Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The Company had ~~56,586,811~~56,433,688 shares of common stock, $1.00 par value per share, outstanding as of ~~February 2,~~May 4, 2022.

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions, except per share amounts)						(In millions, except per share amounts)
Net sales and other operating revenues	$	968		$	746		$	1,092		$	842		$	2,060		$	1,588
Cost of sales		770			553			860			628			1,630			1,181
Gross profit		198			193			232			214			430			407
Selling and administrative expenses		71			61			74			71			145			132
Research and technical expenses		13			14			14			15			27			29
Purification Solutions assets held for sale impairment charge (Note D)		197			—
Loss on sale of business and asset impairment charge (Note D)								7			—			204			—
Gain on bargain purchase of a business (Note C)								(24	)		—			(24	)		—
Income (loss) from operations		(83	)		118			161			128			78			246
Interest and dividend income		3			2			4			2			7			4
Interest expense		(12	)		(12	)		(11	)		(13	)		(23	)		(25	)
Other income (expense)		(1	)		(9	)		(7	)		1			(8	)		(8	)
Income (loss) before income taxes and equity in earnings of affiliated companies		(93	)		99			147			118			54			217
(Provision) benefit for income taxes		12			(29	)		(36	)		(34	)		(24	)		(63	)
Equity in earnings of affiliated companies, net of tax		1			0			3			1			4			1
Net income (loss)		(80	)		70			114			85			34			155
Net income (loss) attributable to noncontrolling interests, net of tax		9			10			7			10			16			20
Net income (loss) attributable to Cabot Corporation	$	(89	)	$	60		$	107		$	75		$	18		$	135

Weighted-average common shares outstanding:
Basic		56.8			56.5			56.6			56.6			56.5			56.6
Diluted		56.8			56.6			57.1			56.7			56.9			56.7

Earnings (loss) per common share:
Basic	$	(1.57	)	$	1.06		$	1.86		$	1.31		$	0.30		$	2.37
Diluted	$	(1.57	)	$	1.06		$	1.84		$	1.30		$	0.30		$	2.36

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Net income (loss)	$	(80	)	$	70		$	114		$	85		$	34		$	155
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment, net of tax		(28	)		94			46			(76	)		18			18
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense, net of tax		(1	)		(1	)		(2	)		(2	)		(3	)		(3	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense, net of tax								1			1			1			1
Pension and other postretirement benefit liability adjustments, net of tax		1			3			1			1			2			4
Other comprehensive income (loss), net of tax of $— and $(3)		(28	)		96
Other comprehensive income (loss), net of tax of $‒, $‒, $(1), and $(3)								46			(76	)		18			20
Comprehensive income (loss)		(108	)		166			160			9			52			175
Net income (loss) attributable to noncontrolling interests, net of tax		9			10			7			10			16			20
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax		2			7			1			(2	)		3			5
Comprehensive income (loss) attributable to noncontrolling interests		11			17			8			8			19			25
Comprehensive income (loss) attributable to Cabot Corporation	$	(119	)	$	149		$	152		$	1		$	33		$	150

The accompanying notes are an integral part of these consolidated financial statements.

	December 31, 2021		September 30, 2021		March 31, 2022		September 30, 2021
	(In millions)				(In millions)
Current assets:
Cash and cash equivalents	$	179	$	168	$	215	$	168
Accounts and notes receivable, net of reserve for doubtful accounts of $4 and $4		660		645
Accounts and notes receivable, net of reserve for doubtful accounts of $3 and $4						791		645
Inventories:
Raw materials		154		168		193		168
Finished goods		341		300		386		300
Other		51		55		54		55
Total inventories		546		523		633		523
Prepaid expenses and other current assets		113		89		139		89
Assets held for sale		111		—
Total current assets		1,609		1,425		1,778		1,425
Property, plant and equipment, net		1,267		1,376		1,291		1,376
Goodwill		140		140		141		140
Equity affiliates		14		40		16		40
Intangible assets, net		70		100		70		100
Deferred income taxes		57		53		63		53
Other assets		158		172		165		172
Total assets	$	3,315	$	3,306	$	3,524	$	3,306

The accompanying notes are an integral part of these consolidated financial statements.

	December 31, 2021			September 30, 2021			March 31, 2022			September 30, 2021
	(In millions, except share						(In millions, except share
	and per share amounts)						and per share amounts)
Current liabilities:
Short-term borrowings	$	226		$	72		$	253		$	72
Accounts payable and accrued liabilities		620			667			737			667
Income taxes payable		37			35			44			35
Current portion of long-term debt		373			373			373			373
Liabilities held for sale		71			—
Total current liabilities		1,327			1,147			1,407			1,147
Long-term debt		714			717			711			717
Deferred income taxes		73			73			73			73
Other liabilities		253			279			267			279
Contingencies (Note H)
Contingencies (Note G)
Stockholders' equity:
Preferred stock:
Authorized: 2,000,000 shares of $1 par value, Issued and Outstanding: NaN and NaN		—			—			—			—
Common stock:
Authorized: 200,000,000 shares of $1 par value, Issued: 56,723,411 and 56,870,237 shares, Outstanding: 56,579,992 and 56,726,818 shares		57			57
Less cost of 143,419 and 143,419 shares of common treasury stock		(4	)		(4	)
Authorized: 200,000,000 shares of $1 par value, Issued: 56,571,822 and 56,870,237 shares, Outstanding: 56,431,554 and 56,726,818 shares								57			57
Less cost of 140,268 and 143,419 shares of common treasury stock								(4	)		(4	)
Additional paid-in capital		11			24			4			24
Retained earnings		1,049			1,159			1,135			1,159
Accumulated other comprehensive income (loss)		(319	)		(289	)		(274	)		(289	)
Total Cabot Corporation stockholders' equity		794			947			918			947
Noncontrolling interests		154			143			148			143
Total stockholders' equity		948			1,090			1,066			1,090
Total liabilities and stockholders' equity	$	3,315		$	3,306		$	3,524		$	3,306

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended December 31						Six Months Ended March 31
	2021			2020			2022			2021
	(In millions)						(In millions)
Cash Flows from Operating Activities:
Net income (loss)	$	(80	)	$	70		$	34		$	155
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		39			39			75			77
Purification Solutions assets held for sale impairment charge		197			—
Loss on sale of business and asset impairment charge								204			—
Gain on bargain purchase of a business								(24	)		—
Deferred tax provision (benefit)		(36	)		(2	)		(45	)		1
Employee benefit plan settlement		—			6			—			6
Equity in earnings of affiliated companies		(1	)		—			(4	)		(1	)
Non-cash compensation		6			4			11			10
Other non-cash (income) expense		5			5			8			19
Cash dividends received from equity affiliates								—			1
Changes in assets and liabilities:
Accounts and notes receivable		(57	)		(76	)		(161	)		(155	)
Inventories		(95	)		(37	)		(177	)		(80	)
Prepaid expenses and other assets		(27	)		(10	)		(55	)		(8	)
Accounts payable and accrued liabilities		9			14			84			56
Income taxes payable		3			7			10			12
Other liabilities		(12	)		1			1			(7	)
Cash provided (used) by operating activities		(49	)		21			(39	)		86
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(30	)		(29	)		(71	)		(69	)
Proceeds from sale of business								79			—
Cash assumed from acquisition of business								5			—
Other		1			—			2			3
Cash provided (used) by investing activities		(29	)		(29	)		15			(66	)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings								13			—
Proceeds from issuance (repayments) of commercial paper, net		156			—			167			31
Proceeds from long-term debt		—			50			—			100
Repayments of long-term debt		(5	)		(66	)		(7	)		(117	)
Purchases of common stock		(19	)		(2	)		(34	)		(2	)
Proceeds from sales of common stock		—			1			3			2
Cash dividends paid to noncontrolling interests		(8	)		(1	)		(15	)		(1	)
Cash dividends paid to common stockholders		(21	)		(20	)		(42	)		(40	)
Cash provided (used) by financing activities		103			(38	)		85			(27	)
Effects of exchange rate changes on cash		(15	)		42			(16	)		6
Increase (decrease) in cash, cash equivalents and restricted cash		10			(4	)		45			(1	)
Cash, cash equivalents and restricted cash at beginning of period		170			151			170			151
Cash, cash equivalents and restricted cash at end of period	$	180		$	147		$	215		$	150

The following table presents the Company’s cash, cash equivalents and restricted cash by category within the Consolidated Balance Sheets:

	December 31, 2021		December 31, 2020		March 31, 2022		March 31, 2021
	(In millions)				(In millions)
Cash and cash equivalents	$	179	$	147	$	215	$	146
Restricted cash classified within Prepaid expenses and other current assets		1		—		—		4
Cash, cash equivalents and restricted cash	$	180	$	147	$	215	$	150

The accompanying notes are an integral part of these consolidated financial statements.

	Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling		Total Stockholders’			Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests		Equity			Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity
	(In millions, except share amounts)																						(In millions, except share amounts)
Balance at September 30, 2021		56,727		$	53	$	24		$	1,159		$	(289	)	$	947		$	143	$	1,090			56,727		$	53	$	24		$	1,159		$	(289	)	$	947		$	143		$	1,090
Net income (loss)										(89	)					(89	)		9		(80	)										(89	)					(89	)		9			(80	)
Total other comprehensive income (loss)													(30	)		(30	)		2		(28	)													(30	)		(30	)		2			(28	)
Cash dividends paid:
Common stock, $0.37 per share										(21	)					(21	)				(21	)										(21	)					(21	)					(21	)
Issuance of stock under equity compensation plans		202			—		—									—					—			202			—		—									—						—
Amortization of share-based compensation							6									6					6								6									6						6
Purchase and retirement of common stock		(349	)		—		(19	)		—						(19	)				(19	)		(349	)		—		(19	)		—						(19	)					(19	)
Balance at December 31, 2021		56,580		$	53	$	11		$	1,049		$	(319	)	$	794		$	154	$	948			56,580		$	53	$	11		$	1,049		$	(319	)	$	794		$	154		$	948
Net income (loss)																																107						107			7			114
Total other comprehensive income (loss)																																			45			45			1			46
Cash dividends paid:
Common stock, $0.37 per share																																(21	)					(21	)					(21	)
Cash dividends declared to noncontrolling interests																																						—			(14	)		(14	)
Issuance of stock under equity compensation plans																								72			—		3									3						3
Amortization of share-based compensation																													5									5						5
Purchase and retirement of common stock																								(221	)		—		(15	)								(15	)					(15	)
Balance at March 31, 2022																								56,431		$	53	$	4		$	1,135		$	(274	)	$	918		$	148		$	1,066

The accompanying notes are an integral part of these consolidated financial statements.

	Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’			Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity			Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity
	(In millions, except share amounts)																							(In millions, except share amounts)
Balance at September 30, 2020		56,467		$	53	$	—		$	989		$	(351	)	$	691		$	123		$	814			56,467		$	53	$	—		$	989		$	(351	)	$	691		$	123		$	814
Net income (loss)										60						60			10			70											60						60			10			70
Total other comprehensive income (loss)													89			89			7			96														89			89			7			96
Cash dividends paid:
Common stock, $0.35 per share										(20	)					(20	)					(20	)										(20	)					(20	)					(20	)
Cash dividends declared to noncontrolling interests																—			(1	)		(1	)																—			(1	)		(1	)
Issuance of stock under equity compensation plans		192			—		1									1						1			192			—		1									1						1
Amortization of share-based compensation							4									4						4								4									4						4
Purchase and retirement of common stock		(53	)		—		(2	)								(2	)					(2	)		(53	)		—		(2	)								(2	)					(2	)
Amount reclassified to retained earnings in excess of additional paid in capital							(3	)		3						—						—								(3	)		3						—						—
Balance at December 31, 2020		56,606		$	53	$	-		$	1,032		$	(262	)	$	823		$	139		$	962			56,606		$	53	$	—		$	1,032		$	(262	)	$	823		$	139		$	962
Net income (loss)																																	75						75			10			85
Total other comprehensive income (loss)																																				(74	)		(74	)		(2	)		(76	)
Cash dividends paid:
Common stock, $0.35 per share																																	(20	)					(20	)					(20	)
Cash dividend declared to noncontrolling interests																																										(11	)		(11	)
Issuance of stock under equity compensation plans																									17			—		1									1						1
Amortization of share-based compensation																														6									6						6
Purchase and retirement of common stock																									(1	)													—						—
Amount reclassified to retained earnings in excess of additional paid in capital																														(7	)		7						—						—
Balance at March 31, 2021																									56,622		$	53	$	—		$	1,094		$	(336	)	$	811		$	136		$	947

The accompanying notes are an integral part of these consolidated financial statements.

The consolidated financial statements have been prepared in conformity with accounting policies generally accepted in the United States (“U.S.”) and include the accounts of Cabot Corporation (“Cabot” or the “Company”) and its wholly-owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights. Intercompany transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to Cabot’s Annual Report on Form 10-K for its fiscal year ended September 30, 2021 (“2021 10-K”).

The financial information submitted herewith is unaudited and reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year.

As discussed in Note C, on February 28, 2022, the Company acquired Tokai Carbon (Tianjin) Co. (“Tokai Carbon”). The results of operations and cash flows of Tokai Carbon are included in the Company’s consolidated financial statements from the date of acquisition.

As discussed in Note D, on March 1, 2022, the Company completed the sale of its Purification Solutions business to an affiliate of funds advised by One Equity Partners (“OEP”). The sale of the Purification Solutions business did not meet the criteria to be reported as a discontinued operation as it did not constitute a significant strategic business shift for the Company, and has no major effect on operations. Therefore, prior periods’ consolidated financial statements and disclosures have not been retroactively restated to reflect the impact of the sale of the Purification Solutions business.

In December 2019, the FASB issued a new standard Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance that reduces complexity in certain areas. The new standard is effective for fiscal years beginning after December 15, 2020. The Company adopted this standard on October 1, 2021. The adoption of this standard did not materially impact the Company’s consolidated financial statements.

In March 2020, the FASB issued a new standard on Reference Rate Reform, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The standard was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on its consolidated financial statements.

~~In November 2021, Cabot entered into an agreement with~~On February 28, 2022, the Company purchased 100% of the registered capital of Tokai Carbon, ~~Group to purchase its~~a carbon black manufacturing facility, ~~in Tianjin, China,~~from Tokai Carbon ~~(Tianjin) Co.,~~Group for ~~approximately~~a net purchase price of $9 million, ~~which is subject~~consisting of cash consideration payable of $14 million, including customary post-closing adjustments, and net of $5 million of cash acquired.

The provisional estimates of the fair value of assets and liabilities acquired as of February 28, 2022 are set forth below along with the calculation of the Gain on bargain purchase of a business based on the cash consideration payable.

The excess of the fair value of the net assets over the purchase price was recorded as a gain of $24 million for the period ended March 31, 2022. The Gain on bargain purchase of a business arose primarily due to necessary equipment upgrades that will be required after the ~~satisfaction or waiver~~purchase to continue to utilize the existing assets.

The payment of ~~customary closing adjustments. The purchase~~$14 million of cash consideration for the acquisition is expected to ~~close~~occur in the third quarter of fiscal 2022 and at March 31, 2022, was included in Accounts payable and accrued liabilities in the Consolidated Balances Sheets.

On March 1, 2022, the Company completed the sale of its Purification Solutions business, a reporting segment of the Company, to OEP for total expected cash proceeds of approximately $90 million, net of $7 million cash transferred. Upon completion of the sale, the Company received net cash proceeds of $79 million and recorded a receivable for $11 million, which are subject to customary post-closing adjustments. The $11 million receivable is included in Accounts and notes receivable on the Consolidated Balance Sheet at March 31, 2022. The Company expects to settle this receivable by the end of fiscal 2022.

The Company recognized a pre-tax loss on sale of the Purification Solutions business of $7 million in the second quarter of fiscal ~~2022.~~

~~In November 2021, the Company~~2022 and an affiliate of funds advised by One Equity Partners (“OEP”) entered into a Share Purchase Agreement (the “Agreement”) for the sale of Cabot’s Purification Solutions business (the “Business”), a reporting segment of the Company, subject to the satisfaction or waiver of the conditions set forth in the Agreement.

~~Under the terms of the Agreement, OEP will acquire the Business on a cash-free and debt-free basis in a transaction valued at approximately $111~~$197 million subject to certain debt-like and other closing adjustments, including a customary working capital adjustment. The net cash proceeds from the transaction are expected to be approximately $80 million, to be paid at the closing. The transaction is expected to close in the second quarter of fiscal 2022.

During the first quarter of fiscal 2022, the assets and liabilities of the Business met the criteria for assets held for sale. The sale of the Business does not meet the criteria to be reported as a discontinued operation as it does not constitute a significant strategic business shift that will have a major effect on the Company’s operations and financial results.

~~In addition, based on the carrying value of the Business as of December 31, 2021 and an estimate of its fair value less costs to sell, Cabot recorded a~~ pre-tax impairment charge ~~of $197 million ($160 million after-tax)~~ in the first quarter of fiscal 2022.

The ~~following table summarizes~~total after-tax loss on sale and impairment charge was $167 million for the ~~carrying amounts of the major classes of assets and liabilities of the Business classified as~~ ~~held for sale as of December~~six months ended March 31, ~~2021, and the associated impairment charge:~~2022.

In September 2020, the Company entered into an agreement to sell its lignite mine located in Marshall, Texas to ADA Carbon Solutions, LLC (“ADACS”) for a nominal amount. As part of the transaction, the Company agreed to fund a portion of the costs ADACS expects to incur to close the mine. Additionally, in conjunction with the sale of the mine, the Business entered into a long-term supply agreement with ADACS, a producer of lignite-based activated carbon, which included an agreement for the Company to fund certain capital expenditures. ~~As of December 31, 2021,~~These liabilities totaled $11 million, ~~was included~~which the Company settled in ~~Accounts payable and accrued liabilities on~~full with ADACS during the ~~Consolidated Balance Sheets for these mine closure costs and capital expenditures. In~~second quarter of fiscal 2022 in connection with the sale of the ~~Business, the Company plans to settle this liability in full with ADACS in the second quarter of fiscal 2022.~~Business.

~~Other postretirement benefit costs were less than $1 million for each of the three months ended December 31, 2021 and 2020.~~

The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 are as follows:

	Reinforcement Materials		Performance Chemicals		Total		Reinforcement Materials		Performance Chemicals		Total
	(In millions)						(In millions)
Balance at September 30, 2021	$	48	$	92	$	140	$	48	$	92	$	140
Foreign currency impact		—		—		—		—		1		1
Balance at December 31, 2021	$	48	$	92	$	140
Balance at March 31, 2022							$	48	$	93	$	141

The following table provides information regarding the Company’s intangible assets:

Intangible assets are amortized over their estimated useful lives, which range between ten and twenty-five years, with a weighted average amortization period of approximately seventeen years. Amortization expense was $1 million and $2 million for ~~each of~~ the three months ended ~~December~~March 31, 2022 and 2021, respectively, and ~~2020~~$3 million and $4 million for the six months ended March 31, 2022 and 2021, respectively. Amortization expense is included in Cost of sales, Selling and administrative expenses and Research and technical expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $6 million each year for the next five fiscal years.

Comprehensive income combines net income (loss) and other comprehensive income items, which are reported as components of stockholders’ equity in the accompanying Consolidated Balance Sheets.

	Currency Translation Adjustment			Pension and Other Postretirement Benefit Liability Adjustments			Total			Currency Translation Adjustment			Pension and Other Postretirement Benefit Liability Adjustments			Total
	(In millions)									(In millions)
Balance at September 30, 2021, attributable to Cabot Corporation	$	(265	)	$	(24	)	$	(289	)	$	(265	)	$	(24	)	$	(289	)
Other comprehensive income (loss) before reclassifications		(28	)		1			(27	)		(28	)		1			(27	)
Amounts reclassified from AOCI		(1	)		—			(1	)		(1	)		—			(1	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		2			—			2			2			—			2
Balance at December 31, 2021, attributable to Cabot Corporation	$	(296	)	$	(23	)	$	(319	)		(296	)		(23	)		(319	)
Other comprehensive income (loss) before reclassifications											12			1			13
Amounts reclassified from AOCI											33			—			33
Less: Other comprehensive income (loss) attributable to noncontrolling interests											1			—			1
Balance at March 31, 2022, attributable to Cabot Corporation										$	(252	)	$	(22	)	$	(274	)

The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in each of the three and six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:

	Affected Line Item in the Consolidated	Three Months Ended December 31						Affected Line Item in the Consolidated	Three Months Ended March 31						Six Months Ended March 31
	Statements of Operations	2021			2020			Statements of Operations	2022			2021			2022			2021
		(In millions)							(In millions)
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense	Interest expense	$	(1	)	$	(1	)	Interest expense	$	(2	)	$	(2	)	$	(3	)	$	(3	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense								Interest expense		1			1			1			1
Release of currency translation adjustment								Loss on sale of business and asset impairment charge		33			—			33			—
Pension and other postretirement
Release of actuarial losses and prior service cost (credit)								Loss on sale of business and asset impairment charge		1			—			1			—
Amortization of actuarial losses and prior service cost (credit)	Net Periodic Benefit Cost (Note E)		—			1		Net Periodic Benefit Cost		—			—			—			1
Settlement charge	Net Periodic Benefit Cost (Note E)		—			6		Net Periodic Benefit Cost		—			—			—			6
Total before tax		$	(1	)	$	6			$	33		$	(1	)	$	32		$	5

Cabot has exposure in connection with a safety respiratory products business that a subsidiary acquired from American Optical Corporation (“AO”) in an April 1990 asset purchase transaction. The subsidiary manufactured respirators under the AO brand and disposed of that business in July 1995. In connection with its acquisition of the business, the subsidiary agreed, in certain circumstances, to assume a portion of AO’s liabilities, including costs of legal fees together with amounts paid in settlements and judgments, allocable to AO respiratory products used prior to the 1990 purchase by the Cabot subsidiary. In exchange for the subsidiary’s assumption of certain of AO’s respirator liabilities, AO agreed to provide to the subsidiary the benefits of: (i) AO’s insurance coverage for the period prior to the 1990 acquisition and (ii) a former owner’s indemnity of AO holding it harmless from any liability allocable to AO respiratory products used prior to May 1982. As more fully described in the 2021 10-K, the respirator liabilities generally involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, allegedly resulting from the use of respirators that are alleged to have been negligently designed and/or labeled. At no time did this respiratory product line represent a significant portion of the respirator market. In addition to Cabot’s subsidiary, other parties are responsible for significant portions of the costs of these respirator liabilities (as defined in the 2021 10-K, the “Payor Group”).

Cabot has a reserve to cover its expected share of liabilities for pending and future respirator liability claims, which is included in Other liabilities and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. The Company expects these liabilities to be incurred over a number of years.The reserve ~~was~~balance decreased from $44 million at ~~both December 31, 2021 and~~ September 30, ~~2021.~~2021 to $42 million at March 31, 2022, representing the net impact from a charge to the reserve and settlement payments made during the six month period ended March 31, 2022.

The Company’s current estimate of the cost of its share of pending and future respirator liability claims is based on facts and circumstances existing at this time, including the number and nature of the remaining claims. Developments that could affect the Company’s estimate include, but are not limited to, (i) significant changes in the number of future claims, (ii) changes in the rate of dismissals without payment of pending claims, (iii) significant changes in the average cost of resolving claims, including potential settlements of groups of claims, (iv) significant changes in the legal costs of defending these claims, (v) changes in the nature of claims received or changes in our assessment of the viability of these claims, (vi) trial and appellate outcomes, (vii) changes in the law and procedure applicable to these claims, (viii) the financial viability of the parties that contribute to the payment of respirator claims, (ix) exhaustion or changes in the recoverability of the insurance coverage maintained by certain members of the Payor Group, or a change in the availability of the indemnity provided by a former owner of AO, (x) changes in the allocation of costs among the various parties paying legal and settlement costs, and (xi) a determination that the assumptions that were used to estimate Cabot’s share of liability are no longer reasonable. The Company cannot determine the impact of these potential developments on its current estimate of its share of liability for existing and future claims. Because reserves are limited to amounts that are probable and estimable as of a relevant measurement date, and there is inherent difficulty in projecting the impact of

potential developments on Cabot’s share of liability for these existing and future claims, it is reasonably possible that the liabilities for existing and future claims could change in the near term and that change could be material.

In July 2021, the Company’s Specialty Compounds manufacturing and research and development facility in Pepinster, Belgium experienced significant flooding. Full production is temporarily halted and is not expected to resume until the second quarter of fiscal 2022. During fiscal 2021, the Company recorded expenses of $17 million for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds.

During the first quarter of fiscal 2022 the Company recorded additional expenses of $5 million for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds as the Company expects insurance proceeds in excess of the total incurred costs and policy deductibles. The flood-related expenses and loss recovery are both included within Cost of sales in the Consolidated Statements of Operations for the first quarter of fiscal 2022.

During fiscal 2021, the Company received insurance proceeds of $8 million. During the first quarter of fiscal 2022, the Company received additional insurance proceeds of $5 million which is included in Cash provided by operating activities in the Consolidated Statements of Cash Flows for the first quarter of fiscal 2022. At both December 31, 2021 and September 30, 2021 the receivable for insurance recoveries was $9 million and is included in Accounts and notes receivable on the Consolidated Balance Sheet.

The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to its divested businesses. The Company does not believe that any of these matters will have a material adverse effect on its financial position; however, litigation is inherently unpredictable. Cabot could incur judgments, enter into settlements or revise its expectations regarding the outcome of certain matters, and such developments could have a material impact on its results of operations in the period in which the amounts are accrued or its cash flows in the period in which the amounts are paid.

In July 2021, the Company’s Specialty Compounds manufacturing and research and development facility in Pepinster, Belgium experienced significant flooding. Full production was temporarily halted and has resumed in the second quarter of fiscal 2022. During fiscal 2021, the Company recorded expenses of $17 million for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds.

For the three and six months ended March 31, 2022, the Company recorded additional expenses of $1 million and $6 million, respectively, for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds as the Company expects insurance proceeds in excess of the total incurred costs and policy deductibles. The flood-related expenses and loss recoveries are both included within Cost of sales in the Consolidated Statements of Operations for the three and six months ended March 31, 2022.

During fiscal 2021, the Company received insurance proceeds of $8 million. For the three and six months ended March 31, 2022, the Company received additional insurance proceeds of $2 million and $7 million, respectively. In the six months ended March 31, 2022, this amount included $1 million in Cash provided by investing activities and $6 million in Cash provided by operating activities in the Consolidated Statements of Cash Flows. At March 31, 2022 and September 30, 2021, the receivable for insurance recoveries was $8 million and $9 million, respectively, and is included in Accounts and notes receivable on the Consolidated Balance Sheet.

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(Dollars in millions)						(Dollars in millions)
(Provision) benefit for income taxes	$	12		$	(29	)	$	(36	)	$	(34	)	$	(24	)	$	(63	)
Effective tax rate		13	%		29	%		24	%		29	%		44	%		29	%

For the three and six months ended ~~December~~March 31, 2022, the (Provision) benefit for income taxes included a net discrete tax expense of $1 million and a net discrete tax benefit of $36 million, respectively, after valuation allowance. The $36 million benefit is primarily related to the Purification Solutions business divestiture. For the three and six months ended March 31, 2021, the (Provision) benefit for income taxes included a net discrete tax benefit of ~~$37~~$1 million~~after valuation allowance which was recorded as part of the pending Purification Solutions business divestiture~~ and ~~assets held for sale impairment. For the three months ended December 31, 2020, the (Provision) benefit for income taxes included~~ a net discrete tax expense of ~~$2 million.~~$1 million, respectively.

Cabot generated a U.S. tax benefit of $183 million from the tax loss related to the divestiture of the Purification Solutions business. This benefit was fully offset with a valuation allowance.

The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. The income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction.

Valuation allowances are provided against the future tax benefits that arise from the deferred tax assets in jurisdictions for which no benefit can be recognized. The estimated annual effective tax rate may be significantly impacted by nondeductible expenses and the Company’s projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.

Cabot and certain subsidiaries are under audit in a number of jurisdictions. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a change in the unrecognized tax benefits may also occur within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of limitations. However, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time.

Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2018 through 2020 tax years generally remain subject to examination by the IRS and various tax years from 2005 through 2020 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2005 through ~~2020~~2021 remain subject to examination by their respective tax authorities.

During ~~each of~~ the three and six months ended ~~December~~March 31, ~~2021 and 2020,~~2022, Cabot released uncertain tax positions of $1 million and $2 million, respectively, due to the expiration of statutes of limitations in various jurisdictions. During the three and six months ended March 31, 2021, Cabot released uncertain tax positions of less than $1 million and $1 million, respectively, due to the expiration of statutes of limitations in various jurisdictions.

The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations:

	Three Months Ended December 31					Three Months Ended March 31				Six Months Ended March 31
	2021			2020		2022		2021		2022		2021
	(In millions, except per share amounts)					(In millions, except per share amounts)
Basic EPS:
Net income (loss) attributable to Cabot Corporation	$	(89	)	$	60	$	107	$	75	$	18	$	135
Less: Dividends and dividend equivalents to participating securities		—			—		1		—		1		—
Less: Undistributed earnings allocated to participating securities⁽¹⁾		—			—
Less: Undistributed earnings allocated to participating securities⁽¹⁾							1		1		—		1
Earnings (loss) allocated to common shareholders (numerator)	$	(89	)	$	60	$	105	$	74	$	17	$	134

Weighted average common shares and participating securities outstanding		57.7			57.2		57.5		57.4		57.4		57.3
Less: Participating securities⁽¹⁾		0.9			0.7
Less: Participating securities⁽¹⁾							0.9		0.8		0.9		0.7
Adjusted weighted average common shares (denominator)		56.8			56.5		56.6		56.6		56.5		56.6

Earnings (loss) per common share - basic:	$	(1.57	)	$	1.06	$	1.86	$	1.31	$	0.30	$	2.37

Diluted EPS:
Earnings (loss) allocated to common shareholders	$	(89	)	$	60	$	105	$	74	$	17	$	134
Plus: Earnings allocated to participating securities		—			—		2		1		1		1
Less: Adjusted earnings allocated to participating securities⁽²⁾		—			—
Less: Adjusted earnings allocated to participating securities⁽²⁾							2		1		1		1
Earnings (loss) allocated to common shareholders (numerator)	$	(89	)	$	60	$	105	$	74	$	17	$	134

Adjusted weighted average common shares outstanding		56.8			56.5		56.6		56.6		56.5		56.6
Effect of dilutive securities:
Common shares issuable⁽³⁾		—			0.1
Common shares issuable⁽³⁾							0.5		0.1		0.4		0.1
Adjusted weighted average common shares (denominator)		56.8			56.6		57.1		56.7		56.9		56.7

Earnings (loss) per common share - diluted:	$	(1.57	)	$	1.06	$	1.84	$	1.30	$	0.30	$	2.36

Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows:

	Three Months Ended December 31					Three Months Ended March 31				Six Months Ended March 31
	2021			2020		2022		2021		2022			2021
	(In millions)					(In millions)
Calculation of undistributed earnings (loss):
Net income (loss) attributable to Cabot Corporation	$	(89	)	$	60	$	107	$	75	$	18		$	135
Less: Dividends declared on common stock		21			20		21		20		42			40
Less: Dividends declared on participating securities		—			—		1		—		1			—
Undistributed earnings (loss)	$	(110	)	$	40	$	85	$	55	$	(25	)	$	95

Allocation of undistributed earnings (loss):
Undistributed earnings (loss) allocated to common shareholders	$	(110	)	$	40	$	84	$	54	$	(25	)	$	94
Undistributed earnings allocated to participating shareholders		—			—		1		1		—			1
Undistributed earnings (loss)	$	(110	)	$	40	$	85	$	55	$	(25	)	$	95

~~Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three months ended December 31, 2021 and 2020 as follows:~~

~~Details of all restructuring activities and the related reserves during the three months ended December 31, 2021 were as follows:~~

Cabot’s severance and employee benefit reserves and other closure related reserves are reflected in Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheets. Cabot’s environmental remediation reserves related to restructuring activities are reflected in Other liabilities on the Company’s Consolidated Balance Sheets.

Beginning in fiscal 2020, the Company has been undertaking various actions that it believes will enable it to perform certain activities more effectively. These actions have primarily consisted of the reorganization of Cabot’s leadership structure, the creation of a Global Business Services function and other operational efficiency initiatives. As of December 31, 2021, the Company had recorded total charges of $24 million, of which $22 million was recorded in prior fiscal years, primarily related to severance costs, and also had $4 million of accrued severance charges in the Consolidated Balance Sheets related to these actions. The Company expects to record additional restructuring charges of approximately $1 million throughout the rest of fiscal 2022 and $2 million thereafter, primarily related to severance and site demolition costs associated with these reorganization activities. As of December 31, 2021, the Company had paid a total of $19 million in cash, of which $18 million was paid in prior fiscal years, and expects to have future cash outlays of approximately $4 million in the remainder of fiscal 2022 and $3 million thereafter related to these reorganization activities.

The FASB authoritative guidance on fair value measurements defines fair value, provides a framework for measuring fair value, and requires certain disclosures about fair value measurements. The required disclosures focus on the inputs used to measure fair value. The guidance establishes the following hierarchy for categorizing these inputs:

There were 0 transfers of financial assets or liabilities measured at fair value between Level 1 and Level 2 and there were no Level 3 investments during the first ~~three~~six months of either fiscal 2022 or 2021.

At ~~December~~March 31, ~~2021~~2022 and September 30, 2021, Cabot had derivatives relating to foreign currency risks, including a net investment hedge and forward foreign currency contracts, carried at fair value. At ~~December~~March 31, ~~2021,~~2022, the fair value of these derivatives was a net ~~asset~~liability of $3$2 million and was included in Prepaid expenses and other current assets, Accounts payable and accrued liabilities, and Other ~~assets~~liabilities on the Consolidated Balance Sheets. At September 30, 2021, the fair value of these derivatives was a net asset of $3 million and was included in Prepaid expenses and other current assets, Accounts payable and accrued liabilities, and Other assets on the Consolidated Balance Sheets. These derivatives are classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on observable inputs.

At each of ~~December~~March 31, ~~2021~~2022 and September 31, 2021, the fair value of guaranteed investment contracts included in Other assets on the Consolidated Balance Sheets was $10 million. Guaranteed investment contracts were classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on other observable inputs.

At ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and short-term borrowings and variable rate debt approximated their carrying values due to the short-term nature of these instruments. The carrying value and fair value of the long-term fixed rate debt were $1.06 billion and ~~$1.12~~$1.07 billion, respectively, as of ~~December~~March 31, ~~2021,~~2022, and $1.06 billion and $1.13 billion, respectively, as of September 30, 2021. The fair values of Cabot’s fixed rate long-term debt are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of Cabot’s floating rate long-term debt and finance and operating lease obligations approximate their fair values. All such measurements are based on observable inputs and are classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model.

Cabot’s international operations are subject to certain risks, including currency exchange rate fluctuations and government actions. Cabot endeavors to match the currency in which debt is issued to the currency of the Company’s major, stable cash receipts. In some situations, Cabot has issued debt denominated in U.S. dollars and then entered into cross-currency swaps that exchange the dollar principal and interest payments into Euro-denominated principal and interest payments.

Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot may enter into cross-currency swaps to mitigate the impact of currency rate changes on the Company’s net investments.

The Company also has foreign currency exposure arising from the denomination of monetary assets and liabilities in foreign currencies other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the dollar value of future cash flows generated in foreign currencies. Accordingly, Cabot uses short-term forward contracts to minimize the exposure to foreign currency risk. In certain situations where the Company has forecasted purchases under a long-term commitment or forecasted sales denominated in a foreign currency, Cabot may enter into appropriate financial instruments in accordance with the Company’s risk management policy to hedge future cash flow exposures.

~~The following table provides details of the derivatives held as of December 31, 2021 and September 30, 2021 to manage foreign currency risk.~~

The Company has cross-currency swaps with a notional amount of $250 million, which are designated as hedges of its net investments in certain Euro-denominated subsidiaries. Cash settlements occur semi-annually on March 15^th ~~and September 15~~^th for fixed rate interest payments and a cash exchange of the notional currency amount will occur at the end of the term in 2026. As of December 31, 2021, the fair value of these swaps was an asset of $3 million and was included in Prepaid expenses and other current assets and Other assets and the cumulative gain of $5 million was included in AOCI on the Consolidated Balance Sheets. As of September 30, 2021, the fair value of these swaps was an asset of $3 million and was included in Prepaid expenses and other current assets and Other assets, and the cumulative gain of $6 million was included in AOCI on the Consolidated Balance Sheets.

~~The following table summarizes the impact of the cross-currency swaps to AOCI and the Consolidated Statements of Operations:~~

The Company identifies a product line as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Cabot’s President and Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments are determined to have similar economic characteristics and if the operating segments are similar in the following areas: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the regulatory environment.

The Company has 32 reportable ~~segments:~~segments consisting of Reinforcement Materials and Performance ~~Chemicals and Purification Solutions. In November 2021, the Company entered into an agreement to sell the~~Chemicals. The Company’s former Purification Solutions ~~business as discussed~~segment was a separate reporting segment prior to divestiture in ~~Note D. Upon consummation~~the second quarter of ~~the transaction, the Company will be organized into 2 reportable segments.~~fiscal 2022.

The Reinforcement Materials segment combines the reinforcing carbons and engineered elastomer composites product lines.

The Performance Chemicals segment combines the specialty carbons, fumed metal oxides, battery materials and aerogel product lines into the Performance Additives business, and combines the specialty compounds and inkjet colorants product lines into the Formulated Solutions business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and therefore have been aggregated into 1 reportable segment. The net sales from each of these businesses for the three and six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:

	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2021		2020		2022		2021		2022		2021
	(In millions)				(In millions)
Performance Additives	$	227	$	184	$	266	$	203	$	493	$	387
Formulated Solutions		75		83		94		91		169		174
Total Performance Chemicals	$	302	$	267	$	360	$	294	$	662	$	561

The Purification Solutions segment ~~consists~~consisted of the Company’s activated carbon business.

Income (loss) before income taxes (“Segment EBIT”) is presented for each reportable segment in the table below. Segment EBIT excludes Interest expense, general unallocated income (expense), unallocated corporate costs, and certain items, meaning items management does not consider representative of on-going operating segment results. In addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable.

	Reinforcement Materials		Performance Chemicals		Purification Solutions			Segment Total		Unallocated and Other⁽¹⁾			Consolidated Total			Reinforcement Materials		Performance Chemicals		Purification Solutions		Segment Total		Unallocated and Other⁽¹⁾			Consolidated Total
	(In millions)															(In millions)
Three Months Ended December 31, 2021
Revenues from external customers⁽²⁾	$	541	$	302	$	61		$	904	$	64		$	968
Income (loss) before income taxes⁽³⁾	$	85	$	52	$	—		$	137	$	(230	)	$	(93	)
Three Months Ended March 31, 2022
Revenues from external customers⁽²⁾																$	627	$	360	$	36	$	1,023	$	69		$	1,092
Income (loss) before income taxes⁽³⁾																$	101	$	70	$	—	$	171	$	(24	)	$	147

Three Months Ended December 31, 2020
Revenues from external customers⁽²⁾	$	375	$	267	$	59		$	701	$	45		$	746
Income (loss) before income taxes⁽³⁾	$	88	$	54	$	(2	)	$	140	$	(41	)	$	99
Three Months Ended March 31, 2021
Revenues from external customers⁽²⁾																$	434	$	294	$	63	$	791	$	51		$	842
Income (loss) before income taxes⁽³⁾																$	89	$	58	$	2	$	149	$	(31	)	$	118

Six Months Ended March 31, 2022
Revenues from external customers⁽²⁾																$	1,168	$	662	$	97	$	1,927	$	133		$	2,060
Income (loss) before income taxes⁽³⁾																$	186	$	122	$	—	$	308	$	(254	)	$	54

Six Months Ended March 31, 2021
Revenues from external customers⁽²⁾																$	809	$	561	$	122	$	1,492	$	96		$	1,588
Income (loss) before income taxes⁽³⁾																$	177	$	112	$	—	$	289	$	(72	)	$	217

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Shipping and handling fees	$	39		$	33		$	41		$	38		$	80		$	71
By-product sales		28			17			33			18			61			35
Other		(3	)		(5	)		(5	)		(5	)		(8	)		(10	)
Total	$	64		$	45		$	69		$	51		$	133		$	96

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Interest expense	$	(12	)	$	(12	)	$	(11	)	$	(13	)	$	(23	)	$	(25	)
Certain items^(a)
Purification Solutions assets held for sale impairment charge (Note D)		(197	)		—
Gain on bargain purchase of a business (Note C)								24			—			24			—
Loss on sale of business and asset impairment charge (Note D)								(7	)		—			(204	)		—
Legal and environmental matters and reserves								(7	)		—			(8	)		—
Divestiture related charges		(4	)		—			(1	)		—			(5	)		—
Global restructuring activities (Note K)		(2	)		(3	)
Legal and environmental matters and reserves		(1	)		—
Acquisition and integration-related charges		(1	)		(1	)		(2	)		(1	)		(3	)		(2	)
Global restructuring activities								—			(1	)		(2	)		(4	)
Employee benefit plan settlement and other charges		—			(6	)		—			1			—			(5	)
Other		1			(1	)		—			—			1			(1	)
Total certain items, pre-tax		(204	)		(11	)		7			(1	)		(197	)		(12	)
Unallocated corporate costs^(b)		(14	)		(13	)		(16	)		(16	)		(30	)		(29	)
General unallocated income (expense)^(c)		1			(5	)		(1	)		—			—			(5	)
Less: Equity in earnings of affiliated companies, net of tax^(d)		1			—			3			1			4			1
Total	$	(230	)	$	(41	)	$	(24	)	$	(31	)	$	(254	)	$	(72	)

The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region.

	Three Months Ended December 31, 2021								Three Months Ended March 31, 2022
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total		Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)								(In millions)
Americas	$	206	$	90	$	27	$	323	$	252	$	110	$	16	$	378
Asia Pacific		240		136		8		384		245		138		6		389
Europe, Middle East and Africa		95		76		26		197		130		112		14		256
Segment revenues from external customers		541		302		61		904		627		360		36		1,023
Unallocated and other								64								69
Net sales and other operating revenues							$	968							$	1,092

	Three Months Ended December 31, 2020								Six Months Ended March 31, 2022
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total		Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)								(In millions)
Americas	$	149	$	69	$	25	$	243	$	458	$	200	$	43	$	701
Asia Pacific		155		118		9		282		485		274		14		773
Europe, Middle East and Africa		71		80		25		176		225		188		40		453
Segment revenues from external customers		375		267		59		701		1,168		662		97		1,927
Unallocated and other								45								133
Net sales and other operating revenues							$	746							$	2,060

Our critical accounting policies have not substantially changed from those described in the 2021 10-K.

Refer to the discussion under the headings “Recently Adopted Accounting Standards” and “Recent Accounting Pronouncements” in Note B of our Notes to the Consolidated Financial Statements.

~~Cabot is organized into three~~The Company has two reportable ~~business segments:~~segments consisting of Reinforcement Materials and Performance ~~Chemicals, and Purification Solutions. In November 2021, the Company entered into an agreement to sell the~~Chemicals. The Company’s former Purification Solutions ~~business as discussed~~segment was a separate reporting segment prior to divestiture in ~~Note D~~the second quarter of ~~our Notes to the Consolidated Financial Statements. Upon consummation of the transaction, the Company will be organized into two reportable segments.~~fiscal 2022. Cabot is also organized for operational purposes into three geographic regions: the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific. The discussion of our results of operations for the periods presented reflects these structures.

Our analysis of our financial condition and operating results should be read with our consolidated financial statements and accompanying notes.

When discussing our results of operations, we use several terms as described below.

The term “product mix” refers to the mix of types and grades of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business and/or segment.

Our discussion under the heading “(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate” includes a discussion and reconciliation of our “effective tax rate” and our “operating tax rate” for the periods presented, as well as management’s projection of our operating tax rate range for the full fiscal year. Our operating tax rate is a non-GAAP financial measure and should not be considered as an alternative to our effective tax rate, the most comparable GAAP financial measure. The operating tax rate is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes. Our definition of the operating tax rate may not be comparable to the definition used by other companies. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Our discussion under the heading ~~“First~~“Second Quarter of Fiscal 2022 versus ~~First~~Second Quarter of Fiscal 2021—By Business Segment” includes a discussion of Total segment EBIT, which is a non-GAAP financial measure defined as Income (loss) before income taxes and equity in earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our reportable segments, provides useful supplemental information for our investors as it is an important indicator of our operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Our definition of Total segment EBIT may not be comparable to the definition used by other companies and it should not be considered an alternative for Income (loss) before income taxes and equity in earnings of affiliated companies, which is the most directly comparable GAAP financial measure. A reconciliation of Total segment EBIT to Income (loss) before income taxes and equity in earnings of affiliated companies is provided under the heading ~~“First~~“Second quarter of Fiscal 2022 versus ~~First~~Second quarter of Fiscal 2021—By Business Segment”. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another.

In calculating Total segment EBIT, we exclude from our Income (loss) before income taxes and equity in earnings of affiliated companies (i) items of expense and income that management does not consider representative of our fundamental on-going segment results, which we refer to as “certain items”, and (ii) items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to special projects and initiatives, which we refer to as “other unallocated items”. Management believes excluding the items identified as certain items facilitates operating performance comparisons from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis and also facilitates an evaluation of our operating performance without the impact of these costs or benefits. The items of income and expense that we exclude from Total segment EBIT but that are included in our GAAP Income (loss) before income taxes and equity in earnings of affiliated companies,, as applicable in a particular reporting period, include, but are not limited to, the following:

During the ~~first~~second quarter of fiscal 2022, Income (loss) before income taxes and equity in earnings of affiliated companies ~~was a loss of $93 million as~~increased compared to ~~income of $99 million in~~ the ~~first~~second quarter of fiscal 2021. The ~~decrease~~increase was driven by ~~the Purification Solutions assets held for sale impairment charge of $197 million due to the planned divestiture of the business, partially offset by strong~~increased earnings across our ~~segments.~~Reinforcement Materials and Performance Chemicals segments and a gain on the Tokai Carbon acquisition.

We continue to closely monitor possible impacts to our business as a result of the COVID-19 pandemic. Despite the improvement in demand for our products since the early days of the pandemic in fiscal 2020, the duration and scope of the COVID-19 pandemic continues to be uncertain. Infection rates remain high in many parts of the world and the virulence and spread of different strains of the virus and the level and timing of COVID-19 vaccine distribution across the world will impact the economic recovery and growth and the general economic consequences of the pandemic. In addition, the COVID-19 pandemic and other factors are having a negative impact on the cost and availability of global transportation and the availability of semi-conductor chips for the automotive industry. If these conditions persist or intensify, they could negatively impact our results. Further, the COVID-19 pandemic has also contributed to increased costs and decreased availability of labor and materials for construction projects, and these factors have increased the costs of our capital improvement projects and may delay our completion of such projects.

~~First~~Second quarter of Fiscal 2022 versus ~~First~~Second quarter of Fiscal 2021—Consolidated

The ~~$222~~$250 million increase in net sales and other operating revenues in the ~~first~~second quarter of fiscal 2022 compared to the ~~first~~second quarter of fiscal 2021 was driven by favorable price and product mix (combined ~~$207~~$269 million) across ~~all~~our Reinforcement Materials and Performance Chemicals segments, ~~and~~ increased energy center by-product revenue ($1115 million) and higher volumes primarily in Reinforcement Materials ($12 million). These increases were partially offset by ~~lower volumes~~the divestiture of our Purification Solutions segment ($627 million) in the second quarter of fiscal 2022 and unfavorable impact from foreign currency translation ($21 million).

The $472 million increase in net sales and other operating revenues in the first six months of fiscal 2022 compared to the first six months of fiscal 2021 was primarily driven by favorable price and product mix (combined $471 million) in Reinforcement Materials and Performance Chemicals and increased energy center by-product revenue ($26 million). ~~The~~These increases were partially

offset by the divestiture of our Purification Solutions segment ($25 million) in the second quarter and the unfavorable impact from foreign currency translation ($19 million).

In both the second quarter and the first six months of fiscal 2022, the favorable price and product mix was driven by favorable 2022 calendar year tire customer agreements and higher prices from higher feedstock and energy costs that are generally passed through to our customers in the Reinforcement Materials segment and favorable price and product mix in the Performance Chemicals segment driven by targeted growth initiatives and price increases to recover rising input costs, including raw material and energy, and other costs including packaging and transportation. The increased energy center by-product revenue was due to higher energy prices. The decrease in volumes was driven by plant downtime of a fence-line partner in our fumed metal oxides product line and the continued plant outage at our Belgium specialty compounds site, partially offset by Reinforcement Materials volume increase in Asia and growth in products sold to our battery materials applications.

Gross profit increased by $5$18 million in the ~~first~~second quarter of fiscal 2022 compared to the second quarter of fiscal 2021. Gross profit increased by $23 million in the first ~~quarter~~six months of fiscal 2022 compared to the first six months of fiscal 2021. The gross profit increase in both comparative periods was primarily due to higher unit margins partially offset by higher fixed costs in the Reinforcement Materials and Performance Chemicals segments.

Selling and administrative expenses increased by ~~$10~~$3 million in the second quarter of fiscal 2022 compared to the same period of fiscal 2021, primarily due to a charge related to our legal reserve for respirator matters. Selling and administrative expenses increased by $13 million in the first ~~quarter~~six months of fiscal 2022 compared to the same period of fiscal 2021, primarily due to increased incentive compensation, divestiture-related charges and ~~costs associated with the Purification Solutions divestiture~~.a charge related to our legal reserve for respirator matters.

Research and technical expenses decreased by $1 million and $2 million in the second quarter and the first ~~quarter~~six months of fiscal 2022, respectively, compared to the same ~~period~~periods of fiscal 2021, primarily due to restructuring activities that occurred in fiscal 2021.

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Interest and dividend income	$	3		$	2		$	4		$	2		$	7		$	4
Interest expense	$	(12	)	$	(12	)	$	(11	)	$	(13	)	$	(23	)	$	(25	)
Other income (expense)	$	(1	)	$	(9	)	$	(7	)	$	1		$	(8	)	$	(8	)

Interest and dividend income increased $1by $2 million and $3 million in the ~~first~~second quarter of fiscal 2022 and for the six months ended March 31, 2022, respectively, compared to the same periods of fiscal 2021, primarily due to higher interest rates.

Interest expense decreased by $2 million in each of the second quarter of fiscal 2022 and for the six months ended March 31, 2022, compared to the same periods of fiscal 2021, primarily due to higher capitalized interest.

Other income (expense) changed by $8 million in the second quarter of fiscal 2022 compared to the same period of fiscal 2021, primarily due to ~~higher interest rates.~~

~~Interest expense remained flat in~~ the ~~first quarter of fiscal~~unfavorable impact from foreign currency translation. For the six months ended March 31, 2022, ~~compared to the same period of~~ ~~fiscal 2021.~~

Other income (expense) ~~changed by $8 million in the first quarter of fiscal 2022~~remained flat compared to the same period of fiscal ~~2021, primarily due to a charge from the settlement of our U.S. pension plan in the first quarter of fiscal 2021 and a favorable comparison of the impact from foreign currency translation.~~2021.

(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate

	Three Months Ended December 31												Three Months Ended March 31
	2021						2020						2022						2021
	(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate
Dollars in millions
Effective tax rate	$	12			13	%	$	(29	)		29	%	$	(36	)		24	%	$	(34	)		29	%
Less: Non-GAAP tax adjustments⁽¹⁾		42						4
Less: Non-GAAP tax adjustments⁽¹⁾														2						(3	)
Operating tax rate	$	(30	)		27	%	$	(33	)		30	%	$	(38	)		27	%	$	(31	)		28	%

													Six Months Ended March 31
													2022						2021
													(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate
Dollars in millions
Effective tax rate													$	(24	)		44	%	$	(63	)		29	%
Less: Non-GAAP tax adjustments⁽¹⁾														44						1
Operating tax rate													$	(68	)		27	%	$	(64	)		28	%

For the three months ended ~~December~~March 31, ~~2021,~~2022, the (Provision) benefit for income taxes was a ~~benefit~~provision of ~~$12~~$36 million compared to ~~a $29~~$34 million ~~provision~~ for the same period in ~~2020.~~2021. For the six months ended March 31, 2022, the (Provision) benefit for income taxes was a provision of $24 million compared to $63 million for the same period in 2021. Included in the (Provision) benefit for income taxes in the ~~first quarter of fiscal~~six months ended March 31, 2022 is a discrete tax benefit of ~~$37~~$36 million primarily related to the ~~pending~~divestiture of the Purification Solutions ~~business divestiture and assets held for sale impairment.~~business. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we operate, and are impacted by the presence of valuation allowances in certain tax jurisdictions.

For fiscal 2022, the Operating tax rate is expected to be in the range of ~~27%~~26% to ~~28%~~27%.We are not providing a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.

	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2021		2020		2022		2021		2022		2021
	(In millions)				(In millions)
Equity in earnings of affiliated companies, net of tax	$	1	$	—	$	3	$	1	$	4	$	1
Net income (loss) attributable to noncontrolling interests, net of tax	$	9	$	10	$	7	$	10	$	16	$	20

Equity in earnings of affiliated companies, net of tax, increased by $1$2 million and $3 million in the second quarter and for the first ~~quarter~~six months of fiscal 2022, respectively, compared to the same ~~period~~periods of fiscal ~~2021.~~2021 primarily due to higher profitability at our equity affiliates in India and Venezuela.

Net income (loss) attributable to noncontrolling interests, net of tax, decreased by $1$3 million and $4 million in the ~~first~~second quarter of fiscal 2022 and for the six months ended March 31, 2022, respectively, as compared to the same ~~period~~periods in fiscal ~~2021.~~2021 primarily due to lower profitability of our joint venture in the Czech Republic.

In the second quarter and first ~~quarter~~six months of fiscal 2022, we reported Net income (loss) attributable to Cabot Corporation of ~~($89)~~$107 million and $18 million, or ~~($1.57)~~$1.84 per diluted common ~~share.~~share and $0.30 per diluted common share, respectively. This compares to Net income (loss) attributable to Cabot Corporation of ~~$60~~$75 million and $135 million, or ~~$1.06~~$1.30 per diluted common share and $2.36 per diluted common share, respectively, in the second quarter and first ~~quarter~~six months of fiscal 2021. The higher net income in the second quarter of fiscal 2022 compared with the same period in fiscal 2021 is primarily due to improved Total segment EBIT. The lower net income ~~was~~in the six months ended March 31, 2022, compared with the same period in fiscal 2022 is primarily due to the Purification Solutions ~~assets held for~~loss on sale and asset impairment charge, ~~of $197 million.~~partially offset by increased Total segment EBIT.

~~First~~Second quarter of Fiscal 2022 versus ~~First~~Second quarter of Fiscal 2021—By Business Segment

Income (loss) before income taxes and equity in earnings of affiliated companies, certain items, other unallocated items, and Total segment EBIT for the three and six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 are set forth in the table below. The details of certain items and other unallocated items are shown below and in Note NL of our Notes to the Consolidated Financial Statements.

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Income (loss) before income taxes and equity in earnings of affiliated companies	$	(93	)	$	99		$	147		$	118		$	54		$	217
Less: Certain items		(204	)		(11	)		7			(1	)		(197	)		(12	)
Less: Other unallocated items		(26	)		(30	)		(31	)		(30	)		(57	)		(60	)
Total segment EBIT	$	137		$	140		$	171		$	149		$	308		$	289

In the second quarter of fiscal 2022, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $29 million and Total segment EBIT increased by $22 million.

In the first ~~quarter~~six months of fiscal 2022, Income (loss) before income taxes and equity in earnings of affiliated companies decreased by ~~$192~~$163 million primarily due to the Purification Solutions loss on sale and asset impairment charge of $204 million, partially offset by increased Total segment EBIT ~~decreased by $3~~of $19 million and gain on the Tokai Carbon acquisition of $24 million. The decrease in Income (loss) before income taxes and equity earnings of affiliated companies was driven by the Purification Solutions assets held for sale impairment charge of $197 million. The decrease in Total segment EBIT was driven by higher fixed costs in the Reinforcement Materials segment and lower volumes in the Performance Chemicals segments, partially offset by higher volumes in the Reinforcement Materials segment and favorable unit margin in Reinforcement Materials and Performance Chemicals segments. Higher fixed costs in Reinforcement Materials ($15 million) were primarily due to higher utility and maintenance costs. Lower volumes in the Performance Chemicals segment ($10 million) were primarily due to plant downtime of a fence-line partner in our fumed metal oxides product line and the continued plant outage at our Belgium specialty compounds site, partially offset by volume growth in battery materials applications. Higher volumes in the Reinforcement Materials segment ($7 million) were primarily driven by higher replacement tire and off-the-road tire demand in Asia. Higher unit margins in the Reinforcement Materials segment ($5 million) were driven by the impact of higher energy prices on our energy center and yield investments. Higher unit margins in the Performance Chemicals segment ($9 million) were driven by favorable product mix in both our specialty carbons and fumed metal product lines and strong pricing in our fumed metal oxides product line.

Details of the certain items for the ~~first quarter of fiscal~~three and six months ended March 31, 2022 and 2021 are as follows:

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Purification Solutions assets held for sale impairment charge (Note D)		(197	)		—
Gain on bargain purchase of a business (Note C)								24			—			24			—
Loss on sale of business and asset impairment charge (Note D)								(7	)		—			(204	)		—
Legal and environmental matters and reserves								(7	)		—			(8	)		—
Divestiture related charges		(4	)		—			(1	)		—			(5	)		—
Global restructuring activities (Note K)		(2	)		(3	)
Legal and environmental matters and reserves		(1	)		—
Acquisition and integration-related charges		(1	)		(1	)		(2	)		(1	)		(3	)		(2	)
Global restructuring activities								—			(1	)		(2	)		(4	)
Employee benefit plan settlement and other charges		—			(6	)		—			1			—			(5	)
Other		1			(1	)		—			—			1			(1	)
Total certain items, pre-tax		(204	)		(11	)		7			(1	)		(197	)		(12	)
Non-GAAP tax adjustments		42			4			2			(3	)		44			1
Total certain items, after tax	$	(162	)	$	(7	)	$	9		$	(4	)	$	(153	)	$	(11	)

	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2021			2020			2022			2021			2022			2021
	(In millions)						(In millions)
Interest expense	$	(12	)	$	(12	)	$	(11	)	$	(13	)	$	(23	)	$	(25	)
Unallocated corporate costs		(14	)		(13	)		(16	)		(16	)		(30	)		(29	)
General unallocated income (expense)		1			(5	)		(1	)		—			—			(5	)
Less: Equity in earnings of affiliated companies, net of tax		1			—			3			1			4			1
Total other unallocated items	$	(26	)	$	(30	)	$	(31	)	$	(30	)	$	(57	)	$	(60	)

A discussion of items that we refer to as “other unallocated items” can be found under the heading “Definition of Terms and Non-GAAP Financial Measures”. The balances of unallocated corporate costs are primarily comprised of expenditures related to managing a public company that are not allocated to the segments and corporate business development costs related to ongoing corporate projects. The balances of General unallocated income (expense) consist of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of a contractual joint venture in Purification Solutions segment EBIT.

Sales and EBIT for Reinforcement Materials for the second quarter and first ~~quarter~~six months of fiscal 2022 and 2021 were as follows:

	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2021		2020		2022		2021		2022		2021
	(In millions)				(In millions)
Reinforcement Materials Sales	$	541	$	375	$	627	$	434	$	1,168	$	809
Reinforcement Materials EBIT	$	85	$	88	$	101	$	89	$	186	$	177

Sales in Reinforcement Materials increased by ~~$166~~$193 million in the ~~first~~second quarter of fiscal 2022 compared to the same period of fiscal 2021, primarily due to a favorable price and product mix (combined ~~$150~~$194 million) and higher volumes ($1513 million), partially offset by unfavorable impact from foreign currency translation ($13 million). The favorable price and product mix was primarily due to ~~higher prices from~~favorable 2022 calendar year tire customer agreements and higher feedstock and energy costs that are generally passed through to our customers. The higher volumes in fiscal 2022 were driven by stronger demand across all regions.

In the first six months of fiscal 2022, sales in Reinforcement Materials increased by $359 million compared to the first six months of fiscal 2021. The increase was primarily due to a favorable price and product mix (combined $344 million) and higher volumes ($28 million), partially offset by unfavorable impact from foreign currency translation ($13 million). The favorable price and product mix was primarily due to favorable 2022 calendar year customer agreements and higher feedstock and energy costs that are generally passed through to our customers. The higher volumes in fiscal 2022 were driven by stronger demand in Asia ~~driven by higher replacement tire~~Pacific and ~~off-the-road tire demand.~~the Americas.

EBIT in Reinforcement Materials in the ~~first~~second quarter of fiscal 2022 ~~decreased~~increased by $3$12 million compared to the same period of fiscal 2021. During the ~~first~~second quarter of fiscal 2022, the segment had higher ~~fixed costs~~unit margins ($1520 million)~~, largely~~ and 3% higher volumes ($6 million) partially offset by 4% higher ~~volumes~~fixed cost ($710 million) and unfavorable impact from foreign currency exchange ($4 million). The higher unit margins ~~($5 million).~~ were primarily driven by favorable 2022 calendar year tire customer agreements. The higher volume was due to increased demand across all regions, largely due to volume gains in our customer agreements in Europe and the Americas. The higher fixed costs were primarily due to ~~higher~~increased costs associated with utilities and ~~maintenance~~maintenance.

EBIT in Reinforcement Materials increased by $9 million in the first six months of fiscal 2022 compared to the same period of fiscal 2021. The increase was driven by higher unit margins ($24 million) and higher volumes ($13 million) partially offset by higher fixed cost ($25 million) and unfavorable impact from foreign currency exchange ($4 million). The higher unit margins were primarily driven by ~~the~~favorable 2022 calendar year customer agreements and benefit of higher energy prices on our energy center and yield ~~investments.~~benefits. The higher volume was due to increased demand in Asia Pacific and the Americas. The higher fixed costs were primarily due to increased costs associated with utilities and maintenance.

As we look to the ~~second~~third quarter of the fiscal year, we expect EBIT in Reinforcement Materials to improve sequentially due to our expectation that the ~~outcome of our calendar year 2022 customer agreements.~~strong volume levels will continue with seasonally stronger growth. We ~~expect volumes~~also anticipate margins to ~~remain solid with sequential improvement expected in EMEA~~be maintained at healthy levels and ~~the Americas, and a normal seasonal demand pattern in China related to the Lunar New Year~~prices adjusting for changing input cost..

Sales and EBIT for Performance Chemicals for the second quarter and first ~~quarter~~six months of fiscal 2022 and 2021 were as follows:

	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2021		2020		2022		2021		2022		2021
	(In millions)				(In millions)
Performance Additives Sales	$	227	$	184	$	266	$	203	$	493	$	387
Formulated Solutions Sales		75		83		94		91		169		174
Performance Chemicals Sales	$	302	$	267	$	360	$	294	$	662	$	561
Performance Chemicals EBIT	$	52	$	54	$	70	$	58	$	122	$	112

Sales in Performance Chemicals increased by ~~$35~~$66 million in the ~~first~~second quarter of fiscal 2022 compared to the same period of fiscal 2021, primarily due to favorable price and product mix (combined ~~$52~~$75 million), partially offset by unfavorable impact from foreign currency translation ($8 million) and lower volumes ($191 million). The favorable price and product mix was due to increased pricing to recover rising input ~~cost~~costs across the ~~segment and a favorable product mix~~ ~~in our specialty carbons and fumed metal product lines.~~segment. The lower volumes were primarily due to a plant outage at our Belgium specialty compounds site, partially offset by continued momentum in our growth vectors in battery materials and inkjet applications.

In the first six months of fiscal 2022, sales in Performance Chemicals increased by $101 million compared to the same period of fiscal 2021, primarily due to favorable price and product mix (combined $127 million), partially offset by lower volumes ($20 million) and by unfavorable impact from foreign currency translation ($6 million). The favorable price and product mix was due to increased pricing to recover rising input costs across the segment. The lower volumes were primarily due to plant downtime of a fence-line partner in our fumed metal oxides product line and ~~the continued~~a plant outage at our Belgium specialty compounds site, partially offset by continued momentum in our growth vectors in battery materials and inkjet applications.

EBIT in Performance Chemicals increased by $12 million in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021 primarily due to higher unit margins ($20 million), partially offset by higher fixed cost ($8 million). Higher unit margins were driven by strong pricing in our specialty carbons and fumed metal oxides product lines and favorable product mix in our specialty carbons product line. Fixed costs increased in support of our growth vectors and higher utilities cost.

EBIT in Performance Chemicals increased by $10 million in the first six months of fiscal 2022 compared to the same period of fiscal 2021 primarily due to higher unit margins ($29 million), partially offset by lower volumes ($8 million) and higher fixed cost ($9 million). Higher unit margins were driven by strong pricing and favorable product mix in our specialty carbons and fumed metal oxides product lines. The lower volumes were primarily due to plant downtime of a fence-line partner in our fumed metal oxides product line and a plant outage at our Belgium specialty compounds site, partially offset by continued momentum in battery materials applications driven by higher demand for electric ~~vehicles.~~vehicles and continued product penetration with top battery producers. Fixed costs increased in support of our growth vectors and higher utilities cost.

~~EBIT in Performance Chemicals decreased by $2 million in~~As we look ahead to the ~~first~~third quarter of the fiscal ~~2022 compared to~~year, we expect a sequential volume increase led by growth in battery materials applications and the ~~first quarter of fiscal 2021 primarily due to decreased volumes ($10 million), partially offset by higher~~benefit from our specialty compounds plant being fully back on-line. We anticipate that unit margins ~~($9 million). Higher unit margins were driven by favorable~~ ~~product mix in both our specialty carbons and fumed metal product lines and~~will remain strong, ~~pricing~~but we do not expect to see the same benefit from price increases ahead of raw material costs in our fumed metal oxides product ~~line~~.

~~As we look to the second quarter of the fiscal year,~~ line. In addition, we expect ~~a step up in sequential volumes in our Performance Chemicals segment as our specialty compounds~~fixed cost to increase due to plant start-ups and ~~fumed metal oxides plants come back on-line. We expect to continue to implement price increases to offset rising input and operating costs across the segment.~~higher utilities.

Sales and EBIT for Purification Solutions for the second quarter and first ~~quarter~~six months of fiscal 2022 and 2021 were as follows:

	Three Months Ended December 31					Three Months Ended March 31				Six Months Ended March 31
	2021		2020			2022		2021		2022		2021
	(In millions)					(In millions)
Purification Solutions Sales	$	61	$	59		$	36	$	63	$	97	$	122
Purification Solutions EBIT	$	—	$	(2	)	$	—	$	2	$	—	$	—

Sales in Purification Solutions increased by $2 million in the first quarter of fiscal 2022 compared to the same period of fiscal 2021 due to favorable price ($5 million), partially offset by lower volumes ($3 million). The favorable price was due to price increases. The lower volumes were primarily due to lower sales in environmental applications.

~~EBIT in Purification Solutions increased by $2 million in the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021 due to lower fixed costs.~~

We ~~expect to close the sale of~~divested the Purification Solutions business ~~during~~in March 2022. Refer to Note D of our Notes to the ~~second quarter of fiscal 2022.~~Consolidated Financial Statements.

Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, decreased by ~~$151~~$130 million during the first ~~three~~six months of fiscal 2022, which was ~~largely attributable to reduced borrowing availability under our $1 billion unsecured revolving credit agreement (the “U.S. Credit Agreement”)~~ due to a higher outstanding commercial paper balance at the end of the period. The higher commercial paper balance was used to fund an increase in net working capital resulting from the impact of rising raw material costs on our inventory balance and higher prices on our accounts receivables balance. ~~Additionally, during the first quarter of fiscal 2022 we resumed share repurchase activity after temporarily halting share repurchase activity in the second quarter of fiscal 2020.~~ As of ~~December~~March 31, ~~2021,~~2022, we had cash and cash equivalents of ~~$179~~$215 million and borrowing availability under our revolving credit agreements of ~~$983~~$968 million.

As of ~~December~~March 31, ~~2021,~~2022, we had access to borrowings under the following two credit agreements:

As of ~~December~~March 31, ~~2021,~~2022, we were in compliance with the debt covenants under the Credit Agreements, which, with limited exceptions, ~~generally~~ require us to comply on a quarterly basis with a leverage test requiring the ratio of consolidated net debt ~~with the ability~~ to consolidated EBITDA not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt offset ~~such debt~~ by the ~~lesser~~lessor of (i) unrestricted cash and cash equivalents and (ii) $150 ~~million, to consolidated EBITDA not to exceed 3.50 to 1.00.~~million.

A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. ~~Cash~~We generally use a combination of U.S. earnings, commercial paper issuances and borrowings under our U.S. Credit Agreement to meet our U.S. cash needs, and cash held by foreign subsidiaries is generally used to finance the subsidiaries’ operational activities and future investments. We ~~are currently using a combination of commercial paper and borrowings from the U.S. Credit Agreement to meet our U.S. cash needs. We generally~~usually reduce our commercial paper balance and, if applicable, borrowings under our Credit Agreements, at quarter-end using cash derived from customer collections, settlement of intercompany balances and short-term intercompany loans. We also have cash pooling structures that support our operations in the U.S., EMEA and China and provide access to cash for our non-U.S. subsidiaries through the global pool. We face limited restrictions on the flow of cash. Argentina has currency controls in place that prevent the distribution of cash, but otherwise we are able to move funds between our non-U.S. subsidiaries through our cash pools, intercompany accounts and/or distributions, as needed. If additional funds are needed in the U.S., we expect to be able to repatriate cash, including cash from China, while paying any withholding or other taxes. However, we consider most cash we generate in geographies outside the U.S. indefinitely reinvested. Changes in tax laws in the U.S. or foreign countries could restrict our ability to transfer funds or ~~to access additional debt under the Credit Agreements.~~ impose material costs on such transfers.

As of ~~December~~March 31, ~~2021,~~2022, we had ~~$226~~$238 million of commercial paper outstanding and our borrowings under the Euro Credit Agreement totaled ~~$131~~$128 million.

We generally manage our cash and debt on a global basis to provide for working capital requirements as needed by region or site. Cash and debt are generally denominated in the local currency of the subsidiary holding the assets or liabilities, except where there are operational cash flow reasons to hold non-functional currency or debt.

We anticipate sufficient liquidity from (i) cash on hand; (ii) cash flows from operating activities; and (iii) cash available from the Credit Agreements and our commercial paper program to meet our operational and capital investment needs and financial obligations for the foreseeable future. The liquidity we derive from cash flows from operations is, to a large degree, predicated on our ability to collect our receivables in a timely manner, the cost of our raw materials, and our ability to manage inventory levels.

The following discussion of the changes in our cash balance refers to the various sections of our Consolidated Statements of Cash Flows.

Cash used by operating activities, which consists of net income adjusted for the various non-cash items included in income, changes in working capital and changes in certain other balance sheet accounts, totaled ~~$49~~$39 million in the first ~~three~~six months of fiscal 2022 compared to ~~$21~~$86 million of cash provided by operating activities during the same period of fiscal 2021.

Cash used by operating activities in the first ~~three~~six months of fiscal ~~2022~~2022 was driven by an increase in net working capital of ~~$143~~$254 million. The increase in net working capital was driven by an increase in accounts receivable due to higher sales and an increase in inventory driven by a higher cost of raw materials, partially offset by an increase in accounts payable.

Cash provided by operating activities in the first ~~three~~six months of fiscal 2021 was driven by business earnings excluding the ~~non‐cash~~non-cash impact of depreciation and amortization of ~~$39~~$77 million, which was partially offset by an increase in net working capital of ~~$99~~$179 million. The increase in net working capital was driven by an increase in accounts receivable due to higher sales, an increase in inventory driven by a higher cost of raw materials, and a $32.6 million cash payment made in the first quarter of fiscal 2021 related to a respirator litigation settlement in ~~the~~ fiscal ~~2020 period.~~

~~In addition to the factors noted above, the following other elements of operations have a bearing on operating cash flows:~~

Restructurings — As of December 31, 2021, we had $9 million of total restructuring costs in accrued expenses in the Consolidated Balance Sheets related to certain of our global restructuring activities. In the first three months of fiscal 2022, we paid $2 million related to these restructuring activities, and we expect to make additional cash payments of approximately $8 million in fiscal 2022 and $4 million thereafter.

Litigation Matters — As of December 31, 2021, we had a $44 million reserve for pending and future respirator claims that we expect to pay over multiple years. During fiscal 2020, we settled a large group of respirator claims for $65.2 million. We paid $32.6 million related to these settled claims during fiscal 2020, and the remaining $32.6 million in the first quarter of fiscal 2021. We also have other lawsuits, claims and contingent liabilities arising in the ordinary course of business.2020.

Investing activities ~~consumed $29~~provided $15 million of cash in the first ~~three~~six months of ~~both~~ fiscal 2022 ~~and~~compared to $66 million of cash consumed in the first six months of fiscal 2021. In both periods, investing activities included capital expenditures for sustaining and compliance capital projects at our operating facilities as well as capacity expansion capital expenditures primarily in Performance Chemicals. Capital expenditures totaled $71 million and $69 million in the first six months of fiscal 2022 and 2021, respectively. In addition, the first six months of fiscal 2022 includes $79 million of net cash proceeds from the sale of our Purification Solutions business in March 2022, as well as $5 million of cash assumed from the acquisition of Tokai Carbon in February 2022.

Capital expenditures for fiscal 2022 are expected to be ~~between~~approximately $250 ~~million and $275~~ million. Our planned capital spending program for fiscal 2022 is primarily for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital expenditures in Performance Chemicals.

Financing activities provided ~~$103~~$85 million of cash in the first ~~three~~six months of fiscal 2022 compared to ~~$38~~$27 million of cash used during the same period of fiscal 2021. In the first ~~three~~six months of fiscal 2022, financing activities primarily consisted of the issuance of commercial paper of ~~$156~~$167 million and proceeds from short-term borrowings of $13 million, partially offset by dividend payments to stockholders of ~~$21~~$42 million, share repurchases of ~~$19~~$34 million, dividend payments to noncontrolling interests of $8$15 million, and ~~net~~ repayments of long-term debt of $5$7 million. We plan to refinance our $350 million in registered notes with a coupon of 3.7% that mature in July of 2022 ahead of the notes’ maturity.

In the first ~~three~~six months of fiscal 2021, financing activities primarily consisted of dividend payments to stockholders of ~~$20~~$40 million and net repayments from borrowings under our ~~Credit Agreements~~revolvers of ~~$16~~$17 million, which consisted of proceeds of ~~$50~~$100 million less repayments of ~~$65~~$117 million.

Each of our segments operates globally, and a significant portion of our revenues and operating profits is derived from operations outside the U.S. In particular, China continues to be an important producer of tires and products for automotive applications and since we made our initial investment in China in 1988, we have increased our operations in China to support increased demand for our products in China. In addition, a significant portion of battery manufacturers are located in China, and we anticipate a material portion of the future growth of our Battery Materials growth vector to be derived from our business and operations in China. We employ local management teams for our operations in China, and our business model in China is predominantly to make and sell product in-country to established local and multi-national customers with operations in China. In fiscal 2021, sales in China across our segments constituted approximately 25% of our revenues, and our property, plant and equipment located in China constituted approximately 25% of our total property, plant and equipment as of September 30, 2021. (See Note U to our Consolidated Financial Statements in our 2021 10-K). There are legal and operational risks associated with having substantial operations in China, which are more fully described under the heading “Risk Factors” in our 2021 10-K. Given the size of our current operations in China and the future growth we anticipate from those operations, if our ability to operate in China were to be constrained by legal and operational risks, it could have a material negative impact on our overall operations and the value of our securities.

This report on Form 10-Q contains “forward-looking statements” under the Federal securities laws. These forward-looking statements address expectations or projections about the future, including our expectations regarding our future business performance and overall prospects; segment growth and the assumptions underlying our growth expectations; demand for our products; when we expect to ~~close~~pay the cash consideration for the Tokai acquisition; when we expect to receive the balance of the cash purchase price for our sale of our Purification Solutions business, the amount of the cash proceeds we expect to receive upon the closing of the transaction; research and development activities; the resumption of activities at our facility in Pepinster, Belgium; when we expect to close our purchase from Tokai Carbon Group of its carbon black facility in Tianjin, China; the settlement of liabilities related to the Marshall, Texas mine; the timing of payments for costs associated with reorganization actions;business; the sufficiency of our cash on hand, cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements; our plans to refinance the 3.7% Notes that mature in July 2022; anticipated capital spending; regulatory developments; ~~restructuring charges and charges~~expected insurance proceeds related to flooding at our Pepinster, Belgium facility; cash requirements and uses of available cash, including future cash outlays associated with ~~restructurings, environmental remediation costs and future~~ respirator liabilities and the timing of such outlays; exposure to interest rate and foreign exchange risk; amortization expenses; ~~our ability to recover such assets;~~ our operating tax rate; and the possible outcome of legal and environmental proceedings. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.

Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control or difficult to predict. If known or unknown risks materialize, our actual results could differ materially from those expressed in the forward-looking statements. Importantly, as we cannot predict the duration or scope of the COVID‐19 pandemic, the negative impact to our results cannot be estimated. Factors that will influence the impact on our business and operations include the duration and extent of the pandemic, the virulence and spread of different strains of the virus and the level and timing of vaccine distribution around the world and its impact on the stability of economic recovery and growth, the degree of disruption in ~~our~~ supply ~~chain~~chains from global logistics matters resulting from the COVID‐19 pandemic, impacts to manufacturing operations resulting from government-imposed lockdowns, and ~~the~~other general economic consequences of the pandemic. Further, the COVID-19 pandemic has also contributed to increased costs and decreased availability of labor and materials for construction projects, and these factors have increased the costs of our capital improvement projects and may delay our completion of such projects.

In addition to factors described elsewhere in this report, the following are some of the factors that could cause our actual results to differ materially from those expressed in our forward-looking statements: industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the price and availability of energy and raw ~~materials;~~materials, including with respect to the Russian invasion of Ukraine; a significant adverse change in a customer relationship or the failure of a customer to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our portfolio management objectives; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, or global health ~~matters;~~matters or geo-political conflicts; litigation or legal proceedings; tax rates and fluctuations in foreign currency exchange and interest rates; our inability to complete capacity expansions or other development projects; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. These other factors and risks are discussed more fully in our 2021 10-K and in our subsequent SEC filings.

Information about market risks for the period ended ~~December~~March 31, ~~2021~~2022 does not differ materially from that discussed under Item 7A of our 2021 10-K.

As of ~~December~~March 31, ~~2021,~~2022, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of that date.

There were no changes in our internal controls over financial reporting that occurred during our fiscal quarter ended ~~December~~March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As permitted by the rules and regulations of the Securities and Exchange Commission we excluded from our assessment the internal controls over financial reporting at Tokai Carbon (Tianjin) Co., which was acquired on February 28, 2022, for the period ended March 31, 2022.

There has been no material change in the risk factors described in our 2021 10-K, with the exception of updates to the following risk factors:

We are exposed to political or country risk inherent in doing business in some countries, including China.

Sales outside of the U.S. constituted the majority of our revenues in fiscal 2021. We conduct business in several countries, including China, that have less stable legal systems and financial markets, and potentially more corrupt, or less predictable, business environments than the U.S. As set forth in Note U to our Consolidated Financial Statements in our 2021 10-K, sales in China constituted approximately 25% of our revenues in fiscal 2021 and our property, plant and equipment located in China constituted approximately 25% of our total property, plant and equipment as of September 30, 2021. Our operations outside of the U.S., including in China, expose us to risks related to uncertain enforcement of laws by foreign governments as well as risks that foreign governmental entities will change applicable rules and regulations with minimal advance notice. These risks could result in a material change in our operations, which could negatively impact the value of our securities. Additionally, our operations in some countries, including China, are subject to the following risks: changes in the rate of economic growth; unsettled political or economic conditions; non-renewal of operating permits or licenses; possible expropriation or other governmental actions; corruption by government officials and other third parties; social unrest, war, terrorist activities or other armed conflict; confiscatory taxation or other adverse tax policies; deprivation of contract rights; trade regulations affecting production, pricing and marketing of products; reduced protection of intellectual property rights; restrictions or additional costs associated with repatriating cash; exchange controls; inflation; currency fluctuations and devaluation; political tension that could result in sanctions being imposed against our customers or suppliers in countries where sanctions have not been imposed in the past; the effect of global health, safety and environmental matters on economic conditions and market opportunities; and changes in financial policy and availability of credit.

For example, the Chinese government has, from time to time, curtailed manufacturing operations, with little or no notice, in industrial regions out of growing concern over air quality. The timing and length of these curtailments are difficult to predict and, at times, are applied to manufacturing operations without regard to whether the operations being curtailed comply with environmental regulations in the area. Accordingly, our manufacturing operations in China have been subject to these curtailments in the past and will likely be subject to them in the future. In addition, the Chinese government has instituted energy intensity and energy consumption targets in a number of provinces in its efforts to reduce energy consumption, resulting in energy quotas and shortages in energy supply. We are unable to predict how any power outages related to these targets will impact our operations. These events could negatively impact our results of operations and cash flows both during and after the period of any government-imposed curtailment or power outages affecting our operations. Further, any such curtailments on the operations at our customers’ facilities could reduce demand for our products and our volumes.

Information technology systems failures, data security breaches, cybersecurity attacks or network disruptions could compromise our information, disrupt our operations and expose us to liability, which may adversely impact our operations.

We rely on information technology, some of which is managed by third parties, to manage the day-to-day operations and activities of our business, operate elements of our manufacturing facilities, manage our customer and vendor transactions, and maintain our financial, accounting and business records. In addition, we collect and store certain data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws and regulations.

The secure processing, maintenance and transmission of this data is critical to our operations and business strategy. Information technology systems failures, including those associated with upgrading our systems or integrating information technology and other systems in connection with the integration of businesses we acquire, or network disruptions could disrupt our operations by impeding our processing of transactions and our financial reporting, and our operations, which could have a material adverse effect on our business or results of operations.

In addition, our information technology systems could be compromised by outside parties intent on extracting information, corrupting information or disrupting business processes. Despite our security design and controls, and those of our third-party providers, we may be vulnerable to cyber-attacks, computer viruses, security breaches, inadvertent or intentional employee actions, system failures and other risks that could potentially lead to the compromising of sensitive, confidential or personal data, improper use of our, or our third-party provider systems, solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, or operational disruptions. We face increased information technology security and fraud risks due to our increased reliance on working remotely during the COVID-19 pandemic and beyond, which may create additional information security vulnerabilities and/or magnify the impact of any disruption in information technology systems. Additionally, we may be exposed to unauthorized access to our information technology systems through undetected vulnerabilities in our service providers’ information systems or software. With the evolving nature of cybersecurity threats, the scope and impact of any information

security incident cannot be predicted. In addition, the global regulatory environment pertaining to information security and privacy is increasingly demanding, with new and changing requirements, such as the European Union’s General Data Protection Regulation, The Personal Information Protection Law of the People’s Republic of China, and Brazil’s Lei Geral de Protecao de Dados. Complying with these laws and regulations may be more costly or take longer than we anticipate, and any failure to comply could result in fines or penalties.

The table below sets forth information regarding Cabot’s purchases of its equity securities during the quarter ended ~~December~~March 31, ~~2021:~~2022:

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value per share	CBT	The New York Stock Exchange

Part I.	Financial Information

	Item 1.	Financial Statements (unaudited)
		Consolidated Statements of Operations	3
		Consolidated Statements of Comprehensive Income (Loss)	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Cash Flows	7
		Consolidated Statements of Changes in Stockholders’ Equity	8
		Notes to the Consolidated Financial Statements	10

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	31

Part II.	Other Information
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
	Item 6.	Exhibits	3334

		~~Notional Amount~~
~~Description~~	~~Borrowing~~	~~December 31, 2021~~	~~September 30, 2021~~	~~Hedge Designation~~
~~Cross-Currency Swaps~~	~~3.4% Notes~~	~~USD 250 million swapped to EUR 223 million~~	~~USD 250 million swapped to EUR 223 million~~	~~Net investment~~
~~Forward Foreign Currency Contracts~~ ⁽¹⁾	~~N/A~~	~~USD 36 million~~	~~USD 48 million~~	~~No designation~~

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

	(In millions)
Fair value of asset acquired
Cash	$	5
Accounts and notes receivable		5
Inventories		11
Prepaid expenses and other current assets		7
Property, plant and equipment		12
Amounts attributable to assets acquired		40

Fair value of liabilities assumed
Accounts payable and accrued liabilities		(2	)
Amounts attributable to liabilities assumed		(2	)

Total identifiable net assets		38

Cash consideration payable		14

Gain on bargain purchase of a business	$	24

	(In millions)
Assets
Accounts and notes receivable, net of reserve for doubtful accounts	$	37
Inventories		67
Prepaid expenses and other current assets		2
Property, plant and equipment, net		106
Equity affiliates		28
Intangible assets, net		27
Deferred income taxes		31
Other assets		10
Total assets held for sale		308
Impairment of assets held for sale		(197	)
Adjusted assets held for sale	$	111

Liabilities
Short-term borrowings	$	(2	)
Accounts payable and accrued liabilities		(51	)
Income taxes payable		(1	)
Long-term debt		(17	)
Total liabilities assumed		(71	)
Total net assets held for sale	$	40

	December 31, 2021							September 30, 2021
	Gross Carrying Value		Accumulated Amortization			Net Intangible Assets		Gross Carrying Value		Accumulated Amortization			Net Intangible Assets
	(In millions)
Intangible assets with finite lives
Developed technologies⁽¹⁾	$	36	$	(7	)	$	29	$	62	$	(12	)	$	50
Trademarks⁽¹⁾		2		—			2		11		(1	)		10
Customer relationships		60		(21	)		39		60		(20	)		40
Total intangible assets	$	98	$	(28	)	$	70	$	133	$	(33	)	$	100

	Severance and Employee Benefits			Environmental Remediation		Total
	(In millions)
Reserve at September 30, 2021	$	5		$	4	$	9
Charges (gain)		2			—		2
Cash paid		(2	)		—		(2	)
Reserve at December 31, 2021	$	5		$	4	$	9

Level 1	—	Quoted market prices in active markets for identical assets or liabilities

Level 2	—	Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs)

Level 3	—	Significant unobservable inputs

Period	Total Number of Shares Purchased⁽¹⁾⁽²⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾
October 1, 2021 - October 31, 2021		—	$	—		—		5,023,665
November 1, 2021 - November 30, 2021		—	$	—		—		5,023,665
December 1, 2021 - December 31, 2021		286,391	$	55.87		286,391		4,737,274
Total		286,391				286,391

Exhibit No.		Description

Exhibit 3.1		Restated Certificate of Incorporation of Cabot Corporation effective January 9, 2009 (incorporated herein by reference to Exhibit 3.1 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2008, file reference 1-5667, filed with the SEC on February 9, 2009).

Exhibit 3.2		The By-laws of Cabot Corporation as amended January 7, 2021 (incorporated herein by reference to Exhibit 3.1 of Cabot Corporation’s Current Report on Form 8-K, file reference 1-5667, filed with the SEC on January 12, 2021).

Exhibit 31.1*		Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

Exhibit 31.2*		Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

Exhibit 32**		Certifications of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

Exhibit 101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Exhibit 101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Exhibit 101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

Exhibit 101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 104*		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2021,~~2022, formatted in Inline XBRL (included in Exhibit 101).

	CABOT CORPORATION

Date: ~~February 4,~~May 6, 2022	By:	/s/ Erica McLaughlin
		Erica McLaughlin
		Senior Vice President and Chief Financial Officer
		(Duly Authorized Officer)


Date: ~~February 4,~~May 6, 2022	By:	/s/ Lisa m. Dumont
		Lisa M. Dumont
		Vice President and Controller (Chief Accounting Officer)