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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001

                          Commission file number 1-2918

                                  ASHLAND INC.
                            (a Kentucky corporation)
                              I.R.S. No. 61-0122250
                           50 E. RiverCenter Boulevard
                                  P.O. Box 391
                         Covington, Kentucky 41012-0391

                        Telephone Number: (859) 815-3333

                Securities Registered Pursuant to Section 12(b):


                                              Name of each exchange
Title of each class                            on which registered
-------------------                           -------------------

Common Stock, par value $1.00 per share     New York Stock Exchange
                                             and Chicago Stock Exchange
Rights to Purchase Series A Participating   New York Stock Exchange
  Cumulative Preferred Stock                 and Chicago Stock Exchange


              Securities Registered Pursuant to Section 12(g): None

     Indicate  by check  mark  whether  the  Registrant  (1) has  filed all
reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No
     Indicate by check mark if disclosure of delinquent  filers pursuant to
Item  405 of  Regulation  S-K is not  contained  herein,  and  will  not be
contained,  to the best of Registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
     At October  31,  2001,  based on the New York Stock  Exchange  closing
price, the aggregate market value of voting stock held by non-affiliates of
the  Registrant  was  approximately  $2,759,644,567.  In  determining  this
amount,  the  Registrant  has  assumed  that its  directors  and  executive
officers are affiliates. Such assumption shall not be deemed conclusive for
any other purpose.
     At October 31,  2001,  there were  69,041,473  shares of  Registrant's
common stock outstanding.

                       Documents Incorporated by Reference

     Portions of Registrant's  Annual Report to Shareholders for the fiscal
year ended  September 30, 2001 are  incorporated by reference into Parts I,
II and IV.
     Portions of  Registrant's  definitive  Proxy Statement for its January
31, 2002 Annual Meeting of Shareholders  are incorporated by reference into
Part III.
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<PAGE>
                             TABLE OF CONTENTS
                                                                        Page
PART I

 Item 1.  Business ......................................................  1
          APAC...........................................................  1
          Ashland Distribution...........................................  2
          Ashland Specialty Chemical.....................................  3
          Valvoline......................................................  4
          Refining and Marketing.........................................  5
          Miscellaneous..................................................  8
 Item 2.  Properties..................................................... 11
 Item 3.  Legal Proceedings.............................................. 11
 Item 4.  Submission of Matters to a
           Vote of Security Holders...................................... 12
 Item X.  Executive Officers of Ashland.................................. 12

PART II

 Item 5.  Market for Registrant's Common Stock and Related
           Security Holder Matters....................................... 13
 Item 6.  Selected Financial Data........................................ 13
 Item 7.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations........................... 13
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk..... 13
 Item 8.  Financial Statements and Supplementary Data.................... 13
 Item 9.  Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure........................ 13

PART III

Item 10.  Directors and Executive Officers of the Registrant............. 13
Item 11.  Executive Compensation......................................... 14
Item 12.  Security Ownership of Certain Beneficial
           Owners and Management......................................... 14
Item 13.  Certain Relationships and Related Transactions................. 14

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports
           on Form 8-K................................................... 14


<PAGE>


                                   PART I

ITEM 1. BUSINESS

     Ashland Inc. is a Kentucky corporation, organized on October 22, 1936,
with  its  principal   executive  offices  located  at  50  E.  RiverCenter
Boulevard,  Covington,  Kentucky 41011 (Mailing Address:  50 E. RiverCenter
Boulevard, P.O. Box 391, Covington,  Kentucky 41012-0391) (Telephone: (859)
815-3333).  The terms  "Ashland" and the  "Company" as used herein  include
Ashland Inc. and its  consolidated  subsidiaries,  except where the context
indicates otherwise.

     Ashland's  businesses are grouped into five industry  segments:  APAC,
Ashland  Distribution,  Ashland Specialty Chemical,  Valvoline and Refining
and  Marketing.  Financial  information  about these segments for the three
fiscal  years ended  September  30, 2001 is set forth on pages 54 and 55 of
Ashland's Annual Report to Shareholders for the fiscal year ended September
30, 2001 ("Annual Report").

     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,  fiber  reinforcements  and fine ingredients in North America and
plastics in Europe.  Ashland  Distribution also provides  environmental and
energy management  services.  Ashland Specialty  Chemical  manufactures and
sells a wide variety of high-performance  chemicals,  resins,  products and
services and certain petrochemicals.

     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.

     At September 30, 2001,  Ashland and its consolidated  subsidiaries had
approximately 25,100 employees (excluding contract employees).


                                    APAC

     The APAC  group of  companies  is the  nation's  largest  asphalt  and
concrete paving company and is a major supplier of construction  materials.
APAC performs construction work, such as paving,  repairing and resurfacing
highways,  streets,  airports,  residential  and  commercial  developments,
sidewalks  and  driveways,  and  grading  and base work.  In  addition,  it
performs a number of  construction  services such as excavation and related
activities  in  the  construction  of  bridges  and  structures,   drainage
facilities and underground utilities. APAC conducts its business through 45
divisions operating in 14 southern and midwestern states.  Distinguished by
their local  identities,  these divisions  provide  construction  services,
technologies  and materials  throughout  the regions in which they operate.
These  divisions are supported by management  and  administrative  staff in
Atlanta, Georgia.

     To  deliver  its  services  and  products,   APAC  utilizes  extensive
aggregate-producing properties and construction equipment. It currently has
37 permanent  operating  quarry  locations,  58 other aggregate  production
facilities,  68 ready-mix concrete plants, 248 hot-mix asphalt plants and a
fleet of over 17,000 mobile equipment units,  including heavy  construction
equipment and  transportation-related  equipment.  In certain  market areas
APAC  is  vertically  integrated  with  asphalt,  aggregate  and  ready-mix
operations, all complementing one another.

     Raw aggregate generally consists of sand, gravel,  granite,  limestone
and sandstone.  About 30% of the raw aggregate  produced by APAC is used in
APAC's  own  contract  construction  work  and the  production  of  various
processed construction  materials.  The remainder is sold to third parties.
APAC also purchases substantial quantities

                                     1
<PAGE>


of raw  aggregate  from other  producers  whose  proximity  to the job site
renders  it  economically  attractive.  Most other raw  materials,  such as
liquid asphalt,  portland cement and reinforcing  steel, are purchased from
third parties.

     APAC  has   customers   in  both  the  public  and  private   sectors.
Approximately  68% of APAC's revenues are derived directly from highway and
other public sector sources.  The other 32% are derived from industrial and
commercial  customers,  private  developers  and other  contractors  to the
public sector.

     Climate and weather  significantly affect revenues in the construction
business.  Due to its  location,  APAC  tends  to enjoy a  relatively  long
construction  season.  Most of APAC's  operating income is generated during
the construction period of May to October.

     Total  backlog at September 30, 2001 was $1,629  million,  compared to
$1,397 million at September 30, 2000. APAC includes a construction  project
in its backlog when a contract is awarded or a firm letter of commitment is
obtained  and  funding is in place.  The backlog at  September  30, 2001 is
considered  firm,  and a major  portion is expected to be completed  during
fiscal 2002.


                            ASHLAND DISTRIBUTION

     Ashland   Distribution   distributes   chemicals,    plastics,   fiber
reinforcements  and fine  ingredients  in North  America  and  plastics  in
Europe.  Ashland  Distribution owns or leases approximately 70 distribution
facilities  in North America and 20  distribution  facilities in 13 foreign
countries. Ashland Distribution is comprised of the following divisions:

     INDUSTRIAL  CHEMICALS  &  SOLVENTS  DIVISION - This  division  markets
specialty and  industrial  chemicals,  additives and solvents to industrial
chemical users in major markets through  distribution centers in the United
States,  Canada, Mexico and Puerto Rico, as well as some export operations.
It distributes approximately 7,000 chemicals,  solvents,  additives and raw
materials made by many of the nation's leading chemical manufacturers and a
growing number of offshore  producers.  It  specializes in supplying  mixed
truckloads and less-than-truckload quantities to many industries, including
the paint and coatings, inks, adhesives,  polymer,  rubber,  industrial and
institutional compounding,  automotive, appliance and paper industries. The
Industrial  Chemicals & Solvents  division  offers  e-commerce  ordering at
www.go2ashland.com.

     GENERAL  POLYMERS  DIVISION - This  division  markets a broad range of
branded thermoplastic resins to injection molders, extruders, blow molders,
and  rotational  molders  in the  plastics  industry  through  distribution
locations in the United  States,  Canada,  Mexico and Puerto Rico.  It also
provides   plastic   material   transfer   and   packaging   services   and
less-than-truckload  quantities  of  packaged  thermoplastics.  The General
Polymers division offers e-commerce ordering at www.gpashland.com.

     FRP SUPPLY  DIVISION  - This  division  markets  mixed  truckload  and
less-than-truckload   quantities   of   polyester   thermosetting   resins,
fiberglass  and  other  specialty  reinforcements,   catalysts  and  allied
products to  customers  in the  reinforced  plastics  and  cultured  marble
industries  through   distribution   facilities  located  throughout  North
America.   The  FRP  Supply   division   offers   e-commerce   ordering  at
www.eFRP.com.

     FINE  INGREDIENTS  DIVISION - This division  distributes  cosmetic and
pharmaceutical specialty chemicals and food-grade and nutritional additives
and ingredients across North America.  The Fine Ingredients division offers
e-commerce ordering at www.FIDonline.com.

     ASHLAND PLASTICS EUROPE DIVISION - This division markets a broad range
of  thermoplastics  to processors in Europe.  Ashland  Plastics  Europe has
distribution centers located in Belgium, England, Finland, France, Germany,
Ireland,  Italy,  the  Netherlands,  Norway,  Poland,  Portugal,  Spain and
Sweden.  The  division  also has a small  compound  manufacturing  facility
located in Spain.

     SERVICE  BUSINESSES  DIVISION  -  This  division  consists  of  Energy
Services and Environmental  Services.  Energy Services provides  customized
management of energy purchasing,  supply and transportation.  Environmental
Services  provides  customers  chemical  waste  collection,   disposal  and
recycling  services,  working in  cooperation  with chemical waste services
companies.   Environmental   Services   offers   e-commerce   ordering   at
www.ashlandES.com.
                                     2
<PAGE>


                         ASHLAND SPECIALTY CHEMICAL

     Ashland  Specialty   Chemical   manufactures  and  supplies  specialty
chemical  products  and services to  industries  including  the  adhesives,
automotive,  composites,  foundry, merchant marine, paint, paper, plastics,
semiconductor  fabrication,  watercraft  and  water  treatment  industries.
Ashland  Specialty  Chemical owns and operates 33 manufacturing  facilities
and  participates  in 14  manufacturing  joint  ventures  in 18  countries.
Ashland Specialty Chemical is comprised of the following divisions:

     COMPOSITE  POLYMERS DIVISION - This division  manufactures and sells a
broad  range of  chemical-resistant,  fire-retardant,  general-purpose  and
high-performance  marine  grades of  unsaturated  polyester and vinyl ester
resins and  gelcoats  for the  reinforced  plastics  industry.  Key markets
include  the  transportation,   construction  and  marine  industries.  The
division has manufacturing plants in Jacksonville and Fort Smith, Arkansas;
Los   Angeles,   California;   Bartow,   Florida;   McMinnville,    Oregon;
Philadelphia,  Pennsylvania;  Johnson Creek,  Wisconsin;  Kelowna,  British
Columbia,  Canada; Kunshan,  China; Porvoo and Lahti, Finland;  Sauveterre,
France;  Miszewo,  Poland;  Benicarlo,  Spain;  and, through separate joint
ventures has manufacturing  plants in Sao Paolo,  Brazil and Jeddah,  Saudi
Arabia. In addition,  the division also manufactures products through other
Ashland   Specialty   Chemical   facilities   located  in  Neville  Island,
Pennsylvania and Mississauga, Ontario, Canada.

     FOUNDRY  PRODUCTS  DIVISION  - This  division  manufactures  and sells
foundry  chemicals   worldwide,   including   sand-binding  resin  systems,
refractory  coatings,  release agents,  engineered sand additives and riser
sleeves.  This division  serves the global metal  casting  industry from 24
manufacturing locations in 18 countries.

     DREW  INDUSTRIAL   DIVISION  -  This  division  supplies   specialized
chemicals  and  consulting  services  for the  treatment  of boiler  water,
cooling  water,  steam,  fuel and waste streams.  It also supplies  process
chemicals  and  technical  services  to  the  pulp  and  paper  and  mining
industries and additives to  manufacturers  of latex and paint. It conducts
operations  throughout  North  America,  Europe  and the Far  East  through
subsidiaries,  joint venture companies and  distributors.  The division has
manufacturing  plants in Kearny,  New Jersey;  Houston,  Texas;  Sydney and
Perth, Australia;  Singapore; Ajax, Ontario, Canada;  Somercotes,  England;
and Auckland, New Zealand.

     ELECTRONIC CHEMICALS DIVISION - This division manufactures and sells a
variety of ultrapure  chemicals  for the worldwide  semiconductor  industry
through various manufacturing locations and also custom blends and packages
ultrapure  liquid  chemicals  to  customer  specifications.   The  division
operates manufacturing plants in Pueblo,  Colorado;  Easton,  Pennsylvania;
Dallas, Texas; Pyongtaek-Shi, Kyonggi-Do, Korea; Milan, Italy and through a
joint venture with Union Petrochemical  Corporation,  an  ultrapure-process
chemicals  manufacturing  facility in Taiwan.  In addition,  it enters into
long-term  agreements  to  provide  complete  on-site  chemical  management
services,  including  purchasing,  warehousing and delivering chemicals for
in-plant  use,  at major  facilities  of large  consumers,  of high  purity
chemicals.  The  division's  Fab Services  business  provides  full-service
equipment  parts-cleaning  refurbishment  and  management  services  to the
semiconductor manufacturing industry from facilities in Chandler and Tempe,
Arizona; and Austin and Carrollton, Texas.

     SPECIALTY POLYMERS & ADHESIVES  DIVISION - This division  manufactures
and sells  specialty  phenolic resins for paper  impregnation  and friction
material  bonding;  acrylic  polymers  for  pressure-sensitive   adhesives;
emulsion  polymer   isocyanate   adhesives  for  structural  wood  bonding;
polyurethane  and  epoxy  structural   adhesives  for  bonding   fiberglass
reinforced plastics,  composites,  thermoplastics and metals in automotive,
recreational,  and industrial  applications;  induction bonding systems for
thermoplastic  materials;  elastomeric  polymer  adhesives and butyl rubber
roofing  tapes  for  commercial  roofing  applications;  and  vapor-curing,
high-performance  urethane coatings systems. It has manufacturing plants in
Calumet  City,  Illinois;  Norwood  and  Totowa,  New  Jersey;  Ashland and
Columbus, Ohio; White City, Oregon; and Kidderminster, England.

     DREW MARINE DIVISION - This division supplies specialty  chemicals for
water  and fuel  treatment  and  general  maintenance,  as well as  sealing
products,  welding and  refrigerant  products and fire  fighting and safety
services to the  world's  merchant  marine  fleet.  Drew  Marine  currently
provides shipboard technical service for more than 11,000 vessels from more
than 100 locations serving approximately 900 ports throughout the world.

     PETROCHEMICALS  DIVISION - This division manufactures maleic anhydride
at Neal,  West Virginia and also markets  maleic  anhydride and methanol in
North America.
                                     3
<PAGE>

OTHER MATTERS

     For information on Ashland Distribution and Ashland Specialty Chemical
and federal,  state and local statutes and regulations  governing  releases
into,  or  protection  of,  the  environment,   see  "Item  1.  Business  -
Miscellaneous  -  Environmental  Matters" and "Item 3. Legal  Proceedings -
Environmental Proceedings" in this Form 10-K.


                                 VALVOLINE

     The  Valvoline  Company,  a division  of  Ashland,  is a  marketer  of
premium-branded  automotive  and  industrial  oils,  automotive  chemicals,
automotive appearance products and automotive services,  with sales in more
than 140 countries.  The Valvoline(R) trademark was federally registered in
1873  and is the  oldest  trademark  for a  lubricating  oil in the  United
States. Valvoline is comprised of the following business units:

     NORTH AMERICAN  PRODUCTS - This unit,  Valvoline's  largest  operating
division,  markets  automotive,   commercial,  and  industrial  lubricants,
automotive chemicals and automotive  appearance products to a broad network
of North American customers. This unit markets Valvoline-branded motor oil,
one of the top selling brands in the U.S.  private  passenger car and light
truck market, and premium synthetic  SynPower(R)  automobile  chemicals for
"under-the-hood" use. During fiscal 2001, Valvoline successfully introduced
MaxLife(TM)  motor oil, the first  lubricant  for  vehicles  with more than
75,000 miles.

     North American  Products also markets Eagle One(R) premium  automotive
appearance   products,   Zerex(R)   antifreeze  and  Pyroil(R)   automotive
chemicals.  Zerex is the  second  leading  antifreeze  brand in the  United
States. This division also markets R-12, an automotive refrigerant that was
phased out of production in 1995. R-12 is being replaced in the market by a
new  generation of  refrigerants  and  Valvoline's  inventories of R-12 are
expected to be depleted in fiscal 2002.

     The domestic  commercial  and  specialty  products  group of the North
American  Products  unit  has a  strategic  alliance  with  Cummins  Engine
Company, Inc. to distribute heavy-duty lubricants to the commercial market.

     In September 2001, Valvoline introduced Spirit(TM) 3-D Foam. Spirit is
a spray-on,  peel-off 3-D foam that can be used for spraying spirit slogans
on cars, SUVs and trucks, as well as around the home, office or school.

     EAGLE  ONE - Eagle  One is a brand of  premium  automobile  appearance
chemicals  for  "above-the-hood"  applications.   Products  include  waxes,
polishes and wheel  cleaners.  Managed by Valvoline as a separate  business
unit,  Eagle One markets its products  through  Valvoline's  North American
Products and Valvoline International divisions.

     VALVOLINE  INTERNATIONAL - Valvoline  International  markets Valvoline
branded  products  and Eagle One  automotive  appearance  products  through
company-owned  affiliates  or divisions in Argentina,  Australia,  Austria,
Belgium,  Brazil,  Denmark,  Finland,  Germany,  Great Britain,  Italy, the
Netherlands,  Poland, South Africa, Sweden and Switzerland.  TECTYL(R) rust
preventives  are  marketed in Europe.  Licensees  and  distributors  market
certain  products  in other  parts of  Europe,  Mexico,  Central  and South
America, the Far East, the Middle East and certain African countries. Joint
ventures  have been  established  in China,  Ecuador,  India,  Thailand and
Venezuela.  Packaging  and  blending  plants  and  distribution  centers in
Australia,   Canada,   the   Netherlands   and  the  United  States  supply
international customers.

     VALVOLINE INSTANT OIL CHANGE(R)  ("VIOC") - VIOC is one of the largest
competitors  in the  expanding  U.S.  "fast oil change"  service  business,
providing  Valvoline with a significant  share of the installed  segment of
the  passenger  car and light truck motor oil market.  As of September  30,
2001, 364 company-owned  and 311 franchised  service centers were operating
in 38 states.

     VIOC has continued its customer service innovation through its Maximum
Vehicle Performance program ("MVP").  MVP is a computer-based  program that
maintains  system-wide  service records on all customer vehicles.  MVP also
contains a database  on all car  models,  which  allows  employees  to make
service recommendations based on a vehicle owner's manual recommendations.

                                     4
<PAGE>


                           REFINING AND MARKETING

     Refining  and  Marketing  operations  are  conducted  by MAP  and  its
subsidiaries,    including   its   wholly-owned   subsidiaries,    Speedway
SuperAmerica LLC and Marathon  Ashland Pipe Line LLC.  Marathon Oil Company
("Marathon")  holds a 62% interest in MAP and Ashland  holds a 38% interest
in MAP.

REFINING

     MAP owns and operates  seven  refineries  with an  aggregate  refining
capacity of 935,000  barrels of crude oil per  calendar  day (1 barrel = 42
United States  gallons).  The table below sets forth the location and daily
crude  oil  throughput  capacity  (measured  in  barrels)  of each of MAP's
refineries as of September 30, 2001:

 Garyville, Louisiana........................................... 232,000
 Catlettsburg, Kentucky......................................... 222,000
 Robinson, Illinois............................................. 192,000
 Detroit, Michigan..............................................  74,000
 Canton, Ohio...................................................  73,000
 Texas City, Texas..............................................  72,000
 St. Paul Park, Minnesota.......................................  70,000
                                                                 -------
 Total.......................................................... 935,000
                                                                 =======

     MAP's   refineries   include   crude  oil   atmospheric   and   vacuum
distillation,    fluid    catalytic    cracking,    catalytic    reforming,
desulfurization   and  sulfur  recovery  units.  The  refineries  have  the
capability  to process a wide variety of crude oils and to produce  typical
refinery products,  including reformulated gasoline ("RFG"). In addition to
typical refinery products, the Catlettsburg refinery, an ISO-9000 certified
facility, manufactures lubricating oils and a wide range of petrochemicals.
For the twelve months ended September 30, 2001, 76% of MAP's  production of
lubricating  oils was purchased by Valvoline and 38% of MAP's production of
petrochemicals was purchased by Ashland Distribution.

     MAP also produces a wide range of asphalt  products,  petroleum  pitch
(primarily  used in the  graphite  electrode,  clay  target and  refractory
industries), aromatics, aliphatic hydrocarbons, cumene, base oil, slack wax
and molten sulfur.

     The table below sets forth  MAP's  refinery  total input and  refinery
production by product group for the twelve months ended September 30, 2001,
2000  and  1999.   Refinery  total  inputs  include  crude  oil  and  other
feedstocks.
<TABLE>
<CAPTION>


                                                          Twelve Months Ended September 30
                                                     ------------------------------------------
     <S>                                               <C>              <C>              <C>

                                                       2001             2000             1999
                                                       ----             ----             ----
     Refinery Input
     (in thousands of barrels per day)               1,051.0          1,033.4           1,034.0
     -----------------------------------

     Refined Product Yields
     (in thousands of barrels per day)
     -----------------------------------
     Gasoline...........................               560.5            559.0             565.5
     Distillates........................               278.7            271.5             265.6
     Propane............................                21.2             21.0              22.2
     Feedstocks & Special Products......                69.9             68.9              64.9
     Heavy Fuel Oils....................                44.7             41.2              45.1
     Asphalt............................                74.5             73.3              70.4
                                                     -------          -------           -------
                      Total.............             1,049.5          1,034.9           1,033.7
                                                     =======          =======           =======
</TABLE>


     Planned maintenance activities requiring temporary shutdown of certain
refinery operating units are periodically  performed at each refinery.  MAP
completed major  turnarounds at the Robinson and Detroit  refineries in the
twelve months ended September 30, 2001, and at the Catlettsburg refinery in
the period ended September 30, 2000.

                                     5
<PAGE>


     The  Garyville,  Louisiana  coker  unit  project  achieved  mechanical
completion in early October  2001.  It is  anticipated  that the coker unit
project will be at full  production  in December  2001.  To supply this new
unit, MAP reached an agreement with P.M.I. Comercio Internacional,  S.A. de
C.V., an affiliate of Petroleos Mexicanos, to purchase approximately 90,000
barrels per day of heavy Mayan crude oil. This  agreement is multi-year and
will begin upon completion of the coker unit.

MARKETING

     MAP's 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 24  states.  Gasoline  is sold at
wholesale primarily to independent  marketers,  jobbers and chain retailers
who  resell  these  products   through  several   thousand  retail  outlets
principally  under their own names. MAP also supplies  approximately  3,800
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.

     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  MAP's
wholly-owned subsidiary, Speedway SuperAmerica LLC ("SSA"). As of September
30,  2001,  SSA had 2,145  retail  outlets in 17 states in the  Midwest and
Southeast 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
such as Subway(R) and Taco Bell(R).

     During  the twelve  months  ended  September  30,  2001,  67% of SSA's
revenues  (excluding  excise  taxes) were derived from the sale of gasoline
and  diesel  fuel,  and  the  remainder  were  derived  from  the  sale  of
merchandise.

     Effective  September  1,  2001,  MAP and Pilot  Corporation  ("Pilot")
completed a  transaction  to form Pilot  Travel  Centers LLC ("PTC")  which
combined  SSA's and Pilot's  travel  centers.  Pilot and MAP each own a 50%
interest in PTC. By  combining  these  travel  centers,  MAP  continues  to
further enhance its retail presence.  PTC is the largest operator of travel
centers in the United States with more than 235 locations in 35 states. The
travel centers offer diesel fuel,  gasoline and a variety of other services
associated   with  such   locations,   including   on-premises   brand-name
restaurants.

     The table below shows the volume of MAP's consolidated refined product
sales for the twelve months ended September 30, 2001, 2000 and 1999.

<TABLE>
<CAPTION>
                                                              Twelve Months Ended September 30
                                                       ------------------------------------------
   <S>                                                 <C>                 <C>              <C>

                                                        2001                2000             1999
                                                        ----                ----             ----

   Refined Product Sales
   (in thousands of barrels per day)
   ---------------------------------
      Gasoline                                         741.0               752.1            699.3
      Distillates                                      349.6               351.2            324.6
      Propane                                           21.5                21.6             22.4
      Feedstocks & Special Products                     68.1                67.6             65.1
      Heavy Fuel Oils                                   46.3                40.9             44.9
      Asphalt                                           75.8                75.1             74.3
                                                     -------             -------          -------
                           Total                     1,302.3             1,308.5          1,230.6
                                                     =======             =======          =======

   Matching Buy/Sell Volumes
   included in above....................                43.7                41.4             47.7
</TABLE>

                                     6
<PAGE>

     MAP sells RFG in parts of its marketing territory,  primarily Chicago,
Illinois; Louisville,  Kentucky; Northern Kentucky; Maryland; Virginia; and
Milwaukee,  Wisconsin.  MAP also  markets  low-vapor-pressure  gasolines in
eleven states.

SUPPLY AND TRANSPORTATION

     The  crude  oil  processed  in  MAP's   refineries  is  obtained  from
negotiated contract and spot purchases or exchanges.  For the twelve months
ended September 30, 2001, MAP's negotiated  contract and spot purchases for
refinery input of crude oil produced in the U.S.  averaged  388,700 barrels
per day,  including an average of 28,200 net barrels per day acquired  from
Marathon.  For the twelve months ended  September  30, 2001,  MAP's foreign
crude oil  requirements  were met largely  through  purchases  from various
foreign national oil companies,  producing companies and traders. Purchases
of foreign crude oil  represented 57% of MAP's crude oil  requirements  for
the twelve months ended September 30, 2001.

     MAP's  ownership  or  interest  in  domestic  pipeline  systems in its
refining and marketing  areas is  significant.  MAP owns,  leases or has an
ownership  interest in 6,466 miles of pipelines in 11 states.  This network
transports crude oil and refined products to and from terminals, refineries
and other  pipelines.  It includes 68 miles of crude oil  gathering  lines,
3,564  miles of crude oil trunk  lines and 2,834  miles of refined  product
lines.

     MAP has a 46.7% ownership interest in LOOP LLC ("LOOP"),  which is the
owner and  operator of the only U.S.  deepwater  port  facility  capable of
receiving crude oil from very large crude carriers.  Ashland has retained a
4% ownership  interest in LOOP. MAP also owns a 49.9% ownership interest in
LOCAP  INC.  ("LOCAP"),  which is the  owner  and  operator  of a crude oil
pipeline  connecting  LOOP to the Capline  system.  Ashland has retained an
8.6% ownership  interest in LOCAP.  In addition,  MAP has a 37.2% ownership
interest in the Capline system. These port and pipeline systems provide MAP
with access to common carrier  transportation from the Louisiana Gulf Coast
to Patoka,  Illinois.  At Patoka,  the Capline  system  connects with other
common carrier pipelines owned or leased by MAP that provide transportation
to MAP's refineries in Illinois, Kentucky, Michigan, Minnesota and Ohio.


     MAP's subsidiary,  Ohio River Pipe Line LLC ("ORPL"), plans to build a
pipeline from Kenova,  West Virginia,  to Columbus,  Ohio. ORPL is a common
carrier  pipeline  company and the pipeline  will be an  interstate  common
carrier pipeline. The pipeline,  which will be named Cardinal Products Pipe
Line, is expected to initially move about 50,000 barrels per day of refined
petroleum products into the central Ohio region.  Construction is currently
planned for the summer of 2002 pending receipt of permits, with start-up of
the pipeline to follow late in the fourth quarter of calendar 2002.

     MAP has a 33.3%  ownership  interest  in  Centennial  Pipeline  LLC, a
limited liability company formed to develop an interstate refined petroleum
products pipeline extending from the U.S. Gulf of Mexico to the Midwest. In
March  2001,  the  Federal  Energy  Regulatory   Commission   approved  the
abandonment  of  a  720-mile,  26-inch  diameter  pipeline  extending  from
Longville, Louisiana to Bourbon, Illinois, from natural gas service thereby
allowing  conversion  to  refined  products  transportation  by  Centennial
Pipeline.  Also as part  of the  project,  a  two-million  barrel  terminal
storage facility is being  constructed and a new 74-mile,  24-inch diameter
pipeline extending from Beaumont,  Texas, to Longville,  Louisiana has been
built.  Marathon Ashland Pipe Line LLC has been designated  operator of the
pipeline.  The  Centennial  Pipeline  system will connect with existing MAP
transportation  assets and other common carrier lines. It is expected to be
operational in the first quarter of calendar 2002.

     MAP  also  has a 33.3%  ownership  interest  in  Minnesota  Pipe  Line
Company,  which operates a crude oil pipeline in Minnesota.  Minnesota Pipe
Line  Company  provides  MAP  with  access  to  crude  oil  common  carrier
transportation  from Clearbrook,  Minnesota,  to Cottage Grove,  Minnesota,
which is in the vicinity of MAP's St. Paul Park, Minnesota refinery.

     MAP's marine  transportation  operations  include  towboats and barges
that  transport  refined  products on the Ohio,  Mississippi  and  Illinois
rivers,  their tributaries and the Intracoastal  Waterway.  MAP also leases
and owns railcars in various sizes and  capacities for movement and storage
of petroleum  products and a large  number of tractors,  tank  trailers and
general service trucks.

     In addition,  MAP owns and operates 91 terminal  facilities from which
it sells a wide range of petroleum products.  These facilities are supplied
by a combination of barges, pipeline, truck and/or rail.

                                     7
<PAGE>


OTHER MATTERS

     For  information  on MAP and  federal,  state and local  statutes  and
regulations  governing  releases into the  environment or protection of the
environment, see "Item 1. Business - Miscellaneous - Environmental Matters"
in this Form 10-K.


                               MISCELLANEOUS

ENVIRONMENTAL MATTERS

     Ashland has implemented a company-wide  environmental  policy overseen
by the  Public  Policy -  Environmental  Committee  of  Ashland's  Board of
Directors.  Ashland's  Environmental,  Health  and  Safety  group  has  the
responsibility   to  ensure  that  Ashland's   operating   groups  maintain
environmental   compliance  in   accordance   with   applicable   laws  and
regulations.

     Federal,  state  and  local  laws  and  regulations  relating  to  the
protection  of the  environment  have a  significant  impact on how Ashland
conducts its  businesses.  New laws are being enacted and  regulations  are
being adopted by various regulatory agencies on a continuing basis, and the
costs of  compliance  with these new rules  cannot be  estimated  until the
manner in which they will be implemented has been more accurately  defined.
In addition, most foreign countries in which Ashland conducts business have
laws dealing with similar matters.

     At  September   30,  2001,   Ashland's   reserves  for   environmental
remediation amounted to $176 million, reflecting Ashland's estimates of the
most  likely  costs  which  will be  incurred  over an  extended  period to
remediate  identified  environmental  conditions  for  which  the costs are
reasonably  estimable,   without  regard  to  any  third-party  recoveries.
Environmental   remediation  reserves  are  subject  to  numerous  inherent
uncertainties  that affect  Ashland's  ability to estimate its share of the
ultimate  costs of the required  remediation  efforts.  Such  uncertainties
involve the nature and extent of  contamination at each site, the extent of
required cleanup efforts under existing environmental  regulations,  widely
varying  costs of  alternate  cleanup  methods,  changes  in  environmental
regulations, the potential effect of continuing improvements in remediation
technology,  and the number and  financial  strength  of other  potentially
responsible parties at multiparty sites. Reserves are regularly adjusted as
environmental  remediation continues.  None of the remediation locations is
individually  material  to Ashland as its  largest  reserve for any site is
under $10 million. As a result,  Ashland's exposure to adverse developments
with respect to any  individual  site is not  expected to be material,  and
these sites are in various stages of the ongoing environmental  remediation
process. Although environmental remediation could have a material effect on
results  of  operations  if a series of  adverse  developments  occurs in a
particular quarter or fiscal year, Ashland believes that the chance of such
developments  occurring  in the same  quarter  or  fiscal  year is  remote.
Ashland does not believe that any liability  resulting  from  environmental
remediation,  after  taking into  consideration  expected  recoveries  from
insurers,  contributions by other  responsible  parties and amounts already
provided  for,  will have a  material  adverse  effect on its  consolidated
financial position, cash flows or liquidity.

     In  connection  with the  formation of MAP,  Marathon and Ashland each
retained  responsibility  for certain  environmental  costs  arising out of
their   respective   prior   ownership  and  operation  of  the  facilities
transferred to MAP. In certain  situations,  various  threshold  provisions
apply,   eliminating  or  reducing  the  financial  responsibility  of  the
contributing  party until certain levels of expenditure  have been reached.
In other  situations,  sunset  provisions  gradually  diminish the level of
financial responsibility of the contributing party over time.

     AIR - The Clean Air Act (the "CAA")  imposes  stringent  limits on air
emissions,  establishes a federally mandated operating permit program,  and
allows  for  civil  and  criminal  enforcement  actions.  Additionally,  it
establishes air quality attainment deadlines and control requirements based
on the severity of air  pollution  in a given  geographical  area.  Various
state clean air acts implement,  complement and, in some instances,  add to
the  requirements  of the federal CAA. The  requirements of the CAA and its
state  counterparts  have a  significant  impact on the daily  operation of
Ashland's  businesses and, in many cases, on product  formulation and other
long-term  business  decisions.   Ashland's  businesses  maintain  numerous
permits  pursuant to these clean air laws and have  implemented  systems to
oversee ongoing compliance efforts.

                                     8
<PAGE>


     In July  1997,  the  United  States  Environmental  Protection  Agency
("EPA") promulgated revisions to the National Ambient Air Quality Standards
("NAAQS") for ground level ozone and particulate  matter.  These revisions,
if they are implemented by the states,  could have a significant  effect on
certain of Ashland's  chemical  manufacturing and distribution  businesses,
and on MAP. The EPA's  authority and scientific  basis to promulgate  these
standards were  challenged by industry.  Although in 2001 the U.S.  Supreme
Court upheld the EPA's ability to set NAAQS's without considering the costs
related to compliance, several other EPA actions were remanded to the Court
of Appeals for further consideration.  Litigation continues,  as do efforts
by the EPA and other regulatory and law enforcement agencies to achieve the
objectives  of these  standards  through  other means.  It is not currently
possible  to  estimate  any  potential  financial  impact  that any revised
standards may have on Ashland's operations.

     WATER - Ashland's  businesses  maintain numerous discharge permits, as
the National Pollutant Discharge  Elimination System of the Clean Water Act
("CWA") and state programs require, and have implemented systems to oversee
their compliance  efforts.  In addition,  several of MAP's  operations,  in
particular its barge and terminal  facilities,  are regulated under the Oil
Pollution Act of 1990.

     SOLID  WASTE  -  Ashland's  businesses  are  subject  to the  Resource
Conservation and Recovery Act ("RCRA"), which establishes standards for the
management of solid and hazardous  wastes.  Besides affecting current waste
disposal  practices,  RCRA also  addresses  the  environmental  effects  of
certain past waste  disposal  operations,  the  recycling of wastes and the
storage of regulated substances in underground tanks.

     REMEDIATION - Ashland currently operates, and in the past has operated
various facilities where, during the normal course of operations,  releases
of hazardous  substances have occurred.  Federal and state laws,  including
but  not  limited  to RCRA  and  various  remediation  laws,  require  that
contamination  caused by such  releases  be  assessed  and,  if  necessary,
remediated to meet applicable standards.  MAP operates, and in the past has
operated,  certain  retail  outlets  where,  during  the  normal  course of
operations,  releases of petroleum products from underground  storage tanks
have occurred.  Federal and state laws require that contamination caused by
such releases at these sites be assessed  and, if necessary,  remediated to
meet applicable standards.

RESEARCH

     Ashland  conducts a program of research and  development to invent and
improve  products and processes and to improve  environmental  controls for
its existing  facilities.  It maintains its research  facilities in Dublin,
Ohio; Lexington,  Kentucky; and Atlanta,  Georgia. Research and development
costs are  expensed as they are  incurred and totaled $36 million in fiscal
2001 ($33 million in 2000 and $30 million in 1999).

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 APAC's goods and
services are marketed under highly  competitive  conditions.  Factors which
influence APAC's  competitiveness  are price,  reputation for quality,  the
availability of aggregate materials,  machinery and equipment, knowledge of
local markets and conditions and estimating abilities.

     Each of Ashland  Distribution's  businesses,  except for the  plastics
distribution  businesses,   compete  with  national,   regional  and  local
companies  throughout North America. The plastics  distribution  businesses
compete in both North America and Europe.  Competition in these  businesses
is based  primarily on price and reliability of supply.  Ashland  Specialty
Chemical's  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 Chemical's  businesses hold proprietary  technology,  and Ashland
believes  it has a  leading  or  strong  market  position  in  most  of its
specialty chemical products.  Ashland Specialty  Chemical's  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 product and service quality, distribution capability, a
focused "master" brand strategy,  advertising and sales promotion.  Some of
the

                                     9
<PAGE>


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.  Valvoline's  brand  recognition,  service  offering and
increasing market presence in the U.S. "fast oil change" market, as well as
quality of service, speed, location,  convenience and sales promotion,  are
important competitive factors.

     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.  MAP  believes  it  ranks  among  the top ten U.S.
petroleum  companies  on the basis of crude  oil  refining  capacity  as of
September 30, 2001.  MAP competes in four distinct  markets for the sale of
refined products - wholesale,  spot, branded and retail  distribution.  MAP
believes it competes  with  approximately  50  companies  in the  wholesale
distribution  of petroleum  products to private  brand  marketers and large
commercial and industrial consumers; approximately 75 companies in the sale
of  petroleum  products in the spot  market;  13  refiner/marketers  in the
supply of branded petroleum  products to dealers and jobbers;  and over 600
petroleum product retailers in the retail sale of petroleum  products.  MAP
also  competes in the  convenience  store  industry  through  SSA's  retail
outlets and in the travel center  industry  through their ownership in PTC.
The retail  outlets  offer  consumers  gasoline,  diesel fuel (at  selected
locations)  and a  variety  of food,  merchandise,  cigarettes,  candy  and
beverages.

FORWARD-LOOKING STATEMENTS

     This Form 10-K and the  documents  incorporated  by reference  contain
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,   including  various  information  within  the  "Capital  Resources,"
"Derivative  Instruments,"  "Outlook" and "Conversion to the Euro" sections
in Management's  Discussion and Analysis in Ashland's Annual Report.  Words
such as  "anticipates,"  "believes,"  "estimates,"  "expects," "is likely,"
"predicts,"  and  variations  of such  words and  similar  expressions  are
intended to identify  such  forward-looking  statements.  Although  Ashland
believes  that its  expectations  are based on reasonable  assumptions,  it
cannot assure that the  expectations  contained in such  statements will be
achieved.  Important  factors  which could cause  actual  results to differ
materially  from those  contained in such  statements  are discussed  under
"Risks  and  Uncertainties"  in Note A of Notes to  Consolidated  Financial
Statements in Ashland's  Annual  Report.  For a discussion of other factors
and risks affecting Ashland's revenues and operations see "Item 1. Business
- Miscellaneous - Marketing Conditions" below.

 MARKETING CONDITIONS

     Domestic and  international  political,  legislative,  regulatory  and
legal  changes  may  adversely  affect  Ashland's  results  of  operations.
Political  actions may include changes in the policies of the  Organization
of  Petroleum  Exporting  Countries  or  other  developments  involving  or
affecting oil-producing countries,  including military conflict, embargoes,
internal  instability  or actions or  reactions of the U.S.  government  in
anticipation  of, or in response  to, such  actions.  Profitability  of MAP
depends  largely  on the  margin  between  the cost of crude  oil and other
feedstocks  refined and the selling  prices of refined  products.  MAP is a
purchaser  of  crude  oil in  order  to  satisfy  its  refinery  throughput
requirements.  As a result, MAP's overall  profitability could be adversely
affected by increases in crude oil and other feedstock  prices that are not
recovered in the market place through  higher prices.  Reference  should be
made to the Refining and Marketing  section of the Management's  Discussion
and Analysis  section in Ashland's  Annual  Report for a discussion  of the
impact of crude oil costs on MAP's  operating  performance.  While  Ashland
maintains  reserves for anticipated  liabilities and carries various levels
of insurance,  Ashland could be affected by civil, criminal,  regulatory or
administrative actions, claims or proceedings.

     Ashland's  operations are subject to various U.S. and foreign laws and
regulations  relating to  environmental  protection  and worker  health and
safety.  These laws and regulations  regulate discharges of pollutants into
the air and water, the management and disposal of hazardous substances, and
the cleanup of contaminated  properties.  The costs of complying with these
laws and  regulations  can be  substantial  and may increase as  applicable
requirements  become  more  stringent  and new  rules are  implemented.  If
violation of these laws and regulations occur, Ashland may be

                                    10
<PAGE>

forced to pay substantial fines, to complete additional costly projects, or
to modify or curtail its operations to limit contaminant emissions.

     The profitability of Ashland's businesses are particularly susceptible
to downturns in the economy,  particularly downturns in the segments of the
U.S.  economy related to the purchase and sale of durable goods,  including
housing, construction,  automotive, marine and semiconductor.  Both overall
demand for  Ashland's  products  and its profit  margins  may  decline as a
direct result of an economic recession, inflation, changes in the prices of
hydrocarbons  and other raw  materials  (e.g.,  crude oil and petroleum and
chemical  products),  consumer  confidence,  interest rates or governmental
fiscal  policies.  In  addition,  Ashland's  profitability  may  experience
significant changes as a result of variations in sales,  changes in product
mix or pricing competition.

     In addition,  changes in climate and weather can significantly  affect
the performance of several of Ashland's operations. Extreme variations from
normal climatic conditions could have a significant effect on the operating
results  of APAC's  construction  operations.  In  particular,  unfavorable
weather conditions will delay the completion of construction  projects, and
may require  the use of  additional  resources.  In  addition,  most of the
refined  products  sold by MAP are seasonal in nature,  and thus demand for
those products may decline due to significant changes in prevailing climate
and weather  conditions.  MAP's  production or distribution  operations are
also subject to disruption by extreme  weather  conditions  such as floods,
frozen rivers or hurricanes.

ITEM 2. PROPERTIES

     Ashland's  corporate  headquarters,  which is  leased,  is  located in
Covington,  Kentucky.  Principal  offices  of other  major  operations  are
located in Atlanta,  Georgia (APAC); Dublin, Ohio (Ashland Distribution and
Ashland Specialty Chemical);  Lexington, Kentucky (Valvoline); and Russell,
Kentucky (Administrative Services). All of these offices are leased, except
for the Russell office, which is owned. Principal manufacturing,  marketing
and other  materially  important  physical  properties  of Ashland  and its
subsidiaries  are described under the  appropriate  segment under Item 1 in
this Form 10-K.  Additional  information  concerning  certain leases may be
found in Note J of Notes to Consolidated  Financial Statements in Ashland's
Annual Report.

ITEM 3. LEGAL PROCEEDINGS

     ENVIRONMENTAL  PROCEEDINGS - (1) As of September 30, 2001, Ashland has
been  identified  as  a  "potentially   responsible  party"  ("PRP")  under
Superfund or similar state laws for potential  joint and several  liability
for  clean-up  costs in  connection  with  alleged  releases  of  hazardous
substances  associated  with 99 waste  treatment or disposal  sites.  These
sites  are  currently   subject  to  ongoing   investigation  and  remedial
activities,  overseen  by the EPA or a state  agency,  in which  Ashland is
typically participating as a member of a PRP group. Generally,  the type of
relief sought includes remediation of contaminated soil and/or groundwater,
reimbursement for past costs of site clean-up and administrative oversight,
and/or long-term  monitoring of environmental  conditions at the sites. The
ultimate  costs are not  predictable  with assurance and could be material.
However, based on its experience with site remediation, its analysis of the
specific hazardous  substances at issue, the existence of other financially
viable  PRPs and its  current  estimates  of  investigatory,  clean-up  and
monitoring costs at each site,  Ashland does not believe that any liability
at these  sites,  either  individually  or in the  aggregate,  will  have a
material adverse effect on Ashland's consolidated financial position,  cash
flows or liquidity.  For  additional  information  regarding  environmental
matters  and  reserves,   see  "Management's   Discussion  and  Analysis  -
Environmental  Matters"  and  Note M of  Notes  to  Consolidated  Financial
Statements in Ashland's Annual Report and "Item 1. Business - Miscellaneous
- Environmental Matters" in this Form 10-K.

     (2) As a result of an EPA enforcement  initiative wherein  information
relating to construction  projects  conducted within refineries since 1980,
including  financial  data,  permit  status and  operational  results,  are
reviewed for compliance  with specific  provisions of the CAA, MAP, as well
as several other refiners,  entered into  negotiations with the EPA and the
Justice  Department.  On August 30, 2001,  the U.S.  District Court for the
Eastern  District  of  Michigan   approved  and  entered  MAP's  settlement
agreement  with  the  EPA,   which  includes  MAP's   commitment  to  spend
approximately  $270  million  in  environmental  capital  expenditures  and
improvements  to  MAP's   refineries.   These   improvements   include  the
installation of specific control technologies over a period of eight years.
In addition,  MAP's  settlement  provides for payment of a civil penalty in
the amount of $3.8 million and the

                                    11
<PAGE>

performance of $8 million in supplemental  environmental projects.  Ashland
has agreed to reimburse MAP a total of $1 million for these projects.

     OTHER PROCEEDINGS - In addition to the environmental matters described
above,  there are pending or threatened against Ashland and its current and
former   subsidiaries   various   claims,   lawsuits   and   administrative
proceedings.  Such actions are with respect to commercial matters,  product
liability,  toxic  tort  liability,  numerous  asbestos  claims,  and other
environmental matters, which seek remedies or damages some of which are for
substantial amounts. While these actions are being contested, their outcome
is not  predictable  with  assurance  and could be  material  to results of
operations  in the period they are  recognized.  However,  Ashland does not
believe that any liability  resulting  from these actions after taking into
consideration  expected  recoveries from insurers,  contributions  by other
responsible  parties and amounts already provided for, will have a material
adverse  effect  on its  consolidated  financial  position,  cash  flows or
liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security  holders,  through the
solicitation  of proxies or otherwise,  during the quarter ended  September
30, 2001.

ITEM X. EXECUTIVE OFFICERS OF ASHLAND

     The following is a list of Ashland's  executive  officers,  their ages
and  their  positions  and  offices  during  the last  five  years  (listed
alphabetically  after the Chief  Executive  Officer as to other Senior Vice
Presidents, Administrative Vice Presidents and other executive officers).

     PAUL W. CHELLGREN (age 58) is Chairman of the Board,  Chief  Executive
Officer and  Director of Ashland  and has served in such  capacities  since
1997, 1996 and 1992, respectively.

     JAMES R. BOYD (age 55) is Senior Vice  President  and Group  Operating
Officer of Ashland and has served in such  capacities  since 1990 and 1993,
respectively. Mr. Boyd will retire from Ashland effective January 31, 2002.

     DAVID  J.  D'ANTONI  (age  56) is  Senior  Vice  President  and  Group
Operating  Officer of Ashland and has served in such capacities  since 1988
and 1999,  respectively.  During the past five years, he has also served as
President of Ashland Chemical Company.

     JAMES J. O'BRIEN (age 47) is Senior Vice President and Group Operating
Officer of Ashland and President of The Valvoline Company and has served in
such capacities since 1997, 2001, and 1995,  respectively.  During the past
five years, he has also served as Vice President of Ashland.

     CHARLES F.  POTTS (age 57) is Senior  Vice  President  of Ashland  and
President of APAC, Inc. and has served in such capacities since 1992.

     J. MARVIN QUIN (age 54) is Senior Vice  President and Chief  Financial
Officer of Ashland and has served in such capacities since 1992.

     KENNETH  L.  AULEN  (age  52) is  Administrative  Vice  President  and
Controller of Ashland and has served in such capacities since 1992.

     PHILIP W.  BLOCK (age 54) is  Administrative  Vice  President  - Human
Resources of Ashland and has served in such capacity since 1992.

     PETER M. BOKACH (age 55) is Vice President of Ashland and President of
Ashland  Distribution Company and has served in such capacities since 1999.
During the past five years,  he has also  served as Group Vice  President -
Distribution Division of Ashland Chemical Company.

     JAMES A. DUQUIN (age 54) is Vice President of Ashland and President of
Ashland Specialty  Chemical Company and has served in such capacities since
1999.  During  the past  five  years,  he has  also  served  as Group  Vice
President - Specialty Chemical Division of Ashland Chemical Company.

     DAVID L.  HAUSRATH (age 49) is Vice  President and General  Counsel of
Ashland   and  has  served  in  such   capacities   since  1998  and  1999,
respectively.  During the past five years,  he has also served as Associate
General Counsel of Ashland.

                                    12
<PAGE>


     J. DAN LACY (age 54) is Vice President - Corporate  Affairs of Ashland
and has served in such capacity since 1986.

     RICHARD P. THOMAS (age 55) is Vice  President and Secretary of Ashland
and has served in such capacities since 1998 and 1999, respectively. During
the past five years,  he has also served as  Associate  General  Counsel of
Ashland and  Administrative  Vice President and General  Counsel of Ashland
Petroleum Company.

     Each executive officer is elected by the Board of Directors of Ashland
to a term of one  year,  or until his  successor  is duly  elected,  at the
annual meeting of the Board of Directors,  except in those  instances where
the  officer  is elected  other  than at an annual  meeting of the Board of
Directors,  in which case his tenure will expire at the next annual meeting
of the Board of Directors unless the officer is re-elected.

                                  PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS

     There is hereby incorporated by reference the information appearing in
Note P of Notes to Consolidated  Financial  Statements in Ashland's  Annual
Report.

     At September  30, 2001,  there were  approximately  18,500  holders of
record of Ashland's Common Stock. Ashland Common Stock is listed on the New
York and  Chicago  stock  exchanges  (ticker  symbol  ASH) and has  trading
privileges  on the  Boston,  Cincinnati,  Pacific  and  Philadelphia  stock
exchanges.

ITEM 6. SELECTED FINANCIAL DATA

     There is hereby  incorporated by reference the  information  appearing
under the caption "Five-Year Selected Financial  Information" on page 56 in
Ashland's Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

     There is hereby  incorporated by reference the  information  appearing
under the caption "Management's  Discussion and Analysis" on pages 28 to 35
in Ashland's Annual Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There is hereby  incorporated by reference the  information  appearing
under the caption "Derivative  Instruments" on pages 33 and 34 in Ashland's
Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     There is hereby  incorporated by reference the consolidated  financial
statements appearing on pages 37 through 55 in Ashland's Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

     None.

                                 PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     There is hereby  incorporated  by reference the  information to appear
under the  caption  "Ashland  Inc.'s  Board of  Directors  -  Nominees  for
Election at the 2002 Annual Meeting" and the information  regarding Section
16 beneficial  ownership reporting compliance in Ashland's definitive Proxy
Statement for its January 31, 2002 Annual  Meeting of  Shareholders,  which
will be filed with the SEC within 120 days after September 30, 2001 ("Proxy
Statement").  See also the list of Ashland's executive officers and related
information  under  "Executive  Officers  of Ashland" in Part I - Item X in
this Form 10-K.

                                    13
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

     There is hereby  incorporated  by reference the  information to appear
under the captions  "Executive  Compensation,"  "Compensation of Directors"
and  "Miscellaneous - Personnel and Compensation  Committee  Interlocks and
Insider Participation" in Ashland's Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

     There is hereby  incorporated  by reference the  information to appear
under the caption  "Ashland Common Stock Ownership of Directors and Certain
Officers  of  Ashland"  and the  information  regarding  the  ownership  of
securities of Ashland in Ashland's Proxy Statement.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     There is hereby  incorporated  by reference the  information to appear
under the caption  "Miscellaneous  - Business  Relationships"  in Ashland's
Proxy Statement.

                                  PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (A) DOCUMENTS FILED AS PART OF THIS REPORT

     (1) and (2) Financial Statements and Financial Schedule

     The  consolidated  financial  statements  and  financial  schedule  of
Ashland presented or incorporated by reference in this report are listed in
the index on page 19.

     (3) Exhibits

3.1      Second Restated  Articles of Incorporation of Ashland,  as amended
         to January 30, 1998 (filed as Exhibit 3 to Ashland's Form 10-Q for
         the quarter  ended  December 31, 1997 and  incorporated  herein by
         reference).

3.2      By-laws  of  Ashland,  effective  as of June 21,  2001  (filed  as
         Exhibit 3.2 to Ashland's  Form 10-Q for the quarter ended June 30,
         2001 and incorporated herein by reference).

4.1      Ashland  agrees  to  provide  the SEC,  upon  request,  copies  of
         instruments  defining the rights of holders of  long-term  debt of
         Ashland  and all of its  subsidiaries  for which  consolidated  or
         unconsolidated  financial statements are required to be filed with
         the SEC.

4.2      Indenture, dated as of August 15, 1989, as amended and restated as
         of August  15,  1990,  between  Ashland  and  Citibank,  N.A.,  as
         Trustee.

4.3      Indenture, dated as of September 7, 2001, between Ashland and U.S.
         Bank National Association, as Trustee.

4.4      Rights Agreement,  dated as of May 16, 1996,  between Ashland Inc.
         and the Rights Agent, together with Form of Right Certificate.


     The following  Exhibits 10.1 through 10.15 are  compensatory  plans or
arrangements  or  management  contracts  required  to be filed as  exhibits
pursuant to Item 601(b)(10)(ii)(A) of Regulation S-K.


10.1     Amended Stock Incentive Plan for Key Employees of Ashland Inc. and
         its Subsidiaries (filed as Exhibit 10.1 to Ashland's Form 10-K for
         the fiscal year ended September 30, 1999 and  incorporated  herein
         by reference).

10.2     Ashland Inc. Deferred Compensation Plan for Non-Employee Directors
         (filed as Exhibit 10.2 to Ashland's  Form 10-K for the fiscal year
         ended September 30, 1999 and incorporated herein by reference).

                                    14
<PAGE>

10.3     Ashland Inc. Deferred Compensation Plan (filed as Exhibit 10.14 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.4     Tenth  Amended  and  Restated  Ashland  Inc.   Supplemental  Early
         Retirement  Plan for  Certain  Employees,  as  amended  (filed  as
         Exhibit 10.2 to Ashland's Form 10-Q for the quarter ended December
         31, 2000 and incorporated herein by reference).

10.5     Ashland Inc. Salary Continuation Plan.

10.6     Form of Ashland Inc. Executive Employment Contract between Ashland
         Inc. and certain  executives of Ashland  (filed as Exhibit 10.6 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 1999
         and incorporated herein by reference).

10.7     Form of Separation  Agreement and General  Release between Ashland
         Inc. and James R. Boyd, an executive officer of Ashland.

10.8     Form of  Indemnification  Agreement  between Ashland Inc. and each
         member of its Board of Directors.

10.9     Ashland Inc.  Nonqualified  Excess Benefit  Pension Plan (filed as
         Exhibit  10.11 to  Ashland's  Form 10-K for the fiscal  year ended
         September 30, 1998 and incorporated herein by reference).

10.10    Ashland Inc.  Long-Term  Incentive  Plan (filed as Exhibit 10.9 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.11    Ashland Inc. Directors' Charitable Award Program (filed as Exhibit
         10.10 to Ashland's  Form 10-K for the fiscal year ended  September
         30, 2000 and incorporated herein by reference).

10.12    Ashland Inc. 1993 Stock  Incentive Plan (filed as Exhibit 10.11 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.13    Ashland Inc. 1995 Performance Unit Plan (filed as Exhibit 10.12 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.14    Ashland Inc. 1997 Stock  Incentive Plan (filed as Exhibit 10.15 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.15    Ashland Inc.  Amended and Restated  Ashland  Inc.  Incentive  Plan
         (filed as  Exhibit  10.1 to  Ashland's  Form 10-Q for the  quarter
         ended December 31, 2000 and incorporated herein by reference).

10.16    Amended  and  Restated  Limited  Liability  Company  Agreement  of
         Marathon  Ashland  Petroleum  LLC dated as of  December  31,  1998
         (filed as Exhibit 10.17 to Ashland's Form 10-K for the fiscal year
         ended September 30, 1999 and incorporated herein by reference).

10.17    Put/Call,  Registration Rights and Standstill Agreement as amended
         to December 31, 1998 among Marathon Oil Company,  USX Corporation,
         Ashland  Inc.  and Marathon  Ashland  Petroleum  (filed as Exhibit
         10.18 to Ashland's  Form 10-K for the fiscal year ended  September
         30, 1999 and incorporated herein by reference).

11       Computation  of  Earnings  Per  Share  (appearing  on  page  43 of
         Ashland's Annual Report to Shareholders, incorporated by reference
         herein, for the fiscal year ended September 30, 2001).

12       Computation of Ratios of Earnings to Fixed Charges and Earnings to
         Combined Fixed Charges and Preferred Stock Dividends.

13       Portions of Ashland's Annual Report to Shareholders,  incorporated
         by reference herein, for the fiscal year ended September 30, 2001.

21       List of subsidiaries.

                                    15
<PAGE>


23.1     Consent of independent auditors.

24       Power  of  Attorney,   including   resolutions  of  the  Board  of
         Directors.

     Upon written or oral  request,  a copy of the above  exhibits  will be
furnished at cost.

     (B) REPORTS ON FORM 8-K

         None.

                                    16


<PAGE>



                                 SIGNATURES

     PURSUANT TO THE  REQUIREMENTS OF SECTION 13 OR 15(D) 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)

                                         By:
                                                 /s/ Kenneth L. Aulen
                                        ---------------------------------------
                                            (Kenneth L. Aulen, Administrative
                                              Vice President and Controller)

                                         Date:  December 3, 2001

     PURSUANT TO THE  REQUIREMENTS OF THE SECURITIES  EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT, IN THE CAPACITIES INDICATED, ON DECEMBER 3, 2001.

      SIGNATURES                                   CAPACITY
      ----------                                   --------

/s/ PAUL W. CHELLGREN                     Chairman of the Board, Chief
---------------------------------          Executive Officer and Director
    PAUL W. CHELLGREN

/s/ J. MARVIN QUIN                        Senior Vice President and Chief
---------------------------------          Financial Officer
    J. MARVIN QUIN


/s/ KENNETH L. AULEN                      Administrative Vice President,
---------------------------------          Controller and Principal
    KENNETH L. AULEN                       Accounting Officer


            *                             Director
---------------------------------
    SAMUEL C. BUTLER


            *                             Director
---------------------------------
    FRANK C. CARLUCCI


            *                             Director
---------------------------------
    ERNEST H. DREW

                                    17
<PAGE>



            *                             Director
---------------------------------
    JAMES B. FARLEY


            *                             Director
---------------------------------
    RALPH E. GOMORY


            *                             Director
---------------------------------
    ROGER W. HALE


            *                             Director
---------------------------------
    BERNADINE P. HEALY


            *                             Director
---------------------------------
    MANNIE L. JACKSON


            *                             Director
---------------------------------
    PATRICK F. NOONAN


            *                             Director
---------------------------------
    JANE C. PFEIFFER


            *                             Director
---------------------------------
    WILLIAM L. ROUSE , JR.


            *                             Director
---------------------------------
    THEODORE M. SOLSO


            *                             Director
---------------------------------
    MICHAEL J. WARD





       *  By: /s/ David L. Hausrath
              ---------------------
              David L. Hausrath
              Attorney-in-Fact





       Date:  December 3, 2001


                                    18

<PAGE>




            INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULE

                                                                     PAGE
                                                                     ----
     Consolidated financial statements:
     Statements of consolidated income ...............................*
     Consolidated balance sheets .....................................*
     Statements of consolidated stockholders' equity .................*
     Statements of consolidated cash flows ...........................*
     Notes to consolidated financial statements ......................*
     Information by industry segment .................................*
     Report of independent auditors................................. 20

     Consolidated financial schedule:
     Schedule II - Valuation and qualifying accounts................ 21
     -----------

     *The consolidated  financial  statements appearing on pages 37 through
55 in Ashland's  Annual Report are incorporated by reference in this Annual
Report on Form 10-K.

     Schedules  other than that listed above have been  omitted  because of
the absence of the conditions  under which they are required or because the
information  required is shown in the consolidated  financial statements or
the notes thereto.  Separate financial  statements for MAP required by Rule
3-09 of  Regulation  S-X will be filed as an  amendment  to this  Form 10-K
within 90 days after the end of MAP's fiscal year ending December 31, 2001.
Separate  financial  statements  of  other  unconsolidated  affiliates  are
omitted  because each company does not constitute a significant  subsidiary
using the 20% tests  when  considered  individually.  Summarized  financial
information  for  such  affiliates  is  disclosed  in  Note F of  Notes  to
Consolidated Financial Statements in Ashland's Annual Report.

                                    19


<PAGE>



                       REPORT OF INDEPENDENT AUDITORS

     We have audited the consolidated  financial statements and schedule of
Ashland Inc. and consolidated subsidiaries listed in the accompanying index
to  financial   statements  and  financial  schedule  (Item  14(a)).  These
financial  statements  and  schedule  are the  responsibility  of Ashland's
management.  Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

     We  conducted  our  audits  in  accordance  with  auditing   standards
generally  accepted in the United States.  Those standards  require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material  misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in  the  financial  statements.   An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial  statements  listed in the accompanying
index to financial  statements (Item 14(a)) present fairly, in all material
respects,   the  consolidated   financial  position  of  Ashland  Inc.  and
consolidated   subsidiaries  at  September  30,  2001  and  2000,  and  the
consolidated  results of their  operations and their cash flows for each of
the three years in the period ended  September 30, 2001, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion,  the related  financial  statement  schedule,  when  considered in
relation  to the  basic  financial  statements  taken as a whole,  presents
fairly in all material respects the information set forth therein.

     As  discussed  in Note A to the  financial  statements,  in  2001  the
Company and its unconsolidated  affiliate,  Marathon Ashland Petroleum LLC,
changed their method of accounting for derivatives.

                                              /s/ Ernst & Young LLP

                                              Ernst & Young LLP


Cincinnati, Ohio
October 31, 2001

                                    20
<PAGE>

<TABLE>
<CAPTION>


 ----------------------------------------------------------------------------------------------------------------------------------
 Ashland Inc. and Consolidated Subsidiaries
 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


<S>                                                       <C>             <C>             <C>                 <C>         <C>

-----------------------------------------------------------------------------------------------------------------------------------
(In millions)                                              Balance at      Provisions                                      Balance
                                                            beginning      charged to      Reserves            Other        at end
Description                                                   of year        earnings      utilized          changes       of year
===================================================================================================================================
YEAR ENDED SEPTEMBER 30, 2001
Reserves deducted from asset accounts
   Accounts receivable                                         $  25             $ 34          $(25)  (1)       $  -         $  34
   Inventories                                                    13                5            (3)               -            15
-----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2000
Reserves deducted from asset accounts
   Accounts receivable                                         $  23             $ 15          $(12)  (1)       $ (1)        $  25
   Inventories                                                    15                3            (5)               -            13
-----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 1999
Reserves deducted from asset accounts
   Accounts receivable                                         $  19             $ 12          $ (8)  (1)       $  -         $  23
   Inventories                                                    11                7            (3)               -            15
-----------------------------------------------------------------------------------------------------------------------------------

(1)      Uncollected  amounts  written off, net of recoveries of $1 million
         in 2001, $1 million in 2000 and $2 million in 1999.


</TABLE>



                                    21

<PAGE>


                               EXHIBIT INDEX
Exhibit
 No.                               Description
-------  ------------------------------------------------------------------

4.2      Indenture between Ashland and Citibank, N.A., as trustee.

4.3      Indenture between Ashland and U. S. Bank National Association,  as
         trustee.

4.4      Rights  Agreement  between Ashland and the Rights Agent,  together
         with Form of Right Certificate.

10.5     Ashland Inc. Salary Continuation Plan.

10.7     Form of Separation  Agreement and General  Release between Ashland
         Inc. and James R. Boyd.

10.8     Form of  Indemnification  Agreement  between Ashland Inc. and each
         member of its Board of Directors.

12       Computation of Ratios of Earnings to Fixed Charges and Earnings to
         Combined Fixed Charges and Preferred Stock Dividends.

13       Portions of Ashland's Annual Report to Shareholders for the fiscal
         year ended September 30, 2001.

21       List of subsidiaries.

23.1     Consent of independent auditors.

24       Power  of  Attorney,   including   resolutions  of  the  Board  of
         Directors.