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Fair Value Measurements | 6 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | NOTE E – 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, 2025:
(In millions) |  | Carrying value |  |  | Total fair value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 168 |  |  | $ | 168 |  |  | $ | 168 |  |  | $ | — |  |  | $ | — |
Restricted investments(a)(b) |  |  | 345 |  |  |  | 345 |  |  |  | 345 |  |  |  | — |  |  |  | — |
Investment of captive insurance company(c) |  |  | 9 |  |  |  | 9 |  |  |  | 9 |  |  |  | — |  |  |  | — |
Commodity derivatives(d) |  |  | 3 |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | — |
Total assets at fair value |  | $ | 525 |  |  | $ | 525 |  |  | $ | 522 |  |  | $ | 3 |  |  | $ | — |
(a) Includes $272 million within restricted investments and $73 million within other current assets in the Condensed Consolidated Balance Sheet. (b) Includes $222 million related to the Asbestos trust and $123 million related to the Environmental trust. (c) Included in other noncurrent assets in the Condensed Consolidated Balance Sheet. (d) Included in accounts receivable, net in the Condensed Consolidated Balance Sheet. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2024:
(In millions) |  | Carrying value |  |  | Total fair value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 300 |  |  | $ | 300 |  |  | $ | 300 |  |  | $ | — |  |  | $ | — |
Restricted investments(a)(b) |  |  | 368 |  |  |  | 368 |  |  |  | 368 |  |  |  | — |  |  |  | — |
Investment of captive insurance company(c) |  |  | 7 |  |  |  | 7 |  |  |  | 7 |  |  |  | — |  |  |  | — |
Foreign currency derivatives(d) |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |
Total assets at fair value |  | $ | 676 |  |  | $ | 676 |  |  | $ | 675 |  |  | $ | 1 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives(e) |  | $ | 1 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Commodity derivatives(e) |  |  | 2 |  |  |  | 2 |  |  |  | — |  |  |  | 2 |  |  |  | — |
Total liabilities at fair value |  | $ | 3 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |
(a) Includes $295 million within restricted investments and $73 million within other current assets in the Condensed Consolidated Balance Sheet. (b) Includes $248 million related to the Asbestos trust and $120 million related to the Environmental trust. (c) Included in other noncurrent assets in the Condensed Consolidated Balance Sheet. (d) Included in accounts receivable, net in the Condensed Consolidated Balance Sheet. (e) Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheet. 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 $73 million classified within other current assets, in the Condensed Consolidated Balance Sheets at both March 31, 2025 and September 30, 2024. The following table presents gross unrealized gains and losses for the restricted investments as of:
|  |  |  |  | Gross |  |  | Gross |  |  |  |
(In millions) |  | Adjusted Cost |  |  | Unrealized Gain |  |  | Unrealized Loss |  |  | Fair Value |
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Demand deposit |  | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |
Equity mutual fund |  |  | 121 |  |  |  | 44 |  |  |  | — |  |  |  | 165 |
Fixed income mutual fund |  |  | 211 |  |  |  | — |  |  |  | (36 | ) |  |  | 175 |
Fair value |  | $ | 337 |  |  | $ | 44 |  |  | $ | (36 | ) |  | $ | 345 |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Demand deposit |  | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |
Equity mutual fund |  |  | 124 |  |  |  | 56 |  |  |  | — |  |  |  | 180 |
Fixed income mutual fund |  |  | 211 |  |  |  | — |  |  |  | (28 | ) |  |  | 183 |
Fair value |  | $ | 340 |  |  | $ | 56 |  |  | $ | (28 | ) |  | $ | 368 |
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:
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Investment income(a) |  | $ | 3 |  |  | $ | 3 |  |  | $ | 8 |  |  | $ | 9 |
Net gains (losses)(a) |  |  | 3 |  |  |  | 9 |  |  |  | (14 | ) |  |  | 39 |
Funds restricted for specific transactions |  |  | 8 |  |  |  | — |  |  |  | 8 |  |  |  | 5 |
Disbursements |  |  | (19 | ) |  |  | (21 | ) |  |  | (25 | ) |  |  | (37 | )
(a) Included in the net interest and other expense (income) caption within the Statements of Condensed Consolidated Comprehensive Income (Loss). Foreign currency derivatives Ashland conducts business in a variety of foreign currencies. Accordingly, Ashland regularly uses foreign currency derivative instruments to manage exposure on certain transactions denominated in foreign currencies to curtail potential earnings volatility effects of certain assets and liabilities, including short-term intercompany loans, denominated in currencies other than Ashland’s functional currency of an entity. These derivative contracts generally require exchange of one foreign currency for another at a fixed rate at a future date and generally have maturities of less than twelve months. All contracts are valued at fair value with net changes in fair value recorded within the selling, general and administrative expense caption within the Statements of Condensed Consolidated Comprehensive Income (Loss). The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in non-functional currencies. The following table summarizes the gains and losses recognized within the Statements of Condensed Consolidated Comprehensive Income (Loss):
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Foreign currency derivative gains (losses) |  | $ | 12 |  |  | $ | (2 | ) |  | $ | (3 | ) |  | $ | 1 |
The following table summarizes the fair values of the outstanding foreign currency derivatives included in accounts receivable, net and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets as of:
|  | March 31 |  |  | September 30 |
(In millions) |  | 2025 |  |  | 2024 |
Foreign currency derivative assets |  | $ | — |  |  | $ | 1 |
Notional contract values |  |  | 114 |  |  |  | 125 |
Foreign currency derivative liabilities |  | $ | — |  |  | $ | 1 |
Notional contract values |  |  | 317 |  |  |  | 184 |
Commodity derivatives To manage its exposure to the market price volatility of natural gas consumed by its U.S. plants during the manufacturing process, Ashland regularly enters into forward contracts that are designated as cash flow hedges. The following table summarizes the net losses recognized within the cost of sales caption of the Statements of Condensed Consolidated Comprehensive Income (Loss):
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Commodity derivative losses |  | $ | — |  |  | $ | (2 | ) |  | $ | (1 | ) |  | $ | (3 | )
The following table summarizes the fair values of the outstanding commodity derivatives included in accounts receivable, net and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets as of:
|  | March 31 |  |  | September 30 |
(In millions) |  | 2025 |  |  | 2024 |
Commodity derivative assets |  | $ | 3 |  |  | $ | — |
Notional contract values |  |  | 11 |  |  |  | 3 |
Commodity derivative liabilities |  | $ | — |  |  | $ | 2 |
Notional contract values |  |  | 1 |  |  |  | 13 |
Other financial instruments At March 31, 2025 and September 30, 2024, Ashland's long-term debt (including the current portion and excluding debt issuance cost discounts) had a carrying value of $1,347 million and $1,361 million, respectively, compared to a fair value of $1,292 million and $1,327 million, respectively. The fair values of long-term debt are based on quoted market prices (level 1 of the fair value hierarchy).

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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