ASH Company Profile

APAC'performs'asphalt'and'concrete'contract'construction'work, including'highway paving and repair,'excavation'and grading,'and bridge construction,'and produces asphaltic and ready-mix concrete, crushed stone and other aggregate in the southern and midwestern United States.

Ashland'Distribution'distributes'industrial chemicals and solvents, plastics,' composite'materials and fine'ingredients'in North America and plastics'in'Europe.' Ashland'Distribution'also'provides'environmental services. Ashland Specialty Chemical is focused on two primary chemistries: thermoset'and water.'It'manufactures' and'supplies'specialty'chemical products and services to industries including the automotive,'building and construction,'foundry,'marine,'paint, paper, ink, flexible packaging and water treatment industries.

Valvoline is a producer and marketer of premium packaged motor oil and automotive chemicals, including appearance products,'antifreeze,'filters, rust'preventives' and coolants.'In addition,'Valvoline is engaged in the "fast oil change"' business'through outlets'operating under the Valvoline Instant Oil Change(R) name.

Marathon Ashland Petroleum LLC ("MAP"),'a joint venture with Marathon Oil'Company,'operates'seven'refineries'with a total crude oil refining capacity' of 935,000'barrels per day.'Refined'products'are'distributed through a network of independent and company-owned'outlets in the Midwest, the upper Great Plains and the'southeastern'United'States.'Marathon Oil Company'holds a 62% interest in MAP,'and Ashland'holds a 38% interest in MAP. Ashland accounts for its investment in MAP using the equity method.

MARKETING

MAPs principal'marketing areas for gasoline and distillates'include the Midwest,' the upper Great Plains and the'southeastern'United'States.
Gasoline'and'distillates'are'sold'in 21'states.'Gasoline'is sold at wholesale primarily to independent'marketers,'jobbers and chain retailers who resell these products through several thousand retail outlets. MAP also supplies'approximately 3,850 jobber-dealer,'open-dealer and lessee-dealer locations using the Marathon(R) and Ashland(R) brand names.

Gasoline,'distillates'and'aviation'products'are'also'sold'to utilities,'railroads, river towing companies,'commercial fleet operators, airlines and governmental agencies. About one-half of MAPs propane is sold into the home heating'markets and the balance is'purchased by'industrial consumers.'Propylene and'petrochemicals' are marketed to customers in the chemical'industry.'Base'lube'oils,'slack'wax' and'extract'are'sold throughout'the'United'States.'Pitch'is'also'sold'domestically,' but approximately'12% of pitch'products are exported into growing'markets in Canada, Mexico, India, and South America.

MAP'markets'asphalt'through'owned'and'leased'terminals'located throughout'the Midwest'and'Southeast.'The MAP'customer'base'includes approximately 900 asphalt paving contractors,'government entities (states, counties, cities and townships) and asphalt roofing shingle manufacturers.

Retail'sales of'gasoline'and'diesel'fuel are made'through'MAPs wholly-owned subsidiary, Speedway SuperAmerica LLC ("SSA").'SSA had 1,791 retail' outlets in 9 states in the Midwest'which sell petroleum'products and convenience store merchandise'primarily under the brand names Speedway(R) and SuperAmerica(R).' The retail locations sell a variety of food, merchandise,'cigarettes,'candy and beverages.'Several locations also have on-premises brand-name restaurants.

Pilot'Travel'Centers LLC'("PTC") is the largest'operator of travel centers in the United States with approximately 260 locations in 34 states. The travel'centers'offer'diesel'fuel,'gasoline'and a variety of other services associated with such locations,'including on-premises'brand-name restaurants.' In February'2003,'PTC'purchased 60 retail'travel'centers located in 15 states,' primarily in the Midwest,'Southeast and'Southwest. Pilot and MAP each own a 50% interest in PTC.

MAPs'retail'marketing'strategy'is'focused'on'SSAs'Midwest operations, additional growth in the Marathon(R) brand and continued growth for PTC.

COMPETITION

In all its operations,'Ashland is subject to intense competition both from' companies in the industries in which it operates and from products of companies in other industries.

The majority of the'business'for which APAC'competes is obtained by competitive' bidding.'There are a substantial number of competitors in the markets in which APAC'operates'and, as a result,'all of APACs goods and services are marketed under highly'competitive'conditions.'Factors which influence APACs'competitiveness' are price,'reputation for quality,'the availability of aggregate materials,' the geographic location of plants and aggregate'materials,'machinery and'equipment,' knowledge of local market conditions and estimating abilities.

Each of Ashland Distributions lines of business (chemicals, plastics, ingredients,' composites,'and'environmental'services),'competes'with national,'regional'and local'companies'throughout'North'America.'The plastics distribution business also competes in Europe.'Competition within each'line of'business'is based'primarily' on price and'reliability'of supply.

Ashland Specialty'Chemicals'businesses compete globally in selected niche markets,'largely on the basis of technology and service.'The number of competitors in the specialty'chemical'business'varies from product to product,'and it is not practical to identify such'competitors'because of the broad range of products and markets served by those products.'However, many'of'Ashland'Specialty'Chemicals' businesses'hold'proprietary technology, and Ashland believes it has a leading or strong market position in most of its specialty'chemical products.'Ashland Specialty'Chemicals petrochemicals business is largely a commodities business, with pricing and quality being the most important factors.

Valvoline'competes'in the'highly'competitive'lubricants'business principally through premium products and services, distribution capability, a focused "master" brand strategy, advertising and sales promotion. Some of the major'brands of motor'oils and'lubricants'Valvoline'competes'with internationally'are'Havoline(R),' Castrol(R),'Pennzoil(R)'and'Quaker State(R).'The highly'competitive'consumer' products car care business is primarily composed of maintenance'chemicals,'appearance products and tire cleaners.'Valvoline'competes'primarily in this market'through' specific product performance benefits,'distribution'capability and advertising and sales'promotion.'In the highly'competitive'"fast oil change"'business, Valvoline'competes'with other leading'independent'fast lube chains on a national,' regional'or local'basis,'as well as'automobile'dealers'and service stations.' Important competitive factors for Valvoline in the "fast oil change" market include Valvolines brand recognition; increasing market presence'through' VIOC and'Valvoline'Express'Care'outlets;'as well as quality of service, speed, location, convenience and sales promotion.

MAP competes with a large number of companies to acquire crude oil for refinery' processing and in the'distribution and marketing of a full array of'petroleum' products.