Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Mar. 31, 2014 | 1-May-14 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Registrant Name | 'CABOT CORP | ' |
Entity Central Index Key | '0000016040 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 64,485,689 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | ||||
Income Statement [Abstract] | ' | ' | ' | ' | ||||
Net sales and other operating revenues | $898 | [1] | $840 | [1] | $1,796 | [1] | $1,659 | [1] |
Cost of sales | 722 | 697 | 1,441 | 1,369 | ||||
Gross profit | 176 | 143 | 355 | 290 | ||||
Selling and administrative expenses | 92 | 77 | 169 | 150 | ||||
Research and technical expenses | 16 | 16 | 31 | 33 | ||||
Income from operations | 68 | 50 | 155 | 107 | ||||
Interest and dividend income | 1 | 1 | 2 | 2 | ||||
Interest expense | -13 | -16 | -27 | -32 | ||||
Other (expense) income | -8 | 2 | 27 | 3 | ||||
Income from continuing operations before income taxes and equity in earnings of affiliated companies | 48 | [2] | 37 | [2] | 157 | [2] | 80 | [2] |
Provision for income taxes | -7 | -16 | -31 | -36 | ||||
Equity in (loss) earnings of affiliated companies, net of tax | -2 | 3 | ' | 6 | ||||
Income from continuing operations | 39 | 24 | 126 | 50 | ||||
Loss from discontinued operations, net of tax | ' | -1 | -1 | -3 | ||||
Net income | 39 | 23 | 125 | 47 | ||||
Net income (loss) attributable to noncontrolling interests, net of tax | 3 | -4 | 9 | ' | ||||
Net income attributable to Cabot Corporation | $36 | $27 | $116 | $47 | ||||
Weighted-average common shares outstanding, in millions: | ' | ' | ' | ' | ||||
Basic | 64.4 | 63.7 | 64.2 | 63.6 | ||||
Diluted | 65.1 | 64.4 | 65 | 64.3 | ||||
Basic: | ' | ' | ' | ' | ||||
Income from continuing operations attributable to Cabot Corporation | $0.56 | $0.44 | $1.81 | $0.79 | ||||
Loss from discontinued operations | ($0.01) | ($0.01) | ($0.02) | ($0.05) | ||||
Net income attributable to Cabot Corporation | $0.55 | $0.43 | $1.79 | $0.74 | ||||
Diluted: | ' | ' | ' | ' | ||||
Income from continuing operations attributable to Cabot Corporation | $0.55 | $0.43 | $1.79 | $0.78 | ||||
Loss from discontinued operations | ($0.01) | ($0.01) | ($0.02) | ($0.05) | ||||
Net income attributable to Cabot Corporation | $0.54 | $0.42 | $1.77 | $0.73 | ||||
Dividends per common share | $0.20 | $0.20 | $0.40 | $0.40 | ||||
[1] | Unallocated and Other reflects royalties, other operating revenues, external shipping and handling costs, 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: | |||||||
[2] | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ' | ' | ' | ' |
Net income | $39 | $23 | $125 | $47 |
Other comprehensive loss, net of tax | ' | ' | ' | ' |
Foreign currency translation adjustment (net of tax of benefit of $-, $7, $1 and $14) | -8 | -36 | -29 | -22 |
Unrealized holding gains arising during the period (net of tax of less than $1 million in all periods) | ' | 1 | ' | 1 |
Pension and other postretirement credit liability adjustments | ' | ' | ' | ' |
Pension and other postretirement benefit liability adjustments arising during the period (net of tax of less than $1 million in all periods) | ' | 2 | ' | 2 |
Amortization of net loss and prior service credit included in net periodic pension cost (net of tax benefit of $-, $1, $- and $-) | 1 | ' | 1 | 1 |
Other comprehensive loss | -7 | -33 | -28 | -18 |
Comprehensive income (loss) | 32 | -10 | 97 | 29 |
Net income (loss) attributable to noncontrolling interests | 3 | -4 | 9 | ' |
Noncontrolling interests foreign currency translation adjustment, net of tax | -1 | -1 | -2 | ' |
Comprehensive income (loss) attributable to noncontrolling interests, net of tax | 2 | -5 | 7 | ' |
Comprehensive income (loss) attributable to Cabot Corporation | $30 | ($5) | $90 | $29 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Foreign currency translation adjustment, tax benefit | ' | $7 | $1 | $14 |
Amortization of net loss and prior service credit included in net periodic pension cost, tax benefit | ' | 1 | ' | ' |
Maximum [Member] | ' | ' | ' | ' |
Unrealized holding gains arising during the period, tax | ' | 1 | ' | 1 |
Pension and other postretirement benefit liability adjustments arising during the period, tax | ' | $1 | ' | $1 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $89 | $95 |
Accounts and notes receivable, net of reserve for doubtful accounts of $11 and $8 | 712 | 634 |
Inventories: | ' | ' |
Raw materials | 129 | 100 |
Work in process | 3 | 2 |
Finished goods | 364 | 309 |
Other | 45 | 44 |
Total inventories | 541 | 455 |
Prepaid expenses and other current assets | 94 | 58 |
Notes receivable from sale of business | 215 | 214 |
Deferred income taxes | 34 | 36 |
Current assets held for sale | 3 | 3 |
Total current assets | 1,688 | 1,495 |
Property, plant and equipment, net | 1,617 | 1,600 |
Goodwill | 555 | 502 |
Equity affiliates | 73 | 119 |
Intangible assets, net | 358 | 308 |
Assets held for rent | 55 | 49 |
Deferred income taxes | 75 | 68 |
Other assets | 58 | 83 |
Noncurrent assets held for sale | 8 | 9 |
Total assets | 4,487 | 4,233 |
Current liabilities: | ' | ' |
Notes payable | 377 | 264 |
Accounts payable and accrued liabilities | 528 | 534 |
Income taxes payable | 35 | 30 |
Deferred income taxes | 3 | 2 |
Current portion of long-term debt | 19 | 14 |
Total current liabilities | 962 | 844 |
Long-term debt | 1,023 | 1,020 |
Deferred income taxes | 51 | 21 |
Other liabilities | 273 | 265 |
Redeemable preferred stock | 29 | ' |
Commitments and contingencies (Note I) | ' | ' |
Preferred stock: | ' | ' |
Authorized: 2,000,000 shares of $1 par value Issued and Outstanding : None and none | ' | ' |
Common stock: | ' | ' |
Authorized: 200,000,000 shares of $1 par value Issued: 64,723,232 and 64,223,985 shares Outstanding: 64,470,691 and 63,970,502 shares | 65 | 64 |
Less cost of 252,541 and 253,483 shares of common treasury stock | -8 | -8 |
Additional paid-in capital | 51 | 39 |
Retained earnings | 1,845 | 1,755 |
Deferred employee benefits | ' | -2 |
Accumulated other comprehensive income | 77 | 103 |
Total Cabot Corporation stockholders' equity | 2,030 | 1,951 |
Noncontrolling interests | 119 | 132 |
Total stockholders' equity | 2,149 | 2,083 |
Total liabilities and stockholders' equity | $4,487 | $4,233 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Accounts and notes receivable, reserve for doubtful accounts | $11 | $8 |
Preferred stock, Authorized shares | 2,000,000 | 2,000,000 |
Preferred stock, Par value | $1 | $1 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, Outstanding shares | 0 | 0 |
Common stock, Authorized shares | 200,000,000 | 200,000,000 |
Common stock, Par value | $1 | $1 |
Common stock, Issued shares | 64,723,232 | 64,223,985 |
Common stock, Outstanding shares | 64,470,691 | 63,970,502 |
Common treasury stock, shares | 252,541 | 253,483 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash Flows from Operating Activities: | ' | ' |
Net income | $125 | $47 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation and amortization | 100 | 99 |
Impairment of assets | 3 | 16 |
Deferred tax provision | -3 | 7 |
Gain on existing investment in NHUMO | -29 | ' |
Loss on disposal of property, plant and equipment | 2 | 2 |
Equity in earnings of affiliated companies | ' | -6 |
Non-cash compensation | 8 | 10 |
Other | -2 | 2 |
Changes in assets and liabilities: | ' | ' |
Accounts and notes receivable | -52 | -8 |
Inventories | -76 | -43 |
Prepaid expenses and other current assets | -15 | -16 |
Accounts payable and accrued liabilities | -14 | -74 |
Income taxes payable | 1 | -30 |
Other liabilities | 4 | -5 |
Cash dividends received from equity affiliates | 21 | 6 |
Other | -4 | -3 |
Cash provided by operating activities | 69 | 4 |
Cash Flows from Investing Activities: | ' | ' |
Additions to property, plant and equipment | -70 | -127 |
Receipts from notes receivable from sale of business | ' | 30 |
Change in assets held for rent | -5 | -4 |
Cash paid for acquisition of business, net of cash acquired of $7 | -73 | ' |
Cash used in investing activities | -148 | -101 |
Cash Flows from Financing Activities: | ' | ' |
Borrowings under financing arrangements | 13 | 6 |
Repayments under financing arrangements | -6 | -8 |
Proceeds from long-term debt, net of issuance costs | 15 | 94 |
Repayments of long-term debt | -7 | -263 |
Increase in notes payable, net | -5 | 8 |
Proceeds from issuance of commercial paper, net | 111 | 256 |
Proceeds from cash contributions received from noncontrolling stockholders | ' | 9 |
Purchases of common stock | -6 | -6 |
Proceeds from sales of common stock | 10 | 5 |
Cash dividends paid to noncontrolling interests | -10 | -6 |
Cash dividends paid to common stockholders | -26 | -26 |
Cash provided by financing activities | 89 | 69 |
Effect of exchange rate changes on cash | -16 | -7 |
Decrease in cash and cash equivalents | -6 | -35 |
Cash and cash equivalents at beginning of period | 95 | 120 |
Cash and cash equivalents at end of period | $89 | $85 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement Of Cash Flows [Abstract] | ' | ' |
Cash acquired in acquisition of business | $7 | $7 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
A. Basis of Presentation | |
The consolidated financial statements include the accounts of Cabot Corporation (“Cabot” or the “Company”) and its wholly owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights, of which there were none in the periods presented. 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 the fiscal year ended September 30, 2013 (“2013 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 March 31, 2014 and 2013. 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. | |
In November 2013, the Company purchased all of Grupo Kuo S.A.B. de C.V.’s (“KUO”) common stock in NHUMO, S.A. de C.V. (“NHUMO”), a carbon black joint venture between the Company and KUO in Mexico, which represented approximately 60% of the outstanding common stock of NHUMO (the “NHUMO transaction”). Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. The financial position, results of operations and cash flows of NHUMO are included in the Company’s consolidated financial statements from the date of acquisition. | |
In March 2014, the Company entered into an agreement to sell its Security Materials business to SICPA SA (“SICPA”). The business is being accounted for as discontinued operations and the applicable assets of the business have been classified as held for sale in the Consolidated Balance Sheets as of March 31, 2014 and September 30, 2013. The Consolidated Statements of Operations for all periods presented have been recast to reflect the Security Materials business in discontinued operations. Unless otherwise indicated, all disclosures and amounts in the Notes to Consolidated Financial Statements relate to the Company’s continuing operations. |
Significant_Accounting_Policie
Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Significant Accounting Policies | ' | ||||||||||||||||
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 in the sales price. | |||||||||||||||||
The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments for the periods presented. The Advanced Technologies reportable segment excludes the Security Materials business from all periods as the Company began reporting the business under discontinued operations. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Reinforcement Materials | 58 | % | 56 | % | 58 | % | 58 | % | |||||||||
Performance Materials | 28 | % | 30 | % | 27 | % | 27 | % | |||||||||
Purification Solutions | 9 | % | 9 | % | 9 | % | 10 | % | |||||||||
Advanced Technologies | 5 | % | 5 | % | 6 | % | 5 | % | |||||||||
Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Materials. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. | |||||||||||||||||
Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. | |||||||||||||||||
Revenue in Advanced Technologies, excluding the Specialty Fluids Business, is typically recognized when the product is shipped and title and risk of loss have passed to the customer. Depending on the nature of the contract with the customer, a portion of the segment’s revenue may be recognized using proportional performance. Cabot has technology and licensing agreements with one customer that are accounted for as multiple element arrangements. Revenue is recognized ratably over the term of the agreements, limited by the cumulative amounts that become due, some of which are through 2022. | |||||||||||||||||
A significant portion of the revenue in the Specialty Fluids Business, included in Advanced Technologies, arises 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 revenue from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. | |||||||||||||||||
Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There is no off-balance sheet credit exposure related to customer receivable balances. | |||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||
Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. | |||||||||||||||||
Intangible Assets and Goodwill | |||||||||||||||||
The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is reviewed for impairment annually, as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The separate businesses included within Performance Materials are considered separate reporting units. The goodwill balance relative to this segment is recorded in the Fumed Metal Oxides reporting unit within Performance Materials. | |||||||||||||||||
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 value amount and as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Alternatively, the Company may elect to proceed directly to the two-step goodwill impairment test. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures, and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline because of reduced operating performance, market declines, or other indicators of impairment, or as a result of changes in the discount rate, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test the fair values of all of its reporting units were substantially in excess of their carrying values. The Company notes that the future growth in the Purification Solutions business, which had $469 million of goodwill at March 31, 2014, is highly dependent on the growth in the mercury removal portion of this business. This growth relies upon achieving the expected volumes and margins in the mercury removal portion of this business and significantly depends on the adoption and enforcement of environmental laws and regulations, particularly those that would require U.S. based coal fired electrical utilities to reduce the quantity of air pollutants they release, including mercury, to comply with the Mercury and Air Toxics Standards that become effective in April 2015. | |||||||||||||||||
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 (i) assumptions used in the valuation model; and (ii) determination of the intangible assets’ useful lives. 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 reviews definite-lived intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. Actual cash flows arising from a particular intangible asset could vary from projected cash flows which could imply different carrying values from those established at the dates of acquisition and which could result in impairment of such asset. | |||||||||||||||||
The Company evaluates indefinite-lived intangible assets for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. The Company’s intangible assets are primarily comprised of trademarks, customer relationships, patented and unpatented technology and other intellectual property. Finite lived intangible assets are amortized over their estimated useful lives. | |||||||||||||||||
Long-lived Assets | |||||||||||||||||
The Company’s long-lived assets primarily include property, plant and equipment, 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. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the probability-weighted undiscounted estimated future cash flows to be generated by the asset. The Company’s estimates reflect management’s assumptions about selling prices, production and sales volumes, costs and market conditions over an estimate of the remaining operating period. If an impairment is indicated, the asset is written down to 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. The key inputs to the discounted cash flow would be the same as the undiscounted cash flow noted above, with the addition of the discount rate used. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. | |||||||||||||||||
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. | |||||||||||||||||
Income Tax in Interim Periods | |||||||||||||||||
The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. 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 recognized 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. The cost of all carbon black inventories in the U.S. is determined using the last-in, first-out (“LIFO”) method. Had the Company used the first-in, first-out (“FIFO”) method instead of the LIFO method for such inventories, the value of those inventories would have been $54 million and $55 million higher as of March 31, 2014 and September 30, 2013, respectively. The cost of Specialty Fluids inventories is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the FIFO method. | |||||||||||||||||
Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated market value. | |||||||||||||||||
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, 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 is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. | |||||||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||||||
Accumulated other comprehensive income (“AOCI”), which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and pension liability adjustments. | |||||||||||||||||
At the beginning of fiscal 2014, the Company adopted new accounting guidance for the presentation of amounts reclassified from AOCI. The guidance specifically requires, either on the face of the financial statements or in the notes, presentation of significant amounts reclassified from AOCI to net income for each component of AOCI and the respective line items within the Consolidated Statements of Operations. These disclosures are included in Note H to the consolidated financial statements. | |||||||||||||||||
Accumulated other comprehensive items in the accompanying Consolidated Balance Sheets consist of the following items net of tax: | |||||||||||||||||
March 31, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Foreign currency translation adjustments at beginning of period | $ | 154 | $ | 167 | |||||||||||||
Net foreign currency translation adjustments during the period | (27 | ) | (13 | ) | |||||||||||||
Balance at end of period | 127 | 154 | |||||||||||||||
Unrealized gain on investments at beginning of period | 2 | — | |||||||||||||||
Net unrealized gains during the period | — | 2 | |||||||||||||||
Balance at end of period | 2 | 2 | |||||||||||||||
Pension and other postretirement benefit plans at beginning of period | (53 | ) | (75 | ) | |||||||||||||
Net change in pension and other postretirement benefit plans during the period | 1 | 22 | |||||||||||||||
Balance at end of period | (52 | ) | (53 | ) | |||||||||||||
Total accumulated other comprehensive income | $ | 77 | $ | 103 | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued a new standard related to the “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The standard requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This standard is applicable for fiscal years beginning after December 15, 2013, and for interim periods within those years. Accordingly, the Company will adopt this standard beginning October 1, 2014, the beginning of the first quarter of its 2015 fiscal year. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and it does not expect the impact to be material. | |||||||||||||||||
In April 2014, the FASB issued a new standard related to the “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The standard requires discontinued operations treatment for disposals of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results and requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This standard is applicable for fiscal years beginning after December 15, 2014 and for interim periods within those years with early adoption permitted but only for disposals that have not been reported in financial statements previously issued. Accordingly, the Company expects to adopt this standard beginning October 1, 2015, the beginning of the first quarter of its 2016 fiscal year. The impact of the adoption of this standard may have a material impact on the Company’s consolidated financial statements based on the nature of the future disposals. |
Acquisition_of_NHUMO
Acquisition of NHUMO | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Acquisition of NHUMO | ' | ||||
C. Acquisition of NHUMO | |||||
In November 2013, the Company purchased all of KUO’s common stock in the NHUMO joint venture, which represented approximately 60% of the outstanding common stock of the joint venture. Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. | |||||
At the close of the transaction, the Company paid KUO $80 million in cash and NHUMO issued redeemable preferred stock to KUO with a redemption value of $25 million. The preliminary purchase price was subject to a working capital adjustment calculation, which was finalized during the second quarter of fiscal 2014, and there were no adjustments. The preferred stock will accumulate dividends at a fixed rate of 6% annually and will be redeemable at the option of KUO or the Company for $25 million starting on the fifth anniversary of the acquisition date or upon the occurrence of certain other conditions. Annual payment by NHUMO of the dividends will be contingent on NHUMO achieving a minimum EBITDA (earnings before interest, taxes, depreciation, and amortization) level and if such minimum EBITDA is not achieved in any year, the dividend will be accumulated and paid at the time the preferred shares are redeemed. The preferred stock issued in connection with the transaction is not mandatorily redeemable and has embedded put and call rights at the fixed redemption price. Accordingly, the instrument is accounted for as a financing obligation and has been separately presented in the Consolidated Balance Sheets as a long term liability. Upon acquisition, the Company began consolidating NHUMO into its consolidated financial statements. Prior to closing, the Company received a $14 million dividend from NHUMO. | |||||
The Company incurred acquisition costs of approximately $1 million through March 31, 2014 associated with the transaction, which are included in Selling and administrative expenses in the Consolidated Statements of Operations. | |||||
The allocation of the purchase price set forth below was based on preliminary estimates of the fair value of assets acquired, liabilities assumed, and Cabot’s previously held equity interest in NHUMO as of the acquisition date. The Company is continuing to obtain information to complete its valuation of these accounts and the associated tax accounting. | |||||
(in millions) | |||||
Assets | |||||
Cash | $ | 7 | |||
Accounts receivable | 33 | ||||
Inventories | 14 | ||||
Property, plant and equipment | 48 | ||||
Other non-current assets | 1 | ||||
Intangible assets | 57 | ||||
Goodwill | 51 | ||||
Total assets acquired | 211 | ||||
Liabilities | |||||
Current liabilities | (18 | ) | |||
Deferred tax liabilities | (31 | ) | |||
Total liabilities assumed | (49 | ) | |||
Net assets acquired | $ | 162 | |||
Cash consideration paid | 80 | ||||
Fair value of redeemable preferred stock | 28 | ||||
Previously held equity interest in NHUMO | 54 | ||||
Total | $ | 162 | |||
As a result of the acquisition, the Company recorded a gain of $29 million for the difference between the carrying value and the fair value of the previously held equity interest in NHUMO, which was included in Other (expense) income. The fair value of $54 million for the previously held equity interest was determined based on the fair value of Cabot’s pre-existing interest in NHUMO as adjusted for a control premium derived from synergies gained as a result of the Company obtaining control of NHUMO. | |||||
As part of the preliminary purchase price allocation, the Company determined that a separately identifiable intangible asset was customer relationships in the amount of $57 million, which is being amortized over a period of 17 years. The Company estimated the fair value of the identifiable acquisition-related intangible asset based on projections of cash flows that will arise from the asset. The projected cash flows are discounted to determine the fair value of the asset at the date of acquisition. The determination of the fair value of the intangible asset acquired required the use of significant judgment with regard to (i) assumptions in the discounted cash flow model used and (ii) determination of the useful life of customer relationships. | |||||
The fair value of the redeemable preferred stock was determined based on a discounted cash flow model, using the expected timing of the cash flows and an appropriate discount rate. | |||||
The excess of the preliminary purchase price over the fair value of the tangible net assets and intangible asset acquired, the issuance of redeemable preferred stock and the previously held equity interest in NHUMO was recorded as goodwill. The goodwill recognized is attributable to the expected growth and operating synergies that the Company expects to realize from this acquisition. Goodwill generated from the acquisition will not be deductible for tax purposes. |
Discontinued_Operations_and_No
Discontinued Operations and Notes Receivable from Sale of Business | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Discontinued Operations And Disposal Groups [Abstract] | ' | ||||||||||||||||
Discontinued Operations and Notes Receivable from Sale of Business | ' | ||||||||||||||||
D. Discontinued Operations and Notes Receivable from Sale of Business | |||||||||||||||||
In January 2012, the Company sold its Supermetals Business to Global Advanced Metals Pty Ltd., an Australian company (“GAM”), for $452 million, including cash consideration of $175 million received on the closing date and notes receivable (“GAM Notes”) totaling $277 million payable at various dates through March 2014. The carrying value of the GAM Notes at March 31, 2014 was $215 million, which was presented as Notes receivable from sale of business on the Consolidated Balance Sheets. In the first week of April 2014, Cabot received the final payment on the GAM Notes in the amount of $215 million. | |||||||||||||||||
In March 2014, the Company entered into an agreement to sell its Security Materials business to SICPA, for approximately $20 million in cash. The sale is expected to close by the end of fiscal year 2014, pending regulatory approvals. The business is being accounted for as discontinued operations, and the applicable assets of the business have been classified as held for sale in the Consolidated Balance Sheets as of March 31, 2014 and September 30, 2013. The Consolidated Statements of Operations for all periods presented have been recast to reflect the Security Materials business in discontinued operations. Unless otherwise indicated, all disclosures and amounts in the Notes to Consolidated Financial Statements relate to the Company’s continuing operations. The Company’s Consolidated Statements of Cash Flows include the cash flows from both continuing and discontinued operations. | |||||||||||||||||
The following table summarizes the results from discontinued operations during the three and six months ended March 31, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Net sales and other operating revenues | $ | 2 | $ | 2 | $ | 3 | $ | 3 | |||||||||
Loss from operations before income taxes | (1 | ) | (1 | ) | (2 | ) | (5 | ) | |||||||||
Benefit from income taxes | 1 | — | 1 | 2 | |||||||||||||
Loss from discontinued operations, net of tax | $ | — | $ | (1 | ) | $ | (1 | ) | $ | (3 | ) | ||||||
The following table summarizes the assets held for sale in the Company’s Consolidated Balance Sheets: | |||||||||||||||||
March 31, 2014 | September 30, 2013 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Inventories | 3 | 3 | |||||||||||||||
Total current assets held for sale | $ | 3 | $ | 3 | |||||||||||||
Property, plant and equipment, net | 4 | 5 | |||||||||||||||
Goodwill | 2 | 2 | |||||||||||||||
Intangible assets, net | 2 | 2 | |||||||||||||||
Total noncurrent assets held for sale | $ | 8 | $ | 9 | |||||||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 6 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Employee Benefit Plans | ' | ||||||||||||||||||||||||||||||||
E. Employee Benefit Plans | |||||||||||||||||||||||||||||||||
Net periodic defined benefit pension and other postretirement benefit costs include the following: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||||||||||
U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | 3 | $ | 2 | $ | 3 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 2 | 4 | 1 | 3 | — | — | — | — | |||||||||||||||||||||||||
Expected return on plan assets | (2 | ) | (5 | ) | (2 | ) | (4 | ) | — | — | — | — | |||||||||||||||||||||
Amortization of prior service credit | — | — | — | — | — | — | (1 | ) | — | ||||||||||||||||||||||||
Amortization of actuarial loss | — | 1 | — | 1 | — | — | — | — | |||||||||||||||||||||||||
Net periodic benefit cost | $ | — | $ | 3 | $ | 1 | $ | 3 | $ | — | $ | — | $ | (1 | ) | $ | — | ||||||||||||||||
Six Months Ended March 31 | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||||||||||
U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||
Service cost | $ | 1 | $ | 5 | $ | 3 | $ | 5 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 4 | 8 | 3 | 7 | 1 | — | 1 | — | |||||||||||||||||||||||||
Expected return on plan assets | (5 | ) | (10 | ) | (5 | ) | (9 | ) | — | — | — | — | |||||||||||||||||||||
Amortization of prior service credit | — | — | — | — | (1 | ) | — | (2 | ) | — | |||||||||||||||||||||||
Amortization of actuarial loss | — | 2 | 1 | 2 | — | — | — | — | |||||||||||||||||||||||||
Net periodic benefit cost | $ | — | $ | 5 | $ | 2 | $ | 5 | $ | — | $ | — | $ | (1 | ) | $ | — | ||||||||||||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||||||||||
F. Goodwill and Other Intangible Assets | |||||||||||||||||||||||||
Cabot had goodwill balances of $555 million and $502 million at March 31, 2014 and September 30, 2013, respectively. Goodwill of $2 million which was presented under the Advanced Technologies reportable segment as of September 30, 2013 has been reclassified to Assets held for sale in the Company’s Consolidated Balance Sheets for all periods presented as a result of the pending divestiture of the Security Materials business discussed in Note D. The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended March 31, 2014 are as follows: | |||||||||||||||||||||||||
Reinforcement | Performance | Purification | Total | ||||||||||||||||||||||
Materials | Materials | Solutions | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Balance at September 30, 2013 | $ | 25 | $ | 11 | $ | 466 | $ | 502 | |||||||||||||||||
Goodwill acquired(1) | 51 | — | — | 51 | |||||||||||||||||||||
Foreign currency impact | (1 | ) | — | 3 | 2 | ||||||||||||||||||||
Balance at March 31, 2014 | $ | 75 | $ | 11 | $ | 469 | $ | 555 | |||||||||||||||||
(1) | Goodwill acquired relates to the NHUMO transaction as described in Note C. | ||||||||||||||||||||||||
Goodwill impairment tests are performed at least annually. The Company performed its last annual impairment assessment as of May 31, 2013 and determined there was no impairment. | |||||||||||||||||||||||||
Net intangible assets of $2 million which were presented as other intangible assets as of September 30, 2013 have been reclassified to Assets held for sale in the Company’s Consolidated Balance Sheets for all periods presented as a result of the pending divestiture of the Security Materials business discussed in Note D. The following table provides information regarding the Company’s intangible assets: | |||||||||||||||||||||||||
March 31, 2014 | September 30, 2013 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Intangible | Carrying | Amortization | Intangible | ||||||||||||||||||||
Value | Assets | Value | Assets | ||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Intangible assets with finite lives | |||||||||||||||||||||||||
Developed technology | $ | 156 | $ | (13 | ) | $ | 143 | $ | 154 | $ | (9 | ) | $ | 145 | |||||||||||
Customer relationships(1) | 170 | (12 | ) | 158 | 113 | (7 | ) | 106 | |||||||||||||||||
Total intangible assets, finite lives | $ | 326 | $ | (25 | ) | $ | 301 | $ | 267 | $ | (16 | ) | $ | 251 | |||||||||||
Trademarks, indefinite lives | 57 | — | 57 | 57 | — | 57 | |||||||||||||||||||
Total intangible assets | $ | 383 | $ | (25 | ) | $ | 358 | $ | 324 | $ | (16 | ) | $ | 308 | |||||||||||
(1) | The change in the gross carrying value of the Customer relationships intangible asset is primarily due to the NHUMO transaction as described in Note C. | ||||||||||||||||||||||||
Intangible assets with finite lives are amortized over their estimated useful lives, which range from six to twenty years, with a weighted average amortization period of approximately 19 years. Amortization expense for the three months ended March 31, 2014 and 2013 was $5 million and $3 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Amortization expense for the six months ended March 31, 2014 and 2013 was $9 million and $6 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $18 million each year for the next five fiscal years. Intangible assets with indefinite lives are evaluated for impairment at least annually. The Company performed its last annual impairment assessment as of May 31, 2013, and determined there was no impairment. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
Stockholders' Equity | ' | ||||||||
G. Stockholders’ Equity | |||||||||
In fiscal 2007, the Board of Directors authorized Cabot to repurchase up to ten million shares of Cabot’s common stock in the open market or in privately negotiated transactions. This authorization does not have a set expiration date. During the first six months of both fiscal 2014 and 2013, Cabot repurchased 379 shares of its common stock under this authorization. As of March 31, 2014, approximately 1.6 million shares remain available for repurchase under the current authorization. | |||||||||
During the six months ended March 31 of both fiscal 2014 and 2013, Cabot paid cash dividends to common stockholders of $26 million in the aggregate. | |||||||||
Noncontrolling interests | |||||||||
The following table illustrates the noncontrolling interests activity for the periods presented: | |||||||||
2014 | 2013 | ||||||||
(Dollars in millions) | |||||||||
Balance at September 30 | $ | 132 | $ | 126 | |||||
Net income attributable to noncontrolling interests | 9 | — | |||||||
Noncontrolling interest foreign currency translation adjustment | (2 | ) | — | ||||||
Contribution from noncontrolling interests | — | 9 | |||||||
Noncontrolling interest dividends | (20 | ) | (13 | ) | |||||
Balance at March 31 | $ | 119 | $ | 122 | |||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||
H. Accumulated Other Comprehensive Income | |||||||||||||||||
Comprehensive income combines net income and other comprehensive income items, which are reported as components of stockholders’ equity in the accompanying Consolidated Balance Sheets. | |||||||||||||||||
Changes in each component of Accumulated other comprehensive income, net of tax, are as follows: | |||||||||||||||||
Currency | Unrealized | Pension and Other | Total | ||||||||||||||
Translation | Gains on | Postretirement | |||||||||||||||
Adjustment | Investments | Benefit Liability | |||||||||||||||
Adjustments | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Balance at September 30, 2013, attributable to Cabot Corporation | $ | 154 | $ | 2 | $ | (53 | ) | $ | 103 | ||||||||
Other comprehensive loss before reclassifications | (29 | ) | — | — | (29 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | 1 | 1 | |||||||||||||
Net other comprehensive items | (29 | ) | — | 1 | (28 | ) | |||||||||||
Balance at March 31, 2014 | 125 | 2 | (52 | ) | 75 | ||||||||||||
Less: Noncontrolling interest | (2 | ) | — | — | (2 | ) | |||||||||||
Balance at March 31, 2014, attributable to Cabot Corporation | $ | 127 | $ | 2 | $ | (52 | ) | $ | 77 | ||||||||
The amounts reclassified out of Accumulated other comprehensive income and into the Statement of Operations for the six months ended March 31, 2014 and 2013 are as follows: | |||||||||||||||||
Six Months Ended March 31, | |||||||||||||||||
Affected Line Item in the Consolidated | 2014 | 2013 | |||||||||||||||
Statements of Operations | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Pension and other postretirement benefit liability adjustment | |||||||||||||||||
Amortization of actuarial losses | Net Periodic Benefit Cost - see Note E for details | $ | 2 | $ | 3 | ||||||||||||
Amortization of prior service cost | Net Periodic Benefit Cost - see Note E for details | (1 | ) | (2 | ) | ||||||||||||
Total before tax | 1 | 1 | |||||||||||||||
Tax impact | Provision for income taxes | — | — | ||||||||||||||
Total after tax | $ | 1 | $ | 1 | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||||||||||
I. Commitments and Contingencies | |||||||||||||||||||||||||||||
Purchase Commitments | |||||||||||||||||||||||||||||
Cabot has entered into long-term purchase agreements primarily for the purchase of raw materials. Under certain of these agreements the quantity of material being purchased is fixed, but the price paid changes as market prices change. For those commitments, the amounts included in the table below are based on market prices at March 31, 2014. | |||||||||||||||||||||||||||||
Payments Due by Fiscal Year | |||||||||||||||||||||||||||||
Remainder of | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||||
Fiscal 2014 | |||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Reinforcement Materials | $ | 202 | $ | 321 | $ | 300 | $ | 186 | $ | 178 | $ | 2,795 | $ | 3,982 | |||||||||||||||
Performance Materials | 23 | 39 | 33 | 30 | 30 | 236 | 391 | ||||||||||||||||||||||
Advanced Technologies | 1 | 2 | 1 | 1 | 1 | — | 6 | ||||||||||||||||||||||
Purification Solutions | 15 | 16 | 9 | 9 | 9 | 16 | 74 | ||||||||||||||||||||||
Total | $ | 241 | $ | 378 | $ | 343 | $ | 226 | $ | 218 | $ | 3,047 | $ | 4,453 | |||||||||||||||
Guarantee Agreements | |||||||||||||||||||||||||||||
Cabot has provided certain indemnities pursuant to which it may be required to make payments to an indemnified party in connection with certain transactions and agreements. In connection with certain acquisitions and divestitures, Cabot has provided routine indemnities with respect to such matters as environmental, tax, insurance, product and employee liabilities. In connection with various other agreements, including service and supply agreements, Cabot may provide routine indemnities for certain contingencies and routine warranties. Cabot is unable to estimate the maximum potential liability for these types of indemnities as a maximum obligation is not explicitly stated in most cases and the amounts, if any, are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be reasonably estimated. The durations of the indemnities vary, and in many cases are indefinite. Cabot has not recorded any liability for these indemnities in the consolidated financial statements, except as otherwise disclosed. | |||||||||||||||||||||||||||||
Contingencies | |||||||||||||||||||||||||||||
Cabot is a defendant, or potentially responsible party, in various lawsuits and environmental proceedings wherein substantial amounts are claimed or at issue. | |||||||||||||||||||||||||||||
Environmental Matters | |||||||||||||||||||||||||||||
As of March 31, 2014 and September 30, 2013, Cabot had $17 million and $5 million, respectively, reserved for environmental matters, substantially all of which is accounted for on an undiscounted basis. These matters mainly related to closed sites. During the three months ended March 31, 2014, additional information related to required environmental actions became available, resulting in the recognition of a $13 million liability as the cost of these actions became probable and estimable. These reserves represent Cabot’s best estimates of the probable costs likely to be incurred at those sites where costs are reasonably estimable based on its analysis of the extent of clean up required, alternative clean-up methods available, abilities of other responsible parties to contribute and its interpretation of laws and regulations applicable to each site. Cash payments related to these environmental matters were $1 million in the first six months of both fiscal 2014 and 2013. Cabot reviews the adequacy of the reserves as circumstances change at individual sites and adjusts the reserves as appropriate. Almost all of Cabot’s reserves relate to environmental issues that are mature and have been investigated and studied and, in many cases, are subject to agreed upon remediation plans. However, depending on the results of future testing, changes in risk assessment practices, remediation techniques and regulatory requirements, newly discovered conditions, and other factors, it is reasonably possible that the Company could incur additional costs in excess of environmental reserves currently recorded. Management estimates, based on the latest available information, that any such future environmental remediation costs that are reasonably possible to be in excess of amounts already recorded would be immaterial to the Company’s consolidated financial statements. | |||||||||||||||||||||||||||||
Other Matters | |||||||||||||||||||||||||||||
Respirator Liabilities | |||||||||||||||||||||||||||||
Cabot has exposure in connection with a safety respiratory products business that a subsidiary acquired from American Optical Corporation (“AO”) in an April 1990 asset purchase transaction. The subsidiary manufactured respirators under the AO brand and disposed of that business in July 1995. In connection with its acquisition of the business, the subsidiary agreed, in certain circumstances, to assume a portion of AO’s liabilities, including costs of legal fees together with amounts paid in settlements and judgments, allocable to AO respiratory products used prior to the 1990 purchase by the Cabot subsidiary. As more fully described in Cabot’s 2013 10-K, the respirator liabilities involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, allegedly resulting from the use of respirators that are alleged to have been negligently designed or labeled. | |||||||||||||||||||||||||||||
As of March 31, 2014 and September 30, 2013, there were approximately 41,000 and 42,000 claimants, respectively, in pending cases asserting claims against AO in connection with respiratory products. Cabot has a reserve to cover its expected share of liability for existing and future respirator liability claims. At March 31, 2014 and September 30, 2013, the reserve was $9 million and $11 million, respectively, on a discounted basis ($13 million and $15 million on an undiscounted basis at March 31, 2014 and September 30, 2013, respectively). The reserve is being accreted up to the undiscounted liability through interest expense over the expected cash flow period, which is through 2065. Cash payments related to this liability were $2 million and $1 million in the first six months of fiscal 2014 and 2013, respectively. | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
The Company is subject to various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to the Company’s divested businesses. In the opinion of the Company, although final disposition of some or all of these other suits and claims may impact the Company’s consolidated financial statements in a particular period, they should not, in the aggregate, have a material adverse effect on the Company’s financial position. |
Income_Tax_Uncertainties
Income Tax Uncertainties | 6 Months Ended |
Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Uncertainties | ' |
J. Income Tax Uncertainties | |
Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2007 through 2013 tax years remain subject to examination by the IRS and various tax years from 2005 through 2013 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2001 through 2013 remain subject to examination by their respective tax authorities. Cabot’s significant non-U.S. jurisdictions include Canada, China, France, Germany, Italy, Japan, and the Netherlands. | |
Certain Cabot subsidiaries are under audit in jurisdictions outside of the U.S. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a change in the unrecognized tax benefits may also occur within the next twelve months related to the settlement of one or more of these audits, however, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time. | |
During the three months ended March 31, 2014, Cabot reached a bilateral agreement with the tax authorities in the U.S. and Canada that covered the fiscal years 2001 through 2012, resulting in a $6 million net benefit. In addition, Cabot expects to recover prepaid taxes of approximately $16 million from the Canadian government during fiscal 2014. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
K. Earnings Per Share | |||||||||||||||||
The following tables summarize the components of the basic and diluted earnings per common share computations: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars and shares in millions, | |||||||||||||||||
except per share amounts) | |||||||||||||||||
Basic EPS: | |||||||||||||||||
Net income attributable to Cabot Corporation | $ | 36 | $ | 27 | $ | 116 | $ | 47 | |||||||||
Less: Dividends and dividend equivalents to participating securities | — | — | — | — | |||||||||||||
Less: Undistributed earnings allocated to participating securities(1) | — | — | 1 | — | |||||||||||||
Earnings allocated to common shareholders (numerator) | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Weighted average common shares and participating securities outstanding | 65 | 64.3 | 64.8 | 64.2 | |||||||||||||
Less: Participating securities(1) | 0.6 | 0.6 | 0.6 | 0.6 | |||||||||||||
Adjusted weighted average common shares (denominator) | 64.4 | 63.7 | 64.2 | 63.6 | |||||||||||||
Amounts per share - basic: | |||||||||||||||||
Income from continuing operations attributable to Cabot Corporation | $ | 0.56 | $ | 0.44 | $ | 1.81 | $ | 0.79 | |||||||||
Loss from discontinued operations | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | |||||||||
Net income attributable to Cabot Corporation | $ | 0.55 | $ | 0.43 | $ | 1.79 | $ | 0.74 | |||||||||
Diluted EPS: | |||||||||||||||||
Earnings allocated to common shareholders | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Plus: Earnings allocated to participating securities | — | — | 1 | — | |||||||||||||
Less: Adjusted earnings allocated to participating securities(2) | — | — | (1 | ) | — | ||||||||||||
Earnings allocated to common shareholders (numerator) | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Adjusted weighted average common shares outstanding | 64.4 | 63.7 | 64.2 | 63.6 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Common shares issuable(3) | 0.7 | 0.7 | 0.8 | 0.7 | |||||||||||||
Adjusted weighted average common shares (denominator) | 65.1 | 64.4 | 65 | 64.3 | |||||||||||||
Amounts per share - diluted: | |||||||||||||||||
Income from continuing operations attributable to Cabot Corporation | $ | 0.55 | $ | 0.43 | $ | 1.79 | $ | 0.78 | |||||||||
Loss from discontinued operations | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | |||||||||
Net income attributable to Cabot Corporation | $ | 0.54 | $ | 0.42 | $ | 1.77 | $ | 0.73 | |||||||||
(1) | Participating securities consist of shares of unvested restricted stock and unvested time-based restricted stock units. | ||||||||||||||||
Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Calculation of undistributed earnings: | |||||||||||||||||
Net income attributable to Cabot Corporation | $ | 36 | $ | 27 | $ | 116 | $ | 47 | |||||||||
Less: Dividends declared on common stock | 13 | 13 | 26 | 26 | |||||||||||||
Less: Dividends declared on participating securities | — | — | — | — | |||||||||||||
Undistributed earnings | $ | 23 | $ | 14 | $ | 90 | $ | 21 | |||||||||
Allocation of undistributed earnings: | |||||||||||||||||
Undistributed earnings allocated to common shareholders | $ | 23 | $ | 14 | $ | 89 | $ | 21 | |||||||||
Undistributed earnings allocated to participating shareholders | — | — | 1 | — | |||||||||||||
Undistributed earnings | $ | 23 | $ | 14 | $ | 90 | $ | 21 | |||||||||
(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 under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. For the three and six months ended March 31, 2014, 203,019 and 220,866 incremental shares of common stock, respectively, were not included in 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, 2013, 308,000 and 418,000 incremental shares of common stock, respectively, were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring
Restructuring | 6 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Restructuring And Related Activities [Abstract] | ' | ||||||||||||||||||||
Restructuring | ' | ||||||||||||||||||||
L. Restructuring | |||||||||||||||||||||
Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||
Cost of sales | $ | 5 | $ | 18 | $ | 9 | $ | 21 | |||||||||||||
Selling and administrative expenses | 11 | 1 | 12 | 3 | |||||||||||||||||
Total | $ | 16 | $ | 19 | $ | 21 | $ | 24 | |||||||||||||
Details of these restructuring activities and the related reserves during the three months ended March 31, 2014 are as follows: | |||||||||||||||||||||
Severance and | Environmental | Asset | Other | Total | |||||||||||||||||
Employee | Remediation | Sales | |||||||||||||||||||
Benefits | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Reserve at December 31, 2013 | $ | 4 | $ | 2 | $ | — | $ | 2 | $ | 8 | |||||||||||
Charges | 13 | 1 | 1 | 1 | 16 | ||||||||||||||||
Cash paid | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | |||||||||||
Reserve at March 31, 2014 | $ | 16 | $ | 2 | $ | — | $ | 2 | $ | 20 | |||||||||||
Details of these restructuring activities and the related reserves during the six months ended March 31, 2014 are as follows: | |||||||||||||||||||||
Severance and | Environmental | Asset | Other | Total | |||||||||||||||||
Employee | Remediation | Impairment | |||||||||||||||||||
Benefits | and | ||||||||||||||||||||
Accelerated | |||||||||||||||||||||
Depreciation | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Reserve at September 30, 2013 | $ | 7 | $ | 2 | $ | — | $ | 1 | $ | 10 | |||||||||||
Charges | 14 | 1 | 3 | 3 | 21 | ||||||||||||||||
Costs charged against assets / liabilities | — | — | (3 | ) | — | (3 | ) | ||||||||||||||
Cash paid | (5 | ) | (1 | ) | — | (2 | ) | (8 | ) | ||||||||||||
Reserve at March 31, 2014 | $ | 16 | $ | 2 | $ | — | $ | 2 | $ | 20 | |||||||||||
Shared Service Center Transition | |||||||||||||||||||||
In January 2014, the Company announced its intention to open a new Europe, Middle East and Africa (“EMEA”) Shared Service Center in Riga, Latvia, and to close its Leuven, Belgium site, subject to the Belgian information and consultation process. These proposed actions were developed following an extensive evaluation of the Company’s shared service capabilities in the EMEA region and a determination that the proposed future EMEA Shared Service Center will enable the Company to provide the highest quality of service at the most competitive cost. | |||||||||||||||||||||
The Company has recorded $14 million of pre-tax cash charges during the three months ended March 31, 2014 related to this plan, comprised primarily of employee severance. The Company expects that the majority of actions related to the transition of the shared service center will occur in calendar 2014 and result in total pre-tax cash charges between $22 million and $26 million. Through March 31, 2014, the Company has made $1 million in cash payments related to this plan, mainly related to transition costs, and expects to make cash payments of $7 million in the second half of fiscal 2014 and the remainder (between $14 million and $18 million) in fiscal 2015. | |||||||||||||||||||||
As of March 31, 2014, Cabot has $13 million of accrued restructuring costs in the Consolidated Balance Sheets related to this closure which is mainly comprised of accrued severance charges. | |||||||||||||||||||||
Closure of Port Dickson, Malaysia Manufacturing Facility | |||||||||||||||||||||
On April 26, 2013, the Company announced that the Board of its joint venture carbon black company, Cabot Malaysia Sdn. Bhd. (“CMSB”), decided to cease carbon black production at its Port Dickson, Malaysia facility. The facility ceased production in June 2013. The Company holds a 51 percent equity share in CMSB. The decision, which affected approximately 90 carbon black employees, was driven by the facility’s manufacturing inefficiencies and raw materials costs. | |||||||||||||||||||||
The Company has recorded pre-tax charges of $2 million and $16 million in the six months ended March 31, 2014 and 2013, respectively, related to this closure and $1 million and $16 million for the three months ended March 31, 2014 and 2013, respectively. Fiscal 2013 costs were comprised of asset impairment charges whereas fiscal 2014 charges are comprised primarily of site demolition, clearing and environmental remediation. | |||||||||||||||||||||
Through March 31, 2014, the consolidated joint venture has recorded pre-tax restructuring costs of approximately $20 million comprised mainly of accelerated depreciation and asset write-offs of $15 million, severance charges of $2 million, site demolition, clearing and environmental remediation charges of $2 million, and other closure related charges of $1 million. CMSB’s net income or loss is attributable to Cabot Corporation and to the noncontrolling interest in the joint venture. The portion of the charges that are allocable to the noncontrolling interest in CMSB (49%) are recorded within Net income (loss) attributable to noncontrolling interests, net of tax, in the Consolidated Statements of Operations. | |||||||||||||||||||||
The Company expects that the majority of actions related to closure of the plant will be completed in fiscal 2014 and result in total pre-tax charges to the consolidated joint venture of approximately $23 million. The expected charges are comprised of asset impairments and accelerated depreciation of $15 million, site demolition, clearing and environmental remediation of $5 million, severance charges of $2 million, and other closure related charges of $1 million. | |||||||||||||||||||||
Cumulative net cash outlays related to this plan are expected to be approximately $8 million comprised primarily of $5 million for site demolition, clearing and environmental remediation, $2 million for severance, and $1 million for other closure related charges. Through March 31, 2014, CMSB has made approximately $3 million in cash payments related to this plan related mainly to severance and site demolition and clearing costs. | |||||||||||||||||||||
CMSB expects to make net cash payments of $5 million during the remainder of fiscal 2014 mainly comprised of site demolition, clearing and environmental remediation costs. These amounts exclude any proceeds that may be received from the sale of land or other manufacturing assets. | |||||||||||||||||||||
As of March 31, 2014, Cabot has $1 million of accrued restructuring costs in the Consolidated Balance Sheets related to this closure which is mainly comprised of accrued severance charges. | |||||||||||||||||||||
Other Activities | |||||||||||||||||||||
The Company has recorded pre-tax charges of approximately $4 million and $6 million during the first six months of fiscal 2014 and fiscal 2013, respectively, and less than $1 million and $2 million for the three months ended March 31, 2014 and 2013, respectively, related to restructuring activities at several other locations. Fiscal 2014 charges are comprised mainly of accelerated depreciation and asset write-offs whereas fiscal 2013 costs are comprised mainly of severance-related charges. The Company anticipates recording additional charges of $2 million during the remainder of fiscal 2014 and thereafter related to these actions. | |||||||||||||||||||||
Through March 31, 2014, Cabot has made cash payments of $15 million related to these activities and expects to pay $3 million in the remainder of fiscal 2014 and thereafter mainly for severance and other closure related costs at the impacted locations. | |||||||||||||||||||||
As of March 31, 2014, Cabot has $1 million of accrued severance and other closure related costs in the Consolidated Balance Sheets related to these activities. | |||||||||||||||||||||
Previous Actions and Sites Pending Sale | |||||||||||||||||||||
Beginning in fiscal 2009, the Company entered into several different restructuring plans which have been substantially completed, pending the sale of former manufacturing sites in Thane, India, Stanlow, U.K. and Hong Kong. The Company has incurred total cumulative pre-tax charges of approximately $163 million related to these plans as of March 31, 2014 comprised of $67 million for severance charges, $65 million for accelerated depreciation and asset impairments, $10 million for environmental, demolition and site clearing costs, and $22 million of other closure related charges partially offset by gains on asset sales of $1 million. These amounts do not include any gain that may be recorded if the Company successfully sells its land rights and certain manufacturing related assets in India and Hong Kong or its land in the U.K. | |||||||||||||||||||||
Pre-tax restructuring expenses related to these plans were approximately $1 million and $2 million during the first six months of fiscal 2014 and 2013, respectively, and approximately $1 million in the three months ended March 31, 2014 and 2013, respectively. | |||||||||||||||||||||
Beginning in fiscal 2009, Cabot has made net cash payments of $84 million related to these plans and expects to pay an additional $4 million in the remainder of fiscal 2014 and thereafter. The remaining payments consist mainly of environmental, severance, and other closure related costs. These amounts do not include any proceeds that may be received if the Company successfully sells its land rights and certain manufacturing related assets in India and Hong Kong or its land in the U.K. | |||||||||||||||||||||
As of March 31, 2014, Cabot has $4 million of accrued environmental, severance, and other closure related costs in the Consolidated Balance Sheets related to these activities. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
Fair Value Disclosures [Abstract] | ' | ||||
Financial Instruments and Fair Value Measurements | ' | ||||
M. Financial Instruments and Fair Value Measurements | |||||
The FASB authoritative guidance on fair value measurements defines fair value, provides a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. The disclosures focus on the inputs used to measure fair value. The guidance establishes the following hierarchy for categorizing these inputs: | |||||
Level 1 | — | Quoted market prices in active markets for identical assets or liabilities | |||
Level 2 | — | Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs) | |||
Level 3 | — | Significant unobservable inputs | |||
There were no transfers of financial assets or liabilities measured at fair value between Level 1 and Level 2, or transfers into or out of Level 3, during the first six months of both fiscal 2014 and 2013. | |||||
The GAM Notes as described in Note D are carried at amortized cost and the carrying value was $215 million at March 31, 2014, which was equivalent to their fair value. The Notes were paid in full in the first week of April 2014. | |||||
At March 31, 2014 and September 30, 2013, the fair value of Guaranteed investment contracts, included in Other assets in the Consolidated Balance Sheets, was $15 million and $14 million, respectively. Guaranteed investment contracts were classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on the other observable inputs. | |||||
At March 31, 2014 and September 30, 2013, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and notes payable approximated their carrying values due to the short-term nature of these instruments. The carrying value of the long-term fixed rate debt was $958 million and $971 million, at March 31, 2014 and September 30, 2013, respectively. The fair value of the long-term fixed rate debt was $1.01 billion at both March 31, 2014 and September 30, 2013. The fair values of Cabot’s fixed rate long-term debt are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of Cabot’s floating rate long-term debt and capital lease obligations approximate their fair values. All such measurements are based on observable inputs and are classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model. |
Derivatives
Derivatives | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' | ||||||||
Derivatives | ' | ||||||||
N. Derivatives | |||||||||
Interest Rate Risk Management | |||||||||
Cabot’s objective is to maintain a certain fixed-to-variable interest rate mix on the Company’s debt obligations. Cabot may enter into interest rate swaps as a hedge of the underlying debt instruments to effectively change the characteristics of the interest rate without changing the debt instrument. As of both March 31, 2014 and September 30, 2013, there were no derivatives held to manage interest rate risk. | |||||||||
Foreign Currency Risk Management | |||||||||
Cabot’s international operations are subject to certain risks, including currency exchange rate fluctuations and government actions. Cabot endeavors to match the currency in which debt is issued to the currency of the Company’s major, stable cash receipts. In some situations Cabot may issue debt denominated in U.S. dollars and enter into cross currency swaps that exchange the dollar principal and interest payments into a currency where the Company expects long-term, stable cash receipts. | |||||||||
Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot may enter into cross-currency swaps to mitigate the impact of currency rate changes on the Company’s net investments. | |||||||||
The Company also has foreign currency exposure arising from the denomination of assets and liabilities in foreign currencies other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the dollar value of future cash flows generated in foreign currencies. Accordingly, Cabot uses forward contracts to minimize the exposure to foreign currency risk. | |||||||||
In certain situations where the Company has forecasted purchases under a long-term commitment or forecasted sales denominated in a foreign currency, Cabot may enter into appropriate financial instruments in accordance with the Company’s risk management policy to hedge future cash flow exposures. The following table provides details of the derivatives held as of March 31, 2014 and September 30, 2013 to manage foreign currency risk: | |||||||||
Notional Amount | |||||||||
Description | Borrowing | March 31, 2014 | September 30, 2013 | Hedge Designation | |||||
Forward Foreign Currency Contracts (1) | N/A | USD 41 million | USD 31 million | No designation | |||||
-1 | Cabot’s forward foreign exchange contracts are denominated primarily in the Brazilian real, British pound sterling, Chinese renminbi, Czech koruna, and Indian rupee. | ||||||||
Accounting for Derivative Instruments and Hedging Activities | |||||||||
The Company determines the fair value of derivative instruments using quoted market prices whenever available. When quoted market prices are not available for various types of derivative instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of the financial counterparty to perform. For interest rate and cross-currency swaps, the significant inputs to these models are interest rate curves for discounting future cash flows. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. | |||||||||
Fair Value Hedge | |||||||||
For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current period earnings. | |||||||||
Cash Flow Hedge | |||||||||
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is recorded in Accumulated other comprehensive income and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings. | |||||||||
Other Derivative Instruments | |||||||||
From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes, which include cross currency swaps, foreign currency forward contracts and commodity derivatives. 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. | |||||||||
For the three and six months ended March 31, 2014 there were no derivatives designated as hedges. For both the three and six months ended March 31, 2013, for derivatives designated as hedges, the change in unrealized gains in Accumulated other comprehensive income, the hedge ineffectiveness recognized in earnings, the realized gains or losses reclassified from Accumulated other comprehensive income, and the losses reclassified from Accumulated other comprehensive income to earnings were immaterial. | |||||||||
During the three and six months ended March 31, 2014, Cabot recognized in earnings through Other (expense) income within the Consolidated Statements of Operations losses of $2 million and $4 million, respectively, related to its foreign currency forward contracts, which were not designated as hedges. | |||||||||
For the three and six months ended March 31, 2013, losses of $6 million and $2 million, respectively, were recognized in earnings as a result of the remeasurement to Euros of the $175 million bond issued by one of Cabot’s European subsidiaries. These losses, which were recognized in earnings through Other (expense) income within the Consolidated Statements of Operations, were offset by gains of $7 million and $3 million, for the three and six months ended March 31, 2013, respectively, from Cabot’s cross currency swaps that are not designated as hedges, but which Cabot entered into to offset the foreign currency translation exposure on the debt. Additionally, during the three and six months ended March 31, 2013, Cabot recognized in earnings through Other (expense) income within the Consolidated Statements of Operations gains of $3 million and $9 million, respectively, related to its foreign currency forward contracts, which were not designated as hedges. | |||||||||
For both March 31, 2014 and September 30, 2013, the fair value of derivative instruments were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. | |||||||||
The net after-tax amounts to be reclassified from Accumulated other comprehensive income to earnings within the next 12 months are expected to be immaterial. |
Venezuela
Venezuela | 6 Months Ended |
Mar. 31, 2014 | |
Equity Method Investments And Joint Ventures [Abstract] | ' |
Venezuela | ' |
O. Venezuela | |
Cabot owns 49% of an operating Carbon Black affiliate in Venezuela, which is accounted for as an equity affiliate, through wholly owned subsidiaries that carry the investment and receive its dividends. As of March 31, 2014, these subsidiaries carried the operating affiliate investment of $20 million and held 20 million bolivars (less than $1 million) in cash. | |
During the six months ended March 31, 2014 and 2013, the operating affiliate declared dividends in the amount of $4 million and $2 million, respectively, which were paid in U.S. dollars and repatriated to the Company’s wholly owned subsidiaries. | |
During the second quarter of fiscal 2014, the Venezuelan government enacted several changes to Venezuela’s foreign exchange regime, introducing a multi-tier foreign exchange system whereby there are now three exchange rate mechanisms available to convert Venezuelan Bolivars to U.S. dollars. In March 2014, the Venezuelan government created a currency exchange mechanism referred to as SICAD 2 (Supplementary System for the Administration of Foreign Currency) and allowed its use by all entities for all transactions. The exchange rate on March 31, 2014 under SICAD 2 was 50.8 bolivars to the U.S. dollar (B/$) compared to the previously used official exchange rate of 6.3 B/$. A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into Bolivars. Since the exchange rate that was made available to the Company when converting these dollars into Bolivars was 50.8B/$, the operating affiliate remeasured its bolivar denominated monetary accounts at this rate, resulting in the recognition of a $2 million loss in the second quarter of fiscal 2014. Cabot’s share of the loss was approximately $1 million, which was included within the Equity in (loss) earnings of affiliated companies line of the Consolidated Statements of Operations. | |
In addition, the Company remeasured the bolivar denominated monetary accounts in its wholly owned subsidiaries at the SICAD 2 rate as it was determined that this exchange mechanism is applicable to these subsidiaries. This resulted in the recognition of a $2 million loss in the second quarter of fiscal 2014, which was recorded within Other (expense) income within the Consolidated Statements of Operations. The Company also recognized a tax benefit of $2 million from a reduction in its bolivar denominated deferred tax liability due to the impact of the devaluation of the bolivar on unremitted earnings. | |
From a segment reporting perspective, the net impact of the devaluation to the Company’s Consolidated Statements of Operations was $1 million in the second quarter of fiscal 2014. | |
The operating entity has been profitable historically and has significant export operations from which it is entitled to retain a certain percentage of the foreign currency that it collects, which is principally the U.S. dollar. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. | |
The Company closely monitors its ability to convert its bolivar holdings into U.S. dollars, as the Company intends to convert substantially all bolivars held by its wholly owned subsidiaries in Venezuela to U.S. dollars as soon as practical. Any future change in the SICAD 2 rate or opening of additional parallel markets could lead the Company to change the exchange rate it uses and result in gains or losses on the bolivar denominated assets held by its wholly owned subsidiaries. |
Financial_Information_by_Segme
Financial Information by Segment | 6 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||||||
Financial Information by Segment | ' | ||||||||||||||||||||||||||||
P. Financial Information by Segment | |||||||||||||||||||||||||||||
The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Company has determined that all of its businesses are operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments are determined to have similar economic characteristics and if the operating segments are similar in the following areas: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the regulatory environment. | |||||||||||||||||||||||||||||
The Company has four reportable segments: Reinforcement Materials, Performance Materials, Advanced Technologies and Purification Solutions. Reinforcement Materials represents the Company’s Rubber Blacks Business. Purification Solutions represents the Company’s Activated Carbon Business. Performance Materials is an aggregation of the Specialty Carbons and Compounds and Fumed Metal Oxides Businesses, which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods. | |||||||||||||||||||||||||||||
The Company has combined and disclosed four of its operating segments (Specialty Fluids, Inkjet, Aerogel and Elastomer Composites) into an other reportable segment labeled “Advanced Technologies”. The Security Materials business was previously included in the Advanced Technologies reportable segment. During the second quarter of fiscal 2014, as discussed in Note D, the Company reached an agreement to sell its Security Materials business. Accordingly, results of the Security Materials Business for all periods presented have been recast as discontinued operations. | |||||||||||||||||||||||||||||
Reportable segment operating profit (loss) before interest and taxes (“Segment EBIT”) is presented for each reportable segment in the financial information by reportable segment table below on the line entitled Income (loss) from continuing operations before taxes. Segment EBIT excludes certain items, meaning items considered by management to be unusual and not representative of segment results. In addition, Segment EBIT includes Equity in net income of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income (loss) attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, the effects of LIFO accounting for inventory, general unallocated (expense) income and unallocated corporate costs. | |||||||||||||||||||||||||||||
Prior year Purification Solutions Segment EBIT has been adjusted to include an allocation of corporate administrative and functional support costs, which were previously reflected in unallocated corporate costs and other segment results. Beginning in the second quarter of fiscal 2014, a reclassification has been made in the Purification Solutions segment information in order to align the presentation of shipping and handling costs on customer sales with the rest of the Company’s businesses. The reclassification was made between Purification Solutions and Unallocated and other to include the shipping and handling costs in Revenues from external customers. There is no impact on Segment EBIT as a result of the reclassification. Historical periods have been adjusted to reflect this reclassification. | |||||||||||||||||||||||||||||
Financial information by reportable segment is as follows: | |||||||||||||||||||||||||||||
Reinforcement | Performance | Advanced | Purification | Segment | Unallocated | Consolidated | |||||||||||||||||||||||
Materials | Materials | Technologies | Solutions | Total | and Other(1) | Total | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 504 | $ | 249 | $ | 48 | $ | 80 | $ | 881 | $ | 17 | $ | 898 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 61 | $ | 47 | $ | 12 | $ | (4 | ) | $ | 116 | $ | (68 | ) | $ | 48 | |||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 459 | $ | 243 | $ | 39 | $ | 75 | $ | 816 | $ | 24 | $ | 840 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 42 | $ | 37 | $ | 8 | $ | — | $ | 87 | $ | (50 | ) | $ | 37 | ||||||||||||||
Six Months Ended March 31, 2014 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 1,021 | $ | 466 | $ | 112 | $ | 152 | $ | 1,751 | $ | 45 | $ | 1,796 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 125 | $ | 81 | $ | 37 | $ | (13 | ) | $ | 230 | $ | (73 | ) | $ | 157 | |||||||||||||
Six Months Ended March 31, 2013 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 934 | $ | 439 | $ | 76 | 163 | $ | 1,612 | $ | 47 | $ | 1,659 | ||||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 92 | $ | 64 | $ | 16 | 5 | $ | 177 | $ | (97 | ) | $ | 80 | |||||||||||||||
(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 Chief Operating Decision Maker. | ||||||||||||||||||||||||||||
(2) | Unallocated and Other reflects royalties, other operating revenues, external shipping and handling costs, 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: | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Royalties, other operating revenues, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. | $ | (12 | ) | $ | — | $ | (12 | ) | $ | (3 | ) | ||||||||||||||||||
Shipping and handling costs | 29 | 24 | 57 | 50 | |||||||||||||||||||||||||
Total | $ | 17 | $ | 24 | $ | 45 | $ | 47 | |||||||||||||||||||||
(3) | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Interest expense | $ | (13 | ) | $ | (16 | ) | $ | (27 | ) | $ | (32 | ) | |||||||||||||||||
Total certain items, pre-tax(a) | (36 | ) | (20 | ) | (12 | ) | (39 | ) | |||||||||||||||||||||
Equity in earnings of affiliated companies, net of tax(b) | — | (3 | ) | (2 | ) | (6 | ) | ||||||||||||||||||||||
Unallocated corporate costs(c) | (16 | ) | (13 | ) | (29 | ) | (25 | ) | |||||||||||||||||||||
General unallocated (expense) income(d) | (3 | ) | 2 | (3 | ) | 5 | |||||||||||||||||||||||
Total | $ | (68 | ) | $ | (50 | ) | $ | (73 | ) | $ | (97 | ) | |||||||||||||||||
(a) | Certain items are items that management does not consider to be representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax, for the three months ended March 31, 2014 include $16 million related to global restructuring activities, $6 million of foreign currency loss on revaluations and $14 million related to legal and environmental matters and reserves. Certain items, pre-tax, for the six months ended March 31, 2014 include $21 million related to global restructuring activities, $5 million for acquisition and integration-related charges (consisting of $3 million for certain other one-time integration costs and $2 million of additional charges related to acquisition accounting adjustments for the acquired inventory of NHUMO) and $15 million for legal and environmental matters and reserves offset by a $29 million non-cash gain recognized on the Company’s pre-existing investment in NHUMO as a result of the NHUMO transaction. Certain items, pre-tax, for the three months ended March 31, 2013 include $19 million related to global restructuring activities and $2 million for acquisition and integration-related charges offset by $1 million of foreign currency gain on revaluation. Certain items, pre-tax, for the six months ended March 31, 2013 include $24 million related to global restructuring activities and $16 million for acquisition and integration-related charges (consisting of $5 million for certain other one-time integration costs and $11 million of charges related to acquisition accounting adjustments for the acquired inventory) offset by $1 million of foreign currency gain on revaluation. | ||||||||||||||||||||||||||||
(b) | Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from continuing operations before taxes. | ||||||||||||||||||||||||||||
(c) | Unallocated corporate costs are not controlled by the operating segments and primarily benefit corporate interests. | ||||||||||||||||||||||||||||
(d) | General unallocated (expense) income consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. | ||||||||||||||||||||||||||||
Performance Materials is comprised of two businesses that sell the following products: specialty grades of carbon black and thermoplastic concentrates and compounds (the Specialty Carbons and Compounds Business); and fumed silica, fumed alumina and dispersions thereof (the Fumed Metal Oxides Business). The net sales from each of these businesses for the three and six months ended March 31, 2014 and 2013 are as follows: | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Specialty Carbons and Compounds | $ | 172 | $ | 173 | $ | 320 | $ | 305 | |||||||||||||||||||||
Fumed Metal Oxides | 77 | 70 | 146 | 134 | |||||||||||||||||||||||||
Total Performance Materials | $ | 249 | $ | 243 | $ | 466 | $ | 439 | |||||||||||||||||||||
The net sales from each of the Advanced Technologies businesses are as follows: | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Inkjet Colorants | $ | 14 | $ | 12 | $ | 29 | $ | 28 | |||||||||||||||||||||
Aerogel | 1 | 3 | 6 | 8 | |||||||||||||||||||||||||
Elastomer Composites | 8 | 4 | 24 | 12 | |||||||||||||||||||||||||
Specialty Fluids | 25 | 20 | 53 | 28 | |||||||||||||||||||||||||
Total Advanced Technologies | $ | 48 | $ | 39 | $ | 112 | $ | 76 | |||||||||||||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Revenue Recognition and Accounts Receivable | ' | ||||||||||||||||
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 in the sales price. | |||||||||||||||||
The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments for the periods presented. The Advanced Technologies reportable segment excludes the Security Materials business from all periods as the Company began reporting the business under discontinued operations. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Reinforcement Materials | 58 | % | 56 | % | 58 | % | 58 | % | |||||||||
Performance Materials | 28 | % | 30 | % | 27 | % | 27 | % | |||||||||
Purification Solutions | 9 | % | 9 | % | 9 | % | 10 | % | |||||||||
Advanced Technologies | 5 | % | 5 | % | 6 | % | 5 | % | |||||||||
Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Materials. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. | |||||||||||||||||
Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. | |||||||||||||||||
Revenue in Advanced Technologies, excluding the Specialty Fluids Business, is typically recognized when the product is shipped and title and risk of loss have passed to the customer. Depending on the nature of the contract with the customer, a portion of the segment’s revenue may be recognized using proportional performance. Cabot has technology and licensing agreements with one customer that are accounted for as multiple element arrangements. Revenue is recognized ratably over the term of the agreements, limited by the cumulative amounts that become due, some of which are through 2022. | |||||||||||||||||
A significant portion of the revenue in the Specialty Fluids Business, included in Advanced Technologies, arises 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 revenue from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. | |||||||||||||||||
Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There is no off-balance sheet credit exposure related to customer receivable balances. | |||||||||||||||||
Property, Plant and Equipment | ' | ||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||
Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. | |||||||||||||||||
Intangible Assets and Goodwill | ' | ||||||||||||||||
Intangible Assets and Goodwill | |||||||||||||||||
The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is reviewed for impairment annually, as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The separate businesses included within Performance Materials are considered separate reporting units. The goodwill balance relative to this segment is recorded in the Fumed Metal Oxides reporting unit within Performance Materials. | |||||||||||||||||
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 value amount and as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Alternatively, the Company may elect to proceed directly to the two-step goodwill impairment test. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures, and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline because of reduced operating performance, market declines, or other indicators of impairment, or as a result of changes in the discount rate, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test the fair values of all of its reporting units were substantially in excess of their carrying values. The Company notes that the future growth in the Purification Solutions business, which had $469 million of goodwill at March 31, 2014, is highly dependent on the growth in the mercury removal portion of this business. This growth relies upon achieving the expected volumes and margins in the mercury removal portion of this business and significantly depends on the adoption and enforcement of environmental laws and regulations, particularly those that would require U.S. based coal fired electrical utilities to reduce the quantity of air pollutants they release, including mercury, to comply with the Mercury and Air Toxics Standards that become effective in April 2015. | |||||||||||||||||
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 (i) assumptions used in the valuation model; and (ii) determination of the intangible assets’ useful lives. 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 reviews definite-lived intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. Actual cash flows arising from a particular intangible asset could vary from projected cash flows which could imply different carrying values from those established at the dates of acquisition and which could result in impairment of such asset. | |||||||||||||||||
The Company evaluates indefinite-lived intangible assets for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. The Company’s intangible assets are primarily comprised of trademarks, customer relationships, patented and unpatented technology and other intellectual property. Finite lived intangible assets are amortized over their estimated useful lives. | |||||||||||||||||
Long-Lived Assets | ' | ||||||||||||||||
Long-lived Assets | |||||||||||||||||
The Company’s long-lived assets primarily include property, plant and equipment, 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. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the probability-weighted undiscounted estimated future cash flows to be generated by the asset. The Company’s estimates reflect management’s assumptions about selling prices, production and sales volumes, costs and market conditions over an estimate of the remaining operating period. If an impairment is indicated, the asset is written down to 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. The key inputs to the discounted cash flow would be the same as the undiscounted cash flow noted above, with the addition of the discount rate used. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. | |||||||||||||||||
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. | |||||||||||||||||
Income Tax in Interim Periods | ' | ||||||||||||||||
Income Tax in Interim Periods | |||||||||||||||||
The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. 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 recognized 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 | ' | ||||||||||||||||
Inventory Valuation | |||||||||||||||||
Inventories are stated at the lower of cost or market. The cost of all carbon black inventories in the U.S. is determined using the last-in, first-out (“LIFO”) method. Had the Company used the first-in, first-out (“FIFO”) method instead of the LIFO method for such inventories, the value of those inventories would have been $54 million and $55 million higher as of March 31, 2014 and September 30, 2013, respectively. The cost of Specialty Fluids inventories is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the FIFO method. | |||||||||||||||||
Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated market value. | |||||||||||||||||
Pensions and Other Postretirement Benefits | ' | ||||||||||||||||
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, 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 is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. | |||||||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||||||
Accumulated other comprehensive income (“AOCI”), which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and pension liability adjustments. | |||||||||||||||||
At the beginning of fiscal 2014, the Company adopted new accounting guidance for the presentation of amounts reclassified from AOCI. The guidance specifically requires, either on the face of the financial statements or in the notes, presentation of significant amounts reclassified from AOCI to net income for each component of AOCI and the respective line items within the Consolidated Statements of Operations. These disclosures are included in Note H to the consolidated financial statements. | |||||||||||||||||
Accumulated other comprehensive items in the accompanying Consolidated Balance Sheets consist of the following items net of tax: | |||||||||||||||||
March 31, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Foreign currency translation adjustments at beginning of period | $ | 154 | $ | 167 | |||||||||||||
Net foreign currency translation adjustments during the period | (27 | ) | (13 | ) | |||||||||||||
Balance at end of period | 127 | 154 | |||||||||||||||
Unrealized gain on investments at beginning of period | 2 | — | |||||||||||||||
Net unrealized gains during the period | — | 2 | |||||||||||||||
Balance at end of period | 2 | 2 | |||||||||||||||
Pension and other postretirement benefit plans at beginning of period | (53 | ) | (75 | ) | |||||||||||||
Net change in pension and other postretirement benefit plans during the period | 1 | 22 | |||||||||||||||
Balance at end of period | (52 | ) | (53 | ) | |||||||||||||
Total accumulated other comprehensive income | $ | 77 | $ | 103 | |||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued a new standard related to the “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The standard requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This standard is applicable for fiscal years beginning after December 15, 2013, and for interim periods within those years. Accordingly, the Company will adopt this standard beginning October 1, 2014, the beginning of the first quarter of its 2015 fiscal year. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and it does not expect the impact to be material. | |||||||||||||||||
In April 2014, the FASB issued a new standard related to the “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The standard requires discontinued operations treatment for disposals of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results and requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This standard is applicable for fiscal years beginning after December 15, 2014 and for interim periods within those years with early adoption permitted but only for disposals that have not been reported in financial statements previously issued. Accordingly, the Company expects to adopt this standard beginning October 1, 2015, the beginning of the first quarter of its 2016 fiscal year. The impact of the adoption of this standard may have a material impact on the Company’s consolidated financial statements based on the nature of the future disposals. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Segment Reporting Revenue Percentage | ' | ||||||||||||||||
The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments for the periods presented. The Advanced Technologies reportable segment excludes the Security Materials business from all periods as the Company began reporting the business under discontinued operations. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Reinforcement Materials | 58 | % | 56 | % | 58 | % | 58 | % | |||||||||
Performance Materials | 28 | % | 30 | % | 27 | % | 27 | % | |||||||||
Purification Solutions | 9 | % | 9 | % | 9 | % | 10 | % | |||||||||
Advanced Technologies | 5 | % | 5 | % | 6 | % | 5 | % | |||||||||
Accumulated Other Comprehensive Items in Accompanying Consolidated Balance Sheets | ' | ||||||||||||||||
Accumulated other comprehensive items in the accompanying Consolidated Balance Sheets consist of the following items net of tax: | |||||||||||||||||
March 31, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Foreign currency translation adjustments at beginning of period | $ | 154 | $ | 167 | |||||||||||||
Net foreign currency translation adjustments during the period | (27 | ) | (13 | ) | |||||||||||||
Balance at end of period | 127 | 154 | |||||||||||||||
Unrealized gain on investments at beginning of period | 2 | — | |||||||||||||||
Net unrealized gains during the period | — | 2 | |||||||||||||||
Balance at end of period | 2 | 2 | |||||||||||||||
Pension and other postretirement benefit plans at beginning of period | (53 | ) | (75 | ) | |||||||||||||
Net change in pension and other postretirement benefit plans during the period | 1 | 22 | |||||||||||||||
Balance at end of period | (52 | ) | (53 | ) | |||||||||||||
Total accumulated other comprehensive income | $ | 77 | $ | 103 | |||||||||||||
Acquisition_of_NHUMO_Tables
Acquisition of NHUMO (Tables) | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Allocation of Purchase Price | ' | ||||
The allocation of the purchase price set forth below was based on preliminary estimates of the fair value of assets acquired, liabilities assumed, and Cabot’s previously held equity interest in NHUMO as of the acquisition date. The Company is continuing to obtain information to complete its valuation of these accounts and the associated tax accounting. | |||||
(in millions) | |||||
Assets | |||||
Cash | $ | 7 | |||
Accounts receivable | 33 | ||||
Inventories | 14 | ||||
Property, plant and equipment | 48 | ||||
Other non-current assets | 1 | ||||
Intangible assets | 57 | ||||
Goodwill | 51 | ||||
Total assets acquired | 211 | ||||
Liabilities | |||||
Current liabilities | (18 | ) | |||
Deferred tax liabilities | (31 | ) | |||
Total liabilities assumed | (49 | ) | |||
Net assets acquired | $ | 162 | |||
Cash consideration paid | 80 | ||||
Fair value of redeemable preferred stock | 28 | ||||
Previously held equity interest in NHUMO | 54 | ||||
Total | $ | 162 | |||
Discontinued_Operations_and_No1
Discontinued Operations and Notes Receivable from Sale of Business (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Discontinued Operations And Disposal Groups [Abstract] | ' | ||||||||||||||||
Components of Discontinued Operations | ' | ||||||||||||||||
The following table summarizes the results from discontinued operations during the three and six months ended March 31, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Net sales and other operating revenues | $ | 2 | $ | 2 | $ | 3 | $ | 3 | |||||||||
Loss from operations before income taxes | (1 | ) | (1 | ) | (2 | ) | (5 | ) | |||||||||
Benefit from income taxes | 1 | — | 1 | 2 | |||||||||||||
Loss from discontinued operations, net of tax | $ | — | $ | (1 | ) | $ | (1 | ) | $ | (3 | ) | ||||||
Summary of Assets Held for Sale | ' | ||||||||||||||||
The following table summarizes the assets held for sale in the Company’s Consolidated Balance Sheets: | |||||||||||||||||
March 31, 2014 | September 30, 2013 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Inventories | 3 | 3 | |||||||||||||||
Total current assets held for sale | $ | 3 | $ | 3 | |||||||||||||
Property, plant and equipment, net | 4 | 5 | |||||||||||||||
Goodwill | 2 | 2 | |||||||||||||||
Intangible assets, net | 2 | 2 | |||||||||||||||
Total noncurrent assets held for sale | $ | 8 | $ | 9 | |||||||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs | ' | ||||||||||||||||||||||||||||||||
Net periodic defined benefit pension and other postretirement benefit costs include the following: | |||||||||||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||||||||||
U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | 3 | $ | 2 | $ | 3 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 2 | 4 | 1 | 3 | — | — | — | — | |||||||||||||||||||||||||
Expected return on plan assets | (2 | ) | (5 | ) | (2 | ) | (4 | ) | — | — | — | — | |||||||||||||||||||||
Amortization of prior service credit | — | — | — | — | — | — | (1 | ) | — | ||||||||||||||||||||||||
Amortization of actuarial loss | — | 1 | — | 1 | — | — | — | — | |||||||||||||||||||||||||
Net periodic benefit cost | $ | — | $ | 3 | $ | 1 | $ | 3 | $ | — | $ | — | $ | (1 | ) | $ | — | ||||||||||||||||
Six Months Ended March 31 | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||||||||||
U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||
Service cost | $ | 1 | $ | 5 | $ | 3 | $ | 5 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 4 | 8 | 3 | 7 | 1 | — | 1 | — | |||||||||||||||||||||||||
Expected return on plan assets | (5 | ) | (10 | ) | (5 | ) | (9 | ) | — | — | — | — | |||||||||||||||||||||
Amortization of prior service credit | — | — | — | — | (1 | ) | — | (2 | ) | — | |||||||||||||||||||||||
Amortization of actuarial loss | — | 2 | 1 | 2 | — | — | — | — | |||||||||||||||||||||||||
Net periodic benefit cost | $ | — | $ | 5 | $ | 2 | $ | 5 | $ | — | $ | — | $ | (1 | ) | $ | — | ||||||||||||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Goodwill Balances | ' | ||||||||||||||||||||||||
The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended March 31, 2014 are as follows: | |||||||||||||||||||||||||
Reinforcement | Performance | Purification | Total | ||||||||||||||||||||||
Materials | Materials | Solutions | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Balance at September 30, 2013 | $ | 25 | $ | 11 | $ | 466 | $ | 502 | |||||||||||||||||
Goodwill acquired(1) | 51 | — | — | 51 | |||||||||||||||||||||
Foreign currency impact | (1 | ) | — | 3 | 2 | ||||||||||||||||||||
Balance at March 31, 2014 | $ | 75 | $ | 11 | $ | 469 | $ | 555 | |||||||||||||||||
(1) | Goodwill acquired relates to the NHUMO transaction as described in Note C. | ||||||||||||||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||||||||||||
The following table provides information regarding the Company’s intangible assets: | |||||||||||||||||||||||||
March 31, 2014 | September 30, 2013 | ||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization | Intangible | Carrying | Amortization | Intangible | ||||||||||||||||||||
Value | Assets | Value | Assets | ||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||
Intangible assets with finite lives | |||||||||||||||||||||||||
Developed technology | $ | 156 | $ | (13 | ) | $ | 143 | $ | 154 | $ | (9 | ) | $ | 145 | |||||||||||
Customer relationships(1) | 170 | (12 | ) | 158 | 113 | (7 | ) | 106 | |||||||||||||||||
Total intangible assets, finite lives | $ | 326 | $ | (25 | ) | $ | 301 | $ | 267 | $ | (16 | ) | $ | 251 | |||||||||||
Trademarks, indefinite lives | 57 | — | 57 | 57 | — | 57 | |||||||||||||||||||
Total intangible assets | $ | 383 | $ | (25 | ) | $ | 358 | $ | 324 | $ | (16 | ) | $ | 308 | |||||||||||
(1) | The change in the gross carrying value of the Customer relationships intangible asset is primarily due to the NHUMO transaction as described in Note C. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
Schedule of Activity in Noncontrolling Interests | ' | ||||||||
The following table illustrates the noncontrolling interests activity for the periods presented: | |||||||||
2014 | 2013 | ||||||||
(Dollars in millions) | |||||||||
Balance at September 30 | $ | 132 | $ | 126 | |||||
Net income attributable to noncontrolling interests | 9 | — | |||||||
Noncontrolling interest foreign currency translation adjustment | (2 | ) | — | ||||||
Contribution from noncontrolling interests | — | 9 | |||||||
Noncontrolling interest dividends | (20 | ) | (13 | ) | |||||
Balance at March 31 | $ | 119 | $ | 122 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Changes in Each Component of Accumulated Other Comprehensive Income, Net of Tax | ' | ||||||||||||||||
Changes in each component of Accumulated other comprehensive income, net of tax, are as follows: | |||||||||||||||||
Currency | Unrealized | Pension and Other | Total | ||||||||||||||
Translation | Gains on | Postretirement | |||||||||||||||
Adjustment | Investments | Benefit Liability | |||||||||||||||
Adjustments | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Balance at September 30, 2013, attributable to Cabot Corporation | $ | 154 | $ | 2 | $ | (53 | ) | $ | 103 | ||||||||
Other comprehensive loss before reclassifications | (29 | ) | — | — | (29 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | 1 | 1 | |||||||||||||
Net other comprehensive items | (29 | ) | — | 1 | (28 | ) | |||||||||||
Balance at March 31, 2014 | 125 | 2 | (52 | ) | 75 | ||||||||||||
Less: Noncontrolling interest | (2 | ) | — | — | (2 | ) | |||||||||||
Balance at March 31, 2014, attributable to Cabot Corporation | $ | 127 | $ | 2 | $ | (52 | ) | $ | 77 | ||||||||
Amounts Reclassified Out of Accumulated Other Comprehensive Income | ' | ||||||||||||||||
The amounts reclassified out of Accumulated other comprehensive income and into the Statement of Operations for the six months ended March 31, 2014 and 2013 are as follows: | |||||||||||||||||
Six Months Ended March 31, | |||||||||||||||||
Affected Line Item in the Consolidated | 2014 | 2013 | |||||||||||||||
Statements of Operations | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Pension and other postretirement benefit liability adjustment | |||||||||||||||||
Amortization of actuarial losses | Net Periodic Benefit Cost - see Note E for details | $ | 2 | $ | 3 | ||||||||||||
Amortization of prior service cost | Net Periodic Benefit Cost - see Note E for details | (1 | ) | (2 | ) | ||||||||||||
Total before tax | 1 | 1 | |||||||||||||||
Tax impact | Provision for income taxes | — | — | ||||||||||||||
Total after tax | $ | 1 | $ | 1 | |||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Components of Purchase Commitments | ' | ||||||||||||||||||||||||||||
Purchase Commitments | |||||||||||||||||||||||||||||
Cabot has entered into long-term purchase agreements primarily for the purchase of raw materials. Under certain of these agreements the quantity of material being purchased is fixed, but the price paid changes as market prices change. For those commitments, the amounts included in the table below are based on market prices at March 31, 2014. | |||||||||||||||||||||||||||||
Payments Due by Fiscal Year | |||||||||||||||||||||||||||||
Remainder of | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||||
Fiscal 2014 | |||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Reinforcement Materials | $ | 202 | $ | 321 | $ | 300 | $ | 186 | $ | 178 | $ | 2,795 | $ | 3,982 | |||||||||||||||
Performance Materials | 23 | 39 | 33 | 30 | 30 | 236 | 391 | ||||||||||||||||||||||
Advanced Technologies | 1 | 2 | 1 | 1 | 1 | — | 6 | ||||||||||||||||||||||
Purification Solutions | 15 | 16 | 9 | 9 | 9 | 16 | 74 | ||||||||||||||||||||||
Total | $ | 241 | $ | 378 | $ | 343 | $ | 226 | $ | 218 | $ | 3,047 | $ | 4,453 | |||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Components of Basic and Diluted Earnings Per Common Share | ' | ||||||||||||||||
The following tables summarize the components of the basic and diluted earnings per common share computations: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars and shares in millions, | |||||||||||||||||
except per share amounts) | |||||||||||||||||
Basic EPS: | |||||||||||||||||
Net income attributable to Cabot Corporation | $ | 36 | $ | 27 | $ | 116 | $ | 47 | |||||||||
Less: Dividends and dividend equivalents to participating securities | — | — | — | — | |||||||||||||
Less: Undistributed earnings allocated to participating securities(1) | — | — | 1 | — | |||||||||||||
Earnings allocated to common shareholders (numerator) | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Weighted average common shares and participating securities outstanding | 65 | 64.3 | 64.8 | 64.2 | |||||||||||||
Less: Participating securities(1) | 0.6 | 0.6 | 0.6 | 0.6 | |||||||||||||
Adjusted weighted average common shares (denominator) | 64.4 | 63.7 | 64.2 | 63.6 | |||||||||||||
Amounts per share - basic: | |||||||||||||||||
Income from continuing operations attributable to Cabot Corporation | $ | 0.56 | $ | 0.44 | $ | 1.81 | $ | 0.79 | |||||||||
Loss from discontinued operations | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | |||||||||
Net income attributable to Cabot Corporation | $ | 0.55 | $ | 0.43 | $ | 1.79 | $ | 0.74 | |||||||||
Diluted EPS: | |||||||||||||||||
Earnings allocated to common shareholders | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Plus: Earnings allocated to participating securities | — | — | 1 | — | |||||||||||||
Less: Adjusted earnings allocated to participating securities(2) | — | — | (1 | ) | — | ||||||||||||
Earnings allocated to common shareholders (numerator) | $ | 36 | $ | 27 | $ | 115 | $ | 47 | |||||||||
Adjusted weighted average common shares outstanding | 64.4 | 63.7 | 64.2 | 63.6 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Common shares issuable(3) | 0.7 | 0.7 | 0.8 | 0.7 | |||||||||||||
Adjusted weighted average common shares (denominator) | 65.1 | 64.4 | 65 | 64.3 | |||||||||||||
Amounts per share - diluted: | |||||||||||||||||
Income from continuing operations attributable to Cabot Corporation | $ | 0.55 | $ | 0.43 | $ | 1.79 | $ | 0.78 | |||||||||
Loss from discontinued operations | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | |||||||||
Net income attributable to Cabot Corporation | $ | 0.54 | $ | 0.42 | $ | 1.77 | $ | 0.73 | |||||||||
(1) | Participating securities consist of shares of unvested restricted stock and unvested time-based restricted stock units. | ||||||||||||||||
Calculation of Undistributed Earnings | ' | ||||||||||||||||
The calculation of undistributed earnings is as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 31 | March 31 | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||
Calculation of undistributed earnings: | |||||||||||||||||
Net income attributable to Cabot Corporation | $ | 36 | $ | 27 | $ | 116 | $ | 47 | |||||||||
Less: Dividends declared on common stock | 13 | 13 | 26 | 26 | |||||||||||||
Less: Dividends declared on participating securities | — | — | — | — | |||||||||||||
Undistributed earnings | $ | 23 | $ | 14 | $ | 90 | $ | 21 | |||||||||
Allocation of undistributed earnings: | |||||||||||||||||
Undistributed earnings allocated to common shareholders | $ | 23 | $ | 14 | $ | 89 | $ | 21 | |||||||||
Undistributed earnings allocated to participating shareholders | — | — | 1 | — | |||||||||||||
Undistributed earnings | $ | 23 | $ | 14 | $ | 90 | $ | 21 | |||||||||
(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 under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. For the three and six months ended March 31, 2014, 203,019 and 220,866 incremental shares of common stock, respectively, were not included in 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, 2013, 308,000 and 418,000 incremental shares of common stock, respectively, were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring_Tables
Restructuring (Tables) | 6 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Restructuring And Related Activities [Abstract] | ' | ||||||||||||||||||||
Recorded Restructuring Activities | ' | ||||||||||||||||||||
Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||
Cost of sales | $ | 5 | $ | 18 | $ | 9 | $ | 21 | |||||||||||||
Selling and administrative expenses | 11 | 1 | 12 | 3 | |||||||||||||||||
Total | $ | 16 | $ | 19 | $ | 21 | $ | 24 | |||||||||||||
Restructuring Activities and Related Reserves | ' | ||||||||||||||||||||
Details of these restructuring activities and the related reserves during the three months ended March 31, 2014 are as follows: | |||||||||||||||||||||
Severance and | Environmental | Asset | Other | Total | |||||||||||||||||
Employee | Remediation | Sales | |||||||||||||||||||
Benefits | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Reserve at December 31, 2013 | $ | 4 | $ | 2 | $ | — | $ | 2 | $ | 8 | |||||||||||
Charges | 13 | 1 | 1 | 1 | 16 | ||||||||||||||||
Cash paid | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | |||||||||||
Reserve at March 31, 2014 | $ | 16 | $ | 2 | $ | — | $ | 2 | $ | 20 | |||||||||||
Details of these restructuring activities and the related reserves during the six months ended March 31, 2014 are as follows: | |||||||||||||||||||||
Severance and | Environmental | Asset | Other | Total | |||||||||||||||||
Employee | Remediation | Impairment | |||||||||||||||||||
Benefits | and | ||||||||||||||||||||
Accelerated | |||||||||||||||||||||
Depreciation | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Reserve at September 30, 2013 | $ | 7 | $ | 2 | $ | — | $ | 1 | $ | 10 | |||||||||||
Charges | 14 | 1 | 3 | 3 | 21 | ||||||||||||||||
Costs charged against assets / liabilities | — | — | (3 | ) | — | (3 | ) | ||||||||||||||
Cash paid | (5 | ) | (1 | ) | — | (2 | ) | (8 | ) | ||||||||||||
Reserve at March 31, 2014 | $ | 16 | $ | 2 | $ | — | $ | 2 | $ | 20 | |||||||||||
Derivatives_Tables
Derivatives (Tables) (Forward Foreign Currency Contracts [Member]) | 6 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Forward Foreign Currency Contracts [Member] | ' | ||||||||
Schedule of Derivatives Foreign Currency | ' | ||||||||
The following table provides details of the derivatives held as of March 31, 2014 and September 30, 2013 to manage foreign currency risk: | |||||||||
Notional Amount | |||||||||
Description | Borrowing | March 31, 2014 | September 30, 2013 | Hedge Designation | |||||
Forward Foreign Currency Contracts (1) | N/A | USD 41 million | USD 31 million | No designation | |||||
-1 | Cabot’s forward foreign exchange contracts are denominated primarily in the Brazilian real, British pound sterling, Chinese renminbi, Czech koruna, and Indian rupee. |
Financial_Information_by_Segme1
Financial Information by Segment (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||||||
Financial Information by Reportable Segment | ' | ||||||||||||||||||||||||||||
Financial information by reportable segment is as follows: | |||||||||||||||||||||||||||||
Reinforcement | Performance | Advanced | Purification | Segment | Unallocated | Consolidated | |||||||||||||||||||||||
Materials | Materials | Technologies | Solutions | Total | and Other(1) | Total | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 504 | $ | 249 | $ | 48 | $ | 80 | $ | 881 | $ | 17 | $ | 898 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 61 | $ | 47 | $ | 12 | $ | (4 | ) | $ | 116 | $ | (68 | ) | $ | 48 | |||||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 459 | $ | 243 | $ | 39 | $ | 75 | $ | 816 | $ | 24 | $ | 840 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 42 | $ | 37 | $ | 8 | $ | — | $ | 87 | $ | (50 | ) | $ | 37 | ||||||||||||||
Six Months Ended March 31, 2014 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 1,021 | $ | 466 | $ | 112 | $ | 152 | $ | 1,751 | $ | 45 | $ | 1,796 | |||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 125 | $ | 81 | $ | 37 | $ | (13 | ) | $ | 230 | $ | (73 | ) | $ | 157 | |||||||||||||
Six Months Ended March 31, 2013 | |||||||||||||||||||||||||||||
Revenues from external customers(2) | $ | 934 | $ | 439 | $ | 76 | 163 | $ | 1,612 | $ | 47 | $ | 1,659 | ||||||||||||||||
Income (loss) from continuing operations before taxes(3) | $ | 92 | $ | 64 | $ | 16 | 5 | $ | 177 | $ | (97 | ) | $ | 80 | |||||||||||||||
(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 Chief Operating Decision Maker. | ||||||||||||||||||||||||||||
(2) | Unallocated and Other reflects royalties, other operating revenues, external shipping and handling costs, 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: | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Royalties, other operating revenues, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. | $ | (12 | ) | $ | — | $ | (12 | ) | $ | (3 | ) | ||||||||||||||||||
Shipping and handling costs | 29 | 24 | 57 | 50 | |||||||||||||||||||||||||
Total | $ | 17 | $ | 24 | $ | 45 | $ | 47 | |||||||||||||||||||||
(3) | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Interest expense | $ | (13 | ) | $ | (16 | ) | $ | (27 | ) | $ | (32 | ) | |||||||||||||||||
Total certain items, pre-tax(a) | (36 | ) | (20 | ) | (12 | ) | (39 | ) | |||||||||||||||||||||
Equity in earnings of affiliated companies, net of tax(b) | — | (3 | ) | (2 | ) | (6 | ) | ||||||||||||||||||||||
Unallocated corporate costs(c) | (16 | ) | (13 | ) | (29 | ) | (25 | ) | |||||||||||||||||||||
General unallocated (expense) income(d) | (3 | ) | 2 | (3 | ) | 5 | |||||||||||||||||||||||
Total | $ | (68 | ) | $ | (50 | ) | $ | (73 | ) | $ | (97 | ) | |||||||||||||||||
(a) | Certain items are items that management does not consider to be representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax, for the three months ended March 31, 2014 include $16 million related to global restructuring activities, $6 million of foreign currency loss on revaluations and $14 million related to legal and environmental matters and reserves. Certain items, pre-tax, for the six months ended March 31, 2014 include $21 million related to global restructuring activities, $5 million for acquisition and integration-related charges (consisting of $3 million for certain other one-time integration costs and $2 million of additional charges related to acquisition accounting adjustments for the acquired inventory of NHUMO) and $15 million for legal and environmental matters and reserves offset by a $29 million non-cash gain recognized on the Company’s pre-existing investment in NHUMO as a result of the NHUMO transaction. Certain items, pre-tax, for the three months ended March 31, 2013 include $19 million related to global restructuring activities and $2 million for acquisition and integration-related charges offset by $1 million of foreign currency gain on revaluation. Certain items, pre-tax, for the six months ended March 31, 2013 include $24 million related to global restructuring activities and $16 million for acquisition and integration-related charges (consisting of $5 million for certain other one-time integration costs and $11 million of charges related to acquisition accounting adjustments for the acquired inventory) offset by $1 million of foreign currency gain on revaluation. | ||||||||||||||||||||||||||||
(b) | Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from continuing operations before taxes. | ||||||||||||||||||||||||||||
(c) | Unallocated corporate costs are not controlled by the operating segments and primarily benefit corporate interests. | ||||||||||||||||||||||||||||
(d) | General unallocated (expense) income consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. | ||||||||||||||||||||||||||||
Schedule of Performance Segment | ' | ||||||||||||||||||||||||||||
The net sales from each of these businesses for the three and six months ended March 31, 2014 and 2013 are as follows: | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Specialty Carbons and Compounds | $ | 172 | $ | 173 | $ | 320 | $ | 305 | |||||||||||||||||||||
Fumed Metal Oxides | 77 | 70 | 146 | 134 | |||||||||||||||||||||||||
Total Performance Materials | $ | 249 | $ | 243 | $ | 466 | $ | 439 | |||||||||||||||||||||
Schedule of Advanced Technologies Business Segment | ' | ||||||||||||||||||||||||||||
The net sales from each of the Advanced Technologies businesses are as follows: | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Inkjet Colorants | $ | 14 | $ | 12 | $ | 29 | $ | 28 | |||||||||||||||||||||
Aerogel | 1 | 3 | 6 | 8 | |||||||||||||||||||||||||
Elastomer Composites | 8 | 4 | 24 | 12 | |||||||||||||||||||||||||
Specialty Fluids | 25 | 20 | 53 | 28 | |||||||||||||||||||||||||
Total Advanced Technologies | $ | 48 | $ | 39 | $ | 112 | $ | 76 | |||||||||||||||||||||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (NHUMO [Member]) | Nov. 30, 2013 |
NHUMO [Member] | ' |
Basis Of Presentation [Line Items] | ' |
Percentage acquisition | 60.00% |
Ownership percentage prior to acquisition | 40.00% |
Significant_Accounting_Policie3
Significant Accounting Policies - Segment Reporting Revenue Percentage (Detail) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Reinforcement Materials [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue, by segment | 58.00% | 56.00% | 58.00% | 58.00% |
Performance Materials [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue, by segment | 28.00% | 30.00% | 27.00% | 27.00% |
Purification Solutions [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue, by segment | 9.00% | 9.00% | 9.00% | 10.00% |
Advanced Technologies [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue, by segment | 5.00% | 5.00% | 6.00% | 5.00% |
Significant_Accounting_Policie4
Significant Accounting Policies - Additional Information (Detail) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Sep. 30, 2013 |
Customer | ||
Significant Accounting Policies [Line Items] | ' | ' |
Revenue recognized due, description | '2022 | ' |
Number of customer having licensing agreements | 1 | ' |
Goodwill | $555 | $502 |
Value of inventories under FIFO method | 54 | 55 |
Purification Solutions [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Goodwill | $469 | $466 |
Buildings [Member] | Minimum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '20 years | ' |
Buildings [Member] | Maximum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '25 years | ' |
Machinery and Equipment [Member] | Minimum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '10 years | ' |
Machinery and Equipment [Member] | Maximum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '25 years | ' |
Other Fixed Assets [Member] | Minimum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '3 years | ' |
Other Fixed Assets [Member] | Maximum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Useful life of property, plant and equipment | '25 years | ' |
Significant_Accounting_Policie5
Significant Accounting Policies - Accumulated Other Comprehensive Items in Accompanying Consolidated Balance Sheets (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ' | ' | ' | ' |
Foreign currency translation adjustments at beginning of period | ' | $154 | $167 | $167 |
Net foreign currency translation adjustments during the period | ' | -27 | ' | -13 |
Foreign currency translation adjustments at end of period | 127 | 127 | ' | 154 |
Unrealized gain on investments at beginning of period | ' | 2 | ' | ' |
Net unrealized gains during the period | ' | ' | ' | 2 |
Unrealized gain on investments at end of period | 2 | 2 | ' | 2 |
Pension and other postretirement benefit plans at beginning of period | ' | -53 | -75 | -75 |
Net change in pension and other postretirement benefit plans during the period | 1 | 1 | 1 | 22 |
Pension and other postretirement benefit plans at end of period | -52 | -52 | ' | -53 |
Total accumulated other comprehensive income | $77 | $77 | ' | $103 |
Acquisition_of_NHUMO_Additiona
Acquisition of NHUMO - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Nov. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ' | ' | ' |
Preferred stock redemption amount | ' | $29 | $29 |
Acquisition costs | ' | ' | 1 |
Gain on acquisition | ' | ' | 29 |
Customer Relationships [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Intangible assets | ' | 57 | 57 |
Amortized period | ' | ' | '17 years |
NHUMO [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Percentage acquisition | 60.00% | ' | ' |
Ownership percentage prior to acquisition | 40.00% | ' | ' |
Cash paid on acquisition | 80 | ' | 80 |
Preferred stock redemption amount | 25 | 28 | 28 |
Dividend percentage of preferred stock | 6.00% | ' | ' |
Preferred stock issued on acquisition | 25 | ' | ' |
Purchase price allocation adjustments | ' | ' | ' |
Dividend received from NHUMO | 14 | ' | ' |
Gain on acquisition | ' | ' | 29 |
Previously held equity interest in NHUMO | ' | ' | $54 |
Acquisition_of_NHUMO_Allocatio
Acquisition of NHUMO - Allocation of Purchase Price (Detail) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 | Nov. 30, 2013 | Mar. 31, 2014 |
In Millions, unless otherwise specified | NHUMO [Member] | NHUMO [Member] | ||
Assets | ' | ' | ' | ' |
Cash | ' | ' | ' | $7 |
Accounts receivable | ' | ' | ' | 33 |
Inventories | ' | ' | ' | 14 |
Property, plant and equipment | ' | ' | ' | 48 |
Other non-current assets | ' | ' | ' | 1 |
Intangible assets | ' | ' | ' | 57 |
Goodwill | 555 | 502 | ' | 51 |
Total assets acquired | ' | ' | ' | 211 |
Liabilities | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | -18 |
Deferred tax liabilities | ' | ' | ' | -31 |
Total liabilities assumed | ' | ' | ' | -49 |
Net assets acquired | ' | ' | ' | 162 |
Cash consideration paid | ' | ' | 80 | 80 |
Fair value of redeemable preferred stock | 29 | ' | 25 | 28 |
Previously held equity interest in NHUMO | ' | ' | ' | 54 |
Total | ' | ' | ' | $162 |
Discontinued_Operations_and_No2
Discontinued Operations and Notes Receivable from Sale of Business - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2012 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 07, 2014 |
GAM Notes [Member] | Subsequent Event [Member] | ||||
GAM Notes [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' |
Total consideration from sale of business | $452 | ' | ' | ' | ' |
Cash payment, transactions closes | 175 | ' | ' | ' | ' |
Notes receivable received on sale of discontinued operations | 277 | ' | ' | ' | ' |
GAM promissory notes and inventory note, final maturity date | '2014-03 | ' | ' | ' | ' |
Promissory note included in other asset section | ' | ' | ' | 215 | ' |
Cabot received final payment on GAM Notes | ' | 30 | ' | ' | 215 |
Approximate cash on sale of security materials business to SICPA | ' | ' | $20 | ' | ' |
Discontinued_Operations_and_No3
Discontinued Operations and Notes Receivable from Sale of Business - Components of Discontinued Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Discontinued Operations And Disposal Groups [Abstract] | ' | ' | ' | ' |
Net sales and other operating revenues | $2 | $2 | $3 | $3 |
Loss from operations before income taxes | -1 | -1 | -2 | -5 |
Benefit from income taxes | 1 | ' | 1 | 2 |
Loss from discontinued operations, net of tax | ' | ($1) | ($1) | ($3) |
Discontinued_Operations_and_No4
Discontinued Operations and Notes Receivable from Sale of Business - Summary of Assets Held for Sale (Detail) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Assets Held For Sale [Line Items] | ' | ' |
Current assets held for sale | $3 | $3 |
Noncurrent assets held for sale | 8 | 9 |
Inventories [Member] | ' | ' |
Assets Held For Sale [Line Items] | ' | ' |
Current assets held for sale | 3 | 3 |
Property, Plant and Equipment [Member] | ' | ' |
Assets Held For Sale [Line Items] | ' | ' |
Noncurrent assets held for sale | 4 | 5 |
Goodwill [Member] | ' | ' |
Assets Held For Sale [Line Items] | ' | ' |
Noncurrent assets held for sale | 2 | 2 |
Intangible Assets, Net [Member] | ' | ' |
Assets Held For Sale [Line Items] | ' | ' |
Noncurrent assets held for sale | $2 | $2 |
Employee_Benefit_Plans_Net_Per
Employee Benefit Plans - Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
U.S. Pension Benefits [Member] | ' | ' | ' | ' |
Employee Benefit Plans [Line Items] | ' | ' | ' | ' |
Service cost | ' | $2 | $1 | $3 |
Interest cost | 2 | 1 | 4 | 3 |
Expected return on plan assets | -2 | -2 | -5 | -5 |
Amortization of prior service credit | ' | ' | ' | ' |
Amortization of actuarial loss | ' | ' | ' | 1 |
Net periodic benefit cost | ' | 1 | ' | 2 |
Foreign Pension Benefits [Member] | ' | ' | ' | ' |
Employee Benefit Plans [Line Items] | ' | ' | ' | ' |
Service cost | 3 | 3 | 5 | 5 |
Interest cost | 4 | 3 | 8 | 7 |
Expected return on plan assets | -5 | -4 | -10 | -9 |
Amortization of prior service credit | ' | ' | ' | ' |
Amortization of actuarial loss | 1 | 1 | 2 | 2 |
Net periodic benefit cost | 3 | 3 | 5 | 5 |
U. S. Postretirement Benefits [Member] | ' | ' | ' | ' |
Employee Benefit Plans [Line Items] | ' | ' | ' | ' |
Service cost | ' | ' | ' | ' |
Interest cost | ' | ' | 1 | 1 |
Expected return on plan assets | ' | ' | ' | ' |
Amortization of prior service credit | ' | -1 | -1 | -2 |
Amortization of actuarial loss | ' | ' | ' | ' |
Net periodic benefit cost | ' | -1 | ' | -1 |
Foreign Postretirement Benefits [Member] | ' | ' | ' | ' |
Employee Benefit Plans [Line Items] | ' | ' | ' | ' |
Service cost | ' | ' | ' | ' |
Interest cost | ' | ' | ' | ' |
Expected return on plan assets | ' | ' | ' | ' |
Amortization of prior service credit | ' | ' | ' | ' |
Amortization of actuarial loss | ' | ' | ' | ' |
Net periodic benefit cost | ' | ' | ' | ' |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
In Millions, unless otherwise specified | 31-May-13 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2013 |
Cost of Sales and Selling and Administrative Expenses [Member] | Cost of Sales and Selling and Administrative Expenses [Member] | Cost of Sales and Selling and Administrative Expenses [Member] | Cost of Sales and Selling and Administrative Expenses [Member] | Minimum [Member] | Maximum [Member] | Weighted Average [Member] | Advanced Technologies [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | ' | $555 | $502 | ' | ' | ' | ' | ' | ' | ' | $2 |
Goodwill annual impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net intangible assets | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life of intangible assets | ' | ' | ' | ' | ' | ' | ' | '6 years | '20 years | '19 years | ' |
Amortization of intangible assets | ' | ' | ' | 5 | 3 | 9 | 6 | ' | ' | ' | ' |
Amortization expense estimated for year one | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense estimated for year two | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense estimated for year three | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense estimated for year four | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense estimated for year five | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset impairment charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill Balances (Detail) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Goodwill And Other Intangible Asset [Line Items] | ' |
Beginning balance | $502 |
Goodwill acquired | 51 |
Foreign currency impact | 2 |
Ending balance | 555 |
Reinforcement Materials [Member] | ' |
Goodwill And Other Intangible Asset [Line Items] | ' |
Beginning balance | 25 |
Goodwill acquired | 51 |
Foreign currency impact | -1 |
Ending balance | 75 |
Performance Materials [Member] | ' |
Goodwill And Other Intangible Asset [Line Items] | ' |
Beginning balance | 11 |
Goodwill acquired | ' |
Foreign currency impact | ' |
Ending balance | 11 |
Purification Solutions [Member] | ' |
Goodwill And Other Intangible Asset [Line Items] | ' |
Beginning balance | 466 |
Goodwill acquired | ' |
Foreign currency impact | 3 |
Ending balance | $469 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Detail) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
Goodwill And Other Intangible Assets [Line Items] | ' | ' |
Gross Carrying Value, finite lives | $326 | $267 |
Gross Carrying Value | 383 | 324 |
Accumulated Amortization | -25 | -16 |
Net Intangible Assets, finite lives | 301 | 251 |
Net Intangible Assets | 358 | 308 |
Trademarks, Indefinite Lives [Member] | ' | ' |
Goodwill And Other Intangible Assets [Line Items] | ' | ' |
Net Intangible Assets, Trademarks, indefinite lives | 57 | 57 |
Developed Technology [Member] | ' | ' |
Goodwill And Other Intangible Assets [Line Items] | ' | ' |
Gross Carrying Value, finite lives | 156 | 154 |
Accumulated Amortization | -13 | -9 |
Net Intangible Assets, finite lives | 143 | 145 |
Customer Relationships [Member] | ' | ' |
Goodwill And Other Intangible Assets [Line Items] | ' | ' |
Gross Carrying Value, finite lives | 170 | 113 |
Accumulated Amortization | -12 | -7 |
Net Intangible Assets, finite lives | $158 | $106 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 6 Months Ended | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2007 |
Equity [Abstract] | ' | ' | ' |
Repurchase authorization, shares | 379 | 379 | 10,000,000 |
Shares remaining available for repurchase under the current authorization | 1,600,000 | ' | ' |
Cash dividends paid to common stockholders | $26 | $26 | ' |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Activity in Noncontrolling Interests (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Equity [Abstract] | ' | ' | ' | ' |
Balance at September 30 | ' | ' | $132 | $126 |
Net income attributable to noncontrolling interests | 3 | -4 | 9 | ' |
Noncontrolling interest foreign currency translation adjustment | -1 | -1 | -2 | ' |
Contribution from noncontrolling interests | ' | ' | ' | 9 |
Noncontrolling interest dividends | ' | ' | -20 | -13 |
Balance at March 31 | $119 | $122 | $119 | $122 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income - Changes in Each Component of Accumulated Other Comprehensive Income, Net of Tax (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' |
Balance at September 30, 2013, attributable to Cabot Corporation | ' | ' | $103 | ' | ' |
Other comprehensive loss before reclassifications | ' | ' | -29 | ' | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | 1 | ' | ' |
Other comprehensive loss | -7 | -33 | -28 | -18 | ' |
Balance at March 31, 2014 | 77 | ' | 77 | ' | 103 |
Less: Noncontrolling interest | ' | ' | -2 | ' | ' |
Balance at March 31, 2014, attributable to Cabot Corporation | 77 | ' | 77 | ' | ' |
Currency Translation Adjustment [Member] | ' | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' |
Balance at September 30, 2013, attributable to Cabot Corporation | ' | ' | 154 | ' | ' |
Other comprehensive loss before reclassifications | ' | ' | -29 | ' | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | ' | ' | ' |
Other comprehensive loss | ' | ' | -29 | ' | ' |
Balance at March 31, 2014 | 125 | ' | 125 | ' | ' |
Less: Noncontrolling interest | ' | ' | -2 | ' | ' |
Balance at March 31, 2014, attributable to Cabot Corporation | 127 | ' | 127 | ' | ' |
Unrealized Gains on Investments [Member] | ' | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' |
Balance at September 30, 2013, attributable to Cabot Corporation | ' | ' | 2 | ' | ' |
Other comprehensive loss before reclassifications | ' | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | ' | ' | ' |
Other comprehensive loss | ' | ' | ' | ' | ' |
Balance at March 31, 2014 | 2 | ' | 2 | ' | ' |
Less: Noncontrolling interest | ' | ' | ' | ' | ' |
Balance at March 31, 2014, attributable to Cabot Corporation | 2 | ' | 2 | ' | ' |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ' | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' |
Balance at September 30, 2013, attributable to Cabot Corporation | ' | ' | -53 | ' | ' |
Other comprehensive loss before reclassifications | ' | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive income | ' | ' | 1 | ' | ' |
Other comprehensive loss | ' | ' | 1 | ' | ' |
Balance at March 31, 2014 | -52 | ' | -52 | ' | ' |
Less: Noncontrolling interest | ' | ' | ' | ' | ' |
Balance at March 31, 2014, attributable to Cabot Corporation | ($52) | ' | ($52) | ' | ' |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income - Amounts Reclassified Out of Accumulated Other Comprehensive Income (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Total before tax | $48 | [1] | $37 | [1] | $157 | [1] | $80 | [1] |
Tax impact | -7 | -16 | -31 | -36 | ||||
Income from continuing operations | 39 | 24 | 126 | 50 | ||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Total before tax | ' | ' | 1 | 1 | ||||
Tax impact | ' | ' | ' | ' | ||||
Income from continuing operations | ' | ' | 1 | 1 | ||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pension and Other Postretirement Benefit Liability Adjustment [Member] | ' | ' | ' | ' | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' | ||||
Amortization of actuarial losses | ' | ' | 2 | 3 | ||||
Amortization of prior service cost | ' | ' | ($1) | ($2) | ||||
[1] | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes |
Commitments_and_Contingencies_1
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Long-term Purchase Commitment [Line Items] | ' |
Payments Due by Remainder of Fiscal Year 2014 | $241 |
Payments Due by Fiscal Year 2015 | 378 |
Payments Due by Fiscal Year 2016 | 343 |
Payments Due by Fiscal Year 2017 | 226 |
Payments Due by Fiscal Year 2018 | 218 |
Payments Due Thereafter | 3,047 |
Payments Due, Total | 4,453 |
Reinforcement Materials [Member] | ' |
Long-term Purchase Commitment [Line Items] | ' |
Payments Due by Remainder of Fiscal Year 2014 | 202 |
Payments Due by Fiscal Year 2015 | 321 |
Payments Due by Fiscal Year 2016 | 300 |
Payments Due by Fiscal Year 2017 | 186 |
Payments Due by Fiscal Year 2018 | 178 |
Payments Due Thereafter | 2,795 |
Payments Due, Total | 3,982 |
Performance Materials [Member] | ' |
Long-term Purchase Commitment [Line Items] | ' |
Payments Due by Remainder of Fiscal Year 2014 | 23 |
Payments Due by Fiscal Year 2015 | 39 |
Payments Due by Fiscal Year 2016 | 33 |
Payments Due by Fiscal Year 2017 | 30 |
Payments Due by Fiscal Year 2018 | 30 |
Payments Due Thereafter | 236 |
Payments Due, Total | 391 |
Advanced Technologies [Member] | ' |
Long-term Purchase Commitment [Line Items] | ' |
Payments Due by Remainder of Fiscal Year 2014 | 1 |
Payments Due by Fiscal Year 2015 | 2 |
Payments Due by Fiscal Year 2016 | 1 |
Payments Due by Fiscal Year 2017 | 1 |
Payments Due by Fiscal Year 2018 | 1 |
Payments Due Thereafter | ' |
Payments Due, Total | 6 |
Purification Solutions [Member] | ' |
Long-term Purchase Commitment [Line Items] | ' |
Payments Due by Remainder of Fiscal Year 2014 | 15 |
Payments Due by Fiscal Year 2015 | 16 |
Payments Due by Fiscal Year 2016 | 9 |
Payments Due by Fiscal Year 2017 | 9 |
Payments Due by Fiscal Year 2018 | 9 |
Payments Due Thereafter | 16 |
Payments Due, Total | $74 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Additional Information (Detail) (USD $) | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 |
claimants | claimants | ||
Respirator Liabilities [Member] | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' |
Number of claimants | 41,000 | ' | 42,000 |
Respirator reserve on discounted basis | $9 | ' | $11 |
Respirator reserve on undiscounted basis | 13 | ' | 15 |
Cash payments for respirator reserves | 2 | 1 | ' |
Environmental Matters [Member] | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' |
Reserve for environmental matters on an undiscounted basis | 17 | ' | 5 |
Liability | 13 | ' | ' |
Cash payments for environmental reserves | $1 | $1 | ' |
Income_Tax_Uncertainties_Addit
Income Tax Uncertainties - Additional Information (Detail) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Income Tax [Line Items] | ' |
Unrecognized tax benefits | 6 |
Prepaid taxes recoverable from Canadian government | 16 |
Internal Revenue Service (IRS) [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination, Description | '2007 through 2013 tax years remain subject to examination by the IRS |
State Tax Authorities [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination, Description | '2005 through 2013 remain subject to examination by the respective state tax authorities |
Non-U.S. Jurisdictions [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination, Description | '2001 through 2013 remain subject to examination by their respective tax authorities |
Minimum [Member] | Internal Revenue Service (IRS) [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2007 |
Minimum [Member] | State Tax Authorities [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2005 |
Minimum [Member] | Non-U.S. Jurisdictions [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2001 |
Maximum [Member] | Internal Revenue Service (IRS) [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2013 |
Maximum [Member] | State Tax Authorities [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2013 |
Maximum [Member] | Non-U.S. Jurisdictions [Member] | ' |
Income Tax [Line Items] | ' |
Tax years remain subject to examination | '2013 |
Earnings_Per_Share_Components_
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Basic EPS: | ' | ' | ' | ' |
Net income attributable to Cabot Corporation | $36 | $27 | $116 | $47 |
Less: Dividends and dividend equivalents to participating securities | ' | ' | ' | ' |
Less: Undistributed earnings allocated to participating securities | ' | ' | 1 | ' |
Earnings allocated to common shareholders (numerator) | 36 | 27 | 115 | 47 |
Weighted average common shares and participating securities outstanding | 65 | 64.3 | 64.8 | 64.2 |
Less: Participating securities | 0.6 | 0.6 | 0.6 | 0.6 |
Adjusted weighted average common shares (denominator) | 64.4 | 63.7 | 64.2 | 63.6 |
Income from continuing operations attributable to Cabot Corporation | $0.56 | $0.44 | $1.81 | $0.79 |
Loss from discontinued operations | ($0.01) | ($0.01) | ($0.02) | ($0.05) |
Net income attributable to Cabot Corporation | $0.55 | $0.43 | $1.79 | $0.74 |
Diluted EPS: | ' | ' | ' | ' |
Earnings allocated to common shareholders | 36 | 27 | 115 | 47 |
Plus: Earnings allocated to participating securities | ' | ' | 1 | ' |
Less: Adjusted earnings allocated to participating securities | ' | ' | -1 | ' |
Earnings allocated to common shareholders (numerator) | $36 | $27 | $115 | $47 |
Adjusted weighted average common shares outstanding | 64.4 | 63.7 | 64.2 | 63.6 |
Common shares issuable | 0.7 | 0.7 | 0.8 | 0.7 |
Adjusted weighted average common shares (denominator) | 65.1 | 64.4 | 65 | 64.3 |
Income from continuing operations attributable to Cabot Corporation | $0.55 | $0.43 | $1.79 | $0.78 |
Loss from discontinued operations | ($0.01) | ($0.01) | ($0.02) | ($0.05) |
Net income attributable to Cabot Corporation | $0.54 | $0.42 | $1.77 | $0.73 |
Earnings_Per_Share_Calculation
Earnings Per Share - Calculation of Undistributed Earnings (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net income attributable to Cabot Corporation | $36 | $27 | $116 | $47 |
Less: Dividends declared on common stock | 13 | 13 | 26 | 26 |
Less: Dividends declared on participating securities | ' | ' | ' | ' |
Undistributed earnings | 23 | 14 | 90 | 21 |
Undistributed earnings allocated to common shareholders | 23 | 14 | 89 | 21 |
Undistributed earnings allocated to participating shareholders | ' | ' | $1 | ' |
Earnings_Per_Share_Calculation1
Earnings Per Share - Calculation of Undistributed Earnings (Parenthetical) (Detail) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Incremental shares of common stock | 203,019 | 308,000 | 220,866 | 418,000 |
Restructuring_Recorded_Restruc
Restructuring - Recorded Restructuring Activities (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring reserve, period expense | $16 | $19 | $21 | $24 |
Cost of Sales [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring reserve, period expense | 5 | 18 | 9 | 21 |
Selling and Administrative Expenses [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring reserve, period expense | $11 | $1 | $12 | $3 |
Restructuring_Restructuring_Ac
Restructuring - Restructuring Activities and Related Reserves (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | $8 | ' | $10 | ' |
Charges | 16 | 19 | 21 | 24 |
Costs charged against assets / liabilities | ' | ' | -3 | ' |
Cash paid | -4 | ' | -8 | ' |
Reserve balance | 20 | ' | 20 | ' |
Severance and Employee Benefits [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | 4 | ' | 7 | ' |
Charges | 13 | ' | 14 | ' |
Costs charged against assets / liabilities | ' | ' | ' | ' |
Cash paid | -1 | ' | -5 | ' |
Reserve balance | 16 | ' | 16 | ' |
Environmental Remediation [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | 2 | ' | 2 | ' |
Charges | 1 | ' | 1 | ' |
Costs charged against assets / liabilities | ' | ' | ' | ' |
Cash paid | -1 | ' | -1 | ' |
Reserve balance | 2 | ' | 2 | ' |
Asset Sales [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | ' | ' | ' | ' |
Charges | 1 | ' | ' | ' |
Cash paid | -1 | ' | ' | ' |
Reserve balance | ' | ' | ' | ' |
Other [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | 2 | ' | 1 | ' |
Charges | 1 | ' | 3 | ' |
Costs charged against assets / liabilities | ' | ' | ' | ' |
Cash paid | -1 | ' | -2 | ' |
Reserve balance | 2 | ' | 2 | ' |
Asset Impairment and Accelerated Depreciation [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Reserve balance | ' | ' | ' | ' |
Charges | ' | ' | 3 | ' |
Costs charged against assets / liabilities | ' | ' | -3 | ' |
Cash paid | ' | ' | ' | ' |
Reserve balance | ' | ' | ' | ' |
Restructuring_Additional_Infor
Restructuring - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2009 | Apr. 26, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
Environmental Remediation [Member] | Environmental Remediation [Member] | Environmental Remediation [Member] | Environmental Remediation [Member] | Severance and Employee Benefits [Member] | Severance and Employee Benefits [Member] | Severance and Employee Benefits [Member] | Severance and Employee Benefits [Member] | Previous Actions and Sites Pending Sale [Member] | Previous Actions and Sites Pending Sale [Member] | Previous Actions and Sites Pending Sale [Member] | Previous Actions and Sites Pending Sale [Member] | Previous Actions and Sites Pending Sale [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Closure of Port Dickson [Member] | Restructuring Activities Other [Member] | Restructuring Activities Other [Member] | Restructuring Activities Other [Member] | Restructuring Activities Other [Member] | Restructuring Activities Other [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | Shared Service Center Transition [Member] | |||||||
Employees | Environmental Remediation [Member] | Severance and Employee Benefits [Member] | Other Closure Charges [Member] | Severance Costs [Member] | Scenario, Forecast [Member] | Severance Costs [Member] | Severance Costs [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Scenario, Forecast [Member] | Remainder of Fiscal 2015 [Member] | Remainder of Fiscal 2015 [Member] | |||||||||||||||||||||||||||
Severance Costs [Member] | Severance Costs [Member] | Minimum [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-tax charge to earnings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $163 | ' | ' | ' | $1 | $16 | $2 | $16 | ' | ' | ' | ' | $23 | ' | ' | ' | ' | ' | $14 | ' | $22 | $26 | $7 | $14 | $18 |
Cash payments | 4 | ' | 8 | ' | ' | ' | 1 | 1 | ' | ' | 1 | 5 | ' | ' | ' | ' | ' | ' | 84 | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | 15 | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Restructuring costs in accrued expenses | 20 | ' | 20 | ' | 8 | 10 | 2 | 2 | 2 | 2 | 16 | 16 | 4 | 7 | 4 | ' | 4 | ' | ' | ' | 1 | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13 | 13 | ' | ' | ' | ' | ' |
Equity share in CMSB | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Affected employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring charges | 16 | 19 | 21 | 24 | ' | ' | 1 | 1 | ' | ' | 13 | 14 | ' | ' | 1 | 1 | 1 | 2 | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' | ' | ' | 4 | 6 | 1 | 2 | ' | ' | ' | ' | ' | ' | ' |
Accelerated depreciation and asset write-offs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Severance charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of the charges that are allocable to the noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49.00% | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Site demolition, clearing and environmental remediation costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22 | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring accelerated depreciation and asset impairments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected cumulative net cash outlays related to plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | 8 | ' | 5 | 2 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected cash outlays remainder fiscal year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | 5 | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional charges during fiscal 2014 and thereafter | 4 | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued severance charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on sale of assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measurements - Additional Information (Detail) (USD $) | 6 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 |
Fixed Rate Debt [Member] | Fixed Rate Debt [Member] | Significant Observable Inputs (Level 2) [Member] | Significant Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Fair value, liabilities, Level 2 to Level 1 transfers, amount | $0 | $0 | ' | ' | ' | ' |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, assets, transfers into Level 3, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, assets, transfers out of Level 3, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, liabilities, transfers into Level 3, amount | 0 | 0 | ' | ' | ' | ' |
Fair value, liabilities, transfers out of Level 3, amount | 0 | 0 | ' | ' | ' | ' |
Notes receivable from sale of business | 215 | ' | ' | ' | ' | ' |
Other assets in the Consolidated Balance Sheets | ' | ' | ' | ' | 15 | 14 |
Carrying value of long-term debt | ' | ' | 958 | 971 | ' | ' |
Fair value of long-term debt | ' | ' | $1,010 | $1,010 | ' | ' |
Derivatives_Additional_Informa
Derivatives - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2013 |
Forward Foreign Currency Contracts [Member] | Forward Foreign Currency Contracts [Member] | Forward Foreign Currency Contracts [Member] | Forward Foreign Currency Contracts [Member] | Currency Swaps [Member] | Currency Swaps [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | ||||
Interest Rate Swap-Fixed to Variable [Member] | Interest Rate Swap-Fixed to Variable [Member] | ||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivatives held to manage interest rate risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 |
Derivatives designated as hedges | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | ' | ' | ' | -2 | 3 | -4 | 9 | 7 | 3 | ' | ' |
Gain (loss) on foreign currency derivatives recorded in earnings | 6 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bond held by one of Cabot's European subsidiaries | $175 | $175 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivatives_Schedule_of_Deriva
Derivatives - Schedule of Derivatives Foreign Currency (Detail) (Not Designated as Hedging Instrument [Member], Forward Foreign Currency Contracts [Member], USD $) | Mar. 31, 2014 | Sep. 30, 2013 | ||
In Millions, unless otherwise specified | ||||
Not Designated as Hedging Instrument [Member] | Forward Foreign Currency Contracts [Member] | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Notional amount of forward foreign currency contract no designation hedge derivatives | $41 | [1] | $31 | [1] |
[1] | Cabot's forward foreign exchange contracts are denominated primarily in the Brazilian real, British pound sterling, Chinese renminbi, Czech koruna, and Indian rupee. |
Venezuela_Additional_Informati
Venezuela - Additional Information (Detail) | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
USD ($) | USD ($) | VEF | Certain Item [Member] | Certain Item [Member] | Certain Item [Member] | SICAD 2 Currency Exchange Mechanism [Member] | Operating Affiliate, Venezuela [Member] | Operating Affiliate [Member] | Operating Affiliate [Member] | |
USD ($) | USD ($) | USD ($) | VEF | USD ($) | USD ($) | |||||
Nature Of Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | ' | ' | 49.00% | ' | ' |
Operating affiliate investment | $20 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due from affiliates, dividends cash | 1 | ' | 20 | ' | ' | ' | ' | ' | ' | ' |
Cash dividends received from subsidiary | 4 | 2 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of bolivars to per USD | ' | ' | 6.3 | ' | ' | ' | 50.8 | ' | ' | ' |
Currency denomination, remeasurement loss | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' |
Loss included in earnings of affiliated companies | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Tax benefit due to reduction of deferred tax liability | -3 | 7 | ' | ' | ' | ' | ' | ' | ' | 2 |
Foreign currency exchange rate, re measurement income (loss) | ' | ' | ' | ($6) | $1 | $1 | ' | ' | ' | ' |
Financial_Information_by_Segme2
Financial Information by Segment - Additional Information (Detail) | 6 Months Ended |
Mar. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Number of reportable segment | 4 |
Number of operating segments | 4 |
Performance Materials [Member] | ' |
Segment Reporting Information [Line Items] | ' |
Number of business activity | 2 |
Financial_Information_by_Segme3
Financial Information by Segment - Financial Information by Reportable Segment (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | $898 | [1] | $840 | [1] | $1,796 | [1] | $1,659 | [1] |
Income (loss) from continuing operations before taxes | 48 | [2] | 37 | [2] | 157 | [2] | 80 | [2] |
Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 881 | [1] | 816 | [1] | 1,751 | [1] | 1,612 | [1] |
Income (loss) from continuing operations before taxes | 116 | [2] | 87 | [2] | 230 | [2] | 177 | [2] |
Unallocated and Other [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 17 | [1],[3] | 24 | [1],[3] | 45 | [1],[3] | 47 | [1],[3] |
Income (loss) from continuing operations before taxes | -68 | [2],[3] | -50 | [2],[3] | -73 | [2],[3] | -97 | [2],[3] |
Reinforcement Materials [Member] | Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 504 | [1] | 459 | [1] | 1,021 | [1] | 934 | [1] |
Income (loss) from continuing operations before taxes | 61 | [2] | 42 | [2] | 125 | [2] | 92 | [2] |
Performance Materials [Member] | Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 249 | [1] | 243 | [1] | 466 | [1] | 439 | [1] |
Income (loss) from continuing operations before taxes | 47 | [2] | 37 | [2] | 81 | [2] | 64 | [2] |
Advanced Technologies [Member] | Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 48 | [1] | 39 | [1] | 112 | [1] | 76 | [1] |
Income (loss) from continuing operations before taxes | 12 | [2] | 8 | [2] | 37 | [2] | 16 | [2] |
Purification Solutions [Member] | Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues from external customers | 80 | [1] | 75 | [1] | 152 | [1] | 163 | [1] |
Income (loss) from continuing operations before taxes | ($4) | [2] | ' | ($13) | [2] | $5 | [2] | |
[1] | Unallocated and Other reflects royalties, other operating revenues, external shipping and handling costs, 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: | |||||||
[2] | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes | |||||||
[3] | 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 Chief Operating Decision Maker. |
Financial_Information_by_Segme4
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Segment Reporting [Abstract] | ' | ' | ' | ' |
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial_Information_by_Segme5
Financial Information by Segment - Royalties Paid by Equity Affiliates, External Shipping and Handling Fees, and the Impact of Corporate Adjustment for Unearned Revenue and Notes Receivable Reflected by Unallocated and Other (Detail) (Unallocated and Other [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $17 | $24 | $45 | $47 |
Royalties, Other Operating Revenues, the Impact of Unearned Revenue, the Removal of 100% of the Sales of an Equity Method Affiliate and Discounting Charges for Certain Notes Receivable [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | -12 | ' | -12 | -3 |
Shipping and Handling Costs [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $29 | $24 | $57 | $50 |
Financial_Information_by_Segme6
Financial Information by Segment - Royalties Paid by Equity Affiliates, External Shipping and Handling Fees, and the Impact of Corporate Adjustment for Unearned Revenue and Notes Receivable Reflected by Unallocated and Other (Parenthetical) (Detail) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Segment Reporting [Abstract] | ' | ' | ' | ' |
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial_Information_by_Segme7
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Interest expense | ($13) | ($16) | ($27) | ($32) | ||||
Equity in earnings of affiliated companies, net of tax | -2 | 3 | ' | 6 | ||||
Income from continuing operations before income taxes and equity in earnings of affiliated companies | 48 | [1] | 37 | [1] | 157 | [1] | 80 | [1] |
Unallocated and Other [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Interest expense | -13 | -16 | -27 | -32 | ||||
Total certain items, pre-tax | -36 | [2] | -20 | [2] | -12 | [2] | -39 | [2] |
Equity in earnings of affiliated companies, net of tax | ' | -3 | [3] | -2 | [3] | -6 | [3] | |
Unallocated corporate costs | -16 | [4] | -13 | [4] | -29 | [4] | -25 | [4] |
General unallocated (expense) income | -3 | [5] | 2 | [5] | -3 | [5] | 5 | [5] |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | ($68) | [1],[6] | ($50) | [1],[6] | ($73) | [1],[6] | ($97) | [1],[6] |
[1] | Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes | |||||||
[2] | Certain items are items that management does not consider to be representative of operating segment results and they are, therefore, excluded from Segment EBIT. Certain items, pre-tax, for the three months ended March 31, 2014 include $16 million related to global restructuring activities, $6 million of foreign currency loss on revaluations and $14 million related to legal and environmental matters and reserves. Certain items, pre-tax, for the six months ended March 31, 2014 include $21 million related to global restructuring activities, $5 million for acquisition and integration-related charges (consisting of $3 million for certain other one-time integration costs and $2 million of additional charges related to acquisition accounting adjustments for the acquired inventory of NHUMO) and $15 million for legal and environmental matters and reserves offset by a $29 million non-cash gain recognized on the Company's pre-existing investment in NHUMO as a result of the NHUMO transaction. Certain items, pre-tax, for the three months ended March 31, 2013 include $19 million related to global restructuring activities and $2 million for acquisition and integration-related charges offset by $1 million of foreign currency gain on revaluation. Certain items, pre-tax, for the six months ended March 31, 2013 include $24 million related to global restructuring activities and $16 million for acquisition and integration-related charges (consisting of $5 million for certain other one-time integration costs and $11 million of charges related to acquisition accounting adjustments for the acquired inventory) offset by $1 million of foreign currency gain on revaluation. | |||||||
[3] | Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from continuing operations before taxes. | |||||||
[4] | Unallocated corporate costs are not controlled by the operating segments and primarily benefit corporate interests. | |||||||
[5] | General unallocated (expense) income consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. | |||||||
[6] | 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 Chief Operating Decision Maker. |
Financial_Information_by_Segme8
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Parenthetical) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Restructuring charges | $16 | $19 | $21 | $24 |
Acquisition costs | ' | ' | 1 | ' |
Certain Item [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Restructuring charges | 16 | 19 | 21 | 24 |
Acquisition costs | ' | 2 | 5 | 16 |
One-time integration costs | ' | ' | 3 | 5 |
Acquisition of accounting adjustments for acquired inventory | ' | ' | 2 | 11 |
Foreign currency exchange rate, re measurement income (loss) | -6 | 1 | ' | 1 |
Reserve for legal and environmental matters | 14 | ' | 15 | ' |
Non-cash gain on acquisition | $29 | ' | $29 | ' |
Financial_Information_by_Segme9
Financial Information by Segment - Schedule of Performance Segment (Detail) (Performance Materials [Member], Operating Segments [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $249 | $243 | $466 | $439 |
Specialty Carbons and Compounds [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 172 | 173 | 320 | 305 |
Fumed Metal Oxides [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $77 | $70 | $146 | $134 |
Recovered_Sheet1
Financial Information by Segment - Schedule of Advanced Technologies Business Segment (Detail) (Operating Segments [Member], Advanced Technologies [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $48 | $39 | $112 | $76 |
Inkjet Colorants [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 14 | 12 | 29 | 28 |
Aerogel [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 1 | 3 | 6 | 8 |
Elastomer Composites [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 8 | 4 | 24 | 12 |
Specialty Fluids [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $25 | $20 | $53 | $28 |