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Ashland Inc. : Ashland Inc. reports preliminary financial results for first quarter of fiscal 2013.



 Ashland Inc. : Ashland Inc. reports preliminary financial results for first
                           quarter of fiscal 2013.

Earnings from continuing  operations equal $1.27  per diluted share;  adjusted 
EPS, excluding key items, is $1.12 per diluted share

 

COVINGTON, Ky. - Ashland Inc. (NYSE: ASH), a global leader in specialty
chemical solutions for consumer and industrial markets, today announced
preliminary^(1) financial results for the quarter ended December 31, 2012, the
first quarter of its 2013 fiscal year.

Quarterly Highlights

(in millions except per-share amounts)                Quarter Ended Dec. 31
                                                           2012         2011
Operating income                                    $       176     $     144
Key items*                                                   (13)           53
Adjusted operating income*                          $       163     $     197
Adjusted EBITDA*                                    $       268     $     301
Diluted earnings per share (EPS)
From net income                                     $      1.26     $    0.77
                                                         
From continuing operations                          $      1.27     $    0.76
Key items*                                                (0.15)         0.44
      Adjusted EPS from continuing operations*      $      1.12     $    1.20
Cash flows provided by operating activities
   from continuing operations                       $        81     $    (181)
Free cash flow*                                              30          (133)
*     See Tables 5, 6 and 7 for definitions and U.S. GAAP
reconciliations.

Ashland reported income from continuing operations of $102 million, or $1.27
per diluted share, on sales of $1.9 billion. These results included three key
items that together had a net favorable impact on continuing operations of $12
million, net of tax, or 15 cents per diluted share. The largest key item was a
$13 million after-tax benefit related to a business interruption insurance
settlement. Excluding the three key items, Ashland's adjusted income from
continuing operations was $90 million, or $1.12 per diluted share, a decrease
of 7 percent from the year-ago quarter.

For the year-ago quarter, Ashland reported income from continuing operations
of $60 million, or 76 cents per diluted share, on sales of $1.9 billion. The
year-ago results included two key items that had a combined negative effect of
$35 million, net of tax, or 44 cents per diluted share. Excluding these items,
adjusted income from continuing operations was $1.20 per diluted share.
(Please refer to Table 5 of the accompanying financial statements for details
of key items in both periods.)

For the remainder of this news release, financial results exclude the effect
of key items in both the current and prior-year quarters. On this basis,
Ashland's results as compared to the year-ago quarter were as follows:
·  Sales were $1.9 billion; normalizing for currency, divestitures and joint
ventures, sales were flat;
· Operating income decreased 17 percent to $163 million;
· Earnings before interest, taxes, depreciation and amortization (EBITDA)
decreased 11 percent to $268 million; and
· EBITDA as a percent of sales declined 130 basis points to 14.3 percent.

"Our financial performance in the first quarter - which is Ashland's
seasonally weakest period of the year - reflects soft demand in some key
markets and regions. It also includes $31 million in losses on straight guar,
primarily reflecting a discrete write-down of inventory to current market
value," said James J. O'Brien, Ashland chairman and chief executive officer.
"Without this loss, adjusted earnings per share would have increased 14
percent when compared to a year ago. Ashland Consumer Markets turned in a
strong quarter, as higher margins led to a 34-percent increase in EBITDA
compared to a year ago. In addition, we generated $30 million of free cash
flow in the first quarter, a significant improvement compared to the year-ago
quarter."

Business Segment Performance
In order to aid understanding of Ashland's ongoing business performance, the
results of Ashland's business segments are described below on an adjusted
basis and EBITDA, or adjusted EBITDA, is reconciled to operating income in
Tables 7 and 8 of this news release.

Ashland Specialty Ingredients' sales totaled $622 million, a decline of 1
percent when compared to a year ago. EBITDA declined 28 percent, to $116
million, while EBITDA as a percent of sales was 18.6 percent, down 690 basis
points versus the year-ago quarter. This year-over-year decline is primarily
due to the aforementioned $31 million loss on straight guar, as well as weak
demand, particularly in the month of December, in our coatings and
construction product lines in emerging markets. Specialty Ingredients'
pharmaceutical, hair and oral care, non-guar energy and specialties businesses
all generated sales and gross profit increases versus the prior-year quarter.

Ashland Water Technologies' sales totaled $421 million in the December 2012
quarter, a decline of 6 percent from the year-ago quarter. Normalizing for
currency effects and adjusting for divestitures, sales would have been flat.
EBITDA was $34 million, a 15-percent decline from the year-ago quarter. EBITDA
as a percent of sales was 8.1 percent, down 80 basis points. During the
quarter, Water Technologies continued to face soft demand in several markets,
most notably industrial water treatment. Under a new leader, Luis
Fernandez-Moreno, the team is focused on revenue growth and cost structure
efficiencies.

Ashland Performance Materials reported sales of $345 million, a 9-percent
decrease from the December 2011 quarter. Normalizing for currency and
adjusting for divestitures, sales would have been down 4 percent over the
prior year. EBITDA declined 38 percent to $28 million, while EBITDA as a
percent of sales declined 380 basis points to 8.1 percent, primarily due to
lower margins on elastomers, which benefited in the year-ago quarter from
declining raw material costs.

Ashland Consumer Markets reported strong  results versus the year ago  period, 
with higher  earnings driven  by  lower raw-material  costs and  a  13-percent 
volume  increase  within  the  international  business.  While  overall  sales 
increased 1 percent, to $481 million, EBITDA rose 34 percent, to $75 million. 
EBITDA as a percent of sales was 15.6 percent, an increase of 380 basis points
versus the year ago quarter.    

After excluding the effects from key items, Ashland's effective tax rate for
the December 2012 quarter was 24 percent. Ashland continues to expect the
effective tax rate for the full 2013 fiscal year to be in the range of 26-28
percent.

Summary and Outlook
"While our first-quarter financial results did not meet our expectations, we
believe the biggest issues affecting our performance have been addressed,"
O'Brien said. "The inventory issue with straight guar is now behind us, and we
have taken action to significantly reduce the risks going forward. In
addition, the weak volumes we saw within certain parts of our Specialty
Ingredients business in December appear to have been short-term, as order
patterns through the first four weeks of January have improved to more
normalized levels."

"Looking ahead, our strategic  focus has not changed.  We remain committed  to 
achieving our fiscal 2013 objectives, which  should put us in a good  position 
to attain our 2014  overall financial targets  and generate significant  value 
for our shareholders," he said.         

Conference Call Webcast
Ashland will host a live webcast of its first-quarter conference call with
securities analysts at 9 a.m. EST Tuesday, Jan. 29, 2013. The webcast and
supporting materials will be accessible through Ashland's website at
http://investor.ashland.com. Following the live event, an archived version of
the webcast and supporting materials will be available for 12 months.

Use of Non-GAAP Measures
This news release includes certain non-GAAP (Generally Accepted Accounting
Principles) measures. Such measurements are not prepared in accordance with
GAAP and should not be construed as an alternative to reported results
determined in accordance with GAAP. Management believes the use of such
non-GAAP measures assists investors in understanding the ongoing operating
performance of the company and its segments. The non-GAAP information provided
may not be consistent with the methodologies used by other companies. All
non-GAAP amounts have been reconciled with reported GAAP results in Tables 5,
6 and 7 of the financial statements provided with this news release.

About Ashland
In more than 100 countries, the people of Ashland Inc. (NYSE: ASH) provide the
specialty chemicals, technologies and insights to help customers create new
and improved products for today and sustainable solutions for tomorrow. Our
chemistry is at work every day in a wide variety of markets and applications,
including architectural coatings, automotive, construction, energy, food and
beverage, personal care, pharmaceutical, tissue and towel, and water
treatment. Visit ashland.com to see the innovations we offer through our four
commercial units - Ashland Specialty Ingredients, Ashland Water Technologies,
Ashland Performance Materials and Ashland Consumer Markets.
- 0 -

C-ASH

Forward-Looking Statements
This news release  contains forward-looking statements  within the meaning  of 
Section 27A of the Securities  Act of 1933 and  Section 21E of the  Securities 
Exchange Act  of  1934.  In addition,  Ashland  may  from time  to  time  make 
forward-looking statements in  its filings  with the  Securities and  Exchange 
Commission (SEC), news  releases and  other written  and oral  communications. 
These forward-looking  statements  are  based on  Ashland's  expectations  and 
assumptions, as  of the  date such  statements are  made, regarding  Ashland's 
future operating performance  and financial condition,  the economy and  other 
future  events  or  circumstances.  Ashland's  expectations  and   assumptions 
include, without limitation,  internal forecasts and  analyses of current  and 
future  market  conditions  and  trends,  management  plans  and   strategies, 
operating efficiencies and  economic conditions  (such as  prices, supply  and 
demand, cost of raw  materials, and the ability  to recover raw-material  cost 
increases through  price increases),  and risks  and uncertainties  associated 
with  the  following:  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, 
and  legal  proceedings  and  claims  (including  environmental  and  asbestos 
matters). Various risks and uncertainties  may cause actual results to  differ 
materially from  those stated,  projected or  implied by  any  forward-looking 
statements, including, without limitation,  risks and uncertainties  affecting 
Ashland that are  described in its  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 www.sec.gov.  Ashland 
believes its expectations and assumptions are reasonable, but there can be  no 
assurance that the  expectations reflected  herein will  be achieved.  Ashland 
undertakes no obligation to subsequently update any forward-looking statements
made in this  news release or  otherwise except as  required by securities  or 
other applicable law.

^(1) Preliminary Results
Financial results are preliminary  until Ashland's Form  10-Q for the  quarter 
ended Dec. 31, 2012, is filed with the SEC.

FOR FURTHER INFORMATION:

Investor Relations:
Jason Thompson         
+1 (859) 815-4454
jlthompson@ashland.com

Media Relations:
Gary Rhodes                                                             
+1 (859) 815-3047                                                     
glrhodes@ashland.com

Q1 2013 Financial Tables

------------------------------------------------------------------------------

This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: Ashland Inc. via Thomson Reuters ONE
HUG#1673704
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