Equity Items

12 Months Ended

Sep. 30, 2019

NOTE P – EQUITY ITEMS

Stock repurchase programs

During March 2018, Ashland’s Board of Directors approved a new $1 billion stock repurchase program. Under the new program, Ashland’s common shares may be repurchased in open market transactions, privately negotiated transactions or pursuant to one or more accelerated stock repurchase programs or Rule 10b5-1 plans. As of September 30, 2019, $800 million remained available for repurchase under the 2018 stock repurchase program.

Stock repurchase program agreements

In May 2019, under the 2018 stock repurchase program, Ashland announced that it entered into an accelerated share repurchase agreement (2019 ASR Agreement). Under the 2019 ASR Agreement, Ashland paid an initial purchase price of $200 million and received an initial delivery of 2.2 million shares of common stock during May 2019. The bank exercised its early termination option under the 2019 ASR Agreement in August 2019, and an additional 400 thousand shares were repurchased, bringing the total shares repurchased upon settlement to 2.6 million. This was the first stock repurchase under the 2018 stock repurchase program.

Stockholder dividends

Ashland paid dividends per common share of $1.05, $0.95 and $1.23 during 2019, 2018 and 2017, respectively.

In May 2019, the Board of Directors of Ashland announced a quarterly cash dividend of 27.5 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 25.0 cents per share. This dividend was paid in the third and fourth quarters of fiscal 2019.

In May 2018, the Board of Directors of Ashland announced a quarterly cash dividend of 25 cents per share to eligible stockholders at record, which represented an increase from the previous quarterly cash dividend of 22.5 cents per share. This dividend was paid in the third and fourth quarters of fiscal 2018.

During May 2017, subsequent to the final distribution of Valvoline Inc.’s common stock, the Board of Directors 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 and second quarters 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 paid during the first and second quarters of fiscal 2017.

Shares reserved for issuance

At September 30, 2019, 14.8 million common shares were reserved for issuance under stock incentive and deferred compensation plans.

Other comprehensive income (loss)

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

				Tax
	Before			(expense)			Net of
(In millions)	tax			benefit			tax
Year ended September 30, 2019
Other comprehensive income (loss)
Unrealized translation loss	$	(80	)	$	—		$	(80	)
Pension and postretirement obligation adjustment		(7	)		2			(5	)
Total other comprehensive loss	$	(87	)	$	2		$	(85	)

Year ended September 30, 2018
Other comprehensive income (loss)
Unrealized translation loss	$	(82	)	$	—		$	(82	)
Net change in investment securities:
Unrealized gain on investment securities (a)		24			(7	)		17
Reclassification adjustment for gains
included in net income		(6	)		2			(4	)
Total other comprehensive loss	$	(64	)	$	(5	)	$	(69	)

Year ended September 30, 2017
Other comprehensive income (loss)
Unrealized translation loss	$	80		$	1		$	81
Amortization of unrecognized prior service
credits included in net income		(7	)		3			(4	)
Net change in investment securities:
Unrealized gain on investment securities (a)		24			(8	)		16
Reclassification adjustment for gains
included in net income		(2	)		1			(1	)
Total other comprehensive income	$	95		$	(3	)	$	92

(a)	Due to the adoption of new accounting guidance in fiscal 2019, unrealized gains and losses on Ashland’s equity securities are now recognized in net income rather than other comprehensive income. See Notes A and G for more information.

Summary of Stockholders’ Equity

A reconciliation of changes in stockholders’ equity are as follows:

(In millions)	2019			2018			2017
Common stock and paid in capital
Balance, beginning of period	$	947		$	932		$	924
Common shares issued under stock incentive and other plans (a)		10			15			8
Common shares purchased under repurchase program (b)		(200	)		—			—
Balance, end of period		757			947			932
Retained earnings
Balance, beginning of period		2,750			2,696			2,704
Adoption of new accounting pronouncements (c)		34			—			—
Net income		505			114			1
Regular dividends		(65	)		(60	)		(77	)
Distribution of Valvoline Inc. (d)		—			—			68
Balance, end of period		3,224			2,750			2,696
Accumulated other comprehensive income (loss)
Balance, beginning of period		(291	)		(222	)		(281	)
Adoption of new accounting pronouncements (c)		(34	)		—			—
Unrealized translation gain (loss)		(80	)		(82	)		81
Distribution of Valvoline Inc. (d)		—			—			(33	)
Net change in investment securities		—			13			15
Pension and postretirement obligation adjustment		(5	)		—			(4	)
Balance, end of period		(410	)		(291	)		(222	)
Noncontrolling interest
Balance, beginning of period		—			—			(182	)
Net income		—			—			27
Distribution of Valvoline Inc. (d)		—			—			152
Other		—			—			7
Distributions to noncontrolling interest		—			—			(4	)
Balance, end of period		—			—			—
Total stockholders' equity	$	3,571		$	3,406		$	3,406
Cash dividends declared per common share	$	1.05		$	0.95		$	1.23

(a)	Common shares issued were 336,188, 360,468 and 42,861 for 2019, 2018 and 2017, respectively.

(b)	Common shares repurchased were 2,637,054 for 2019.

(c)	Represents the cumulative-effect adjustment related to the adoption of the new guidance related to the accounting for equity securities and tax effects of intercompany transfers during fiscal 2019. See Note A for more information.

(d)	See Note B for discussion of the noncontrolling interest and the initial public offering and distribution of Valvoline Inc.