Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Nov. 19, 2015 | Mar. 31, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CBT | ||
Entity Registrant Name | CABOT CORP | ||
Entity Central Index Key | 16,040 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 62,566,968 | ||
Entity Public Float | $ 2,832,098,400 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net sales and other operating revenues | $ 2,871 | $ 3,647 | $ 3,456 |
Cost of sales | 2,286 | 2,926 | 2,823 |
Gross profit | 585 | 721 | 633 |
Selling and administrative expenses | 282 | 326 | 297 |
Research and technical expenses | 58 | 60 | 68 |
Goodwill impairment charge (Note G) | 352 | ||
(Loss) income from operations | (317) | 335 | 268 |
Interest and dividend income | 4 | 3 | 5 |
Interest expense | (53) | (55) | (62) |
Other (expense) income | (11) | 25 | (1) |
(Loss) income from continuing operations before income taxes and equity in earnings of affiliated companies | (377) | 308 | 210 |
Benefit (provision) for income taxes | 45 | (92) | (60) |
Equity in earnings of affiliated companies, net of tax | 4 | 11 | |
(Loss) income from continuing operations | (328) | 216 | 161 |
Income (loss) from discontinued operations, net of tax of $-, $2 and $(6) | 2 | 2 | (1) |
Net (loss) income | (326) | 218 | 160 |
Net income attributable to noncontrolling interests, net of tax of $5, $5 and $5 | 8 | 19 | 7 |
Net (loss) income attributable to Cabot Corporation | $ (334) | $ 199 | $ 153 |
Weighted-average common shares outstanding, in millions: | |||
Basic | 63.4 | 64.4 | 63.8 |
Diluted | 63.4 | 65.1 | 64.5 |
Basic: | |||
(Loss) income from continuing operations attributable to Cabot Corporation | $ (5.29) | $ 3.04 | $ 2.39 |
Income (loss) from discontinued operations | 0.02 | 0.02 | (0.01) |
Net (loss) income attributable to Cabot Corporation | (5.27) | 3.06 | 2.38 |
Diluted: | |||
(Loss) income from continuing operations attributable to Cabot Corporation | (5.29) | 3.01 | 2.37 |
Income (loss) from discontinued operations | 0.02 | 0.02 | (0.01) |
Net (loss) income attributable to Cabot Corporation | (5.27) | 3.03 | 2.36 |
Dividends per common share | $ 0.88 | $ 0.84 | $ 0.80 |
Purification Solutions [Member] | |||
Long-lived assets impairment charge (Note G) | $ 210 | ||
Goodwill impairment charge (Note G) | $ 352 |
Consolidated Statements of Ope3
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ||
Income (loss) from discontinued operations, tax amount | $ 2 | $ (6) |
Net income attributable to noncontrolling interests, tax amount | $ 5 | $ 5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net (loss) income | $ (326) | $ 218 | $ 160 |
Other comprehensive (loss) income, net of tax | |||
Foreign currency translation adjustment (net of tax (benefit) provision of $(3), $(10), ($12)) | (270) | (131) | (10) |
Unrealized holding gains (losses) arising during the period (net of tax provision of $—, $—, $1) | 2 | ||
Pension and other postretirement benefit liability adjustments | |||
Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision (benefit) of $5, $(1), $13) | 28 | (40) | 20 |
Amortization of net loss and prior service credit included in net periodic pension cost (net of tax provision of $—, $—, $—) | 3 | 2 | |
Other comprehensive (loss) income | (239) | (171) | 14 |
Comprehensive (loss) income | (565) | 47 | 174 |
Net income attributable to noncontrolling interests, net of tax of $5, $5 and $5 | 8 | 19 | 7 |
Noncontrolling interests foreign currency translation adjustment | (4) | (4) | 3 |
Comprehensive income attributable to noncontrolling interests | 4 | 15 | 10 |
Comprehensive (loss) income attributable to Cabot Corporation | $ (569) | $ 32 | $ 164 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Foreign currency translation adjustment, tax provision (benefit) | $ (3) | $ (10) | $ (12) |
Unrealized holding gains (losses) arising during the period, tax provision | 1 | ||
Pension and other postretirement benefit liability adjustments arising during the period, tax provision (benefit) | 5 | (1) | 13 |
Net income attributable to noncontrolling interests, tax provision | $ 5 | $ 5 | $ 5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 77 | $ 67 |
Accounts and notes receivable, net of reserve for doubtful accounts of $7 and $7 | 477 | 688 |
Inventories | 397 | 498 |
Prepaid expenses and other current assets | 54 | 69 |
Deferred income taxes | 43 | 42 |
Total current assets | 1,048 | 1,364 |
Property, plant and equipment | 3,385 | 3,710 |
Accumulated depreciation | (2,002) | (2,129) |
Net property, plant and equipment | 1,383 | 1,581 |
Goodwill | 154 | 536 |
Equity affiliates | 57 | 68 |
Intangible assets, net | 153 | 347 |
Assets held for rent | 86 | 56 |
Deferred income taxes | 152 | 80 |
Other assets | 42 | 52 |
Total assets | 3,075 | 4,084 |
Current liabilities: | ||
Notes payable | 22 | 44 |
Accounts payable and accrued liabilities | 389 | 512 |
Income taxes payable | 28 | 49 |
Deferred income taxes | 1 | 1 |
Current portion of long-term debt | 1 | 24 |
Total current liabilities | 441 | 630 |
Long-term debt | 970 | 1,004 |
Deferred income taxes | 59 | 68 |
Other liabilities | 240 | 291 |
Redeemable Preferred Stock | $ 27 | $ 27 |
Commitments and contingencies (Note T) | ||
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: 62,704,966 and 64,634,731 shares Outstanding 62,458,396 and 64,382,366 shares | $ 63 | $ 64 |
Less cost of 246,570 and 252,365 shares of common treasury stock | (8) | (7) |
Additional paid-in capital | 49 | |
Retained earnings | 1,478 | 1,900 |
Accumulated other comprehensive loss | (299) | (64) |
Total Cabot Corporation stockholders’ equity | 1,234 | 1,942 |
Noncontrolling interests | 104 | 122 |
Total stockholders’ equity | 1,338 | 2,064 |
Total liabilities and stockholders’ equity | $ 3,075 | $ 4,084 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 7 | $ 7 |
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 | 62,704,966 | 64,634,731 |
Common stock, outstanding shares | 62,458,396 | 64,382,366 |
Common treasury stock, shares | 246,570 | 252,365 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows from Operating Activities: | |||
Net (loss) income | $ (326) | $ 218 | $ 160 |
Adjustments to reconcile net (loss) income to cash provided (used in) by operating activities: | |||
Depreciation and amortization | 183 | 201 | 190 |
Goodwill impairment charge (Note G) | 352 | ||
Deferred tax (benefit) provision | (86) | 8 | (9) |
Gain on existing investment in NHUMO | (29) | ||
Gain on sale of business | (4) | ||
Employee benefit plan settlement | 18 | ||
Equity in net income of affiliated companies | (4) | (11) | |
Non-cash compensation | 12 | 14 | 16 |
Other non-cash expense | 6 | 22 | 18 |
Changes in assets and liabilities: | |||
Accounts and notes receivable | 154 | (54) | 34 |
Inventories | 58 | (56) | 64 |
Prepaid expenses and other current assets | 16 | 2 | 5 |
Accounts payable and accrued liabilities | (75) | (29) | (18) |
Income taxes payable | (21) | 15 | (29) |
Other liabilities | (17) | (14) | (11) |
Cash dividends received from equity affiliates | 14 | 25 | 8 |
Other | 5 | (4) | 2 |
Cash provided by operating activities | 499 | 315 | 419 |
Cash Flows from Investing Activities: | |||
Additions to property, plant and equipment | (141) | (171) | (264) |
Proceeds from notes receivable from sales of business | 20 | ||
Receipts from notes receivable from sale of business | 215 | 39 | |
Change in assets held for rent | (21) | (7) | (2) |
Cash paid for acquisition of business, net of cash acquired of $7 | (73) | ||
Cash used in investing activities | (162) | (16) | (227) |
Cash Flows from Financing Activities: | |||
Borrowings under financing arrangements | 13 | 6 | |
Repayments under financing arrangements | (3) | (17) | (33) |
Decrease in notes payable, net | (4) | (12) | |
(Repayments) proceeds from issuance of commercial paper, net | (18) | (211) | 241 |
Proceeds from long-term debt, net of issuance costs | 17 | 117 | |
Repayments of long-term debt | (57) | (23) | (442) |
Settlement of derivatives | (31) | ||
Proceeds from cash contributions received from noncontrolling stockholders | 13 | ||
Purchases of common stock | (101) | (18) | (6) |
Proceeds from sales of common stock | 6 | 14 | 9 |
Cash dividends paid to noncontrolling interests | (27) | (19) | (17) |
Cash dividends paid to common stockholders | (56) | (54) | (51) |
Cash used in financing activities | (256) | (302) | (206) |
Effects of exchange rate changes on cash | (71) | (25) | (11) |
Increase (decrease) in cash and cash equivalents | 10 | (28) | (25) |
Cash and cash equivalents at beginning of year | 67 | 95 | 120 |
Cash and cash equivalents at end of year | 77 | 67 | 95 |
Income taxes paid | 78 | 53 | 84 |
Interest paid | 42 | $ 47 | $ 51 |
Purification Solutions [Member] | |||
Adjustments to reconcile net (loss) income to cash provided (used in) by operating activities: | |||
Long-lived assets impairment charge (Note G) | 210 | ||
Goodwill impairment charge (Note G) | 352 | ||
Deferred tax (benefit) provision | $ (80) |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Statement Of Cash Flows [Abstract] | |
Cash acquired in acquisition of business | $ 7 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock, Net of Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Deferred Employee Benefits [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Cabot Corporation Stockholders' Equity [Member] | Non-Controlling Interests [Member] |
Beginning Balance at Sep. 30, 2012 | $ 1,939 | $ 56 | $ 20 | $ 1,653 | $ (8) | $ 92 | $ 1,813 | $ 126 |
Beginning Balance, Shares at Sep. 30, 2012 | 63,348 | |||||||
Net income (loss) attributable to Cabot Corporation | 153 | 153 | 153 | |||||
Net income attributable to non-controlling interests | 7 | 7 | ||||||
Total other comprehensive income | 14 | 11 | 11 | 3 | ||||
Contribution from noncontrolling interests | 13 | 13 | ||||||
Noncontrolling interest-dividends | (17) | (17) | ||||||
Cash dividends paid to common stockholders | (51) | (51) | (51) | |||||
Issuance of stock under employee compensation plans | 12 | 12 | 12 | |||||
Issuance of stock under employee compensation plans, Shares | 784 | |||||||
Amortization of share-based compensation | 13 | 13 | 13 | |||||
Purchase and retirement of common stock | (6) | (6) | (6) | |||||
Purchase and retirement of common stock, Shares | (161) | |||||||
Principal payment by Employee Stock Ownership Plan under guaranteed loan | 6 | 6 | 6 | |||||
Ending Balance at Sep. 30, 2013 | 2,083 | $ 56 | 39 | 1,755 | (2) | 103 | 1,951 | 132 |
Ending Balance, Shares at Sep. 30, 2013 | 63,971 | |||||||
Net income (loss) attributable to Cabot Corporation | 199 | 199 | 199 | |||||
Net income attributable to non-controlling interests | 19 | 19 | ||||||
Total other comprehensive income | (171) | (167) | (167) | (4) | ||||
Noncontrolling interest-other | (1) | (1) | ||||||
Noncontrolling interest-dividends | (24) | (24) | ||||||
Cash dividends paid to common stockholders | (54) | (54) | (54) | |||||
Issuance of stock under employee compensation plans | 14 | $ 1 | 13 | 14 | ||||
Issuance of stock under employee compensation plans, Shares | 758 | |||||||
Amortization of share-based compensation | 14 | 14 | 14 | |||||
Purchase and retirement of common stock | (17) | (17) | (17) | |||||
Purchase and retirement of common stock, Shares | (346) | |||||||
Principal payment by Employee Stock Ownership Plan under guaranteed loan | 2 | $ 2 | 2 | |||||
Ending Balance at Sep. 30, 2014 | 2,064 | $ 57 | 49 | 1,900 | (64) | 1,942 | 122 | |
Ending Balance, Shares at Sep. 30, 2014 | 64,383 | |||||||
Net income (loss) attributable to Cabot Corporation | (334) | (334) | (334) | |||||
Net income attributable to non-controlling interests | 8 | 8 | ||||||
Total other comprehensive income | (239) | (235) | (235) | (4) | ||||
Noncontrolling interest-dividends | (22) | (22) | ||||||
Cash dividends paid to common stockholders | (56) | (56) | (56) | |||||
Issuance of stock under employee compensation plans | 6 | 6 | 6 | |||||
Issuance of stock under employee compensation plans, Shares | 450 | |||||||
Amortization of share-based compensation | 12 | 12 | 12 | |||||
Purchase and retirement of common stock | (101) | $ (2) | $ (67) | (32) | (101) | |||
Purchase and retirement of common stock, Shares | (2,375) | |||||||
Ending Balance at Sep. 30, 2015 | $ 1,338 | $ 55 | $ 1,478 | $ (299) | $ 1,234 | $ 104 | ||
Ending Balance, Shares at Sep. 30, 2015 | 62,458 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note A. Significant Accounting Policies The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. The significant accounting policies of Cabot Corporation (“Cabot” or “the Company”) are described below. In November 2013, the Company purchased all of Grupo Kuo S.A.B. de C.V.’s (“KUO”) common stock in NHUMO, S.A. de C.V. (“NHUMO”), a carbon black joint venture between the Company and KUO in Mexico, which represented approximately 60% of the outstanding common stock of NHUMO (the “NHUMO transaction”). Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. The financial position, results of operations and cash flows of NHUMO are included in the Company’s consolidated financial statements from the date of acquisition. In July 2014, the Company completed the sale of its Security Materials business. The results of this business are reflected as discontinued operations in the Consolidated Statements of Operations. In the first quarter of fiscal 2015, the Company realigned its business reporting structure into four segments that consist of Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. The new structure is aligned with senior management changes and it better leverages Cabot’s global activities across common customer applications, production, and research and development activities. Prior period segment results have been recast to reflect the realignment. Unless otherwise indicated, all disclosures and amounts in the Notes to Consolidated Financial Statements relate to the Company’s continuing operations. Certain amounts in prior years’ Consolidated Statement of Cash Flows have been reclassified to conform to the current presentation. Principles of Consolidation The consolidated financial statements include the accounts of Cabot 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, of which there were none in the periods presented. Intercompany transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash equivalents include all highly liquid investments with a maturity of three months or less at date of acquisition. Cabot continually assesses the liquidity of cash equivalents and, as of September 30, 2015, has determined that they are readily convertible to cash. Inventories Inventories are stated at the lower of cost or market. The cost of all carbon black inventories in the U.S. is determined using the last-in, first-out (“LIFO”) method. The cost of Specialty Fluids inventories, which are classified as assets held for rent, is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the first-in, first-out (“FIFO”) method. Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving, or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable value. Investments The Company has investments in equity affiliates and marketable securities. As circumstances warrant, all investments are subject to periodic impairment reviews. Unless consolidation is required, investments in equity affiliates, where Cabot generally owns between 20% and 50% of the affiliate, are accounted for using the equity method. Cabot records its share of the equity affiliate’s results of operations based on its percentage of ownership of the affiliate. Dividends declared from equity affiliates are a return on investment and are recorded as a reduction to the equity investment value. At September 30, 2015 and 2014, Cabot had equity affiliate investments of $57 million and $68 million, respectively. Dividends declared and received from these investments were $14 million, $25 million and $8 million in fiscal 2015, 2014 and 2013, respectively. All investments in marketable securities are classified as available-for-sale and are recorded at fair value with the corresponding unrealized holding gains or losses, net of taxes, recorded as a separate component of Other comprehensive loss within stockholders’ equity. Unrealized losses that are determined to be other-than-temporary, based on current and expected market conditions, are recognized in earnings. The fair value of marketable securities is determined based on quoted market prices at the balance sheet dates. The cost of marketable securities sold is determined by the specific identification method. The Company’s investment in marketable securities was immaterial as of both September 30, 2015 and 2014. Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to Performance Chemicals is recorded in the Fumed Metal Oxides reporting unit. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline below its carrying amount because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2015, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit was less than its carrying amount. Refer to Note G for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the third fiscal quarter of 2015. Due to the impairment recorded, the fair value of the Purification Solutions reporting unit was insignificantly higher than its carrying value. No events occurred in the fourth fiscal quarter of 2015 that would suggest that it is more likely than not that the carrying values of any of our reporting units exceeded its fair value. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. Definite-lived intangible assets, which are comprised of customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company evaluates indefinite-lived intangible assets, which are comprised of the trademarks of Purification Solutions, for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. Refer to Note G for details on the impairment test performed on intangible assets of the Purification Solutions reporting unit and the resulting impairment charges recorded. Effective in the third quarter of 2015 and as a part of the impairment assessment performed, the Company determined that the trademarks for Purification Solutions no longer have an indefinite life. Long-lived Assets Impairment The Company’s long-lived assets primarily include property, plant and equipment, intangible assets, long-term investments and assets held for rent. The carrying values of long-lived assets are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. To test for impairment of assets, the Company generally uses a probability-weighted estimate of the future undiscounted net cash flows of the assets over their remaining lives to determine if the value of the asset is recoverable. Long-lived assets are grouped with other assets and liabilities at the lowest level for which independent identifiable cash flows are determinable. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the analysis described above, in which case the asset is written down to its fair value. If the asset does not have a readily determinable market value, a discounted cash flow model may be used to determine the fair value of the asset. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. Refer to Note G regarding the results of the impairment test performed on the long-lived assets of the Purification Solutions segment. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. Cabot capitalizes interest costs when they are part of the historical cost of acquiring and constructing certain assets that require a period of time to prepare for their intended use. During fiscal 2015, 2014 and 2013, Cabot capitalized less than $1 million, $3 million and $5 million of interest costs, respectively. These amounts will be amortized over the lives of the related assets. Assets Held for Rent Assets held for rent represent Specialty Fluids cesium formate product that is available to customers in the normal course of business and $11 million of ore that has been mined and will be converted into cesium formate. Assets held for rent are stated at average cost. Asset Retirement Obligations Cabot estimates incremental costs for special handling, removal and disposal of materials that may or will give rise to conditional asset retirement obligations (“ARO”) and then discounts the expected costs back to the current year using a credit adjusted risk free rate. Cabot recognizes ARO liabilities and costs when the timing and/or settlement can be reasonably estimated. The ARO reserves were $20 million and $15 million at September 30, 2015 and 2014, respectively. Foreign Currency Translation The functional currency of the majority of Cabot’s foreign subsidiaries is the local currency in which the subsidiary operates. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet dates. Income and expense items are translated at average monthly exchange rates during the year. Unrealized currency translation adjustments are included as a separate component of Accumulated other comprehensive (loss) income within stockholders’ equity. Realized and unrealized foreign currency gains and losses arising from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings with the exception of (i) intercompany transactions considered to be of a long-term investment nature; and (ii) foreign currency borrowings designated as net investment hedges. Gains or losses arising from these transactions are included as a component of other comprehensive (loss) income. In fiscal 2015, 2014 and 2013, net foreign currency transaction losses of $8 million, losses of $2 million, and gains of $2 million, respectively, are included in Other (expense) income in the Consolidated Statements of Operations. Financial Instruments Cabot’s financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, investments, accounts payable and accrued liabilities, short-term and long-term debt, and derivative instruments. The carrying values of Cabot’s financial instruments approximate fair value with the exception of fixed rate long-term debt, which is recorded at amortized cost. The fair values of the Company’s financial instruments are based on quoted market prices, if such prices are available. In situations where quoted market prices are not available, the Company relies on valuation models to derive fair value. Such valuation takes into account the ability of the financial counterparty to perform. Cabot uses derivative financial instruments primarily for purposes of hedging the exposures to fluctuations in foreign currency exchange rates, which exist as part of its on-going business operations. Cabot does not enter into derivative contracts for speculative purposes, nor does it hold or issue any derivative contracts for trading purposes. All derivatives are recognized on the Consolidated Balance Sheets at fair value. Where Cabot has a legal right to offset derivative settlements under a master netting agreement with a counterparty, derivatives with that counterparty are presented on a net basis. The changes in the fair value of derivatives are recorded in either earnings or Accumulated other comprehensive (loss) income, depending on whether or not the instrument is designated as part of a hedge transaction and, if designated as part of a hedge transaction, the type of hedge transaction. The gains or losses on derivative instruments reported in Accumulated other comprehensive (loss) income are reclassified to earnings in the period in which earnings are affected by the underlying hedged item. The ineffective portion of all hedges is recognized in earnings during the period in which the ineffectiveness occurs. In accordance with Cabot’s risk management strategy, the Company may enter into certain derivative instruments that may not be designated as hedges for hedge accounting purposes. Although these derivatives are not designated as hedges, the Company believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The Company records in earnings the gains or losses from changes in the fair value of derivative instruments that are not designated as hedges. Cash movements associated with these instruments are presented in the Consolidated Statement of Cash Flows as Cash Flows from Operating Activities because the derivatives are designed to mitigate risk to the Company’s cash flow from operations. The cash flows related to the principal amount of outstanding debt instruments are presented in the Cash Flows from Financing Activities section of the Consolidated Statement of Cash Flows. Revenue Recognition Cabot recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Cabot generally is able to ensure that products meet customer specifications prior to shipment. If the Company is unable to determine that the product has met the specified objective criteria prior to shipment or if title has not transferred because of sales terms, the revenue is considered “unearned” and is deferred until the revenue recognition criteria are met. Shipping and handling charges related to sales transactions are recorded as sales revenue when billed to customers or included in the sales price. Taxes collected on sales to customers are excluded from revenues. The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments Years ended September 30 2015 2014 2013 Reinforcement Materials 54 % 59 % 57 % Performance Chemicals 33 % 29 % 30 % Purification Solutions 11 % 9 % 10 % Specialty Fluids 2 % 3 % 3 % Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Chemicals. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. Cost of Sales Cost of sales consists of the cost of raw and packaging materials, direct manufacturing costs, depreciation, internal transfer costs, inspection costs, inbound and outbound freight and shipping and handling costs, plant purchasing and receiving costs and other overhead expenses necessary to manufacture the products. Accounts and Notes Receivable Trade receivables are recorded at the invoiced amount and generally do not bear interest. Trade receivables in China may at certain times be settled with the receipt of bank issued non-interest bearing notes. These notes totaled 95 million Chinese Renminbi (“RMB”) ($15 million) and 193 million RMB ($31 million) as of September 30, 2015 and 2014, respectively, and are included in accounts and notes receivable. Cabot periodically sells a portion of the trade receivables in China and other customer receivables at a discount and such sales are accounted for as asset sales. The Company does not have any continuing involvement with the notes after the sale. The difference between the proceeds from the sale and the carrying value of the receivables is recognized as a loss on the sale of receivables and is included in Other (expense) income in the accompanying Consolidated Statements of Operations. During each of fiscal 2015, 2014 and 2013, the Company recorded charges of $3 million, $3 million, and $4 million, respectively, for the sale of these receivables. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. Stock-based Compensation Cabot recognizes compensation expense for stock-based awards granted to employees using the fair value method. Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as expense over the service period, which generally represents the vesting period, and includes an estimate of the awards that will be forfeited, and an estimate of what level of performance the Company will achieve for Cabot’s performance-based stock awards. Cabot calculates the fair value of its stock options using the Black-Scholes option pricing model. The fair value of restricted stock units is determined using the closing price of Cabot stock on the day of the grant. Selling and Administrative Expenses Selling and administrative expenses consist of salaries and fringe benefits of sales and office personnel, general office expenses and other expenses not directly related to manufacturing operations. Research and Technical Expenses Research and technical expenses include salaries, equipment and material expenditures, and contractor fees and are expensed as incurred. Income Taxes Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Cabot has designated to be indefinitely reinvested. Cabot records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon ultimate settlement. This analysis presumes the taxing authorities’ full knowledge of the positions taken and all relevant facts, but does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and includes such charges in its income tax provision in the Consolidated Statements of Operations. Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income, which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. Environmental Costs Cabot accrues environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single liability amount cannot be reasonably estimated, but a range can be reasonably estimated, Cabot accrues the amount that reflects the best estimate within that range or the low end of the range if no estimate within the range is better. The amount accrued reflects Cabot’s assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number and financial viability of other potentially responsible parties. Cabot does not reduce its estimated liability for possible recoveries from insurance carriers. Proceeds from insurance carriers are recorded when realized by either the receipt of cash or a contractual agreement. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note B. Recent Accounting Pronouncements In July 2013, the Financial Accounting Standards Board (“FASB”) issued a new standard related to the “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The standard requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit to be presented in the consolidated financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This standard is applicable for fiscal years beginning after December 15, 2013, and for interim periods within those years. The Company adopted this standard on October 1, 2014 and the implementation of the new standard did not have a material impact on its consolidated financial statements. In April 2014, the FASB issued a new standard related to “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The standard requires discontinued operations treatment for disposals of a component or group of components of a business that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results and requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This standard is applicable for fiscal years beginning after December 15, 2014 and for interim periods within those years and early adoption is permitted, but only for disposals that have not been reported in consolidated financial statements previously issued. The Company will adopt this standard beginning on October 1, 2015 and does not expect it to have a material impact on its consolidated financial statements. In May 2014, the FASB issued a new standard related to the “Revenue from Contracts with Customers” which amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017 and for interim periods within those years and early adoption is permitted for the fiscal years beginning after December 15, 2016. The Company expects to adopt this standard on October 1, 2018. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs by requiring debt issuance costs to be presented as a reduction of the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. The Company expects to adopt this standard on October 1, 2016. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Acquisition of NHUMO
Acquisition of NHUMO | 12 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition of NHUMO | Note C. Acquisition of NHUMO In November 2013, the Company purchased all of KUO’s common stock in the former NHUMO joint venture, which represented approximately 60% of the outstanding common stock of the joint venture. Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. At the close of the transaction, the Company paid KUO $80 million in cash and NHUMO issued redeemable preferred stock to KUO with a redemption value of $25 million. The preferred stock accumulates dividends at a fixed rate of 6% annually and is redeemable at the option of KUO or the Company for $25 million starting in November 2018 or upon the occurrence of certain other conditions. Annual payment by NHUMO of the dividends is contingent on NHUMO achieving a minimum EBITDA (earnings before interest, taxes, depreciation and amortization) level and if such minimum EBITDA is not achieved in any year, the dividend will be accumulated and paid at the time the preferred shares are redeemed. The minimum EBITDA was achieved in both 2014 and 2015. A dividend payment of $1.5 million was made in December 2014 related to fiscal 2014 and a dividend payment of $1.5 million related to fiscal 2015 is due in December 2015. The preferred stock issued in connection with the transaction is not mandatorily redeemable and has embedded put and call rights at the fixed redemption price. Accordingly, the instrument is accounted for as a financing obligation and has been separately presented in the Consolidated Balance Sheets as a long-term liability. Upon acquisition, the Company began consolidating NHUMO into its consolidated financial statements. Prior to closing, the Company received a $14 million dividend from NHUMO. The Company incurred acquisition costs of approximately $2 million in fiscal 2014, which are included in Selling and administrative expenses in the Consolidated Statements of Operations. As of September 2014, the Company completed the valuation of its assets acquired and liabilities assumed. The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed, and Cabot’s previously held equity interest in NHUMO as of the acquisition date. The following table presents the components and allocation of the purchase price: (Dollars in millions) Assets Current assets $ 54 Property, plant and equipment 48 Other non-current assets 1 Intangible assets 63 Goodwill 45 Total assets acquired 211 Liabilities Accounts payable, accruals and other liabilities (20 ) Deferred tax liabilities - long-term (29 ) Total liabilities assumed (49 ) Net assets acquired $ 162 Cash consideration paid 80 Fair value of redeemable preferred stock 28 Previously held equity interest in NHUMO 54 Total $ 162 As a result of the acquisition, the Company recorded a gain of $29 million for the difference between the carrying value and the fair value of the previously held equity interest in NHUMO, which was included in Other (expense) income in the first quarter of fiscal 2014. The fair value of $54 million for the previously held equity interest was determined based on the fair value of Cabot’s pre-existing interest in NHUMO as adjusted for a control premium derived from synergies gained as a result of the Company obtaining control of NHUMO. As part of the purchase price allocation, the Company determined that a separately identifiable intangible asset was customer relationships in the amount of $63 million, which is being amortized over a period of 20 years. The Company estimated the fair value of the identifiable acquisition-related intangible asset based on projections of cash flows that will arise from the asset. The projected cash flows are discounted to determine the fair value of the asset at the date of acquisition. The determination of the fair value of the intangible asset acquired required the use of significant judgment with regard to assumptions in the discounted cash flow model used. The fair value of the redeemable preferred stock was determined based on a discounted cash flow model, using the expected timing of the cash flows and an appropriate discount rate. The excess of the purchase price, which includes the cash consideration paid and the fair values of redeemable preferred stock and the previously held equity interest in NHUMO, over the fair value of the tangible net assets and intangible asset acquired, was recorded as goodwill. The goodwill recognized is attributable to the expected growth and operating synergies that the Company expects to realize from this acquisition. Goodwill generated from the acquisition is not deductible for tax purposes. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | Note D. Discontinued Operations In July 2014, the Company sold its Security Materials business to SICPA SA. The Consolidated Statements of Operations for all periods presented have been recast to reflect the Security Materials business in discontinued operations. In January 2012, the Company sold its Supermetals business to Global Advanced Metals Pty Ltd., an Australian company (“GAM”) for $452 million, including cash consideration of $175 million received on the closing date and notes receivable (“GAM Notes”) totaling $277 million that were payable at various dates through March 2014. In fiscal 2014, Cabot received the final payment on the GAM Notes in the amount of $215 million. During fiscal 2015, Cabot recorded $2 million of income from discontinued operations related to sales of businesses that occurred in prior years. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Note E. Inventories Inventories, net of LIFO, obsolete, unmarketable and slow moving reserves, are as follows: September 30 2015 2014 (Dollars in millions) Raw materials $ 69 $ 111 Work in process 1 2 Finished goods 287 341 Other 40 44 Total $ 397 $ 498 Inventories valued under the LIFO method comprised approximately 6% and 5% of total inventories at September 30, 2015 and 2014, respectively. At September 30, 2015 and 2014, the LIFO reserve was $30 million and $52 million, respectively. Other inventory is comprised of certain spare parts and supplies. During fiscal 2015 and 2013, inventory quantities carried on a LIFO basis were decreased at the Company’s U.S. carbon black sites. In fiscal 2015, these reductions led to liquidations of LIFO inventory quantities and resulted in an increase of Cost of sales of $1 million and a decrease in consolidated Net income of $1 million ($0.01 per diluted common share). In fiscal 2013, these reductions led to liquidations of LIFO inventory quantities and resulted in a decrease of Cost of sales of $1 million and an increase in consolidated Net income of $1 million ($0.01 per diluted common share). No such reductions occurred in fiscal 2014. Cabot reviews inventory for both potential obsolescence and potential loss of value periodically. In this review, Cabot makes assumptions about the future demand for and market value of the inventory and, based on these assumptions, estimates the amount of obsolete, unmarketable or slow moving inventory. Total inventory reserves were $20 million and $14 million, respectively, as of September 30, 2015 and 2014. During fiscal year 2015, the Company recorded a lower cost or market reserve in the amount of $6 million related to its Purification Solutions inventory held in Marshall, TX. This reserve reflects less favorable sales trends for activated carbon in mercury removal applications in the U.S., which continued into the fourth fiscal quarter of 2015. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2015 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note F. Property, Plant and Equipment Property, plant and equipment consists of the following: September 30 2015 2014 (Dollars in millions) Land and land improvements $ 154 $ 132 Buildings 509 536 Machinery and equipment 2,391 2,593 Other 225 233 Construction in progress 106 216 Total property, plant and equipment 3,385 3,710 Less: accumulated depreciation (2,002 ) (2,129 ) Net property, plant and equipment $ 1,383 $ 1,581 Depreciation expense was $169 million, $184 million and $175 million for fiscal 2015, 2014 and 2013, respectively. |
Purification Solutions Goodwill
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | Note G. Purification Solutions Goodwill and Long-Lived Assets Impairment Charges During fiscal 2015 and as a result of the impairment tests performed on goodwill and long-lived assets of the Purification Solutions reporting unit, the Company recorded impairment charges and an associated tax benefit in the Consolidated Statements of Operations as follows: Year Ended September 30, 2015 (Dollars in millions) Purification Solutions goodwill impairment charge $ 352 Purification Solutions long-lived assets impairment charge 210 Provision (benefit) for income taxes (80 ) Impairment charges, after tax $ 482 The future growth in the Purification Solutions segment is highly dependent on achieving the expected volumes and margins in the activated carbon based mercury removal business. These volumes and margins are highly dependent on demand for mercury removal products and the Company’s successful realization of its anticipated share of volumes in this business. The expected demand for mercury removal products significantly depends on: (1) the implementation and enforcement of environmental laws and regulations, particularly those that would require U.S. based coal-fired electric utilities to reduce the quantity of air pollutants they release, including mercury, to comply with the Mercury and Air Toxics Standards (“MATS”) issued by the U.S. Environmental Protection Agency (“EPA”) and (2) other factors such as the anticipated usage of activated carbon in the coal-fired energy units. In November 2014, the U.S. Supreme Court agreed to consider whether the EPA appropriately considered costs in determining whether it is necessary and appropriate to regulate hazardous air pollutants emitted by electric utilities. On June 29, 2015, the U.S. Supreme Court held that the EPA unreasonably failed to consider costs in determining whether it is necessary and appropriate to regulate hazardous air pollutants emitted by coal-fired utilities, and remanded the case back to the U.S. Court of Appeals for the District of Columbia Circuit further proceedings. The implementation period for the MATS regulations began in April 2015. With this recent implementation and associated customer and industry developments during the third fiscal quarter, as well as the U.S. Supreme Court’s ruling, the Company reassessed its previous estimates for expected growth in volumes, prices and margins in the Purification Solutions reporting unit. The main drivers of growth, including the size of the overall mercury removal industry, utility adoption rates, usage levels, and pricing, among others, were lowered from previous estimates. Based on these revised estimates and as part of step one of the annual impairment test, the Company determined that the estimated fair value of the Purification Solutions reporting unit was lower than the reporting unit's carrying value. As such, the reporting unit failed step one of the goodwill impairment test. In determining the fair value of the Purification Solutions reporting unit, the Company used an income approach (a discounted cash flow analysis) which incorporated significant estimates and assumptions related to future periods, including timing of MATS implementation, the anticipated size of the mercury removal industry, and growth rates and pricing assumptions of activated carbon, among others. The Company assumed a two year delay in the final MATS implementation due to the U.S. Supreme Court’s ruling. Total charges incurred could be higher if the rulings of the U.S. Court of Appeals for the District of Columbia Circuit on remand result in a delay in the implementation of MATS that is longer than two years. In addition, an estimate of the reporting unit’s weighted average cost of capital (“WACC”) is used to discount future estimated cash flows to their present value. The WACC was based upon externally available data considering market participants’ cost of equity and debt, capital structure and risk factors specific to the Purification Solutions reporting unit. Step two of the goodwill impairment test requires the Company to perform a theoretical purchase price allocation for the reporting unit to determine the implied fair value of goodwill and to compare the implied fair value of goodwill to the recorded amount of goodwill. The estimate of fair value is complex and requires significant judgment. Accounting guidance provides that a company should recognize an estimated impairment charge to the extent that it determines that it is probable that an impairment loss has occurred and such impairment can be reasonably estimated. As of June 30, 2015, we recorded a pre-tax goodwill impairment charge in the amount of $353 million. We completed the step two analysis in the fourth quarter of fiscal 2015, which resulted in recording a credit of $1 million to the pre-tax goodwill impairment charge. Therefore, for the year ended September 30, 2015, the pre-tax goodwill impairment charge was $352 million. Based on the same factors leading to goodwill impairment, the Company also considered whether the reporting unit's carrying values of definite-lived intangible assets and property, plant and equipment may not be recoverable or whether the carrying value of certain indefinite-lived intangible assets were impaired. The Company used the income approach to determine the fair value of the indefinite-lived intangible assets, which are the trademarks of Purification Solutions, and determined that the fair value of these intangible assets was lower than their carrying value. As such, an impairment loss was recorded in the amount of $39 million. Subsequent to this impairment analysis, the Company concluded that such assets no longer had an indefinite life and began amortizing these assets over their estimated useful life. The Company also performed an impairment analysis to assess if definite-lived intangible assets and property, plant and equipment were recoverable based on the estimated undiscounted cash flows of the reporting unit, and these cash flows were not sufficient to recover the carrying value of the long-lived assets over their remaining useful lives. Accordingly, an impairment charge was recorded based on the lower of the carrying amount or fair value of the long-lived assets. The Company used the income approach to determine the fair value of the definite-lived intangible assets and a combination of the cost and market approaches to fair value its property, plant and equipment. The Company recorded impairment charges of $119 million and $51 million, to its definite-lived intangible assets and property, plant and equipment, respectively. We completed the impairment analysis in the fourth quarter of fiscal year 2015 which resulted in increasing the property, plant and equipment impairment charge by $1 million to $52 million. Therefore, for the year ended September 30, 2015, the long-lived assets impairment charge was $210 million. In connection with the long-lived assets impairment charges, the Company recorded a deferred tax benefit of $80 million to its income tax provision. The performance of the Purification Solutions reporting unit will continue to be monitored. If the reporting unit does not achieve the financial performance that the Company expects or events or circumstances change, it is possible that additional impairment charges may result. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note H. Goodwill and Intangible Assets Cabot had goodwill balances of $154 million and $536 million at September 30, 2015 and September 30, 2014, respectively. The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended September 30, 2015 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2014 $ 68 $ 10 $ 458 $ 536 Impairment charge — — (352 ) (352 ) Foreign currency impact (13 ) (1 ) (16 ) (30 ) Balance at September 30, 2015 $ 55 $ 9 $ 90 $ 154 Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Accumulated impairment losses at September 30, 2014 — — — — Accumulated impairment losses at September 30, 2015 $ — $ — $ (352 ) $ (352 ) Goodwill impairment tests are performed at least annually. The Company performed its most recent annual impairment assessment as of May 31, 2015 and determined there was an impairment of the assets attributable to the Purification Solutions reporting unit. Refer to Note G. The following table provides information regarding the Company’s intangible assets: September 30, 2015 September 30, 2014 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives (1) Developed technologies $ 48 $ (1 ) $ 47 $ 152 $ (16 ) $ 136 Trademarks 16 — 16 57 — 57 Customer relationships 96 (6 ) 90 171 (17 ) 154 Total intangible assets $ 160 $ (7 ) $ 153 $ 380 $ (33 ) $ 347 (1) Refer to Note G for intangible assets impairment charges recorded in fiscal 2015. Intangible assets are amortized over their estimated useful lives, which range from fourteen to twenty-five years, with a weighted average amortization period of approximately nineteen years. Amortization expense for the years ended September 30, 2015, 2014 and 2013 was $14 million, $17 million and $14 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $9 million each year for the next five fiscal years. |
Accounts Payable, Accrued Liabi
Accounts Payable, Accrued Liabilities and Other Liabilities | 12 Months Ended |
Sep. 30, 2015 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Liabilities and Other Liabilities | Note I. Accounts Payable, Accrued Liabilities and Other Liabilities Accounts payable and accrued liabilities included in current liabilities consist of the following: September 30 2015 2014 (Dollars in millions) Accounts payable $ 274 $ 351 Accrued employee compensation 34 48 Other accrued liabilities 81 113 Total $ 389 $ 512 Other long-term liabilities consist of the following: September 30 2015 2014 (Dollars in millions) Employee benefit plan liabilities $ 138 $ 174 Non-current tax liabilities 17 33 Other accrued liabilities 85 84 Total $ 240 $ 291 |
Debt and Other Obligations
Debt and Other Obligations | 12 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Note J. Debt and Other Obligations Long-term Obligations The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized below: September 30 2015 2014 (Dollars in millions) Variable Rate Debt: $750 million Revolving Credit Facility, expires 2019 $ — $ — Chinese Renminbi Notes, due through 2016, 6.15%—6.77% — 28 Total variable rate debt — 28 Fixed Rate Debt: 5% Notes due 2017 $ 300 $ 300 2.55% Notes due 2018 250 250 3.7% Notes due 2022 350 350 Medium Term Notes: Notes due 2019, 7.42% 30 30 Notes due 2022, 8.35%—8.47% 15 15 Notes due 2028, 6.57%—7.28% 8 8 Total Medium Term Notes $ 53 $ 53 Chinese Renminbi Notes, due through 2017, 4.63%—6.15% 5 31 Total fixed rate debt 958 984 Capital lease obligations, due through 2031 14 17 Unamortized debt discount (1 ) (1 ) Total debt 971 1,028 Less current portion of long-term debt (1 ) (24 ) Total long-term debt $ 970 $ 1,004 $750 million Revolving Credit Facility —The amount available for borrowing under the revolving credit agreement, after consideration of letters of credit and commercial paper outstanding, was $738 million as of September 30, 2015. Effective October 23, 2015, the Company entered into a new revolving credit agreement that amended and extended the $750 million revolving credit agreement, which was scheduled to mature on October 3, 2019. The borrowing capacity on the new revolving credit agreement, which matures on October 23, 2020, subject to two one-year options to extend on the first and second anniversaries of the effective date, is $1 billion and continues to support the Company’s commercial paper program. Borrowings under the new revolving credit agreement may be used for working capital, letters of credit and other general corporate purposes. The new revolving credit agreement contains affirmative and negative covenants, a single financial covenant (consolidated total debt to consolidated EBITDA) and events of default customary for financings of this type. Chinese Renminbi Debt —The Company’s consolidated Chinese subsidiaries had $5 million and $59 million of unsecured long-term debt outstanding as of September 30, 2015 and September 30, 2014, respectively. 5% Notes due fiscal 2017 —In fiscal 2009, Cabot issued $300 million in registered notes with a coupon of 5% that will mature on October 1, 2016. These notes are unsecured and pay interest on April 1 and October 1. The net proceeds of this offering were $296 million after deducting discounts and issuance costs. The discount of approximately $2 million was recorded at issuance and is being amortized over the life of the notes. 2.55% Notes due fiscal 2018 —In July 2012, Cabot issued $250 million in registered notes with a coupon of 2.55% that will mature on January 15, 2018. These notes are unsecured and pay interest on January 15 and July 15. The net proceeds of this offering were $248 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and is being amortized over the life of the notes. 3.7% Notes due fiscal 2022 —In July 2012, Cabot issued $350 million in registered notes with a coupon of 3.7% that will mature on July 15, 2022. These notes are unsecured and pay interest on January 15 and July 15. The net proceeds of this offering were $347 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and is being amortized over the life of the notes. Medium Term Notes —At both September 30, 2015 and 2014, there were $53 million of unsecured medium term notes outstanding issued to numerous lenders with various fixed interest rates and maturity dates. The weighted average maturity of the total outstanding medium term notes is 6 years with a weighted average interest rate of 7.65%. Capital Lease Obligations —Cabot had capital lease obligations for certain equipment and buildings with a recorded value of $14 million and $17 million at September 30, 2015 and 2014, respectively. Cabot will make payments totaling $33 million over the next 16 years, including $9 million of imputed interest. At September 30, 2015 and 2014, the original cost of capital lease assets was $20 million and $22 million, respectively, and the associated accumulated depreciation of assets under capital leases was $9 million at both September 30, 2015 and 2014. The amortization related to those assets under capital lease is included in depreciation expense. Future Years Payment Schedule The aggregate principal amounts of long-term debt and capital lease obligations due in each of the five years from fiscal 2016 through 2020 and thereafter are as follows: Fiscal Years Ending September 30, Principal Payments on Long-Term Debt Payments on Capital Lease Obligations Total (Dollars in millions) 2016 $ — $ 3 $ 3 2017 305 4 309 2018 250 3 253 2019 30 3 33 2020 — 3 3 Thereafter 373 17 390 Less: executory costs and interest — (19 ) (19 ) Total $ 958 $ 14 $ 972 Standby letters of credit —At September 30, 2015, the Company had provided standby letters of credit that were outstanding and not drawn totaling $11 million, which expire through fiscal 2016. Short-term Obligations Short-term Notes Payable —The Company had unsecured short-term notes of $22 million and $44 million as of September 30, 2015 and 2014, respectively, with maturities of less than one year. The weighted-average interest rate on short-term notes payable, including commercial paper, was 4.6% and 3.9% as of September 30, 2015 and 2014, respectively. The Company has a commercial paper program and the maximum aggregate balance of commercial paper notes outstanding and the amounts borrowed under the revolving credit facility may not exceed the borrowing capacity of the revolving credit facility, $750 million (increased to $1 billion in October 2015). The proceeds from the issuance of the commercial paper have been used for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, and acquisitions. The revolving credit facility is available to repay the outstanding commercial paper, if necessary . The outstanding balance of commercial paper, included within the Notes payable caption on the Consolidated Balance Sheets, was $12 million as of September 30, 2015 bearing a weighted-average interest rate of 0.36% with a weighted-average maturity of 1 day. The outstanding balance of commercial paper was $30 million as of September 30, 2014 bearing a weighted-average interest rate of 0.25% with a weighted-average maturity of 1 day. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Note K. Financial Instruments and Fair Value Measurements The FASB authoritative guidance on fair value measurements defines fair value, provides a framework, for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. The 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, or transfers into or out of Level 3, during fiscal 2015 or 2014. At September 30, 2015 and 2014, the fair value of Guaranteed investment contracts, included in Other assets on the Consolidated Balance Sheets, was $12 million and $13 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. At September 30, 2015 and 2014, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and notes payable 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 $0.96 billion and $1.02 billion, respectively, as of September 30, 2015. The carrying value and fair value of the long-term fixed rate debt were $0.98 billion and $1.05 billion, respectively, as of September 30, 2014. The fair values of Cabot’s fixed rate long-term debt and capital lease obligations 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 capital 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. |
Derivatives
Derivatives | 12 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | Note L. Derivatives Risk Management Cabot’s business operations are exposed to changes in interest rates, foreign currency exchange rates and commodity prices because Cabot finances certain operations through long and short-term borrowings, denominates transactions in a variety of foreign currencies and purchases certain commoditized raw materials. Changes in these rates and prices may have an impact on future cash flows and earnings. The Company manages these risks through normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company has policies governing the use of derivative instruments and does not enter into financial instruments for trading or speculative purposes. By using derivative instruments, Cabot is subject to credit and market risk. If a counterparty fails to fulfill its performance obligations under a derivative contract, Cabot’s credit risk will equal the fair value of the derivative. Generally, when the fair value of a derivative contract is positive, the counterparty owes Cabot, thus creating a payment risk for Cabot. The Company minimizes counterparty credit (or repayment) risk by entering into transactions with major financial institutions of investment grade credit rating. As of September 30, 2015, the counterparty with which the Company has executed derivatives carried a Standard and Poor’s credit rating of AA-. Cabot’s exposure to market risk is not hedged in a manner that completely eliminates the effects of changing market conditions on earnings or cash flow. No significant concentration of credit risk existed at September 30, 2015. Interest Rate Risk Management Cabot’s objective is to maintain a certain fixed-to-variable interest rate mix on the Company’s debt obligations. Cabot may enter into interest rate swaps as a hedge of the underlying debt instruments to effectively change the characteristics of the interest rate without changing the debt instrument. As of both September 30, 2015 and 2014, there were no derivatives held to manage interest rate risk. Foreign Currency Risk Management 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 a currency where the Company expects long-term, stable cash receipts. Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot, from time to time, enters 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 September 30, 2015 and 2014 to manage foreign currency risk. Notional Amount Description Borrowing September 30, 2015 September 30, 2014 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 2 million USD 32 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Brazilian real, and Czech koruna. Accounting for Derivative Instruments and Hedging Activities The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of the financial counterparty to perform. For interest rate and cross-currency swaps, the significant inputs to these models are interest rate curves for discounting future cash flows. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. Fair Value Hedge For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current period earnings. Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is recorded in Accumulated other comprehensive (loss) income and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings. Other Derivative Instruments From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes, which include cross currency swaps, foreign currency forward contracts and commodity derivatives. For cross currency swaps and foreign currency forward contracts not designated as hedges, the Company uses standard models with market-based inputs. The significant inputs to these models are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. In determining the fair value of the commodity derivatives, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. Although these derivatives do not qualify for hedge accounting, Cabot believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings. During fiscal 2015 and 2014, there were no derivatives designated as hedges. During fiscal 2013, for derivatives designated as hedges, the change in unrealized gains in Accumulated other comprehensive (loss) income, the hedge ineffectiveness recognized in earnings, the realized gains or losses reclassified from Accumulated other comprehensive (loss) income, and the losses reclassified from Accumulated other comprehensive (loss) income to earnings were immaterial. During fiscal 2013 a gain of $4 million was recognized in earnings as a result of the remeasurement to Euros of the $175 million bond held by one of Cabot’s European subsidiaries. The gain was recognized in earnings through Other (expense) income within the Consolidated Statements of Operations. The gain was offset by a loss of $2 million from Cabot’s cross currency swaps that are not designated as hedges, but which Cabot entered into to offset the foreign currency remeasurement exposure on the debt. Additionally, during fiscal 2013, Cabot recognized in earnings through Other (expense) income within the Consolidated Statements of Operations, a gain of $5 million related to its foreign currency forward contracts, which were not designated as hedges. At both September 30, 2015 and 2014, the fair value of derivative instruments were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. |
Venezuela
Venezuela | 12 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Venezuela | Note M. Venezuela Cabot owns 49% of an operating carbon black affiliate in Venezuela, which is accounted for as an equity affiliate, through wholly-owned subsidiaries that carry the investment and receive its dividends. As of September 30, 2015, these subsidiaries carried the operating affiliate investment of $14 million and held 18 million bolivars (less than $1 million) in cash. During fiscal 2015, 2014 and 2013, the Company received dividends in the amounts of $6 million, $5 million and $3 million, respectively, which were paid in U.S. dollars. A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into bolivars. The operating affiliate and the Company’s wholly owned subsidiaries used an exchange rate that was available to Cabot when converting these dollars into bolivars to remeasure their bolivar denominated monetary accounts. The exchange rate made available to us on September 30, 2015 was 52 bolivars to the U.S. dollar (B/S). The operating entity has generally been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. The Company closely monitors its ability to convert its bolivar holdings into U.S. dollars, as the Company intends to convert substantially all bolivars held by its wholly-owned subsidiaries in Venezuela to U.S. dollars as soon as practical. Any future change in the exchange rate made available to the Company or opening of additional parallel markets could cause the Company to change the exchange rate it uses and result in gains or losses on the bolivar denominated assets held by its operating affiliate and wholly-owned subsidiaries. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Note N. Employee Benefit Plans The information below provides detail concerning the Company’s benefit obligations under the defined benefit and postretirement benefit plans it sponsors. Defined benefit plans provide pre-determined benefits to employees that are distributed upon retirement. Cabot is making all required contributions to these plans. The accumulated benefit obligation was $170 million for the U.S. defined benefit plans and $326 million for the foreign plans as of September 30, 2015 and $173 million for the U.S. defined benefit plans and $462 million for the foreign plans as of September 30, 2014. In addition to benefits provided under the defined benefit and postretirement benefit plans, the Company provided benefits under defined contribution plans. One of these plans included an Employee Stock Ownership Plan (“ESOP”) component, which is described below. Cabot recognized expenses related to these plans, not including the expenses related to the ESOP, of $20 million in fiscal 2015, $14 million in fiscal 2014 and $9 million in fiscal 2013. Employee Stock Ownership Plan In the first quarter of fiscal 2014, all shares that remained available for distribution under the ESOP were allocated to participant accounts and no further contributions under the plan have been or will be made. Compensation expense related to the ESOP, which is based on the fair value of the shares on the date of allocation, was $1 million in fiscal 2014 and $4 million in fiscal 2013. The following provides information about benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans: Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Change in Benefit Obligations: Benefit obligation at beginning of year $ 173 $ 491 $ 170 $ 439 $ 50 $ 17 $ 55 $ 17 Service cost 1 9 2 9 — — — — Interest cost 7 11 7 16 2 1 2 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (45 ) — (28 ) — (2 ) — — Loss (gain) from changes in actuarial assumptions and plan experience 3 (23 ) 6 75 1 (1 ) (3 ) — Benefits paid (1) (13 ) (13 ) (11 ) (18 ) (4 ) — (4 ) (1 ) Settlements or curtailment gain (2) — (85 ) — (7 ) — — — — Acquisition / business combination — — — 3 — — — — Plan amendments — — — — (11 ) — — — Other (1 ) 1 (1 ) — — — — — Benefit obligation at end of year $ 170 $ 348 $ 173 $ 491 $ 38 $ 15 $ 50 $ 17 Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Change in Plan Assets: Fair value of plan assets at beginning of year $ 167 $ 388 $ 155 $ 375 — — $ — $ — Actual return on plan assets (1 ) 11 21 41 — — — — Employer contribution 1 10 3 12 4 — 4 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (34 ) — (20 ) — — — — Benefits paid (1) (13 ) (13 ) (11 ) (18 ) (4 ) — (4 ) (1 ) Settlements (2) — (85 ) — (4 ) — — — — Acquisition / business combination — — — 1 — — — — Expenses paid from assets (1 ) — (1 ) (1 ) — — — — Fair value of plan assets at end of year $ 153 $ 279 $ 167 $ 388 $ — $ — $ — $ — Funded status $ (17 ) $ (69 ) $ (6 ) $ (103 ) $ (38 ) $ (15 ) $ (50 ) $ (17 ) Recognized liability $ (17 ) $ (69 ) $ (6 ) $ (103 ) $ (38 ) $ (15 ) $ (50 ) $ (17 ) (1 ) Included in this amount are $6 million and $7 million that the Company paid directly to the participants in its defined benefit plans in fiscal 2015 and 2014, respectively. (2 ) The $85 million settlement amount is primarily driven by the transfer of certain plan assets and obligations to a third party, as discussed further under Curtailments and Settlements of Employee Benefit Plans. Pension Assumptions and Strategy The following assumptions were used to determine the pension benefit obligations at September 30: Assumptions as of September 30 2015 2014 2013 Pension Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.2 % 2.9 % 4.0 % 3.0 % 4.5 % 3.8 % Rate of increase in compensation N/A 2.8 % N/A 2.8 % 3.0 % 3.1 % Actuarial assumptions used to determine net periodic benefit cost during the year: Discount rate 4.0 % 3.0 % 4.5 % 3.8 % 3.5 % 3.6 % Expected long-term rate of return on plan assets 7.5 % 5.4 % 7.8 % 5.3 % 7.8 % 5.3 % Rate of increase in compensation N/A 2.8 % 3.0 % 3.1 % 3.5 % 3.1 % Postretirement Assumptions and Strategy The following assumptions were used to determine the postretirement benefit obligations at September 30: Assumptions as of September 30 2015 2014 2013 Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 3.7 % 3.9 % 3.8 % 3.9 % 4.0 % 4.4 % Initial health care cost trend rate 6.5 % 6.8 % 7.0 % 7.1 % 7.5 % 7.5 % Actuarial assumptions used to determine net cost during the year: Discount rate 3.8 % 3.9 % 4.0 % 4.4 % 3.3 % 3.9 % Initial health care cost trend rate 7.0 % 7.1 % 7.5 % 7.5 % 8.0 % 7.4 % Cabot uses discount rates as of September 30, the plans’ measurement date, to determine future benefit obligations under its U.S. and foreign defined benefit plans. The discount rates for the defined benefit plans in the U.S., Canada, Mexico, UAE, Euro-zone, Japan, Switzerland and the U.K. are derived from yield curves that reflect high quality corporate bond yield or swap rate information in each region and reflect the characteristics of Cabot’s employee benefit plans. The discount rates for the defined benefit plans in the Czech Republic and Indonesia are based on government bond indices that best reflect the durations of the plans, adjusted for credit spreads presented in selected AA corporate bond indices. The rates utilized are selected because they represent long-term, high quality, fixed income benchmarks that approximate the long-term nature of Cabot’s pension obligations and related payouts. Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net Amounts Recognized in the Consolidated Balance Sheets: Noncurrent assets $ — $ 5 $ — $ 4 $ — $ — $ — $ — Current liabilities (1 ) (1 ) — (1 ) (4 ) — (5 ) — Noncurrent liabilities (16 ) (73 ) (6 ) (106 ) (34 ) (15 ) (45 ) (17 ) Amounts recognized in Accumulated other comprehensive (loss) income at September 30, 2015 and 2014 were as follows: Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net actuarial loss (gain) $ 5 $ 65 $ (9 ) $ 118 $ (6 ) $ 1 $ (7 ) $ 2 Net prior service credit — (1 ) — — (11 ) — (3 ) — Balance in accumulated other comprehensive (loss) income, pretax $ 5 $ 64 $ (9 ) $ 118 $ (17 ) $ 1 $ (10 ) $ 2 In fiscal 2016, the Company expects an estimated net loss of $3 million will be amortized from Accumulated other comprehensive (loss) income to net periodic benefit cost. In addition, the Company expects prior service credits of $4 million for other postretirement benefits will be amortized from Accumulated other comprehensive (loss) income to net periodic benefit costs in fiscal 2016. Estimated Future Benefit Payments The Company expects that the following benefit payments will be made to plan participants in the years from 2016 to 2025: Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign (Dollars in millions) Years Ended: 2016 $ 12 $ 14 $ 4 $ — 2017 10 12 4 — 2018 11 13 3 1 2019 11 13 3 1 2020 11 14 3 1 2021-2025 55 77 14 4 Postretirement medical benefits are unfunded and impact Cabot’s cash flows as benefits become due. The Company expects to contribute $8 million to its foreign pension plans in fiscal 2016. Net periodic defined benefit pension and other postretirement benefit costs include the following components: Years Ended September 30 2015 2014 2013 2015 2014 2013 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 9 $ 2 $ 9 $ 6 $ 9 $ — $ — $ — $ — $ — $ — Interest cost 7 11 7 16 6 15 2 1 2 1 2 1 Expected return on plan assets (11 ) (14 ) (10 ) (19 ) (10 ) (18 ) — — — — — — Amortization of prior service cost — 3 — — — — (4 ) — (3 ) — (3 ) — Net losses — 4 — 3 1 4 — — — — — — Settlements or Curtailments cost — 18 — — 1 2 — — — — — — Net periodic (benefit) cost $ (3 ) $ 31 $ (1 ) $ 9 $ 4 $ 12 $ (2 ) $ 1 $ (1 ) $ 1 $ (1 ) $ 1 Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows: Years Ended September 30 2015 2014 2013 2015 2014 2013 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net losses (gains) $ 14 $ (8 ) $ (4 ) $ 50 $ (32 ) $ 8 $ 1 $ — $ (4 ) $ — $ (6 ) $ — Prior service (credit) cost — (2 ) — — — — (11 ) — 3 — 3 — Amortization of prior service credit — — — — — — — — — — — — Amortization of prior unrecognized loss — (4 ) — (3 ) (2 ) (4 ) 4 — — — — — Other — (27 ) — (1 ) — (4 ) — — — — — — Total other Comprehensive loss (income) $ 14 $ (41 ) $ (4 ) $ 46 $ (34 ) $ — $ (6 ) $ — $ (1 ) $ — $ (3 ) $ — Curtailments and Settlements of Employee Benefit Plans In recent years, the Company incurred curtailments and settlements of certain of its employee benefit plans. Associated with these curtailments and settlements, the Company recognized net losses of $17 million, less than $1 million, and $3 million in fiscal 2015, 2014 and 2013, respectively. Effective October 1, 2014, the Company transferred the defined benefit obligations and pension plan assets in one of its foreign defined benefit plans to a multi-employer plan. This action effectively moves the administrative, asset custodial, asset investment, actuarial, communication and benefit payment obligations to the multi-employer fund administrator. Cabot is required to make contributions to the multi-employer plan which is over 80% funded. Contributed assets by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. As a result of the transfer a pre-tax charge of $18 million was recorded in the first quarter of fiscal 2015. In addition, there was an approximately $85 million reduction in plan assets and plan obligations as a result of the transfer of assets and obligations of this foreign plan. Sensitivity Analysis Measurement of postretirement benefit expense is based on actuarial assumptions used to value the postretirement benefit liability at the beginning of the year. Assumed health care cost trend rates have an effect on the amounts reported for the health care plans. The fiscal 2015 weighted-average assumed health care cost trend rate is 7.0% for U.S. plans and 7.1% for foreign plans. The ultimate weighted-average health care cost trend rate has been designated as 5.0% for U.S. plans and 6.6% for foreign plans, and is anticipated to be achieved during 2019 and 2016, respectively. A one percentage point change in the 2015 assumed health care cost trend rate would have the following effects: 1-Percentage-Point Increase Decrease U.S. Foreign U.S. Foreign (Dollars in millions) Effect on postretirement benefit obligation $ — $ 3 $ — $ (2 ) Plan Assets The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2015 and 2014, by asset category, are as follows: Pension Assets September 30 2015 2014 U.S. Foreign U.S. Foreign Asset Category: Equity securities 55 % 39 % 55 % 37 % Debt securities 45 % 54 % 45 % 47 % Cash and other securities — 7 % — 16 % Total 100 % 100 % 100 % 100 % To develop the expected long-term rate of return on plan assets assumption, the Company used a capital asset pricing model. The model considers the current level of expected returns on risk-free investments comprised of government bonds, the historical level of the risk premium associated with the other asset classes in which the portfolio is invested, and the expectations for future returns for each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return for each plan. Cabot’s investment strategy for each of its defined benefit plans in the U.S. and abroad is generally based on a set of investment objectives and policies that cover time horizons and risk tolerance levels consistent with plan liabilities. Periodic studies are performed to determine the asset mix that will meet pension obligations at a reasonable cost to the Company. The assets of the defined benefit plans are comprised principally of investments in equity and high quality fixed income securities, which are broadly diversified across the capitalization and style spectrum and are managed using both active and passive strategies. The weighted average target asset allocation for the U.S. plans is 60% in equity and 40% in fixed income and for the foreign plans is 40% in equity, 53% in fixed income, 3% in real estate and 4% in cash and other securities. For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks. The fair value of the Company’s pension plan assets at September 30, 2015 and 2014 by asset category is as follows: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) 2015 Total 2014 Total Asset Category: Cash $ 1 $ — $ 1 $ 69 $ — $ 69 Direct investments: U.S. equity securities 22 — 22 22 — 22 Total direct investments 22 — 22 22 — 22 Investment funds: Equity funds (1) 60 108 168 68 120 188 Fixed income funds (2) 70 150 220 90 163 253 Real estate funds (3) — 9 9 — 9 9 Common and collective investment trust funds (4) — — — — 1 1 Cash equivalent funds — 1 1 — — — Total investment funds 130 268 398 158 293 451 Alternative investments: Insurance contracts (5) — 11 11 — 13 13 Total alternative investments — 11 11 — 13 13 Total pension plan assets $ 153 $ 279 $ 432 $ 249 $ 306 $ 555 (1) The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. (2) The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. (3) The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. (4) The investment objective of the portfolio of this common and collective investment trust is to achieve long-term, total return in excess of the MSCI World Index Benchmark by investing in equity securities of companies worldwide, emphasizing those with above-average potential for capital appreciation. (5) Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note O. Stock-Based Compensation The Company has established equity compensation plans that provide stock-based compensation to eligible employees. The 2009 Long-Term Incentive Plan (the “2009 Plan”), which was approved by Cabot’s stockholders on March 12, 2009 and amended on March 8, 2012, authorizes the issuance of approximately 8.9 million shares of common stock. This is the Company’s only equity incentive plan under which awards may currently be made to employees. The terms of awards made under Cabot’s equity compensation plans are generally determined by the Compensation Committee of Cabot’s Board of Directors. The 2009 Plan allows for grants of stock options, restricted stock, restricted stock units and other stock-based awards to employees. The awards made in fiscal 2015, 2014 and 2013 under the 2009 Plan consist of grants of stock options, time-based restricted stock units, performance-based restricted stock units, and restricted stock units that will be settled in cash. The options were issued with an exercise price equal to 100% of the market price of Cabot’s common stock on the date of grant, vest over a three year period (30% on each of the first and second anniversaries of the date of grant and 40% on the third anniversary of the date of grant) and have a ten-year term. The restricted stock units vest three years from the date of the grant. The number of shares issuable, if any, when a performance-based restricted stock unit award vests will depend on the degree of achievement (threshold, target or maximum performance) of the corporate performance metrics for each year within the three-year performance period of the award. Accordingly, future compensation costs associated with outstanding awards of performance-based restricted stock units may increase or decrease based on the probability of the Company achieving the performance metrics. As of September 30, 2015, there were 35,769 outstanding time-based and performance-based restricted stock units which will be settled by the payment of cash, assuming unbanked awards will be settled at target performance. Compensation expense related to these awards is remeasured throughout the vesting period and until ultimate settlement of the award. Cumulative compensation expense and the associated liability is recorded equal to the fair value of Cabot common stock multiplied by the applicable vesting percentage. The Company recorded liabilities associated with these cash settled awards of $1 million at both September 30, 2015 and 2014. Stock-based employee compensation expense was $8 million, $9 million and $8 million, after tax, for fiscal 2015, 2014 and 2013, respectively. The Company recognized the full impact of its stock-based employee compensation expense in the Consolidated Statements of Operations for fiscal 2015, 2014 and 2013 and did not capitalize any such costs on the Consolidated Balance Sheets because those that qualified for capitalization were not material. The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations: 2015 2014 2013 (Dollars in millions) Cost of sales $ 4 $ 5 $ 4 Selling and administrative expenses 7 8 7 Research and technical expenses 1 1 1 Stock-based compensation expense 12 14 12 Income tax benefit (4 ) (5 ) (4 ) Net stock-based compensation expense $ 8 $ 9 $ 8 As of September 30, 2015, Cabot has $12 million and $2 million of total unrecognized compensation cost related to restricted stock units and options, respectively, granted under the Company’s equity incentive plans. These costs are expected to be recognized over a weighted-average period of 1.3 years and 0.8 years for restricted stock units and options, respectively. Equity Incentive Plan Activity The following table summarizes the total stock option and restricted stock unit activity in the equity incentive plans for fiscal 2015: Stock Options Restricted Stock Units Total Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Restricted Stock Units (1) Weighted Average Grant Date Fair Value (Shares in thousands) Outstanding at September 30, 2014 1,421 $31.22 $10.71 946 $39.31 Granted 245 46.03 15.68 345 45.85 Performance-based adjustment (2) — — — (202 ) 41.72 Exercised / Vested (137 ) 26.47 8.50 (289 ) 33.10 Cancelled / Forfeited (19 ) 41.97 15.81 (65 ) 42.88 Outstanding at September 30, 2015 1,510 33.91 11.65 735 43.84 Exercisable at September 30, 2015 1,023 29.10 Vested and expected to vest (3) 1,500 33.85 (1) The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. (2) Represents the number of performance based restricted stock units cancelled based on the Company’s actual performance against certain performance targets applicable to outstanding restricted stock units. ( 3 ) Stock Options The following table summarizes information related to the outstanding and vested options on September 30, 2015: Total Options Outstanding Exercisable Options Vested and Expected to Vest Aggregate Intrinsic Value (in millions of dollars) $ (4 ) $ 3 $ (3 ) Weighted Average Remaining Contractual Term (in years) 6.30 5.30 6.30 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, based on the Company’s closing common stock price of $31.56 on September 30, 2015, which would have been received by the option holders had all option holders exercised their options and immediately sold their shares on that date. The intrinsic value of options exercised during fiscal 2015, 2014 and 2013 was $2 million, $12 million and $5 million, respectively, and the Company received cash of $4 million, $9 million and $5 million, respectively, from these exercises. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the options at the grant date. The estimated weighted average grant date fair values of options granted during fiscal 2015, 2014 and 2013 was $15.68, $18.36, and $12.51 per option, respectively. The fair values on the grant date were calculated using the following weighted-average assumptions: Years Ended September 30 2015 2014 2013 Expected stock price volatility 41 % 45 % 46 % Risk free interest rate 2.0 % 1.9 % 0.9 % Expected life of options (years) 6 6 6 Expected annual dividends per year $ 0.88 $ 0.80 $ 0.80 The expected stock price volatility assumption was determined using the historical volatility of the Company’s common stock over the expected life of the option. The expected term reflects the anticipated time period between the measurement date and the exercise date or post-vesting cancellation date. Restricted Stock Units The value of restricted stock unit awards is the closing stock price at the date of the grant. The weighted average grant date fair values of restricted stock unit awards granted during fiscal 2015, 2014 and 2013 was $45.85, $47.63 and $35.28, respectively. The intrinsic value of restricted stock units (meaning the fair value of the units on the date of vest) that vested during fiscal 2015, 2014 and 2013 were $14 million, $17 million and $16 million, respectively. Restricted Stock The fair value of restricted stock awards is derived by calculating the difference between the share price and the purchase price at the date of the grant. There were no restricted stock awards granted during fiscal 2015, 2014 or 2013. There was no restricted stock activity during 2015, as all awards were vested as of September 2014. The intrinsic value of restricted stock that vested during each of fiscal 2014 and 2013 was less than $1 million. Supplemental 401(k) Plan Cabot’s Deferred Compensation and Supplemental Retirement Plan (“SERP 401(k)”) provides benefits to highly compensated employees in circumstances in which the maximum limits established under ERISA and the Internal Revenue Code prevent them from receiving all of the Company matching and retirement contributions that would otherwise be provided under the qualified 401(k) plan. The SERP 401(k) is non-qualified and unfunded. Contributions under the SERP 401(k) are treated as if invested in Cabot common stock. The majority of the distributions made under the SERP 401(k) are required to be paid with shares of Cabot common stock. The remaining distributions, which relate to certain grandfathered accounts, will be paid in cash based on the market price of Cabot common stock at the time of distribution. The aggregate value of the accounts that will be paid out in stock, which is equivalent to approximately 150,000 and 146,000 shares of Cabot common stock as of September 30, 2015 and 2014, respectively, is reflected at historic cost in stockholders’ equity, and the aggregate value of the accounts that will be paid in cash, which is $1 million as of both September 30, 2015 and 2014, is reflected in other long-term liabilities and marked-to-market quarterly. |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2015 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | Note P. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Cost of sales $ 10 $ 12 $ 28 Selling and administrative expenses 11 17 7 Total $ 21 $ 29 $ 35 Details of these restructuring activities and the related reserves for fiscal 2015 and 2014 were as follows: Severance and Employee Benefits Environmental Remediation Asset Impairment and Accelerated Depreciation Asset Sales Other Total (Dollars in millions) Reserve at September 30, 2013 $ 7 $ 2 $ — $ — $ 1 $ 10 Charges 18 1 4 1 5 29 Costs charged against assets and other — — (4 ) — — (4 ) Cash paid (8 ) (1 ) — (1 ) (5 ) (15 ) Foreign currency translation adjustment (1 ) — — — — (1 ) Reserve at September 30, 2014 $ 16 $ 2 $ — $ — $ 1 $ 19 Charges 9 — 5 — 7 21 Costs charged against assets and other — — (5 ) — — (5 ) Cash paid (18 ) — — — (6 ) (24 ) Foreign currency translation adjustment (2 ) — — — — (2 ) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 2016 Plan On October 20, 2015, in response to challenging macroeconomic conditions, the Company announced its intention to restructure its operations subject to local consultation requirements and processes in certain locations. In addition, on November 11, 2015, the Company announced that it had committed to a plan to close its carbon black manufacturing facility in Merak, Indonesia. It is anticipated that manufacturing operations at this location will cease by the end of January 2016 and the production in Asia will be consolidated in the Company’s Cilegon, Indonesia and other global carbon black production sites to meet demand. As proposed, these combined 2016 plan actions would result in a reduction of approximately 370 positions across the Company’s global locations. In response to current market conditions, these actions are intended to result in a more competitive cost structure. Business Service Center Transition In January 2014, the Company announced its intention to open a new Europe, Middle East and Africa (“EMEA”) business service center in Riga, Latvia, and to close its Leuven, Belgium site, subject to the Belgian information and consultation process, which was successfully completed in June 2014. These actions were developed following an extensive evaluation of the Company’s business service capabilities in the EMEA region and a determination that the future EMEA business service center will enable the Company to provide the highest quality of service at the most competitive cost. During fiscal 2015 and 2014, the Company has recorded pre-tax restructuring charges of $6 million and $18 million, respectively, comprised primarily of employee severance costs and other transition costs. The majority of actions related to the transition of the business service center have been completed and have resulted in total charges of approximately $24 million comprised of $16 million of severance charges and $8 million of other transition costs including training costs and redundant salaries. Through September 30, 2015, the Company has made $20 million in cash payments related to this plan, comprised of $13 million of severance payments and $7 million of other transition related costs, and expects to make cash payments of approximately $2 million, comprised mainly of severance, in fiscal 2016. The difference between the initial accrual and subsequent cash payments was due to changes in foreign exchange rates. As of September 30, 2015, Cabot has $2 million of accrued restructuring costs in the Consolidated Balance Sheet related to this closure, which is mainly comprised of accrued severance charges. Closure of Port Dickson, Malaysia Manufacturing Facility On April 26, 2013, the Company announced that the Board of its carbon black joint venture, Cabot Malaysia Sdn. Bhd. (“CMSB”), decided to cease production at its Port Dickson, Malaysia facility. The facility ceased production in June 2013. The Company holds a 50.1 percent equity share in CMSB. The decision, which affected approximately 90 carbon black employees, was driven by the facility’s manufacturing inefficiencies and raw materials costs. During fiscal 2015, 2014 and 2013, the Company recorded pre-tax restructuring charges related to this plan of less than $1 million, $2 million and $18 million, respectively. These pre-tax restructuring costs were comprised mainly of accelerated depreciation and asset write-offs of $15 million, severance charges of $2 million, site demolition, clearing and environmental remediation charges of $2 million, and other closure related charges of $1 million. CMSB’s net income or loss is attributable to Cabot Corporation and to the noncontrolling interest in the joint venture. The portion of the charges that are allocable to the noncontrolling interest in CMSB (49.9%) are recorded within Net income (loss) attributable to noncontrolling interests, net of tax, in the Consolidated Statements of Operations. The majority of actions related to closure of the plant were completed in fiscal 2014. Cumulative net cash outlays related to this plan are expected to be approximately $4 million comprised primarily of $1 million for site demolition, clearing and environmental remediation, $2 million for severance, and $1 million for other closure related charges and does not include any gain expected to be recorded on the sale of land. Through September 30, 2015, CMSB has made approximately $3 million in cash payments related to this plan related mainly to severance and site demolition and clearing costs. CMSB expects to make net cash payments of $1 million during fiscal 2016 and thereafter mainly comprised of site demolition, clearing and environmental remediation costs. Approximately $8 million is expected to be received from the sale of land in fiscal 2016, pending the completion of certain activities. As of September 30, 2015, Cabot has less than $1 million of accrued restructuring costs in the Consolidated Balance Sheets related to this closure which is mainly comprised of accrued environmental and other charges. Other Activities The Company has recorded pre-tax charges of approximately $13 million, $8 million and $13 million during fiscal 2015, 2014 and 2013, respectively, related to restructuring activities at several other locations. Fiscal 2015 charges are comprised of $7 million of severance charges, $4 million of assets write-offs and accelerated depreciation and $2 million of other costs and were comprised of charges at the Company’s corporate headquarters in Boston, Massachusetts and Specialty Fluids facility in Bergen, Norway, as well as other locations. Fiscal 2014 charges are comprised of accelerated depreciation and asset write-offs of $5 million and severance charges of $3 million and were comprised of charges at the Company’s carbon black facilities in Port Dickson, Malaysia and Maua, Brazil, as well as other locations. Fiscal 2013 costs are comprised of $8 million of severance charges, $3 million of accelerated depreciation and asset write-offs and $2 million of other expenses and were comprised of charges at the Company’s research and development facility in Billerica, Massachusetts, certain Purification Solutions sites, and other locations. The Company anticipates that it will record additional charges of less than $1 million in fiscal 2016 related to these actions. Through September 30, 2015, Cabot has made cash payments of $23 million related to these activities and expects to pay $5 million in fiscal 2016 mainly for severance and other closure related costs at the impacted locations. As of September 30, 2015, Cabot has $5 million of accrued severance and other closure related costs in the Consolidated Balance Sheets related to these activities. Previous Actions and Sites Pending Sale Beginning in fiscal 2009, the Company entered into several different restructuring plans which have been substantially completed, pending the sale of former manufacturing sites in Thane, India, and Hong Kong. The Company has incurred total cumulative pre-tax charges of approximately $165 million related to these plans through September 30, 2015, comprised of $67 million for severance charges, $66 million for accelerated depreciation and asset impairments, $10 million for environmental, demolition and site clearing costs, and $23 million of other closure related charges partially offset by gains on asset sales of $1 million. These amounts do not include any gain that may be recorded if the Company successfully sells its land rights and certain manufacturing related assets in India or Hong Kong. Pre-tax restructuring expenses related to these plans were approximately $2 million, $1 million and $3 million during fiscal 2015, 2014 and 2013, respectively. Fiscal 2015 charges are comprised mainly of severance, accelerated depreciation and other expenses. Fiscal 2014 charges are comprised mainly of environmental charges and other post closure costs. Fiscal 2013 charges are comprised mainly of severance, accelerated depreciation and other expenses. Since fiscal 2009, Cabot has made net cash payments of $87 million related to these plans and expects to pay approximately $1 million in fiscal 2016 and thereafter. The remaining payments consist mainly of environmental and other closure related costs. These amounts do not include any proceeds that may be received if the Company successfully sells its land rights and certain manufacturing related assets in India or Hong Kong. As of September 30, 2015, Cabot has $2 million of accrued environmental, severance and other closure related costs in the Consolidated Balance Sheets related to these activities. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Sep. 30, 2015 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Note Q. Accumulated Other Comprehensive (Loss) Income Changes in each component of Accumulated other comprehensive (loss) income, net of tax, are as follows for fiscal 2014 and 2015: Currency Translation Adjustment Unrealized Gains on Investment Pension and Other Postretirement Benefit Liability Adjustment Total (Dollars in millions) Balance at September 30, 2013 attributable to Cabot Corporation $ 154 $ 2 $ (53 ) $ 103 Other comprehensive loss before reclassifications (131 ) — (40 ) (171 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Net other comprehensive items 23 2 (93 ) (68 ) Less: Noncontrolling interest (4 ) — — (4 ) Balance at September 30, 2014 attributable to Cabot Corporation 27 2 (93 ) (64 ) Other comprehensive (loss) income before reclassifications (270 ) — 7 (263 ) Amounts reclassified from accumulated other comprehensive income — — 24 24 Net other comprehensive items (243 ) 2 (62 ) (303 ) Less: Noncontrolling interest (4 ) — — (4 ) Balance at September 30, 2015 attributable to Cabot Corporation $ (239 ) $ 2 $ (62 ) $ (299 ) The amounts reclassified out of Accumulated other comprehensive (loss) income and into the Statements of Operations for the fiscal year ended September 30, 2015, 2014 and 2013 are as follows: Affected Line Item in the Consolidated September 30 Statements of Operations 2015 2014 2013 (Dollars in Millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost- see Note N for details $ (1 ) $ 3 $ 5 Amortization of prior service cost Net Periodic Benefit Cost- see Note N for details 4 (3 ) (3 ) Settlement costs Net Periodic Benefit Cost - see Note N for details 27 — — Total before tax 30 — 2 Tax impact Provision for income taxes (6 ) — — Total after tax $ 24 $ — $ 2 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note R. Earnings Per Share The following tables summarize the components of the basic and diluted earnings per common share computations: Years Ended September 30 2015 2014 2013 (In millions, except per share amounts) Basic EPS: Net (loss) income attributable to Cabot Corporation $ (334 ) $ 199 $ 153 Less: Dividends and dividend equivalents to participating securities — 1 — Less: Undistributed earnings allocated to participating securities (1) — 1 1 (Loss) earnings allocated to common shareholders (numerator) $ (334 ) $ 197 $ 152 Weighted average common shares and participating securities outstanding 63.9 65.0 64.4 Less: Participating securities (1) 0.5 0.6 0.6 Adjusted weighted average common shares (denominator) 63.4 64.4 63.8 Per share amounts—basic: (Loss) income from continuing operations attributable to Cabot Corporation $ (5.29 ) $ 3.04 $ 2.39 Income (loss) from discontinued operations 0.02 0.02 (0.01 ) Net (loss) income attributable to Cabot Corporation $ (5.27 ) $ 3.06 $ 2.38 Diluted EPS: (Loss) earnings allocated to common shareholders $ (334 ) $ 197 $ 152 Plus: Earnings allocated to participating securities — 1 1 Less: Adjusted earnings allocated to participating securities (2) — 1 1 (Loss) earnings available to common shares (numerator) $ (334 ) $ 197 $ 152 Adjusted weighted average common shares outstanding 63.4 64.4 63.8 Effect of dilutive securities: Common shares issuable (3) — 0.7 0.7 Adjusted weighted average common shares (denominator) 63.4 65.1 64.5 Per share amounts—diluted: (Loss) income from continuing operations attributable to Cabot Corporation $ (5.29 ) $ 3.01 $ 2.37 Income (loss) from discontinued operations 0.02 0.02 (0.01 ) Net (loss) income attributable to Cabot Corporation $ (5.27 ) $ 3.03 $ 2.36 (1) Participating securities consist of shares of unvested restricted stock, vested restricted stock awards held by employees in which Cabot has a security interest, and unvested time-based restricted stock units. 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: Years Ended September 30 2015 2014 2013 (Dollars in millions) Calculation of undistributed earnings: Net (loss) income attributable to Cabot Corporation $ (334 ) $ 199 $ 153 Less: Dividends declared on common stock 56 54 51 Less: Dividends and dividend equivalents to participating securities — 1 — Undistributed (loss) earnings $ (390 ) $ 144 $ 102 Allocation of undistributed earnings: Undistributed (loss) earnings allocated to common shareholders $ (390 ) $ 143 $ 101 Undistributed earnings allocated to participating securities — 1 1 Undistributed (loss) earnings $ (390 ) $ 144 $ 102 (2) Undistributed (loss) 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 (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii) assumed issuance of shares to employees pursuant to the Company’s Supplemental 401(k) Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based stock unit awards issued under Cabot’s equity incentive plans using the treasury stock method. For fiscal 2015, 2014 and 2013, respectively, 897,056, 197,072 and 301,328 incremental shares of common stock were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note S. Income Taxes Income from continuing operations before income taxes and equity in net earnings of affiliated companies was as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Income from continuing operations: Domestic $ (439 ) $ 50 $ 40 Foreign 62 258 170 Total $ (377 ) $ 308 $ 210 Tax provision (benefit) for income taxes consisted of the following: Years ended September 30 2015 2014 2013 (Dollars in millions) U.S. federal and state: Current $ (7 ) $ (4 ) $ (3 ) Deferred (74 ) (4 ) (6 ) Total (81 ) (8 ) (9 ) Foreign: Current 48 86 70 Deferred (12 ) 14 (1 ) Total 36 100 69 Total U.S. and foreign $ (45 ) $ 92 $ 60 The provision (benefit) for income taxes differed from the provision for income taxes as calculated using the U.S. statutory rate as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Computed tax expense at the federal statutory rate $ (132 ) $ 108 $ 74 Foreign income: Impact of taxation at different rates, repatriation and other (24 ) (29 ) (27 ) Impact of (decrease) increase in valuation allowance on deferred taxes (7 ) 20 — Impact of investment incentive credits — — (1 ) Impact of foreign losses for which a current tax benefit is not available 9 7 9 Impact of non-deductible net currency losses (1 ) — 18 U.S. and state benefits from research and experimentation activities (2 ) — (4 ) Tax settlements (7 ) (7 ) (6 ) Impact of goodwill impairment charge 123 — — Nontaxable gain on existing equity investment — (10 ) — Permanent differences, net — 3 (4 ) State taxes, net of federal effect (4 ) — 1 Total $ (45 ) $ 92 $ 60 Significant components of deferred income taxes were as follows: September 30 2015 2014 (Dollars in millions) Deferred tax assets: Deferred expenses $ 38 $ 37 Intangible assets 32 — Inventory 9 11 Other 3 20 Pension and other benefits 72 74 Net operating loss carry-forwards 145 171 Foreign tax credit carry-forwards 42 40 R&D credit carry-forwards 31 28 Other business credit carry-forwards 40 38 Subtotal 412 419 Valuation allowances (161 ) (186 ) Total deferred tax assets $ 251 $ 233 September 30 2015 2014 (Dollars in millions) Deferred tax liabilities: Intangible assets $ — $ (37 ) Property, plant and equipment (116 ) (143 ) Total deferred tax liabilities $ (116 ) $ (180 ) In the fiscal 2015 tax benefit, Cabot recorded $13 million of discrete tax benefits including benefits of $7 million for tax settlements, $4 million for repatriation, and $2 million for the renewal of the U.S. research and experimentation credit. In the fiscal 2014 tax provision, Cabot recorded $17 million of net discrete tax charges including a $20 million charge for a valuation allowance on deferred tax assets in a foreign jurisdiction, a $2 million charge for return to provision adjustments, a $2 million charge for interest on uncertain tax positions and a $4 million charge for miscellaneous tax items, offset by an $11 million net tax benefit for tax audit settlements. In the fiscal 2013 tax provision, Cabot recorded $3 million of net discrete tax charges including a $13 million foreign currency charge, offset by $10 million of net tax benefit related to tax settlements, renewal of the U.S. research and experimentation credit, and other miscellaneous tax items. Approximately $677 million of net operating loss carryforwards (“NOLs”) and $114 million of other tax credit carryforwards remain at September 30, 2015. The benefits of these carryforwards are dependent upon taxable income during the carryforward period in the jurisdictions in which they arose. Accordingly, a valuation allowance has been provided where management has determined that it is more likely than not that the carryforwards will not be utilized. The following table provides detail surrounding the expiration dates of these carryforwards: NOLs Credits (Dollars in millions) Expiration periods 2016 to 2022 $ 323 $ 51 2023 and thereafter 95 41 Indefinite carry-forwards 259 22 Total $ 677 $ 114 As of September 30, 2015, provisions have not been made for U.S. income taxes or non-U.S. withholding taxes on approximately $1.5 billion of undistributed earnings of non-U.S. subsidiaries, as these earnings are considered indefinitely reinvested. Cabot continually reviews the financial position and forecasted cash flows of its U.S. consolidated group and foreign subsidiaries in order to reaffirm the Company’s intent and ability to continue to indefinitely reinvest earnings of its foreign subsidiaries or whether such earnings will need to be repatriated in the foreseeable future. Such review encompasses operational needs and future capital investments. From time to time, however, the Company’s intentions relative to specific indefinitely reinvested amounts change because of certain unique circumstances. These earnings could become subject to U.S. income taxes and non-U.S. withholding taxes if they were remitted as dividends, were loaned to Cabot Corporation or a U.S. subsidiary, or if Cabot should sell its stock in the subsidiaries with the reinvested earnings. As of September 30, 2015, net deferred tax assets of $155 million are in the U.S. Management believes that the Company’s history of generating domestic profits provides adequate evidence that it is more likely than not that all of the U.S. net deferred tax assets will be realized in the normal course of business. U.S. income from continuing operations adjusted for U.S. permanent differences and excluding the impairment of long-lived assets within the U.S. (see Note G) was a profit of $75 million for the year ended September 30, 2015 and was a cumulative profit of $190 million for the three years ended September 30, 2015 including dividends from non-U.S. subsidiaries. Realization of deferred tax assets is dependent upon future taxable income generated over an extended period of time. As of September 30, 2015, the Company needs to generate approximately $443 million in cumulative future U.S. taxable income at various times over approximately 20 years to realize all of its net U.S. deferred tax assets. The Company reviews its forecast in relation to actual results and expected trends on a quarterly basis. Failure to achieve operating income targets may change the Company’s assessment regarding the realization of Cabot’s deferred tax assets and such change could result in a valuation allowance being recorded against some or all of the Company’s deferred tax assets. Any increase in a valuation allowance would result in additional income tax expense, lower stockholders’ equity and could have a significant impact on Cabot’s earnings in future periods. The valuation allowances at September 30, 2015 and 2014 represent management’s best estimate of the non-realizable portion of the deferred tax assets. The valuation allowance decreased by $25 million in 2015 primarily due to reduction in value of certain future tax benefits and net operating losses generated or acquired that are included in deferred tax assets. The valuation allowance increased by $20 million in 2014 due to the uncertainty of the ultimate realization of certain future tax benefits and net operating losses generated or acquired that are included in deferred tax assets. Cabot has filed its tax returns in accordance with the tax laws in each jurisdiction and recognizes tax benefits for uncertain tax positions when the position would more likely than not be sustained based on its technical merits and recognizes measurement adjustments when needed. As of September 30, 2015, the total amount of unrecognized tax benefits was $30 million, of which $16 million was recorded in the Company’s Consolidated Balance Sheet and $14 million of deferred tax assets, principally related to state net operating loss carry-forwards, have not been recorded. In addition, accruals of $1 million and $8 million have been recorded for penalties and interest, respectively, as of September 30, 2015 and $1 million and $11 million, respectively, as of September 30, 2014. Total penalties and interest recorded in the tax provision in the Consolidated Statement of Operations was $2 million in fiscal 2015 and $3 million in both fiscal 2014 and 2013. If the unrecognized tax benefits were recognized at a given point in time, there would be approximately $20 million favorable impact on the Company’s tax provision before consideration of the impact of the potential need for valuation allowances. A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2015, 2014 and 2013 is as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Balance at beginning of the year $ 41 $ 50 $ 55 Additions based on tax provisions related to the current year 1 1 1 Additions for tax positions of prior years — — 2 Reductions of tax provisions of prior years (1 ) (1 ) (5 ) Reductions related to settlements (9 ) (5 ) — Reductions from lapse of statute of limitations (2 ) (4 ) (3 ) Balance at end of the year $ 30 $ 41 $ 50 Certain Cabot subsidiaries are under audit in jurisdictions outside of the U.S. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a further change in the unrecognized tax benefits may 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 2012 through 2014 tax years generally remain subject to examination by the IRS and various tax years from 2005 through 2014 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2002 through 2014 remain subject to examination by their respective tax authorities. As of September 30, 2015, Cabot’s significant non-U.S. jurisdictions include Canada, China, France, Germany, Italy, Japan, and the Netherlands. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note T. Commitments and Contingencies Operating Lease Commitments Cabot leases certain transportation vehicles, warehouse facilities, office space, machinery and equipment under cancelable and non-cancelable operating leases, most of which expire within ten years and may be renewed by Cabot. Escalation clauses, lease payments dependent on existing rates/indexes and other lease concessions are included in the minimum lease payments and such lease payments are recognized on a straight-line basis over the minimum lease term. Rent expense under such arrangements for fiscal 2015, 2014 and 2013 totaled $29 million, $26 million and $23 million, respectively. Future minimum rental commitments under non-cancelable leases are as follows: (Dollars in millions) 2016 $ 21 2017 14 2018 12 2019 10 2020 8 2021 and thereafter 67 Total future minimum rental commitments $ 132 Other Long-Term Commitments Cabot has entered into long-term purchase agreements primarily for the purchase of raw materials. Under certain of these agreements, the quantity of material being purchased is fixed, but the price paid changes as market prices change. Raw materials purchased under these agreements by segment for fiscal 2015, 2014 and 2013 are as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Reinforcement Materials $ 276 $ 354 $ 371 Performance Chemicals 62 43 34 Purification Solutions 14 32 34 Other — 3 2 Total $ 352 $ 432 $ 441 Included in the table above are raw materials purchases from noncontrolling shareholders of consolidated subsidiaries. These purchases were $169 million, $241 million and $150 million during fiscal 2015, 2014 and 2013, respectively, and accounts payable and accrued liabilities owed to noncontrolling shareholders as of September 30, 2015 and 2014, were $8 million and $16 million, respectively. The purchase commitments for Reinforcement Materials, Performance Chemicals, and Purification Solutions covered by these agreements are with various suppliers and purchases are expected to take place as follows: Payments Due by Fiscal Year 2016 2017 2018 2019 2020 Thereafter Total (Dollars in millions) Reinforcement Materials $ 228 $ 177 $ 176 $ 173 $ 137 $ 1,821 $ 2,712 Performance Chemicals 60 38 33 33 30 178 372 Purification Solutions 14 10 7 6 7 2 46 Total $ 302 $ 225 $ 216 $ 212 $ 174 $ 2,001 $ 3,130 These commitments have been estimated using current market prices. As noted above, these will fluctuate based on the actual market price at the time of purchase. Guarantee Agreements Cabot has provided certain indemnities pursuant to which it may be required to make payments to an indemnified party in connection with certain transactions and agreements. In connection with certain acquisitions and divestitures, Cabot has provided routine indemnities with respect to such matters as environmental, tax, insurance, product and employee liabilities. In connection with various other agreements, including service and supply agreements with customers, Cabot has provided indemnities for certain contingencies and routine warranties. Cabot is unable to estimate the maximum potential liability for these types of indemnities as a maximum obligation is not explicitly stated in most cases and the amounts, if any, are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be reasonably estimated. The duration of the indemnities vary, and in many cases are indefinite. Cabot has not recorded any liability for these indemnities in the consolidated financial statements, except as otherwise disclosed. Self-Insurance and Retention for Certain Contingencies The Company is partially self-insured for certain third-party liabilities globally, as well as workers’ compensation and employee medical benefits in the United States. The third-party and workers’ compensation liabilities are managed through a wholly-owned insurance captive and the related liabilities are included in the consolidated financial statements. The employee medical obligations are managed by a third-party provider and the related liabilities are included in the consolidated financial statements. To limit Cabot’s potential liabilities for these risks, however, the Company purchases insurance from third-parties that provides individual and aggregate stop-loss protection. The aggregate self-insured liability in fiscal 2015 for combined U.S. / Canadian third-party liabilities and U.S. workers’ compensation was $6.9 million, and the retention for medical costs in the United States is at most $225,000 per person per annum. There is no aggregate self-insurance limitation outside of the U.S. and Canada for third party liabilities. Contingencies Cabot is a defendant, or potentially responsible party, in various lawsuits and environmental proceedings wherein substantial amounts are claimed or at issue. Environmental Matters As of September 30, 2015 and September 30, 2014, Cabot had $16 million and $17 million, respectively, reserved for environmental matters. These environmental matters mainly relate to closed sites. These reserves represent Cabot’s best estimates of the probable costs to be incurred at those sites where costs are reasonably estimable based on the Company’s analysis of the extent of clean up required, alternative clean-up methods available, abilities of other responsible parties to contribute and its interpretation of laws and regulations applicable to each site. In fiscal 2015 and 2014, there was $4 million and $4 million in Accounts payable and accrued liabilities and $12 million and $13 million in Other liabilities, respectively, in the Consolidated Balance Sheets for environmental matters. Cabot reviews the adequacy of the reserves as circumstances change at individual sites and adjusts the reserves as appropriate. Almost all of Cabot’s environmental issues relate to sites that are mature and have been investigated and studied and, in many cases, are subject to agreed upon remediation plans. However, depending on the results of future testing, changes in risk assessment practices, remediation techniques and regulatory requirements, newly discovered conditions, and other factors, it is reasonably possible that the Company could incur additional costs in excess of environmental reserves currently recorded. Management estimates, based on the latest available information, that any such future environmental remediation costs that are reasonably possible to be in excess of amounts already recorded would be immaterial to the Company’s consolidated financial statements. Charges for environmental expense were $1 million, $15 million, and $1 million in fiscal 2015, 2014 and 2013, respectively, which are included in Cost of sales in the Consolidated Statements of Operations. Cash payments related to these environmental matters were $2 million in fiscal 2015, $3 million in fiscal 2014, and $2 million in fiscal 2013. The operation and maintenance component of the $16 million reserve for environmental matters was $7 million at September 30, 2015. Cabot expects to make payments of $2 million in fiscal 2016, $3 million in fiscal 2017 and 2018, less than $1 million in fiscal 2019 and 2020, and a total of $6 million thereafter. In November 2013, Cabot entered into a Consent Decree with the United States Environmental Protection Agency (“EPA”) and the Louisiana Department of Environmental Quality (“LDEQ”) regarding Cabot’s three carbon black manufacturing facilities in the United States. This settlement is related to EPA’s national enforcement initiative focused on the U.S. carbon black manufacturing sector alleging non-compliance with certain regulatory and permitting requirements under The Clean Air Act, including the New Source Review (“NSR”) construction permitting requirements. Pursuant to this settlement, Cabot paid a combined $975,000 civil penalty to EPA and LDEQ, agreed to fund environmental mitigation projects in the three communities where the plants are located for a total cost of approximately $450,000, two of which have been completed, and will install technology controls for sulfur dioxide and nitrogen oxide. Other Matters 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. Generally, these respirator liabilities 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. Neither Cabot, nor its past or present subsidiaries, at any time manufactured asbestos or asbestos-containing products. At no time did this respiratory product line represent a significant portion of the respirator market. The subsidiary transferred the business to Aearo Corporation (“Aearo”) in July 1995. Cabot agreed to have the subsidiary retain certain liabilities associated with exposure to asbestos and silica while using respirators prior to the 1995 transaction so long as Aearo paid, and continues to pay, Cabot an annual fee of $400,000. Aearo can discontinue payment of the fee at any time, in which case it will assume the responsibility for and indemnify Cabot against those liabilities which Cabot’s subsidiary had agreed to retain. The Company anticipates that it will continue to receive payment of the $400,000 fee from Aearo and thereby retain these liabilities for the foreseeable future. Cabot has no liability in connection with any products manufactured by Aearo after 1995. In addition to Cabot’s subsidiary and as described above, other parties are responsible for significant portions of the costs of respirator liabilities, leaving Cabot’s subsidiary with a portion of the liability in only some of the pending cases. These parties include Aearo, AO, AO’s insurers, another former owner and its insurers and a third-party manufacturer of respirators formerly sold under the AO brand and its insurers (collectively, with the Company’s subsidiary, the “Payor Group”). As of September 30, 2015 and 2014, there were approximately 38,000 and 41,000 claimants, respectively, in pending cases asserting claims against AO in connection with respiratory products. Cabot has contributed to the Payor Group’s defense and settlement costs with respect to a percentage of pending claims depending on several factors, including the period of alleged product use. In order to quantify Cabot’s estimated share of liability for pending and future respirator liability claims, Cabot has engaged, through counsel, the assistance of Hamilton, Rabinovitz & Alschuler, Inc. (“HR&A”), a leading consulting firm in the field of tort liability valuation. The methodology used by HR&A addresses the complexities surrounding Cabot’s potential liability by making assumptions about future claimants with respect to periods of asbestos, silica and coal mine dust exposure and respirator use. Using those and other assumptions, HR&A estimates the number of future asbestos, silica and coal mine dust claims that will be filed and the related costs that would be incurred in resolving both currently pending and future claims. On this basis, HR&A then estimates the value of the share of these liabilities that reflect Cabot’s period of direct manufacture and Cabot’s contractual obligations. Based on the HR&A estimates, Cabot has recorded an $11 million reserve to accrue for its estimated share of liability for pending and future respirator claims. The Company made payments related to its respirator liability of $2 million in each of fiscal 2015, 2014 and 2013. The Company’s current estimate of the cost of its share of existing and future respirator liability claims is based on facts and circumstances existing at this time. 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 silica and non-malignant asbestos claims, (iii) significant changes in the average cost of resolving claims, (iv) significant changes in the legal costs of defending these claims, (v) changes in the nature of claims received, (vi) changes in the law and procedure applicable to these claims, (vii) the financial viability of members of the Payor Group, (viii) a change in the availability of the insurance coverage of the members of the Payor Group or the indemnity provided by AO’s former owner, (ix) changes in the allocation of costs among the Payor Group and (x) a determination that the assumptions that were used to estimate the Company’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. Accordingly, the actual amount of these liabilities for existing and future claims could be different than the reserved amount. Other The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to the Company’s divested businesses. In the opinion of the Company, although final disposition of some or all of these other suits and claims may impact the Company’s consolidated financial statements in a particular period, they are not expected in the aggregate to have a material adverse effect on the Company’s consolidated financial statements. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Sep. 30, 2015 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | Note U. Concentration of Credit Risk Credit risk represents the loss that would be recognized if counterparties failed to completely perform as contracted. Financial instruments that subject Cabot to credit risk consist principally of cash and cash equivalents, investments, trade receivables and derivatives. Cabot maintains financial instruments with major banks and financial institutions. The Company has not experienced any material credit losses related to these instruments held at these financial institutions. Furthermore, concentrations of credit risk exist for groups of customers when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. No customer individually represented 10% or more of consolidated net sales for fiscal 2015, 2014 and 2013. Tire manufacturers comprise a significant portion of Cabot’s trade receivable balance. The accounts receivable balance for these significant customers as a group is as follows: September 30 2015 2014 (Dollars in millions) Tire manufacturers $ 217 $ 311 Cabot has not experienced significant losses in the past from these customers. Cabot monitors its exposure to customers to manage potential credit losses. |
Financial Information by Segmen
Financial Information by Segment & Geographic Area | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Information by Segment & Geographic Area | Note V. Financial Information by Segment & Geographic Area Segment Information The Company identifies a business 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”) to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Company has determined that all of its businesses are operating segments. 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. In the first quarter of fiscal 2015, the Company realigned its business reporting structure into four segments that consist of Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. Segment results have been recast for all periods presented to reflect the realignment of the Company’s global business segments. The new segment structure is designed to improve efficiency and resource prioritization and reflects how the Company’s CODM reviews segment results to assess performance and allocate resources. The Reinforcement Materials segment combines the rubber blacks and elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons and compounds and inkjet colorants product lines into the Specialty Carbons and Formulations business, and combines the fumed metal oxides and aerogel product lines into the Metal Oxides 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 one reportable segment. The Purification Solutions segment represents the Company’s activated carbon business and the Specialty Fluids segment includes cesium formate oil and gas drilling fluids and high-purity fine cesium chemicals product lines. Reportable segment operating profit (loss) before interest and taxes (“Segment EBIT”) is presented for each reportable segment in the financial information by the reportable segment table below on the line entitled Income (loss) from continuing operations before taxes. Segment EBIT excludes certain items, meaning items management does not consider representative of 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, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, the effects of LIFO accounting for inventory, general unallocated expense and unallocated corporate costs. Segment assets exclude cash, short-term investments, cost investments, income taxes receivable, deferred taxes and headquarters’ assets, which are included in unallocated and other. Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. Reinforcement Materials Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and aggregates of varied structure and surface chemistry, resulting in many different performance characteristics for a wide variety of applications. Rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. Our rubber blacks products are used in tires and industrial products. Rubber blacks have traditionally been used in the tire industry as a rubber reinforcing agent to increase tread durability and are also used as a performance additive to reduce rolling resistance and improve traction. In industrial products such as hoses, belts, extruded profiles and molded goods, rubber blacks are used to improve the physical performance of the product, including the product’s physical strength, fluid resistance, conductivity and resistivity. Performance Chemicals Performance Chemicals is comprised of two businesses: (i) our Specialty Carbons and Formulations business, which manufactures and sells specialty grades of carbon black, specialty compounds and inkjet colorants, and (ii) our Metal Oxides business, which manufactures and sells fumed silica, fumed alumina and dispersions thereof and aerogel. In Performance Chemicals, we design, manufacture and sell materials that deliver performance in a broad range of customer applications across the automotive, construction and infrastructure, inkjet printing, electronics, and consumer products sectors. The net sales from each of these businesses for fiscal 2015, 2014 and 2013 are as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Specialty Carbons and Formulations $ 630 $ 709 $ 686 Metal Oxides 297 313 303 Total Performance Chemicals $ 927 $ 1,022 $ 989 Specialty Carbons and Formulations Business Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and aggregates of varied structure and surface chemistry, resulting in many different performance characteristics for a wide variety of applications. Our specialty grades of carbon black are used to impart color, provide rheology control, enhance conductivity and static charge control, provide UV protection, enhance mechanical properties, and provide formulation flexibility through surface treatment. These specialty carbon products are used in a wide variety of applications, such as inks, coatings, cables, pipes, toners and electronics. Our thermoplastic concentrates and compounds, which we refer to as “specialty compounds”, are derived from our specialty grades of carbon black mixed with polymers and other additives. These products are generally used by plastics formulators in thermoplastic polymer applications, such as cable jacketings, films, fibers, moldings, pipes and sheets, as they are generally easier to handle, mix and disperse for these applications than carbon black alone. In addition, our electrically conductive compound products generally are used to reduce the risk of damage from electrostatic discharge in plastics applications. Our inkjet colorants are high-quality pigment-based black and color dispersions based on our patented, carbon black, surface modification technology. The dispersions are used in aqueous inkjet inks to impart color, sharp print characteristics and durability, while maintaining high printhead reliability. These products are used in various inkjet printing applications, including commercial printing, small office/home office and corporate office, and niche applications that require a high level of dispersibility and colloidal stability. Our inkjet inks, which utilize our pigment-based colorant dispersions, are used in the emerging commercial printing segment for digital print. Metal Oxides Business Fumed silica is an ultra-fine, high-purity particle used as a reinforcing, thickening, abrasive, thixotropic, suspending or anti-caking agent in a wide variety of products for the automotive, construction, microelectronics, and consumer products industries. These products include adhesives, sealants, cosmetics, inks, toners, silicone rubber, coatings, polishing slurries and pharmaceuticals. Fumed alumina, also an ultra-fine, high-purity particle, is used as an abrasive, absorbent or barrier agent in a variety of products, such as inkjet media, lighting, coatings, cosmetics and polishing slurries. Aerogel is a hydrophobic, silica-based particle with a high surface area that is used in a variety of thermal insulation and specialty chemical applications. In the building and construction industry, the product is used in insulative sprayable plasters and composite building products, as well as translucent skylight, window, wall and roof systems for insulating eco-daylighting applications. In the specialty chemicals industry, the product is used to provide matte finishing, insulating and thickening properties for use in a variety of applications. Purification Solutions The Company’s activated carbon products are used for the purification of water, air, food and beverages, pharmaceuticals and other liquids and gases, as either a colorant or a decoloring agent in the production of products for food and beverage applications and as a chemical carrier in slow release applications. In gas and air applications, one of the uses of activated carbon is for the removal of mercury in flue gas streams. In certain applications, used activated carbon can be reactivated for further use by removing the contaminants from the pores of the activated carbon product. In addition to activated carbon production and reactivation, the Company also provides activated carbon solutions through on-site equipment and services, including delivery systems for activated carbon injection in coal-fired utilities, mobile water filter units and carbon reactivation services. Specialty Fluids The Specialty Fluids segment principally produces and markets cesium formate as a drilling and completion fluid for use primarily in high-pressure and high-temperature oil and gas well construction. The fluid is resistant to high temperatures, minimizes damage to producing reservoirs and is readily biodegradable in accordance with testing guidelines set by the Organization for Economic Cooperation and Development. The business also manufactures and sells fine cesium chemicals that are used in a wide range of applications, including catalysts and brazing fluxes. Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1), (3) Consolidated Total (Dollars in millions) Years Ended September 30 2015 Revenues from external customers (2) $ 1,507 $ 927 $ 296 $ 42 $ 2,772 $ 99 $ 2,871 Depreciation and amortization 83 54 45 2 184 (1 ) 183 Equity in earnings of affiliated companies 2 1 6 — 9 (5 ) 4 Income (loss) from continuing operations before taxes (3) 143 178 5 6 332 (709 ) (377 ) Assets (4) 1,220 625 789 119 2,753 322 3,075 Total expenditures for additions to long-lived assets (5) 44 29 48 16 137 4 141 2014 Revenues from external customers (2) 2,108 1,022 315 98 3,543 104 3,647 Depreciation and amortization 88 56 54 3 201 — 201 Equity in earnings of affiliated companies (3 ) 1 6 — 4 (4 ) — Income (loss) from continuing operations before taxes (3) 259 168 (19 ) 39 447 (139 ) 308 Assets (4) 1,632 731 1,389 115 3,867 217 4,084 Total expenditures for additions to long-lived assets (5) 65 29 64 7 165 6 171 2013 Revenues from external customers (2) 1,931 989 328 101 3,349 107 3,456 Depreciation and amortization 82 56 54 2 194 (4 ) 190 Equity in earnings of affiliated companies 9 2 4 — 15 (4 ) 11 Income (loss) from continuing operations before taxes (3) 195 149 (4 ) 46 386 (176 ) 210 Assets (4) 1,523 752 1,388 110 3,773 460 4,233 Total expenditures for additions to long-lived assets (5) 172 46 38 5 261 3 264 (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) Revenue from external customers that are categorized as Unallocated and Other reflects royalties, other operating revenues, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below. Years Ended September 30 2015 2014 2013 (Dollars in millions) Royalties, other operating revenues, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable $ 9 $ (7 ) $ 5 Shipping and handling fees 90 111 102 Total $ 99 $ 104 $ 107 (3) Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: Years Ended September 30 2015 2014 2013 (Dollars in millions) Interest expense $ (53 ) $ (55 ) $ (62 ) Total certain items, pre-tax (a) (617 ) (28 ) (54 ) Equity in earnings of affiliated companies, net of tax (b) (4 ) — (11 ) Unallocated corporate costs (c) (46 ) (54 ) (48 ) General unallocated expense (d) 11 (2 ) (1 ) Total $ (709 ) $ (139 ) $ (176 ) (a) Certain items are items that management does not consider representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax for fiscal 2015 include $562 million related to goodwill and long-lived asset impairment charges for the Purification Solutions business (refer to Note G), $21 million related to global restructuring activities (Refer to Note P), $5 million for acquisition and integration-related charges, $21 million related to employee benefit plan settlement and other charges (refer to note N), and $2 million related to foreign currency loss on revaluations, and $6 million related to an inventory reserve adjustment (refer to Note E). Certain items, pre-tax, for fiscal 2014 primarily include $29 million related to global restructuring activities, $7 million for acquisition and integration-related charges, $18 million for legal and environmental matters and reserves and $3 million of certain foreign currency gains recorded by foreign subsidiaries offset by a $29 million non-cash gain recognized on the Company’s pre-existing investment in NHUMO as a result of the NHUMO transaction. Certain items, pre-tax, for fiscal 2013 primarily include $35 million related to global restructuring activities, $21 million for acquisition and integration-related charges (consisting of $10 million for certain other one-time integration costs and $11 million of additional charges related to acquisition accounting adjustments for the acquired inventory) and $1 million for legal and environmental matters and reserves offset by $3 million of certain foreign currency gains recorded by foreign subsidiaries. (b) Equity in earnings of affiliated companies, net of tax is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (c) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (d) General unallocated expense consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. (4) Unallocated and Other assets includes cash, marketable securities, cost investments, income taxes receivable, deferred taxes, headquarters’ assets, and current and non-current assets held for sale. (5) Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. Geographic Information Sales are attributed to the United States and to all foreign countries based on the location from which the sale originated. Revenues from external customers and long-lived assets attributable to an individual country, other than the United States, China and The Netherlands, were not material for disclosure. Revenues from external customers and long-lived asset information by geographic area are summarized as follows: United States China The Netherlands Other Foreign Countries Consolidated Total (Dollars in millions) Years Ended September 30, 2015 Revenues from external customers $ 705 $ 548 $ 176 $ 1,442 $ 2,871 Net property, plant and equipment $ 480 $ 311 $ 157 $ 435 $ 1,383 2014 Revenues from external customers $ 847 $ 628 $ 220 $ 1,952 $ 3,647 Net property, plant and equipment $ 496 $ 355 $ 197 $ 533 $ 1,581 2013 Revenues from external customers $ 818 $ 558 $ 224 $ 1,856 $ 3,456 Net property, plant and equipment $ 488 $ 385 $ 211 $ 516 $ 1,600 |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | Note W. Unaudited Quarterly Financial Information Unaudited financial results by quarter for fiscal 2015 and 2014 are summarized below: Quarter Ended December March June September Year (Dollars in millions, except per share amounts) Fiscal 2015 Consolidated Net Income Net sales and other operating revenues $ 812 $ 694 $ 694 $ 671 $ 2,871 Gross profit 157 139 150 139 585 Purification Solutions long-lived assets impairment charge — — 209 1 210 Purification Solutions goodwill impairment charge — — 353 (1 ) 352 Income from discontinued operations, net of tax — — 1 1 2 Net income (loss) 49 27 (443 ) 41 (326 ) Net income (loss) attributable to Cabot Corporation 45 26 (445 ) 40 (334 ) Income per share—basic: Income (loss) from continuing operations $ 0.70 $ 0.41 $ (7.05 ) $ 0.63 $ (5.29 ) Income from discontinued operations — — 0.01 0.01 0.02 Net income (loss) attributable to Cabot Corporation $ 0.70 $ 0.41 $ (7.04 ) $ 0.64 $ (5.27 ) Income per share—diluted: Income (loss) from continuing operations $ 0.69 $ 0.41 $ (7.05 ) $ 0.62 $ (5.29 ) Income from discontinued operations — — 0.01 0.01 0.02 Net income (loss) attributable to Cabot Corporation $ 0.69 $ 0.41 $ (7.04 ) $ 0.63 $ (5.27 ) Quarter Ended December March June September Year (Dollars in millions, except per share amounts) Fiscal 2014 Consolidated Net Income Net sales and other operating revenues $ 898 $ 898 $ 940 $ 911 $ 3,647 Gross profit 179 176 184 182 721 (Loss) income from discontinued operations, net of tax (1 ) — (1 ) 4 2 Net income 86 39 57 36 218 Net income attributable to Cabot Corporation 80 36 52 31 199 Income per share—basic: Income from continuing operations $ 1.25 $ 0.56 $ 0.80 $ 0.43 $ 3.04 Income from discontinued operations (0.01 ) (0.01 ) (0.01 ) 0.05 0.02 Net income attributable to Cabot Corporation $ 1.24 $ 0.55 $ 0.79 $ 0.48 $ 3.06 Income per share—diluted: Income from continuing operations $ 1.24 $ 0.55 $ 0.79 $ 0.43 $ 3.01 (Loss) income from discontinued operations (0.01 ) (0.01 ) (0.01 ) 0.05 0.02 Net income attributable to Cabot Corporation $ 1.23 $ 0.54 $ 0.78 $ 0.48 $ 3.03 |
Significant Accounting Polici34
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cabot 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, of which there were none in the periods presented. Intercompany transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include all highly liquid investments with a maturity of three months or less at date of acquisition. Cabot continually assesses the liquidity of cash equivalents and, as of September 30, 2015, has determined that they are readily convertible to cash. |
Inventories | Inventories Inventories are stated at the lower of cost or market. The cost of all carbon black inventories in the U.S. is determined using the last-in, first-out (“LIFO”) method. The cost of Specialty Fluids inventories, which are classified as assets held for rent, is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the first-in, first-out (“FIFO”) method. Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving, or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable value. |
Investments | Investments The Company has investments in equity affiliates and marketable securities. As circumstances warrant, all investments are subject to periodic impairment reviews. Unless consolidation is required, investments in equity affiliates, where Cabot generally owns between 20% and 50% of the affiliate, are accounted for using the equity method. Cabot records its share of the equity affiliate’s results of operations based on its percentage of ownership of the affiliate. Dividends declared from equity affiliates are a return on investment and are recorded as a reduction to the equity investment value. At September 30, 2015 and 2014, Cabot had equity affiliate investments of $57 million and $68 million, respectively. Dividends declared and received from these investments were $14 million, $25 million and $8 million in fiscal 2015, 2014 and 2013, respectively. All investments in marketable securities are classified as available-for-sale and are recorded at fair value with the corresponding unrealized holding gains or losses, net of taxes, recorded as a separate component of Other comprehensive loss within stockholders’ equity. Unrealized losses that are determined to be other-than-temporary, based on current and expected market conditions, are recognized in earnings. The fair value of marketable securities is determined based on quoted market prices at the balance sheet dates. The cost of marketable securities sold is determined by the specific identification method. The Company’s investment in marketable securities was immaterial as of both September 30, 2015 and 2014. |
Intangible Assets and Goodwill Impairment | Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to Performance Chemicals is recorded in the Fumed Metal Oxides reporting unit. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline below its carrying amount because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2015, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit was less than its carrying amount. Refer to Note G for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the third fiscal quarter of 2015. Due to the impairment recorded, the fair value of the Purification Solutions reporting unit was insignificantly higher than its carrying value. No events occurred in the fourth fiscal quarter of 2015 that would suggest that it is more likely than not that the carrying values of any of our reporting units exceeded its fair value. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. Definite-lived intangible assets, which are comprised of customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company evaluates indefinite-lived intangible assets, which are comprised of the trademarks of Purification Solutions, for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. Refer to Note G for details on the impairment test performed on intangible assets of the Purification Solutions reporting unit and the resulting impairment charges recorded. Effective in the third quarter of 2015 and as a part of the impairment assessment performed, the Company determined that the trademarks for Purification Solutions no longer have an indefinite life. |
Long-Lived Assets Impairment | Long-lived Assets Impairment The Company’s long-lived assets primarily include property, plant and equipment, intangible assets, long-term investments and assets held for rent. The carrying values of long-lived assets are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. To test for impairment of assets, the Company generally uses a probability-weighted estimate of the future undiscounted net cash flows of the assets over their remaining lives to determine if the value of the asset is recoverable. Long-lived assets are grouped with other assets and liabilities at the lowest level for which independent identifiable cash flows are determinable. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the analysis described above, in which case the asset is written down to its fair value. If the asset does not have a readily determinable market value, a discounted cash flow model may be used to determine the fair value of the asset. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. Refer to Note G regarding the results of the impairment test performed on the long-lived assets of the Purification Solutions segment. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. Cabot capitalizes interest costs when they are part of the historical cost of acquiring and constructing certain assets that require a period of time to prepare for their intended use. During fiscal 2015, 2014 and 2013, Cabot capitalized less than $1 million, $3 million and $5 million of interest costs, respectively. These amounts will be amortized over the lives of the related assets. |
Assets Held for Rent | Assets Held for Rent Assets held for rent represent Specialty Fluids cesium formate product that is available to customers in the normal course of business and $11 million of ore that has been mined and will be converted into cesium formate. Assets held for rent are stated at average cost. |
Asset Retirement Obligations | Asset Retirement Obligations Cabot estimates incremental costs for special handling, removal and disposal of materials that may or will give rise to conditional asset retirement obligations (“ARO”) and then discounts the expected costs back to the current year using a credit adjusted risk free rate. Cabot recognizes ARO liabilities and costs when the timing and/or settlement can be reasonably estimated. The ARO reserves were $20 million and $15 million at September 30, 2015 and 2014, respectively. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the majority of Cabot’s foreign subsidiaries is the local currency in which the subsidiary operates. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet dates. Income and expense items are translated at average monthly exchange rates during the year. Unrealized currency translation adjustments are included as a separate component of Accumulated other comprehensive (loss) income within stockholders’ equity. Realized and unrealized foreign currency gains and losses arising from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings with the exception of (i) intercompany transactions considered to be of a long-term investment nature; and (ii) foreign currency borrowings designated as net investment hedges. Gains or losses arising from these transactions are included as a component of other comprehensive (loss) income. In fiscal 2015, 2014 and 2013, net foreign currency transaction losses of $8 million, losses of $2 million, and gains of $2 million, respectively, are included in Other (expense) income in the Consolidated Statements of Operations. |
Financial Instruments | Financial Instruments Cabot’s financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, investments, accounts payable and accrued liabilities, short-term and long-term debt, and derivative instruments. The carrying values of Cabot’s financial instruments approximate fair value with the exception of fixed rate long-term debt, which is recorded at amortized cost. The fair values of the Company’s financial instruments are based on quoted market prices, if such prices are available. In situations where quoted market prices are not available, the Company relies on valuation models to derive fair value. Such valuation takes into account the ability of the financial counterparty to perform. Cabot uses derivative financial instruments primarily for purposes of hedging the exposures to fluctuations in foreign currency exchange rates, which exist as part of its on-going business operations. Cabot does not enter into derivative contracts for speculative purposes, nor does it hold or issue any derivative contracts for trading purposes. All derivatives are recognized on the Consolidated Balance Sheets at fair value. Where Cabot has a legal right to offset derivative settlements under a master netting agreement with a counterparty, derivatives with that counterparty are presented on a net basis. The changes in the fair value of derivatives are recorded in either earnings or Accumulated other comprehensive (loss) income, depending on whether or not the instrument is designated as part of a hedge transaction and, if designated as part of a hedge transaction, the type of hedge transaction. The gains or losses on derivative instruments reported in Accumulated other comprehensive (loss) income are reclassified to earnings in the period in which earnings are affected by the underlying hedged item. The ineffective portion of all hedges is recognized in earnings during the period in which the ineffectiveness occurs. In accordance with Cabot’s risk management strategy, the Company may enter into certain derivative instruments that may not be designated as hedges for hedge accounting purposes. Although these derivatives are not designated as hedges, the Company believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The Company records in earnings the gains or losses from changes in the fair value of derivative instruments that are not designated as hedges. Cash movements associated with these instruments are presented in the Consolidated Statement of Cash Flows as Cash Flows from Operating Activities because the derivatives are designed to mitigate risk to the Company’s cash flow from operations. The cash flows related to the principal amount of outstanding debt instruments are presented in the Cash Flows from Financing Activities section of the Consolidated Statement of Cash Flows. |
Revenue Recognition | Revenue Recognition Cabot recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Cabot generally is able to ensure that products meet customer specifications prior to shipment. If the Company is unable to determine that the product has met the specified objective criteria prior to shipment or if title has not transferred because of sales terms, the revenue is considered “unearned” and is deferred until the revenue recognition criteria are met. Shipping and handling charges related to sales transactions are recorded as sales revenue when billed to customers or included in the sales price. Taxes collected on sales to customers are excluded from revenues. The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments Years ended September 30 2015 2014 2013 Reinforcement Materials 54 % 59 % 57 % Performance Chemicals 33 % 29 % 30 % Purification Solutions 11 % 9 % 10 % Specialty Fluids 2 % 3 % 3 % Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Chemicals. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. |
Cost of Sales | Cost of Sales Cost of sales consists of the cost of raw and packaging materials, direct manufacturing costs, depreciation, internal transfer costs, inspection costs, inbound and outbound freight and shipping and handling costs, plant purchasing and receiving costs and other overhead expenses necessary to manufacture the products. |
Accounts and Notes Receivable | Accounts and Notes Receivable Trade receivables are recorded at the invoiced amount and generally do not bear interest. Trade receivables in China may at certain times be settled with the receipt of bank issued non-interest bearing notes. These notes totaled 95 million Chinese Renminbi (“RMB”) ($15 million) and 193 million RMB ($31 million) as of September 30, 2015 and 2014, respectively, and are included in accounts and notes receivable. Cabot periodically sells a portion of the trade receivables in China and other customer receivables at a discount and such sales are accounted for as asset sales. The Company does not have any continuing involvement with the notes after the sale. The difference between the proceeds from the sale and the carrying value of the receivables is recognized as a loss on the sale of receivables and is included in Other (expense) income in the accompanying Consolidated Statements of Operations. During each of fiscal 2015, 2014 and 2013, the Company recorded charges of $3 million, $3 million, and $4 million, respectively, for the sale of these receivables. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. |
Stock-Based Compensation | Stock-based Compensation Cabot recognizes compensation expense for stock-based awards granted to employees using the fair value method. Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as expense over the service period, which generally represents the vesting period, and includes an estimate of the awards that will be forfeited, and an estimate of what level of performance the Company will achieve for Cabot’s performance-based stock awards. Cabot calculates the fair value of its stock options using the Black-Scholes option pricing model. The fair value of restricted stock units is determined using the closing price of Cabot stock on the day of the grant. |
Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses consist of salaries and fringe benefits of sales and office personnel, general office expenses and other expenses not directly related to manufacturing operations. |
Research and Technical Expenses | Research and Technical Expenses Research and technical expenses include salaries, equipment and material expenditures, and contractor fees and are expensed as incurred. |
Income Taxes | Income Taxes Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Cabot has designated to be indefinitely reinvested. Cabot records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon ultimate settlement. This analysis presumes the taxing authorities’ full knowledge of the positions taken and all relevant facts, but does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and includes such charges in its income tax provision in the Consolidated Statements of Operations. |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income, which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. |
Environmental Costs | Environmental Costs Cabot accrues environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single liability amount cannot be reasonably estimated, but a range can be reasonably estimated, Cabot accrues the amount that reflects the best estimate within that range or the low end of the range if no estimate within the range is better. The amount accrued reflects Cabot’s assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number and financial viability of other potentially responsible parties. Cabot does not reduce its estimated liability for possible recoveries from insurance carriers. Proceeds from insurance carriers are recorded when realized by either the receipt of cash or a contractual agreement. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Significant Accounting Polici35
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Segment Reporting Revenue Percentage | The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments Years ended September 30 2015 2014 2013 Reinforcement Materials 54 % 59 % 57 % Performance Chemicals 33 % 29 % 30 % Purification Solutions 11 % 9 % 10 % Specialty Fluids 2 % 3 % 3 % |
Acquisition of NHUMO (Tables)
Acquisition of NHUMO (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Components and Allocation of Purchase Price | The following table presents the components and allocation of the purchase price: (Dollars in millions) Assets Current assets $ 54 Property, plant and equipment 48 Other non-current assets 1 Intangible assets 63 Goodwill 45 Total assets acquired 211 Liabilities Accounts payable, accruals and other liabilities (20 ) Deferred tax liabilities - long-term (29 ) Total liabilities assumed (49 ) Net assets acquired $ 162 Cash consideration paid 80 Fair value of redeemable preferred stock 28 Previously held equity interest in NHUMO 54 Total $ 162 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Company's Inventories | Inventories, net of LIFO, obsolete, unmarketable and slow moving reserves, are as follows: September 30 2015 2014 (Dollars in millions) Raw materials $ 69 $ 111 Work in process 1 2 Finished goods 287 341 Other 40 44 Total $ 397 $ 498 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment consists of the following: September 30 2015 2014 (Dollars in millions) Land and land improvements $ 154 $ 132 Buildings 509 536 Machinery and equipment 2,391 2,593 Other 225 233 Construction in progress 106 216 Total property, plant and equipment 3,385 3,710 Less: accumulated depreciation (2,002 ) (2,129 ) Net property, plant and equipment $ 1,383 $ 1,581 |
Purification Solutions Goodwi39
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment Charges and Associated Tax Benefit | During fiscal 2015 and as a result of the impairment tests performed on goodwill and long-lived assets of the Purification Solutions reporting unit, the Company recorded impairment charges and an associated tax benefit in the Consolidated Statements of Operations as follows: Year Ended September 30, 2015 (Dollars in millions) Purification Solutions goodwill impairment charge $ 352 Purification Solutions long-lived assets impairment charge 210 Provision (benefit) for income taxes (80 ) Impairment charges, after tax $ 482 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Balances | The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended September 30, 2015 are as follows Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2014 $ 68 $ 10 $ 458 $ 536 Impairment charge — — (352 ) (352 ) Foreign currency impact (13 ) (1 ) (16 ) (30 ) Balance at September 30, 2015 $ 55 $ 9 $ 90 $ 154 Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Accumulated impairment losses at September 30, 2014 — — — — Accumulated impairment losses at September 30, 2015 $ — $ — $ (352 ) $ (352 ) |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: September 30, 2015 September 30, 2014 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives (1) Developed technologies $ 48 $ (1 ) $ 47 $ 152 $ (16 ) $ 136 Trademarks 16 — 16 57 — 57 Customer relationships 96 (6 ) 90 171 (17 ) 154 Total intangible assets $ 160 $ (7 ) $ 153 $ 380 $ (33 ) $ 347 |
Accounts Payable, Accrued Lia41
Accounts Payable, Accrued Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Payables And Accruals [Abstract] | |
Components of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities included in current liabilities consist of the following: September 30 2015 2014 (Dollars in millions) Accounts payable $ 274 $ 351 Accrued employee compensation 34 48 Other accrued liabilities 81 113 Total $ 389 $ 512 |
Components of Other Long-Term Liabilities | Other long-term liabilities consist of the following: September 30 2015 2014 (Dollars in millions) Employee benefit plan liabilities $ 138 $ 174 Non-current tax liabilities 17 33 Other accrued liabilities 85 84 Total $ 240 $ 291 |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized below: September 30 2015 2014 (Dollars in millions) Variable Rate Debt: $750 million Revolving Credit Facility, expires 2019 $ — $ — Chinese Renminbi Notes, due through 2016, 6.15%—6.77% — 28 Total variable rate debt — 28 Fixed Rate Debt: 5% Notes due 2017 $ 300 $ 300 2.55% Notes due 2018 250 250 3.7% Notes due 2022 350 350 Medium Term Notes: Notes due 2019, 7.42% 30 30 Notes due 2022, 8.35%—8.47% 15 15 Notes due 2028, 6.57%—7.28% 8 8 Total Medium Term Notes $ 53 $ 53 Chinese Renminbi Notes, due through 2017, 4.63%—6.15% 5 31 Total fixed rate debt 958 984 Capital lease obligations, due through 2031 14 17 Unamortized debt discount (1 ) (1 ) Total debt 971 1,028 Less current portion of long-term debt (1 ) (24 ) Total long-term debt $ 970 $ 1,004 |
Schedule of Future Years Payment | The aggregate principal amounts of long-term debt and capital lease obligations due in each of the five years from fiscal 2016 through 2020 and thereafter are as follows: Fiscal Years Ending September 30, Principal Payments on Long-Term Debt Payments on Capital Lease Obligations Total (Dollars in millions) 2016 $ — $ 3 $ 3 2017 305 4 309 2018 250 3 253 2019 30 3 33 2020 — 3 3 Thereafter 373 17 390 Less: executory costs and interest — (19 ) (19 ) Total $ 958 $ 14 $ 972 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Forward Foreign Currency Contracts [Member] | |
Derivative [Line Items] | |
Details of Derivatives Held to Manage Foreign Currency Risk | The following table provides details of the derivatives held as of September 30, 2015 and 2014 to manage foreign currency risk. Notional Amount Description Borrowing September 30, 2015 September 30, 2014 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 2 million USD 32 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Brazilian real, and Czech koruna. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Change in Benefit Obligations and Change in Plan Assets | The following provides information about benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans: Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Change in Benefit Obligations: Benefit obligation at beginning of year $ 173 $ 491 $ 170 $ 439 $ 50 $ 17 $ 55 $ 17 Service cost 1 9 2 9 — — — — Interest cost 7 11 7 16 2 1 2 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (45 ) — (28 ) — (2 ) — — Loss (gain) from changes in actuarial assumptions and plan experience 3 (23 ) 6 75 1 (1 ) (3 ) — Benefits paid (1) (13 ) (13 ) (11 ) (18 ) (4 ) — (4 ) (1 ) Settlements or curtailment gain (2) — (85 ) — (7 ) — — — — Acquisition / business combination — — — 3 — — — — Plan amendments — — — — (11 ) — — — Other (1 ) 1 (1 ) — — — — — Benefit obligation at end of year $ 170 $ 348 $ 173 $ 491 $ 38 $ 15 $ 50 $ 17 Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Change in Plan Assets: Fair value of plan assets at beginning of year $ 167 $ 388 $ 155 $ 375 — — $ — $ — Actual return on plan assets (1 ) 11 21 41 — — — — Employer contribution 1 10 3 12 4 — 4 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (34 ) — (20 ) — — — — Benefits paid (1) (13 ) (13 ) (11 ) (18 ) (4 ) — (4 ) (1 ) Settlements (2) — (85 ) — (4 ) — — — — Acquisition / business combination — — — 1 — — — — Expenses paid from assets (1 ) — (1 ) (1 ) — — — — Fair value of plan assets at end of year $ 153 $ 279 $ 167 $ 388 $ — $ — $ — $ — Funded status $ (17 ) $ (69 ) $ (6 ) $ (103 ) $ (38 ) $ (15 ) $ (50 ) $ (17 ) Recognized liability $ (17 ) $ (69 ) $ (6 ) $ (103 ) $ (38 ) $ (15 ) $ (50 ) $ (17 ) (1 ) Included in this amount are $6 million and $7 million that the Company paid directly to the participants in its defined benefit plans in fiscal 2015 and 2014, respectively. (2 ) The $85 million settlement amount is primarily driven by the transfer of certain plan assets and obligations to a third party, as discussed further under Curtailments and Settlements of Employee Benefit Plans. |
Assumptions Used to Determine Pension Benefit Obligations | Pension Assumptions and Strategy The following assumptions were used to determine the pension benefit obligations at September 30: Assumptions as of September 30 2015 2014 2013 Pension Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.2 % 2.9 % 4.0 % 3.0 % 4.5 % 3.8 % Rate of increase in compensation N/A 2.8 % N/A 2.8 % 3.0 % 3.1 % Actuarial assumptions used to determine net periodic benefit cost during the year: Discount rate 4.0 % 3.0 % 4.5 % 3.8 % 3.5 % 3.6 % Expected long-term rate of return on plan assets 7.5 % 5.4 % 7.8 % 5.3 % 7.8 % 5.3 % Rate of increase in compensation N/A 2.8 % 3.0 % 3.1 % 3.5 % 3.1 % Postretirement Assumptions and Strategy The following assumptions were used to determine the postretirement benefit obligations at September 30: Assumptions as of September 30 2015 2014 2013 Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 3.7 % 3.9 % 3.8 % 3.9 % 4.0 % 4.4 % Initial health care cost trend rate 6.5 % 6.8 % 7.0 % 7.1 % 7.5 % 7.5 % Actuarial assumptions used to determine net cost during the year: Discount rate 3.8 % 3.9 % 4.0 % 4.4 % 3.3 % 3.9 % Initial health care cost trend rate 7.0 % 7.1 % 7.5 % 7.5 % 8.0 % 7.4 % |
Net Amounts Recognized in Consolidated Balance Sheets | The rates utilized are selected because they represent long-term, high quality, fixed income benchmarks that approximate the long-term nature of Cabot’s pension obligations and related payouts. Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net Amounts Recognized in the Consolidated Balance Sheets: Noncurrent assets $ — $ 5 $ — $ 4 $ — $ — $ — $ — Current liabilities (1 ) (1 ) — (1 ) (4 ) — (5 ) — Noncurrent liabilities (16 ) (73 ) (6 ) (106 ) (34 ) (15 ) (45 ) (17 ) |
Amounts Recognized in Accumulated Other Comprehensive (Loss) Income | Amounts recognized in Accumulated other comprehensive (loss) income at September 30, 2015 and 2014 were as follows: Years Ended September 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net actuarial loss (gain) $ 5 $ 65 $ (9 ) $ 118 $ (6 ) $ 1 $ (7 ) $ 2 Net prior service credit — (1 ) — — (11 ) — (3 ) — Balance in accumulated other comprehensive (loss) income, pretax $ 5 $ 64 $ (9 ) $ 118 $ (17 ) $ 1 $ (10 ) $ 2 |
Estimated Future Benefit Payments | Estimated Future Benefit Payments The Company expects that the following benefit payments will be made to plan participants in the years from 2016 to 2025: Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign (Dollars in millions) Years Ended: 2016 $ 12 $ 14 $ 4 $ — 2017 10 12 4 — 2018 11 13 3 1 2019 11 13 3 1 2020 11 14 3 1 2021-2025 55 77 14 4 |
Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs | Net periodic defined benefit pension and other postretirement benefit costs include the following components: Years Ended September 30 2015 2014 2013 2015 2014 2013 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 9 $ 2 $ 9 $ 6 $ 9 $ — $ — $ — $ — $ — $ — Interest cost 7 11 7 16 6 15 2 1 2 1 2 1 Expected return on plan assets (11 ) (14 ) (10 ) (19 ) (10 ) (18 ) — — — — — — Amortization of prior service cost — 3 — — — — (4 ) — (3 ) — (3 ) — Net losses — 4 — 3 1 4 — — — — — — Settlements or Curtailments cost — 18 — — 1 2 — — — — — — Net periodic (benefit) cost $ (3 ) $ 31 $ (1 ) $ 9 $ 4 $ 12 $ (2 ) $ 1 $ (1 ) $ 1 $ (1 ) $ 1 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income, Pre-Tax | Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows: Years Ended September 30 2015 2014 2013 2015 2014 2013 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Net losses (gains) $ 14 $ (8 ) $ (4 ) $ 50 $ (32 ) $ 8 $ 1 $ — $ (4 ) $ — $ (6 ) $ — Prior service (credit) cost — (2 ) — — — — (11 ) — 3 — 3 — Amortization of prior service credit — — — — — — — — — — — — Amortization of prior unrecognized loss — (4 ) — (3 ) (2 ) (4 ) 4 — — — — — Other — (27 ) — (1 ) — (4 ) — — — — — — Total other Comprehensive loss (income) $ 14 $ (41 ) $ (4 ) $ 46 $ (34 ) $ — $ (6 ) $ — $ (1 ) $ — $ (3 ) $ — |
Sensitivity Analysis | A one percentage point change in the 2015 assumed health care cost trend rate would have the following effects: 1-Percentage-Point Increase Decrease U.S. Foreign U.S. Foreign (Dollars in millions) Effect on postretirement benefit obligation $ — $ 3 $ — $ (2 ) |
Defined Benefit Pension Plans Weighted-Average Asset Allocations | The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2015 and 2014, by asset category, are as follows: Pension Assets September 30 2015 2014 U.S. Foreign U.S. Foreign Asset Category: Equity securities 55 % 39 % 55 % 37 % Debt securities 45 % 54 % 45 % 47 % Cash and other securities — 7 % — 16 % Total 100 % 100 % 100 % 100 % |
Fair Value of Pension Plan Assets by Asset Category | The fair value of the Company’s pension plan assets at September 30, 2015 and 2014 by asset category is as follows: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) 2015 Total 2014 Total Asset Category: Cash $ 1 $ — $ 1 $ 69 $ — $ 69 Direct investments: U.S. equity securities 22 — 22 22 — 22 Total direct investments 22 — 22 22 — 22 Investment funds: Equity funds (1) 60 108 168 68 120 188 Fixed income funds (2) 70 150 220 90 163 253 Real estate funds (3) — 9 9 — 9 9 Common and collective investment trust funds (4) — — — — 1 1 Cash equivalent funds — 1 1 — — — Total investment funds 130 268 398 158 293 451 Alternative investments: Insurance contracts (5) — 11 11 — 13 13 Total alternative investments — 11 11 — 13 13 Total pension plan assets $ 153 $ 279 $ 432 $ 249 $ 306 $ 555 (1) The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. (2) The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. (3) The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. (4) The investment objective of the portfolio of this common and collective investment trust is to achieve long-term, total return in excess of the MSCI World Index Benchmark by investing in equity securities of companies worldwide, emphasizing those with above-average potential for capital appreciation. (5) Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expenses | The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations: 2015 2014 2013 (Dollars in millions) Cost of sales $ 4 $ 5 $ 4 Selling and administrative expenses 7 8 7 Research and technical expenses 1 1 1 Stock-based compensation expense 12 14 12 Income tax benefit (4 ) (5 ) (4 ) Net stock-based compensation expense $ 8 $ 9 $ 8 |
Equity Incentive Plan Activity | The following table summarizes the total stock option and restricted stock unit activity in the equity incentive plans for fiscal 2015: Stock Options Restricted Stock Units Total Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Restricted Stock Units (1) Weighted Average Grant Date Fair Value (Shares in thousands) Outstanding at September 30, 2014 1,421 $31.22 $10.71 946 $39.31 Granted 245 46.03 15.68 345 45.85 Performance-based adjustment (2) — — — (202 ) 41.72 Exercised / Vested (137 ) 26.47 8.50 (289 ) 33.10 Cancelled / Forfeited (19 ) 41.97 15.81 (65 ) 42.88 Outstanding at September 30, 2015 1,510 33.91 11.65 735 43.84 Exercisable at September 30, 2015 1,023 29.10 Vested and expected to vest (3) 1,500 33.85 (1) The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. (2) Represents the number of performance based restricted stock units cancelled based on the Company’s actual performance against certain performance targets applicable to outstanding restricted stock units. ( 3 ) |
Stock Options Outstanding and Vested Options | The following table summarizes information related to the outstanding and vested options on September 30, 2015: Total Options Outstanding Exercisable Options Vested and Expected to Vest Aggregate Intrinsic Value (in millions of dollars) $ (4 ) $ 3 $ (3 ) Weighted Average Remaining Contractual Term (in years) 6.30 5.30 6.30 |
Weighted-Average Assumptions | The fair values on the grant date were calculated using the following weighted-average assumptions: Years Ended September 30 2015 2014 2013 Expected stock price volatility 41 % 45 % 46 % Risk free interest rate 2.0 % 1.9 % 0.9 % Expected life of options (years) 6 6 6 Expected annual dividends per year $ 0.88 $ 0.80 $ 0.80 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Restructuring And Related Activities [Abstract] | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Cost of sales $ 10 $ 12 $ 28 Selling and administrative expenses 11 17 7 Total $ 21 $ 29 $ 35 |
Restructuring Activities and Related Reserves | Details of these restructuring activities and the related reserves for fiscal 2015 and 2014 were as follows: Severance and Employee Benefits Environmental Remediation Asset Impairment and Accelerated Depreciation Asset Sales Other Total (Dollars in millions) Reserve at September 30, 2013 $ 7 $ 2 $ — $ — $ 1 $ 10 Charges 18 1 4 1 5 29 Costs charged against assets and other — — (4 ) — — (4 ) Cash paid (8 ) (1 ) — (1 ) (5 ) (15 ) Foreign currency translation adjustment (1 ) — — — — (1 ) Reserve at September 30, 2014 $ 16 $ 2 $ — $ — $ 1 $ 19 Charges 9 — 5 — 7 21 Costs charged against assets and other — — (5 ) — — (5 ) Cash paid (18 ) — — — (6 ) (24 ) Foreign currency translation adjustment (2 ) — — — — (2 ) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 |
Accumulated Other Comprehensi47
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Changes in Each Component of Accumulated Other Comprehensive (Loss) Income, Net of Tax | Changes in each component of Accumulated other comprehensive (loss) income, net of tax, are as follows for fiscal 2014 and 2015: Currency Translation Adjustment Unrealized Gains on Investment Pension and Other Postretirement Benefit Liability Adjustment Total (Dollars in millions) Balance at September 30, 2013 attributable to Cabot Corporation $ 154 $ 2 $ (53 ) $ 103 Other comprehensive loss before reclassifications (131 ) — (40 ) (171 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Net other comprehensive items 23 2 (93 ) (68 ) Less: Noncontrolling interest (4 ) — — (4 ) Balance at September 30, 2014 attributable to Cabot Corporation 27 2 (93 ) (64 ) Other comprehensive (loss) income before reclassifications (270 ) — 7 (263 ) Amounts reclassified from accumulated other comprehensive income — — 24 24 Net other comprehensive items (243 ) 2 (62 ) (303 ) Less: Noncontrolling interest (4 ) — — (4 ) Balance at September 30, 2015 attributable to Cabot Corporation $ (239 ) $ 2 $ (62 ) $ (299 ) |
Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income | The amounts reclassified out of Accumulated other comprehensive (loss) income and into the Statements of Operations for the fiscal year ended September 30, 2015, 2014 and 2013 are as follows: Affected Line Item in the Consolidated September 30 Statements of Operations 2015 2014 2013 (Dollars in Millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost- see Note N for details $ (1 ) $ 3 $ 5 Amortization of prior service cost Net Periodic Benefit Cost- see Note N for details 4 (3 ) (3 ) Settlement costs Net Periodic Benefit Cost - see Note N for details 27 — — Total before tax 30 — 2 Tax impact Provision for income taxes (6 ) — — Total after tax $ 24 $ — $ 2 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings Per Common Share | The following tables summarize the components of the basic and diluted earnings per common share computations: Years Ended September 30 2015 2014 2013 (In millions, except per share amounts) Basic EPS: Net (loss) income attributable to Cabot Corporation $ (334 ) $ 199 $ 153 Less: Dividends and dividend equivalents to participating securities — 1 — Less: Undistributed earnings allocated to participating securities (1) — 1 1 (Loss) earnings allocated to common shareholders (numerator) $ (334 ) $ 197 $ 152 Weighted average common shares and participating securities outstanding 63.9 65.0 64.4 Less: Participating securities (1) 0.5 0.6 0.6 Adjusted weighted average common shares (denominator) 63.4 64.4 63.8 Per share amounts—basic: (Loss) income from continuing operations attributable to Cabot Corporation $ (5.29 ) $ 3.04 $ 2.39 Income (loss) from discontinued operations 0.02 0.02 (0.01 ) Net (loss) income attributable to Cabot Corporation $ (5.27 ) $ 3.06 $ 2.38 Diluted EPS: (Loss) earnings allocated to common shareholders $ (334 ) $ 197 $ 152 Plus: Earnings allocated to participating securities — 1 1 Less: Adjusted earnings allocated to participating securities (2) — 1 1 (Loss) earnings available to common shares (numerator) $ (334 ) $ 197 $ 152 Adjusted weighted average common shares outstanding 63.4 64.4 63.8 Effect of dilutive securities: Common shares issuable (3) — 0.7 0.7 Adjusted weighted average common shares (denominator) 63.4 65.1 64.5 Per share amounts—diluted: (Loss) income from continuing operations attributable to Cabot Corporation $ (5.29 ) $ 3.01 $ 2.37 Income (loss) from discontinued operations 0.02 0.02 (0.01 ) Net (loss) income attributable to Cabot Corporation $ (5.27 ) $ 3.03 $ 2.36 (1) Participating securities consist of shares of unvested restricted stock, vested restricted stock awards held by employees in which Cabot has a security interest, and unvested time-based restricted stock units. |
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 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: Years Ended September 30 2015 2014 2013 (Dollars in millions) Calculation of undistributed earnings: Net (loss) income attributable to Cabot Corporation $ (334 ) $ 199 $ 153 Less: Dividends declared on common stock 56 54 51 Less: Dividends and dividend equivalents to participating securities — 1 — Undistributed (loss) earnings $ (390 ) $ 144 $ 102 Allocation of undistributed earnings: Undistributed (loss) earnings allocated to common shareholders $ (390 ) $ 143 $ 101 Undistributed earnings allocated to participating securities — 1 1 Undistributed (loss) earnings $ (390 ) $ 144 $ 102 (2) Undistributed (loss) 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 (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii) assumed issuance of shares to employees pursuant to the Company’s Supplemental 401(k) Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based stock unit awards issued under Cabot’s equity incentive plans using the treasury stock method. For fiscal 2015, 2014 and 2013, respectively, 897,056, 197,072 and 301,328 incremental shares of common stock were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Taxes | Income from continuing operations before income taxes and equity in net earnings of affiliated companies was as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Income from continuing operations: Domestic $ (439 ) $ 50 $ 40 Foreign 62 258 170 Total $ (377 ) $ 308 $ 210 |
Provision (Benefit) for Income Taxes | Tax provision (benefit) for income taxes consisted of the following: Years ended September 30 2015 2014 2013 (Dollars in millions) U.S. federal and state: Current $ (7 ) $ (4 ) $ (3 ) Deferred (74 ) (4 ) (6 ) Total (81 ) (8 ) (9 ) Foreign: Current 48 86 70 Deferred (12 ) 14 (1 ) Total 36 100 69 Total U.S. and foreign $ (45 ) $ 92 $ 60 |
Reconciliation Using U.S. Statutory Rate | The provision (benefit) for income taxes differed from the provision for income taxes as calculated using the U.S. statutory rate as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Computed tax expense at the federal statutory rate $ (132 ) $ 108 $ 74 Foreign income: Impact of taxation at different rates, repatriation and other (24 ) (29 ) (27 ) Impact of (decrease) increase in valuation allowance on deferred taxes (7 ) 20 — Impact of investment incentive credits — — (1 ) Impact of foreign losses for which a current tax benefit is not available 9 7 9 Impact of non-deductible net currency losses (1 ) — 18 U.S. and state benefits from research and experimentation activities (2 ) — (4 ) Tax settlements (7 ) (7 ) (6 ) Impact of goodwill impairment charge 123 — — Nontaxable gain on existing equity investment — (10 ) — Permanent differences, net — 3 (4 ) State taxes, net of federal effect (4 ) — 1 Total $ (45 ) $ 92 $ 60 |
Components of Deferred Income Taxes | Significant components of deferred income taxes were as follows: September 30 2015 2014 (Dollars in millions) Deferred tax assets: Deferred expenses $ 38 $ 37 Intangible assets 32 — Inventory 9 11 Other 3 20 Pension and other benefits 72 74 Net operating loss carry-forwards 145 171 Foreign tax credit carry-forwards 42 40 R&D credit carry-forwards 31 28 Other business credit carry-forwards 40 38 Subtotal 412 419 Valuation allowances (161 ) (186 ) Total deferred tax assets $ 251 $ 233 September 30 2015 2014 (Dollars in millions) Deferred tax liabilities: Intangible assets $ — $ (37 ) Property, plant and equipment (116 ) (143 ) Total deferred tax liabilities $ (116 ) $ (180 ) |
Expiration Dates of Carryforwards | The following table provides detail surrounding the expiration dates of these carryforwards: NOLs Credits (Dollars in millions) Expiration periods 2016 to 2022 $ 323 $ 51 2023 and thereafter 95 41 Indefinite carry-forwards 259 22 Total $ 677 $ 114 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2015, 2014 and 2013 is as follows: Years ended September 30 2015 2014 2013 (Dollars in millions) Balance at beginning of the year $ 41 $ 50 $ 55 Additions based on tax provisions related to the current year 1 1 1 Additions for tax positions of prior years — — 2 Reductions of tax provisions of prior years (1 ) (1 ) (5 ) Reductions related to settlements (9 ) (5 ) — Reductions from lapse of statute of limitations (2 ) (4 ) (3 ) Balance at end of the year $ 30 $ 41 $ 50 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Non-Cancelable Leases | Future minimum rental commitments under non-cancelable leases are as follows: (Dollars in millions) 2016 $ 21 2017 14 2018 12 2019 10 2020 8 2021 and thereafter 67 Total future minimum rental commitments $ 132 |
Schedule of Raw Material Purchased under Long Term Purchase Agreements | Cabot has entered into long-term purchase agreements primarily for the purchase of raw materials. Under certain of these agreements, the quantity of material being purchased is fixed, but the price paid changes as market prices change. Raw materials purchased under these agreements by segment for fiscal 2015, 2014 and 2013 are as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Reinforcement Materials $ 276 $ 354 $ 371 Performance Chemicals 62 43 34 Purification Solutions 14 32 34 Other — 3 2 Total $ 352 $ 432 $ 441 |
Schedule of Components of Purchase Commitments | The purchase commitments for Reinforcement Materials, Performance Chemicals, and Purification Solutions covered by these agreements are with various suppliers and purchases are expected to take place as follows: Payments Due by Fiscal Year 2016 2017 2018 2019 2020 Thereafter Total (Dollars in millions) Reinforcement Materials $ 228 $ 177 $ 176 $ 173 $ 137 $ 1,821 $ 2,712 Performance Chemicals 60 38 33 33 30 178 372 Purification Solutions 14 10 7 6 7 2 46 Total $ 302 $ 225 $ 216 $ 212 $ 174 $ 2,001 $ 3,130 |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Risks And Uncertainties [Abstract] | |
Schedule of Account Receivable | Tire manufacturers comprise a significant portion of Cabot’s trade receivable balance. The accounts receivable balance for these significant customers as a group is as follows: September 30 2015 2014 (Dollars in millions) Tire manufacturers $ 217 $ 311 |
Financial Information by Segm52
Financial Information by Segment & Geographic Area (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Performance Segment | The net sales from each of these businesses for fiscal 2015, 2014 and 2013 are as follows: Years Ended September 30 2015 2014 2013 (Dollars in millions) Specialty Carbons and Formulations $ 630 $ 709 $ 686 Metal Oxides 297 313 303 Total Performance Chemicals $ 927 $ 1,022 $ 989 |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1), (3) Consolidated Total (Dollars in millions) Years Ended September 30 2015 Revenues from external customers (2) $ 1,507 $ 927 $ 296 $ 42 $ 2,772 $ 99 $ 2,871 Depreciation and amortization 83 54 45 2 184 (1 ) 183 Equity in earnings of affiliated companies 2 1 6 — 9 (5 ) 4 Income (loss) from continuing operations before taxes (3) 143 178 5 6 332 (709 ) (377 ) Assets (4) 1,220 625 789 119 2,753 322 3,075 Total expenditures for additions to long-lived assets (5) 44 29 48 16 137 4 141 2014 Revenues from external customers (2) 2,108 1,022 315 98 3,543 104 3,647 Depreciation and amortization 88 56 54 3 201 — 201 Equity in earnings of affiliated companies (3 ) 1 6 — 4 (4 ) — Income (loss) from continuing operations before taxes (3) 259 168 (19 ) 39 447 (139 ) 308 Assets (4) 1,632 731 1,389 115 3,867 217 4,084 Total expenditures for additions to long-lived assets (5) 65 29 64 7 165 6 171 2013 Revenues from external customers (2) 1,931 989 328 101 3,349 107 3,456 Depreciation and amortization 82 56 54 2 194 (4 ) 190 Equity in earnings of affiliated companies 9 2 4 — 15 (4 ) 11 Income (loss) from continuing operations before taxes (3) 195 149 (4 ) 46 386 (176 ) 210 Assets (4) 1,523 752 1,388 110 3,773 460 4,233 Total expenditures for additions to long-lived assets (5) 172 46 38 5 261 3 264 (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) Revenue from external customers that are categorized as Unallocated and Other reflects royalties, other operating revenues, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below. Years Ended September 30 2015 2014 2013 (Dollars in millions) Royalties, other operating revenues, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable $ 9 $ (7 ) $ 5 Shipping and handling fees 90 111 102 Total $ 99 $ 104 $ 107 (3) Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: Years Ended September 30 2015 2014 2013 (Dollars in millions) Interest expense $ (53 ) $ (55 ) $ (62 ) Total certain items, pre-tax (a) (617 ) (28 ) (54 ) Equity in earnings of affiliated companies, net of tax (b) (4 ) — (11 ) Unallocated corporate costs (c) (46 ) (54 ) (48 ) General unallocated expense (d) 11 (2 ) (1 ) Total $ (709 ) $ (139 ) $ (176 ) (a) Certain items are items that management does not consider representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax for fiscal 2015 include $562 million related to goodwill and long-lived asset impairment charges for the Purification Solutions business (refer to Note G), $21 million related to global restructuring activities (Refer to Note P), $5 million for acquisition and integration-related charges, $21 million related to employee benefit plan settlement and other charges (refer to note N), and $2 million related to foreign currency loss on revaluations, and $6 million related to an inventory reserve adjustment (refer to Note E). Certain items, pre-tax, for fiscal 2014 primarily include $29 million related to global restructuring activities, $7 million for acquisition and integration-related charges, $18 million for legal and environmental matters and reserves and $3 million of certain foreign currency gains recorded by foreign subsidiaries offset by a $29 million non-cash gain recognized on the Company’s pre-existing investment in NHUMO as a result of the NHUMO transaction. Certain items, pre-tax, for fiscal 2013 primarily include $35 million related to global restructuring activities, $21 million for acquisition and integration-related charges (consisting of $10 million for certain other one-time integration costs and $11 million of additional charges related to acquisition accounting adjustments for the acquired inventory) and $1 million for legal and environmental matters and reserves offset by $3 million of certain foreign currency gains recorded by foreign subsidiaries. (b) Equity in earnings of affiliated companies, net of tax is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (c) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (d) General unallocated expense consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. (4) Unallocated and Other assets includes cash, marketable securities, cost investments, income taxes receivable, deferred taxes, headquarters’ assets, and current and non-current assets held for sale. (5) Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. |
Revenues from External Customers and Long-Lived Asset Information by Geographic Area | Revenues from external customers and long-lived asset information by geographic area are summarized as follows: United States China The Netherlands Other Foreign Countries Consolidated Total (Dollars in millions) Years Ended September 30, 2015 Revenues from external customers $ 705 $ 548 $ 176 $ 1,442 $ 2,871 Net property, plant and equipment $ 480 $ 311 $ 157 $ 435 $ 1,383 2014 Revenues from external customers $ 847 $ 628 $ 220 $ 1,952 $ 3,647 Net property, plant and equipment $ 496 $ 355 $ 197 $ 533 $ 1,581 2013 Revenues from external customers $ 818 $ 558 $ 224 $ 1,856 $ 3,456 Net property, plant and equipment $ 488 $ 385 $ 211 $ 516 $ 1,600 |
Unaudited Quarterly Financial53
Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Unaudited financial results by quarter for fiscal 2015 and 2014 are summarized below: Quarter Ended December March June September Year (Dollars in millions, except per share amounts) Fiscal 2015 Consolidated Net Income Net sales and other operating revenues $ 812 $ 694 $ 694 $ 671 $ 2,871 Gross profit 157 139 150 139 585 Purification Solutions long-lived assets impairment charge — — 209 1 210 Purification Solutions goodwill impairment charge — — 353 (1 ) 352 Income from discontinued operations, net of tax — — 1 1 2 Net income (loss) 49 27 (443 ) 41 (326 ) Net income (loss) attributable to Cabot Corporation 45 26 (445 ) 40 (334 ) Income per share—basic: Income (loss) from continuing operations $ 0.70 $ 0.41 $ (7.05 ) $ 0.63 $ (5.29 ) Income from discontinued operations — — 0.01 0.01 0.02 Net income (loss) attributable to Cabot Corporation $ 0.70 $ 0.41 $ (7.04 ) $ 0.64 $ (5.27 ) Income per share—diluted: Income (loss) from continuing operations $ 0.69 $ 0.41 $ (7.05 ) $ 0.62 $ (5.29 ) Income from discontinued operations — — 0.01 0.01 0.02 Net income (loss) attributable to Cabot Corporation $ 0.69 $ 0.41 $ (7.04 ) $ 0.63 $ (5.27 ) Quarter Ended December March June September Year (Dollars in millions, except per share amounts) Fiscal 2014 Consolidated Net Income Net sales and other operating revenues $ 898 $ 898 $ 940 $ 911 $ 3,647 Gross profit 179 176 184 182 721 (Loss) income from discontinued operations, net of tax (1 ) — (1 ) 4 2 Net income 86 39 57 36 218 Net income attributable to Cabot Corporation 80 36 52 31 199 Income per share—basic: Income from continuing operations $ 1.25 $ 0.56 $ 0.80 $ 0.43 $ 3.04 Income from discontinued operations (0.01 ) (0.01 ) (0.01 ) 0.05 0.02 Net income attributable to Cabot Corporation $ 1.24 $ 0.55 $ 0.79 $ 0.48 $ 3.06 Income per share—diluted: Income from continuing operations $ 1.24 $ 0.55 $ 0.79 $ 0.43 $ 3.01 (Loss) income from discontinued operations (0.01 ) (0.01 ) (0.01 ) 0.05 0.02 Net income attributable to Cabot Corporation $ 1.23 $ 0.54 $ 0.78 $ 0.48 $ 3.03 |
Significant Accounting Polici54
Significant Accounting Policies - Additional Information (Detail) ¥ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014Segment | Dec. 31, 2014Segment | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2015CNY (¥) | Sep. 30, 2014CNY (¥) | Nov. 30, 2013 | |
Significant Accounting Policies [Line Items] | ||||||||
Number of business reportable segments | Segment | 4 | 4 | ||||||
Equity affiliate investments | $ 57,000,000 | $ 68,000,000 | ||||||
Dividends declared | 14,000,000 | 25,000,000 | $ 8,000,000 | |||||
Capitalized interest | 3,000,000 | 5,000,000 | ||||||
Inventory, assets held for rent | 11,000,000 | |||||||
Asset retirement obligation reserve | 20,000,000 | 15,000,000 | ||||||
Charges on sale of notes receivables | 3,000,000 | 3,000,000 | 4,000,000 | |||||
Changes in allowance | $ 0 | 0 | ||||||
Chance of utilizing the associated benefit for valuation allowances, maximum | 50.00% | |||||||
China [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Accounts and notes receivable, net | $ 15,000,000 | 31,000,000 | ¥ 95 | ¥ 193 | ||||
Other Nonoperating Income (Expense) [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Foreign currency transaction gains (losses) | $ (8,000,000) | $ (2,000,000) | $ 2,000,000 | |||||
Minimum [Member] | Buildings [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 20 years | |||||||
Minimum [Member] | Machinery and Equipment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 10 years | |||||||
Minimum [Member] | Other Fixed Assets [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 3 years | |||||||
Minimum [Member] | Cabot [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Minority interest ownership percentage by parent | 20.00% | 20.00% | ||||||
Maximum [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Capitalized interest | $ 1,000,000 | |||||||
Maximum [Member] | Buildings [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 25 years | |||||||
Maximum [Member] | Machinery and Equipment [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 25 years | |||||||
Maximum [Member] | Other Fixed Assets [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Useful life of property, plant and equipment | 25 years | |||||||
Maximum [Member] | Cabot [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Minority interest ownership percentage by parent | 50.00% | 50.00% | ||||||
NHUMO [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage acquisition | 60.00% | |||||||
Ownership percentage prior to acquisition | 40.00% |
Significant Accounting Polici55
Significant Accounting Policies - Segment Reporting Revenue Percentage (Detail) - Sales Revenue, Segment [Member] - Revenue from Rights Concentration Risk [Member] | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reinforcement Materials [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 54.00% | 59.00% | 57.00% |
Performance Chemicals [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 33.00% | 29.00% | 30.00% |
Purification Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 11.00% | 9.00% | 10.00% |
Specialty Fluids [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 2.00% | 3.00% | 3.00% |
Acquisition of NHUMO - Addition
Acquisition of NHUMO - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Sep. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Acquisition [Line Items] | ||||||
Gain on acquisition | $ 29 | |||||
Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible asset | $ 63 | |||||
Amortized period | 20 years | |||||
NHUMO [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage acquisition | 60.00% | |||||
Ownership percentage prior to acquisition | 40.00% | |||||
Cash paid on acquisition | $ 80 | $ 80 | ||||
Dividend percentage of preferred stock | 6.00% | |||||
Preferred stock issued on acquisition | $ 25 | |||||
Dividend payment | $ 1.5 | |||||
Dividend received from NHUMO | 14 | |||||
Dividends payable | $ 1.5 | |||||
Gain on acquisition | $ 29 | |||||
Previously held equity interest in NHUMO | $ 54 | 54 | ||||
NHUMO [Member] | Selling and Administrative Expenses [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs incurred | $ 2 | |||||
NHUMO [Member] | Carrying Value [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Preferred stock redemption amount | $ 25 |
Acquisition of NHUMO - Componen
Acquisition of NHUMO - Components and Allocation of Purchase Price (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Nov. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2015 | |
Assets | ||||
Goodwill | $ 536 | $ 536 | $ 154 | |
NHUMO [Member] | ||||
Assets | ||||
Current assets | 54 | 54 | ||
Property, plant and equipment | 48 | 48 | ||
Other non-current assets | 1 | 1 | ||
Intangible assets | 63 | 63 | ||
Goodwill | 45 | 45 | ||
Total assets acquired | 211 | 211 | ||
Liabilities | ||||
Accounts payable, accruals and other liabilities | (20) | (20) | ||
Deferred tax liabilities - long-term | (29) | (29) | ||
Total liabilities assumed | (49) | (49) | ||
Net assets acquired | 162 | 162 | ||
Cash consideration paid | 80 | $ 80 | ||
Fair value of redeemable preferred stock | 28 | |||
Previously held equity interest in NHUMO | 54 | $ 54 | ||
Total | $ 162 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | Jan. 31, 2012 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Total consideration from sale of business | $ 452 | ||||||||
Cash consideration received on sale of discontinued operations | 175 | ||||||||
Notes receivable received on sale of discontinued operations | $ 277 | ||||||||
GAM promissory notes and inventory note, final maturity date | 2014-03 | ||||||||
Cabot received final payment on GAM Notes | $ 215 | $ 39 | |||||||
Income (loss) from discontinued operations, net of tax | $ 1 | $ 1 | $ 4 | $ (1) | $ (1) | $ 2 | 2 | $ (1) | |
GAM [Member] | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Cabot received final payment on GAM Notes | $ 215 |
Inventories - Components of Com
Inventories - Components of Company's Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 69 | $ 111 |
Work in process | 1 | 2 |
Finished goods | 287 | 341 |
Other | 40 | 44 |
Total | $ 397 | $ 498 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Inventory Disclosure [Abstract] | |||
Inventory valued under the LIFO method | 6.00% | 5.00% | |
Inventory, LIFO reserve | $ 30 | $ 52 | |
Increase (Decrease) in cost of sales | 1 | 0 | $ (1) |
Effect of LIFO inventory liquidation on income | $ (1) | $ 0 | $ 1 |
Liquidation of LIFO inventory, resulted per diluted common share | $ 0.01 | $ 0 | $ 0.01 |
Obsolete inventory reserve | $ 20 | $ 14 | |
Lower of cost or market reserve inventory | $ 6 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 |
Property Plant And Equipment [Abstract] | |||
Land and land improvements | $ 154 | $ 132 | |
Buildings | 509 | 536 | |
Machinery and equipment | 2,391 | 2,593 | |
Other | 225 | 233 | |
Construction in progress | 106 | 216 | |
Total property, plant and equipment | 3,385 | 3,710 | |
Less: accumulated depreciation | (2,002) | (2,129) | |
Net property, plant and equipment | $ 1,383 | $ 1,581 | $ 1,600 |
Property, Plant and Equipment62
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 169 | $ 184 | $ 175 |
Purification Solutions Goodwi63
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Impairment Charges and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | $ 352 | |||||
Provision (benefit) for income taxes | (86) | $ 8 | $ (9) | |||
Purification Solutions [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | $ 353 | 352 | ||||
Purification Solutions long-lived assets impairment charge | $ 1 | $ 209 | 210 | |||
Provision (benefit) for income taxes | (80) | |||||
Impairment charges, after tax | $ 482 |
Purification Solutions Goodwi64
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | $ 352 | |||||
Provision (benefit) for income taxes | 86 | $ (8) | $ 9 | |||
Purification Solutions [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | $ 353 | 352 | ||||
Decrease in goodwill impairment charge during the period | $ 1 | |||||
Impairment loss of indefinite lived Intangibles | 39 | |||||
Impairment charges of definite lived Intangible assets | 119 | |||||
Long-lived asset impairment charge | 1 | $ 209 | 210 | |||
Provision (benefit) for income taxes | 80 | |||||
Purification Solutions [Member] | Property, Plant and Equipment [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Long-lived asset impairment charge | $ 1 | $ 51 | $ 52 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 154 | $ 536 | |
Amortization expense estimated for year one | 9 | ||
Amortization expense estimated for year two | 9 | ||
Amortization expense estimated for year three | 9 | ||
Amortization expense estimated for year four | 9 | ||
Amortization expense estimated for year five | 9 | ||
Cost of Sales and Selling and Administrative Expenses [Member] | |||
Goodwill And Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 14 | $ 17 | $ 14 |
Minimum [Member] | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life of intangible assets | 14 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 | 19 years |
Goodwill and Intangible Asset66
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Sep. 30, 2015 | |
Goodwill And Intangible Assets [Line Items] | ||
Beginning balance | $ 536 | $ 536 |
Impairment charge | (352) | |
Foreign currency impact | (30) | |
Ending balance | 154 | |
Accumulated impairment losses | (352) | |
Reinforcement Materials [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning balance | 68 | 68 |
Foreign currency impact | (13) | |
Ending balance | 55 | |
Performance Chemicals [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning balance | 10 | 10 |
Foreign currency impact | (1) | |
Ending balance | 9 | |
Purification Solutions [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning balance | 458 | 458 |
Impairment charge | $ (353) | (352) |
Foreign currency impact | (16) | |
Ending balance | 90 | |
Accumulated impairment losses | $ (352) |
Goodwill and Intangible Asset67
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | $ 160 | $ 380 |
Accumulated Amortization | (7) | (33) |
Net Intangible Assets, finite lives | 153 | 347 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 48 | 152 |
Accumulated Amortization | (1) | (16) |
Net Intangible Assets, finite lives | 47 | 136 |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 16 | 57 |
Net Intangible Assets, finite lives | 16 | 57 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 96 | 171 |
Accumulated Amortization | (6) | (17) |
Net Intangible Assets, finite lives | $ 90 | $ 154 |
Accounts Payable, Accrued Lia68
Accounts Payable, Accrued Liabilities and Other Liabilities - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 274 | $ 351 |
Accrued employee compensation | 34 | 48 |
Other accrued liabilities | 81 | 113 |
Total | $ 389 | $ 512 |
Accounts Payable, Accrued Lia69
Accounts Payable, Accrued Liabilities and Other Liabilities - Components of Other Long-Term Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Payables And Accruals [Abstract] | ||
Employee benefit plan liabilities | $ 138 | $ 174 |
Non-current tax liabilities | 17 | 33 |
Other accrued liabilities | 85 | 84 |
Total | $ 240 | $ 291 |
Debt and Other Obligations - Sc
Debt and Other Obligations - Schedule of Long-Term Obligations (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | Jul. 31, 2012 | Sep. 30, 2009 |
Debt Instrument [Line Items] | ||||
Total variable rate debt | $ 28 | |||
Total Medium Term Notes | $ 53 | 53 | ||
Total debt | 958 | 984 | ||
Capital lease obligations, due through 2031 | 14 | 17 | ||
Unamortized debt discount | (1) | (1) | ||
Total debt | 971 | 1,028 | ||
Less current portion of long-term debt | (1) | (24) | ||
Total long-term debt | 970 | 1,004 | ||
Chinese Renminbi Notes, Due Through 2016, 6.15%-6.77% [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes | 28 | |||
5% Notes Due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes | 300 | 300 | ||
Unamortized debt discount | $ (2) | |||
2.55% Notes Due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes | 250 | 250 | ||
Unamortized debt discount | $ (1) | |||
3.7% Notes Due 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes | 350 | 350 | ||
Unamortized debt discount | $ (1) | |||
Notes Due 2019, 7.42% [Member] | ||||
Debt Instrument [Line Items] | ||||
Total Medium Term Notes | 30 | 30 | ||
Notes Due 2022, 8.35% - 8.47% [Member] | ||||
Debt Instrument [Line Items] | ||||
Total Medium Term Notes | 15 | 15 | ||
Notes Due 2028, 6.57%-7.28% [Member] | ||||
Debt Instrument [Line Items] | ||||
Total Medium Term Notes | 8 | 8 | ||
Chinese Renminbi Notes, Due Through 2017, 4.63%-6.15% [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes | $ 5 | $ 31 |
Debt and Other Obligations - 71
Debt and Other Obligations - Schedule of Long-Term Obligations (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Revolving Credit Facility Expiry August 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 750 | $ 750 |
Debt instrument due, year | 2,019 | 2,019 |
Chinese Renminbi Notes, Due Through 2016, 6.15%-6.77% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, minimum | 6.15% | 6.15% |
Debt instrument interest rate, maximum | 6.77% | 6.77% |
Debt instrument maturity, maximum range | 2,016 | 2,016 |
5% Notes Due 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 5.00% | 5.00% |
Debt instrument due, year | 2,017 | 2,017 |
2.55% Notes Due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.55% | 2.55% |
Debt instrument due, year | 2,018 | 2,018 |
3.7% Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 3.70% | 3.70% |
Debt instrument due, year | 2,022 | 2,022 |
Notes Due 2019, 7.42% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 7.42% | 7.42% |
Debt instrument due, year | 2,019 | 2,019 |
Notes Due 2022, 8.35% - 8.47% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, minimum | 8.35% | 8.35% |
Debt instrument interest rate, maximum | 8.47% | 8.47% |
Debt instrument due, year | 2,022 | 2,022 |
Notes Due 2028, 6.57%-7.28% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, minimum | 6.57% | 6.57% |
Debt instrument interest rate, maximum | 7.28% | 7.28% |
Debt instrument due, year | 2,028 | 2,028 |
Chinese Renminbi Notes, Due Through 2017, 4.63%-6.15% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, minimum | 4.63% | 4.63% |
Debt instrument interest rate, maximum | 6.15% | 6.15% |
Debt instrument due, year | 2,017 | 2,017 |
Capital Lease Obligations, Due Through 2031 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity, maximum range | 2,031 | 2,031 |
Debt and Other Obligations - Ad
Debt and Other Obligations - Additional Information (Detail) - USD ($) | Oct. 23, 2015 | Jul. 31, 2012 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2009 |
Debt Instrument [Line Items] | |||||
Revolving credit facility, committed amount | $ 750,000,000 | ||||
Letters of credit and commercial paper outstanding | 738,000,000 | ||||
Long-term debt | 958,000,000 | ||||
Issuance of notes, discount recorded | 1,000,000 | $ 1,000,000 | |||
Unsecured medium term notes outstanding issued | $ 53,000,000 | 53,000,000 | |||
Maturity of the total outstanding medium term notes, years | 6 years | ||||
Weighted average interest of medium term notes | 7.65% | ||||
Capital lease obligations | $ 14,000,000 | 17,000,000 | |||
Repayments of long-term capital lease obligations | $ 33,000,000 | ||||
Repayment period of capital lease obligation, years | 16 years | ||||
Payment towards imputed interest | $ 9,000,000 | ||||
Original cost of capital lease assets | 20,000,000 | 22,000,000 | |||
Accumulated depreciation of assets under capital leases | 9,000,000 | 9,000,000 | |||
Unsecured short term notes payable to bank | $ 22,000,000 | $ 44,000,000 | |||
Debt instrument maturity date | 1 year | ||||
Weighted-average interest rate | 4.60% | 3.90% | |||
Commercial paper notes outstanding | $ 22,000,000 | $ 44,000,000 | |||
Commercial Paper [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | 1 day | ||||
Weighted-average interest rate | 0.36% | 0.25% | |||
Commercial paper notes outstanding | $ 12,000,000 | $ 30,000,000 | |||
Standby Letters of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument due, year | 2,016 | ||||
Standby letters of credit, outstanding amount | $ 11,000,000 | ||||
Chinese Renminbi Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 5,000,000 | $ 59,000,000 | |||
5% Notes Due 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt maturity date | Oct. 1, 2016 | ||||
Debt instrument, interest rate | 5.00% | 5.00% | |||
Registered notes issued | $ 300,000,000 | ||||
Issuance of notes, discount recorded | $ 2,000,000 | ||||
Proceeds from issuance of debt notes | $ 296,000,000 | ||||
Debt instrument due, year | 2,017 | 2,017 | |||
5% Notes Due 2017 [Member] | Fixed Rate Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 5.00% | ||||
Debt instrument due, year | 2,017 | ||||
2.55% Notes Due 2018 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt maturity date | Jan. 15, 2018 | ||||
Debt instrument, interest rate | 2.55% | 2.55% | |||
Registered notes issued | $ 250,000,000 | ||||
Issuance of notes, discount recorded | $ 1,000,000 | ||||
Proceeds from issuance of debt notes | $ 248,000,000 | ||||
Debt instrument due, year | 2,018 | 2,018 | |||
2.55% Notes Due 2018 [Member] | Fixed Rate Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 2.55% | ||||
Debt instrument due, year | 2,018 | ||||
3.7% Notes Due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt maturity date | Jul. 15, 2022 | ||||
Debt instrument, interest rate | 3.70% | 3.70% | |||
Registered notes issued | $ 350,000,000 | ||||
Issuance of notes, discount recorded | $ 1,000,000 | ||||
Proceeds from issuance of debt notes | $ 347,000,000 | ||||
Debt instrument due, year | 2,022 | 2,022 | |||
3.7% Notes Due 2022 [Member] | Fixed Rate Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 3.70% | ||||
Debt instrument due, year | 2,022 | ||||
Scenario, Previously Reported [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit agreement maturity date | Oct. 3, 2019 | ||||
Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility, committed amount | $ 1,000,000,000 | ||||
Credit agreement maturity date | Oct. 23, 2020 |
Debt and Other Obligations - 73
Debt and Other Obligations - Schedule of Future Years Payment (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 305 |
2,018 | 250 |
2,019 | 30 |
Thereafter | 373 |
Total | 958 |
2,016 | 3 |
2,017 | 4 |
2,018 | 3 |
2,019 | 3 |
2,020 | 3 |
Thereafter | 17 |
Less: executory costs and interest | (19) |
Total | 14 |
2,016 | 3 |
2,017 | 309 |
2,018 | 253 |
2,019 | 33 |
2,020 | 3 |
Thereafter | 390 |
Total | $ 972 |
Financial Instruments and Fai74
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
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 |
Fair value of long-term debt | 1,020,000,000 | 1,050,000,000 |
Fixed Rate Debt [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of long-term debt | 960,000,000 | 980,000,000 |
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 | $ 12,000,000 | $ 13,000,000 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative [Line Items] | |||
Significant concentration of credit risk associated with our derivative instruments | $ 0 | ||
Derivatives designated as hedges | 0 | $ 0 | |
Gain on foreign currency derivatives recorded in earnings | $ 4,000,000 | ||
Bond held by one of Cabot's European subsidiaries | 175,000,000 | ||
Forward Foreign Currency Contracts [Member] | |||
Derivative [Line Items] | |||
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | 5,000,000 | ||
Currency Swaps [Member] | |||
Derivative [Line Items] | |||
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | $ (2,000,000) | ||
Fair Value Hedging [Member] | Interest Rate Swap-Fixed to Variable [Member] | |||
Derivative [Line Items] | |||
Derivatives held to manage interest rate risk | $ 0 | $ 0 |
Derivatives - Details of Deriva
Derivatives - Details of Derivatives Held to Manage Foreign Currency Risk (Detail) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 | |
Not Designated as Hedging Instrument [Member] | Forward Foreign Currency Contracts [Member] | |||
Derivative [Line Items] | |||
Notional amount, net of forward foreign currency contract no designation hedge derivatives | [1] | $ 2,000,000 | $ 32,000,000 |
[1] | Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Brazilian real, and Czech koruna. |
Venezuela - Additional Informat
Venezuela - Additional Information (Detail) VEF in Millions | 12 Months Ended | |||
Sep. 30, 2015USD ($)VEB / $ | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2015VEFVEB / $ | |
Nature Of Operations [Line Items] | ||||
Operating affiliate investment | $ 14,000,000 | |||
Due from affiliates, dividends cash | VEF | VEF 18 | |||
Conversion of Bolivars to USD | VEB / $ | 52 | 52 | ||
Subsidiaries [Member] | ||||
Nature Of Operations [Line Items] | ||||
Cash dividends received from subsidiary | $ 6,000,000 | $ 5,000,000 | $ 3,000,000 | |
Maximum [Member] | ||||
Nature Of Operations [Line Items] | ||||
Due from affiliates, dividends cash | $ 1,000,000 | |||
Venezuela [Member] | Carbon Black Affiliate [Member] | ||||
Nature Of Operations [Line Items] | ||||
Equity method investment, ownership percentage | 49.00% | 49.00% |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution plans, expenses not related to ESOP | $ 20 | $ 14 | $ 9 | |||
Compensation expense related to the ESOP | 1 | 4 | ||||
Settlements or curtailment gain | $ (17) | |||||
Maximum [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Settlements or curtailment gain | (1) | $ (3) | ||||
Minimum [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contribution to multi-employer plan | 80.00% | |||||
Scenario, Forecast [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Net loss amortized from accumulated other comprehensive income to net periodic benefit cost | $ 3 | |||||
Amortization of estimated prior service credits | $ 4 | |||||
U.S. Defined Benefit Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Accumulated benefit obligation | $ 170 | 173 | ||||
Weighted-average assumed health care cost trend rate | 7.00% | |||||
Ultimate weighted-average health care cost trend rate | 5.00% | |||||
Ultimate weighted-average health care cost trend rate, anticipated achievement year | 2,019 | |||||
U.S. Defined Benefit Plans [Member] | Equity [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 60.00% | |||||
U.S. Defined Benefit Plans [Member] | Fixed Income Funds [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 40.00% | |||||
Foreign Plans [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Accumulated benefit obligation | $ 326 | 462 | ||||
Weighted-average assumed health care cost trend rate | 7.00% | |||||
Ultimate weighted-average health care cost trend rate | 6.60% | |||||
Ultimate weighted-average health care cost trend rate, anticipated achievement year | 2,016 | |||||
Foreign Plans [Member] | Equity [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 40.00% | |||||
Foreign Plans [Member] | Fixed Income Funds [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 53.00% | |||||
Foreign Plans [Member] | Real Estate [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 3.00% | |||||
Foreign Plans [Member] | Cash and Other Securities [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Percentage of weighted-average target asset allocation | 4.00% | |||||
Foreign Pension Benefits [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected contribution | $ 8 | |||||
Settlements or curtailment gain | [1] | (85) | $ (7) | |||
Pre-tax charge due to transfer of defined benefit plan assets | $ 18 | |||||
Reduction in plan assets and plan obligations | $ (85) | |||||
[1] | The $85 million settlement amount is primarily driven by the transfer of certain plan assets and obligations to a third party, as discussed further under Curtailments and Settlements of Employee Benefit Plans. |
Employee Benefit Plans - Change
Employee Benefit Plans - Change in Benefit Obligations and Change in Plan Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Change in Benefit Obligations: | ||||
Settlements or curtailment gain | $ (17) | |||
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 555 | |||
Fair value of plan assets at end of year | 432 | $ 555 | ||
U.S. Pension Benefits [Member] | ||||
Change in Benefit Obligations: | ||||
Benefit obligation at beginning of year | 173 | 170 | ||
Service cost | 1 | 2 | $ 6 | |
Interest cost | 7 | 7 | 6 | |
Loss (gain) from changes in actuarial assumptions and plan experience | 3 | 6 | ||
Benefits paid | [1] | (13) | (11) | |
Other | (1) | (1) | ||
Benefit obligation at end of year | 170 | 173 | 170 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 167 | 155 | ||
Service cost | 1 | 2 | 6 | |
Interest cost | 7 | 7 | 6 | |
Actual return on plan assets | (1) | 21 | ||
Employer contribution | 1 | 3 | ||
Loss (gain) from changes in actuarial assumptions and plan experience | 3 | 6 | ||
Benefits paid | [1] | (13) | (11) | |
Expenses paid from assets | (1) | (1) | ||
Fair value of plan assets at end of year | 153 | 167 | 155 | |
Funded status | (17) | (6) | ||
Recognized liability | (17) | (6) | ||
Foreign Pension Benefits [Member] | ||||
Change in Benefit Obligations: | ||||
Benefit obligation at beginning of year | 491 | 439 | ||
Service cost | 9 | 9 | 9 | |
Interest cost | 11 | 16 | 15 | |
Plan participants’ contribution | 2 | 2 | ||
Foreign currency exchange rate changes | (45) | (28) | ||
Loss (gain) from changes in actuarial assumptions and plan experience | (23) | 75 | ||
Benefits paid | [1] | (13) | (18) | |
Settlements or curtailment gain | [2] | (85) | (7) | |
Acquisition / business combination | 3 | |||
Other | 1 | |||
Benefit obligation at end of year | 348 | 491 | 439 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 388 | 375 | ||
Service cost | 9 | 9 | 9 | |
Interest cost | 11 | 16 | 15 | |
Plan participants’ contribution | 2 | 2 | ||
Actual return on plan assets | 11 | 41 | ||
Employer contribution | 10 | 12 | ||
Plan participants’ contribution | 2 | 2 | ||
Foreign currency exchange rate changes | (34) | (20) | ||
Loss (gain) from changes in actuarial assumptions and plan experience | (23) | 75 | ||
Benefits paid | [1] | (13) | (18) | |
Settlements | [2] | (85) | (4) | |
Acquisition / business combination | 1 | |||
Expenses paid from assets | (1) | |||
Fair value of plan assets at end of year | 279 | 388 | 375 | |
Funded status | (69) | (103) | ||
Recognized liability | (69) | (103) | ||
U. S. Postretirement Benefits [Member] | ||||
Change in Benefit Obligations: | ||||
Benefit obligation at beginning of year | 50 | 55 | ||
Interest cost | 2 | 2 | 2 | |
Loss (gain) from changes in actuarial assumptions and plan experience | 1 | (3) | ||
Benefits paid | [1] | (4) | (4) | |
Plan amendments | (11) | |||
Benefit obligation at end of year | 38 | 50 | 55 | |
Change in Plan Assets: | ||||
Interest cost | 2 | 2 | 2 | |
Employer contribution | 4 | 4 | ||
Loss (gain) from changes in actuarial assumptions and plan experience | 1 | (3) | ||
Benefits paid | [1] | (4) | (4) | |
Funded status | (38) | (50) | ||
Recognized liability | (38) | (50) | ||
Foreign Postretirement Benefits [Member] | ||||
Change in Benefit Obligations: | ||||
Benefit obligation at beginning of year | 17 | 17 | ||
Interest cost | 1 | 1 | 1 | |
Foreign currency exchange rate changes | (2) | |||
Loss (gain) from changes in actuarial assumptions and plan experience | (1) | |||
Benefits paid | [1] | (1) | ||
Benefit obligation at end of year | 15 | 17 | 17 | |
Change in Plan Assets: | ||||
Interest cost | 1 | 1 | $ 1 | |
Employer contribution | 1 | |||
Loss (gain) from changes in actuarial assumptions and plan experience | (1) | |||
Benefits paid | [1] | (1) | ||
Funded status | (15) | (17) | ||
Recognized liability | $ (15) | $ (17) | ||
[1] | Included in this amount are $6 million and $7 million that the Company paid directly to the participants in its defined benefit plans in fiscal 2015 and 2014, respectively | |||
[2] | The $85 million settlement amount is primarily driven by the transfer of certain plan assets and obligations to a third party, as discussed further under Curtailments and Settlements of Employee Benefit Plans. |
Employee Benefit Plans - Chan80
Employee Benefit Plans - Change in Benefit Obligations and Change in Plan Assets (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Foreign Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits paid | [1] | $ 13 | $ 18 |
Settlements | [2] | 85 | 4 |
Change in Assumptions for Pension Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits paid | $ 6 | $ 7 | |
[1] | Included in this amount are $6 million and $7 million that the Company paid directly to the participants in its defined benefit plans in fiscal 2015 and 2014, respectively | ||
[2] | The $85 million settlement amount is primarily driven by the transfer of certain plan assets and obligations to a third party, as discussed further under Curtailments and Settlements of Employee Benefit Plans. |
Employee Benefit Plans - Assump
Employee Benefit Plans - Assumptions Used to Determine Pension Benefit Obligations (Detail) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
U.S. Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.20% | 4.00% | 4.50% |
Initial health care cost trend rate | 3.00% | ||
Discount rate | 4.00% | 4.50% | 3.50% |
Expected long-term rate of return on plan assets | 7.50% | 7.80% | 7.80% |
Initial health care cost trend rate | 3.00% | 3.50% | |
Foreign Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.90% | 3.00% | 3.80% |
Initial health care cost trend rate | 2.80% | 2.80% | 3.10% |
Discount rate | 3.00% | 3.80% | 3.60% |
Expected long-term rate of return on plan assets | 5.40% | 5.30% | 5.30% |
Initial health care cost trend rate | 2.80% | 3.10% | 3.10% |
U. S. Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.70% | 3.80% | 4.00% |
Initial health care cost trend rate | 6.50% | 7.00% | 7.50% |
Discount rate | 3.80% | 4.00% | 3.30% |
Initial health care cost trend rate | 7.00% | 7.50% | 8.00% |
Foreign Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.90% | 3.90% | 4.40% |
Initial health care cost trend rate | 6.80% | 7.10% | 7.50% |
Discount rate | 3.90% | 4.40% | 3.90% |
Initial health care cost trend rate | 7.10% | 7.50% | 7.40% |
Employee Benefit Plans - Net Am
Employee Benefit Plans - Net Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent liabilities | $ (138) | $ (174) |
U.S. Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current liabilities | (1) | |
Noncurrent liabilities | (16) | (6) |
Foreign Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent assets | 5 | 4 |
Current liabilities | (1) | (1) |
Noncurrent liabilities | (73) | (106) |
U. S. Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current liabilities | (4) | (5) |
Noncurrent liabilities | (34) | (45) |
Foreign Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent liabilities | $ (15) | $ (17) |
Employee Benefit Plans - Amount
Employee Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
U.S. Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | $ 5 | $ (9) |
Balance in accumulated other comprehensive (loss) income, pretax | 5 | (9) |
Foreign Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | 65 | 118 |
Net prior service credit | (1) | |
Balance in accumulated other comprehensive (loss) income, pretax | 64 | 118 |
U. S. Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | (6) | (7) |
Net prior service credit | (11) | (3) |
Balance in accumulated other comprehensive (loss) income, pretax | (17) | (10) |
Foreign Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss (gain) | 1 | 2 |
Balance in accumulated other comprehensive (loss) income, pretax | $ 1 | $ 2 |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated Future Benefit Payments (Detail) $ in Millions | Sep. 30, 2015USD ($) |
U.S. Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | $ 12 |
2,017 | 10 |
2,018 | 11 |
2,019 | 11 |
2,020 | 11 |
2021-2025 | 55 |
Foreign Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 14 |
2,017 | 12 |
2,018 | 13 |
2,019 | 13 |
2,020 | 14 |
2021-2025 | 77 |
U. S. Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 4 |
2,017 | 4 |
2,018 | 3 |
2,019 | 3 |
2,020 | 3 |
2021-2025 | 14 |
Foreign Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 1 |
2,019 | 1 |
2,020 | 1 |
2021-2025 | $ 4 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
U.S. Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 1 | $ 2 | $ 6 |
Interest cost | 7 | 7 | 6 |
Expected return on plan assets | (11) | (10) | (10) |
Net losses | 1 | ||
Settlements or Curtailments cost | 1 | ||
Net periodic (benefit) cost | (3) | (1) | 4 |
Foreign Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 9 | 9 | 9 |
Interest cost | 11 | 16 | 15 |
Expected return on plan assets | (14) | (19) | (18) |
Amortization of prior service cost | 3 | ||
Net losses | 4 | 3 | 4 |
Settlements or Curtailments cost | 18 | 2 | |
Net periodic (benefit) cost | 31 | 9 | 12 |
U. S. Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 2 | 2 | 2 |
Amortization of prior service cost | (4) | (3) | (3) |
Net periodic (benefit) cost | (2) | (1) | (1) |
Foreign Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 1 | 1 | 1 |
Net periodic (benefit) cost | $ 1 | $ 1 | $ 1 |
Employee Benefit Plans - Other
Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income, Pre-Tax (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
U.S. Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net losses (gains) | $ 14 | $ (4) | $ (32) |
Amortization of prior unrecognized loss | (2) | ||
Total other Comprehensive loss (income) | 14 | (4) | (34) |
Foreign Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net losses (gains) | (8) | 50 | 8 |
Prior service (credit) cost | (2) | ||
Amortization of prior unrecognized loss | (4) | (3) | (4) |
Other | (27) | (1) | (4) |
Total other Comprehensive loss (income) | (41) | 46 | |
U. S. Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net losses (gains) | 1 | (4) | (6) |
Prior service (credit) cost | (11) | 3 | 3 |
Amortization of prior unrecognized loss | 4 | ||
Total other Comprehensive loss (income) | $ (6) | $ (1) | $ (3) |
Employee Benefit Plans - Sensit
Employee Benefit Plans - Sensitivity Analysis (Detail) - Foreign Postretirement Benefits [Member] $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
1 -Percent-Point Increase, Effect on postretirement benefit obligation | $ 3 |
1 -Percent-Point Decrease, Effect on postretirement benefit obligation | $ (2) |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Benefit Pension Plans Weighted-Average Asset Allocations (Detail) | Sep. 30, 2015 | Sep. 30, 2014 |
U.S. Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Equity securities | 55.00% | 55.00% |
Debt securities | 45.00% | 45.00% |
Total | 100.00% | 100.00% |
Foreign Pension Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Equity securities | 39.00% | 37.00% |
Debt securities | 54.00% | 47.00% |
Cash and other securities | 7.00% | 16.00% |
Total | 100.00% | 100.00% |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Value of Pension Plan Assets by Asset Category (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | $ 432 | $ 555 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 153 | 249 | |
Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 279 | 306 | |
Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 22 | 22 | |
Total Direct Investments [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 22 | 22 | |
Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 398 | 451 | |
Total Investment Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 130 | 158 | |
Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 268 | 293 | |
Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 11 | 13 | |
Alternative Investments [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 11 | 13 | |
Cash and Cash Equivalent Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | 69 | |
Cash and Cash Equivalent Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | 69 | |
U.S. Equity Securities [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 22 | 22 | |
U.S. Equity Securities [Member] | Total Direct Investments [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 22 | 22 | |
Equity Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 168 | 188 |
Equity Funds [Member] | Total Investment Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 60 | 68 |
Equity Funds [Member] | Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 108 | 120 |
Fixed Income Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 220 | 253 |
Fixed Income Funds [Member] | Total Investment Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 70 | 90 |
Fixed Income Funds [Member] | Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 150 | 163 |
Real Estate [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [3] | 9 | 9 |
Real Estate [Member] | Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [3] | 9 | 9 |
Common and Collective Investment Trust Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [4] | 1 | |
Common and Collective Investment Trust Funds [Member] | Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [4] | 1 | |
Cash Equivalent Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | ||
Cash Equivalent Funds [Member] | Total Investment Funds [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | ||
Insurance Contracts [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [5] | 11 | 13 |
Insurance Contracts [Member] | Alternative Investments [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [5] | $ 11 | $ 13 |
[1] | The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. | ||
[2] | The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. | ||
[3] | The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. | ||
[4] | The investment objective of the portfolio of this common and collective investment trust is to achieve long-term, total return in excess of the MSCI World Index Benchmark by investing in equity securities of companies worldwide, emphasizing those with above-average potential for capital appreciation. | ||
[5] | Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 08, 2012 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock, authorized shares | 8,900,000 | |||||
Percentage of vesting in first anniversary | 30.00% | |||||
Percentage of vesting in second anniversary | 30.00% | |||||
Percentage of vesting in third anniversary | 40.00% | |||||
Stock based compensation outstanding units | 35,769 | |||||
Cash settled awards | $ 1,000,000 | $ 1,000,000 | ||||
Net stock-based compensation expense | $ 8,000,000 | $ 9,000,000 | $ 8,000,000 | |||
Closing common stock price | $ 31.56 | |||||
Stock Options, Weighted Average Grant Date Fair Value, Granted | $ 15.68 | |||||
Supplemental 401(k) Plan [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Supplemental retirement savings plan, aggregate value of the accounts, shares | 150,000 | 146,000 | ||||
Supplemental retirement savings plan aggregate value of the accounts paid in cash | $ 1,000,000 | $ 1,000,000 | ||||
Stock Options [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of exercise price equal to market price on the date of grant | 100.00% | |||||
Vesting period (in years) | 3 years | |||||
Expiration period, years | 10 years | |||||
Unrecognized compensation cost | $ 2,000,000 | |||||
Weighted-average period, years | 9 months 18 days | |||||
Intrinsic value of options exercised | $ 2,000,000 | 12,000,000 | 5,000,000 | |||
Cash received from exercises | $ 4,000,000 | $ 9,000,000 | $ 5,000,000 | |||
Stock Options, Weighted Average Grant Date Fair Value, Granted | $ 12.51 | $ 15.68 | $ 18.36 | |||
Restricted Stock Units [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Stock based compensation outstanding units | [1] | 735,000 | 946,000 | |||
Unrecognized compensation cost | $ 12,000,000 | |||||
Weighted-average period, years | 1 year 3 months 18 days | |||||
Estimated weighted average grant date fair value | $ 45.85 | $ 47.63 | $ 35.28 | |||
Intrinsic value of restricted stock units vested | $ 14,000,000 | $ 17,000,000 | $ 16,000,000 | |||
Awards granted | [1] | 345,000 | ||||
Restricted Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Awards granted | 0 | 0 | 0 | |||
Restricted Stock | Maximum [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Intrinsic value of restricted stock units vested | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
[1] | The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expenses (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | $ 12 | $ 14 | $ 12 |
Income tax benefit | (4) | (5) | (4) |
Net stock-based compensation expense | 8 | 9 | 8 |
Cost of Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | 4 | 5 | 4 |
Selling and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | 7 | 8 | 7 |
Research and Technical Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | $ 1 | $ 1 | $ 1 |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plan Activity (Detail) - $ / shares | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock Options, Total Options, Outstanding at September 30, 2014 | 1,421,000 | |||
Stock Options, Total Options, Granted | 245,000 | |||
Stock Options, Total Options, Exercised / Vested | (137,000) | |||
Stock Options, Total Options, Cancelled / Forfeited | (19,000) | |||
Stock Options, Total Options, Outstanding at September 30, 2015 | 1,510,000 | 1,421,000 | ||
Stock Options, Total Options, Exercisable at September 30, 2015 | 1,023,000 | |||
Vested or expected to vest | [1] | 1,500,000 | ||
Stock Options, Weighted Average Exercise Price, Outstanding at September 30, 2014 | $ 31.22 | |||
Stock Options, Weighted Average Exercise Price, Granted | 46.03 | |||
Stock Options, Weighted Average Exercise Price, Exercised / Vested | 26.47 | |||
Stock Options, Weighted Average Exercise Price, Cancelled / Forfeited | 41.97 | |||
Stock Options, Weighted Average Exercise Price, Outstanding at September 30, 2015 | 33.91 | $ 31.22 | ||
Exercisable at September 30, 2015 | 29.10 | |||
Vested or expected to vest | [1] | 33.85 | ||
Stock Options, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2014 | 10.71 | |||
Stock Options, Weighted Average Grant Date Fair Value, Granted | 15.68 | |||
Stock Options, Weighted Average Grant Date Fair Value, Exercised / Vested | 8.50 | |||
Stock Options, Weighted Average Grant Date Fair Value, Cancelled / Forfeited | 15.81 | |||
Stock Options, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2015 | $ 11.65 | $ 10.71 | ||
Restricted Stock / Units, Outstanding at September 30, 2015 | 35,769 | |||
Restricted Stock Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Restricted Stock / Units, Outstanding at September 30, 2014 | [2] | 946,000 | ||
Restricted Stock / Units, Granted | [2] | 345,000 | ||
Restricted Stock / Units, Performance-based adjustment | [2],[3] | (202,000) | ||
Restricted Stock / Units, Exercised / Vested | [2] | (289,000) | ||
Restricted Stock / Units, Cancelled / Forfeited | [2] | (65,000) | ||
Restricted Stock / Units, Outstanding at September 30, 2015 | [2] | 735,000 | 946,000 | |
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2014 | $ 39.31 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Granted | 45.85 | $ 47.63 | $ 35.28 | |
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Performance-based adjustment | [3] | 41.72 | ||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Exercised / Vested | 33.10 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Cancelled / Forfeited | 42.88 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2015 | $ 43.84 | $ 39.31 | ||
[1] | Stock options vested and expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 6.3 years. | |||
[2] | The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. | |||
[3] | Represents the number of performance based restricted stock units cancelled based on the Company’s actual performance against certain performance targets applicable to outstanding restricted stock units. |
Stock-Based Compensation - Eq93
Stock-Based Compensation - Equity Incentive Plan Activity (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock options expected to vest in the future, net of estimated forfeitures, weighted average remaining contractual life, in years | 6 years 3 months 18 days |
Stock-Based Compensation - St94
Stock-Based Compensation - Stock Options Outstanding and Vested Options (Detail) $ in Millions | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Total Options Outstanding, Aggregate Intrinsic Value | $ (4) |
Total Options Outstanding, Weighted Average Remaining Contractual Term (in years) | 6 years 3 months 18 days |
Exercisable Options, Aggregate Intrinsic Value | $ 3 |
Exercisable Options, Weighted Average Remaining Contractual Term (in years) | 5 years 3 months 18 days |
Vested or Expected to Vest, Aggregate Intrinsic Value | $ (3) |
Vested or Expected to Vest, Weighted Average Remaining Contractual Term (in years) | 6 years 3 months 18 days |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted-Average Assumptions (Detail) - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Expected stock price volatility | 41.00% | 45.00% | 46.00% |
Risk free interest rate | 2.00% | 1.90% | 0.90% |
Expected life of options (years) | 6 years | 6 years | 6 years |
Expected annual dividends per year | $ 0.88 | $ 0.80 | $ 0.80 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | $ 21 | $ 29 | $ 35 |
Cost of Sales [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | 10 | 12 | 28 |
Selling and Administrative Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | $ 11 | $ 17 | $ 7 |
Restructuring - Restructuring A
Restructuring - Restructuring Activities and Related Reserves (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | $ 19 | $ 10 | |
Charges | 21 | 29 | $ 35 |
Costs charged against assets and other | (5) | (4) | |
Cash paid | (24) | (15) | |
Foreign currency translation adjustment | (2) | (1) | |
Reserve balance | 9 | 19 | 10 |
Severance and Employee Benefits [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 16 | 7 | |
Charges | 9 | 18 | |
Cash paid | (18) | (8) | |
Foreign currency translation adjustment | (2) | (1) | |
Reserve balance | 5 | 16 | 7 |
Environmental Remediation [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 2 | 2 | |
Charges | 1 | ||
Cash paid | (1) | ||
Reserve balance | 2 | 2 | 2 |
Asset Impairment and Accelerated Depreciation [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges | 5 | 4 | |
Costs charged against assets and other | (5) | (4) | |
Asset Sales [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges | 1 | ||
Cash paid | (1) | ||
Other [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 1 | 1 | |
Charges | 7 | 5 | |
Cash paid | (6) | (5) | |
Reserve balance | $ 2 | $ 1 | $ 1 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | Nov. 11, 2015Position | Apr. 26, 2013Employees | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2013USD ($) | Sep. 30, 2015USD ($) |
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | $ 21,000,000 | $ 29,000,000 | $ 35,000,000 | ||||||
Cash payments | 24,000,000 | 15,000,000 | |||||||
Restructuring costs in accrued expenses | $ 9,000,000 | $ 9,000,000 | 9,000,000 | 19,000,000 | 10,000,000 | $ 9,000,000 | |||
Site demolition, clearing and environmental remediation costs | 1,000,000 | 15,000,000 | 1,000,000 | ||||||
Restructuring Activities Other [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 13,000,000 | 8,000,000 | 13,000,000 | ||||||
Severance charges | 7,000,000 | 3,000,000 | 8,000,000 | ||||||
Other charges | 2,000,000 | 2,000,000 | |||||||
Accelerated depreciation and asset write-offs | $ 4,000,000 | 5,000,000 | 3,000,000 | ||||||
Maximum [Member] | Scenario, Forecast [Member] | Restructuring Activities Other [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Additional restructuring charges after current fiscal | $ 1,000,000 | ||||||||
Cabot [Member] | Maximum [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Equity share in CMSB | 50.00% | 50.00% | 50.00% | 50.00% | |||||
Severance and Employee Benefits [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | $ 9,000,000 | 18,000,000 | |||||||
Cash payments | 18,000,000 | 8,000,000 | |||||||
Restructuring costs in accrued expenses | $ 5,000,000 | $ 5,000,000 | 5,000,000 | 16,000,000 | 7,000,000 | $ 5,000,000 | |||
Environmental Remediation [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 1,000,000 | ||||||||
Cash payments | 1,000,000 | ||||||||
Restructuring costs in accrued expenses | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||
Severance Costs [Member] | Restructuring Activities Other [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Cash payments | 23,000,000 | ||||||||
Accrued severance charges | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Severance and Other Closure Costs [Member] | Scenario, Forecast [Member] | Restructuring Activities Other [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Cash payments | 5,000,000 | ||||||||
2016 Plan [Member] | Subsequent Event [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Number of positions eliminated | Position | 370 | ||||||||
Shared Service Center Transition [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 24,000,000 | ||||||||
Severance charges | 13,000,000 | 16,000,000 | |||||||
Other charges | 7,000,000 | 8,000,000 | |||||||
Cash payments | 20,000,000 | ||||||||
Expected restructuring charges | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||
Restructuring costs in accrued expenses | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||
Shared Service Center Transition [Member] | Severance and Employee Benefits [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 6,000,000 | ||||||||
Shared Service Center Transition [Member] | Other Transition Costs [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 18,000,000 | ||||||||
Closure of Port Dickson [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Severance charges | 2,000,000 | ||||||||
Other charges | 1,000,000 | ||||||||
Affected employees | Employees | 90 | ||||||||
Accelerated depreciation and asset write-offs | 15,000,000 | ||||||||
Site demolition, clearing and environmental remediation costs | 2,000,000 | ||||||||
Expected cumulative net cash outlays related to plan | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||
Closure of Port Dickson [Member] | Scenario, Forecast [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Cash payments | 1,000,000 | ||||||||
Expected proceeds from the sale of land | 8,000,000 | ||||||||
Closure of Port Dickson [Member] | Maximum [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Expected restructuring charges | 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 | 18,000,000 | 1,000,000 | |||
Restructuring costs in accrued expenses | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||||
Closure of Port Dickson [Member] | Cabot [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Equity share in CMSB | 50.10% | ||||||||
Closure of Port Dickson [Member] | CMSB [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Portion of the charges that are allocable to the noncontrolling interest | 49.90% | 49.90% | 49.90% | 49.90% | |||||
Closure of Port Dickson [Member] | Severance and Employee Benefits [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Expected cumulative net cash outlays related to plan | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | |||||
Closure of Port Dickson [Member] | Environmental Remediation [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Expected cumulative net cash outlays related to plan | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||
Closure of Port Dickson [Member] | Facility Closure Costs [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Expected cumulative net cash outlays related to plan | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||
Closure of Port Dickson [Member] | Severance Costs [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Cash payments | 3,000,000 | ||||||||
Previous Actions and Sites Pending Sale [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Pre-tax charge to earnings | 2,000,000 | $ 1,000,000 | $ 3,000,000 | ||||||
Severance charges | 67,000,000 | ||||||||
Other charges | 23,000,000 | ||||||||
Cash payments | 87,000,000 | ||||||||
Expected restructuring charges | 165,000,000 | 165,000,000 | 165,000,000 | 165,000,000 | |||||
Site demolition, clearing and environmental remediation costs | 10,000,000 | ||||||||
Restructuring accelerated depreciation and asset impairments | 66,000,000 | ||||||||
Gain on sale of asset | 1,000,000 | ||||||||
Previous Actions and Sites Pending Sale [Member] | Scenario, Forecast [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Cash payments | $ 1,000,000 | ||||||||
Previous Actions and Sites Pending Sale [Member] | Severance Costs [Member] | Restructuring Activities Other [Member] | |||||||||
Restructuring Cost And Reserve [Line Items] | |||||||||
Accrued severance charges | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Accumulated Other Comprehensi99
Accumulated Other Comprehensive (Loss) Income - Changes in Each Component of Accumulated Other Comprehensive (Loss) Income, Net of Tax (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance attributable to Cabot Corporation | $ (64) | $ 103 | |
Other comprehensive (loss) income before reclassifications | (263) | (171) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 24 | $ 2 | |
Net other comprehensive items | (303) | (68) | |
Less: Noncontrolling interest | (4) | (4) | |
Balance attributable to Cabot Corporation | (299) | (64) | 103 |
Currency Translation Adjustment [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance attributable to Cabot Corporation | 27 | 154 | |
Other comprehensive (loss) income before reclassifications | (270) | (131) | |
Net other comprehensive items | (243) | 23 | |
Less: Noncontrolling interest | (4) | (4) | |
Balance attributable to Cabot Corporation | (239) | 27 | 154 |
Unrealized Gains on Investments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance attributable to Cabot Corporation | 2 | 2 | |
Net other comprehensive items | 2 | 2 | |
Balance attributable to Cabot Corporation | 2 | 2 | 2 |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance attributable to Cabot Corporation | (93) | (53) | |
Other comprehensive (loss) income before reclassifications | 7 | (40) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 24 | ||
Net other comprehensive items | (62) | (93) | |
Balance attributable to Cabot Corporation | $ (62) | $ (93) | $ (53) |
Accumulated Other Comprehens100
Accumulated Other Comprehensive (Loss) Income - Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | $ 30 | $ 2 | |
Tax impact | (6) | ||
Total after tax | 24 | 2 | |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Amortization of actuarial losses | (1) | $ 3 | 5 |
Amortization of prior service cost | 4 | $ (3) | $ (3) |
Settlement costs | 27 | ||
Total after tax | $ 24 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Basic EPS: | |||||||||||
Net (loss) income attributable to Cabot Corporation | $ 40 | $ (445) | $ 26 | $ 45 | $ 31 | $ 52 | $ 36 | $ 80 | $ (334) | $ 199 | $ 153 |
Less: Dividends and dividend equivalents to participating securities | 1 | ||||||||||
Less: Undistributed earnings allocated to participating securities | 1 | 1 | |||||||||
(Loss) earnings allocated to common shareholders (numerator) | $ (334) | $ 197 | $ 152 | ||||||||
Weighted average common shares and participating securities outstanding | 63.9 | 65 | 64.4 | ||||||||
Less: Participating securities | 0.5 | 0.6 | 0.6 | ||||||||
Adjusted weighted average common shares (denominator) | 63.4 | 64.4 | 63.8 | ||||||||
(Loss) income from continuing operations attributable to Cabot Corporation | $ 0.63 | $ (7.05) | $ 0.41 | $ 0.70 | $ 0.43 | $ 0.80 | $ 0.56 | $ 1.25 | $ (5.29) | $ 3.04 | $ 2.39 |
Income (loss) from discontinued operations | 0.01 | 0.01 | 0.05 | (0.01) | (0.01) | (0.01) | 0.02 | 0.02 | (0.01) | ||
Net (loss) income attributable to Cabot Corporation | 0.64 | (7.04) | 0.41 | 0.70 | 0.48 | 0.79 | 0.55 | 1.24 | $ (5.27) | $ 3.06 | $ 2.38 |
Diluted EPS: | |||||||||||
(Loss) earnings allocated to common shareholders | $ (334) | $ 197 | $ 152 | ||||||||
Plus: Earnings allocated to participating securities | 1 | 1 | |||||||||
Less: Adjusted earnings allocated to participating securities | 1 | 1 | |||||||||
(Loss) earnings available to common shares (numerator) | $ (334) | $ 197 | $ 152 | ||||||||
Adjusted weighted average common shares (denominator) | 63.4 | 64.4 | 63.8 | ||||||||
Common shares issuable | 0.7 | 0.7 | |||||||||
Adjusted weighted average common shares(denominator) | 63.4 | 65.1 | 64.5 | ||||||||
(Loss) income from continuing operations attributable to Cabot Corporation | 0.62 | (7.05) | 0.41 | 0.69 | 0.43 | 0.79 | 0.55 | 1.24 | $ (5.29) | $ 3.01 | $ 2.37 |
Income (loss) from discontinued operations | 0.01 | 0.01 | 0.05 | (0.01) | (0.01) | (0.01) | 0.02 | 0.02 | (0.01) | ||
Net (loss) income attributable to Cabot Corporation | $ 0.63 | $ (7.04) | $ 0.41 | $ 0.69 | $ 0.48 | $ 0.78 | $ 0.54 | $ 1.23 | $ (5.27) | $ 3.03 | $ 2.36 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net (loss) income attributable to Cabot Corporation | $ 40 | $ (445) | $ 26 | $ 45 | $ 31 | $ 52 | $ 36 | $ 80 | $ (334) | $ 199 | $ 153 |
Less: Dividends declared on common stock | 56 | 54 | 51 | ||||||||
Less: Dividends and dividend equivalents to participating securities | 1 | ||||||||||
Undistributed (loss) earnings | (390) | 144 | 102 | ||||||||
Undistributed (loss) earnings allocated to common shareholders | $ (390) | 143 | 101 | ||||||||
Undistributed earnings allocated to participating securities | $ 1 | $ 1 |
Earnings Per Share - Calcula103
Earnings Per Share - Calculation of Undistributed Earnings (Parenthetical) (Detail) - shares | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share | 897,056 | 197,072 | 301,328 |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments [Abstract] | |||
Domestic | $ (439) | $ 50 | $ 40 |
Foreign | 62 | 258 | 170 |
(Loss) income from continuing operations before income taxes and equity in earnings of affiliated companies | $ (377) | $ 308 | $ 210 |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal and state, Current | $ (7) | $ (4) | $ (3) |
U.S. federal and state, Deferred | (74) | (4) | (6) |
U.S. federal and state, Total | (81) | (8) | (9) |
Foreign, Current | 48 | 86 | 70 |
Foreign, Deferred | (12) | 14 | (1) |
Foreign, Total | 36 | 100 | 69 |
Total U.S and foreign | $ (45) | $ 92 | $ 60 |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Using U.S. Statutory Rate (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |||
Computed tax expense at the federal statutory rate | $ (132) | $ 108 | $ 74 |
Impact of taxation at different rates, repatriation and other | (24) | (29) | (27) |
Impact of (decrease) increase in valuation allowance on deferred taxes | (7) | 20 | |
Impact of investment incentive credits | (1) | ||
Impact of foreign losses for which a current tax benefit is not available | 9 | 7 | 9 |
Impact of non-deductible net currency losses | (1) | 18 | |
U.S. and state benefits from research and experimentation activities | (2) | (4) | |
Tax settlements | (7) | (7) | (6) |
Impact of goodwill impairment charge | 123 | ||
Nontaxable gain on existing equity investment | (10) | ||
Permanent differences, net | 3 | (4) | |
State taxes, net of federal effect | (4) | 1 | |
Total U.S and foreign | $ (45) | $ 92 | $ 60 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Components Of Deferred Tax Assets [Abstract] | ||
Deferred expenses | $ 38 | $ 37 |
Intangible assets | 32 | |
Inventory | 9 | 11 |
Other | 3 | 20 |
Pension and other benefits | 72 | 74 |
Net operating loss carry-forwards | 145 | 171 |
Foreign tax credit carry-forwards | 42 | 40 |
R&D credit carry-forwards | 31 | 28 |
Other business credit carry-forwards | 40 | 38 |
Subtotal | 412 | 419 |
Valuation allowances | (161) | (186) |
Total deferred tax assets | 251 | 233 |
Intangible assets | (37) | |
Property, plant and equipment | (116) | (143) |
Total deferred tax liabilities | $ (116) | $ (180) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | 38 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2015 | Sep. 30, 2012 | |
Income Taxes [Line Items] | |||||
Net discrete tax benefits (charges) related to tax settlements | $ (13) | $ (17) | $ (3) | ||
Foreign currency charge related to tax settlements | 7 | 13 | |||
Tax benefits from repatriation of high taxed income | 4 | $ 4 | |||
Cost of renewal of the U.S. research and experimentation credit | 2 | ||||
Charge for valuation allowance on deferred tax assets in foreign jurisdiction | 161 | 186 | 161 | ||
Charge for return to provision adjustments | 2 | ||||
Charge for interest on uncertain tax positions | 2 | ||||
Miscellaneous tax items | 4 | ||||
Net tax benefit related to tax settlements | 11 | 10 | |||
Net operating loss carryforwards | 677 | 677 | |||
Other tax credit carryforwards | 114 | 114 | |||
Undistributed earnings | 1,500 | 1,500 | |||
Tax credits | 75 | 190 | |||
Required future taxable operating income | $ 443 | ||||
Expected term to realize deferred tax asset, years | 20 years | ||||
Increased/(decreased) valuation allowance | $ (25) | 20 | |||
Unrecognized tax benefits | 30 | 41 | 50 | 30 | $ 55 |
Unrecognized tax benefits, recorded | 16 | 16 | |||
Unrecognized tax benefits, not recorded | 14 | 14 | |||
Accruals for penalties | 1 | 1 | 1 | ||
Accruals for interest | 8 | 11 | 8 | ||
Total penalties and interest | 2 | 3 | $ 3 | ||
Favorable impact on tax provision | $ 20 | ||||
Earliest Tax Year [Member] | Internal Revenue Service (IRS) [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,012 | ||||
Latest Tax Year [Member] | Internal Revenue Service (IRS) [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,014 | ||||
U.S. Management [Member] | |||||
Income Taxes [Line Items] | |||||
Net deferred tax assets | $ 155 | $ 155 | |||
Non-U.S. Jurisdictions [Member] | |||||
Income Taxes [Line Items] | |||||
Charge for valuation allowance on deferred tax assets in foreign jurisdiction | $ 20 | ||||
Non-U.S. Jurisdictions [Member] | Earliest Tax Year [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,002 | ||||
Non-U.S. Jurisdictions [Member] | Latest Tax Year [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,014 | ||||
State Tax Authorities [Member] | Earliest Tax Year [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,005 | ||||
State Tax Authorities [Member] | Latest Tax Year [Member] | |||||
Income Taxes [Line Items] | |||||
Tax years remain subject to examination | 2,014 |
Income Taxes - Expiration Dates
Income Taxes - Expiration Dates of Carryforwards (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | $ 677 |
Credits | 114 |
2015 to 2021 [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 323 |
Credits | 51 |
2022 and thereafter [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 95 |
Credits | 41 |
Indefinite Carry-Forwards [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 259 |
Credits | $ 22 |
Income Taxes - Expiration Da110
Income Taxes - Expiration Dates of Carryforwards (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2015 | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,023 |
Minimum [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,016 |
Maximum [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,022 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of the year | $ 41 | $ 50 | $ 55 |
Additions based on tax provisions related to the current year | 1 | 1 | 1 |
Additions for tax positions of prior years | 2 | ||
Reductions of tax provisions of prior years | (1) | (1) | (5) |
Reductions related to settlements | (9) | (5) | |
Reductions from lapse of statute of limitations | (2) | (4) | (3) |
Balance at end of the year | $ 30 | $ 41 | $ 50 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2013USD ($)CommunityProject | Sep. 30, 2015USD ($)claimants | Sep. 30, 2014USD ($)claimants | Sep. 30, 2013USD ($) | |
Loss Contingencies [Line Items] | ||||
Lease expiration period, years | 10 years | |||
Rent expense under such operating lease agreement | $ 29,000,000 | $ 26,000,000 | $ 23,000,000 | |
Raw material purchased | 352,000,000 | 432,000,000 | 441,000,000 | |
Aggregate self-insured liability | 6,900,000 | |||
Charges for environmental expense | 1,000,000 | $ 15,000,000 | 1,000,000 | |
Respirator Liabilities [Member] | ||||
Loss Contingencies [Line Items] | ||||
Annual fees paid by transferee to transferor company | $ 400,000 | |||
Number of claimants | claimants | 38,000 | 41,000 | ||
Respirator reserve | $ 11,000,000 | |||
Cash payments for respirator reserves | 2,000,000 | $ 2,000,000 | 2,000,000 | |
Environmental Matters [Member] | ||||
Loss Contingencies [Line Items] | ||||
Reserved for environmental matters | 16,000,000 | 17,000,000 | ||
Reserve for environmental matters included in accrued expenses | 4,000,000 | 4,000,000 | ||
Reserve for environmental matters included in other liabilities | 12,000,000 | 13,000,000 | ||
Cash payments for environmental reserves | 2,000,000 | 3,000,000 | 2,000,000 | |
Civil penalty paid by cabot to EPA and LDEQ | $ 975,000 | |||
Amount of fund paid by Cabot in environmental mitigation projects | $ 450,000 | |||
Number of communities funded under environmental mitigation projects | Community | 3 | |||
Number of environmental mitigation projects completed | Project | 2 | |||
Environmental Matters [Member] | Operating and Maintenance Component [Member] | ||||
Loss Contingencies [Line Items] | ||||
Reserved for environmental matters | 7,000,000 | |||
Expected future payments, 2016 | 2,000,000 | |||
Expected future payments, 2017 | 3,000,000 | |||
Expected future payments, 2018 | 3,000,000 | |||
Expected future payments, thereafter | 6,000,000 | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Retention for medical costs per person per annum | 225,000 | |||
Maximum [Member] | Environmental Matters [Member] | Operating and Maintenance Component [Member] | ||||
Loss Contingencies [Line Items] | ||||
Expected future payments, 2019 | 1,000,000 | |||
Expected future payments, 2020 | 1,000,000 | |||
Non-Controlling Interests [Member] | ||||
Loss Contingencies [Line Items] | ||||
Raw material purchased | 169,000,000 | 241,000,000 | $ 150,000,000 | |
Accounts payable and accrued liabilities | $ 8,000,000 | $ 16,000,000 |
Commitments and Contingencie113
Commitments and Contingencies - Schedule of Future Minimum Rental Commitments under Non-Cancelable Leases (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,016 | $ 21 |
2,017 | 14 |
2,018 | 12 |
2,019 | 10 |
2,020 | 8 |
2021 and thereafter | 67 |
Total future minimum rental commitments | $ 132 |
Commitments and Contingencie114
Commitments and Contingencies - Schedule of Raw Material Purchased under Long Term Purchase Agreements (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | $ 352 | $ 432 | $ 441 |
Reinforcement Materials [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | 276 | 354 | 371 |
Performance Chemicals [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | 62 | 43 | 34 |
Purification Solutions [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | $ 14 | 32 | 34 |
Other [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | $ 3 | $ 2 |
Commitments and Contingencie115
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2016 | $ 302 |
Payments Due by Fiscal Year 2017 | 225 |
Payments Due by Fiscal Year 2018 | 216 |
Payments Due by Fiscal Year 2019 | 212 |
Payments Due by Fiscal Year 2020 | 174 |
Payments Due Thereafter | 2,001 |
Payments Due, Total | 3,130 |
Reinforcement Materials [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2016 | 228 |
Payments Due by Fiscal Year 2017 | 177 |
Payments Due by Fiscal Year 2018 | 176 |
Payments Due by Fiscal Year 2019 | 173 |
Payments Due by Fiscal Year 2020 | 137 |
Payments Due Thereafter | 1,821 |
Payments Due, Total | 2,712 |
Performance Chemicals [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2016 | 60 |
Payments Due by Fiscal Year 2017 | 38 |
Payments Due by Fiscal Year 2018 | 33 |
Payments Due by Fiscal Year 2019 | 33 |
Payments Due by Fiscal Year 2020 | 30 |
Payments Due Thereafter | 178 |
Payments Due, Total | 372 |
Purification Solutions [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2016 | 14 |
Payments Due by Fiscal Year 2017 | 10 |
Payments Due by Fiscal Year 2018 | 7 |
Payments Due by Fiscal Year 2019 | 6 |
Payments Due by Fiscal Year 2020 | 7 |
Payments Due Thereafter | 2 |
Payments Due, Total | $ 46 |
Concentration of Credit Risk -
Concentration of Credit Risk - Schedule of Account Receivable (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Sep. 30, 2014 |
Tire Manufacturers [Member] | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 217 | $ 311 |
Financial Information by Seg117
Financial Information by Segment & Geographic Area - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014Segment | Dec. 31, 2014Segment | Sep. 30, 2015SegmentBusiness_Unit | |
Segment Reporting Information [Line Items] | |||
Number of business reportable segments | 4 | 4 | |
Performance Chemicals [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of business reportable segments | 1 | ||
Number of business activity | Business_Unit | 2 |
Financial Information by Seg118
Financial Information by Segment & Geographic Area - Schedule of Performance Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 671 | $ 694 | $ 694 | $ 812 | $ 911 | $ 940 | $ 898 | $ 898 | $ 2,871 | $ 3,647 | $ 3,456 |
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 2,772 | 3,543 | 3,349 | ||||||||
Performance Chemicals [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 927 | 1,022 | 989 | ||||||||
Performance Chemicals [Member] | Specialty Carbons and Formulations [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 630 | 709 | 686 | ||||||||
Performance Chemicals [Member] | Metal Oxides [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 297 | $ 313 | $ 303 |
Financial Information by Seg119
Financial Information by Segment & Geographic Area - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ 671 | $ 694 | $ 694 | $ 812 | $ 911 | $ 940 | $ 898 | $ 898 | $ 2,871 | $ 3,647 | $ 3,456 |
Depreciation and amortization | 183 | 201 | 190 | ||||||||
Equity in earnings of affiliated companies | 4 | 11 | |||||||||
Income (loss) from continuing operations before taxes | (377) | 308 | 210 | ||||||||
Assets | 3,075 | 4,084 | 3,075 | 4,084 | 4,233 | ||||||
Total expenditures for additions to long-lived assets | 141 | 171 | 264 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 2,772 | 3,543 | 3,349 | ||||||||
Depreciation and amortization | 184 | 201 | 194 | ||||||||
Equity in earnings of affiliated companies | 9 | 4 | 15 | ||||||||
Income (loss) from continuing operations before taxes | 332 | 447 | 386 | ||||||||
Assets | 2,753 | 3,867 | 2,753 | 3,867 | 3,773 | ||||||
Total expenditures for additions to long-lived assets | 137 | 165 | 261 | ||||||||
Unallocated and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 99 | 104 | 107 | ||||||||
Depreciation and amortization | (1) | (4) | |||||||||
Equity in earnings of affiliated companies | (5) | (4) | (4) | ||||||||
Income (loss) from continuing operations before taxes | (709) | (139) | (176) | ||||||||
Assets | 322 | 217 | 322 | 217 | 460 | ||||||
Total expenditures for additions to long-lived assets | 4 | 6 | 3 | ||||||||
Reinforcement Materials [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 1,507 | 2,108 | 1,931 | ||||||||
Depreciation and amortization | 83 | 88 | 82 | ||||||||
Equity in earnings of affiliated companies | 2 | (3) | 9 | ||||||||
Income (loss) from continuing operations before taxes | 143 | 259 | 195 | ||||||||
Assets | 1,220 | 1,632 | 1,220 | 1,632 | 1,523 | ||||||
Total expenditures for additions to long-lived assets | 44 | 65 | 172 | ||||||||
Performance Chemicals [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 927 | 1,022 | 989 | ||||||||
Depreciation and amortization | 54 | 56 | 56 | ||||||||
Equity in earnings of affiliated companies | 1 | 1 | 2 | ||||||||
Income (loss) from continuing operations before taxes | 178 | 168 | 149 | ||||||||
Assets | 625 | 731 | 625 | 731 | 752 | ||||||
Total expenditures for additions to long-lived assets | 29 | 29 | 46 | ||||||||
Purification Solutions [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 296 | 315 | 328 | ||||||||
Depreciation and amortization | 45 | 54 | 54 | ||||||||
Equity in earnings of affiliated companies | 6 | 6 | 4 | ||||||||
Income (loss) from continuing operations before taxes | 5 | (19) | (4) | ||||||||
Assets | 789 | 1,389 | 789 | 1,389 | 1,388 | ||||||
Total expenditures for additions to long-lived assets | 48 | 64 | 38 | ||||||||
Specialty Fluids [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 42 | 98 | 101 | ||||||||
Depreciation and amortization | 2 | 3 | 2 | ||||||||
Income (loss) from continuing operations before taxes | 6 | 39 | 46 | ||||||||
Assets | $ 119 | $ 115 | 119 | 115 | 110 | ||||||
Total expenditures for additions to long-lived assets | $ 16 | $ 7 | $ 5 |
Financial Information by Seg120
Financial Information by Segment & Geographic Area - Financial Information by Reportable Segment (Parenthetical) (Detail) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting [Abstract] | |||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% |
Financial Information by Seg121
Financial Information by Segment & Geographic Area - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 671 | $ 694 | $ 694 | $ 812 | $ 911 | $ 940 | $ 898 | $ 898 | $ 2,871 | $ 3,647 | $ 3,456 |
Unallocated and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 99 | 104 | 107 | ||||||||
Unallocated and Other [Member] | Royalties, Other Operating Revenues, the Impact of Unearned Revenue, the Removal of 100% of the Sales of an Equity Method Affiliate and Discounting Charges for Certain Notes Receivable [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 9 | (7) | 5 | ||||||||
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 90 | $ 111 | $ 102 |
Financial Information by Seg122
Financial Information by Segment & Geographic Area - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Parenthetical) (Detail) | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting [Abstract] | |||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% |
Financial Information by Seg123
Financial Information by Segment & Geographic Area - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | |||
Interest expense | $ (53) | $ (55) | $ (62) |
Unallocated and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest expense | (53) | (55) | (62) |
Total certain items, pre-tax | (617) | (28) | (54) |
Equity in earnings of affiliated companies, net of tax | (4) | (11) | |
Unallocated corporate costs | (46) | (54) | (48) |
General unallocated expense | 11 | (2) | (1) |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | $ (709) | $ (139) | $ (176) |
Financial Information by Seg124
Financial Information by Segment & Geographic Area - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | |||
Restructuring reserve, period expense | $ 21 | $ 29 | $ 35 |
Charges for environmental expense | 1 | 15 | 1 |
Non-cash gain on acquisition | 29 | ||
Inventory reserve adjustments | 6 | ||
Certain Item [Member] | |||
Segment Reporting Information [Line Items] | |||
Restructuring reserve, period expense | 21 | 29 | 35 |
Asset Impairment Charges | 562 | ||
Acquisition and integration related charges | 5 | 7 | 21 |
Employee benefit plan settlement charge | 21 | ||
One-time integration costs | 10 | ||
Acquisition of accounting adjustments for acquired inventory | 11 | ||
Charges for environmental expense | 18 | 1 | |
Foreign currency exchange rate, re measurement income (loss) | (2) | 3 | $ 3 |
Non-cash gain on acquisition | $ 29 | ||
Inventory reserve adjustments | $ 6 |
Financial Information by Seg125
Financial Information by Segment & Geographic Area - Revenue from External Customers and Long-Lived Asset Information by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | $ 671 | $ 694 | $ 694 | $ 812 | $ 911 | $ 940 | $ 898 | $ 898 | $ 2,871 | $ 3,647 | $ 3,456 |
Net property, plant and equipment | 1,383 | 1,581 | 1,383 | 1,581 | 1,600 | ||||||
United States [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 705 | 847 | 818 | ||||||||
Net property, plant and equipment | 480 | 496 | 480 | 496 | 488 | ||||||
China [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 548 | 628 | 558 | ||||||||
Net property, plant and equipment | 311 | 355 | 311 | 355 | 385 | ||||||
The Netherlands [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 176 | 220 | 224 | ||||||||
Net property, plant and equipment | 157 | 197 | 157 | 197 | 211 | ||||||
Other Foreign Countries [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 1,442 | 1,952 | 1,856 | ||||||||
Net property, plant and equipment | $ 435 | $ 533 | $ 435 | $ 533 | $ 516 |
Unaudited Quarterly Financia126
Unaudited Quarterly Financial Information - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule Of Quarterly Financial Information Disclosure [Line Items] | |||||||||||
Net sales and other operating revenues | $ 671 | $ 694 | $ 694 | $ 812 | $ 911 | $ 940 | $ 898 | $ 898 | $ 2,871 | $ 3,647 | $ 3,456 |
Gross profit | 139 | 150 | 139 | 157 | 182 | 184 | 176 | 179 | 585 | 721 | 633 |
(Loss) income from discontinued operations, net of tax | 1 | 1 | 4 | (1) | (1) | 2 | 2 | (1) | |||
Net income (loss) | 41 | (443) | 27 | 49 | 36 | 57 | 39 | 86 | (326) | 218 | 160 |
Net income (loss) attributable to Cabot Corporation | $ 40 | $ (445) | $ 26 | $ 45 | $ 31 | $ 52 | $ 36 | $ 80 | $ (334) | $ 199 | $ 153 |
Basic: | |||||||||||
Income (loss) from continuing operations | $ 0.63 | $ (7.05) | $ 0.41 | $ 0.70 | $ 0.43 | $ 0.80 | $ 0.56 | $ 1.25 | $ (5.29) | $ 3.04 | $ 2.39 |
Income from discontinued operations | 0.01 | 0.01 | 0.05 | (0.01) | (0.01) | (0.01) | 0.02 | 0.02 | (0.01) | ||
Net (loss) income attributable to Cabot Corporation | 0.64 | (7.04) | 0.41 | 0.70 | 0.48 | 0.79 | 0.55 | 1.24 | (5.27) | 3.06 | 2.38 |
Diluted: | |||||||||||
Income (loss) from continuing operations | 0.62 | (7.05) | 0.41 | 0.69 | 0.43 | 0.79 | 0.55 | 1.24 | (5.29) | 3.01 | 2.37 |
Income from discontinued operations | 0.01 | 0.01 | 0.05 | (0.01) | (0.01) | (0.01) | 0.02 | 0.02 | (0.01) | ||
Net (loss) income attributable to Cabot Corporation | $ 0.63 | $ (7.04) | $ 0.41 | $ 0.69 | $ 0.48 | $ 0.78 | $ 0.54 | $ 1.23 | $ (5.27) | $ 3.03 | $ 2.36 |
Purification Solutions [Member] | |||||||||||
Schedule Of Quarterly Financial Information Disclosure [Line Items] | |||||||||||
Long-lived assets impairment charge | $ 1 | $ 209 | $ 210 | ||||||||
Goodwill impairment charge | $ (1) | $ 353 | $ 352 |