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Reportable Segment Information | 9 Months Ended
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Jun. 30, 2020
Segment Reporting [Abstract] |
Reportable Segment Information | NOTE Q – REPORTABLE SEGMENT INFORMATION Ashland determines its reportable segments based on how operations are managed internally for the products and services sold to customers, including how the results are reviewed by the chief operating decision maker, which includes determining resource allocation methodologies used for reportable segments. Operating income and EBITDA are the primary measures of performance that are reviewed by the chief operating decision maker in assessing each reportable segment's financial performance. Ashland does not aggregate operating segments to arrive at these reportable segments. Change in Reportable Segments During the second quarter of fiscal year 2020, Ashland changed the manner in which it manages the business moving from a functionally led to a business led organization. This change recognizes that Ashland has a diverse portfolio of businesses with different value propositions for the markets Ashland serves. The organizational change allows Ashland to align its business models, resources and cost structure to the specific needs of each business and enables greater ownership and accountability for both short- and long-term performance. Ashland has realigned its segment reporting structure commensurate with this organizational change. As a result, Ashland’s five reportable segments include the consumer specialty businesses: Life Sciences and Personal Care & Household; the industrial specialty businesses: Specialty Additives and Performance Adhesives; and Intermediates and Solvents. Corporate includes corporate governance activities and certain legacy matters. The historical segment information has been recast to conform to the current segment structure. Reportable segment business descriptions Consumer Specialties Life Sciences is comprised of pharmaceuticals, nutrition, nutraceuticals, agricultural chemicals, advanced materials and fine chemicals. Pharmaceutical solutions include controlled release polymers, disintegrants, film coatings, solubilizers, and tablet binders. Nutrition solutions include thickeners, stabilizers, emulsifiers and additives for enhancing mouthfeel, controlling moisture migration, reducing oil uptake and controlling color. Nutraceutical solutions include products for weight management, joint comfort, stomach and intestinal health, sports nutrition and general wellness, and providing custom formulation, toll processing and particle engineering solutions. Customers include pharmaceutical, food, beverage, nutraceuticals and supplements manufacturers, hospitals and radiologists and industrial manufacturers. Personal Care & Household is comprised of biofunctionals, preservatives, skin care, sun care, oral care, hair care and household. These businesses have a broad range of nature-based, biodegradable, and performance-enhancing ingredients for customer-driven solutions to help protect, renew, moisturize and revitalize skin and hair, and provide solutions for toothpastes, mouth washes and rinses, denture cleaning and care for teeth. Household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers for household, industrial and institutional cleaning products. Customers include formulators at large multinational branded consumer products companies and smaller, independent boutique companies. Industrial Specialties Specialty Additives is comprised of rheology- and performance-enhancing additives serving the coatings, construction, energy, automotive and various industrial markets. Solutions include coatings additives for architectural paints, finishes and lacquers, cement- and gypsum- based dry mortars, ready-mixed joint compounds, synthetic plasters for commercial and residential construction, and specialty materials for industrial applications. Products include rheology modifiers (cellulosic and associative thickeners), foam-control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, and environmental filters, ingredients that aid the manufacturing process of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals and alloys for welding. Products help improve desired functional outcomes through rheology modification and control, water retention, workability, adhesive strength, binding power, film formation, deposition and suspension and emulsification. Customers include global paint manufacturers, electronics and automotive manufacturers, textile mills, the construction industry, and welders. Performance Adhesives is comprised of adhesives used in packaging, converting and structural applications. Packaging adhesives has an extensive line of pressure sensitive adhesives, functional coatings and primers combined with innovative technology solutions for narrow-, mid- and wide-web applications. Products meet stringent requirements in food and beverage safety, shipping, transportation, health and beauty, industrial, postage and security printing. Structural adhesives include light weighting vehicles and eliminating VOCs in buildings. Customers include converters of packaging materials, manufacturers of building materials and tier one suppliers to transportation industry. Other Intermediates and Solvents is comprised of the production of 1,4 butanediol (BDO) and related derivatives, including n-methylpyrrolidone. These products are used as chemical intermediates in the production of engineering polymers and polyurethanes, and as specialty process solvents in a wide array of applications including electronics, pharmaceuticals, water filtration membranes and more. Butanediol is also provided to Life Sciences, Personal Care, and Specialty Additives for use as a raw material. Unallocated and Other generally includes items such as certain significant company-wide restructuring activities, corporate governance costs and legacy costs or activities that relate to divested businesses that are no longer operated by Ashland. Reportable segment results Results of Ashland’s reportable segments are presented based on its management and internal accounting structure. The structure is specific to Ashland; therefore, the financial results of Ashland’s reportable segments are not necessarily comparable with similar information for other comparable companies. Ashland allocates all significant costs to its reportable segments except for certain significant company-wide restructuring activities, certain corporate governance costs and other costs or activities that relate to former businesses that Ashland no longer operates. The service cost component of pension and other postretirement benefits costs is allocated to each reportable segment on a ratable basis; while the remaining components of pension and other postretirement benefits costs are recorded within the other net periodic benefit income caption on the Statements of Consolidated Comprehensive Income (Loss). Ashland refines its expense allocation methodologies to the reportable segments from time to time as internal accounting practices are improved, more refined information becomes available and the industry or market changes. Significant revisions to Ashland’s methodologies are adjusted for all segments on a retrospective basis. This includes charges in the current fiscal year for certain corporate governance costs, which were previously allocated. These costs are now reflected in Unallocated and Other for all periods presented. The following table presents various financial information for each reportable segment for the three and nine months ended June 30, 2020 and 2019.
| Three months ended |  |  | Nine months ended |
| June 30 |  |  | June 30 |
(In millions - unaudited) | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
SALES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences | $ | 189 |  |  | $ | 190 |  |  | $ | 528 |  |  | $ | 556 |
Personal Care & Household |  | 155 |  |  |  | 158 |  |  |  | 451 |  |  |  | 495 |
Consumer Specialties |  | 344 |  |  |  | 348 |  |  |  | 979 |  |  |  | 1,051 |
Specialty Additives |  | 135 |  |  |  | 177 |  |  |  | 429 |  |  |  | 494 |
Performance Adhesives |  | 70 |  |  |  | 88 |  |  |  | 229 |  |  |  | 258 |
Industrial Specialties |  | 205 |  |  |  | 265 |  |  |  | 658 |  |  |  | 752 |
Intermediates and Solvents |  | 37 |  |  |  | 41 |  |  |  | 102 |  |  |  | 118 |
Intersegment sales (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intermediates and Solvents |  | (12 | ) |  |  | (13 | ) |  |  | (22 | ) |  |  | (37 | )
| $ | 574 |  |  | $ | 641 |  |  | $ | 1,717 |  |  | $ | 1,884 |
OPERATING INCOME (LOSS) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences | $ | 40 |  |  | $ | 32 |  |  | $ | 97 |  |  | $ | 88 |
Personal Care & Household |  | 16 |  |  |  | 17 |  |  |  | (309 | ) |  |  | 60 |
Consumer Specialties |  | 56 |  |  |  | 49 |  |  |  | (212 | ) |  |  | 148 |
Specialty Additives |  | 15 |  |  |  | 19 |  |  |  | (137 | ) |  |  | (5 | )
Performance Adhesives |  | 13 |  |  |  | 16 |  |  |  | 40 |  |  |  | 42 |
Industrial Specialties |  | 28 |  |  |  | 35 |  |  |  | (97 | ) |  |  | 37 |
Intermediates and Solvents |  | 7 |  |  |  | 8 |  |  |  | (7 | ) |  |  | 20 |
Unallocated and other |  | (43 | ) |  |  | (49 | ) |  |  | (87 | ) |  |  | (125 | )
| $ | 48 |  |  | $ | 43 |  |  | $ | (403 | ) |  | $ | 80 |
DEPRECIATION EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences | $ | 8 |  |  | $ | 8 |  |  | $ | 24 |  |  | $ | 24 |
Personal Care & Household |  | 10 |  |  |  | 10 |  |  |  | 30 |  |  |  | 30 |
Consumer Specialties |  | 18 |  |  |  | 18 |  |  |  | 54 |  |  |  | 54 |
Specialty Additives |  | 15 |  |  |  | 15 |  |  |  | 46 |  |  |  | 84 |
Performance Adhesives |  | 4 |  |  |  | 4 |  |  |  | 10 |  |  |  | 11 |
Industrial Specialties |  | 19 |  |  |  | 19 |  |  |  | 56 |  |  |  | 95 |
Intermediates and Solvents |  | 4 |  |  |  | 3 |  |  |  | 10 |  |  |  | 8 |
Unallocated and other |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
| $ | 41 |  |  | $ | 40 |  |  | $ | 120 |  |  | $ | 160 |
AMORTIZATION EXPENSE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences | $ | 7 |  |  | $ | 7 |  |  | $ | 21 |  |  | $ | 21 |
Personal Care & Household |  | 9 |  |  |  | 10 |  |  |  | 27 |  |  |  | 28 |
Consumer Specialties |  | 16 |  |  |  | 17 |  |  |  | 48 |  |  |  | 49 |
Specialty Additives |  | 5 |  |  |  | 5 |  |  |  | 14 |  |  |  | 14 |
Performance Adhesives |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1 |
Industrial Specialties |  | 5 |  |  |  | 5 |  |  |  | 15 |  |  |  | 15 |
Intermediates and Solvents |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
| $ | 21 |  |  | $ | 22 |  |  | $ | 63 |  |  | $ | 65 |
EBITDA (b) (c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences | $ | 55 |  |  | $ | 47 |  |  | $ | 142 |  |  | $ | 133 |
Personal Care & Household |  | 35 |  |  |  | 37 |  |  |  | (252 | ) |  |  | 118 |
Consumer Specialties |  | 90 |  |  |  | 84 |  |  |  | (110 | ) |  |  | 251 |
Specialty Additives |  | 35 |  |  |  | 39 |  |  |  | (77 | ) |  |  | 93 |
Performance Adhesives |  | 17 |  |  |  | 20 |  |  |  | 51 |  |  |  | 54 |
Industrial Specialties |  | 52 |  |  |  | 59 |  |  |  | (26 | ) |  |  | 147 |
Intermediates and Solvents |  | 11 |  |  |  | 11 |  |  |  | 3 |  |  |  | 29 |
Unallocated and other |  | (43 | ) |  |  | (49 | ) |  |  | (83 | ) |  |  | (122 | )
| $ | 110 |  |  | $ | 105 |  |  | $ | (216 | ) |  | $ | 305 |
|  |  |  |  |  |  |  |  | June 30, 2020 |  |  | September 30, 2019 |
TOTAL ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences |  |  |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 1,946 |
Personal Care & Household |  |  |  |  |  |  |  |  |  | 979 |  |  |  | 1,366 |
Consumer Specialties |  |  |  |  |  |  |  |  |  | 2,958 |  |  |  | 3,312 |
Specialty Additives |  |  |  |  |  |  |  |  |  | 1,642 |  |  |  | 1,775 |
Performance Adhesives |  |  |  |  |  |  |  |  |  | 595 |  |  |  | 618 |
Industrial Specialties |  |  |  |  |  |  |  |  |  | 2,237 |  |  |  | 2,393 |
Intermediates and Solvents |  |  |  |  |  |  |  |  |  | 164 |  |  |  | 185 |
Unallocated and other |  |  |  |  |  |  |  |  |  | 1,627 |  |  |  | 1,361 |
|  |  |  |  |  |  |  |  | $ | 6,986 |  |  | $ | 7,251 |
| (a) | Intersegment sales from Intermediates and Solvents are accounted for at prices that approximate fair value. All other intersegment sales are accounted for at cost.
| (b) | Excludes income (loss) from discontinued operations, other net periodic benefit income (expense) and net income (loss) on divestitures. See the Statement of Consolidated Comprehensive Income (Loss) for applicable amounts excluded.
| (c) | Includes $39 million of accelerated depreciation for the nine months ended June 30, 2019.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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