Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME												Page 1
(In millions except per share data - preliminary and unaudited)
		Three months ended						Nine months ended
		June 30						June 30
		2007			2006			2007			2006
REVENUES
	Sales and operating revenues	$	1,983		$	1,853		$	5,700		$	5,325
	Equity income		5			3			12			8
	Other income		5			6			19			19
			1,993			1,862			5,731			5,352
COSTS AND EXPENSES
	Cost of sales and operating expenses		1,643			1,538			4,707			4,419
	Selling, general and administrative expenses (a)		259			277			834			792
			1,902			1,815			5,541			5,211
OPERATING INCOME			91			47			190			141
	Gain (loss) on the MAP Transaction (b)		1			-			(3)			(2)
	Net interest and other financing income		9			9			34			29
INCOME FROM CONTINUING OPERATIONS
	BEFORE INCOME TAXES		101			56			221			168
	Income taxes		(15)			(14)			(52)			(42)
INCOME FROM CONTINUING OPERATIONS			86			42			169			126
	Income from discontinued operations (net of income taxes) (c)		14			51			29			81
NET INCOME		$	100		$	93		$	198		$	207
DILUTED EARNINGS PER SHARE
	Income from continuing operations	$	1.35		$	.59		$	2.64		$	1.75
	Income from discontinued operations		.23			.70			.45			1.11
	Net income	$	1.58		$	1.29		$	3.09		$	2.86
AVERAGE COMMON SHARES AND ASSUMED CONVERSIONS			63			72			64			72
SALES AND OPERATING REVENUES
	Performance Materials	$	400		$	370		$	1,142		$	1,068
	Distribution		1,026			1,050			2,982			3,046
	Valvoline		407			366			1,141			1,030
	Water Technologies		201			113			569			310
	Intersegment sales		(51)			(46)			(134)			(129)
		$	1,983		$	1,853		$	5,700		$	5,325
OPERATING INCOME
	Performance Materials	$	33		$	41		$	81		$	94
	Distribution		12			30			46			95
	Valvoline		28			(10)			68			(6)
	Water Technologies		6			9			18			9
	Unallocated and other (a) (d)		12			(23)			(23)			(51)
		$	91		$	47		$	190		$	141
(a)	The nine months ended June 30, 2007 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 gain (loss) for the periods presented reflects adjustments in the recorded receivable for future estimated tax deductions related primarily to environmental and other postretirement liabilities.
(c)	The three and nine months ended June 30, 2007 includes after-tax income of $16 million and $34 million, respectively, 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 (d) below) as a result of APAC's sale to Oldcastle Materials, Inc. in August 2006 for approximately $1.3 billion.
(d)	Includes corporate costs classified within the selling, general and administrative expense caption previously allocated to APAC of $12 million for the three months ended June 30, 2006 and $34 million for the nine months ended June 30, 2006.