Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME												Page 1
(In millions except per share data - preliminary and unaudited)
		Three months ended						Year ended
		September 30						September 30
		2007			2006			2007			2006
REVENUES
	Sales and operating revenues	$	2,085		$	1,908		$	7,785		$	7,233
	Equity income		4			4			15			11
	Other income		15			13			34			33
			2,104			1,925			7,834			7,277
COSTS AND EXPENSES
	Cost of sales and operating expenses		1,740			1,612			6,447			6,030
	Selling, general and administrative expenses (a)		338			285			1,171			1,077
			2,078			1,897			7,618			7,107
OPERATING INCOME			26			28			216			170
	Loss on the MAP Transaction (b)		-			(4)			(3)			(5)
	Net interest and other financing income		12			19			46			47
INCOME FROM CONTINUING OPERATIONS
	BEFORE INCOME TAXES		38			43			259			212
	Income tax (expense) benefit		(6)			13			(58)			(29)
INCOME FROM CONTINUING OPERATIONS			32			56			201			183
	Income from discontinued operations (net of income taxes) (c)		-			144			29			224
NET INCOME		$	32		$	200		$	230		$	407
DILUTED EARNINGS PER SHARE
	Income from continuing operations	$	.51		$	.79		$	3.15		$	2.53
	Income from discontinued operations		-			2.03			.45			3.11
	Net income	$	.51		$	2.82		$	3.60		$	5.64
AVERAGE COMMON SHARES AND ASSUMED CONVERSIONS			63			71			64			72
SALES AND OPERATING REVENUES
	Performance Materials	$	438		$	358		$	1,580		$	1,425
	Distribution		1,050			1,024			4,031			4,070
	Valvoline		384			379			1,525			1,409
	Water Technologies		249			191			818			502
	Intersegment sales		(36)			(44)			(169)			(173)
		$	2,085		$	1,908		$	7,785		$	7,233
OPERATING INCOME
	Performance Materials	$	7		$	18		$	89		$	112
	Distribution		(4)			26			41			120
	Valvoline		18			(15)			86			(21)
	Water Technologies		(2)			5			16			14
	Unallocated and other (a) (d)		7			(6)			(16)			(55)
		$	26		$	28		$	216		$	170
(a)	The year ended September 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 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 year ended September 30, 2007 includes after-tax income of $35 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 (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      $8 million for the three months ended September 30, 2006 and $41 million for the year ended September 30, 2006.