8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

______________

FORM 8-K

______________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  November 21, 2008

ASHLAND INC.

(Exact name of registrant as specified in its charter)

Kentucky

(State or other jurisdiction of incorporation)

1-32532	20-0865835
(Commission File Number)	(I.R.S. Employer Identification No.)

50 E. RiverCenter Boulevard, Covington, Kentucky  41011

(Address of principal executive offices)   (Zip Code)

P.O. Box 391, Covington, Kentucky  41012-0391

(Mailing Address)   (Zip Code)

Registrant’s telephone number, including area code (859) 815-3333

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 Item 7.01.  Regulation FD Disclosure

Ashland Inc.’s Chairman and Chief Executive Officer, James J. O’Brien, is scheduled to speak at 8:30 a.m. this morning at the Bank of America Credit Conference in Orlando, Florida.  A copy of the supporting materials for this presentation is attached hereto as Exhibit 99.1, and incorporated herein by reference.  The supporting materials provide summary information and are to be considered in the context of Ashland’s filings with the Securities and Exchange Commission and other public announcements.

Ashland is furnishing this information pursuant to the SEC’s Regulation FD.  By filing this report on Form 8-K, Ashland makes no admission as to the materiality of any information in this report.

 Item 9.01.  Financial Statements and Exhibits

(d)	Exhibits
99.1	Presentation slides dated November 21, 2008.

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 SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ASHLAND INC.

(Registrant)

November 21, 2008	/s/ Lamar M. Chambers
	Lamar M. Chambers
	Senior Vice President and
	Chief Financial Officer

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 EXHIBIT INDEX

99.1 Presentation slides dated November 21, 2008.  

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EX-99.1

Exhibit 99.1

Bank of America
2008 Credit Conference

James J. O'Brien

Chairman and Chief Executive Officer

November 21, 2008

2

Forward-Looking Statements

This presentation contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include those made with respect to Ashland’s operating performance and Ashland’s acquisition of Hercules Inc. These expectations are based upon a number of assumptions, including those mentioned within this presentation. Performance estimates are also based upon internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, weather, operating efficiencies and economic conditions, such as prices, supply and demand, cost of raw materials, and legal proceedings and claims (including environmental and asbestos matters). These risks and uncertainties may cause actual operating results to differ materially from those stated, projected or implied. Such risks and uncertainties with respect to Ashland’s acquisition of Hercules include the possibility that the benefits anticipated from the Hercules transaction will not be fully realized; the substantial indebtedness Ashland has incurred to finance the acquisition may impair Ashland’s financial condition; the restrictive covenants under the debt instruments may hinder the successful operation of Ashland’s business; future cash flow may be insufficientto repay the debt; and other risks that are described in filings made by Ashland with the Securities and Exchange Commission (SEC). Although Ashland believes its expectations are based on reasonable assumptions, it cannot assure the expectations reflected herein will be achieved. This forward-looking information may prove to be inaccurate and actual results may differ significantly from those anticipated if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized or if other unexpected conditions or events occur. Other factors, uncertainties and risks affecting Ashland are contained in Ashland's periodic filings made with the SEC, including its Form 10-K for the fiscal year ended September 30, 2007, and Forms 10-Q for the quarters ended Dec. 31, 2007, and March 31 and June 30, 2008, which are available on Ashland’s Investor Relations website at www.ashland.com/investors or the SEC’s website at www.sec.gov. Ashland undertakes no obligation to subsequently update or revise the forward- looking statements made in this presentation to reflect events or circumstances after the date of this presentation.

3

Agenda

•Hercules acquisition

•Financial structure

•Ashland today

•Summary

•Questions

4

Hercules Acquisition
Investment Highlights

•Diversified business portfolio serving wide range
of end markets

•Creates focus and scale in specialty paper
chemicals

•Leading market positions across platform

•Broad geographical diversity

-Approximately $3.7 billion of pro forma revenues
generated outside North America

-Increased focus on high growth markets

5

Hercules AcquisitionKey Terms

•Hercules shareholders receive consideration of:

-$18.60 per Hercules share in cash

-0.093 of a share of Ashland stock

•Purchase price of $2.6 billion for shares
of Hercules stock that were outstanding
at the closing date

•Net assumed debt of $0.8 billion

6

Hercules Acquisition
Financing

•$2.6 billion new financing

-Jointly led by Bank of America and Scotia Capital

-$2.3 billion drawn at closing

•Term Loan A, Term Loan B and bridge loan

•$400 million revolver ($100 million drawn)

•10.5 million new common shares issued at closing

•$750 million cash

•$54 million book loss from cross-currency swaps

•Debt/Consolidated EBITDA ratio1 at close: 3.2x

•Ashland 2- to 4-year target: 2.0x

•Fixed charge coverage ratio: 2.3

•Goal of attaining investment-grade credit rating
in two to four years

-Current corporate credit ratings of BB- / Ba2 from S&P and Moody's

-New senior secured debt BB+ / Ba1

1 As adjusted for bank covenants. Debt/EBITDA ratio of 3.5X based on trailing 12 mos. pro forma earnings.

7

Financing at Close

1 Convertible to rollover loan/exchange notes or exchangeable to bonds with not longer than 6-year no-call 4-year
provisions.2 $282MM par. 3 Estimated fair value. 4 Revolver draw = $100MM.

(in millions)

•Forecasted Year 1 annual book interest expense
of approximately $250 million

8

Financial Covenants

•Consolidated leverage ratio (Consolidated Debt/EBITDA)

-Funding date through Sept. 2009:3.75x

-Dec. 2009 through Sept. 2010: 3.5x

-Dec. 2010 through Sept. 2011: 3.0x

-Dec. 2011 through Sept. 2012: 2.75x

-Dec. 2012 and after: 2.5x

•Consolidated fixed charge coverage ratio

-Funding date through Sept. 2010: 1.25x

-Dec. 2010 and after: 1.50x

•Minimum consolidated net worth

-> 85 percent of consolidated net worth as of Dec. 2008
+ 50 percent of consolidated net income after Dec. 2008
+ 100 percent of proceeds of equity interests after Dec. 2008

9

•$120 million estimate
(cost savings only)

-Run-rate by the end
of FY 2010

-$80 million run-rate
by end of FY 2009

Sales & Marketing
Manufacturing
Purchasing

Sales & Marketing
Manufacturing
Purchasing

G&A

G&A

•Estimated one-time
integration costs
still being finalized

•Key areas for synergy

-Corporate function
restructuring

-Global supply chain

-Paper/Water integration

10

Ashland Today

•Pro forma sales and operating revenue* = $10.7 billion

•Pro forma EBITDA* = $717 million

•Among top five specialty chemicals companies
in North America and top 10 worldwide

Ashland

Performance
Materials

Ashland

Hercules
Water
Technologies

Ashland

Distribution

Ashland
Consumer
Markets

Ashland

Aqualon
Functional
Ingredients

* For the 12 months ended Sept. 30, 2008. Revenue includes intersegment, Hercules Paper Technologies &
Ventures and Aqualon sales. See Appendix A for reconciliation of pro forma EBITDA.

11

Fiscal 2008 Pro Forma*
Sales and Operating Revenue

Ashland
Distribution
40%

Ashland
Distribution
40%

Ashland
Consumer
Markets
16%

By commercial unit

19%

19%

* For the 12 months ended Sept. 30, 2008, including intersegment, Hercules Paper Technologies &
Ventures and Aqualon sales.

North
America
65%

North
America
65%

Latin America/
Other - 4%

Europe

Europe

24%

24%

•35 percent of total revenue comes
from outside North America

12

Corporate Profile

* For the 12 months ended Sept. 30, 2008.

Ashland

Ashland

Distribution

Distribution

10%

10%

Ashland

Ashland

Performance Materials

Performance Materials

13%

13%

Ashland Consumer
Markets
16%

Ashland Hercules
Water Technologies

Ashland Hercules
Water Technologies

25%

25%

Ashland

Ashland

Aqualon Functional

Aqualon Functional

Ingredients

Ingredients

36%

36%

•74 percent of EBITDA comes from specialty chemicals

•33 percent of EBITDA comes from renewable materials

Pro Forma EBITDA*
by commercial unit

NYSE Ticker Symbol:

ASH

Employees:

~16,000

% outside N.A.:

35%

Number of countries
in which Ashland
has sales:

More than
100

Active patents in U.S.:

596

Active patents worldwide:

2,042

13

Focus on Cash Flow

•Reduced dividend reflects levels
of specialty chemical peers

•Capital expenditures expected to be
approximately $200 million

•Accelerate realization of $120 million
of synergies

•Focus on expense control and
discretionary spending

•Other sources

14

Investment in Ashland

•Focus on cash generation producing results

•Realizing cost structure efficiencies

•Completion of Hercules acquisition creates
a major, global specialty chemicals company

-74 percent of pro forma EBITDA derived
from specialty chemicals core, with roughly one-third
from bio-based chemistries

-$10.7 billion in pro forma sales and operating revenue,
with 35 percent from outside North America

-Drives stronger, higher margin, less cyclical earnings

Appendix A
Fiscal 2008 Preliminary Results

16

Fiscal 2008
Preliminary Financial Results

(in millions, except change)

Twelve months ended Sept. 30,

2008

2007

Fav./(Unfav.)

Sales and operating revenue

$

8,381)

$

7,785)

8 %

Cost of sales

7,056)

6,447)

(9)%

Gross profit

1,325)

1,338)

(1)%

Gross profit percentage

15.8%

17.2%

(140) bp

Selling, general & administrative expenses

1,166)

1,171)

-)%

SG&A percentage

13.9%

15.0%

110) bp

Equity and other income

54)

49)

10 %

Operating income

213)

216)

(1)%

Operating income percentage

2.5%

2.8%

(30) bp

Earnings before interest, taxes, depreciation
and amortization (EBITDA)

$

358)

$

349)

3)%

EBITDA as a percent of sales

4.3%

4.5%

(20) bp

17

Fiscal 2008
Preliminary Diluted Earnings Per Share

(in millions)	Twelve months ended Sept. 30,
	2008	2007
Operating income	$213)	$216)
Gain (loss) on MAP Transaction	20)	(3)
Net interest and other financing income	28)	46)
Income from continuing operations before income taxes	261)	259)
Income tax expense	86)	58)
Income from continuing operations	175)	201)
Income (loss) from discontinued operations, net of income taxes	(8)	29)
Net income	167)	230)
Diluted EPS from continuing operations	2.76)	3.15)
Diluted EPS on net income	2.63)	3.60)
Full-year effective tax rate	32.9%	22.3%

18

Regulation G: Reconciliation of Operating
Income to EBITDA

The information provided in this presentation regarding earnings before interest, taxes, depreciation, and amortization (EBITDA) does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the financials that follow in this Appendix.

19

Ashland Inc. Fiscal Year Ended Sept. 30
Regulation G: Reconciliation
of Operating Income to EBITDA

(in millions)

20

Hercules Inc. 12 Months Ended Sept. 30, 2008
Regulation G: Reconciliation of Operating
Income to EBITDA

Appendix B
Commercial Unit Profiles

22

Ashland Hercules Water Technologies
A major global supplier of process and functional chemicals

North
America

43%

Latin America/
Other - 6%

E&PS
18%

E&PS
18%

Pulp/ Paper

57%

Business Overview
Customers/ Markets	•Pulp and paper processing •Industrial and institutional •Mining •Municipal wastewater treatment •Merchant marine
Products/ Services	•Process chemicals for microbial and contaminant control, pulping aids and retention aids •Functional chemicals for sizing and wet strength •Utility water treatments •Process water treatments •Technical products and shipboard services for the merchant marine and cruise ship industry

Revenue
by Geography

Revenue
by Market

Marine - 7%

Asia
Pacific
12%

Europe
39%

For the Fiscal Year Ended Sept.30, 2008

Pro Forma Revenue: $2.1 billion

Pro Forma EBITDA: $186 million

Pro Forma EBITDA Margin: 8.9%

Industrial
18%

Industrial
18%

23

Pkg. &

Ashland Performance Materials
A global leader in specialty chemicals

North
America

North
America

45%

45%

Europe

36%

Latin
America/
Other -

9%

Trans-
portation

Trans-
portation

24%

24%

Ind.
Constr.

27%

Revenue
by Geography

Revenue
by Market

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $1.6 billion

EBITDA: $94 million

EBITDA Margin: 5.8%

Res.
Constr.

14%

Infra-
structure

15%

Marine - 9%

Asia
Pacific - 10%

24

AshlandAqualonFunctionalIngredients
A global leader in managing rheology of water-based systems

Business Overview
Customers	•Diversified, global customer base
Products	•Broad product line based on renewable resources -Water soluble polymers (cellulose derivatives and guar) -Pinova products (wood rosin derivatives)
Markets	•Water-based paints •Paper coatings •Construction •Oilfield (chemicals and drilling muds) •Regulated markets -Personal care -Food -Pharmaceuticals

North
America

North
America

37%

37%

Asia
Pacific

Asia
Pacific

16%

16%

Europe

41%

Other - 6%

Coatings &
Construction
49%

Coatings &
Construction
49%

Energy &
Spec. Solutions
26%

Regulated
Industries
25%

Regulated
Industries
25%

Revenue
by Geography

Revenue
by Product

For the 12 Months Ended Sept. 30, 2008
Revenue: $1.1 billion

EBITDA: $261 million
EBITDA Margin: 23.7%

25

Ashland Consumer Markets: A leading worldwide
marketer of premium-branded automotive lubricants and chemicals

Lubricants

80%

Filters - 3%

Valvoline
Int'l - 23%

Valvoline
Int'l - 23%

Do-It-
Yourself

35%

Business Overview
Customers	•Retail auto parts stores and mass merchandisers who sell to consumers; installers, such as car dealers and quick lubes; distributors
Products/ Services	•Valvoline® lubricants and automotive chemicals •MaxLife® lubricants for high-mileage vehicles •SynPower® synthetic motor oil •Eagle One® and Car Brite® appearance products •Zerex® antifreeze •Valvoline Instant Oil Change® service
Market Channels	•Do-It-Yourself (DIY) •Do-It-For-Me (DIFM) •Valvoline International

Revenue
by Product Line

Revenue
by Market Channel

Do-It-
For-Me
37%

DIFM:
Installer channel
23%

Specialty/
Other - 5%

DIFM:
Valvoline Instant
Oil Change - 14%

Chemicals - 6%

Appearance
products - 3%

Antifreeze - 8%

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $1.7 billion

EBITDA: $115 million

EBITDA Margin: 6.9%

26

Ashland Distribution
A leading North American chemicals and plastics distributor

Chemicals

Chemicals

47%

47%

Plastics

41%

Environmental
Service/Other -
2%

Construction

Construction

24%

24%

Other

15%

Revenue
by Product
Line

Revenue
by Market

Trans-
portation

15%

Paint & Coatings - 10%

Medical - 6%

Marine - 4%

Com-
posites

10%

Chemical Mfg.
- 11%

Retail
Consumer - 8%

Personal
Care - 7%

For the Fiscal Year Ended Sept. 30, 2008

Revenue: $4.4 billion

EBITDA: $75 million

EBITDA Margin: 1.7%