 

120

 

Original issue discount and debt issuance costs amortization

 

 

3

 

 

 

3

 

Deferred income taxes

 

 

(136

)

 

 

15

 

Stock based compensation expense

 

 

7

 

 

 

12

 

Excess tax benefit on stock-based compensation

 

 

 

 

 

2

 

Income from restricted investments

 

 

(47

)

 

 

(48

)

Asset impairments

 

 

 

 

 

4

 

Pension contributions

 

 

(11

)

 

 

(3

)

Change in operating assets and liabilities

 

 

130

 

 

 

(212

)

Total cash flows provided by operating activities from continuing operations

 

 

255

 

 

 

27

 

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

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(70

)

 

 

(58

)

Proceeds from settlement of Company-owned life insurance contracts

 

 

 

 

 

3

 

Company-owned life insurance payments

 

 

(1

)

 

 

(1

)

Funds restricted for specific transactions

 

 

(5

)

 

 

(5

)

Other investing cash flows

 

 

(10

)

 

 

 

Reimbursements from restricted investments

 

 

37

 

 

 

16

 

Proceeds from sale of securities

 

 

20

 

 

 

15

 

Purchases of securities

 

 

(20

)

 

 

(15

)

Total cash flows used by investing activities from continuing operations

 

 

(49

)

 

 

(45

)

CASH FLOWS USED BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

Repurchase of Common Stock

 

 

(100

)

 

 

(142

)

Repayment of short-term debt

 

 

(16

)

 

 

 

Cash dividends paid

 

 

(39

)

 

 

(36

)

Stock based compensation employee withholding taxes paid in cash

 

 

(4

)

 

 

(10

)

Total cash flows used by financing activities from continuing operations

 

 

(159

)

 

 

(188

)

CASH PROVIDED (USED) BY CONTINUING OPERATIONS

 

 

47

 

 

 

(206

)

Cash used by discontinued operations

 

 

 

 

 

 

Operating cash flows

 

 

(27

)

 

 

(47

)

Total cash used by discontinued operations

 

 

(27

)

 

 

(47

)

Effect of currency exchange rate changes on cash and cash equivalents

 

 

2

 

 

 

6

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

22

 

 

 

(247

)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

 

 

417

 

 

 

646

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

 

$

439

 

 

$

399

 

 

 

 

 

 

 

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

4


ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE A – 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 ("U.S. GAAP") and Securities and Exchange Commission ("SEC") regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. These statements omit certain information and footnote disclosures required for complete annual financial statements and, therefore, should be read in conjunction with the Ashland Inc. and consolidated subsidiaries ("Ashland" or the "Company") Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Results of operations for the period ended March 31, 2024 are not necessarily indicative of the expected results for the remainder of the fiscal year.

Ashland is comprised of the following reportable segments: Life Sciences, Personal Care, Specialty Additives and Intermediates. Unallocated and Other includes corporate governance activities and certain legacy matters. For additional information about Ashland's reportable segments, see Note P.

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, environmental remediation, asbestos litigation, the accounting for goodwill and other indefinite-lived intangible assets and income taxes. 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, income taxes or other matters.

New accounting pronouncements

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, 2023. There were no new standards that were either issued or adopted in the current fiscal year that will have a material impact on Ashland's Condensed Consolidated Financial Statements.

NOTE B – DISCONTINUED OPERATIONS

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 (Loss) for all periods presented.

The following divested businesses represent disposal groups that qualified as discontinued operations in previous periods and impacted discontinued operations for the three and six months ended March 31, 2024 and 2023:

The Performance Adhesives business divested in 2022;
The Composites business and Marl facility (Composites/Marl facility) divested in 2019;
The separation of Valvoline Inc. (Valvoline) business divested in 2017; and
The sale of the Ashland Distribution (Distribution) business divested in 2011.

5


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 and six months ended March 31, 2024 and 2023.

 

 

Three months ended

 

 

Six months ended

 

 

 

March 31

 

 

March 31

 

(In millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Performance Adhesives

 

$

 

 

$

 

 

$

(3

)

 

$

 

Composites/Marl facility

 

 

(2

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

Distribution

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Valvoline

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

$

(1

)

 

$

(1

)

 

$

(2

)

 

$

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTE C – RESTRUCTURING ACTIVITIES

Ashland periodically implements restructuring programs related to acquisitions, divestitures and other cost reduction programs in order to enhance profitability through streamlined operations and an improved overall cost structure.

Fiscal 2024 and 2023 restructuring costs

During fiscal 2023, Ashland implemented targeted organizational restructuring actions to reduce costs. This program continued into fiscal 2024.

Severance costs

Ashland recorded severance expense of $18 million and zero during the three months ended March 31, 2024 and 2023 and $21 million and zero during the six months ended March 31, 2024 and 2023, respectively, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). As of March 31, 2024, the severance liability associated with this program was $20 million and is recorded within accrued expenses and other liabilities in the Consolidated Balance Sheets.

The following table details at March 31, 2024 the amount of restructuring severance reserves related to this program.

(In millions)

Severance reserves

 

Balance at of September 30, 2023

$

3

 

Severance expense

 

21

 

Utilization (cash paid)

 

(4

)

Balance at March 31, 2024

$

20

 

 

 

 

Plant optimization actions

During the three and six months ended March 31, 2024 , Ashland incurred $27 million and $49 million, respectively, of accelerated depreciation for product line optimization activities associated with two Specialty Additives manufacturing facilities, which was recorded within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss). Ashland's portfolio optimization actions include the consolidation of Ashland's carboxymethylcellulose (CMC) and industrial methylcellulose (MC) capacity and rebalancing of the hydroxyethylcellulose (HEC) network.

Fiscal 2023 Life Sciences restructuring program

During the three months ended December 31, 2022, Ashland implemented a restructuring program within the Nutraceuticals business of the Life Sciences segment. Ashland recorded severance expense of $1 million during the three months ended December 31, 2022, within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss). As of March 31, 2024, the severance reserve associated with this program was zero.

 

6


NOTE D – FAIR VALUE MEASUREMENTS

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.

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 March 31, 2024.

 

 

 

Carrying

 

 

Total
fair

 

 

Quoted prices
in active
markets for
identical
assets

 

 

Significant
other
observable
inputs

 

 

Significant
unobservable
inputs

 

(In millions)

 

value

 

 

value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

439

 

 

$

439

 

 

$

439

 

 

$

 

 

$

 

Restricted investments(a)(b)

 

 

383

 

 

 

383

 

 

 

383

 

 

 

 

 

 

 

Investment of captive insurance company(c)

 

 

8

 

 

 

8

 

 

 

8

 

 

 

 

 

 

 

Total assets at fair value

 

$

830

 

 

$

830

 

 

$

830

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivatives(d)

 

$

1

 

 

$

1

 

 

$

 

 

$

1

 

 

$

 

Commodity derivatives(d)

 

 

4

 

 

 

4

 

 

 

 

 

 

4

 

 

 

 

Total liabilities at fair value

 

$

5

 

 

$

5

 

 

$

 

 

$

5

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)
Includes $306 million within restricted investments and $77 million within other current assets in the Condensed Consolidated Balance Sheets.
(b)
Includes $255 million related to the Asbestos trust and $128 million related to the Environmental trust.
(c)
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
(d)
Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets.

7


The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2023.

 

 

 

Carrying

 

 

Total
fair

 

 

Quoted prices
in active
markets for
identical
assets

 

 

Significant
other
observable
inputs

 

 

Significant
unobservable
inputs

 

(In millions)

 

value

 

 

value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

417

 

 

$

417

 

 

$

417

 

 

$

 

 

$

 

Restricted investments(a)(b)

 

 

367

 

 

 

367

 

 

 

367

 

 

 

 

 

 

 

Investment of captive insurance company(c)

 

 

6

 

 

 

6

 

 

 

6

 

 

 

 

 

 

 

Foreign currency derivatives(d)

 

 

1

 

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Total assets at fair value

 

$

791

 

 

$

791

 

 

$

790

 

 

$

1

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivatives(e)

 

$

1

 

 

$

1

 

 

$

 

 

$

1

 

 

$

 

Commodity derivatives(e)

 

 

4

 

 

 

4

 

 

 

 

 

 

4

 

 

 

 

Total liabilities at fair value

 

$

5

 

 

$

5

 

 

$

 

 

$

5

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)
Includes $290 million within restricted investments and $77 million within other current assets in the Condensed Consolidated Balance Sheets.
(b)
Includes $243 million related to the Asbestos trust and $124 million related to the Environmental trust.
(c)
Included in other noncurrent assets in the Condensed Consolidated Balance Sheets.
(d)
Included in accounts receivable in the Condensed Consolidated Balance Sheets.
(e)
Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets.

Restricted investments

Ashland maintains certain investments in company restricted renewable annual trusts for the purpose of paying future asbestos indemnity and defense costs and future environmental remediation and related litigation costs. The financial instruments are designated as investment securities, classified as Level 1 measurements within the fair value hierarchy. These securities were classified primarily as noncurrent restricted investment assets, with $77 million classified within other current assets, in the Condensed Consolidated Balance Sheets at both March 31, 2024 and September 30, 2023.

The following table presents gross unrealized gains and losses for the restricted securities as of March 31, 2024 and September 30, 2023:

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

(In millions)

 

Adjusted Cost

 

 

Unrealized Gain

 

 

Unrealized Loss

 

 

Fair Value

 

As of March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit

 

$

9

 

 

$

 

 

$

 

 

$

9

 

Equity mutual fund

 

 

141

 

 

 

46

 

 

 

 

 

 

187

 

Fixed income mutual fund

 

 

223

 

 

 

 

 

 

(36

)

 

 

187

 

Fair value

 

$

373

 

 

$

46

 

 

$

(36

)

 

$

383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposit

 

$

12

 

 

$

 

 

$

 

 

$

12

 

Equity mutual fund

 

 

155

 

 

 

24

 

 

 

(2

)

 

 

177

 

Fixed income mutual fund

 

 

226

 

 

 

 

 

 

(48

)

 

 

178

 

Fair value

 

$

393

 

 

$

24

 

 

$

(50

)

 

$

367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

The following table presents the investment income, net gains and losses realized, funds restricted for specific transactions, and disbursements related to the investments within the restricted investments portfolio for the three and six months ended March 31, 2024 and 2023.

 

 

 

Three months ended

 

 

Six months ended

 

 

 

March 31

 

 

March 31

 

(In millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Investment income(a)

 

$

3

 

 

$

3

 

 

$

9

 

 

$

6

 

Net gains(a)

 

 

9

 

 

 

19

 

 

 

39

 

 

 

41

 

Funds restricted for specific transactions

 

 

 

 

 

 

 

 

5

 

 

 

5

 

Disbursements

 

 

(21

)

 

 

(16

)

 

 

(37

)

 

 

(16

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)
Included in the net interest and other expense (income) caption within the Statements of Consolidated Comprehensive Income (Loss).