ASHLAND INC. Leases Disclosure
NOTE J – LEASING ARRANGEMENTS
Ashland leases certain office buildings, transportation equipment, warehouses and storage facilities, and equipment. Substantially all of Ashland’s leases are operating leases or short-term leases. Real estate leases represented over 85% of the total lease liability at both September 30, 2025 and 2024. See Note A for additional information related to Ashland’s leasing arrangements.
The components of lease cost recognized within the Statements of Consolidated Comprehensive Income (Loss) for the years ended September 30, were as follows:
(In millions) |
|
Location |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
Selling, General & Administrative |
|
$ |
13 |
|
|
$ |
13 |
|
|
$ |
13 |
|
Operating lease cost |
|
Cost of Sales |
|
|
14 |
|
|
|
15 |
|
|
|
15 |
|
Variable lease cost |
|
Selling, General & Administrative |
|
|
6 |
|
|
|
5 |
|
|
|
4 |
|
Variable lease cost |
|
Cost of Sales |
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
Short-term leases |
|
Cost of Sales |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
Total lease cost |
|
|
|
$ |
41 |
|
|
$ |
41 |
|
|
$ |
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following table summarizes Ashland’s lease assets and liabilities at September 30:
(In millions) |
|
|
|
2025 |
|
|
2024 |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Finance lease assets(a) |
|
|
|
$ |
10 |
|
|
$ |
10 |
|
Operating lease assets, net |
|
|
|
|
103 |
|
|
|
114 |
|
Total lease assets |
|
|
|
$ |
113 |
|
|
$ |
124 |
|
|
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
Current operating lease obligations |
|
|
|
$ |
21 |
|
|
$ |
20 |
|
Non-current operating lease obligations |
|
|
|
|
85 |
|
|
|
99 |
|
Total lease liabilities |
|
|
|
$ |
106 |
|
|
$ |
119 |
|
|
|
|
|
|
|
|
|
|
||
The weighted average remaining lease term for operating leases as of September 30, 2025 and 2024 was approximately 10 years and 19 years, respectively. The sale of the Avoca business in fiscal 2025 was the driver for the reduction of the average.
The weighted average discount rate used to measure operating lease liabilities as of both September 30, 2025 and 2024 was 3.8%. There are no leases that have not yet commenced but that create significant rights and obligations for Ashland.
Right-of-use assets exchanged for new operating lease obligations was $7 million and $6 million for the years ended September 30, 2025 and 2024, respectively. During the second quarter of fiscal 2024, Ashland acquired a favorable lease asset for $10 million, which was recorded in the property, plant and equipment caption of the Consolidated Balance Sheet at September 30, 2024.
The following table provides cash paid for amounts included in the measurement of operating lease liabilities for the years ended September 30:
(In millions) |
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating cash flows from operating leases |
|
$ |
26 |
|
|
$ |
27 |
|
|
$ |
27 |
|
||
Investing cash flows from finance lease |
|
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following table summarizes Ashland's maturities of lease liabilities as of September 30, 2025:
(In millions) |
|
|
|
|
|
|
2026 |
|
|
|
$ |
23 |
|
2027 |
|
|
|
|
18 |
|
2028 |
|
|
|
|
13 |
|
2029 |
|
|
|
|
9 |
|
2030 |
|
|
|
|
5 |
|
Thereafter |
|
|
|
|
50 |
|
Total lease payments |
|
|
|
|
118 |
|
Less amount of lease payment representing interest |
|
|
|
|
(12 |
) |
Total present value of lease payments |
|
|
|
$ |
106 |
|
|
|
|
|
|
|
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2019 | Nov 25, 2019 | |
| 2018 | Nov 19, 2018 | |
| 2017 | Nov 20, 2017 | |
| 2016 | Nov 21, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.