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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

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

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

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

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

The Company had ~~61,807,147~~55,258,155 shares of common stock, $1.00 par value per share, outstanding as of ~~February~~May 6, ~~2018.~~2024.


Part I.	Financial Information

	Item 1.	Financial Statements (unaudited)
		Consolidated Statements of Operations	3
		Consolidated Statements of Comprehensive Income (Loss)	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Cash Flows	7
		Consolidated Statements of Changes in Stockholders’ Equity	8
		Notes to the Consolidated Financial Statements	810

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2721
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3730
	Item 4.	Controls and Procedures	3730

Part II.	Other Information

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3831
	Item 6.	Exhibits	3831

Part I. ~~Financi~~alFinancial Information

~~Item 1.~~

~~Financial Statements~~

Item 1. Financial Statements

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED


	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2017			2016			2024			2023			2024			2023
	(In millions, except per share amounts)						(In millions, except per share amounts)
Net sales and other operating revenues	$	720		$	611		$	1,019		$	1,033		$	1,977		$	1,998
Cost of sales		542			452			773			823			1,513			1,607
Gross profit		178			159			246			210			464			391
Selling and administrative expenses		69			63			75			66			142			126
Research and technical expenses		15			12			15			15			30			28
Loss on sale of business								—			—			—			3
Income (loss) from operations		94			84			156			129			292			234
Interest and dividend income		3			2			8			9			17			15
Interest expense		(13	)		(13	)		(21	)		(23	)		(43	)		(45	)
Other income (expense)		8			2			(1	)		(5	)		(30	)		(10	)
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies		92			75
Income (loss) from operations before income taxes and equity in earnings of affiliated companies								142			110			236			194
(Provision) benefit for income taxes		(205	)		(18	)		(47	)		(29	)		(81	)		(49	)
Equity in earnings of affiliated companies, net of tax		1			2			2			1			3			3
Net income (loss)		(112	)		59			97			82			158			148
Net income (loss) attributable to noncontrolling interests, net of tax		10			4			13			7			24			19
Net income (loss) attributable to Cabot Corporation	$	(122	)	$	55		$	84		$	75		$	134		$	129

Weighted-average common shares outstanding:
Basic		61.9			62.2			55.4			56.3			55.3			56.3
Diluted		61.9			62.8			55.8			56.8			55.8			56.7

Earnings per common share:
Earnings (loss) per common share:
Basic	$	(1.98	)	$	0.87		$	1.50		$	1.31		$	2.39		$	2.24
Diluted	$	(1.98	)	$	0.86		$	1.49		$	1.29		$	2.37		$	2.23

Dividends per common share	$	0.315		$	0.30

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED


	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2017			2016			2024			2023			2024			2023
	(In millions)						(In millions)
Net income (loss)	$	(112	)	$	59		$	97		$	82		$	158		$	148
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment, net of tax provision (benefit) of $(2) and $2		—			(125	)
Foreign currency translation adjustment, net of tax								(15	)		49			47			137
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense, net of tax provision of $— and $—		(1	)		—
Pension and other postretirement benefit liability adjustments
Amortization of net loss and prior service credit included in net periodic benefit cost, net of tax		—			1
Other comprehensive income (loss)		(1	)		(124	)
(Gains) losses reclassified to interest expense, net of tax								(1	)		(2	)		(2	)		(3	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense, net of tax								1			1			1			1
Pension and other post-retirement benefit liability adjustments, net of tax								(1	)		(1	)		(1	)		(1	)
Other comprehensive income (loss), net of tax (provision) benefit of $ 11, $ —, $ 12 and $ —								(16	)		47			45			134
Comprehensive income (loss)		(113	)		(65	)		81			129			203			282
Net income (loss) attributable to noncontrolling interests, net of tax		10			4			13			7			24			19
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax		3			(4	)		(4	)		3			—			9
Comprehensive income (loss) attributable to noncontrolling interests, net of tax		13			—
Comprehensive income (loss) attributable to noncontrolling interests								9			10			24			28
Comprehensive income (loss) attributable to Cabot Corporation	$	(126	)	$	(65	)	$	72		$	119		$	179		$	254

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

CABOT CORPORATION

CONSOLIDATED BALANCE SHEETS

ASSETS

UNAUDITED


	December 31, 2017		September 30, 2017		March 31, 2024			September 30, 2023
	(In millions)				(In millions)
Current assets:
Cash and cash equivalents	$	189	$	280	$	206		$	238
Accounts and notes receivable, net of reserve for doubtful accounts of $10 and $9		551		527
Accounts and notes receivable, net of reserve for doubtful accounts of $5 and $2						744			695
Inventories:
Raw materials		112		93		127			148
Work in process		2		2
Finished goods		318		293		354			374
Other		46		45		70			63
Total inventories		478		433		551			585
Prepaid expenses and other current assets		63		59		104			108
Total current assets		1,281		1,299		1,605			1,626
Property, plant and equipment, net		1,329		1,305
Property, plant and equipment						3,909			3,827
Accumulated depreciation						(2,482	)		(2,415	)
Net property, plant and equipment						1,427			1,412
Goodwill		184		154		137			134
Equity affiliates		54		56		22			20
Intangible assets, net		164		137		59			60
Assets held for rent		104		104
Deferred income taxes		27		237		163			180
Other assets		46		46		183			172
Total assets	$	3,189	$	3,338	$	3,596		$	3,604

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

CABOT CORPORATION

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

UNAUDITED


	December 31, 2017			September 30, 2017			March 31, 2024			September 30, 2023
	(In millions, except share						(In millions, except share
	and per share amounts)						and per share amounts)
Current liabilities:
Notes payable	$	7		$	7
Short-term borrowings							$	88		$	174
Accounts payable and accrued liabilities		475			457			587			600
Income taxes payable		20			22			35			40
Current portion of long-term debt		286			256			8			8
Total current liabilities		788			742			718			822
Long-term debt		631			661			1,088			1,094
Deferred income taxes		20			38			38			50
Other liabilities		252			245			245			231
Redeemable preferred stock		26			27
Commitments and contingencies (Note H)
Stockholders’ equity:
Contingencies (Note E)
Stockholders' equity:
Preferred stock:
Authorized: 2,000,000 shares of $1 par value		—			—
Issued and Outstanding: None and none
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: 61,999,921 and 62,087,627 shares
Outstanding: 61,796,641 and 61,884,347 shares		62			62
Less cost of 203,280 and 203,280 shares of common treasury stock		(6	)		(6	)
Authorized: 200,000,000 shares of $1 par value, Issued: 55,391,349 and 55,379,636 shares, Outstanding: 55,258,040 and 55,243,804 shares								55			55
Less cost of 133,309 and 135,832 shares of common treasury stock								(3	)		(3	)
Additional paid-in capital		—			—			—			—
Retained earnings		1,555			1,707			1,632			1,574
Accumulated other comprehensive income (loss)		(263	)		(259	)		(317	)		(362	)
Total Cabot Corporation stockholders' equity		1,348			1,504			1,367			1,264
Noncontrolling interests		124			121			140			143
Total stockholders' equity		1,472			1,625			1,507			1,407
Total liabilities and stockholders’ equity	$	3,189		$	3,338
Total liabilities and stockholders' equity							$	3,596		$	3,604

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED


	Three Months Ended December 31						Six Months Ended March 31
	2017			2016			2024			2023
	(In millions)						(In millions)
Cash Flows from Operating Activities:
Net income (loss)	$	(112	)	$	59		$	158		$	148
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		39			38			78			71
Loss on sale of business								—			3
Gain on sale of land								—			(1	)
Deferred tax provision (benefit)		186			(1	)		9			(3	)
Gain on sale of investments		(10	)		—
Equity in net income of affiliated companies		(1	)		(2	)
Non-cash compensation		6			5
Equity in earnings of affiliated companies								(3	)		(3	)
Share-based compensation								13			12
Other non-cash (income) expense								52			(2	)
Cash dividends received from equity affiliates								1			2
Changes in assets and liabilities:
Accounts and notes receivable		(19	)		28			(43	)		108
Inventories		(41	)		(36	)		38			72
Prepaid expenses and other current assets		(4	)		2
Prepaid expenses and other assets								(11	)		(25	)
Accounts payable and accrued liabilities		10			22			(20	)		(155	)
Income taxes payable		(3	)		(4	)		(6	)		(16	)
Other liabilities		(10	)		(7	)		15			3
Cash dividends received from equity affiliates		4			3
Cash provided by operating activities		45			107

Cash provided by (used in) operating activities								281			214
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(52	)		(22	)		(97	)		(86	)
Cash paid for acquisition of business, net of cash acquired of $1		(64	)		—
Proceeds from sale of investments		10			—
Change in assets held for rent		—			(1	)
Proceeds from sale of land								—			7
Proceeds from sale of business								—			6
Other		5			—			2			9
Cash used in investing activities		(101	)		(23	)

Cash provided by (used in) investing activities								(95	)		(64	)
Cash Flows from Financing Activities:
Repayments under financing arrangements		—			(4	)
Increase in notes payable, net		—			4
Proceeds from short-term borrowings								—			14
Proceeds from issuance (repayments) of commercial paper, net								(85	)		(105	)
Repayments of long-term debt								(9	)		(7	)
Purchases of common stock		(16	)		(16	)		(57	)		(33	)
Proceeds from sales of common stock		—			3			13			4
Cash dividends paid to noncontrolling interests								(12	)		(41	)
Cash dividends paid to common stockholders		(20	)		(19	)		(45	)		(42	)
Cash used in financing activities		(36	)		(32	)
Cash provided by (used in) financing activities								(195	)		(210	)
Effects of exchange rate changes on cash		1			(63	)		(23	)		59
Increase (decrease) in cash and cash equivalents		(91	)		(11	)		(32	)		(1	)
Cash and cash equivalents at beginning of period		280			200			238			206
Cash and cash equivalents at end of period	$	189		$	189		$	206		$	205

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED


	Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity
	(In millions, except share amounts)
Balance at September 30, 2023		55,244		$	52	$	—		$	1,574		$	(362	)	$	1,264		$	143		$	1,407
Net income (loss)										50						50			11			61
Total other comprehensive income (loss)													57			57			4			61
Cash dividends paid:
Common stock, $0.40 per share										(22	)					(22	)					(22	)
Cash dividends declared to noncontrolling interests																—			(12	)		(12	)
Issuance of stock under equity compensation plans		441			—		7									7						7
Share-based compensation							6									6						6
Purchase and retirement of common stock		(260	)		—		(13	)		(20	)					(33	)					(33	)
Balance at December 31, 2023		55,425		$	52	$	—		$	1,582		$	(305	)	$	1,329		$	146		$	1,475
Net income (loss)										84						84			13			97
Total other comprehensive income (loss)													(12	)		(12	)		(4	)		(16	)
Cash dividends paid:
Common stock, $0.40 per share										(23	)					(23	)					(23	)
Cash dividends declared to noncontrolling interests																—			(15	)		(15	)
Issuance of stock under equity compensation plans		122			—		6									6						6
Share-based compensation							7									7						7
Purchase and retirement of common stock		(289	)		—		(13	)		(11	)					(24	)					(24	)
Balance at March 31, 2024		55,258		$	52	$	—		$	1,632		$	(317	)	$	1,367		$	140		$	1,507

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED


	Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity
	(In millions, except share amounts)
Balance at September 30, 2022		56,249		$	52	$	1		$	1,284		$	(439	)	$	898		$	134		$	1,032
Net income (loss)										54						54			12			66
Total other comprehensive income (loss)													81			81			6			87
Cash dividends paid:
Common stock, $0.37 per share										(21	)					(21	)					(21	)
Cash dividends declared to noncontrolling interests																—			(2	)		(2	)
Issuance of stock under equity compensation plans		309			1		2									3						3
Share-based compensation							11									11						11
Purchase and retirement of common stock		(242	)		—		(14	)		(3	)					(17	)					(17	)
Balance at December 31, 2022		56,316		$	53	$	—		$	1,314		$	(358	)	$	1,009		$	150		$	1,159
Net income (loss)										75						75			7			82
Total other comprehensive income (loss)													44			44			3			47
Cash dividends paid:
Common stock, $0.37 per share										(21	)					(21	)					(21	)
Cash dividends declared to noncontrolling interests																—			(27	)		(27	)
Issuance of stock under equity compensation plans		29			—		1									1						1
Share-based compensation							7									7						7
Purchase and retirement of common stock		(199	)		—		(8	)		(8	)					(16	)					(16	)
Balance at March 31, 2023		56,146		$	53	$	—		$	1,360		$	(314	)	$	1,099		$	133		$	1,232

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

CABOT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~March 31, ~~2017~~2024

UNAUDITED

A. Basis of Presentation

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

The unaudited consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to Cabot’s Annual Report on Form 10-K for its fiscal year ended September 30, ~~2017 (“2017~~2023 (the “2023 10-K”).

The financial information submitted herewith is unaudited and reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods ended ~~December~~March 31, ~~2017~~2024 and ~~2016.~~2023. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year.

B. Significant Accounting Policies

~~Effective October 1, 2017,~~Full detail on the Company’s significant accounting policies may be obtained by referring to Note A in the 2023 10-K.

Argentinian Government Actions

The Company’s wholly-owned Argentinian subsidiary operates in a highly inflationary economy and, as a result, the functional currency of the subsidiary is Cabot’s reporting currency, the U.S. dollar. During the three and six months ended March 31, 2024, the Company ~~changed its method~~recorded foreign exchange losses of ~~accounting for its U.S. carbon black inventories from the last-in, first-out (“LIFO”) method~~less than $1 million and $40 million, respectively, related to the ~~first-in, first-out (“FIFO”) method.~~revaluation of non-functional currency denominated monetary asset and liability balances, of which $33 million related to a single devaluation action in December 2023 by the newly-elected Argentine government. The Company ~~applied this change retrospectively to all prior periods presented, which is discussed~~invests cash in ~~further detail~~money market funds and recorded investment income of $4 million and $16 million, respectively, for the three and six months ended March 31, 2024. The foreign exchange losses and investment gains are recorded in ~~Note B.~~Other income (expense) in the Consolidated Statement of Operations.

~~As discussed in Note C, in November 2017,~~During the three months ended March 31, 2024, the Company ~~acquired all~~purchased $30 million in BOPREAL bonds (standing for “Bond for the Reconstruction of a Free Argentina” in Spanish), which are U.S. dollar-denominated securities issued by the ~~issued~~Central Bank of Argentina, as part of an Argentine government program to settle foreign payables for importers with debts for goods with customs registration and/or services, incurred on or prior to December 12, 2023. The Company subsequently sold the bonds for $22 million and ~~outstanding shares~~utilized the proceeds to partially repay its foreign payables in Argentina. The purchase and proceeds of ~~8755329 Canada Inc. (“Tech Blend”), a North American producer of black masterbatches. The financial position, results of operations and cash flows of Tech Blend~~BOPREAL bonds are included in the ~~Company’s consolidated financial statements from the date of acquisition.~~

~~B. Significant Accounting Policies~~

~~Revenue Recognition and Accounts Receivable~~

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~~Changes 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.~~

Three Months Ended December 31

2017

2016

Reinforcement Materials

56
%

51
%
Performance Chemicals

33
%

35
%
Purification Solutions

10
%

12
%
Specialty Fluids

1
%

2
%

Cabot derives the substantial majority of its revenues from the sale of products in its Reinforcement Materials, Performance Chemicals, and Purification Solutions segments. 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.

~~For major activated carbon injection systems projects in Purification Solutions, 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 the rental process and from the sale of fine cesium chemicals. This revenue is recognized upon delivery of the product.

~~Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable~~Prepaid expenses 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 periods presented. There is no material off-balance sheet credit exposure related to customer receivable balances.

~~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. 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. The Company acquired Tech Blend in November 2017, which included separately identifiable intangible assets of $31 million as part of the preliminary purchase price allocation as discussed in Note C.

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. As part of the Tech Blend acquisition, goodwill of $31 million was generated and is reflected in the Specialty Compounds reporting unit. The other 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 balances relative to Performance Chemicals are recorded in the Fumed Metal Oxides and Specialty Compounds reporting units.

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. 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, a goodwill impairment loss would result. The goodwill impairment loss would be the amount by which the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. 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.

Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2017, 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 exceeded its carrying amount by 13%. The fair value of the Purification Solutions reporting unit includes certain growth assumptions that are primarily dependent on: (1) growth in demand for Cabot’s existing portfolio of activated carbon products and new products developed for environmental and specialty applications; and (2) stable demand in the mercury removal related portion of the business, which is largely dependent on the amount of coal-based power generation used in the United States and the continued regulation of those utilities under the U.S. Mercury and Air Toxics Standards regulation (“MATS”). In April 2017, the U.S. Environmental Protection Agency (“EPA”) indicated that it intends to review the cost benefit analysis previously prepared by the EPA in support of MATS to determine if the EPA should reconsider MATS or some part of it. This analysis continues to be under review by the EPA.In addition, the Company continues to review its strategic options for this business and look for opportunities to better position the business for growth and long-term value enhancement. Failure to achieve the Company’s projected growth in environmental or specialty applications, actions taken by the EPA related to MATS that decrease demand for the Company’s products, or the result of the strategic options or opportunities the Company may pursue could have a negative impact on the fair value of the Purification Solutions reporting unit, which may lead to 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 separately identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset.

~~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 between twenty and twenty-five years, ten and twenty-five years, and three and 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~~Statement 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.

~~Income Tax~~Cash Flows. The $8 million investment loss is included in ~~Interim Periods~~

The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. Losses from jurisdictions for which no benefit can be recognized and the income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognizedOther non-cash (income) expense in the ~~impacted interim period.~~

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

~~Inventory Valuation~~

Inventories are stated at the lower of cost or market. Effective October 1, 2017, the Company changed its method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method. Total U.S. inventories accounted for utilizing the LIFO cost flow assumption represented 7% of the Company’s total worldwide inventories as of September 30, 2017 prior to this change in method. The Company believes the FIFO method is preferable because it: (i) conforms the accounting for U.S. carbon black inventories to the Company’s inventory valuation methodology for the majority of its other inventories; (ii) better represents how management assesses and reports on the performance of the Reinforcement Materials and Performance Chemicals operating segments that carry the Company’s U.S. carbon black inventories, as the impact of accounting for this inventory on a LIFO basis has historically been excluded from segment results; (iii) better aligns the accounting for U.S. carbon black inventories with the physical flow of that inventory; and (iv) improves comparability with many of the Company’s peers.

The Company applied this change retrospectively to all prior periods presented. This change resulted in a $17 million increase in retained earnings as of October 1, 2016, from $1,544 million to $1,561 million. In addition, the following financial statement line items in the Company’s Consolidated ~~Balance Sheets as of September 30, 2017 and its Consolidated Statements of Operations and Consolidated Statements~~Statement of Cash Flows ~~for the three months ended December 31, 2016 were adjusted as follows:~~

Consolidated Statements of Operations

Three Months Ended December 31

2016

As Originally Reported

Effect of Change

As Adjusted

(In millions, except per share amounts)

Cost of sales

$
454

$
(2
)

$
452

Income (loss) from continuing operations before income taxes
   and equity in earnings of affiliated companies

$
73

$
2

$
75

(Provision) benefit for income taxes

$
(17
)

$
(1
)

$
(18
)
Net income (loss)

$
58

$
1

$
59

Net income (loss) attributable to Cabot Corporation

$
54

$
1

$
55

Earnings per common share:

   Basic

$
0.85

$
0.02

$
0.87

   Diluted

$
0.85

$
0.01

$
0.86

Consolidated Balance Sheets

September 30, 2017

As Originally Reported

Effect of Change

As Adjusted

(In millions)

Inventories

$
396

$
37

$
433

Deferred income taxes (assets)

$
250

$
(13
)

$
237

Retained earnings

$
1,683

$
24

$
1,707

Consolidated Statements of Cash Flows

Three Months Ended December 31

2016

As Originally Reported

Effect of Change

As Adjusted

(In millions)

Net income (loss)

$
58

$
1

$
59

Deferred tax provision (benefit)

$
(2
)

$
1

$
(1
)
Inventories

$
(34
)

$
(2
)

$
(36
)

~~If the Company had continued to account for its U.S. carbon black inventories under LIFO, there would have been an impact of less than $1 million to Cost of sales, (Provision) for~~and in Other income ~~taxes and Net (loss) attributable to Cabot Corporation, and an increase of $0.01~~ ~~in both basic and diluted loss per common share~~(expense) in the Consolidated ~~Statements~~Statement of ~~Operations for the three months ended December 31, 2017. The impact to the Consolidated Balance Sheets as of December 31, 2017 would have been a decrease of $~~37 ~~million in Inventories, an increase of $~~13 ~~million in Deferred income taxes, and a decrease of $~~24 ~~million in Retained earnings.~~

~~The cost of Specialty Fluids inventories that are classified as assets held for rent is determined using the average cost method. The cost of all other inventories is determined using the FIFO method.~~

~~Cabot periodically reviews inventory for both potential obsolescence and potential declines in anticipated selling prices.~~Operations. In ~~this review,~~accordance with Argentine government regulations, the Company ~~makes assumptions about~~purchased an additional $8 million of U.S. dollars in April 2024 and utilized the ~~future demand for and market value~~funds to complete the settlement of ~~the inventory, and based~~outstanding foreign payables incurred 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~~prior to ~~the difference between the cost of the inventory and its estimated net realizable value.~~December 12, 2023.

~~Pensions and Other Postretirement Benefits~~

The Company recognizes the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. The Company is required to recognize as a component of other comprehensive income (loss), net of tax, the actuarial gains/losses and prior service costs/credits that arise but were not previously required to be recognized as components of net periodic benefit cost. Other comprehensive income (loss) is adjusted as these amounts are later recognized in income as components of net periodic benefit cost.

~~Accumulated Other Comprehensive Income (Loss)~~

Accumulated other comprehensive income (loss) (“AOCI”), 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.

Recently Adopted Accounting Standards

In ~~March 2016,~~November 2022, the Financial Accounting Standards Board (“FASB”) issued a new standard ~~that amends~~on the ~~accounting~~disclosure of supplier financing programs. The new standard requires qualitative and quantitative disclosures as to the nature and potential magnitude of such programs in addition to program activity and changes for ~~stock compensation by simplifying several aspects of~~ the accounting for employee share-based payment transactions, including the related accounting for income taxes, forfeitures, and the withholding of shares to satisfy the employer’s tax withholding requirements, as well as classification in the statements of cash flows.periods presented. The Company adopted ~~the~~this standard on October 1, ~~2017. The following guidance was updated under the new standard, and its impact to Cabot is described below:~~

~~When accounting~~2023. See Note J for forfeitures the Company may elect to estimate the number of forfeitures to be recognized over the term of an award, which was also permitted under the previous guidance, or account for forfeitures as they occur. The Company elected to modify its accounting policy and account for forfeitures as they occur. The Company applied the accounting change on a modified retrospective basis, which resulted in a cumulative-effect charge of less than $1 million to Retained earnings as of October 1, 2017.

~~Excess tax benefits or deficiencies~~disclosures related to stock compensation that were previously recorded to Additional paid-in capital are now recognized as a discrete tax benefit or expense in (Provision) benefit for income taxes within the Consolidated Statements of Operations. The impact on the (Provision) benefit for income taxes was a discrete tax benefit of $1 million during the first three months of fiscal 2018.

Excess tax benefits are no longer reclassified out of cash flows from operating activities to financing activities in the Consolidated Statement of Cash Flows. The Company elected to apply this cash flow presentation requirement retrospectively, which resulted in the reclassification of $5 million of tax benefit from share-based compensation awards from cash flows from financing activities to cash flows from operating activities in the Consolidated Statements of Cash Flows for the three months ended December 31, 2016.

Cash paid by an employer when directly withholding shares for tax withholding purposes are required to be classified as a financing activity in the Consolidated Statements of Cash Flows. This method of presentation is consistent with the Company's ~~historical presentation.~~

In August 2017, the FASB issued a new standard that amends the hedge accounting recognition and presentation requirements under hedge accounting. The new standard will make more financial and nonfinancial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements, and simplifies how companies assess effectiveness. The Company adopted the standard on October 1, 2017.supplier financing programs. The adoption of this standard did not have a material impact on the ~~Company’s consolidated financial statements.~~Company's Consolidated Financial Statements.

Recent Accounting Pronouncements

In ~~May 2014,~~March 2024, the ~~FASB~~Securities and Exchange Commission (“SEC”) issued its final rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors that requires the Company to provide certain climate-related information. The rule provides a new standard that 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 standardphased-in compliance period and is ~~applicable~~effective for fiscal years beginning after December 15, ~~2017.~~2024, with early adoption permitted. In April 2024, the SEC voluntarily stayed its rule pending completion of judicial review by the U.S. Court of Appeals for the Eighth Circuit and, therefore, the timing of the effectiveness of these disclosure requirements is uncertain. The Company ~~has completed its preliminary assessment~~is currently monitoring the timing of adoption and evaluating the impact of the ~~new standard, which included reviewing a sample of contracts across the Company’s four business segments. Based on this assessment, the Company does not expect~~potential adoption of this standard ~~to have a material impact~~ on ~~how it recognizes revenue. The Company is continuing its assessment of~~ the new standard and preparing to implement the updates that will be necessary to its revenue recognition policy, internal controls, processes and financial statement disclosures. The Company will adopt this standard on October 1, 2018 and expects to apply a modified retrospective approach.Company’s Consolidated Financial Statements.

In ~~February 2016,~~November 2023, the FASB issued a new standard, ~~for~~Improvement to Reportable Segment Disclosures. The new guidance enhances the accounting for leases. This new standard requires lessees to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner that is similar to the current accounting treatment for leases. The standard is applicable for fiscal years beginning after December 15, 2018 and for interim periods within those years, and early adoption is permitted. The Company expects to adopt the standard on October 1, 2019. The Company is currently evaluating the impactdisclosure of ~~the adoption of this standard on its consolidated financial statements.~~

In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows, such as distributions received from equity method investees, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies.significant reportable segment expenses. The new standard is effective for fiscal years beginning after December 15, ~~2017, including interim periods within those years,~~2023, and early adoption is permitted. The Company is currently evaluating ~~this standard and~~ the timing of ~~its adoption. The~~adoption and the impact of the adoption of this standard ~~is not expected to materially impact~~on the Company’s ~~consolidated financial statements.~~Consolidated Financial Statements.

In ~~March 2017,~~December 2023, the FASB issued a new standard, ~~that amends the requirements on the presentation of net periodic pension and postretirement benefit cost. Currently, net benefit costs are reported as employee costs within operating income.~~Improvements to Income Tax Disclosures. The new ~~standard~~guidance requires additional disclosures primarily related to the ~~service cost component to be presented with other employee compensation costs. The other components will be reported separately outside of operations.~~income tax rate reconciliation and income taxes paid. The new standard is effective for fiscal years beginning after December 15, ~~2017.~~2024, and early adoption is permitted. The Company ~~will adopt this standard on October 1, 2018. The~~is currently evaluating the timing of adoption and the impact of the adoption of this standard ~~is not expected to materially impact~~on the Company’s ~~consolidated financial statements.~~

~~C. Acquisition of Tech Blend~~

In November 2017, the Company acquired all of the issued and outstanding shares and cash of Tech Blend, a North American producer of black masterbatches, for a preliminary purchase price of $65 million, paid in cash. The preliminary purchase price is subject to a working capital adjustment, which has not been finalized. The operating results of the business are included in the Company’s Performance Chemicals segment. The acquisition extends the Company’s global footprint in black masterbatch and compounds and provides a platform to serve global customers and grow in conductive formulations. Since the acquisition, Tech Blend revenues totaled approximately $4 million in the two month period ended December 31, 2017.

~~The Company incurred acquisition costs of less than $1 million through December 31, 2017 associated with the transaction, which are included in Selling and administrative expenses in the~~ Consolidated ~~Statements of Operations.~~Financial Statements.

Intangible assets are amortized over their estimated useful lives, which range between ten and twenty-five years, with a weighted average amortization period of approximately ~~nineteen years.~~seventeen years. Amortization expense was $2 million for both of the three ~~month periods~~months ended ~~December~~March 31, ~~2017~~2024 and ~~2016~~2023. Amortization expense was $2$3 million for both the six months ended March 31, 2024 and 2023. Amortization expense is included in Cost of sales, ~~and~~ Selling and administrative expenses and Research and technical expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately ~~$10~~$6 million each year for the next five fiscal years.

J.G. Earnings Per Share

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


	Three Months Ended March 31				Six Months Ended March 31
	2024		2023		2024		2023
	(In millions, except per share amounts)
Basic EPS:
Net income (loss) attributable to Cabot Corporation	$	84	$	75	$	134	$	129
Less: Dividends and dividend equivalents to participating securities		—		1		—		1
Less: Undistributed earnings allocated to participating securities(1)		1		1		2		2
Earnings (loss) allocated to common stockholders (numerator)	$	83	$	73	$	132	$	126

Weighted average common shares and participating securities outstanding		56.2		57.6		56.2		57.6
Less: Participating securities(1)		0.8		1.3		0.9		1.3
Adjusted weighted average common shares (denominator)		55.4		56.3		55.3		56.3

Earnings (loss) per common share - basic:	$	1.50	$	1.31	$	2.39	$	2.24

Diluted EPS:
Earnings (loss) allocated to common stockholders	$	83	$	73	$	132	$	126
Plus: Earnings allocated to participating securities		1		2		2		3
Less: Adjusted earnings allocated to participating securities(2)		1		2		2		3
Earnings (loss) allocated to common stockholders (numerator)	$	83	$	73	$	132	$	126

Adjusted weighted average common shares outstanding		55.4		56.3		55.3		56.3
Effect of dilutive securities:
Common shares issuable(3)		0.4		0.5		0.5		0.4
Adjusted weighted average common shares (denominator)		55.8		56.8		55.8		56.7

Earnings (loss) per common share - diluted:	$	1.49	$	1.29	$	2.37	$	2.23

Three Months Ended December 31

2017

2016

(In millions, except per share amounts)

Basic EPS:

Net income (loss) attributable to Cabot
   Corporation

$
(122
)

$
55

Earnings (loss) allocated to common
   shareholders (numerator)

$
(122
)

$
55

Weighted average common shares and
   participating securities outstanding

62.6

62.7

Less: Participating securities⁽¹⁾

0.7

0.5

Adjusted weighted average common
   shares (denominator)

61.9

62.2

Earnings (loss) per common share - basic:

$
(1.98
)

$
0.87

Diluted EPS:

Earnings (loss) allocated to common
   shareholders (numerator)

$
(122
)

$
55

Adjusted weighted average common
   shares outstanding

61.9

62.2

Effect of dilutive securities:

Common shares issuable⁽³⁾

—

0.6

Adjusted weighted average common
   shares (denominator)

61.9

62.8

Earnings (loss) per common share - diluted:

$
(1.98
)

$
0.86

(1)

Participating securities consist of shares underlying unvested time-based restricted stock units (the "TSUs"), earned and unvested performance-based restricted stock units (the "PSUs", and referred to in this note collectively with the TSUs as the "RSUs"), stock units accounted for under the Supplemental 401(k) Plan portion of the Company’s Deferred Compensation and Supplemental Retirement Plan, and stock units and phantom stock units accounted for under the Company’s Non-Employee Directors’ Deferral Plan. The holders of RSUs are entitled to receive dividend equivalents, payable in cash, to the extent dividends are paid on the outstanding shares of Common Stock, and equal in value to the dividends that would have been paid in respect of the Common Stock underlying the RSU. The accounts of holders of stock units and phantom stock units are credited with dividend equivalents, which are payable, in stock or cash, as the case may be, with the distribution of account balances.

⁽¹⁾	Participating securities consist of shares underlying outstanding and achieved performance-based restricted stock units issued during and after fiscal 2017 and all 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.~~stockholders. Undistributed earnings are allocated to common and participating ~~shareholders~~stockholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows:


	Three Months Ended March 31				Six Months Ended March 31
	2024		2023		2024		2023
	(In millions)
Calculation of undistributed earnings (loss):
Net income (loss) attributable to Cabot Corporation	$	84	$	75	$	134	$	129
Less: Dividends declared on common stock		23		21		45		42
Less: Dividends declared on participating securities		—		1		—		1
Undistributed earnings (loss)	$	61	$	53	$	89	$	86

Allocation of undistributed earnings (loss):
Undistributed earnings (loss) allocated to common stockholders	$	60	$	52	$	87	$	84
Undistributed earnings allocated to participating stockholders		1		1		2		2
Undistributed earnings (loss)	$	61	$	53	$	89	$	86

Three Months Ended December 31

2017

2016

(In millions)

Calculation of undistributed earnings (loss):

Net income (loss) attributable to Cabot Corporation

$
(122
)

$
55

Less: Dividends declared on common stock

20

19

Undistributed earnings (loss)

$
(142
)

$
36

Allocation of undistributed earnings (loss):

Undistributed earnings (loss) allocated to
common shareholders

$
(142
)

$
36

Undistributed earnings (loss)

$
(142
)

$
36

(2)

Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities.

⁽²⁾	~~Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities.~~

⁽³⁾

Represents incremental shares of common stock from the (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 Deferred Compensation and Supplemental Retirement Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based restricted stock unit awards issued before fiscal 2017 under Cabot’s equity incentive plans using the treasury stock method. For the three months ended December 31, 2017 and 2016, respectively, 764,077 and 173,927 incremental shares of common stock, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.

(3)

Represents incremental shares of common stock from the assumed exercise of stock options issued under Cabot’s equity incentive plans. For the three and six months ended March 31, 2024, 281,488 and 244,448 incremental shares of common stock, respectively, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. For the three and six months ended March 31, 2023, 156,550 and 121,283 incremental shares of common stock, respectively, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.

Three Months Ended December 31

2017

2016

2017

2016

2017

2016

Description

Gain/(Loss) Recognized in AOCI

(Gain)/Loss Reclassified from AOCI into Interest Expense in the Consolidated Statements of Operations

(Gain)/Loss Recognized in Interest Expense in the Consolidated Statements of Operations (Amount Excluded from Effectiveness Testing)

(In millions)

Cross-currency swaps ⁽¹⁾

$
(5
)

$
7

$
(1
)

$
—

$
—

$
—

⁽¹⁾

As noted above, effective October 1, 2017, the Company changed the method it uses to assess effectiveness from the method based on changes in forward exchange rates, in which all gains/losses were recognized in AOCI, to the method based on changes in spot exchange rates.

~~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 may 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.

At both December 31, 2017 and September 30, 2017, the fair value of derivative instruments not designated as hedges were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets.

~~N. Venezuela~~

Cabot owns 49% of a carbon black operating 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 December 31, 2017, these subsidiaries carried the operating affiliate investment of $14 million.

~~During the three months ended December 31, 2017 and 2016, the Company received dividends in the amounts of $2 million and $1 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 exchange rate made available to the Company as of December 31, 2017 was 3,345 bolivars to the U.S. dollar, which was unchanged from the exchange rate available to the Company as of September 30, 2017.

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. Any future change in the exchange rate made available to the Company 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.

O.K. Financial Information by Segment

The Company identifies a ~~business~~product line as an operating segment if: ~~(i)~~i) it engages in business activities from which it may earn revenues and incur expenses; ~~(ii)~~ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Cabot’s President and Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and ~~(iii)~~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)~~i) nature of products and services; ~~(ii)~~ii) nature of production processes; ~~(iii)~~iii) type or class of customer for their products and services; ~~(iv)~~iv) methods used to distribute the products or provide services; and ~~(v)~~v) if applicable, the nature of the regulatory environment.

The Company has ~~four~~two reportable segments: Reinforcement Materials and Performance ~~Chemicals, Purification Solutions and Specialty Fluids.~~

Chemicals. The Reinforcement Materials segment ~~represents~~combines the ~~rubber blacks~~reinforcing carbons and engineered elastomer composites product lines.

The Performance Chemicals segment ~~combines~~aggregates the specialty carbons, ~~and~~specialty compounds, ~~and inkjet colorants product lines into the Specialty Carbons and Formulations business, and combines the~~ fumed metal oxides, battery materials, inkjet colorants 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 net sales from each of these businesses for the three months ended December 31, 2017 and 2016 were as follows:lines.

Three Months Ended December 31

2017

2016

(In millions)

Specialty Carbons and Formulations

$
160

$
138

Metal Oxides

69

67

Total Performance Chemicals

$
229

$
205

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.

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

Financial information by reportable segment is as follows:


	Reinforcement Materials		Performance Chemicals		Segment Total		Unallocated and Other(1)			Consolidated Total
	(In millions)
Three Months Ended March 31, 2024
Revenues from external customers(2)	$	676	$	311	$	987	$	32		$	1,019
Income (loss) before income taxes(3)	$	149	$	31	$	180	$	(38	)	$	142

Three Months Ended March 31, 2023
Revenues from external customers(2)	$	672	$	326	$	998	$	35		$	1,033
Income (loss) before income taxes(3)	$	122	$	28	$	150	$	(40	)	$	110

Six Months Ended March 31, 2024
Revenues from external customers(2)	$	1,317	$	596	$	1,913	$	64		$	1,977
Income (loss) before income taxes(3)	$	278	$	65	$	343	$	(107	)	$	236

Six Months Ended March 31, 2023
Revenues from external customers(2)	$	1,315	$	612	$	1,927	$	71		$	1,998
Income (loss) before income taxes(3)	$	216	$	57	$	273	$	(79	)	$	194

Reinforcement
Materials

Performance
Chemicals

Purification
Solutions

Specialty
Fluids

Segment
Total

Unallocated
and Other⁽¹⁾

Consolidated
Total

(In millions)

Three Months Ended December 31, 2017

Revenues from external customers⁽²⁾

$
387

$
229

$
70

$
6

$
692

$
28

$
720

Income (loss) from continuing operations
before income taxes⁽³⁾

$
62

$
47

$
6

$
(2
)

$
113

$
(21
)

$
92

Three Months Ended December 31, 2016

Revenues from external customers⁽²⁾

$
295

$
205

$
69

$
11

$
580

$
31

$
611

Income (loss) from continuing operations
before income taxes⁽³⁾

$
40

$
49

$
4

$
2

$
95

$
(20
)

$
75

(1)

Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM.

(2)

Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects external shipping and handling fees, royalties, the impact of unearned revenue, discounting charges for certain Notes receivable, and other by-product revenue. Details are provided in the table below:


	Three Months Ended March 31					Six Months Ended March 31
	2024		2023			2024		2023
	(In millions)
Shipping and handling fees	$	32	$	36		$	62	$	69
Other		—		(1	)		2		2
Total	$	32	$	35		$	64	$	71

⁽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.

(3)

Consolidated Total Income (loss) before income taxes reconciles to Income (loss) before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) before income taxes that are categorized as Unallocated and Other includes:


	Three Months Ended March 31						Six Months Ended March 31
	2024			2023			2024			2023
	(In millions)
Interest expense	$	(21	)	$	(23	)	$	(43	)	$	(45	)
Certain items(a)
Argentina controlled currency devaluation and other losses (Note B)		(8	)		—			(41	)		—
Global restructuring activities (Note H)		(3	)		—			(12	)		—
Legal and environmental matters and reserves		(1	)		(1	)		(1	)		(2	)
Gain on sale of land		—			—			—			1
Loss on sale of business		—			—			—			(3	)
Acquisition and integration-related charges		—			—			—			(1	)
Other		—			(1	)		—			(1	)
Total certain items		(12	)		(2	)		(54	)		(6	)
Unallocated corporate costs(b)		(18	)		(16	)		(35	)		(31	)
General unallocated income (expense)(c)		15			2			28			6
Less: Equity in earnings of affiliated companies, net of tax(d)		2			1			3			3
Total	$	(38	)	$	(40	)	$	(107	)	$	(79	)

(a)

Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT.

⁽²⁾

Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statement of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, 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:

(b)

Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests.

(c)

General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. This does not include items of income or expense that are separately treated as Certain items.

(d)

Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies.

⁽³⁾

~~Consolidated Total~~ ~~Income (loss) from continuing operations before income taxes~~ reconciles to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies on the Consolidated Statement of Operations. Income (loss) from continuing operations before income taxes that are categorized as Unallocated and Other includes:

Three Months Ended December 31

2017

2016

(In millions)

Interest expense

$
(13
)

$
(13
)
Certain items ^(a)

   Global restructuring activities

(1
)

—

   Legal and environmental matters and reserves

(1
)

—

   Gains (losses) on sale of investments

10

—

   Other

(1
)

—

             Total certain items, pre-tax

7

—

Unallocated corporate costs^(b)

(14
)

(12
)
General unallocated income (expense)^(c)

—

7

Less: Equity in earnings of affiliated
   companies, net of tax^(d)

1

2

Total

$
(21
)

$
(20
)

^(a)

^(b)

~~Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests.~~

^(c)

General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT. Fiscal 2017 amounts have been recast to reflect the retrospective application of the Company’s election to change its inventory valuation method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method, which resulted in a decrease in General unallocated income (expense) of $2 million.

^(d)

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~Critical~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recently Issued Accounting ~~Policies~~Pronouncements

Our consolidated financial statements have been prepared in conformity with accounting policies generally accepted in the United States (“GAAP”). The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. We consider an accounting estimate to be criticalRefer to the financial statements if (i) the estimate is complex in nature or requires a high degree of judgment and (ii) different estimates and assumptions were used, the results could have a material impact on the consolidated financial statements. On an ongoing basis, we evaluate our estimates and the application of our policies. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonablediscussion under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting policies have not substantially changed from those described in the 2017 Form 10-K. We have updated the discussion of the Inventory Valuation and Intangible Asset and Goodwill Impairment policies included below to reflect recent events.

~~Inventory Valuation~~

Effective October 1, 2017, we changed our method of accounting for U.S. carbon black inventories from the LIFO method to the FIFO method. Total U.S. inventories accounted for utilizing the LIFO cost flow assumption represented 7% of total worldwide inventories as of September 30, 2017 prior to this change in method. We believe the FIFO method is preferable because it: (i) conforms the accounting for U.S. carbon black inventories to the inventory valuation methodology for the majority of our other inventories; (ii) better represents how management assesses and reports on the performance of the Reinforcement Materials and Performance Chemicals operating segments that carry U.S. carbon black inventories, as the impact of accounting for this inventory on a LIFO basis has historically been excluded from segment results; (iii) better aligns the accounting for U.S. carbon black inventories with the physical flow of that inventory; and (iv) improves comparability with many of our peers. We applied this change retrospectively to all prior periods presented for which details are presentedheading “Recent Accounting Pronouncements” in Note B of our Notes to the Consolidated Financial ~~Statements (“Note B”).~~Statements.

Results of Operations

The ~~cost of Specialty Fluids inventories that are classified as assets held for rent is determined using the average cost method. The cost of all other inventories is determined using the FIFO method.~~

We periodically review inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, we make assumptions about the future demand for and market value of the inventory, and based on these assumptions estimate the amount of any obsolete, unmarketable, slow moving or overvalued inventory. We write down the value of our inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable value. Historically, such write-downs have not been material. If actual market conditions are less favorable than those projected by management at the time of the assessment, however, additional inventory write-downs may be required, which could reduce our gross profit and our earnings.

~~Intangible Assets and Goodwill Impairment~~

We record 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. We use 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. We estimate 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 trademarks, 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. As discussed in Note C of our Notes to the Consolidated Financial Statements, we acquired Tech Blend in November 2017, and the preliminary purchase price allocation included separately identifiable intangible assets of $31 million.

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. As part of the Tech Blend acquisition, goodwill of $31 million was generated and is reflected in the Specialty Compounds reporting unit. The other 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 and Specialty Compounds reporting units.

For the purpose of the goodwill impairment test, we first assess 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. Alternatively, we 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, a goodwill impairment loss would result. The goodwill impairment loss would be the amount by which the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. 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.

~~Based on our most recent annual goodwill impairment test performed as of May 31, 2017, the fair values of the~~Company has two reportable segments: 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 exceeded its carrying amount by 13%. The fair value of the Purification Solutions reporting unit includes certain growth assumptions that are primarily dependent on: (1) growth in demand for our existing portfolio of activated carbon products and new products developed for environmental and specialty applications; and (2) stable demand in the mercury removal related portion of the business, which is largely dependent on the amount of coal-based power generation used in the U.S. and the continued regulation of those utilities under the U.S. Mercury and Air Toxics Standards regulation (“MATS”). In April 2017, the U.S. Environmental Protection Agency (“EPA”) indicated that it intends to review the cost benefit analysis previously prepared by the EPA in support of MATS to determine if the EPA should reconsider MATS or some part of it. This analysis continues to be under review by the EPA. In addition, we continue to review our strategic options for this business and look for opportunities to better position the business for growth and long-term value enhancement. Failure to achieve our projected growth in environmental or specialty applications, actions taken by the EPA related to MATS that decrease demand for our products, or the result of the strategic options or opportunities we may pursue could have a negative impact on the fair value of the Purification Solutions reporting unit, which may lead to impairment.

~~Results of Operations~~

~~Cabot is organized into four reportable business segments: Reinforcement Materials,~~ Performance ~~Chemicals, Purification Solutions and Specialty Fluids.~~Chemicals. Cabot is also organized for operational purposes into three geographic regions: the Americas; Europe, Middle East and ~~Africa;~~Africa (“EMEA”); and Asia Pacific. The ~~discussions~~discussion of our results of operations for the periods presented ~~reflect~~reflects these structures.

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

Definition of Terms and Non-GAAP Financial Measures

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

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

Our discussion under the heading ~~“Provision (Benefit)~~“(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate” includes a discussion and reconciliation of our “effective tax rate” and our “operating tax rate” ~~and includes a reconciliation~~for the periods presented, as well as management’s projection of our operating tax rate range for the ~~two rates.~~full fiscal year. Our operating tax rate is a non-GAAP financial measure and should not be considered as an alternative to our effective tax rate, the most comparable GAAP financial measure. ~~In calculating our~~The operating tax rate ~~we exclude~~is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis, the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which ~~include: (i) unusual or infrequent~~the certain items ~~such as a significant release or establishment~~occurred and includes both current and deferred income tax (expense) benefit based on the nature of athe certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, ~~(ii) items related to~~ uncertain tax positions, ~~such as the tax impact of audit settlements, interest on tax reserves,~~ and ~~the release of tax reserves from the expiration of statutes of limitations, and (iii)~~ other ~~discrete~~ tax items, such as the tax impact of legislative changes and tax accruals on ~~a quarterly basis, the timing of losses~~historic earnings due to changes in certain jurisdictions and the cumulative rate adjustment, if applicable. We also exclude the tax impact of certain items, as defined below in the discussion of Total segment EBIT, on both operating income and the tax provision.indefinite reinvestment assertions. Our definition of the operating tax rate may not be comparable to the definition used by other companies. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Our discussion under the heading ~~“First~~“Second Quarter of Fiscal ~~2018~~2024 versus ~~First~~Second Quarter of Fiscal ~~2017—~~2023—By Business Segment” includes a discussion of Total segment EBIT, which is a non-GAAP financial measure defined as Income (loss) from ~~continuing~~ operations before income taxes and equity in earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our ~~four~~ reportable segments, provides useful supplemental information for our investors as it is an important indicator of our operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Total segment EBIT should not be considered an alternative for Income (loss) from ~~continuing~~ operations before income taxes and equity in earnings of affiliated companies, which is the most directly comparable U.S. GAAP financial measure. A reconciliation of Total segment EBIT to Income (loss) from ~~continuing~~ operations before income taxes and equity in earnings of affiliated companies is provided under the heading ~~“First Quarter~~“Second quarter of Fiscal ~~2018~~2024 versus ~~First Quarter~~Second quarter of Fiscal ~~2017—~~2023—By Business Segment”. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another.

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

Total segment EBIT, as applicable, but that are included in our GAAP Income (loss) from ~~continuing~~ operations before income taxes and equity in earnings of affiliated companies, as applicable, are described below.

•

Argentina controlled currency devaluation loss related to the foreign exchange loss from government-controlled currency devaluations on our net monetary assets denominated in the Argentine peso and investment losses related to the utilization of government bond programs established for the settlement of certain foreign payables.

•

Global restructuring activities, which include costs or benefits associated with cost reduction initiatives or plant closures and are primarily related to (i) employee termination costs, (ii) asset impairment charges associated with restructuring actions, (iii) costs to close facilities, including environmental costs and contract termination penalties, and (iv) gains realized on the sale of land or equipment associated with restructured plants or locations.

•

~~Non-recurring gains (losses) on foreign exchange, which primarily relate to the impact of controlled currency devaluations on our net monetary assets denominated in that currency.~~

Legal and environmental reserves and matters, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business.

•

~~Executive transition costs, which include incremental charges, including stock compensation charges, associated with the retirement or termination of employment of senior executives of the Company.~~

~~Asset impairment charges, which primarily include charges associated with an impairment of goodwill or other long-lived assets.~~

Acquisition and integration-related charges, which include transaction costs, redundant costs incurred during the period of integration, and costs associated with transitioning certain management and business processes to ~~our~~Cabot’s processes.

•

Asset impairment charges, which primarily include charges associated with an impairment of goodwill, other long-lived assets or assets held for sale.

•

~~Gains (losses) on sale of investments, which primarily relate to the sale of investments accounted for using the cost method.~~

•

Charges related to the divestiture of our Purification Solutions business, which include accelerated costs associated with the change in control and employee incentive compensation.

•

Benefit from the settlement of a royalty arrangement entered into in connection with the divestiture of our former Specialty Fluids business.

•

Gains (losses) on sale of a business.

•

Employee benefit plan settlements, which consist of either charges or benefits associated with the termination of a pension plan or the transfer of a pension plan to a multi-employer plan.

•

Gain associated with the bargain purchase of a business.

Overview

During the ~~first~~second quarter of fiscal ~~2018,~~2024, Income (loss) ~~from continuing operations~~ before income taxes and equity in earnings of affiliated companies increased compared to the ~~first~~second quarter of fiscal ~~2017, primarily due to~~2023. The increase was driven by higher ~~unit margins~~earnings in ~~the~~our Reinforcement Materials ~~segment from favorable spot pricing~~and Performance Chemicals segments, increased investment income in ~~Asia~~Argentina and ~~the impact from the calendar year 2017 tire customer agreements.~~lower foreign exchange losses primarily in Argentina.

~~First Quarter~~Second quarter of Fiscal ~~2018~~2024 versus ~~First Quarter~~Second quarter of Fiscal ~~2017—~~2023—Consolidated

Net Sales and Other Operating Revenues and Gross Profit


	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2017		2016		2024		2023		2024		2023
	(In millions)				(In millions)
Net sales and other operating revenues	$	720	$	611	$	1,019	$	1,033	$	1,977	$	1,998
Gross profit	$	178	$	159	$	246	$	210	$	464	$	391

The ~~$109~~$14 million ~~increase~~decrease in ~~net~~Net sales and other operating revenues in the ~~first~~second quarter of fiscal ~~2018~~2024 compared to the ~~first~~second quarter of fiscal ~~2017~~2023 was driven by ~~a more favorable~~unfavorable price and product mix (combined ~~$80~~$61 million) predominantly in Reinforcement Materials, higher volumes ($20 million) and the favorable impact from foreign currency translation ($13 million). The increase in volumes was primarily due to volume increases from Reinforcement Materials ($9 million) and Performance Chemicals ($16 million), partially offset by a decrease in volumes from Specialty Fluids ($5 million).

~~Gross profit increased by $19 million in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017, primarily due to higher volumes in~~across our Reinforcement Materials and Performance Chemicals segments driven by lower pricing from the pass through of lower raw material costs, partially offset by higher volumes in both our Reinforcement Materials and Performance Chemicals segments (combined $51 million).

The $21 million decrease in Net sales and other operating revenues in the first six months of fiscal 2024 compared to the first six months of fiscal 2023 was driven by unfavorable price and product mix (combined $110 million) across our Reinforcement Materials and Performance Chemicals segments driven by lower pricing from the pass through of lower raw material costs, partially offset by higher volumes (combined $87 million).

For the three and six months ended March 31, 2024, gross profit increased by $36 million and $73 million, respectively, compared to the same periods of fiscal 2023. The increases were primarily due to higher unit margins inand higher volumes within the Reinforcement Materials ~~partially offset by an unfavorable impact from changing inventory levels~~ and ~~higher fixed costs.~~Performance Chemicals segments.

Selling and Administrative Expenses

Three Months Ended December 31

2017

2016

(In millions)

Selling and administrative expenses

$
69

$
63


	Three Months Ended March 31				Six Months Ended March 31
	2024		2023		2024		2023
	(In millions)
Selling and administrative expenses	$	75	$	66	$	142	$	126

Selling and administrative expenses increased by $6$9 million and $16 million in the ~~first~~second quarter of fiscal ~~2018~~2024 and for the six months ended March 31, 2024, respectively, compared to the same periods of fiscal 2023, primarily due to an increase in the incentive compensation expense.

Research and Technical Expenses


	Three Months Ended March 31				Six Months Ended March 31
	2024		2023		2024		2023
	(In millions)
Research and technical expenses	$	15	$	15	$	30	$	28

Research and technical expenses remained flat in the second quarter of fiscal 2024 and increased by $2 million for the six months ended March 31, 2024, compared to the same period of fiscal ~~2017, primarily due to ongoing Corporate projects and higher personnel costs.~~2023.

~~Research and Technical Expenses~~Loss on Sale of Business

Three Months Ended December 31

2017

2016

(In millions)

Research and technical expenses

$
15

$
12


	Three Months Ended March 31				Six Months Ended March 31
	2024		2023		2024		2023
	(In millions)
Loss on sale of business	$	—	$	—	$	—	$	3

~~Research and technical expenses increased by $3 million~~There was no Loss on sale of business in the ~~first~~second quarter of fiscal ~~2018 compared to~~2024 or fiscal 2023. Previously reported Loss on sale of business in fiscal 2023 is associated with the ~~same period~~fiscal 2022 divesture of ~~fiscal 2017, primarily due to higher spending on growth projects across~~ the ~~Company.~~Purification Solutions business.

Interest and Dividend Income, Interest Expense and Other Income (Expense)


	Three Months Ended December 31						Three Months Ended March 31						Six Months Ended March 31
	2017			2016			2024			2023			2024			2023
	(In millions)						(In millions)
Interest and dividend income	$	3		$	2		$	8		$	9		$	17		$	15
Interest expense	$	(13	)	$	(13	)	$	(21	)	$	(23	)	$	(43	)	$	(45	)
Other income (expense)	$	8		$	2		$	(1	)	$	(5	)	$	(30	)	$	(10	)

Interest and dividend income ~~increased~~decreased by $1 million in the ~~first~~second quarter of fiscal ~~2018~~2024 compared to the same period of fiscal ~~2017~~2023, primarily due to lower average balances. Interest and dividend income increased by $2 million for the six months ended March 31, 2024 compared to the same period of fiscal 2023, primarily due to higher interest ~~earned on higher cash balances.~~rates.

Interest expense ~~was flat~~decreased by $2 million in the three and six months ended March 31, 2024 compared to the same periods of fiscal 2023, primarily due to lower average commercial paper balances, partially offset by higher rates.

Other expense decreased by $4 million in the second quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to lower foreign currency losses on the revaluation of our Argentine peso monetary assets and liability balances ($9 million), and higher investment income ($2 million) on our cash and cash equivalent balances in Argentina and Brazil, partially offset by a loss on the sale of BOPREAL bonds (standing for “Bond for the Reconstruction of a free Argentina” in Spanish) in Argentina ($8 million). Other expense increased by $20 million for the six months ended March 31, 2024, as compared to the same period of fiscal 2023, primarily due to higher foreign currency losses in Argentina including from the impact of the government devaluation of the currency that occurred during the first quarter of fiscal ~~2018 compared to the same period in fiscal 2017.~~2024.

Other income (expense) changed by $6 million in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017, primarily due to the gains on sale of cost-method investments, partially offset by an unfavorable comparison of foreign currency movements.

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


	Three Months Ended March 31
	2024						2023
	(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate
Dollars in millions
Effective tax rate	$	(47	)		33	%	$	(29	)		26	%
Less: Non-GAAP tax adjustments(1)		(4	)					—
Operating tax rate	$	(43	)		28	%	$	(29	)		25	%


	Six Months Ended March 31
	2024						2023
	(Provision) / Benefit for Income Taxes			Rate			(Provision) / Benefit for Income Taxes			Rate
Dollars in millions
Effective tax rate	$	(81	)		34	%	$	(49	)		25	%
Less: Non-GAAP tax adjustments(1)		—						1
Operating tax rate	$	(81	)		28	%	$	(50	)		25	%

Three Months Ended December 31

2017

2016

(Dollars in millions)

Provision (benefit) for income taxes

$
205

$
18

Effective tax rate

224
%

24
%
Impact of discrete tax items⁽¹⁾:

Unusual or infrequent items

(200
)%

(1
)%
Items related to uncertain tax positions

(1
)%

2
%
Other discrete tax items

(1
)%

(1
)%
Impact of certain items

(1
)%

—
%
Operating tax rate

21
%

24
%
(1)

Non-GAAP tax adjustments made to arrive at the operating tax provision include the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis, the timing of losses in certain jurisdictions, as further described above under the heading “Definition of Terms and Non-GAAP Financial Measures”.

For the three months ended March 31, 2024, the (Provision) benefit for income taxes was a provision of $47 million compared to a $29 million provision for the same period in fiscal 2023. For the six months ended March 31, 2024, the (Provision) benefit for income taxes was a provision of $81 million compared to a $49 million provision for the same period in fiscal 2023, primarily due to higher earnings in the current period and additional accruals and corresponding interest of uncertain tax positions. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we operate, and by the presence of valuation allowances in certain tax jurisdictions.

⁽¹⁾

For the three months ended December 31, 2017 and 2016, Impact of discrete tax items included a net discrete tax expense of $185 million and a net discrete tax benefit of less than $1 million, respectively. The nature

For fiscal 2024, the Company expects the Operating tax rate to be in the range of 27% to 29%. We are not providing a forward-looking reconciliation of the ~~discrete tax items for the periods ended December 31, 2017 and 2016 were as follows:~~

^(a)

Unusual or infrequent items during the three months ended December 31, 2017 consists of the net tax impacts resulting from the enactment of H.R. 1 (the “Act”) as discussed further below and in the discussion under the heading “Tax Reform” in Note I of our Notes to the Consolidated Financial Statements (“Note I”) ($185 million), as well as immaterial impacts related to stock compensation deductions. Additionally, unusual or infrequent items during the three months ended December 31, 2017 and 2016 included the tax impact of excludible foreign exchange gains and losses in certain jurisdictions;

^(b)

Items related to uncertain tax positions during the three months ended December 31, 2017 and 2016 included net tax benefits from the reversal of accruals for uncertain tax positions due to the expiration of statutes of limitations and the settlement of tax audits, the accrual of interest on uncertain tax positions, and, for fiscal 2018 only, the refinement of the accrual for existing uncertain tax positions;

^(c)

Other discrete tax items during the three months ended December 31, 2017 and 2016 included net tax impacts from various return to provision adjustments related to tax return filings and, for fiscal 2018 only, changes in non-U.S. tax laws.

~~For fiscal 2018, our expected~~ operating tax rate ~~is reconciled~~range with an effective tax rate range because, without unreasonable effort, we are unable to ~~our expected~~predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in ~~the table below.~~future periods.

	~~Forecast for the Year Ended September 30, 2018~~
~~Effective tax rate~~		74	%
~~Impact of discrete tax items:~~
~~Unusual or infrequent items~~		~~(52~~	)%
~~Items related to uncertain tax positions~~		—	%
~~Other discrete tax items~~		—	%
~~Impact of certain items~~		(1	)%
~~Operating tax rate~~		21	%

We file U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. We are under audit in a number of jurisdictions. It is possible that some of these audits will be resolved in fiscal 2018 and could impact our anticipated effective tax rate. We have filed our tax returns in accordance with the tax laws, in all material respects, in each jurisdiction and maintain tax reserves for uncertain tax positions.

~~Tax Reform~~

On December 22, 2017, the U.S. enacted significant changes to federal income tax law affecting us, including a permanent reduction of the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. We expect that these changes will positively impact our future after-tax earnings in the U.S., primarily due to the lower federal statutory tax rate and the establishment of a full participation exemption regime for foreign earnings. In transitioning to this new full participation exemption regime for foreign earnings, we are subject to a one-time tax for the deemed repatriation of certain foreign earnings. ~~Refer to the discussion under the heading “Tax Reform” in Note I.~~

~~Equity in Earnings of Affiliated Companies and~~ Net Income (Loss) Attributable to Noncontrolling Interests


	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2017		2016		2024		2023		2024		2023
	(In millions)				(In millions)
Equity in earnings of affiliated companies, net of tax	$	1	$	2	$	2	$	1	$	3	$	3
Net income (loss) attributable to noncontrolling interests, net of tax	$	10	$	4	$	13	$	7	$	24	$	19

Equity in earnings of affiliated companies, net of tax, ~~decreased~~increased by $1 million in the ~~first~~second quarter ~~of fiscal 2018~~ compared to the same period of fiscal ~~2017,~~2023 primarily due to ~~lower~~higher profitability at our equity affiliate in Venezuela. Equity in earnings ~~from our Venezuelan equity affiliate.~~of affiliated companies, net of tax, remained flat for the first six months of fiscal 2024 compared to the same period of fiscal 2023.

Net income (loss) attributable to noncontrolling interests, net of tax, increased by $6 million and $5 million in the second quarter and the first ~~quarter~~six months of fiscal ~~2018 as~~2024, respectively, compared to the same ~~period~~periods of fiscal ~~2017,~~2023, primarily due to ~~the~~ higher profitability of our joint ventures in ~~China and the Czech Republic.~~China.

Net Income Attributable to Cabot Corporation

In the second quarter and the first ~~quarter~~six months of fiscal ~~2018,~~2024, we reported ~~net~~Net income (loss) attributable to Cabot Corporation of ~~($122)~~$84 million and $134 million, or ~~($1.98)~~$1.49 and $2.37 per diluted common ~~share.~~share, respectively. This compares to ~~net~~Net income (loss) attributable to Cabot Corporation of ~~$55~~$75 million and $129 million, or ~~$0.86~~$1.29 and $2.23 per diluted common share, respectively, in the second quarter and the first six months of fiscal 2023. The higher net income in the second quarter of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($30 million) and higher General unallocated income ($13 million) partially offset by a loss on the sale of BOPREAL bonds ($8 million) in Argentina and a higher provision for income taxes ($18 million).

The higher net income in the first six months of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($70 million) and higher General unallocated income ($22 million) partially offset by foreign currency losses and a loss on the sale of BOPREAL bonds ($41 million combined) in Argentina and a higher provision for income taxes ($32 million).

Second quarter of ~~fiscal 2017. The net loss in fiscal 2018 is due to a tax charge recorded of $185 million in connection with the enactment of the tax Act.~~

~~First Quarter~~Fiscal 2024 versus Second quarter of Fiscal ~~2018 versus First Quarter of Fiscal 2017—~~2023—By Business Segment

Income (loss) ~~from continuing operations~~ before income taxes and equity in earnings of affiliated companies, certain items, other unallocated items and Total segment EBIT for the three and six months ended ~~December~~March 31, ~~2017~~2024 and ~~2016~~2023 are set forth in the table below. The details of certain items and other unallocated items are shown below and in Note OK of our Notes to the Consolidated Financial Statements.

	Three Months Ended December 31
	2017			2016			Three Months Ended March 31						Six Months Ended March 31
	(In millions)						2024			2023			2024			2023
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies	$	92		$	75
							(In millions)
Income (loss) before income taxes and equity in earnings of affiliated companies							$	142		$	110		$	236		$	194
Less: Certain items		7			—			(12	)		(2	)		(54	)		(6	)
Less: Other unallocated items		(28	)		(20	)		(26	)		(38	)		(53	)		(73	)
Total segment EBIT	$	113		$	95		$	180		$	150		$	343		$	273

In the ~~first~~second quarter of fiscal ~~2018,~~2024, Income (loss) ~~from continuing operations~~ before income taxes and equity in earnings of affiliated companies increased by ~~$17~~$32 million and ~~total~~Total segment EBIT increased by ~~$18 million when compared to the same period~~$30 million. The increase in Income (loss) before income taxes and equity in earnings of ~~fiscal 2017. The increases were primarily~~affiliated companies was largely driven by higher Total segment EBIT. Total segment EBIT was driven by higher volumes ~~($8 million), higher unit margins ($19~~in both the Reinforcement Materials and Performance Chemicals segments (combined $18 million) and ~~a favorable impact from foreign currency translation~~higher pricing and improved product mix, net of costs in Reinforcement Materials ($111 million),.

In the first six months of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $42 million and Total Segment EBIT increased by $70 million. The increase in Income (loss) before income taxes and equity in earnings of affiliated companies was largely driven by higher Total segment EBIT partially offset by ~~an unfavorable impact from changing inventory levels~~higher foreign currency losses primarily in Argentina. Total segment EBIT was driven by higher pricing and improved product mix, net of costs in Reinforcement Materials ($641 million) and higher ~~fixed costs ($6~~volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $31 million). ~~Higher unit margins were primarily driven by a better spot pricing environment in Asia and product mix in Reinforcement Materials.~~

Certain Items

Details of the certain items for the ~~first quarter of fiscal 2018~~three and six months ended March 31, 2024 and 2023 are as follows:


	Three Months Ended March 31						Six Months Ended March 31
	2024			2023			2024			2023
	(In millions)
Argentina controlled currency devaluation and other losses (Note B)	$	(8	)	$	—		$	(41	)	$	—
Global restructuring activities (Note H)		(3	)		—			(12	)		—
Legal and environmental matters and reserves		(1	)		(1	)		(1	)		(2	)
Gain on sale of land		—			—			—			1
Loss on sale of business		—			—			—			(3	)
Acquisition and integration-related charges		—			—			—			(1	)
Other		—			(1	)		—			(1	)
Total certain items	$	(12	)	$	(2	)	$	(54	)	$	(6	)

Three Months Ended December 31

2017

(In millions)

Global restructuring activities

$
(1
)
Legal and environmental matters and reserves

(1
)
Gains (losses) on sale of investments

10

Other

(1
)
Total certain items, pre-tax

7

Tax-related certain items:

Tax impact of certain items

(2
)
Discrete tax items

(185
)
Total tax-related certain items

(187
)
Total certain items, after tax

$
(180
)

Other Unallocated Items

~~Certain~~


	Three Months Ended March 31						Six Months Ended March 31
	2024			2023			2024			2023
	(In millions)
Interest expense	$	(21	)	$	(23	)	$	(43	)	$	(45	)
Unallocated corporate costs		(18	)		(16	)		(35	)		(31	)
General unallocated income (expense)		15			2			28			6
Less: Equity in earnings of affiliated companies, net of tax		2			1			3			3
Total other unallocated items	$	(26	)	$	(38	)	$	(53	)	$	(73	)

Total other unallocated items decreased by $12 million and $20 million for the ~~first quarter of~~three and six months ended March 31, 2024, respectively, when compared to the same period in fiscal ~~2017 included charges of less than $1 million.~~2023, due to higher General unallocated income (expense) resulting from higher investment income on our cash and cash equivalent balances in Argentina and lower foreign exchange losses primarily in Argentina.

The tax impact of certain items is determined by (1) starting with the current and deferred income tax expense or benefit included in Net income (loss) attributable to Cabot Corporation, and (2) subtracting the tax expense or benefit on “adjusted earnings”. Adjusted earnings is defined as the pre-tax income attributable to Cabot Corporation excluding certain items. The tax expense or benefit on adjusted earnings is calculated by applying the operating tax rate, as defined under the heading “Definition of Terms and Non-GAAP Financial Measures”, to adjusted earnings.

~~Other Unallocated Items~~

Three Months Ended December 31

2017

2016

(In millions)

Interest expense

$
(13
)

$
(13
)
Unallocated corporate costs

(14
)

(12
)
General unallocated income (expense)

—

7

Less: Equity in earnings of affiliated
companies, net of tax

1

2

Total other unallocated items

$
(28
)

$
(20
)

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

Total other unallocated items changed by $8 million in the first quarter of fiscal 2018 as compared to the same period in fiscal 2017, primarily due to the unfavorable impact of foreign currency translation which is included inunrealized holding gains (losses) for investments. General unallocated income (expense) ~~and an increase in Unallocated corporate costs for corporate projects.~~does not include items of income or expense that are separately treated as Certain items.

Reinforcement Materials

Sales and EBIT for Reinforcement Materials for the second quarter and first ~~quarter~~six months of fiscal ~~2018~~2024 and ~~fiscal 2017~~2023 were as follows:


	Three Months Ended December 31				Three Months Ended March 31				Six Months Ended March 31
	2017		2016		2024		2023		2024		2023
	(In millions)				(In millions)
Reinforcement Materials Sales	$	387	$	295	$	676	$	672	$	1,317	$	1,315
Reinforcement Materials EBIT	$	62	$	40	$	149	$	122	$	278	$	216

Sales in Reinforcement Materials increased by ~~$92~~$4 million in the ~~first~~second quarter of fiscal ~~2018~~2024 compared to the same period of fiscal ~~2017,~~2023, primarily due to ~~a more~~higher volumes ($41 million) partially offset by less favorable price and product mix ~~(combined $78~~($36 million),. The higher volumes ~~($9 million) and a favorable impact from foreign currency translation ($5 million). The favorable price and product mix impact was primarily due to higher selling prices~~ in the second quarter of fiscal 2024 were driven by higher volumes in Asia and Europe. The less favorable pricing was driven primarily from ~~price adjustments to customers for increases in~~lower raw material costs ~~price improvements in calendar year 2017 customer agreements and higher spot prices in Asia.~~that are generally passed through to our customers.

~~EBIT~~In the first six months of fiscal 2024, sales in Reinforcement Materials increased by ~~$22~~$2 million ~~in the first quarter of fiscal 2018~~ compared to the ~~same period~~first six months of fiscal ~~2017,~~2023 primarily due to higher ~~unit margins ($21 million), higher~~ volumes ($457 million) ~~and~~, the favorable impact from foreign currency translation ($16 million) and higher by-product revenue ($2 million), partially offset by ~~higher fixed costs~~less favorable price and product mix ($~~2 million) and an unfavorable impact from changing inventory levels ($2~~63 million). ~~Higher unit margins~~The higher volumes in the first six months of fiscal 2024 were driven by higher volumes in Asia and Europe. The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers.

EBIT in Reinforcement Materials in the second quarter of fiscal 2024 increased by $27 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($11 million) and higher volumes ($15 million). The higher unit margins in the first quarter of fiscal 2024 were primarily driven by favorable price ~~improvements~~and product mix in the 2024 calendar year ~~2017~~ customer ~~agreements, a more~~agreements. The higher volumes were driven by higher volumes in Asia and Europe.

In the first six months of fiscal 2024, EBIT in Reinforcement Materials increased by $62 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($41 million) and higher volumes ($20 million). The higher unit margins in the first six months of fiscal 2024 were primarily driven by favorable price and product mix in the 2023 and ~~spot pricing~~2024 calendar year customer agreements. The higher volumes were driven by higher volumes in ~~Asia.~~Asia and Europe.

As we look to the third quarter of the fiscal year, we expect the Reinforcement Materials EBIT to be in line with the second quarter of fiscal 2024 as we expect modest volume improvement to be offset by higher costs associated with plant maintenance.

Performance Chemicals

Sales and EBIT for Performance Chemicals for the second quarter and first ~~quarter~~six months of fiscal ~~2018~~2024 and ~~fiscal 2017~~2023 were as follows:

	Three Months Ended December 31
	2017		2016		Three Months Ended March 31				Six Months Ended March 31
	(In millions)				2024		2023		2024		2023
Specialty Carbons and Formulations Sales	$	160	$	138
Metal Oxides Sales		69		67
					(In millions)
Performance Chemicals Sales	$	229	$	205	$	311	$	326	$	596	$	612
Performance Chemicals EBIT	$	47	$	49	$	31	$	28	$	65	$	57

Sales in Performance Chemicals ~~increased~~decreased by ~~$24~~$15 million in the ~~first~~second quarter of fiscal ~~2018~~2024 compared to the same period of fiscal ~~2017,~~2023, primarily due to less favorable price and product mix ($25 million), partially offset by higher volumes ($10 million). The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers. The higher volumes in the second quarter of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.

In the first six months of fiscal 2024, sales in Performance Chemicals decreased by $16 million compared to the first six months of fiscal 2023, primarily due to less favorable price and product mix ($47 million), partially offset by higher volumes ($30 million). The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers. The higher volumes in the first six months of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.

EBIT in Performance Chemicals increased by $3 million in the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 primarily due to higher volumes ($~~16 million), a favorable impact from foreign currency translation ($5 million) and a more favorable price and product mix (combined $3~~3 million). The ~~increase in volumes was primarily due to~~ higher ~~sales~~ volumes in ~~Europe~~the second quarter of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.

In the first six months of fiscal 2024, EBIT in Performance Chemicals increased by $8 million compared to the same period of fiscal ~~2017.~~

~~EBIT in Performance Chemicals decreased~~2023. The increase was driven by ~~$2 million in the first quarter~~higher unit margins, net of ~~fiscal 2018 compared to the same period of fiscal 2017, primarily due to, higher fixed~~ costs ($~~6 million), an unfavorable impact from changing inventory levels ($3~~7 million) and ~~lower unit margins~~higher volumes ($111 million), partially offset by ~~higher volumes~~the unfavorable impact of a reduction in inventory levels ($75 million) and ~~a favorable~~the unfavorable impact ~~from~~of foreign currency translation ($14 million). ~~Higher fixed costs were primarily driven by increased spending on maintenance and selling and administrative costs. The~~

As we look ahead to the third quarter of the fiscal year, we expect seasonally higher volumes ~~during the quarter were primarily due to higher sales volumes in Europe.~~and relatively stable unit margins.

~~Purification Solutions~~

~~Sales~~Liquidity and ~~EBIT for Purification Solutions for the first quarter of fiscal 2018 and fiscal 2017 were as follows:~~Capital Resources

Three Months Ended December 31

2017

2016

(In millions)

Purification Solutions Sales

$
70

$
69

Purification Solutions EBIT

$
6

$
4

Overview

Sales in Purification Solutions increased by $1 million in the first quarter of fiscal 2017 compared to the same period of fiscal 2017 due to higher volumes ($1 million) and a favorable impact from foreign currency translation ($2 million), partially offset by a less favorable price and product mix (combined $2 million).

EBIT in Purification Solutions increased by $2 million in the first quarter of fiscal 2018 compared to the same period of fiscal 2017, primarily due to higher volumes ($1 million) and the accelerated receipt of royalty payments ($3 million), partially offset by an unfavorable impact from changing inventory levels ($2 million). The royalty payment received in the quarter consists of all the remaining payments due to the Company under that royalty arrangement.

~~Specialty Fluids~~

~~Sales and EBIT for Specialty Fluids for the first quarter of fiscal 2018 and 2017 were as follows:~~

Three Months Ended December 31

2017

2016

(In millions)

Specialty Fluids Sales

$
6

$
11

Specialty Fluid EBIT

$
(2
)

$
2

~~Sales in Specialty Fluids decreased by $5 million in the first quarter of fiscal 2018 compared to the same period of fiscal 2017 primarily due to lower volumes from reduced project activity.~~

~~EBIT in Specialty Fluids decreased by $4 million in the first quarter of fiscal 2018 compared to the same period of fiscal 2017 primarily due to lower volumes from reduced project activity.~~

~~Outlook~~

During the second quarter, we anticipate that Reinforcement Materials will benefit from the calendar year 2018 customer agreements along with a firm spot market in Europe and Asia. In Performance Chemicals we are expecting an improvement sequentially due to higher seasonal volumes and the positive impact from price increases, but anticipate margins will be impacted somewhat by rising feedstock costs in specialty carbons and higher costs to support growth investments. We also expect Purification Solutions to benefit from continued momentum in the specialty applications but it will be challenged by continued competitive pricing in the mercury removal application. In Specialty Fluids, we expect a similar level of project activity for the next quarter with an uptick in activity in the second half of the year.

~~Cash Flows and Liquidity~~

~~Overview~~

Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, ~~decreased~~increased by $91$67 million during the first ~~three~~six months of fiscal ~~2018,~~2024, which was ~~attributable~~largely due to a lower ~~cash~~outstanding commercial paper balance at ~~December 31, 2017.~~the end of the period. As of ~~December~~March 31, ~~2017,~~2024, we had cash and cash equivalents of $~~189~~$206 million and borrowing availability under our revolving credit ~~agreement~~agreements of $1$1.1 billion. ~~Our~~We have access to borrowings under the following two credit agreements:

•

$1 billion unsecured revolving credit agreement (the “U.S. Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, and the other lenders party thereto, which ~~was amended~~matures in ~~October 2017 to extend the maturity to October 2022,~~August 2027. The U.S. Credit Agreement supports our issuance of commercial paper, ~~program~~ and borrowings under it may be used for working capital, letters of credit and other general corporate purposes.

•

€300 million unsecured revolving credit agreement (the “Euro Credit Agreement”, and together with the U.S. Credit Agreement, the “Credit Agreements”), with PNC Bank, National Association, as Administrative Agent, and the other lenders party thereto, which matures in August 2027. Borrowings under the Euro Credit Agreement may be used for the repatriation of earnings of our foreign subsidiaries to the United States, the repayment of indebtedness of our foreign subsidiaries owing to us or any of our subsidiaries and for working capital and general corporate purposes.

~~At December~~As of March 31, ~~2017,~~2024, we were in compliance with ~~all~~the debt covenants under ~~our revolving credit facility, including~~ the ~~total~~Credit Agreements, which, with limited exceptions, require us to comply on a quarterly basis with a leverage test requiring the ratio of consolidated net debt to consolidated EBITDA ~~(earnings before interest, taxes, depreciation~~not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt offset by the lesser of (i) unrestricted cash and ~~amortization) covenant.~~cash equivalents and (ii) $150 million.

A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. ~~Cash~~We generally use a combination of U.S. earnings, repatriation of certain foreign earnings, commercial paper issuances and borrowings under our U.S. Credit Agreement to meet our U.S. cash needs. With the exception of Argentina, which has currency controls that prevent the distribution of cash, we are generally able to move cash throughout the Company through our cash pooling structures, intercompany accounts and/or distributions, as needed. Although we repatriate certain foreign earnings, cash held by foreign subsidiaries is generally considered permanently reinvested and is used to finance the subsidiaries’ operational activities and future investments. We ~~use commercial paper throughout the year to manage short-term U.S. cash needs. The~~usually reduce our commercial paper balance ~~is generally paid down~~and, if applicable, borrowings under our Credit Agreements, at quarter-end using cash derived from customer collections, including the utilization of customer supply chain financing programs, settlement of intercompany balances and short-term intercompany loans. ~~In the unusual event that~~If additional funds are needed in the U.S., we ~~have~~expect to be able to repatriate cash, including cash from China, while paying any withholding or other taxes. Changes in regulations and tax laws in the U.S. or foreign countries could restrict our ability to ~~repatriate additional funds.~~transfer funds or impose material costs on such transfers.

We do not expect Tax Reform, discussed in more detail in Note I, to have a material impact on our liquidity position due to our existing tax attributes. We are evaluating the impact of tax reform on our opportunities to repatriate some portion of our foreign cash balancesIn addition to the ~~U.S.~~

~~We generally manage our~~currency controls that prevent the distribution of cash in Argentina, there are also government regulations that require all cash in Argentina to be held in Argentine pesos and ~~debt~~regulations that restrict how and when suppliers of imported goods and services into Argentina can be paid. In accordance with government regulations, we purchased and sold at a discount BOPREAL bonds during the second quarter of fiscal 2024 to partially repay imported goods received on ~~a global basis~~or prior to ~~provide for working capital requirements as needed by region or site. Cash~~December 12, 2023. The balance of these outstanding payables was paid in April 2024. Current and ~~debt are generally denominated~~future imported goods and services will be paid in accordance with new regulations enacted in the ~~local currency~~latter part of calendar year 2023. Future regulations could impact our ability to pay suppliers for our imported goods and services.

As of March 31, 2024, we had $1.1 billion of availability under our Credit Agreements. As of March 31, 2024, we had $114 million of borrowings under the ~~subsidiary holding~~Euro Credit Agreement and no outstanding borrowings under the ~~assets or liabilities, except where there are operational cash flow reasons to hold non-functional currency or debt.~~U.S. Credit Agreement. There was $87 million of commercial paper outstanding as of March 31, 2024.

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

~~We issued $250 million of 2.55% fixed rate debt in fiscal 2012 that matured on January 15, 2018. This debt was repaid using a combination of foreign cash and commercial paper borrowings.~~

We issued $30 million of 7.42% medium term notes in fiscal 1999 that mature on December 11, 2018 and are included in Current portion of long-term debt on the Consolidated Balance Sheets as of December 31, 2017. We intend to pay off these notes at maturity with cash on hand and/or commercial paper borrowings.

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

Cash Flows from Operating Activities

Cash provided by operating activities, which consists of net income adjusted for the various non-cash items included in income, changes in working capital and changes in certain other balance sheet accounts, totaled ~~$45~~$281 million in the first ~~three~~six months of fiscal ~~2018~~2024 compared to ~~$107~~$214 million of cash provided by operating activities during the same period of fiscal ~~2017.~~2023.

Cash provided by operating activities in the first ~~three~~six months of fiscal ~~2018~~2024 was driven ~~primarily~~ by business earnings excluding the non-cash impacts of depreciation and amortization of ~~$39~~$78 million and foreign exchange losses of $36 million, primarily related to devaluation of the Argentine peso, which was partially offset by an increase in ~~our deferred tax provision~~net working capital of ~~$186 million, which more than offset our net loss. In addition, there was an~~$25 million. The increase in ~~Accounts payable and accrued liabilities. Partially offsetting these cash inflows~~net working capital was largely driven by an increase in Accounts and notes receivable from higher sales volumes, partially offset by a decrease in Inventories and ~~Inventories.~~Accounts payable and accrued expenses driven by lower cost of raw materials.

Cash provided by operating activities in the first ~~three~~six months of fiscal ~~2017~~2023 was driven ~~primarily~~ by ~~net income~~business earnings excluding the non-cash ~~impact~~impacts of depreciation and amortization of ~~$38 million. In addition, there was~~$71 million and a decrease in ~~Accounts~~net working capital of $25 million. The decrease in
net working capital was largely driven by a decrease in accounts receivable due to lower customer prices from lower cost of raw
materials and ~~an increase~~decreased sales volumes and a decrease in ~~Accounts~~inventories and accounts payable and accrued ~~liabilities. Partially offsetting these cash inflows was an increase in Inventories.~~expenses driven by lower
cost of raw materials.

Cash Flows from Investing Activities

~~In the three months ended December 31, 2017, investing~~Investing activities consumed ~~$101~~$95 million of cash ~~which was primarily driven by~~in the first six months of fiscal 2024 compared to $64 million of cash ~~paid for our acquisition~~consumed in the first six months of ~~Tech Blend, net~~fiscal 2023.

In the first six months of ~~cash acquired~~fiscal 2024, investing activities included $97 million of ~~$1 million, and~~ capital expenditures ~~of $52 million. These capital expenditures were~~ for sustaining and compliance capital projects at our operating facilities as well as growth-related capital, including capacity expansion capital ~~expenditures.~~ projects.

In the ~~three~~first six months ~~ended December 31, 2016,~~of fiscal 2023, investing activities ~~consumed $23~~included $86 million of ~~cash which was primarily driven by~~ capital expenditures ~~of $22 million. These capital expenditures were primarily~~ for sustaining and compliance capital projects at our operating ~~facilities.~~facilities as well as growth-related capital, including capacity expansion projects in Performance Chemicals, partially offset by proceeds from the sale of land of $7 million, proceeds from the sale of our Purification Solutions business of $6 million, and proceeds from insurance settlements of $6 million.

Capital expenditures for fiscal ~~2018~~2024 are expected to be ~~approximately~~between $250 million and $275 million. Our planned capital spending program for fiscal ~~2018~~2024 is ~~primarily~~ for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital ~~expenditures, primarily~~expenditures.

Province of Ontario Regulation 419 Update

As described in Part I, Item 1 of the 2023 10-K under the heading “Safety, Health, Environment, and Sustainability”, under the Province of Ontario Ministry of Environment, Conservation and Parks’ (“MECP”) Regulation 419, a new requirement for sulfur dioxide (“SO2”) emissions went into effect on July 1, 2023 for our reinforcing carbons plant in Sarnia, Ontario. We are out of compliance with the new air standards for SO2 and are in discussions with the MECP on an alternative to this requirement that we expect, in its current form, would require the installation of air pollution controls at the plant by July 1, 2028. To date, this has not restricted our ability to operate our reinforcing carbons plant in Sarnia, Ontario as we are working with the MECP for a solution. We anticipate that we will need to incur significant capital costs for the ~~construction~~installation of ~~our fumed silica manufacturing plants in Carrollton, Kentucky and Wuhai, China.~~these new SO2 emissions controls, particularly during the 24-month period prior to the date of installation.

Cash Flows from Financing Activities

Financing activities consumed ~~$36~~$195 million of cash in the first ~~three~~six months of fiscal ~~2018~~2024 compared to ~~$32~~$210 million of cash consumed induring the same period of fiscal 2023.

In the first ~~three~~six months of fiscal ~~2017.~~ 2024, financing activities primarily consisted of net repayment of commercial paper of $85 million, share repurchases of $57 million, dividend payments to stockholders of $45 million, cash dividends paid to noncontrolling interests of $12 million, and repayments of long-term debt of $9 million. These payments were partially offset by proceeds from sales of common stock of $13 million from stock option exercises.

In the first ~~three~~six months of ~~both~~ fiscal ~~2018 and 2017, these~~2023, financing activities primarily consisted of ~~share repurchases and~~the repayment of commercial paper of $105 million, dividend payments to ~~stockholders.~~stockholders of $42 million, share repurchases of $33 million, cash dividends paid to noncontrolling interests of $41 million and repayments of long-term debt of $7 million. These payments were partially offset by proceeds from short-term borrowings of $14 million and proceeds from sales of common stock of $4 million from stock option exercises.

~~Purchase Commitments~~

We have 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. For those commitments, the amounts included in the table below are based on market prices at December 31, 2017, which may differ from actual market prices at the time of purchase.

Payments Due by Fiscal Year

Remainder of
Fiscal 2018

2019

2020

2021

2022

Thereafter

Total

(In millions)

Reinforcement Materials

$
253

$
264

$
153

$
114

$
114

$
1,537

$
2,435

Performance Chemicals

48

58

55

54

43

468

726

Purification Solutions

7

7

6

1

—

—

21

Total

$
308

$
329

$
214

$
169

$
157

$
2,005

$
3,182

~~Off-Balance Sheet Arrangements~~

~~As of December 31, 2017, we had no material transactions that meet the definition of an off-balance sheet arrangement.~~

Forward-Looking Information

This report on Form 10-Q contains “forward-looking statements” under the Federal securities laws. These forward-looking statements address expectations or projections about the future, including our expectations regarding our future business performance and overall prospects, including for ~~future financial performance;~~earnings, volumes and costs in our Reinforcement Materials segment, and for volumes and unit margins in our Performance Chemicals segment; the impact and cost of restructuring activities; demand for our products; the amount and timing of the charge to earnings we will record and the cash outlays we will make in connection with the closing of certain manufacturing facilities and restructuring initiatives; our estimated future amortization expenses for our intangible assets; the sufficiency of our cash on hand, cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements in both the next twelve months and the foreseeable future; anticipated capital spending; regulatory developments, including regulatory compliance costs and potential impact on our operations, including the potential timing for ~~the repayment~~installation of ~~the current portion of~~air pollution controls at our ~~long-term debt;~~plant in Sarnia, Ontario and when we would incur those capital costs; cash requirements and uses of available cash, including ~~anticipated capital spending and~~ future cash outlays associated with ~~long-term contractual obligations;~~respirator liabilities and the ~~impact we expect~~timing of such outlays; amortization expenses; our operating tax ~~reform legislation in the U.S. to have on our future after-tax earnings and liquidity position, and our expected tax rate for fiscal 2018;~~rate; and the possible outcome of legal and environmental proceedings. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.

Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control or difficult to predict. If known or unknown risks materialize, our actual results could differ materially from those expressed in the forward-looking statements.

In addition to factors described elsewhere in this report, the following are some of the factors that could cause our actual results to differ materially from those expressed in ~~the~~our forward-looking statements: ~~changes in raw material costs; lower than expected demand for our products; changes in~~industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the ~~U.S.;~~price and availability of energy and raw materials, including with respect to the ~~loss~~Russian invasion of ~~one~~Ukraine and the U.S.-China trade relationship; a significant adverse change in a customer or ~~more~~joint venture relationship or the failure of a customer or joint venture partner to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our ~~important customers;~~portfolio management objectives; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; litigation or legal proceedings; interest rates, tax rates, currency exchange controls, and fluctuations in foreign currency, such as the recent currency movements in Argentina; our inability to complete capacity expansions or other development projects; ~~the availability of raw materials; our failure to develop new products or to keep pace with technological developments; fluctuations in currency exchange rates; patent rights of others; stock~~ and credit market conditions; the timely commercialization of products under development (which may be disrupted or delayed by technical difficulties, market acceptance, competitors’ new products, as well as difficulties in moving from the experimental stage to the production stage); demand for our customers’ products; competitors’ reactions to market conditions; unanticipated disruptions or delays in plant operations or development projects; delays in the successful integration of structural changes, including acquisitions or joint ventures; severe weather events that cause business interruptions, including plant and power outages or disruptions in supplier or customer operations; the accuracy of the assumptions we used in establishing reserves for ~~environmental matters and for~~ our share of liability for respirator ~~claims; and the outcome of pending litigation. Other~~claims. These other factors and risks are discussed more fully in our ~~2017 10-K.~~

~~Recently Issued Accounting Pronouncements~~

~~Refer to the discussion under the headings “Recently Adopted Accounting Standards”~~2023 10-K and ~~“Recent Accounting Pronouncements”~~ in ~~Note B.~~our subsequent SEC filings.

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

Information about market risks for the period ended ~~December~~March 31, ~~2017~~2024 does not differ materially from that discussed under Item 7A of our ~~2017~~2023 10-K.

As of ~~December~~March 31, ~~2017,~~2024, we carried out an evaluation, under the supervision and with the participation of our management, including our ~~Principal Executive Officer~~principal executive officer and our ~~Executive Vice President and Chief Financial Officer,~~principal financial officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as ~~amended (the “Exchange Act”).~~amended. Based upon that evaluation, our ~~Principal Executive Officer~~principal executive officer and our ~~Executive Vice President and Chief Financial Officer~~principal financial officer concluded that our disclosure controls and procedures were effective as of that date.

There were no changes in our internal ~~control~~controls over financial reporting that occurred during our fiscal quarter ended ~~December~~March 31, ~~2017~~2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The table below sets forth information regarding Cabot’s purchases of its equity securities during the quarter ended ~~December~~March 31, ~~2017:~~2024:

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


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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ ~~(Do not check if smaller reporting company)~~	Smaller reporting company	☐

Emerging growth company	☐


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

		~~Notional Amount~~
~~Description~~	~~Borrowing~~	~~December 31, 2017~~	~~September 30, 2017~~	~~Hedge Designation~~
~~Cross-Currency Swaps~~	~~3.4% Notes~~	~~USD 250 million swapped to EUR 223 million~~	~~USD 250 million swapped to EUR 223 million~~	~~Net investment~~
~~Forward Foreign Currency Contracts~~ ⁽¹⁾	~~N/A~~	~~USD 11 million~~	~~USD 5 million~~	~~No designation~~


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Consolidated Balance Sheets	September 30, 2017
	As Originally Reported		Effect of Change			As Adjusted
	(In millions)
Inventories	$	396	$	37		$	433
Deferred income taxes (assets)	$	250	$	(13	)	$	237
Retained earnings	$	1,683	$	24		$	1,707

	(In millions)
Assets
Cash	$	1
Accounts Receivable		5
Inventories		3
Property, plant and equipment		7
Intangible assets		31
Goodwill		31
Total assets acquired		78

Liabilities
Current liabilities		(3	)
Deferred tax liabilities		(10	)
Total liabilities assumed		(13	)

Cash consideration paid	$	65

	Reinforcement Materials			Performance Chemicals		Purification Solutions		Total
	(In millions)
Balance at September 30, 2017	$	53		$	9	$	92	$	154
Goodwill acquired⁽¹⁾		—			31		—		31
Foreign currency impact		(2	)		1		—		(1	)
Balance at December 31, 2017	$	51		$	41	$	92	$	184


	Currency Translation Adjustment			Pension and Other Post-retirement Benefit Liability Adjustments			Total
	(In millions)
Balance at September 30, 2023, attributable to Cabot Corporation	$	(353	)	$	(9	)	$	(362	)
Other comprehensive income (loss) before reclassifications		62			—			62
Amounts reclassified from AOCI		(1	)		—			(1	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		4			—			4
Balance at December 31, 2023, attributable to Cabot Corporation	$	(296	)	$	(9	)	$	(305	)
Other comprehensive income (loss) before reclassifications		(15	)		—			(15	)
Amounts reclassified from AOCI		—			(1	)		(1	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		(4	)		—			(4	)
Balance at March 31, 2024, attributable to Cabot Corporation	$	(307	)	$	(10	)	$	(317	)

	Currency Translation Adjustment			Unrealized Gains on Investments		Pension and Other Postretirement Benefit Liability Adjustments			Total
	(In millions)
Balance at September 30, 2017, attributable to Cabot Corporation	$	(204	)	$	2	$	(57	)	$	(259	)
Other comprehensive income (loss) before reclassifications		—			—		—			—
Amounts reclassified from AOCI		(1	)		—		—			(1	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		3			—		—			3
Balance at December 31, 2017, attributable to Cabot Corporation	$	(208	)	$	2	$	(57	)	$	(263	)


	Affected Line Item in the Consolidated	Three Months Ended March 31						Six Months Ended March 31
	Statements of Operations	2024			2023			2024			2023
		(In millions)
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense	Interest expense	$	(2	)	$	(2	)	$	(3	)	$	(3	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense	Interest expense		1			1			1			1
Pension and other postretirement
Amortization of actuarial losses and prior service cost (credit)	Other income (expense)		(1	)		(1	)		(1	)		(1	)
Total before tax		$	(2	)	$	(2	)	$	(3	)	$	(3	)

	Payments Due by Fiscal Year
	Remainder of Fiscal 2018		2019		2020		2021		2022		Thereafter		Total
	(In millions)
Reinforcement Materials	$	253	$	264	$	153	$	114	$	114	$	1,537	$	2,435
Performance Chemicals		48		58		55		54		43		468		726
Purification Solutions		7		7		6		1		—		—		21
Total	$	308	$	329	$	214	$	169	$	157	$	2,005	$	3,182

	Severance and Employee Benefits		Environmental Remediation		Other			Total
	(In millions)
Reserve at September 30, 2017	$	1	$	2	$	—		$	3
Charges		—		—		1			1
Cash paid		—		—		(1	)		(1	)
Reserve at December 31, 2017	$	1	$	2	$	—		$	3


	Severance and Employee Benefits			Accelerated Depreciation on Assets			Other		Total
	(In millions)
Reserve at September 30, 2023	$	—		$	—		$	—	$	—
Charges		3			6			—		9
Cost charged against assets		—			(6	)		—		(6	)
Cash paid		(1	)		—			—		(1	)
Reserve at December 31, 2023	$	2		$	—		$	—	$	2
Charges		2			—			1		3
Cash paid		(1	)		—			—		(1	)
Reserve at March 31, 2024	$	3		$	—		$	1	$	4


Period	Total Number of Shares Purchased(1)(2)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(1)
January 1, 2024 - January 31, 2024		—	$	—		—		2,724,876
February 1, 2024 - February 29, 2024		236,700	$	81.62		236,700		2,488,176
March 1, 2024 - March 31, 2024		52,000	$	86.26		52,000		2,436,176
Total		288,700				288,700

Period	Total Number of Shares Purchased⁽¹⁾⁽²⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾
October 1, 2017- October 31, 2017		—	$	—		—		1,715,824
November 1, 2017- November 30, 2017		140,500	$	60.70		140,500		1,575,324
December 1, 2017- December 31, 2017		67,226	$	58.33		67,226		1,508,098
Total		207,726				207,726

~~Exhibit No.~~		Description

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

Exhibit 3.2		The By-laws of Cabot Corporation as amended ~~January 8, 2016~~May 11, 2023 (incorporated herein by reference to Exhibit 3.1 of Cabot Corporation’s ~~Quarterly~~Current Report on Form ~~10-Q for the quarterly period ended December 31, 2015,~~8-K, file reference 1-5667, filed with the SEC on ~~February 5, 2016)~~May 15, 2023).

Exhibit 10.131.1		Extension Agreement dated October 6, 2017 to the Credit Agreement, dated October 23, 2015, among Cabot Corporation, JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLS, Citigroup Global Markets Inc., Citibank, N.A., Bank of America, N.A., Mizuho Bank, Ltd., TD Bank, N.A., and Wells Fargo Bank, National Association, and the other lenders party thereto.

Exhibit 18.1*		~~Preferability letter regarding LIFO to FIFO change in inventory accounting.~~

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

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

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

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

Exhibit 101.SCH*		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document.

Exhibit 101.CAL104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL ~~Taxonomy Extension Calculation Linkbase Document.~~

(included in Exhibit 101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase Document.~~

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

Exhibit 101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~101).


	CABOT CORPORATION

Date: ~~February 8, 2018~~May 9, 2024	By:	/s/ E~~duardo~~ ~~E. Cordeiro~~Erica McLaughlin
		~~Eduardo E. Cordeiro~~Erica McLaughlin
		Executive Vice President and Chief Financial Officer
		(Duly Authorized Officer)


Date: ~~February 8, 2018~~May 9, 2024	By:	/s/ J~~ames~~ ~~P. Kelly~~Lisa m. Dumont
		~~James P. Kelly~~Lisa M. Dumont
		Vice President, Controller and ~~Controller~~Chief Accounting Officer (Chief Accounting Officer)