Equity Items

9 Months Ended

Jun. 30, 2019

NOTE M – EQUITY ITEMS

Stock repurchase programs

During March 2018, Ashland’s Board of Directors approved a new $1 billion stock repurchase program, which replaced the 2015 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 June 30, 2019, $800 million remained available for repurchase under this authorization.

2019 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 2019 ASR Agreement is scheduled to terminate no later than August 2019 but may be terminated early in certain circumstances, in whole or in part.

Stockholder dividends

In May 2019, the Board of Directors of Ashland announced a quarterly cash dividend of 27.5 cents per share to eligible stockholders of record, which was paid in the third quarter of fiscal 2019. This dividend represented a 10% increase over the previous quarters’ dividend. Dividends of 25 cents per share were paid in the first and second quarter of fiscal 2019 and the third and fourth quarters of fiscal 2018. These dividends represented an 11% increase over the previous quarterly cash dividend of 22.5 cents per share paid in the first and second quarters of fiscal 2018.

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.

	2019								2018
(In millions)	Before tax			Tax (expense) benefit		Net of tax			Before tax			Tax (expense) benefit			Net of tax
Three months ended June 30
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	3		$	—	$	3		$	(140	)	$	—		$	(140	)
Pension and postretirement obligation adjustment:
Adjustment of unrecognized prior service costs		—			—		—			—			—			—
Net change in investment securities:
Unrealized gains during periods (a)		—			—		—			4			(2	)		2
Reclassification adjustment for gains
included in net income		—			—		—			—			—			—
Total other comprehensive income (loss)	$	3		$	—	$	3		$	(136	)	$	(2	)	$	(138	)

Nine months ended June 30
Other comprehensive income (loss)
Unrealized translation gain (loss)	$	(37	)	$	—	$	(37	)	$	(82	)	$	—		$	(82	)
Pension and postretirement obligation adjustment:
Adjustment of unrecognized prior service costs		(7	)		1		(6	)		—			—			—
Net change in investment securities:
Unrealized gains during periods (a)		—			—		—			10			(3	)		7
Reclassification adjustment for gains
included in net income		—			—		—			(4	)		1			(3	)
Total other comprehensive income (loss)	$	(44	)	$	1	$	(43	)	$	(76	)	$	(2	)	$	(78	)

(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 AOCI. See Notes A and E for more information.

Summary of stockholders’ equity

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

	Three months ended						Nine months ended
	June 30						June 30
(In millions)	2019			2018			2019			2018
Common stock and paid in capital
Balance, beginning of period	$	953		$	936		$	947		$	932
Common shares issued under stock incentive and other plans (a)		2			7			8			11
Common shares purchased under repurchase program (b)		(200	)		—			(200	)		—
Balance, end of period		755			943			755			943
Retained earnings
Balance, beginning of period		2,780			2,736			2,750			2,696
Adoption of new accounting pronouncements (c)		—			—			34			—
Net income (loss)		66			36			94			104
Regular dividends		(16	)		(16	)		(48	)		(44	)
Balance, end of period		2,830			2,756			2,830			2,756
Accumulated other comprehensive income (loss)
Balance, beginning of period		(371	)		(162	)		(291	)		(222	)
Adoption of new accounting pronouncements (c)		—			—			(34	)		—
Unrealized translation gain (loss)		3			(140	)		(37	)		(82	)
Pension and postretirement obligation adjustment		—			—			(6	)		—
Net change in investment securities		—			2			—			4
Balance, end of period		(368	)		(300	)		(368	)		(300	)
Total stockholders' equity	$	3,217		$	3,399		$	3,217		$	3,399
Cash dividends declared per common share	$	0.275		$	0.25		$	0.775		$	0.70

(a)

Common shares issued were 46,725 and 42,958 for the three months ended June 30, 2019 and 2018 and 281,077 and 308,779 for the nine months ended June 30, 2019 and 2018.

(b)

Common shares repurchased were 2,236,546 in the three and nine months ended June 30, 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.