Ashland Inc. and Consolidated Subsidiaries												Page 1
STATEMENTS OF CONSOLIDATED INCOME
(In millions except per share data - preliminary and unaudited)
		Three months ended						Six months ended
		March 31						March 31
		2007			2006			2007			2006
REVENUES
	Sales and operating revenues	$	1,915		$	1,786		$	3,717		$	3,472
	Equity income		3			2			6			4
	Other income		7			7			14			14
			1,925			1,795			3,737			3,490
COSTS AND EXPENSES
	Cost of sales and operating expenses		1,575			1,484			3,064			2,880
	Selling, general and administrative expenses (a)		309			262			574			515
			1,884			1,746			3,638			3,395
OPERATING INCOME			41			49			99			95
	Loss on the MAP Transaction (b)		(4)			(3)			(4)			(2)
	Net interest and other financing income		9			9			25			20
INCOME FROM CONTINUING OPERATIONS
	BEFORE INCOME TAXES		46			55			120			113
	Income taxes		(15)			(5)			(36)			(29)
INCOME FROM CONTINUING OPERATIONS			31			50			84			84
	Income (loss) from discontinued operations (net of income taxes) (c)		18			(1)			14			30
NET INCOME		$	49		$	49		$	98		$	114
DILUTED EARNINGS  PER SHARE
	Income from continuing operations	$	.49		$	.68		$	1.30		$	1.16
	Income (loss) from discontinued operations		.28			(.01)			.22			.41
	Net income	$	.77		$	.67		$	1.52		$	1.57
AVERAGE COMMON SHARES AND ASSUMED CONVERSIONS			64			72			64			73
SALES AND OPERATING REVENUES
	Performance Materials (d)	$	376		$	347		$	742		$	698
	Distribution		1,008			1,029			1,956			1,996
	Valvoline		382			353			734			663
	Water Technologies (d)		190			100			368			197
	Intersegment sales		(41)			(43)			(83)			(82)
		$	1,915		$	1,786		$	3,717		$	3,472
OPERATING INCOME
	Performance Materials (d)	$	23		$	27		$	48		$	53
	Distribution		20			30			34			65
	Valvoline		22			2			40			3
	Water Technologies (d)		6			(1)			12			-
	Unallocated and other (a) (e)		(30)			(9)			(35)			(26)
		$	41		$	49		$	99		$	95
(a)	The current quarter includes a $25 million charge for costs associated with Ashland's voluntary severance offer.
(b)	“MAP Transaction” refers to the June 30, 2005 transfer of Ashland’s 38% interest in Marathon Ashland Petroleum LLC (MAP) and two other businesses to Marathon Oil Corporation.  The loss for the periods presented reflects adjustments in the recorded receivable for future estimated tax deductions related primarily to environmental and other post retirement reserves.
(c)	The current quarter includes income of $18 million from the increase of Ashland's asbestos insurance receivable.  The prior periods primarily include after-tax operating results of APAC (excluding previously allocated corporate costs - see note (e) below) as a result of APAC's sale to Oldcastle Materials, Inc. in August 2006 for approximately $1.3 billion.
(d)	In June 2006, Ashland redefined its reporting segments as it continues to evolve into a diversified chemical company.  Performance Materials and Water Technologies, formerly combined under Ashland Specialty Chemical, have now been separately disclosed.  Prior periods have been conformed to the current period presentation.
(e)	Includes corporate costs previously allocated to APAC of $12 million for the three months ended March 31, 2006 and $22 million for the six months ended March 31, 2006.