XML 20 R14.htm IDEA: XBRL DOCUMENT v3.25.1
Debt and Other Financing Activities
 6 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt and Other Financing Activities

NOTE H – DEBT AND OTHER FINANCING ACTIVITIES

The following table summarizes Ashland’s long-term debt as of:

 

(In millions)

 

March 31, 2025

 

 

September 30, 2024

 

3.375% Senior Notes, due 2031

 

$

450

 

 

$

450

 

2.00% Senior Notes, due 2028 (Euro 500 million principal)

 

 

541

 

 

 

558

 

6.875% Notes, due 2043

 

 

282

 

 

 

282

 

6.50% Junior Subordinated Notes, due 2029

 

 

70

 

 

 

67

 

Other(a)

 

 

43

 

 

 

(8

)

Total debt

 

 

1,386

 

 

 

1,349

 

Short-term debt

 

 

50

 

 

 

—

 

Long-term debt (less debt issuance costs)

 

$

1,336

 

 

$

1,349

 

 

 

 

 

 

 

 
(a)
Other includes $11 million and $12 million of debt issuance costs as of March 31, 2025 and September 30, 2024, respectively. The current portion of the long-term debt was zero for both March 31, 2025 and September 30, 2024.

The scheduled aggregate maturities for long-term debt by year (excluding debt issuance costs) are as follows as of March 31, 2025: zero in 2025 and 2026, $4 million in 2027, $541 million in 2028, $97 million in 2029, and zero in 2030.

Accounts Receivable Facilities and Off-Balance Sheet Arrangements

Ashland continues to maintain its U.S. Accounts Receivable Sales Program, which was entered into during fiscal 2021, and its Foreign Accounts Receivable Sales Program, which was entered into during fiscal 2024. Under these programs, Ashland accounts for the accounts receivable transferred to buyers as sales. Ashland recognizes any gains or losses based on the excess of proceeds received net of buyer’s discounts and fees compared to the carrying value of the accounts receivable. Proceeds received, net of buyer’s discounts and fees, are recorded within the operating activities of the Statements of Condensed Consolidated Cash Flows. Losses on sale of accounts receivable, including related transaction expenses are recorded within the net interest and other expense (income) caption of the Statements of Condensed Consolidated Comprehensive Income (Loss). Ashland regularly assesses its servicing obligations and records them as assets or liabilities when appropriate. Ashland also monitors its obligation with regards to the limited guarantee and records the resulting guarantee liability when warranted. When applicable, Ashland discloses the amount of the accounts receivable that serves as over-collateralization as a restricted asset.

U.S. Accounts Receivable Sales Program

Ashland recognized a loss of $1 million and $1 million within the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2024, respectively, and $2 million and $2 million for the six months ended March 31, 2025 and 2024, respectively, within the net interest and other expense (income) caption associated with sales under the program. Ashland has recorded $60 million in sales at March 31, 2025 against the buyer’s limit, which was $60 million at March 31, 2025 compared to $71 million of sales at September 30, 2024 against the buyer's limit, which was $71 million at September 30, 2024. Ashland transferred $73 million and $85 million in accounts receivable to the special purpose entity as of March 31, 2025 and September 30, 2024, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of March 31, 2025 and September 30, 2024 of less than $1 million.

As of March 31, 2025 and 2024, the year-to-date gross cash proceeds received for accounts receivable transferred and derecognized were $189 million and $174 million, respectively, of which $200 million and $159 million were collected, which includes collections from sales in prior years transferred to the buyer. The difference between accounts receivable transferred and derecognized versus collected of $11 million and $15 million for the six months ended March 31, 2025 and 2024, respectively, represents the impact of a net reduction and a net increase in accounts receivable sales volume during each period, respectively.

Foreign Accounts Receivable Sales Program

Ashland recognized a loss of $1 million and $1 million within the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2024, respectively, and $2 million and $2 million for the six months ended March 31, 2025 and 2024, respectively, within the net interest and other expense (income) caption associated with sales under the program. Ashland has recorded $117 million in sales at March 31, 2025 against the buyer’s limit, which was $117 million at March 31, 2025 compared to $104 million of sales at September 30, 2024 against the buyer's limit, which was $104 million at September 30, 2024. Ashland transferred $152 million and $155 million in accounts receivable to the special purpose entity as of March 31, 2025 and September 30, 2024, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of March 31, 2025 and September 30, 2024 of less than $1 million.

As of March 31, 2025 and 2024, the year-to-date gross cash proceeds received for accounts receivable transferred and derecognized were $242 million and $122 million, respectively, of which $233 million and zero million were collected. The difference between accounts receivable transferred and derecognized versus collected of $9 million and $122 million for the six months ended March 31, 2025 and 2024, respectively, represents the impact of a net increase in accounts receivable sales volume during each period, respectively.

Supply Chain Finance Program

During April 2024, Ashland authorized a financing program offered through JP Morgan and Taulia Alliance. Under this program, JP Morgan and its affiliates may purchase certain confirmed receivables directly from suppliers pursuant to the terms of a separate arrangement entered into between JPMorgan and Taulia Alliance and such Suppliers. There were no changes to Ashland's standard payment terms with its suppliers in connection with this program. Ashland provides no guarantees to JP Morgan and Taulia Alliance under this program. As of March 31, 2025, the program is still in implementation with no active supplier participation.

Available borrowing capacity and liquidity

The borrowing capacity remaining under current credit agreement (the “2022 Credit Agreement”) was $546 million, which reflects reductions for utilization of $50 million of the $600 million Revolving Credit Facility and $4 million for letters of credit outstanding as of March 31, 2025.

Ashland had no available liquidity under its current U.S. and Foreign Accounts Receivable Sales Programs as of March 31, 2025.

Covenants related to current Ashland debt agreements

Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of March 31, 2025, Ashland is in compliance with all debt agreement covenant restrictions.

The maximum consolidated net leverage ratio permitted under the 2022 Credit Agreement is 4.0. At March 31, 2025, Ashland’s calculation of the consolidated net leverage ratio was 2.9.

The minimum required consolidated interest coverage ratio under the 2022 Credit Agreement during its entire duration is 3.0. At March 31, 2025, Ashland’s calculation of the interest coverage ratio was 7.0.