Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2023 | Feb. 06, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2023 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CBT | |
Entity Registrant Name | Cabot Corporation | |
Entity Central Index Key | 0000016040 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,430,710 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-5667 | |
Entity Tax Identification Number | 04-2271897 | |
Entity Address, Address Line One | Two Seaport Lane | |
Entity Address, Address Line Two | Suite 1400 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02210-2019 | |
City Area Code | 617 | |
Local Phone Number | 345-0100 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $1 par value per share | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales and other operating revenues | $ 958 | $ 965 |
Cost of sales | 740 | 784 |
Gross profit | 218 | 181 |
Selling and administrative expenses | 67 | 60 |
Research and technical expenses | 15 | 13 |
Loss on sale of business | 3 | |
Income (loss) from operations | 136 | 105 |
Interest and dividend income | 9 | 6 |
Interest expense | (22) | (22) |
Other income (expense) | (29) | (5) |
Income (loss) from operations before income taxes and equity in earnings of affiliated companies | 94 | 84 |
(Provision) benefit for income taxes | (34) | (20) |
Equity in earnings of affiliated companies, net of tax | 1 | 2 |
Net income (loss) | 61 | 66 |
Net income (loss) attributable to noncontrolling interests, net of tax | 11 | 12 |
Net income (loss) attributable to Cabot Corporation | $ 50 | $ 54 |
Weighted-average common shares outstanding: | ||
Basic | 55.3 | 56.3 |
Diluted | 55.8 | 56.7 |
Earnings (loss) per common share: | ||
Basic | $ 0.88 | $ 0.94 |
Diluted | $ 0.88 | $ 0.93 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 61 | $ 66 |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustment, net of tax | 62 | 88 |
Derivatives: net investment hedges | ||
(Gains) losses reclassified to interest expense, net of tax | (1) | (1) |
Other comprehensive income (loss), net of tax of $ 1 and $ - | 61 | 87 |
Comprehensive income (loss) | 122 | 153 |
Net income (loss) attributable to noncontrolling interests, net of tax | 11 | 12 |
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax | 4 | 6 |
Comprehensive income (loss) attributable to noncontrolling interests | 15 | 18 |
Comprehensive income (loss) attributable to Cabot Corporation | $ 107 | $ 135 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Statement of Comprehensive Income [Abstract] | |
Net of tax | $ 1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 244 | $ 238 |
Accounts and notes receivable, net of reserve for doubtful accounts of $3 and $2 | 726 | 695 |
Inventories: | ||
Raw materials | 154 | 148 |
Finished goods | 398 | 374 |
Other | 65 | 63 |
Total inventories | 617 | 585 |
Prepaid expenses and other current assets | 105 | 108 |
Total current assets | 1,692 | 1,626 |
Property, plant and equipment | 3,936 | 3,827 |
Accumulated depreciation | 2,492 | 2,415 |
Net property, plant and equipment | 1,444 | 1,412 |
Goodwill | 138 | 134 |
Equity affiliates | 21 | 20 |
Intangible assets, net | 61 | 60 |
Deferred income taxes | 166 | 180 |
Other assets | 173 | 172 |
Total assets | 3,695 | 3,604 |
Current liabilities: | ||
Short-term borrowings | 206 | 174 |
Accounts payable and accrued liabilities | 585 | 600 |
Income taxes payable | 31 | 40 |
Current portion of long-term debt | 8 | 8 |
Total current liabilities | 830 | 822 |
Long-term debt | 1,098 | 1,094 |
Deferred income taxes | 51 | 50 |
Other liabilities | 241 | 231 |
Contingencies (Note E) | ||
Preferred stock: | ||
Authorized: 2,000,000 shares of $1 par value, Issued and Outstanding: None and none | ||
Common stock: | ||
Authorized: 200,000,000 shares of $1 par value, Issued: 55,560,648 and 55,379,636 shares, Outstanding: 55,424,816 and 55,243,804 shares Less cost of 135,832 and 135,832 shares of common treasury stock | 55 | 55 |
Less cost of 135,832 and 135,832 shares of common treasury stock | (3) | (3) |
Retained earnings | 1,582 | 1,574 |
Accumulated other comprehensive income (loss) | (305) | (362) |
Total Cabot Corporation stockholders' equity | 1,329 | 1,264 |
Noncontrolling interests | 146 | 143 |
Total stockholders' equity | 1,475 | 1,407 |
Total liabilities and stockholders' equity | $ 3,695 | $ 3,604 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 3 | $ 2 |
Preferred stock, authorized shares | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, Outstanding shares | 0 | 0 |
Common stock, authorized shares | 200,000,000 | 200,000,000 |
Common stock, par value | $ 1 | $ 1 |
Common stock, issued shares | 55,560,648 | 55,379,636 |
Common stock, outstanding shares | 55,424,816 | 55,243,804 |
Common treasury stock, shares | 135,832 | 135,832 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 61 | $ 66 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 41 | 35 |
Loss on sale of business | 3 | |
Gain on sale of land | (1) | |
Deferred tax provision (benefit) | 7 | |
Equity in earnings of affiliated companies | (1) | (2) |
Share-based compensation | 6 | 6 |
Other non-cash (income) expense | 37 | (4) |
Cash dividends received from equity affiliates | 1 | 2 |
Changes in assets and liabilities: | ||
Accounts and notes receivable | (7) | 80 |
Inventories | (19) | (14) |
Prepaid expenses and other assets | (2) | (12) |
Accounts payable and accrued liabilities | (20) | (100) |
Income taxes payable | (10) | (10) |
Other liabilities | 11 | 3 |
Cash provided by (used in) operating activities | 105 | 52 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (54) | (35) |
Proceeds from sale of land | 7 | |
Proceeds from sale of business | 6 | |
Other | 5 | |
Cash provided by (used in) investing activities | (54) | (17) |
Cash Flows from Financing Activities: | ||
Proceeds from short-term borrowings | 11 | |
Proceeds from issuance (repayments) of commercial paper, net | 32 | (48) |
Repayments of long-term debt | (1) | (6) |
Purchases of common stock | (33) | (17) |
Proceeds from sales of common stock | 7 | 3 |
Cash dividends paid to noncontrolling interests | (12) | (14) |
Cash dividends paid to common stockholders | (22) | (21) |
Cash provided by (used in) financing activities | (29) | (92) |
Effects of exchange rate changes on cash | (16) | 41 |
Increase (decrease) in cash and cash equivalents | 6 | (16) |
Cash and cash equivalents at beginning of period | 238 | 206 |
Cash and cash equivalents at end of period | $ 244 | $ 190 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Common Stock, Net of Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Cabot Corporation Stockholders' Equity [Member] | Noncontrolling Interests [Member] |
Beginning Balance at Sep. 30, 2022 | $ 1,032 | $ 52 | $ 1 | $ 1,284 | $ (439) | $ 898 | $ 134 |
Beginning Balance, Shares at Sep. 30, 2022 | 56,249 | ||||||
Net income (loss) | 66 | 54 | 54 | 12 | |||
Total other comprehensive income (loss) | 87 | 81 | 81 | 6 | |||
Cash dividends paid, Common stock, per share | (21) | (21) | (21) | ||||
Cash dividends declared to noncontrolling interests | (2) | (2) | |||||
Issuance of stock under equity compensation plans | 3 | $ 1 | 2 | 3 | |||
Issuance of stock under equity compensation plans, Shares | 309 | ||||||
Share-based compensation | 11 | 11 | 11 | ||||
Purchase and retirement of common stock | (17) | (14) | (3) | (17) | |||
Purchase and retirement of common stock, Shares | (242) | ||||||
Ending Balance at Dec. 31, 2022 | 1,159 | $ 53 | 1,314 | (358) | 1,009 | 150 | |
Ending Balance, Shares at Dec. 31, 2022 | 56,316 | ||||||
Beginning Balance at Sep. 30, 2023 | 1,407 | $ 52 | 1,574 | (362) | 1,264 | 143 | |
Beginning Balance, Shares at Sep. 30, 2023 | 55,244 | ||||||
Net income (loss) | 61 | 50 | 50 | 11 | |||
Total other comprehensive income (loss) | 61 | 57 | 57 | 4 | |||
Cash dividends paid, Common stock, per share | (22) | (22) | (22) | ||||
Cash dividends declared to noncontrolling interests | (12) | (12) | |||||
Issuance of stock under equity compensation plans | 7 | 7 | 7 | ||||
Issuance of stock under equity compensation plans, Shares | 441 | ||||||
Share-based compensation | 6 | 6 | 6 | ||||
Purchase and retirement of common stock | (33) | $ (13) | (20) | (33) | |||
Purchase and retirement of common stock, Shares | (260) | ||||||
Ending Balance at Dec. 31, 2023 | $ 1,475 | $ 52 | $ 1,582 | $ (305) | $ 1,329 | $ 146 | |
Ending Balance, Shares at Dec. 31, 2023 | 55,425 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, cash dividends paid, per share | $ 0.40 | $ 0.37 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) (“GAAP”) 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, 2023 (the “2023 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 31, 2023 and 2022. All such adjustments are of a normal rec urring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | B. Significant Accounting Policies Full detail on the Company’s significant accounting policies may be obtained by referring to Note A in the 2023 10-K. Argentina Devaluation The Company’s wholly-owned Argentinian subsidiary operates in a highly inflationary economy and, as a result, the functional currency of the subsidiary is Cabot’s reporting currency, the U.S. dollar. During the three months ended December 31, 2023, the Company recorded foreign exchange losses of $ 40 million related to the revaluation of non-functional currency denominated monetary asset and liability balances, of which $ 33 million related to a single devaluation action by the newly elected Argentine government. The Company invests cash in money market funds and recorded investment income of $ 12 million for the three months ended December 31, 2023. The foreign exchange losses and investment gains are recorded in Other income (expense) in the Consolidated Statement of Operations. Recently Adopted Accounting Standards In November 2022, the FASB issued a new standard on the disclosure of supplier financing programs. The new standard requires qualitative and quantitative disclosures as to the nature and potential magnitude of such programs in addition to program activity and changes for the periods presented. The Company adopted this standard on October 1, 2023. See Note J for disclosures related to the Company's supplier financing programs. The adoption of this standard did not have a material impact on the Company's Consolidated Financial Statements. Recent Accounting Pronouncements In November 2023, the FASB issued a new standard, Improvement to Reportable Segment Disclosures. The new guidance enhances the disclosure of significant reportable segment expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements. In December 2023, the FASB issued a new standard, Improvements to Income Tax Disclosures. The new guidance requires additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | C. Goodwill and Intangible Assets The carrying amount of goodwill attributable to each reportable segment and the changes in those balances during the three months ended December 31, 2023 are as follows: Reinforcement Performance Total (In millions) Balance at September 30, 2023 $ 51 $ 83 $ 134 Foreign currency impact 2 2 4 Balance at December 31, 2023 $ 53 $ 85 $ 138 The following table provides information regarding the Company’s intangible assets: December 31, 2023 September 30, 2023 Gross Accumulated Net Gross Accumulated Net (In millions) Intangible assets with finite lives Developed technologies $ 35 $ ( 11 ) 24 $ 34 $ ( 10 ) $ 24 Trademarks 2 ( 1 ) 1 2 ( 1 ) 1 Customer relationships 67 ( 31 ) 36 65 ( 30 ) 35 Total intangible assets $ 104 $ ( 43 ) $ 61 $ 101 $ ( 41 ) $ 60 Intangible assets are amortized over their estimated useful lives, which range betwee n ten and twenty-five years , with a weighted average amortization period of approximately seventeen years . Amortiza tion expense was $ 1 million for both the three months ended December 31, 2023 and 2022. 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 3 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Income (Loss) ("AOCI") | D. Accumulated Other Comprehensive Income (Loss) (“AOCI”) 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. Changes in each component of AOCI, net of tax, were as follows: Currency Pension and Other Total (In millions) Balance at September 30, 2023, attributable to Cabot Corporation $ ( 353 ) $ ( 9 ) $ ( 362 ) Other comprehensive income (loss) before reclassifications 62 — 62 Amounts reclassified from AOCI ( 1 ) — ( 1 ) Less: Other comprehensive income (loss) attributable to 4 — 4 Balance at December 31, 2023, attributable to Cabot Corporation $ ( 296 ) $ ( 9 ) $ ( 305 ) Currency Pension and Other Total (In millions) Balance at September 30, 2022, attributable to Cabot Corporation $ ( 429 ) $ ( 10 ) $ ( 439 ) Other comprehensive income (loss) before reclassifications 88 — 88 Amounts reclassified from AOCI ( 1 ) — ( 1 ) Less: Other comprehensive income (loss) attributable to 6 — 6 Balance at December 31, 2022, attributable to Cabot Corporation $ ( 348 ) $ ( 10 ) $ ( 358 ) For both the three months ended December 31, 2023 and 2022, the Company reclassifi ed $ 1 million of gain associated with net investment hedges out of AOCI and into interest expense on the Consolidated Statements of Operations. |
Contingencies
Contingencies | 3 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | E. Contingencies Respirator Liabilities 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 2023 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 2023 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 balance was $ 38 million at both December 31, 2023 and September 30, 2023. 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. Other Matters 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. |
Income Tax
Income Tax | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax | F. Income Tax Effective Tax Rate Three Months Ended December 31 2023 2022 (Dollars in millions) (Provision) benefit for income taxes $ ( 34 ) $ ( 20 ) Effective tax rate 36 % 24 % For the three months ended December 31, 2023 and 2022 , the (Provision) benefit for income taxes included a net discrete tax expense of $ 7 million and $ 3 million, respectively. Income tax in Interim Periods 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 the Company expects that 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. Uncertainties 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 2020 through 2022 tax years generally remain subject to examination by the IRS and various tax years from 2016 through 2022 remain subject to examination by the respective state tax authorities. In foreign jurisdictions, various tax years from 2006 through 2022 remain subject to examination by their respective tax authorities. During each of the three months ended December 31, 2023 and 2022, Cabot released uncertain tax po sitions of $ 1 million d ue to the expiration of statutes of limitations in various jurisdictions. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | G. Earnings Per Share The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations: Three Months Ended December 31 2023 2022 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot $ 50 $ 54 Less: Dividends and dividend equivalents — — Less: Undistributed earnings allocated to (1) 1 1 Earnings (loss) allocated to common $ 49 $ 53 Weighted average common shares and 56.4 57.6 Less: Participating securities (1) 1.1 1.3 Adjusted weighted average common 55.3 56.3 Earnings (loss) per common share - basic: $ 0.88 $ 0.94 Diluted EPS: Earnings (loss) allocated to common $ 49 $ 53 Plus: Earnings allocated to 1 1 Less: Adjusted earnings allocated to (2) 1 1 Earnings (loss) allocated to common $ 49 $ 53 Adjusted weighted average common 55.3 56.3 Effect of dilutive securities: Common shares issuable (3) 0.5 0.4 Adjusted weighted average common 55.8 56.7 Earnings (loss) per common share - diluted: $ 0.88 $ 0.93 (1) Participating securities consist of shares underlying unvested time-based restricted stock units (the "TSUs"), earned and unvested performance-based restricted stock units (the "PSUs", and referred to in this note collectively with the TSUs as the "RSUs"), stock units accounted for under the Supplemental 401(k) Plan portion of the Company’s Deferred Compensation and Supplemental Retirement Plan, and stock units and phantom stock units accounted for under the Company’s Non-Employee Directors’ Deferral Plan. The holders of RSUs are entitled to receive dividend equivalents, payable in cash, to the extent dividends are paid on the outstanding shares of Common Stock, and equal in value to the dividends that would have been paid in respect of the Common Stock underlying the RSU. The accounts of holders of stock units and phantom stock units are credited with dividend equivalents, which are payable, in stock or cash, as the case may be, with the distribution of account balances. Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating stockholders . Undistributed earnings are allocated to common and participating stockholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended December 31 2023 2022 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 50 $ 54 Less: Dividends declared on common stock 22 21 Less: Dividends declared on participating — — Undistributed earnings (loss) $ 28 $ 33 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to $ 27 $ 32 Undistributed earnings allocated to 1 1 Undistributed earnings (loss) $ 28 $ 33 (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the assumed exercise of stock options issued under Cabot’s equity incentive plans. For the three months ended December 31, 2023 and 2022 , 330,331 and 86,782 incremental shares of common stock, respectively, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring
Restructuring | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | H. Restructuring 2024 Reorganizations During the first quarter of fiscal 2024, the Company initiated restructuring activities in both its Reinforcement Materials segment (“RM Plan”) and its Performance Chemicals segment (“PC Plan”). Under the RM Plan, the Company will close its reinforcing carbons unit at the facility in Tianjin, China that the Company acquired from Tokai Carbon Group in February 2022. The Company expects to consolidate reinforcing carbons operations and reduce ongoing operational costs. During the three months ended December 31, 2023, the Company recorded charges of $ 2 million for severance related costs and $ 6 million for accelerated depreciation as part of the RM Plan. The Company expects to record additional restructuring charges of $ 1 million related to the RM Plan during the remainder of fiscal 2024. Under the PC Plan, the Company will temporarily idle its aerogel manufacturing plant in Frankfurt, Germany and reorganize certain positions within the Performance Chemicals segment to reduce operating costs. While the Frankfurt facility is idled, the Company expects to reduce inventory levels at that facility as the Company continues its efforts to commercialize aerogel for use in thermal insulation for electric vehicles. During the three months ended December 31, 2023, the Company recorded charges of $ 1 million for severance related costs as part of the PC Plan. The Company expects to record additional restructuring charges of $ 3 million related to the PC Plan during the remainder of fiscal 2024. Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 as follows: Three Months Ended December 31 2023 2022 (In millions) Cost of sales $ 9 $ — Total $ 9 $ — Details of all restructuring activities and the related reserves during the three months ended December 31, 2023 were as follows: Severance Accelerated Depreciation on Assets Total (In millions) Reserve at September 30, 2023 $ — $ — $ — Charges 3 6 9 Cost charged against assets — ( 6 ) ( 6 ) Cash paid ( 1 ) — ( 1 ) Reserve at December 31, 2023 $ 2 $ — $ 2 Cabot’s severance and employee benefit reserves are reflected in Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheets. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | I. Financial Instruments and Fair Value Measurements 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: 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 There were no 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 months of either fiscal 2024 or 2023. At December 31, 2023 and September 30, 2023, 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. Cash and cash equivalents are classified as Level 1 within the fair value hierarchy. At December 31, 2023 and September 30, 2023, Cabot had derivatives relating to foreign currency risks, including a net investment hedge and forward foreign currency contracts, carried at fair value. At December 31, 2023 the fair value of these derivatives was a net asset of $ 4 million and was included in Prepaid expenses and other current assets, Accounts payable and accrued liabilities, and Other assets on the Consolidated Balance Sheets. At September 30, 2023 , the fair value of these derivatives was an asset of $ 12 million and was included in Prepaid expenses and other current assets 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 December 31, 2023 and September 30, 2023, the fair value of guaranteed investment contracts included in Other assets on the Consolidated Balance Sheets was $ 9 million and $ 8 million, respectively. 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. The carrying value and fair value of the long-term fixed rate debt were $ 1.09 billion a nd $ 1.08 billion, res pectively, as of December 31, 2023 and 1.08 billion and 1.04 billion, respectively, as of September 30, 2023 . 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. |
Supplier Financing Programs
Supplier Financing Programs | 3 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Supplier Financing Programs | J. Supplier Financing Programs The Company maintains supply chain finance agreements with third-party financial institutions. These agreements allow the Company’s participating suppliers to sell their receivables to such third-party financial institutions to receive payment earlier than the negotiated commercial terms between the supplier and the Company. Such sales are at the sole discretion of the supplier, and on terms and conditions that are negotiated between the supplier and the respective financial institution. The terms and conditions of the supplier invoice, including payment terms and amounts due, are not impacted by a supplier’s participation in the program. Pursuant to the supply chain finance agreements, the Company has agreed to pay financial institutions on the original due date of the applicable invoice. There are no guarantees associated with these programs. The Company's outstanding payment obligations to financial institutions related to supplier financing programs were $ 17 million at both December 31, 2023 and September 30, 2023 and are included within Accounts payable and accrued liabilities on the Consolidated Balance Sheets. |
Financial Information by Segmen
Financial Information by Segment | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | K. Financial Information by Segment 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 two reportable segments: Reinforcement Materials and Performance Chemicals. The Reinforcement Materials segment combines the reinforcing carbons and engineered elastomer composites product lines. The Performance Chemicals segment aggregates the specialty carbons, specialty compounds, fumed metal oxides, battery materials, inkjet colorants and aerogel product lines. 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, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable. Financial information by reportable segment is as follows: Reinforcement Performance Segment Unallocated (1) Consolidated (In millions) Three Months Ended December 31, 2023 Revenues from external customers (2) $ 641 $ 285 $ 926 $ 32 $ 958 Income (loss) before income taxes (3) $ 129 $ 34 $ 163 $ ( 69 ) $ 94 Three Months Ended December 31, 2022 Revenues from external customers (2) $ 643 $ 286 $ 929 $ 36 $ 965 Income (loss) before income taxes (3) $ 94 $ 29 $ 123 $ ( 39 ) $ 84 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects external shipping and handling fees, royalties, the impact of unearned revenue, discounting charges for certain Notes receivable, and other by-product revenue. Details are provided in the table below: Three Months Ended December 31 2023 2022 (In millions) Shipping and handling fees $ 30 $ 33 Other 2 3 Total $ 32 $ 36 (3) Consolidated Total Income (loss) before income taxes reconciles to Income (loss) before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) before income taxes that are categorized as Unallocated and Other includes: Three Months Ended December 31 2023 2022 (In millions) Interest expense $ ( 22 ) $ ( 22 ) Certain items (a) Argentina controlled currency devaluation loss (Note B) ( 33 ) — Global restructuring activities (Note H) ( 9 ) — Gain on sale of land — 1 Loss on sale of business — ( 3 ) Legal and environmental matters and reserves — ( 1 ) Acquisition and integration-related charges — ( 1 ) Total certain items ( 42 ) ( 4 ) Unallocated corporate costs (b) ( 17 ) ( 15 ) General unallocated income (expense) (c) 13 4 Less: Equity in earnings of affiliated companies, net (d) 1 2 Total $ ( 69 ) $ ( 39 ) (a) Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. This does not include items of income or expense that are separately treated as Certain items. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. 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, 2023 Reinforcement Performance Consolidated Total (In millions) Americas $ 254 $ 88 $ 342 Asia Pacific 260 120 380 Europe, Middle East and Africa 127 77 204 Segment revenues from external customers 641 285 926 Unallocated and other 32 Net sales and other operating revenues $ 958 Three Months Ended December 31, 2022 Reinforcement Performance Consolidated Total (In millions) Americas $ 241 $ 89 $ 330 Asia Pacific 273 126 399 Europe, Middle East and Africa 129 71 200 Segment revenues from external customers 643 286 929 Unallocated and other 36 Net sales and other operating revenues $ 965 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In November 2022, the FASB issued a new standard on the disclosure of supplier financing programs. The new standard requires qualitative and quantitative disclosures as to the nature and potential magnitude of such programs in addition to program activity and changes for the periods presented. The Company adopted this standard on October 1, 2023. See Note J for disclosures related to the Company's supplier financing programs. The adoption of this standard did not have a material impact on the Company's Consolidated Financial Statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the FASB issued a new standard, Improvement to Reportable Segment Disclosures. The new guidance enhances the disclosure of significant reportable segment expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements. In December 2023, the FASB issued a new standard, Improvements to Income Tax Disclosures. The new guidance requires additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Balances | The carrying amount of goodwill attributable to each reportable segment and the changes in those balances during the three months ended December 31, 2023 are as follows: Reinforcement Performance Total (In millions) Balance at September 30, 2023 $ 51 $ 83 $ 134 Foreign currency impact 2 2 4 Balance at December 31, 2023 $ 53 $ 85 $ 138 |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: December 31, 2023 September 30, 2023 Gross Accumulated Net Gross Accumulated Net (In millions) Intangible assets with finite lives Developed technologies $ 35 $ ( 11 ) 24 $ 34 $ ( 10 ) $ 24 Trademarks 2 ( 1 ) 1 2 ( 1 ) 1 Customer relationships 67 ( 31 ) 36 65 ( 30 ) 35 Total intangible assets $ 104 $ ( 43 ) $ 61 $ 101 $ ( 41 ) $ 60 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) ("AOCI") (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, were as follows: Currency Pension and Other Total (In millions) Balance at September 30, 2023, attributable to Cabot Corporation $ ( 353 ) $ ( 9 ) $ ( 362 ) Other comprehensive income (loss) before reclassifications 62 — 62 Amounts reclassified from AOCI ( 1 ) — ( 1 ) Less: Other comprehensive income (loss) attributable to 4 — 4 Balance at December 31, 2023, attributable to Cabot Corporation $ ( 296 ) $ ( 9 ) $ ( 305 ) Currency Pension and Other Total (In millions) Balance at September 30, 2022, attributable to Cabot Corporation $ ( 429 ) $ ( 10 ) $ ( 439 ) Other comprehensive income (loss) before reclassifications 88 — 88 Amounts reclassified from AOCI ( 1 ) — ( 1 ) Less: Other comprehensive income (loss) attributable to 6 — 6 Balance at December 31, 2022, attributable to Cabot Corporation $ ( 348 ) $ ( 10 ) $ ( 358 ) |
Income Tax (Tables)
Income Tax (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate | Effective Tax Rate Three Months Ended December 31 2023 2022 (Dollars in millions) (Provision) benefit for income taxes $ ( 34 ) $ ( 20 ) Effective tax rate 36 % 24 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) | The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations: Three Months Ended December 31 2023 2022 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot $ 50 $ 54 Less: Dividends and dividend equivalents — — Less: Undistributed earnings allocated to (1) 1 1 Earnings (loss) allocated to common $ 49 $ 53 Weighted average common shares and 56.4 57.6 Less: Participating securities (1) 1.1 1.3 Adjusted weighted average common 55.3 56.3 Earnings (loss) per common share - basic: $ 0.88 $ 0.94 Diluted EPS: Earnings (loss) allocated to common $ 49 $ 53 Plus: Earnings allocated to 1 1 Less: Adjusted earnings allocated to (2) 1 1 Earnings (loss) allocated to common $ 49 $ 53 Adjusted weighted average common 55.3 56.3 Effect of dilutive securities: Common shares issuable (3) 0.5 0.4 Adjusted weighted average common 55.8 56.7 Earnings (loss) per common share - diluted: $ 0.88 $ 0.93 (1) Participating securities consist of shares underlying unvested time-based restricted stock units (the "TSUs"), earned and unvested performance-based restricted stock units (the "PSUs", and referred to in this note collectively with the TSUs as the "RSUs"), stock units accounted for under the Supplemental 401(k) Plan portion of the Company’s Deferred Compensation and Supplemental Retirement Plan, and stock units and phantom stock units accounted for under the Company’s Non-Employee Directors’ Deferral Plan. The holders of RSUs are entitled to receive dividend equivalents, payable in cash, to the extent dividends are paid on the outstanding shares of Common Stock, and equal in value to the dividends that would have been paid in respect of the Common Stock underlying the RSU. The accounts of holders of stock units and phantom stock units are credited with dividend equivalents, which are payable, in stock or cash, as the case may be, with the distribution of account balances. |
Calculation of Undistributed Earnings | Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating stockholders . Undistributed earnings are allocated to common and participating stockholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended December 31 2023 2022 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 50 $ 54 Less: Dividends declared on common stock 22 21 Less: Dividends declared on participating — — Undistributed earnings (loss) $ 28 $ 33 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to $ 27 $ 32 Undistributed earnings allocated to 1 1 Undistributed earnings (loss) $ 28 $ 33 (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the assumed exercise of stock options issued under Cabot’s equity incentive plans. For the three months ended December 31, 2023 and 2022 , 330,331 and 86,782 incremental shares of common stock, respectively, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 as follows: Three Months Ended December 31 2023 2022 (In millions) Cost of sales $ 9 $ — Total $ 9 $ — |
Restructuring Activities and Related Reserves | Details of all restructuring activities and the related reserves during the three months ended December 31, 2023 were as follows: Severance Accelerated Depreciation on Assets Total (In millions) Reserve at September 30, 2023 $ — $ — $ — Charges 3 6 9 Cost charged against assets — ( 6 ) ( 6 ) Cash paid ( 1 ) — ( 1 ) Reserve at December 31, 2023 $ 2 $ — $ 2 |
Financial Information by Segm_2
Financial Information by Segment (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Reinforcement Performance Segment Unallocated (1) Consolidated (In millions) Three Months Ended December 31, 2023 Revenues from external customers (2) $ 641 $ 285 $ 926 $ 32 $ 958 Income (loss) before income taxes (3) $ 129 $ 34 $ 163 $ ( 69 ) $ 94 Three Months Ended December 31, 2022 Revenues from external customers (2) $ 643 $ 286 $ 929 $ 36 $ 965 Income (loss) before income taxes (3) $ 94 $ 29 $ 123 $ ( 39 ) $ 84 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects external shipping and handling fees, royalties, the impact of unearned revenue, discounting charges for certain Notes receivable, and other by-product revenue. Details are provided in the table below: Three Months Ended December 31 2023 2022 (In millions) Shipping and handling fees $ 30 $ 33 Other 2 3 Total $ 32 $ 36 (3) Consolidated Total Income (loss) before income taxes reconciles to Income (loss) before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) before income taxes that are categorized as Unallocated and Other includes: Three Months Ended December 31 2023 2022 (In millions) Interest expense $ ( 22 ) $ ( 22 ) Certain items (a) Argentina controlled currency devaluation loss (Note B) ( 33 ) — Global restructuring activities (Note H) ( 9 ) — Gain on sale of land — 1 Loss on sale of business — ( 3 ) Legal and environmental matters and reserves — ( 1 ) Acquisition and integration-related charges — ( 1 ) Total certain items ( 42 ) ( 4 ) Unallocated corporate costs (b) ( 17 ) ( 15 ) General unallocated income (expense) (c) 13 4 Less: Equity in earnings of affiliated companies, net (d) 1 2 Total $ ( 69 ) $ ( 39 ) (a) Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. This does not include items of income or expense that are separately treated as Certain items. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. |
Revenues from External Customers by Geographic Region | 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, 2023 Reinforcement Performance Consolidated Total (In millions) Americas $ 254 $ 88 $ 342 Asia Pacific 260 120 380 Europe, Middle East and Africa 127 77 204 Segment revenues from external customers 641 285 926 Unallocated and other 32 Net sales and other operating revenues $ 958 Three Months Ended December 31, 2022 Reinforcement Performance Consolidated Total (In millions) Americas $ 241 $ 89 $ 330 Asia Pacific 273 126 399 Europe, Middle East and Africa 129 71 200 Segment revenues from external customers 643 286 929 Unallocated and other 36 Net sales and other operating revenues $ 965 |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Detail) - Other Income (Expense) [Member] $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Significant Accounting Policies [Line Items] | |
Investment income | $ 12 |
Revaluation of Non-functional Currency [Member] | |
Significant Accounting Policies [Line Items] | |
Foreign exchange losses | (40) |
Single Devaluation Action [Member] | |
Significant Accounting Policies [Line Items] | |
Foreign exchange losses | $ (33) |
Divestitures - Additional Infor
Divestitures - Additional Information (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Proceeds from sale of business | $ 6 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Changes in Balances (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | $ 134 |
Foreign currency impact | 4 |
Ending balance | 138 |
Reinforcement Materials [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 51 |
Foreign currency impact | 2 |
Ending balance | 53 |
Performance Chemicals [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 83 |
Foreign currency impact | 2 |
Ending balance | $ 85 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | $ 104 | $ 101 |
Accumulated Amortization | (43) | (41) |
Net Intangible Assets, finite lives | 61 | 60 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 35 | 34 |
Accumulated Amortization | (11) | (10) |
Net Intangible Assets, finite lives | 24 | 24 |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 2 | 2 |
Accumulated Amortization | (1) | (1) |
Net Intangible Assets, finite lives | 1 | 1 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 67 | 65 |
Accumulated Amortization | (31) | (30) |
Net Intangible Assets, finite lives | $ 36 | $ 35 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill And Intangible Assets [Line Items] | ||
Amortization expense estimated for year one | $ 6 | |
Amortization expense estimated for year two | 6 | |
Amortization expense estimated for year three | 6 | |
Amortization expense estimated for year four | 6 | |
Amortization expense estimated for year five | 6 | |
Cost of Sales, Selling and Administrative Expenses and Research and Technical Expenses [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 1 | $ 1 |
Minimum [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Useful life of intangible assets | 10 years | |
Maximum [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Useful life of intangible assets | 25 years | |
Weighted Average [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Useful life of intangible assets | 17 years |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Changes in Each Component of AOCI, Net of Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 1,407 | $ 1,032 |
Ending Balance | 1,475 | 1,159 |
Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (353) | (429) |
Other comprehensive income (loss) before reclassifications | 62 | 88 |
Amounts reclassified from AOCI | (1) | (1) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 4 | 6 |
Ending Balance | (296) | (348) |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (9) | (10) |
Ending Balance | (9) | (10) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (362) | (439) |
Other comprehensive income (loss) before reclassifications | 62 | 88 |
Amounts reclassified from AOCI | (1) | (1) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 4 | 6 |
Ending Balance | $ (305) | $ (358) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Gain associated with the net investment hedges out of AOCI | $ 1 | $ 1 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Respirator Liabilities [Member] | ||
Loss Contingencies [Line Items] | ||
Respirator reserve | $ 38 | $ 38 |
Income Tax - Effective Tax Rate
Income Tax - Effective Tax Rate (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
(Provision) benefit for income taxes | $ (34) | $ (20) |
Effective tax rate | 36% | 24% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes [Line Items] | ||
Net discrete tax (benefits) expense related to tax settlements | $ 7 | $ 3 |
Uncertain tax positions from expirations of statute of limitations | $ 1 | $ 1 |
United States Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2020 | |
United States Internal Revenue Service (IRS) [Member] | Latest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2022 | |
State Tax Authorities [Member] | Earliest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2016 | |
State Tax Authorities [Member] | Latest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2022 | |
Foreign Jurisdictions [Member] | Earliest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2006 | |
Foreign Jurisdictions [Member] | Latest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2022 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Basic EPS: | ||
Net income (loss) attributable to Cabot Corporation | $ 50 | $ 54 |
Less: Undistributed earnings allocated to participating securities | 1 | 1 |
Earnings (loss) allocated to common stockholders (numerator) | $ 49 | $ 53 |
Weighted average common shares and participating securities outstanding | 56.4 | 57.6 |
Less: Participating securities | 1.1 | 1.3 |
Adjusted weighted average common shares (denominator) | 55.3 | 56.3 |
Earnings (loss) per common share - basic: | $ 0.88 | $ 0.94 |
Diluted EPS: | ||
Earnings (loss) allocated to common stockholders | $ 49 | $ 53 |
Plus: Earnings allocated to participating securities | 1 | 1 |
Less: Adjusted earnings allocated to participating securities | 1 | 1 |
Earnings (loss) allocated to common stockholders (numerator) | $ 49 | $ 53 |
Adjusted weighted average common shares outstanding | 55.3 | 56.3 |
Common shares issuable | 0.5 | 0.4 |
Adjusted weighted average common shares (denominator) | 55.8 | 56.7 |
Earnings (loss) per common share - diluted: | $ 0.88 | $ 0.93 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Cabot Corporation | $ 50 | $ 54 |
Less: Dividends declared on common stock | 22 | 21 |
Undistributed earnings (loss) | 28 | 33 |
Undistributed earnings (loss) allocated to common shareholders | 27 | 32 |
Undistributed earnings allocated to participating shareholders | $ 1 | $ 1 |
Earnings Per Share - Componen_2
Earnings Per Share - Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) (Parenthetical) (Detail) - shares | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share | 330,331 | 86,782 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
RM Plan [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Severance costs | $ 2 |
Accelerated depreciation | 6 |
Expected additional restructuring charges | 1 |
PC Plan [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Severance costs | 1 |
Expected additional restructuring charges | $ 3 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Total | $ 9 |
Cost of Sales [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total | $ 9 |
Restructuring - Restructuring A
Restructuring - Restructuring Activities and Related Reserves (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Reserve balance | $ 0 |
Charges | 9 |
Cost charged against assets | (6) |
Cash paid | (1) |
Reserve balance | 2 |
Severance and Employee Benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Reserve balance | 0 |
Charges | 3 |
Cash paid | (1) |
Reserve balance | 2 |
Accelerated Depreciation on Assets [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Reserve balance | 0 |
Charges, Accelerated depreciation on assets | 6 |
Cost charged against assets | $ (6) |
Supplier Financing Programs - A
Supplier Financing Programs - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Supplier Finance Program [Line Items] | ||
Outstanding payment obligations to financial institutions related to supplier financing programs | $ 17 | $ 17 |
Supplier Finance Program, Obligation, Current, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Accrued Liabilities, Current | Accounts Payable and Accrued Liabilities, Current |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, liabilities, Level 2 to Level 1 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, transfers into Level 3, amount | 0 | 0 | |
Fair value, assets, transfers out of Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers into Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers out of Level 3, amount | 0 | $ 0 | |
Fixed Rate Debt [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of long-term debt | 1,090,000,000 | $ 1,080,000,000 | |
Fair value of long-term debt | 1,080,000,000 | 1,040,000,000 | |
Foreign Currency Risks [Member] | Prepaid Expenses and Other Current Assets Accounts Payable and Accrued Liabilities and Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets (liabilities), at fair Value | 4,000,000 | 12,000,000 | |
Significant Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets in the Consolidated Balance Sheets | $ 9,000,000 | $ 8,000,000 |
Financial Information by Segm_3
Financial Information by Segment - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2023 Segment | |
Segment Reporting Information [Line Items] | |
Number of business reportable segments | 2 |
Financial Information by Segm_4
Financial Information by Segment - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 958 | $ 965 |
Income (loss) before income taxes | 94 | 84 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 926 | 929 |
Income (loss) before income taxes | 163 | 123 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 32 | 36 |
Income (loss) before income taxes | (69) | (39) |
Reinforcement Materials [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 641 | 643 |
Income (loss) before income taxes | 129 | 94 |
Performance Chemicals [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 285 | 286 |
Income (loss) before income taxes | $ 34 | $ 29 |
Financial Information by Segm_5
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 958 | $ 965 |
Financial Information by Segm_6
Financial Information by Segment - Revenues From External Customers That are Categorized as Unallocated and Other Reflects Royalties, External Shipping and Handling Fees, The Impact of Unearned Revenue, Discounting Charges For Certain Notes Receivable, and Other By-product Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 958 | $ 965 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 32 | 36 |
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 30 | 33 |
Unallocated and Other [Member] | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 2 | $ 3 |
Financial Information by Segm_7
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Income Taxes and Equity in Earnings of Affiliated Companies for Unallocated and Other (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Interest expense | $ (22) | $ (22) |
Gain on sale of land | 1 | |
Loss on sale of business | (3) | |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest expense | (22) | (22) |
Unallocated corporate costs | (17) | (15) |
General unallocated income (expense) | 13 | 4 |
Less: Equity in earnings of affiliated companies, net of tax | 1 | 2 |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | (69) | (39) |
Certain Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Global restructuring activities (Note H) | (9) | |
Gain on sale of land | 1 | |
Loss on sale of business | (3) | |
Legal and environmental matters and reserves | (1) | |
Acquisition and integration-related charges | (1) | |
Total certain items | (42) | $ (4) |
Certain Items [Member] | Argentina [Member] | ||
Segment Reporting Information [Line Items] | ||
Controlled currency devaluation loss | $ (33) |
Financial Information by Segm_8
Financial Information by Segment - Revenue from External Customers by Geographic Region (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | $ 958 | $ 965 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 926 | 929 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 32 | 36 |
Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 342 | 330 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 380 | 399 |
Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 204 | 200 |
Reinforcement Materials [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 641 | 643 |
Reinforcement Materials [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 254 | 241 |
Reinforcement Materials [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 260 | 273 |
Reinforcement Materials [Member] | Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 127 | 129 |
Performance Chemicals [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 285 | 286 |
Performance Chemicals [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 88 | 89 |
Performance Chemicals [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 120 | 126 |
Performance Chemicals [Member] | Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | $ 77 | $ 71 |