Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CBT | |
Entity Registrant Name | CABOT CORP | |
Entity Central Index Key | 16,040 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,914,994 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net sales and other operating revenues | $ 694 | $ 940 | $ 2,200 | $ 2,736 |
Cost of sales | 544 | 756 | 1,754 | 2,197 |
Gross profit | 150 | 184 | 446 | 539 |
Selling and administrative expenses | 67 | 76 | 216 | 245 |
Research and technical expenses | 15 | 15 | 44 | 46 |
Income from operations | 68 | 93 | 186 | 248 |
Interest and dividend income | 1 | 1 | 3 | 3 |
Interest expense | (13) | (14) | (40) | (41) |
Other (expense) income | (3) | (6) | 27 | |
Long-lived assets impairment charge (Note F) | (209) | (209) | (4) | |
Goodwill impairment charge (Note F) | (353) | (353) | ||
(Loss) income from continuing operations | (509) | 80 | (419) | 237 |
Benefit (provision) for income taxes | 64 | (20) | 47 | (51) |
Equity in earnings (loss) of affiliated companies, net of tax | 1 | (2) | 4 | (2) |
(Loss) income from continuing operations | (444) | 58 | (368) | 184 |
Income (loss) from discontinued operations, net of tax | 1 | (1) | 1 | (2) |
Net (loss) income | (443) | 57 | (367) | 182 |
Net income attributable to noncontrolling interests, net of tax | 2 | 5 | 7 | 14 |
Net (loss) income attributable to Cabot Corporation | $ (445) | $ 52 | $ (374) | $ 168 |
Weighted-average common shares outstanding, in millions: | ||||
Basic | 63.3 | 64.5 | 63.7 | 64.3 |
Diluted | 63.3 | 65.2 | 63.7 | 65 |
Basic: | ||||
(Loss) income from continuing operations attributable to Cabot Corporation | $ (7.05) | $ 0.80 | $ (5.89) | $ 2.61 |
Income (loss) from discontinued operations | 0.01 | (0.01) | 0.01 | (0.03) |
Net (loss) income attributable to Cabot Corporation | (7.04) | 0.79 | (5.88) | 2.58 |
Diluted: | ||||
(Loss) income from continuing operations attributable to Cabot Corporation | (7.05) | 0.79 | (5.89) | 2.58 |
Income (loss) from discontinued operations | 0.01 | (0.01) | 0.01 | (0.03) |
Net (loss) income attributable to Cabot Corporation | (7.04) | 0.78 | (5.88) | 2.55 |
Dividends per common share | $ 0.22 | $ 0.22 | $ 0.66 | $ 0.62 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||||
Net (loss) income | $ (443) | $ 57 | $ (367) | $ 182 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment (net of tax provision of $-, $-, $1 and $1) | 18 | 11 | (216) | (18) |
Unrealized holding gains arising during the period (net of tax provision of $-, $1, $- and $-) | 2 | 2 | ||
Pension and other postretirement benefit liability adjustments | ||||
Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision of $-, $-, $6 and $-) | 21 | |||
Amortization of net loss and prior service credit included in net periodic pension cost (net of tax benefit of less than $1 million in all periods) | 1 | 1 | ||
Other comprehensive income (loss) | 18 | 13 | (194) | (15) |
Comprehensive (loss) income | (425) | 70 | (561) | 167 |
Net income attributable to noncontrolling interests | 2 | 5 | 7 | 14 |
Noncontrolling interests foreign currency translation adjustment, net of tax | (3) | (2) | ||
Comprehensive income attributable to noncontrolling interests, net of tax | 2 | 5 | 4 | 12 |
Comprehensive (loss) income attributable to Cabot Corporation | $ (427) | $ 65 | $ (565) | $ 155 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||||
Foreign currency translation adjustment, tax provision (benefit) | $ 1 | $ 1 | ||
Unrealized holding gains (losses) arising during the period, tax provision | $ 1 | |||
Pension and other postretirement benefit liability adjustments arising during the period, tax provision (benefit) | 6 | |||
Amortization of net loss and prior service credit included in net periodic pension cost , tax provision | $ 1 | $ 1 | $ 1 | $ 1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 84 | $ 67 |
Accounts and notes receivable, net of reserve for doubtful accounts of $8 and $7 | 563 | 688 |
Inventories: | ||
Raw materials | 88 | 111 |
Work in process | 4 | 2 |
Finished goods | 298 | 341 |
Other | 42 | 44 |
Total inventories | 432 | 498 |
Prepaid expenses and other current assets | 60 | 69 |
Deferred income taxes | 39 | 42 |
Total current assets | 1,178 | 1,364 |
Property, plant and equipment, net | 1,427 | 1,581 |
Goodwill | 157 | 536 |
Equity affiliates | 61 | 68 |
Intangible assets, net | 159 | 347 |
Assets held for rent | 68 | 56 |
Deferred income taxes | 137 | 80 |
Other assets | 49 | 52 |
Total assets | 3,236 | 4,084 |
Current liabilities: | ||
Notes payable | 152 | 44 |
Accounts payable and accrued liabilities | 387 | 512 |
Income taxes payable | 27 | 49 |
Deferred income taxes | 1 | 1 |
Current portion of long-term debt | 1 | 24 |
Total current liabilities | 568 | 630 |
Long-term debt | 971 | 1,004 |
Deferred income taxes | 52 | 68 |
Other liabilities | 249 | 291 |
Redeemable preferred stock | $ 28 | $ 27 |
Commitments and contingencies (Note J) | ||
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: 0 and 64,634,731 shares Outstanding: 0 and 64,382,366 shares | $ 63 | $ 64 |
Less cost of 247,816 and 252,365 shares of common treasury stock | (8) | (7) |
Additional paid-in capital | 49 | |
Retained earnings | 1,464 | 1,900 |
Accumulated other comprehensive loss | (255) | (64) |
Total Cabot Corporation stockholders' equity | 1,264 | 1,942 |
Noncontrolling interests | 104 | 122 |
Total stockholders' equity | 1,368 | 2,064 |
Total liabilities and stockholders’ equity | $ 3,236 | $ 4,084 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 8 | $ 7 |
Preferred stock, authorized shares | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, Outstanding shares | 0 | 0 |
Common stock, authorized shares | 200,000,000 | 200,000,000 |
Common stock, par value | $ 1 | $ 1 |
Common stock, issued shares | 63,162,812 | 64,634,731 |
Common stock, outstanding shares | 62,914,996 | 64,382,366 |
Common treasury stock, shares | 247,816 | 252,365 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ (367) | $ 182 |
Adjustments to reconcile net income to cash provided (used in) by operating activities: | ||
Depreciation and amortization | 140 | 150 |
Long-lived asset impairment charge | 209 | 4 |
Goodwill impairment charge | 353 | |
Deferred tax (benefit) provision | (75) | (16) |
Gain on step-acquisition | (29) | |
Employee benefit plan settlement | 18 | |
Equity in net (income) loss of affiliated companies | (4) | 2 |
Non-cash compensation | 9 | 11 |
Other non-cash (income) expense | (3) | 1 |
Changes in assets and liabilities: | ||
Accounts and notes receivable | 80 | (62) |
Inventories | 33 | (66) |
Prepaid expenses and other current assets | 4 | (20) |
Accounts payable and accrued liabilities | (84) | |
Income taxes payable | (22) | 2 |
Other liabilities | (27) | 4 |
Cash dividends received from equity affiliates | 10 | 22 |
Other | 4 | |
Cash provided by operating activities | 278 | 185 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (103) | (115) |
Proceeds from notes receivable from sales of business | 215 | |
Change in assets held for rent | (8) | (5) |
Cash paid for acquisition of business, net of cash acquired of $7 | (73) | |
Cash (used in) provided by investing activities | (111) | 22 |
Cash Flows from Financing Activities: | ||
Borrowings under financing arrangements | 13 | |
Repayments under financing arrangements | (4) | (10) |
Increase (decrease) in notes payable, net | 1 | (11) |
Proceeds (repayments) from issuance of commercial paper, net | 111 | (138) |
Proceeds from long-term debt, net of issuance costs | 17 | |
Repayments of long-term debt | (57) | (7) |
Purchases of common stock | (85) | (6) |
Proceeds from sales of common stock | 6 | 13 |
Cash dividends paid to noncontrolling interests | (16) | (19) |
Cash dividends paid to common stockholders | (42) | (40) |
Cash used in financing activities | (86) | (188) |
Effects of exchange rate changes on cash | (64) | (13) |
Increase in cash and cash equivalents | 17 | 6 |
Cash and cash equivalents at beginning of period | 67 | 95 |
Cash and cash equivalents at end of period | $ 84 | $ 101 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) $ in Millions | 9 Months Ended |
Jun. 30, 2015USD ($) | |
Statement Of Cash Flows [Abstract] | |
Cash acquired in acquisition of business | $ 7 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2015 | |
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. 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, 2014 (“2014 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 June 30, 2015 and 2014. 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 former carbon black joint venture between the Company and KUO in Mexico, which represented approximately 60% of the outstanding common stock of NHUMO (the “NHUMO transaction”). Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. The financial position, results of operations and cash flows of NHUMO are included in the Company’s consolidated financial statements from the date of acquisition. In July 2014, the Company completed the sale of its Security Materials business. The Consolidated Statements of Operations and the notes to the consolidated financial statements for all periods presented exclude the Security Materials business. In December 2014, the Company realigned its business reporting structure into four segments that consist of Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. The new structure is aligned with senior management changes and it better leverages Cabot’s global activities across common customer applications, production, and research and development activities. Prior period segment results have been recast to reflect the realignment. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2015 | |
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. Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 Reinforcement Materials 52 % 60 % 55 % 59 % Performance Chemicals 35 % 29 % 33 % 29 % Purification Solutions 11 % 9 % 10 % 9 % Specialty Fluids 2 % 2 % 2 % 3 % Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Chemicals. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. Depending on the nature of the contract with the customer, a portion of the revenue may be recognized using proportional performance. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. 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 material off-balance sheet credit exposure related to customer receivable balances. Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to this segment is recorded in the Fumed Metal Oxides reporting unit within Performance Chemicals. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units sufficiently decline because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2015, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit was less than its carrying amount. Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. Definite-lived intangible assets, which are comprised of customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company evaluates indefinite-lived intangible assets, which are comprised of the trademarks of Purification Solutions, for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. Refer to Note F for details on the impairment test performed on intangible assets of the Purification Solutions reporting unit and the resulting impairment charges recorded. Effective in the third quarter of 2015 and as a part of the impairment assessment performed, the Company determined that the trademarks for Purification Solutions no longer have an indefinite life. Long-lived Assets Impairment The Company’s long-lived assets primarily include property, plant and equipment, intangible assets, long-term investments and assets held for rent. The carrying values of long-lived assets are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. To test for impairment of assets, the Company generally uses a probability-weighted estimate of the future undiscounted net cash flows of the assets over their remaining lives to determine if the value of the asset is recoverable. Long-lived assets are grouped with other assets and liabilities at the lowest level for which independent identifiable cash flows are determinable. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the analysis described above, in which case the asset is written down to its fair value. If the asset does not have a readily determinable market value, a discounted cash flow model may be used to determine the fair value of the asset. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. Refer to Note F regarding the results of the impairment test performed on the long-lived assets of the Purification Solutions segment. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is generally 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. 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 $37 million and $52 million higher as of June 30, 2015 and September 30, 2014, 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 (Loss) Income Accumulated other comprehensive (loss) 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. Recent Accounting Pronouncements In July 2013, the Financial Accounting Standards Board (“FASB”) issued a new standard related to the “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The standard requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit to be presented in the consolidated financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This standard is applicable for fiscal years beginning after December 15, 2013, and for interim periods within those years. The Company adopted this standard on October 1, 2014 and the implementation of the new standard did not have a material impact on its consolidated financial statements. In April 2014, the FASB issued a new standard related to “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The standard requires discontinued operations treatment for disposals of a component or group of components of a business that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results and requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This standard is applicable for fiscal years beginning after December 15, 2014 and for interim periods within those years and early adoption is permitted, but only for disposals that have not been reported in consolidated financial statements previously issued. The Company expects to adopt this standard beginning on October 1, 2015. In May 2014, the FASB issued a new standard related to the “Revenue from Contracts with Customers” which amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017 and for interim periods within those years and early adoption is permitted for the fiscal years beginning after December 15, 2016. The Company expects to adopt this standard on October 1, 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs by requiring debt issuance costs to be presented as a reduction of the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. The Company expects to adopt this standard on October 1, 2016. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Acquisition of NHUMO
Acquisition of NHUMO | 9 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition of NHUMO | C. Acquisition of NHUMO In November 2013, the Company purchased all of KUO’s common stock in the former NHUMO joint venture, which represented approximately 60% of the outstanding common stock of the joint venture. Prior to this transaction, the Company owned approximately 40% of the outstanding common stock of NHUMO, and the NHUMO entity was accounted for as an equity affiliate of the Company. At the close of the transaction, the Company paid KUO $80 million in cash and NHUMO issued redeemable preferred stock to KUO with a redemption value of $25 million. The preferred stock accumulates dividends at a fixed rate of 6% annually and is redeemable at the option of KUO or the Company for $25 million starting in November 2018 or upon the occurrence of certain other conditions. Annual payment by NHUMO of the dividends is contingent on NHUMO achieving a minimum EBITDA (earnings before interest, taxes, depreciation and amortization) level and if such minimum EBITDA is not achieved in any year, the dividend will be accumulated and paid at the time the preferred shares are redeemed. The minimum EBITDA was achieved in 2014 and a dividend payment of $1.5 million was made in December 2014. 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. As of September 2014, the Company completed the valuation of its assets acquired and liabilities assumed. The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed, and Cabot’s previously held equity interest in NHUMO as of the acquisition date. The following table presents the components and allocation of the purchase price: (Dollars in millions) Assets Current assets $ 54 Property, plant and equipment 48 Other non-current assets 1 Intangible assets 63 Goodwill 45 Total assets acquired 211 Liabilities Accounts payable, accruals and other liabilities (20 ) Deferred tax liabilities - long-term (29 ) Total liabilities assumed (49 ) Net assets acquired $ 162 Cash consideration paid 80 Fair value of redeemable preferred stock 28 Previously held equity interest in NHUMO 54 Total $ 162 As a result of the acquisition, the Company recorded a gain of $29 million for the difference between the carrying value and the fair value of the previously held equity interest in NHUMO, which was included in Other (expense) income in the first quarter of fiscal 2014. The fair value of $54 million for the previously held equity interest was determined based on the fair value of Cabot’s pre-existing interest in NHUMO as adjusted for a control premium derived from synergies gained as a result of the Company obtaining control of NHUMO. As part of the purchase price allocation, the Company determined that a separately identifiable intangible asset was customer relationships in the amount of $63 million, which is being amortized over a period of 20 years. The Company estimated the fair value of the identifiable acquisition-related intangible asset based on projections of cash flows that will arise from the asset. The projected cash flows are discounted to determine the fair value of the asset at the date of acquisition. The determination of the fair value of the intangible asset acquired required the use of significant judgment with regard to assumptions in the discounted cash flow model used. The fair value of the redeemable preferred stock was determined based on a discounted cash flow model, using the expected timing of the cash flows and an appropriate discount rate. The excess of the purchase price, which includes the cash consideration paid and the fair values of redeemable preferred stock and the previously held equity interest in NHUMO, over the fair value of the tangible net assets and intangible asset acquired, was recorded as goodwill. The goodwill recognized is attributable to the expected growth and operating synergies that the Company expects to realize from this acquisition. Goodwill generated from the acquisition is not deductible for tax purposes. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | D. Discontinued Operations In July 2014, the Company sold its Security Materials business to SICPA SA. The Consolidated Statements of Operations for all periods presented have been recast to reflect the Security Materials business in discontinued operations. During the third quarter of fiscal 2015, Cabot recorded a tax benefit in the amount of $1 million related to the sale of the business, which was included in the Company’s 2014 tax return. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Jun. 30, 2015 | |
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 June 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ — $ 2 $ 1 $ 2 $ — $ — $ — $ — Interest cost 2 3 2 4 — 1 1 1 Expected return on plan assets (3 ) (4 ) (3 ) (5 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — 1 — 1 — — — — Net periodic benefit (credit) cost $ (1 ) $ 2 $ — $ 2 $ (1 ) $ 1 $ — $ 1 Nine Months Ended June 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ — $ 7 $ 2 $ 7 $ — $ — $ — $ — Interest cost 5 9 6 12 1 1 2 1 Expected return on plan assets (8 ) (12 ) (8 ) (15 ) — — — — Amortization of prior service credit — — — — (2 ) — (2 ) — Amortization of actuarial loss — 3 — 3 — — — — Settlement costs — 18 — — — — — — Net periodic benefit (credit) cost $ (3 ) $ 25 $ — $ 7 $ (1 ) $ 1 $ — $ 1 Settlement of employee benefit plan Effective October 1, 2014, the Company transferred the defined benefit obligations and pension plan assets in one of its foreign defined benefit plans to a multi-employer plan. This decision effectively moves the administrative, asset custodial, asset investment, actuarial, communication and benefit payment obligations to the multi-employer fund administrator. The plan is over 80% funded. Cabot is required to make contributions to the multi-employer fund and assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. As a result of the transfer, a pre-tax charge of $18 million has been recorded in the nine months ended June 30, 2015 as reflected in Settlement costs in the table above. The pre-tax charge consists of $27 million released from AOCI and $2 million of employer contributions at the time of the settlement, partially offset by an $11 million release of the pension liability. The settlement charge has been recorded primarily in Cost of sales in the Consolidated Statements of Operations. |
Purification Solutions Goodwill
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | F. Purification Solutions Goodwill and Long-Lived Assets Impairment Charges During the third quarter of fiscal 2015 and as a result of the impairment tests performed on goodwill and long-lived assets of the Purification Solutions reporting unit, the Company recorded impairment charges and an associated tax benefit in the Consolidated Statements of Operations as follows: June 30, 2015 (Dollars in millions) Goodwill impairment charge $ 353 Long-lived assets impairment charge 209 Provision (benefit) for income taxes (80 ) Impairment charges, after tax $ 482 The future growth in the Purification Solutions segment is highly dependent on achieving the expected volumes and margins in the activated carbon based mercury removal business. These volumes and margins are highly dependent on demand for mercury removal products and the Company’s successful realization of its anticipated share of volumes in this business. The expected demand for mercury removal products significantly depends on: (1) the implementation and enforcement of environmental laws and regulations, particularly those that would require U.S. based coal-fired electric utilities to reduce the quantity of air pollutants they release, including mercury, to comply with the Mercury and Air Toxics Standards (“MATS”) issued by the U.S. Environmental Protection Agency (“EPA”) and (2) other factors such as the anticipated usage of activated carbon in the coal-fired energy units. In November 2014, the U.S. Supreme Court agreed to consider whether the EPA appropriately considered costs in determining whether it is necessary and appropriate to regulate hazardous air pollutants emitted by electric utilities. On June 29, 2015, the U.S. Supreme Court held that the EPA unreasonably failed to consider costs in determining whether it is necessary and appropriate to regulate hazardous air pollutants emitted by coal-fired utilities, and remanded the case back to the D.C. Circuit Court of Appeals for further proceedings. The implementation period for the MATS regulations began in April 2015. With this recent implementation and associated customer and industry developments during the quarter, as well as the U.S. Supreme Court’s ruling, the Company reassessed its previous estimates for expected growth in volumes, prices and margins in the Purification Solutions reporting unit. The main drivers of growth, including the size of the overall mercury removal industry, utility adoption rates, usage levels, and pricing, among others, were lowered. Based on these revised estimates and as part of step one of the annual impairment test, the Company determined that the estimated fair value of the Purification Solutions reporting unit was lower than the reporting unit's carrying value. As such, the reporting unit failed step one of the goodwill impairment test. In determining the fair value of the Purification Solutions reporting unit, the Company used an income approach (a discounted cash flow analysis) which incorporated significant estimates and assumptions related to future periods, including timing of MATS implementation, the anticipated size of the mercury removal industry, and growth rates and pricing assumptions of activated carbon, among others. The Company assumed a two year delay in the MATS implementation due to the U.S. Supreme Court’s ruling. Total charges incurred could be higher if the rulings of the D.C. Circuit Court of Appeals on remand result in a delay in the implementation of MATS that is longer than two years. In addition, an estimate of the reporting unit’s weighted average cost of capital (“WACC”) is used to discount future estimated cash flows to their present value. The WACC was based upon externally available data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to the Purification Solutions reporting unit. Step two of the goodwill impairment test requires the Company to perform a theoretical purchase price allocation for the reporting unit to determine the implied fair value of goodwill and to compare the implied fair value of goodwill to the recorded amount of goodwill. The estimate of fair value is complex and requires significant judgment. Accounting guidance provides that a company should recognize an estimated impairment charge to the extent that it determines that it is probable that an impairment loss has occurred and such impairment can be reasonably estimated. Based on the best estimate as of June 30, 2015, the Company recorded a pre-tax goodwill impairment charge of $353 million. Based on the same factors leading to goodwill impairment, the Company also considered whether the reporting unit's carrying values of definite-lived intangible assets and property, plant and equipment may not be recoverable or whether the carrying value of certain indefinite-lived intangible assets were impaired. The Company used the income approach to determine the fair value of the indefinite-lived intangible assets, which are the trademarks of Purification Solutions, and determined that the fair value of these intangible assets was lower than their carrying value. As such, an impairment loss was recorded in the amount of $39 million. Subsequent to this impairment analysis, the Company concluded that such assets no longer had an indefinite life and began amortizing these assets over their estimated useful life. The Company also performed an impairment analysis to assess if definite-lived intangible assets and property, plant and equipment were recoverable based on the estimated undiscounted cash flows of the reporting unit, and these cash flows were not sufficient to recover the carrying value of the long-lived assets over their remaining useful lives. Accordingly, an impairment charge was recorded based on the lower of the carrying amount or fair value of the long-lived assets. The Company used the income approach to determine the fair value of the definite-lived intangible assets and a combination of the cost and market approaches to fair value its property, plant and equipment. The Company recorded impairment charges of $119 million and $51 million, to its definite-lived intangible assets and property, plant and equipment, respectively, in the quarter ended June 30, 2015. In connection with the long-lived assets impairment charges, the Company recorded a deferred tax benefit of $80 million to its income tax provision. Due to the complexities involved in estimating fair value and the recent issuance of the U.S. Supreme Court’s ruling, the Company has not completed the step two analysis and expects to finalize it in the fourth quarter of fiscal 2015. Total impairment charges are not expected to materially change. The performance of the Purification Solutions reporting unit will continue to be monitored. If the reporting unit does not achieve the financial performance that the Company expects or events or circumstances change, it is possible that additional impairment charges may result. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | G. Goodwill and Intangible Assets Cabot had goodwill balances of $157 million and $536 million at June 30, 2015 and September 30, 2014, respectively. The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended June 30, 2015 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2014 $ 68 $ 10 $ 458 $ 536 Impairment charge — — (353 ) (353 ) Foreign currency impact (9 ) (1 ) (16 ) (26 ) Balance at June 30, 2015 $ 59 $ 9 $ 89 $ 157 Goodwill impairment tests are performed at least annually. The Company performed its last annual impairment assessment as of May 31, 2015 and determined there was an impairment of the assets attributable to the Purification Solutions reporting unit. Refer to Note F. The following table provides information regarding the Company’s intangible assets: June 30, 2015 September 30, 2014 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives (1) Developed technologies $ 48 $ — $ 48 $ 152 $ (16 ) $ 136 Trademarks 16 — 16 57 — 57 Customer relationships 100 (5 ) 95 171 (17 ) 154 Total intangible assets $ 164 $ (5 ) $ 159 $ 380 $ (33 ) $ 347 (1) Refer to Note F for intangible assets impairment charges recorded in the third fiscal quarter of 2015. Intangible assets are amortized over their estimated useful lives, which range from fourteen to twenty-five years, with a weighted average amortization period of approximately nineteen years. Amortization expense for the three months ended June 30, 2015 and 2014 was $3 million and $4 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Amortization expense for the nine months ended June 30, 2015 and 2014 was $12 million and $13 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $9 million each year for the next five fiscal years. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | H. 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 did not have a set expiration date. During the first nine months of fiscal 2015 and 2014, Cabot repurchased 925,700 and 379 shares, respectively, of its common stock under this authorization. In January 2015, the Board of Directors authorized Cabot to repurchase up to five million shares of the Company’s common stock in the open market or in privately negotiated transactions and cancelled the previous authorization. Cabot has repurchased 874,300 shares of its common stock under this authorization. As of June 30, 2015, approximately 4,125,700 shares remain available for repurchase under the current authorization. The Company retired the repurchased shares and recorded the excess of the purchase price over par value to additional paid-in capital until such amount was reduced to zero and then charged the remainder against retained earnings. During the first nine months of fiscal 2015, Cabot paid cash dividends of $0.66 per share of common stock for a total of $42 million. During the first nine months of fiscal 2014, Cabot paid cash dividends of $0.62 per share of common stock for a total of $40 million. Noncontrolling interest The following table illustrates the noncontrolling interest activity for the periods presented: 2015 2014 (Dollars in millions) Balance at September 30 $ 122 $ 132 Net income attributable to noncontrolling interest 7 14 Noncontrolling interest foreign currency translation adjustment (3 ) (2 ) Noncontrolling interest dividends (22 ) (25 ) Balance at June 30 $ 104 $ 119 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | I. Accumulated Other Comprehensive Loss Comprehensive income combines net (loss) 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 AOCI, net of tax, are as follows: Pension and Other Currency Unrealized Postretirement Translation Gains on Benefit Liability Adjustment Investments Adjustments Total (Dollars in millions) Balance at September 30, 2014, attributable to Cabot Corporation $ 27 $ 2 $ (93 ) $ (64 ) Other comprehensive loss before reclassifications (103 ) — — (103 ) Amounts reclassified from accumulated other comprehensive income — — 21 21 Net other comprehensive items (103 ) — 21 (82 ) Less: Noncontrolling interest (2 ) — — (2 ) Balance at December 31, 2014, attributable to Cabot Corporation $ (74 ) $ 2 $ (72 ) $ (144 ) Other comprehensive loss before reclassifications (131 ) — — (131 ) Amounts reclassified — — 1 1 Net other comprehensive items (131 ) — 1 (130 ) Less: Noncontrolling interest (1 ) — — (1 ) Balance at March 31, 2015, attributable to Cabot Corporation $ (204 ) $ 2 $ (71 ) $ (273 ) Other comprehensive income before reclassifications 18 — — 18 Amounts reclassified — — — — Net other comprehensive items 18 — — 18 Less: Noncontrolling interest — — — — Balance at June 30, 2015, attributable to Cabot Corporation $ (186 ) $ 2 $ (71 ) $ (255 ) Accumulated other comprehensive items in the accompanying Consolidated Balance Sheets consist of the following items, net of tax: June 30, September 30, 2015 2014 (Dollars in millions) Foreign currency translation adjustments at beginning of period $ 27 $ 154 Net foreign currency translation adjustments attributable to Cabot during the period (213 ) (127 ) Balance at end of period (186 ) 27 Unrealized gain on investments at beginning of period 2 2 Net unrealized gains during the period — — Balance at end of period 2 2 Pension and other postretirement benefit plans attributable to Cabot at beginning of period (93 ) (53 ) Net change in pension and other postretirement benefit plans during the period 22 (40 ) Balance at end of period (71 ) (93 ) Total accumulated other comprehensive loss $ (255 ) $ (64 ) The amounts reclassified out of AOCI and into the Consolidated Statements of Operations for the three and nine months ended June 30, 2015 and 2014 are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2015 2014 2015 2014 (Dollars in millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note E for details $ 1 $ 1 $ 3 $ 3 Amortization of prior service cost Net Periodic Benefit Cost - see Note E for details (1 ) (1 ) (2 ) (2 ) Settlement costs Net Periodic Benefit Cost - see Note E for details — — 27 — Total before tax — — 28 1 Tax impact Benefit for income taxes — — (6 ) — Total after tax $ — $ — $ 22 $ 1 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | J. 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 June 30, 2015. Payments Due by Fiscal Year Remainder of Fiscal 2015 2016 2017 2018 2019 Thereafter Total (Dollars in millions) Reinforcement Materials $ 86 $ 227 $ 178 $ 177 $ 173 $ 1,911 $ 2,752 Performance Chemicals 19 60 38 33 33 210 393 Purification Solutions 7 13 9 7 7 8 51 Total $ 112 $ 300 $ 225 $ 217 $ 213 $ 2,129 $ 3,196 Guarantee Agreements Cabot has provided certain indemnities pursuant to which it may be required to make payments to an indemnified party in connection with certain transactions and agreements. In connection with certain acquisitions and divestitures, Cabot has provided routine indemnities with respect to such matters as environmental, tax, insurance, product and employee liabilities. In connection with various other agreements, including service and supply agreements with customers, Cabot has provided indemnities for certain contingencies and routine warranties. Cabot is unable to estimate the maximum potential liability for these types of indemnities as a maximum obligation is not explicitly stated in most cases and the amounts, if any, are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be reasonably estimated. The duration of the indemnities vary, and in many cases are indefinite. Cabot has not recorded any liability for these indemnities in the consolidated financial statements, except as otherwise disclosed. 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 June 30, 2015 and September 30, 2014, Cabot had $16 million and $17 million, respectively, reserved for environmental matters, substantially all of which is accounted for on an undiscounted basis. These environmental matters mainly relate to closed sites. These reserves represent Cabot’s best estimates of the probable costs to be incurred at those sites where costs are reasonably estimable based on the Company’s analysis of the extent of clean up required, alternative clean-up methods available, abilities of other responsible parties to contribute and its interpretation of laws and regulations applicable to each site. Cash payments related to these environmental matters were $1 million and $2 million in the first nine months of fiscal 2015 and 2014, respectively. Cabot reviews the adequacy of the reserves as circumstances change at individual sites and adjusts the reserves as appropriate. Almost all of Cabot’s environmental issues relate to sites that are mature and have been investigated and studied and, in many cases, are subject to agreed upon remediation plans. However, depending on the results of future testing, changes in risk assessment practices, remediation techniques and regulatory requirements, newly discovered conditions, and other factors, it is reasonably possible that the Company could incur additional costs in excess of environmental reserves currently recorded. Management estimates, based on the latest available information, that any such future environmental remediation costs that are reasonably possible to be in excess of amounts already recorded would be immaterial to the Company’s consolidated financial statements. 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 Cabot subsidiary agreed, in certain circumstances, to assume a portion of AO’s liabilities, including costs of legal fees together with amounts paid in settlements and judgments, allocable to AO respiratory products used prior to the 1990 purchase by the Cabot subsidiary. In exchange for the subsidiary’s assumption of certain of AO’s respirator liabilities, AO agreed to provide to the subsidiary the benefits of: (i) AO’s insurance coverage for the period prior to the 1990 acquisition and (ii) a former owner’s indemnity of AO holding it harmless from any liability allocable to AO respiratory products used prior to May 1982. As more fully described in the 2014 10-K, the respirator liabilities generally involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, allegedly resulting from the use of respirators that are alleged to have been negligently designed and/or labeled. As of June 30, 2015 and September 30, 2014, there were approximately 38,000 and 41,000 claimants, respectively, in pending cases asserting claims against AO in connection with respiratory products. Cabot has a reserve to cover its expected share of liability for existing and future respirator liability claims. At June 30, 2015 and September 30, 2014, the reserve was $11 million and $13 million, respectively. Cash payments related to this liability were $2 million in the first nine months of both fiscal 2015 and 2014. 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 are not expected, in the aggregate, to have a material adverse effect on the Company’s financial position. |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | K. Income Tax Effective Tax Rate Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) (Dollars in millions) (Benefit) Provision for income taxes $ (64 ) $ 20 $ (47 ) $ 51 Effective tax rate 13 % 25 % 11 % 22 % During the third quarter of fiscal 2015, the Company recorded charges related to the impairment of goodwill and long-lived assets of the Purification Solutions segment as disclosed in Note F. Prior to the impairment, the Company had recorded deferred tax liabilities for the difference in the tax basis and book basis for certain of these long-lived assets. As a result of the $209 million impairment charge and reduction in the book basis of these assets, the Company recorded a corresponding decrease in deferred tax liabilities, as there was no change in tax basis of these assets due to the book impairment, and recorded a tax benefit of $80 million. The $353 million goodwill impairment charge was related to goodwill, which is non-deductible for tax purposes, and therefore there was no tax impact related to this impairment charge. As a result, the Company’s effective tax rate was significantly lower for both the three and nine month periods ending June 30, 2015 than for the comparable periods in fiscal 2014. Uncertainties Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2012 through 2014 tax years remain subject to examination by the United States Internal Revenue Service (“IRS”) and various tax years from 2005 through 2014 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2004 through 2014 remain subject to examination by their respective tax authorities. Cabot’s significant non-U.S. jurisdictions include 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 and nine months ended June 30, 2015, Cabot released uncertain tax positions of less than $1 million and approximately $13 million, respectively, due to the expirations of statutes of limitations in various jurisdictions. As of October 1, 2014, Cabot adopted a new accounting standard which requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit be presented in the consolidated financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This resulted in a reduction of the liability for uncertain tax positions and deferred tax assets of $5 million. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | L. Earnings Per Share The following tables summarize the components of the basic and diluted earnings per common share computations: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars and shares in millions, except per share amounts) Basic EPS: Net (loss) income attributable to Cabot Corporation $ (445 ) $ 52 $ (374 ) $ 168 Less: Dividends and dividend equivalents to participating securities — — — — Less: Undistributed earnings allocated to participating securities (1) — 1 — 2 (Loss) earnings allocated to common shareholders (numerator) $ (445 ) $ 51 $ (374 ) $ 166 Weighted average common shares and participating securities outstanding 63.8 65.1 64.2 64.9 Less: Participating securities (1) 0.5 0.6 0.5 0.6 Adjusted weighted average common shares (denominator) 63.3 64.5 63.7 64.3 Amounts per share - basic: (Loss) income from continuing operations attributable to Cabot Corporation $ (7.05 ) $ 0.80 $ (5.89 ) $ 2.61 Income (loss) from discontinued operations 0.01 (0.01 ) 0.01 (0.03 ) Net (loss) income attributable to Cabot Corporation $ (7.04 ) $ 0.79 $ (5.88 ) $ 2.58 Diluted EPS ( 2 ) (Loss) earnings allocated to common shareholders $ (445 ) $ 51 $ (374 ) $ 166 Plus: (Loss) earnings allocated to participating securities — 1 — 2 Less: Adjusted earnings allocated to participating securities ( 3 ) — (1 ) — (2 ) (Loss) earnings allocated to common shareholders (numerator) $ (445 ) $ 51 $ (374 ) $ 166 Adjusted weighted average common shares outstanding 63.3 64.5 63.7 64.3 Effect of dilutive securities: Common shares issuable ( 4 ) — 0.7 — 0.7 Adjusted weighted average common shares (denominator) 63.3 65.2 63.7 65.0 Amounts per share - diluted: (Loss) income from continuing operations attributable to Cabot Corporation $ (7.05 ) $ 0.79 $ (5.89 ) $ 2.58 Income (loss) from discontinued operations 0.01 (0.01 ) 0.01 (0.03 ) Net (loss) income attributable to Cabot Corporation $ (7.04 ) $ 0.78 $ (5.88 ) $ 2.55 (1) 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 June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Calculation of undistributed (loss) earnings: Net (loss) income attributable to Cabot Corporation $ (445 ) $ 52 $ (374 ) $ 168 Less: Dividends declared on common stock 14 14 42 40 Less: Dividends declared on participating securities — — — — Undistributed (loss) earnings $ (459 ) $ 38 $ (416 ) $ 128 Allocation of undistributed (loss) earnings: Undistributed (loss) earnings allocated to common shareholders $ (459 ) $ 37 $ (416 ) $ 126 Undistributed (loss) earnings allocated to participating shareholders — 1 — 2 Undistributed (loss) earnings $ (459 ) $ 38 $ (416 ) $ 128 ( 2 ) ( 3 ) ( 4 ) |
Restructuring
Restructuring | 9 Months Ended |
Jun. 30, 2015 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | M. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Cost of sales $ 1 $ 2 $ 4 $ 11 Selling and administrative expenses 1 2 10 13 Total $ 2 $ 4 $ 14 $ 24 Details of these restructuring activities and the related reserves during the three months ended June 30, 2015 are as follows: Severance and Employee Benefits Environmental Remediation Other Total ( Dollars in millions) Reserve at March 31, 2015 $ 9 $ 3 $ 1 $ 13 Charges 2 — — 2 Cash paid (5 ) — — (5 ) Reserve at June 30, 2015 $ 6 $ 3 $ 1 $ 10 Details of these restructuring activities and the related reserves during the nine months ended June 30, 2015 are as follows: Severance and Employee Benefits Environmental Remediation Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2014 $ 16 $ 2 $ — $ 1 $ 19 Charges 7 1 1 5 14 Costs charged against assets / liabilities — — (1 ) — (1 ) Cash paid (15 ) — — (5 ) (20 ) Foreign currency translation adjustment (2 ) — — — (2 ) Reserve at June 30, 2015 $ 6 $ 3 $ — $ 1 $ 10 Business Service Center Transition In January 2014, the Company announced its intention to open a new Europe, Middle East and Africa (“EMEA”) business service center in Riga, Latvia, and to close its Leuven, Belgium site, subject to the Belgian information and consultation process, which was completed in June 2014. These actions were developed following an extensive evaluation of the Company’s business service capabilities in the EMEA region and a determination that the future EMEA business service center will enable the Company to provide the highest quality of service at the most competitive cost. The Company expects that the majority of actions related to the transition of the business service center will be completed by the end of fiscal 2015 and result in total charges of approximately $24 million, comprised of $16 million of severance charges and $8 million of other transition costs. Through June 30, 2015, the Company has recorded $23 million for this plan comprised of $16 million of severance charges and $7 million of other transition costs The Company has recorded $5 million and $15 million of charges in the first nine months of fiscal 2015 and 2014, respectively related to this plan. Fiscal 2014 costs included employee severance costs of $14 million and $1 million of other transition costs, whereas fiscal 2015 costs include severance charges of $1 million and $4 million of other transition costs including training costs and redundant salaries. The Company has recorded $1 million of charges in both of the three months ended June 30, 2015 and 2014, respectively, related to this plan, comprised of severance and other transition costs. Cumulative cash outlays related to this plan are expected to be approximately $22 million, comprised of $14 million of severance payments and $8 million of transition costs. Through June 30, 2015, the Company has made $19 million in cash payments related to this plan, comprised of $7 million of transition costs and $12 million of severance costs, and expects to make additional cash payments of approximately $3 million during the remainder of fiscal 2015 and thereafter, comprised of $2 million of severance costs and $1 million of other transition costs. As of June 30, 2015, Cabot has $3 million of accrued restructuring costs in the Consolidated Balance Sheet related to this closure. Closure of Port Dickson, Malaysia Manufacturing Facility On April 26, 2013, the Company announced that the Board of its carbon black joint venture, Cabot Malaysia Sdn. Bhd. (“CMSB”), decided to cease production at its Port Dickson, Malaysia facility. The facility ceased production in June 2013. The Company holds a 50.1 percent equity share in CMSB. The decision, which affected approximately 90 carbon black employees, was driven by the facility’s manufacturing inefficiencies and raw materials costs. Through June 30, 2015, the Company recorded pre-tax restructuring charges related to this plan of $18 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, partially offset by the anticipated gain from the sale of land of $2 million in fiscal 2016. CMSB’s net income or loss is attributable to Cabot Corporation and to the noncontrolling interest in the joint venture. The Company has recorded pre-tax charges of less than $1 million and $2 million in the nine months ended June 30, 2015 and 2014, respectively, related to this closure and less than $1 million in both of three months ended June 30, 2015 and 2014, respectively. The portion of the charges that are allocable to the noncontrolling interest in CMSB (49.9%) are recorded within Net income attributable to noncontrolling interests, net of tax, in the Consolidated Statements of Operations. The majority of actions related to closure of the plant were completed in fiscal 2014. Cumulative cash outlays related to this plan are expected to be approximately $5 million comprised primarily of $2 million for site demolition, clearing and environmental remediation, $2 million for severance, and $1 million for other closure related charges. Through June 30, 2015, CMSB has made approximately $4 million in cash payments related to this plan mainly for severance and site demolition and clearing costs. CMSB expects to make cash payments of $1 million during the remainder of fiscal 2015 and thereafter mainly for site demolition, clearing and environmental remediation costs. Approximately $8 million is expected to be received from the sale of land in fiscal 2016. As of June 30, 2015, Cabot has $1 million of accrued restructuring costs in the Consolidated Balance Sheets related to this closure, which is mainly for accrued environmental and other charges. Other Activities The Company has recorded pre-tax charges of approximately $6 million during both of the first nine months of fiscal 2015 and 2014, respectively, and $1 million and $2 million for the three months ended June 30, 2015 and 2014, respectively, related to restructuring activities at several other locations. Fiscal 2015 charges are comprised of severance costs whereas fiscal 2014 charges are comprised of accelerated depreciation, asset write-offs, and severance costs. The Company anticipates that it will record additional charges of $1 million in the remainder of fiscal 2015 related to these actions. The Company made payments of $4 million related to these actions in the first nine months of fiscal 2015 and expects to pay $5 million in the remainder of fiscal 2015 and thereafter mainly for severance and other closure related costs at the impacted locations. As of June 30, 2015, Cabot has $4 million of accrued severance and other closure related costs in the Consolidated Balance Sheets related to these activities. Previous Actions and Sites Pending Sale Beginning in fiscal 2009, the Company entered into several different restructuring plans which have been substantially completed, pending the sale of former manufacturing sites in Thane, India and Hong Kong. The Company has incurred total cumulative pre-tax charges of approximately $165 million related to these plans through June 30, 2015, comprised of $67 million for severance charges, $66 million for accelerated depreciation and asset impairments, $10 million for environmental, demolition and site clearing costs, and $23 million of other closure related charges, partially offset by gains on asset sales of $1 million. These amounts do not include any gain that may be recorded if the Company successfully sells its land rights and certain manufacturing related assets in India and Hong Kong. Pre-tax restructuring expenses related to these plans were approximately $2 million and $6 million during the first nine months of fiscal 2015 and 2014, respectively, and less than $1 million in each of the three months ended June 30, 2015 and 2014, respectively. Since fiscal 2009, Cabot has made net cash payments of $86 million related to these plans and expects to pay approximately $3 million in the remainder of fiscal 2015 and thereafter. The remaining payments consist mainly of environmental and other closure related costs. As of June 30, 2015, Cabot has $2 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 | 9 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | N. 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 nine months of either fiscal 2015 or 2014. At June 30, 2015 and September 30, 2014, the fair value of guaranteed investment contracts, included in Other assets in the Consolidated Balance Sheets, was $12 million and $13 million, respectively, which approximated their carrying values in both periods. Guaranteed investment contracts were classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on other observable inputs. At June 30, 2015 and September 30, 2014, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and notes payable and variable rate debt approximated their carrying values due to the short-term nature of these instruments. The carrying values and fair values of the long-term fixed rate debt were $0.96 billion and $1.01 billion, respectively, as of June 30, 2015 and $0.98 billion and $1.05 billion, respectively, as of September 30, 2014. The fair values of Cabot’s fixed rate long-term debt and capital lease obligations are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of Cabot’s floating rate long-term debt and capital lease obligations approximate their fair values. All such measurements are based on observable inputs and are classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model. |
Derivatives
Derivatives | 9 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | O. 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 June 30, 2015 and September 30, 2014, there were no derivatives held to manage interest risk. Foreign Currency Risk Management Cabot’s international operations are subject to certain risks, including currency exchange rate fluctuations and government actions. Cabot endeavors to match the currency in which debt is issued to the currency of the Company’s major, stable cash receipts. In some situations Cabot has issued debt denominated in U.S. dollars and then entered into cross currency swaps that exchange the dollar principal and interest payments into a currency where the Company expects long-term, stable cash receipts. Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot, from time to time, enters into cross-currency swaps to mitigate the impact of currency rate changes on the Company’s net investments. The Company also has foreign currency exposure arising from the denomination of monetary assets and liabilities in foreign currencies other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the dollar value of future cash flows generated in foreign currencies. Accordingly, Cabot uses short-term forward contracts to minimize the exposure to foreign currency risk. In certain situations where the Company has forecasted purchases under a long-term commitment or forecasted sales denominated in a foreign currency, Cabot may enter into appropriate financial instruments in accordance with the Company’s risk management policy to hedge future cash flow exposures. The following table provides details of the derivatives held as of June 30, 2015 and September 30, 2014 to manage foreign currency risk. Notional Amount, net Description Borrowing June 30, 2015 September 30, 2014 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 1 million USD 32 million No designation (1) Accounting for Derivative Instruments and Hedging Activities The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of the financial counterparty to perform. For interest rate and cross-currency swaps, the significant inputs to these models are interest rate curves for discounting future cash flows. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. Fair Value Hedge For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current period earnings. Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is recorded in AOCI and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings. Other Derivative Instruments From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes, which include cross currency swaps, foreign currency forward contracts and commodity derivatives. For cross currency swaps and foreign currency forward contracts not designated as hedges, the Company uses standard models with market-based inputs. The significant inputs to these models are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. In determining the fair value of the commodity derivatives, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. Although these derivatives do not qualify for hedge accounting, Cabot believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings. For both June 30, 2015 and September 30, 2014, the fair value of derivative instruments were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. The net after-tax amounts to be reclassified from AOCI to earnings within the next 12 months are expected to be immaterial. |
Venezuela
Venezuela | 9 Months Ended |
Jun. 30, 2015 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Venezuela | P. 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 June 30, 2015, these subsidiaries carried the operating affiliate investment of $15 million and held 18 million bolivars (less than $1 million) in cash. During each of the nine months ended June 30, 2015 and 2014, the operating affiliate declared a dividend in the amount of $5 million and $4 million, respectively, which were paid in U.S. dollars and repatriated to the Company’s wholly-owned subsidiaries. A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into bolivars. The operating affiliate and the Company’s wholly owned subsidiaries used an exchange rate that is available to the Company when converting these dollars into bolivars to remeasure their bolivar denominated monetary accounts. The exchange rate made available to the Company on June 30, 2015 was 52 bolivars to the U.S. dollar (B/$). The operating entity has generally been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. The Company closely monitors its ability to convert its bolivar holdings into U.S. dollars, as the Company intends to convert substantially all bolivars held by its wholly-owned subsidiaries in Venezuela to U.S. dollars as soon as practical. Any future change in the exchange rate made available to the Company or opening of additional parallel markets could cause the Company to change the exchange rate it uses and result in gains or losses on the bolivar denominated assets held by its operating affiliate and wholly-owned subsidiaries. |
Financial Information by Segmen
Financial Information by Segment | 9 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | Q. 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 reported 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 if the operating segments are determined to have similar economic characteristics and if the operating segments are similar in the following areas: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the regulatory environment. In December 2014, the Company realigned its business reporting structure into four segments that consist of Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. Segment results have been recast for all periods presented to reflect the realignment of the Company’s global business segments. The new segment structure is designed to improve efficiency and resource prioritization and reflects how the Company’s CODM reviews segment results to assess performance and allocate resources. The Reinforcement Materials segment combines the rubber blacks and elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons and compounds and inkjet colorants product lines into the Specialty Carbons and Formulations business, and combines the fumed metal oxides and aerogel product lines into the Metal Oxides business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and therefore have been aggregated into one reportable segment. The Purification Solutions segment represents the Company’s activated carbon business and the Specialty Fluids segment includes cesium formate oil and gas drilling fluids and high-purity fine cesium chemicals product lines. Reportable segment operating profit (loss) before interest and taxes (“Segment EBIT”) is presented for each reportable segment in the financial information by reportable segment table below on the line entitled Income (loss) from continuing operations before taxes. Segment EBIT excludes certain items, meaning items management does not consider representative of segment results. In addition, Segment EBIT includes Equity in earnings (loss) of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, the effects of LIFO accounting for inventory, general unallocated expense and unallocated corporate costs. Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1) Consolidated Total (Dollars in millions) Three Months Ended June 30, 2015 Revenues from external customers (2) $ 351 $ 234 $ 72 $ 12 $ 669 $ 25 $ 694 Income (loss) from continuing operations before taxes (3) $ 32 $ 48 $ 3 $ 3 $ 86 $ (595 ) $ (509 ) Three Months Ended June 30, 2014 Revenues from external customers (2) $ 538 $ 262 $ 78 $ 24 $ 902 $ 38 $ 940 Income (loss) from continuing operations before taxes (3) $ 62 $ 44 $ (7 ) $ 10 $ 109 $ (29 ) $ 80 Nine Months Ended June 30, 2015 Revenues from external customers (2) $ 1,169 $ 700 $ 219 $ 36 $ 2,124 $ 76 $ 2,200 Income (loss) from continuing operations before taxes (3) $ 112 $ 129 $ 3 $ 8 $ 252 $ (671 ) $ (419 ) Nine Months Ended June 30, 2014 Revenues from external customers (2) $ 1,583 $ 763 $ 230 $ 77 $ 2,653 $ 83 $ 2,736 Income (loss) from continuing operations before taxes (3) $ 200 $ 127 $ (20 ) $ 32 $ 339 $ (102 ) $ 237 (1) (2) Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (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. $ (5 ) $ 10 $ (9 ) $ (2 ) Shipping and handling fees 30 28 85 85 Total $ 25 $ 38 $ 76 $ 83 (3) Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Interest expense $ (13 ) $ (14 ) $ (40 ) $ (41 ) Total certain items, pre-tax (a) (567 ) (7 ) (599 ) (19 ) Equity in (earnings) loss of affiliated companies, net of tax (b) (1 ) 2 (4 ) 2 Unallocated corporate costs (c) (12 ) (14 ) (35 ) (43 ) General unallocated income (expense) (d) (2 ) 4 7 (1 ) Total $ (595 ) $ (29 ) $ (671 ) $ (102 ) (a) (b) (c) (d) Performance Chemicals is comprised of two businesses that sell the following products: specialty grades of carbon black, thermoplastic concentrates and compounds and inkjet colorants (the Specialty Carbons and Formulation business); and fumed silica, fumed alumina and dispersions thereof, and aerogel (the Metal Oxides business). The net sales from each of these businesses for the three and nine months ended June 30, 2015 and 2014 are as follows: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Specialty Carbons and Formulations $ 159 $ 182 $ 478 $ 531 Metal Oxides 75 80 222 232 Total Performance Chemicals $ 234 $ 262 $ 700 $ 763 |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2015 | |
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. Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 Reinforcement Materials 52 % 60 % 55 % 59 % Performance Chemicals 35 % 29 % 33 % 29 % Purification Solutions 11 % 9 % 10 % 9 % Specialty Fluids 2 % 2 % 2 % 3 % Cabot derives the substantial majority of its revenues from the sale of products in Reinforcement Materials and Performance Chemicals. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. Depending on the nature of the contract with the customer, a portion of the revenue may be recognized using proportional performance. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Purification Solutions is typically recognized when the product is shipped and title and risk of loss have passed to the customer. For major activated carbon injection systems projects, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of a rental process and revenue is recognized upon delivery of the fluid. 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 material off-balance sheet credit exposure related to customer receivable balances. |
Intangible Assets and Goodwill Impairment | Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to this segment is recorded in the Fumed Metal Oxides reporting unit within Performance Chemicals. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units sufficiently decline because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2015, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit was less than its carrying amount. Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. Definite-lived intangible assets, which are comprised of customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company evaluates indefinite-lived intangible assets, which are comprised of the trademarks of Purification Solutions, for impairment annually or when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount. The annual review is performed as of May 31. The Company may first perform a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The quantitative impairment test is based on discounted estimated future cash flows. The assumptions used to estimate fair value include management’s best estimates of future growth rates and discount rates over an estimate of the remaining operating period at the unit of accounting level. Refer to Note F for details on the impairment test performed on intangible assets of the Purification Solutions reporting unit and the resulting impairment charges recorded. Effective in the third quarter of 2015 and as a part of the impairment assessment performed, the Company determined that the trademarks for Purification Solutions no longer have an indefinite life. |
Long-lived Assets Impairment | Long-lived Assets Impairment The Company’s long-lived assets primarily include property, plant and equipment, intangible assets, long-term investments and assets held for rent. The carrying values of long-lived assets are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. To test for impairment of assets, the Company generally uses a probability-weighted estimate of the future undiscounted net cash flows of the assets over their remaining lives to determine if the value of the asset is recoverable. Long-lived assets are grouped with other assets and liabilities at the lowest level for which independent identifiable cash flows are determinable. An asset impairment is recognized when the carrying value of the asset is not recoverable based on the analysis described above, in which case the asset is written down to its fair value. If the asset does not have a readily determinable market value, a discounted cash flow model may be used to determine the fair value of the asset. In circumstances when an asset does not have separate identifiable cash flows, an impairment charge is recorded when the Company no longer intends to use the asset. Refer to Note F regarding the results of the impairment test performed on the long-lived assets of the Purification Solutions segment. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is generally 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. |
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 $37 million and $52 million higher as of June 30, 2015 and September 30, 2014, 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 (Loss) Income | Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2013, the Financial Accounting Standards Board (“FASB”) issued a new standard related to the “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The standard requires, unless certain conditions exist, an unrecognized tax benefit or a portion of an unrecognized tax benefit to be presented in the consolidated financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar to a tax loss or a tax credit carryforward. This standard is applicable for fiscal years beginning after December 15, 2013, and for interim periods within those years. The Company adopted this standard on October 1, 2014 and the implementation of the new standard did not have a material impact on its consolidated financial statements. In April 2014, the FASB issued a new standard related to “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The standard requires discontinued operations treatment for disposals of a component or group of components of a business that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results and requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This standard is applicable for fiscal years beginning after December 15, 2014 and for interim periods within those years and early adoption is permitted, but only for disposals that have not been reported in consolidated financial statements previously issued. The Company expects to adopt this standard beginning on October 1, 2015. In May 2014, the FASB issued a new standard related to the “Revenue from Contracts with Customers” which amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017 and for interim periods within those years and early adoption is permitted for the fiscal years beginning after December 15, 2016. The Company expects to adopt this standard on October 1, 2018. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs by requiring debt issuance costs to be presented as a reduction of the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. The Company expects to adopt this standard on October 1, 2016. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Significant Accounting Polici27
Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Segment Reporting Revenue Percentage | The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments for the periods presented. Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 Reinforcement Materials 52 % 60 % 55 % 59 % Performance Chemicals 35 % 29 % 33 % 29 % Purification Solutions 11 % 9 % 10 % 9 % Specialty Fluids 2 % 2 % 2 % 3 % |
Acquisition of NHUMO (Tables)
Acquisition of NHUMO (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Components and Allocation of Purchase Price | The following table presents the components and allocation of the purchase price: (Dollars in millions) Assets Current assets $ 54 Property, plant and equipment 48 Other non-current assets 1 Intangible assets 63 Goodwill 45 Total assets acquired 211 Liabilities Accounts payable, accruals and other liabilities (20 ) Deferred tax liabilities - long-term (29 ) Total liabilities assumed (49 ) Net assets acquired $ 162 Cash consideration paid 80 Fair value of redeemable preferred stock 28 Previously held equity interest in NHUMO 54 Total $ 162 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
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 June 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ — $ 2 $ 1 $ 2 $ — $ — $ — $ — Interest cost 2 3 2 4 — 1 1 1 Expected return on plan assets (3 ) (4 ) (3 ) (5 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — 1 — 1 — — — — Net periodic benefit (credit) cost $ (1 ) $ 2 $ — $ 2 $ (1 ) $ 1 $ — $ 1 Nine Months Ended June 30 2015 2014 2015 2014 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ — $ 7 $ 2 $ 7 $ — $ — $ — $ — Interest cost 5 9 6 12 1 1 2 1 Expected return on plan assets (8 ) (12 ) (8 ) (15 ) — — — — Amortization of prior service credit — — — — (2 ) — (2 ) — Amortization of actuarial loss — 3 — 3 — — — — Settlement costs — 18 — — — — — — Net periodic benefit (credit) cost $ (3 ) $ 25 $ — $ 7 $ (1 ) $ 1 $ — $ 1 |
Purification Solutions Goodwi30
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment Charges and Associated Tax Benefit | During the third quarter of fiscal 2015 and as a result of the impairment tests performed on goodwill and long-lived assets of the Purification Solutions reporting unit, the Company recorded impairment charges and an associated tax benefit in the Consolidated Statements of Operations as follows: June 30, 2015 (Dollars in millions) Goodwill impairment charge $ 353 Long-lived assets impairment charge 209 Provision (benefit) for income taxes (80 ) Impairment charges, after tax $ 482 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Balances | The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended June 30, 2015 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2014 $ 68 $ 10 $ 458 $ 536 Impairment charge — — (353 ) (353 ) Foreign currency impact (9 ) (1 ) (16 ) (26 ) Balance at June 30, 2015 $ 59 $ 9 $ 89 $ 157 |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: June 30, 2015 September 30, 2014 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives (1) Developed technologies $ 48 $ — $ 48 $ 152 $ (16 ) $ 136 Trademarks 16 — 16 57 — 57 Customer relationships 100 (5 ) 95 171 (17 ) 154 Total intangible assets $ 164 $ (5 ) $ 159 $ 380 $ (33 ) $ 347 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Schedule of Activity in Noncontrolling Interests | The following table illustrates the noncontrolling interest activity for the periods presented: 2015 2014 (Dollars in millions) Balance at September 30 $ 122 $ 132 Net income attributable to noncontrolling interest 7 14 Noncontrolling interest foreign currency translation adjustment (3 ) (2 ) Noncontrolling interest dividends (22 ) (25 ) Balance at June 30 $ 104 $ 119 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, are as follows: Pension and Other Currency Unrealized Postretirement Translation Gains on Benefit Liability Adjustment Investments Adjustments Total (Dollars in millions) Balance at September 30, 2014, attributable to Cabot Corporation $ 27 $ 2 $ (93 ) $ (64 ) Other comprehensive loss before reclassifications (103 ) — — (103 ) Amounts reclassified from accumulated other comprehensive income — — 21 21 Net other comprehensive items (103 ) — 21 (82 ) Less: Noncontrolling interest (2 ) — — (2 ) Balance at December 31, 2014, attributable to Cabot Corporation $ (74 ) $ 2 $ (72 ) $ (144 ) Other comprehensive loss before reclassifications (131 ) — — (131 ) Amounts reclassified — — 1 1 Net other comprehensive items (131 ) — 1 (130 ) Less: Noncontrolling interest (1 ) — — (1 ) Balance at March 31, 2015, attributable to Cabot Corporation $ (204 ) $ 2 $ (71 ) $ (273 ) Other comprehensive income before reclassifications 18 — — 18 Amounts reclassified — — — — Net other comprehensive items 18 — — 18 Less: Noncontrolling interest — — — — Balance at June 30, 2015, attributable to Cabot Corporation $ (186 ) $ 2 $ (71 ) $ (255 ) |
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: June 30, September 30, 2015 2014 (Dollars in millions) Foreign currency translation adjustments at beginning of period $ 27 $ 154 Net foreign currency translation adjustments attributable to Cabot during the period (213 ) (127 ) Balance at end of period (186 ) 27 Unrealized gain on investments at beginning of period 2 2 Net unrealized gains during the period — — Balance at end of period 2 2 Pension and other postretirement benefit plans attributable to Cabot at beginning of period (93 ) (53 ) Net change in pension and other postretirement benefit plans during the period 22 (40 ) Balance at end of period (71 ) (93 ) Total accumulated other comprehensive loss $ (255 ) $ (64 ) |
Amounts Reclassified Out of AOCI | The amounts reclassified out of AOCI and into the Consolidated Statements of Operations for the three and nine months ended June 30, 2015 and 2014 are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2015 2014 2015 2014 (Dollars in millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note E for details $ 1 $ 1 $ 3 $ 3 Amortization of prior service cost Net Periodic Benefit Cost - see Note E for details (1 ) (1 ) (2 ) (2 ) Settlement costs Net Periodic Benefit Cost - see Note E for details — — 27 — Total before tax — — 28 1 Tax impact Benefit for income taxes — — (6 ) — Total after tax $ — $ — $ 22 $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Components of 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 June 30, 2015. Payments Due by Fiscal Year Remainder of Fiscal 2015 2016 2017 2018 2019 Thereafter Total (Dollars in millions) Reinforcement Materials $ 86 $ 227 $ 178 $ 177 $ 173 $ 1,911 $ 2,752 Performance Chemicals 19 60 38 33 33 210 393 Purification Solutions 7 13 9 7 7 8 51 Total $ 112 $ 300 $ 225 $ 217 $ 213 $ 2,129 $ 3,196 |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate | Effective Tax Rate Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) (Dollars in millions) (Benefit) Provision for income taxes $ (64 ) $ 20 $ (47 ) $ 51 Effective tax rate 13 % 25 % 11 % 22 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings Per Common Share | The following tables summarize the components of the basic and diluted earnings per common share computations: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars and shares in millions, except per share amounts) Basic EPS: Net (loss) income attributable to Cabot Corporation $ (445 ) $ 52 $ (374 ) $ 168 Less: Dividends and dividend equivalents to participating securities — — — — Less: Undistributed earnings allocated to participating securities (1) — 1 — 2 (Loss) earnings allocated to common shareholders (numerator) $ (445 ) $ 51 $ (374 ) $ 166 Weighted average common shares and participating securities outstanding 63.8 65.1 64.2 64.9 Less: Participating securities (1) 0.5 0.6 0.5 0.6 Adjusted weighted average common shares (denominator) 63.3 64.5 63.7 64.3 Amounts per share - basic: (Loss) income from continuing operations attributable to Cabot Corporation $ (7.05 ) $ 0.80 $ (5.89 ) $ 2.61 Income (loss) from discontinued operations 0.01 (0.01 ) 0.01 (0.03 ) Net (loss) income attributable to Cabot Corporation $ (7.04 ) $ 0.79 $ (5.88 ) $ 2.58 Diluted EPS ( 2 ) (Loss) earnings allocated to common shareholders $ (445 ) $ 51 $ (374 ) $ 166 Plus: (Loss) earnings allocated to participating securities — 1 — 2 Less: Adjusted earnings allocated to participating securities ( 3 ) — (1 ) — (2 ) (Loss) earnings allocated to common shareholders (numerator) $ (445 ) $ 51 $ (374 ) $ 166 Adjusted weighted average common shares outstanding 63.3 64.5 63.7 64.3 Effect of dilutive securities: Common shares issuable ( 4 ) — 0.7 — 0.7 Adjusted weighted average common shares (denominator) 63.3 65.2 63.7 65.0 Amounts per share - diluted: (Loss) income from continuing operations attributable to Cabot Corporation $ (7.05 ) $ 0.79 $ (5.89 ) $ 2.58 Income (loss) from discontinued operations 0.01 (0.01 ) 0.01 (0.03 ) Net (loss) income attributable to Cabot Corporation $ (7.04 ) $ 0.78 $ (5.88 ) $ 2.55 (1) |
Calculation of Undistributed Earnings | Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Calculation of undistributed (loss) earnings: Net (loss) income attributable to Cabot Corporation $ (445 ) $ 52 $ (374 ) $ 168 Less: Dividends declared on common stock 14 14 42 40 Less: Dividends declared on participating securities — — — — Undistributed (loss) earnings $ (459 ) $ 38 $ (416 ) $ 128 Allocation of undistributed (loss) earnings: Undistributed (loss) earnings allocated to common shareholders $ (459 ) $ 37 $ (416 ) $ 126 Undistributed (loss) earnings allocated to participating shareholders — 1 — 2 Undistributed (loss) earnings $ (459 ) $ 38 $ (416 ) $ 128 ( 2 ) ( 3 ) ( 4 ) |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
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 June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Cost of sales $ 1 $ 2 $ 4 $ 11 Selling and administrative expenses 1 2 10 13 Total $ 2 $ 4 $ 14 $ 24 |
Restructuring Activities and Related Reserves | Details of these restructuring activities and the related reserves during the three months ended June 30, 2015 are as follows: Severance and Employee Benefits Environmental Remediation Other Total ( Dollars in millions) Reserve at March 31, 2015 $ 9 $ 3 $ 1 $ 13 Charges 2 — — 2 Cash paid (5 ) — — (5 ) Reserve at June 30, 2015 $ 6 $ 3 $ 1 $ 10 Details of these restructuring activities and the related reserves during the nine months ended June 30, 2015 are as follows: Severance and Employee Benefits Environmental Remediation Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2014 $ 16 $ 2 $ — $ 1 $ 19 Charges 7 1 1 5 14 Costs charged against assets / liabilities — — (1 ) — (1 ) Cash paid (15 ) — — (5 ) (20 ) Foreign currency translation adjustment (2 ) — — — (2 ) Reserve at June 30, 2015 $ 6 $ 3 $ — $ 1 $ 10 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Forward Foreign Currency Contracts [Member] | |
Schedule of Derivatives Foreign Currency | The following table provides details of the derivatives held as of June 30, 2015 and September 30, 2014 to manage foreign currency risk. Notional Amount, net Description Borrowing June 30, 2015 September 30, 2014 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 1 million USD 32 million No designation (1) |
Financial Information by Segm39
Financial Information by Segment (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1) Consolidated Total (Dollars in millions) Three Months Ended June 30, 2015 Revenues from external customers (2) $ 351 $ 234 $ 72 $ 12 $ 669 $ 25 $ 694 Income (loss) from continuing operations before taxes (3) $ 32 $ 48 $ 3 $ 3 $ 86 $ (595 ) $ (509 ) Three Months Ended June 30, 2014 Revenues from external customers (2) $ 538 $ 262 $ 78 $ 24 $ 902 $ 38 $ 940 Income (loss) from continuing operations before taxes (3) $ 62 $ 44 $ (7 ) $ 10 $ 109 $ (29 ) $ 80 Nine Months Ended June 30, 2015 Revenues from external customers (2) $ 1,169 $ 700 $ 219 $ 36 $ 2,124 $ 76 $ 2,200 Income (loss) from continuing operations before taxes (3) $ 112 $ 129 $ 3 $ 8 $ 252 $ (671 ) $ (419 ) Nine Months Ended June 30, 2014 Revenues from external customers (2) $ 1,583 $ 763 $ 230 $ 77 $ 2,653 $ 83 $ 2,736 Income (loss) from continuing operations before taxes (3) $ 200 $ 127 $ (20 ) $ 32 $ 339 $ (102 ) $ 237 (1) (2) Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (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. $ (5 ) $ 10 $ (9 ) $ (2 ) Shipping and handling fees 30 28 85 85 Total $ 25 $ 38 $ 76 $ 83 (3) Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Interest expense $ (13 ) $ (14 ) $ (40 ) $ (41 ) Total certain items, pre-tax (a) (567 ) (7 ) (599 ) (19 ) Equity in (earnings) loss of affiliated companies, net of tax (b) (1 ) 2 (4 ) 2 Unallocated corporate costs (c) (12 ) (14 ) (35 ) (43 ) General unallocated income (expense) (d) (2 ) 4 7 (1 ) Total $ (595 ) $ (29 ) $ (671 ) $ (102 ) (a) (b) (c) (d) |
Schedule of Performance Segment | The net sales from each of these businesses for the three and nine months ended June 30, 2015 and 2014 are as follows: Three Months Ended June 30 Nine Months Ended June 30 2015 2014 2015 2014 (Dollars in millions) Specialty Carbons and Formulations $ 159 $ 182 $ 478 $ 531 Metal Oxides 75 80 222 232 Total Performance Chemicals $ 234 $ 262 $ 700 $ 763 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | 1 Months Ended | |
Dec. 31, 2014SegmentsSegment | Nov. 30, 2013 | |
Basis Of Presentation [Line Items] | ||
Number of reporting segments | 4 | |
NHUMO [Member] | ||
Basis Of Presentation [Line Items] | ||
Percentage acquisition | 60.00% | |
Ownership percentage prior to acquisition | 40.00% |
Significant Accounting Polici41
Significant Accounting Policies - Segment Reporting Revenue Percentage (Detail) - Sales Revenue, Segment [Member] - Segment Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reinforcement Materials [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 52.00% | 60.00% | 55.00% | 59.00% |
Performance Chemicals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 35.00% | 29.00% | 33.00% | 29.00% |
Purification Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 11.00% | 9.00% | 10.00% | 9.00% |
Specialty Fluids [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 2.00% | 2.00% | 2.00% | 3.00% |
Significant Accounting Polici42
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Sep. 30, 2014 | |
Significant Accounting Policies [Line Items] | ||
Value of inventories under FIFO method | $ 37 | $ 52 |
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 |
Acquisition of NHUMO - Addition
Acquisition of NHUMO - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Nov. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | |
Business Acquisition [Line Items] | ||||
Preferred stock redemption amount | $ 27 | $ 28 | ||
Gain on acquisition | $ 29 | |||
Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | $ 63 | |||
Amortized period | 20 years | |||
NHUMO [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquisition | 60.00% | |||
Ownership percentage prior to acquisition | 40.00% | |||
Cash paid on acquisition | 80 | $ 80 | ||
Dividend percentage of preferred stock | 6.00% | |||
Preferred stock issued on acquisition | $ 25 | |||
Dividend payment | 1.5 | |||
Dividend received from NHUMO | 14 | |||
Gain on acquisition | $ 29 | |||
Previously held equity interest in NHUMO | $ 54 | $ 54 | ||
NHUMO [Member] | Carrying Value [Member] | ||||
Business Acquisition [Line Items] | ||||
Preferred stock redemption amount | $ 25 |
Acquisition of NHUMO - Componen
Acquisition of NHUMO - Components and Allocation of Purchase Price (Detail) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Nov. 30, 2013 | Jun. 30, 2015 | |
Assets | |||
Goodwill | $ 536 | $ 157 | |
NHUMO [Member] | |||
Assets | |||
Current assets | 54 | ||
Property, plant and equipment | 48 | ||
Other non-current assets | 1 | ||
Intangible assets | 63 | ||
Goodwill | 45 | ||
Total assets acquired | 211 | ||
Liabilities | |||
Accounts payable, accruals and other liabilities | (20) | ||
Deferred tax liabilities - long-term | (29) | ||
Total liabilities assumed | (49) | ||
Net assets acquired | 162 | ||
Cash consideration paid | 80 | $ 80 | |
Fair value of redeemable preferred stock | 28 | ||
Previously held equity interest in NHUMO | 54 | $ 54 | |
Total | $ 162 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Discontinued Operations And Disposal Groups [Abstract] | ||||
Income (loss) from discontinued operations, net of tax | $ 1 | $ (1) | $ 1 | $ (2) |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement costs | $ 18 | |||
U.S. Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 2 | ||
Interest cost | $ 2 | 2 | 5 | 6 |
Expected return on plan assets | (3) | (3) | (8) | (8) |
Net periodic benefit (credit) cost | (1) | (3) | ||
Foreign Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | 7 | 7 |
Interest cost | 3 | 4 | 9 | 12 |
Expected return on plan assets | (4) | (5) | (12) | (15) |
Amortization of actuarial loss | 1 | 1 | 3 | 3 |
Settlement costs | 18 | |||
Net periodic benefit (credit) cost | 2 | 2 | 25 | 7 |
United States Postretirement Benefit Plans Of U S Entity Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1 | 1 | 2 | |
Amortization of prior service credit | (1) | (1) | (2) | (2) |
Net periodic benefit (credit) cost | (1) | (1) | ||
Foreign Postretirement Benefit Plans Defined Benefit | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1 | 1 | 1 | 1 |
Net periodic benefit (credit) cost | $ 1 | $ 1 | $ 1 | $ 1 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - Jun. 30, 2015 - USD ($) $ in Millions | Total |
Defined Benefit Plan Disclosure [Line Items] | |
Settlement costs | $ 18 |
Pre-tax charge from AOCI | 27 |
Settlement charges on pension liability | 11 |
Settlement charges on employer contributions | $ 2 |
Minimum [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to multi-employer plan | 80.00% |
Purification Solutions Goodwi48
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Impairment Charges and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Intangible Assets [Line Items] | |||
Goodwill impairment charge | $ 353 | $ 353 | |
Long-lived asset impairment charge | $ 209 | 209 | $ 4 |
Deferred tax (benefit) provision | (75) | $ (16) | |
Impairment charges, after tax | 482 | ||
Purification Solutions [Member] | |||
Intangible Assets [Line Items] | |||
Goodwill impairment charge | 353 | ||
Deferred tax (benefit) provision | $ (80) |
Purification Solutions Goodwi49
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Intangible Assets [Line Items] | |||
Pre-tax goodwill impairment charge | $ 353 | $ 353 | |
Impairment loss of indefinite lived Intangibles | 39 | ||
Impairment charges of definite lived Intangible assets | 119 | ||
Long-lived asset impairment charge | $ 209 | 209 | $ 4 |
Deferred tax benefit to income tax provision | 75 | $ 16 | |
Purification Solutions [Member] | |||
Intangible Assets [Line Items] | |||
Pre-tax goodwill impairment charge | 353 | ||
Deferred tax benefit to income tax provision | 80 | ||
Property, Plant and Equipment | |||
Intangible Assets [Line Items] | |||
Long-lived asset impairment charge | $ 51 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | |
Intangible Assets [Line Items] | |||||
Goodwill | $ 157 | $ 157 | $ 536 | ||
Amortization expense estimated for year one | 9 | 9 | |||
Amortization expense estimated for year two | 9 | 9 | |||
Amortization expense estimated for year three | 9 | 9 | |||
Amortization expense estimated for year four | 9 | 9 | |||
Amortization expense estimated for year five | 9 | 9 | |||
Cost of Sales and Selling and Administrative Expenses [Member] | |||||
Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 3 | $ 4 | $ 12 | $ 13 | |
Minimum [Member] | |||||
Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 14 years | ||||
Maximum [Member] | |||||
Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 25 years | ||||
Weighted Average [Member] | |||||
Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 19 years |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) - Jun. 30, 2015 - USD ($) $ in Millions | Total | Total |
Goodwill And Other Intangible Asset [Line Items] | ||
Beginning balance | $ 536 | |
Goodwill impairment charge (Note F) | $ (353) | (353) |
Foreign currency impact | (26) | |
Ending balance | 157 | 157 |
Reinforcement Materials [Member] | ||
Goodwill And Other Intangible Asset [Line Items] | ||
Beginning balance | 68 | |
Foreign currency impact | (9) | |
Ending balance | 59 | 59 |
Performance Chemicals [Member] | ||
Goodwill And Other Intangible Asset [Line Items] | ||
Beginning balance | 10 | |
Foreign currency impact | (1) | |
Ending balance | 9 | 9 |
Purification Solutions [Member] | ||
Goodwill And Other Intangible Asset [Line Items] | ||
Beginning balance | 458 | |
Goodwill impairment charge (Note F) | (353) | |
Foreign currency impact | (16) | |
Ending balance | $ 89 | $ 89 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 164 | $ 380 |
Accumulated Amortization | (5) | (33) |
Net Intangible Assets | 159 | 347 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 48 | 152 |
Accumulated Amortization | (16) | |
Net Intangible Assets, finite lives | 48 | 136 |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 16 | 57 |
Net Intangible Assets, finite lives | 16 | 57 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 100 | 171 |
Accumulated Amortization | (5) | (17) |
Net Intangible Assets, finite lives | $ 95 | $ 154 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jan. 31, 2015 | Sep. 30, 2007 | |
Class Of Stock [Line Items] | ||||
Repurchase authorization, shares | 5,000,000 | 10,000,000 | ||
Cash dividends paid to common stockholders | $ 42 | $ 40 | ||
Cash dividend paid per share | $ 0.66 | $ 0.62 | ||
2007 Share Repurchase Authorization [Member] | ||||
Class Of Stock [Line Items] | ||||
Common stock shares repurchased | 925,700 | 379 | ||
January 2015 Share Repurchase Authorization [Member] | ||||
Class Of Stock [Line Items] | ||||
Common stock shares repurchased | 874,300 | |||
Shares remaining available for repurchase under the current authorization | 4,125,700 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Activity in Noncontrolling Interests (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Equity [Abstract] | ||||
Balance at September 30 | $ 122 | $ 132 | ||
Net income attributable to noncontrolling interests | $ 2 | $ 5 | 7 | 14 |
Noncontrolling interest foreign currency translation adjustment | (3) | (2) | ||
Noncontrolling interest dividends | (22) | (25) | ||
Balance at June 30 | $ 104 | $ 119 | $ 104 | $ 119 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Loss - Changes in Each Component of AOCI, Net of Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Balance attributable to Cabot Corporation | $ (273) | $ (144) | $ (64) | $ (64) | ||
Other comprehensive loss before reclassifications | 18 | (131) | (103) | |||
Amounts reclassified from accumulated other comprehensive income | 1 | 21 | ||||
Other comprehensive income (loss) | 18 | (130) | (82) | $ 13 | (194) | $ (15) |
Less: Noncontrolling interest | (1) | (2) | ||||
Balance attributable to Cabot Corporation | (255) | (273) | (144) | (255) | ||
Currency Translation Adjustment [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Balance attributable to Cabot Corporation | (204) | (74) | 27 | 27 | ||
Other comprehensive loss before reclassifications | 18 | (131) | (103) | |||
Other comprehensive income (loss) | 18 | (131) | (103) | |||
Less: Noncontrolling interest | (1) | (2) | ||||
Balance attributable to Cabot Corporation | (186) | (204) | (74) | (186) | ||
Unrealized Gains on Investments [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Balance attributable to Cabot Corporation | 2 | 2 | 2 | 2 | ||
Balance attributable to Cabot Corporation | 2 | 2 | 2 | 2 | ||
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Balance attributable to Cabot Corporation | (71) | (72) | (93) | (93) | ||
Amounts reclassified from accumulated other comprehensive income | 1 | 21 | ||||
Other comprehensive income (loss) | 1 | 21 | ||||
Balance attributable to Cabot Corporation | $ (71) | $ (71) | $ (72) | $ (71) |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Loss - Accumulated Other Comprehensive Items in Accompanying Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||||
Foreign currency translation adjustments at beginning of period | $ 27 | $ 154 | ||
Net foreign currency translation adjustments attributable to Cabot during the period | (213) | (127) | ||
Foreign currency translation adjustments at end of period | (186) | 27 | ||
Unrealized gain on investments at beginning of period | 2 | 2 | ||
Unrealized gain on investments at end of period | 2 | 2 | ||
Pension and other postretirement benefit plans attributable to Cabot at beginning of period | (93) | (53) | ||
Net change in pension and other postretirement benefit plans during the period | 22 | (40) | ||
Pension and other postretirement benefit plans at end of period | (71) | (93) | ||
Total accumulated other comprehensive loss | $ (255) | $ (64) | $ (273) | $ (144) |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Loss - Amounts Reclassified Out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pre-tax charge from AOCI | $ 27 | |||
Total before tax | $ (509) | $ 80 | (419) | $ 237 |
Benefit (provision) for income taxes | 64 | (20) | 47 | (51) |
(Loss) income from continuing operations | (444) | 58 | (368) | 184 |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Pre-tax charge from AOCI | 27 | |||
Total before tax | 28 | 1 | ||
Benefit (provision) for income taxes | (6) | |||
(Loss) income from continuing operations | 22 | 1 | ||
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of actuarial losses | 1 | 1 | 3 | 3 |
Amortization of prior service cost | $ (1) | $ (1) | $ (2) | $ (2) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended | ||
Jun. 30, 2015USD ($)claimants | Jun. 30, 2014USD ($) | Sep. 30, 2014USD ($)claimants | |
Respirator Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Number of claimants | claimants | 38,000 | 41,000 | |
Respirator reserve on discounted basis | $ 11 | $ 13 | |
Cash payments for respirator reserves | 2 | $ 2 | |
Environmental Matters [Member] | |||
Loss Contingencies [Line Items] | |||
Reserved for environmental matters, on an undiscounted basis | 16 | $ 17 | |
Cash payments for environmental reserves | $ 1 | $ 2 |
Income Tax - Effective Tax Rate
Income Tax - Effective Tax Rate (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
(Benefit) Provision for income taxes | $ (64) | $ 20 | $ (47) | $ 51 |
Effective tax rate | 13.00% | 25.00% | 11.00% | 22.00% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - Jun. 30, 2015 - USD ($) $ in Millions | Total | Total |
Income Taxes [Line Items] | ||
Long-lived assets impairment | $ 209 | |
Deferred tax liabilities | $ 80 | 80 |
Goodwill impairment charge related to goodwill | 353 | 353 |
Uncertain tax positions from expirations of statute of limitations | 1 | 13 |
Deferred tax assets | $ 5 | $ 5 |
Earliest Tax Year [Member] | U.S. Federal [Member] | Internal Revenue Service (IRS) [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,012 | |
Earliest Tax Year [Member] | State Tax Authorities [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,005 | |
Earliest Tax Year [Member] | Non-U.S. Jurisdictions [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,004 | |
Latest Tax Year [Member] | U.S. Federal [Member] | Internal Revenue Service (IRS) [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,014 | |
Latest Tax Year [Member] | State Tax Authorities [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,014 | |
Latest Tax Year [Member] | Non-U.S. Jurisdictions [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2,014 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Basic EPS: | ||||
Net (loss) income attributable to Cabot Corporation | $ (445) | $ 52 | $ (374) | $ 168 |
Less: Undistributed earnings allocated to participating securities | 1 | 2 | ||
(Loss) earnings allocated to common shareholders (numerator) | $ (445) | $ 51 | $ (374) | $ 166 |
Weighted average common shares and participating securities outstanding | 63.8 | 65.1 | 64.2 | 64.9 |
Less: Participating securities | 0.5 | 0.6 | 0.5 | 0.6 |
Adjusted weighted average common shares (denominator) | 63.3 | 64.5 | 63.7 | 64.3 |
(Loss) income from continuing operations attributable to Cabot Corporation | $ (7.05) | $ 0.80 | $ (5.89) | $ 2.61 |
Income (loss) from discontinued operations | 0.01 | (0.01) | 0.01 | (0.03) |
Net (loss) income attributable to Cabot Corporation | $ (7.04) | $ 0.79 | $ (5.88) | $ 2.58 |
Diluted EPS(2): | ||||
(Loss) earnings allocated to common shareholders | $ (445) | $ 51 | $ (374) | $ 166 |
Plus: (Loss) earnings allocated to participating securities | 1 | 2 | ||
Less: Adjusted earnings allocated to participating securities | (1) | (2) | ||
(Loss) earnings allocated to common shareholders (numerator) | $ (445) | $ 51 | $ (374) | $ 166 |
Adjusted weighted average common shares outstanding | 63.3 | 64.5 | 63.7 | 64.3 |
Common shares issuable | 0.7 | 0.7 | ||
Adjusted weighted average common shares (denominator) | 63.3 | 65.2 | 63.7 | 65 |
(Loss) income from continuing operations attributable to Cabot Corporation | $ (7.05) | $ 0.79 | $ (5.89) | $ 2.58 |
Income (loss) from discontinued operations | 0.01 | (0.01) | 0.01 | (0.03) |
Net (loss) income attributable to Cabot Corporation | $ (7.04) | $ 0.78 | $ (5.88) | $ 2.55 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to Cabot Corporation | $ (445) | $ 52 | $ (374) | $ 168 |
Less: Dividends declared on common stock | 14 | 14 | 42 | 40 |
Undistributed (loss) earnings | (459) | 38 | (416) | 128 |
Undistributed (loss) earnings allocated to common shareholders | $ (459) | 37 | $ (416) | 126 |
Undistributed (loss) earnings allocated to participating shareholders | $ 1 | $ 2 |
Earnings Per Share - Calculat63
Earnings Per Share - Calculation of Undistributed Earnings (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share | 492,172 | 142,115 | 508,991 | 203,019 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 2 | $ 4 | $ 14 | $ 24 |
Cost of Sales [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, period expense | 1 | 2 | 4 | 11 |
Selling and Administrative Expenses [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 1 | $ 2 | $ 10 | $ 13 |
Restructuring - Restructuring A
Restructuring - Restructuring Activities and Related Reserves (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 13 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||||
Reserve balance | $ 13 | $ 19 | |||
Charges | 2 | $ 4 | 14 | $ 24 | |
Costs charged against assets / liabilities | (1) | ||||
Cash paid | (5) | (20) | $ (19) | ||
Foreign currency translation adjustment | (2) | ||||
Reserve balance | 10 | 10 | 10 | ||
Severance and Employee Benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reserve balance | 9 | 16 | |||
Charges | 2 | 7 | |||
Cash paid | (5) | (15) | |||
Foreign currency translation adjustment | (2) | ||||
Reserve balance | 6 | 6 | 6 | ||
Environmental Remediation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reserve balance | 3 | 2 | |||
Charges | 1 | ||||
Reserve balance | 3 | 3 | 3 | ||
Asset Impairment and Accelerated Depreciation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges | 1 | ||||
Costs charged against assets / liabilities | (1) | ||||
Other [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reserve balance | 1 | 1 | |||
Charges | 5 | ||||
Cash paid | (5) | ||||
Reserve balance | $ 1 | $ 1 | $ 1 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | Apr. 26, 2013Employees | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | $ 2,000,000 | $ 4,000,000 | $ 14,000,000 | $ 24,000,000 | ||||||||
Expected cumulative net cash outlays related to plan | $ 22,000,000 | 22,000,000 | 22,000,000 | $ 22,000,000 | $ 22,000,000 | |||||||
Cash payments | 5,000,000 | 20,000,000 | 19,000,000 | |||||||||
Restructuring costs in accrued expenses | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | $ 13,000,000 | $ 19,000,000 | |||||
Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | 6,000,000 | 6,000,000 | |||||||||
Maximum [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 2,000,000 | |||||||||||
Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Expected cumulative net cash outlays related to plan | $ 3,000,000 | $ 3,000,000 | ||||||||||
Additional restructuring charges after current fiscal | 1,000,000 | |||||||||||
Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 2,000,000 | 7,000,000 | ||||||||||
Severance charges | 14,000,000 | 1,000,000 | 14,000,000 | 12,000,000 | ||||||||
Cash payments | 5,000,000 | 15,000,000 | ||||||||||
Restructuring costs in accrued expenses | 6,000,000 | 6,000,000 | 6,000,000 | 6,000,000 | 6,000,000 | 9,000,000 | 16,000,000 | |||||
Severance and Employee Benefits [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance charges | 2,000,000 | |||||||||||
Other Transition Costs [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Other charges | 8,000,000 | 4,000,000 | 1,000,000 | 7,000,000 | ||||||||
Other Transition Costs [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Other charges | 1,000,000 | |||||||||||
Environmental Remediation [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | |||||||||||
Restructuring costs in accrued expenses | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | $ 3,000,000 | $ 2,000,000 | |||||
Severance Costs [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Cash payments | 4,000,000 | |||||||||||
Accrued severance charges | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||||
Severance Costs [Member] | Scenario, Forecast [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Cash payments | 5,000,000 | |||||||||||
Shared Service Center Transition [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | 1,000,000 | 5,000,000 | 15,000,000 | 23,000,000 | |||||||
Restructuring costs in accrued expenses | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | |||||||
Shared Service Center Transition [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 24,000,000 | |||||||||||
Shared Service Center Transition [Member] | Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance charges | 16,000,000 | |||||||||||
Shared Service Center Transition [Member] | Severance and Employee Benefits [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance charges | 16,000,000 | |||||||||||
Shared Service Center Transition [Member] | Other Transition Costs [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Other charges | 7,000,000 | |||||||||||
Shared Service Center Transition [Member] | Other Transition Costs [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Other charges | $ 8,000,000 | |||||||||||
Closure of Port Dickson [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Severance charges | 2,000,000 | |||||||||||
Other charges | 1,000,000 | |||||||||||
Expected cumulative net cash outlays related to plan | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||
Equity share in CMSB | 50.10% | |||||||||||
Affected employees | Employees | 90 | |||||||||||
Pre-tax charge to earnings | $ 18,000,000 | $ 18,000,000 | 18,000,000 | $ 18,000,000 | $ 18,000,000 | |||||||
Accelerated depreciation and asset write-offs | $ 15,000,000 | |||||||||||
Portion of the charges that are allocable to the noncontrolling interest | 49.90% | 49.90% | 49.90% | 49.90% | 49.90% | |||||||
Site demolition, clearing and environmental remediation costs | $ 2,000,000 | |||||||||||
Closure of Port Dickson [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Other charges | $ 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 | ||||||||
Restructuring costs in accrued expenses | $ 1,000,000 | 1,000,000 | 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||||||
Closure of Port Dickson [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Cash payments | 1,000,000 | |||||||||||
Expected proceeds from the sale of land | 8,000,000 | |||||||||||
Closure of Port Dickson [Member] | Scenario, Forecast [Member] | Land [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Expected gain from land sale to partially offset restructuring charges | 2,000,000 | |||||||||||
Closure of Port Dickson [Member] | Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Expected cumulative net cash outlays related to plan | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||||
Closure of Port Dickson [Member] | Environmental Remediation [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Expected cumulative net cash outlays related to plan | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||||
Closure of Port Dickson [Member] | Facility Closure Costs [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Expected cumulative net cash outlays related to plan | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Closure of Port Dickson [Member] | Severance Costs [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Cash payments | 4,000,000 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 2,000,000 | $ 6,000,000 | ||||||||||
Severance charges | 67,000,000 | |||||||||||
Other charges | 23,000,000 | |||||||||||
Cash payments | 86,000,000 | |||||||||||
Pre-tax charge to earnings | 165,000,000 | 165,000,000 | 165,000,000 | 165,000,000 | 165,000,000 | |||||||
Expected gain from land sale to partially offset restructuring charges | 1,000,000 | |||||||||||
Site demolition, clearing and environmental remediation costs | 10,000,000 | |||||||||||
Restructuring accelerated depreciation and asset impairments | 66,000,000 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | $ 1,000,000 | ||||||||||
Previous Actions and Sites Pending Sale [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Cash payments | $ 3,000,000 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | Severance Costs [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Accrued severance charges | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Financial Instruments and Fai67
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, liabilities, Level 2 to Level 1 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, transfers into Level 3, amount | 0 | 0 | |
Fair value, assets, transfers out of Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers into Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers out of Level 3, amount | 0 | $ 0 | |
Fair value of long-term debt | 1,010,000,000 | $ 1,050,000,000 | |
Fixed Rate Debt [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of long-term debt | 960,000,000 | 980,000,000 | |
Significant Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets in the Consolidated Balance Sheets | $ 12,000,000 | $ 13,000,000 |
Derivative - Additional Informa
Derivative - Additional Information (Detail) - USD ($) | Jun. 30, 2015 | Sep. 30, 2014 |
Fair Value Hedging [Member] | Interest Rate Swap-Fixed to Variable [Member] | ||
Derivative [Line Items] | ||
Derivatives held to manage interest rate risk | $ 0 | $ 0 |
Derivatives - Schedule of Deriv
Derivatives - Schedule of Derivatives Foreign Currency (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 | |
Not Designated as Hedging Instrument [Member] | Forward Foreign Currency Contracts [Member] | |||
Derivative [Line Items] | |||
Notional amount, net of forward foreign currency contract no designation hedge derivatives | [1] | $ 1 | $ 32 |
[1] | Cabot’s forward foreign exchange contracts are denominated primarily in the Brazilian real, British pound sterling, Czech koruna, Indonesian rupiah, and Mexican peso. |
Venezuela - Additional Informat
Venezuela - Additional Information (Detail) VEF in Millions | 9 Months Ended | ||
Jun. 30, 2015USD ($)VEB / $ | Jun. 30, 2014USD ($) | Jun. 30, 2015VEFVEB / $ | |
Nature Of Operations [Line Items] | |||
Operating affiliate investment | $ 15,000,000 | ||
Due from affiliates, dividends cash | VEF | VEF 18 | ||
Conversion of Bolivars to USD | VEB / $ | 52 | 52 | |
Subsidiaries [Member] | |||
Nature Of Operations [Line Items] | |||
Cash dividend received from subsidiary | $ 5,000,000 | $ 4,000,000 | |
Maximum [Member] | |||
Nature Of Operations [Line Items] | |||
Due from affiliates, dividends cash | $ 1,000,000 | ||
Carbon Black Affiliate [Member] | Venezuela [Member] | |||
Nature Of Operations [Line Items] | |||
Equity method investment, ownership percentage | 49.00% | 49.00% |
Financial Information by Segm71
Financial Information by Segment - Additional Information (Detail) | 1 Months Ended | 9 Months Ended |
Dec. 31, 2014SegmentsSegment | Jun. 30, 2015SegmentBusiness_Unit | |
Segment Reporting Information [Line Items] | ||
Number of aggregated business segment | 4 | |
Performance Chemicals [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of aggregated business segment | 1 | |
Number of business activity | Business_Unit | 2 |
Financial Information by Segm72
Financial Information by Segment - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | $ 694 | $ 940 | $ 2,200 | $ 2,736 |
Income (loss) from continuing operations before taxes | (509) | 80 | (419) | 237 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 669 | 902 | 2,124 | 2,653 |
Income (loss) from continuing operations before taxes | 86 | 109 | 252 | 339 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 25 | 38 | 76 | 83 |
Income (loss) from continuing operations before taxes | (595) | (29) | (671) | (102) |
Reinforcement Materials [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 351 | 538 | 1,169 | 1,583 |
Income (loss) from continuing operations before taxes | 32 | 62 | 112 | 200 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 234 | 262 | 700 | 763 |
Income (loss) from continuing operations before taxes | 48 | 44 | 129 | 127 |
Purification Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 72 | 78 | 219 | 230 |
Income (loss) from continuing operations before taxes | 3 | (7) | 3 | (20) |
Specialty Fluids [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 12 | 24 | 36 | 77 |
Income (loss) from continuing operations before taxes | $ 3 | $ 10 | $ 8 | $ 32 |
Financial Information by Segm73
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm74
Financial Information by Segment - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 694 | $ 940 | $ 2,200 | $ 2,736 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 25 | 38 | 76 | 83 |
Unallocated and Other [Member] | Royalties, Other Operating Revenues, the Impact of Unearned Revenue, the Removal of 100% of the Sales of an Equity Method Affiliate and Discounting Charges for Certain Notes Receivable [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (5) | 10 | (9) | (2) |
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 30 | $ 28 | $ 85 | $ 85 |
Financial Information by Segm75
Financial Information by Segment - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm76
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Interest expense | $ (13) | $ (14) | $ (40) | $ (41) |
Equity in (earnings) loss of affiliated companies, net of tax | 4 | (2) | ||
(Loss) income from continuing operations | (509) | 80 | (419) | 237 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | (13) | (14) | (40) | (41) |
Total certain items, pre-tax | (567) | (7) | (599) | (19) |
Equity in (earnings) loss of affiliated companies, net of tax | (1) | 2 | (4) | 2 |
Unallocated corporate costs | (12) | (14) | (35) | (43) |
General unallocated income (expense) | (2) | 4 | 7 | (1) |
(Loss) income from continuing operations | $ (595) | $ (29) | $ (671) | $ (102) |
Financial Information by Segm77
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Taxes for Unallocated and Other (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Restructuring charges | $ 2 | $ 4 | $ 14 | $ 24 |
Asset Impairment Charges | 482 | |||
Employee benefit plan settlement charge | 18 | |||
Non-cash gain on acquisition | 29 | |||
Certain Item [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges | 2 | 3 | 14 | 24 |
Asset Impairment Charges | 563 | 563 | ||
Acquisition and integration related charges | 2 | 5 | ||
Employee benefit plan settlement charge | 18 | |||
One-time integration costs | 3 | |||
Acquisition of accounting adjustments for acquired inventory | 2 | |||
Reserves for environmental matters | 1 | 16 | ||
Foreign currency exchange rate, re measurement income (loss) | $ 2 | $ 3 | $ 2 | 3 |
Non-cash gain on acquisition | $ 29 |
Financial Information by Segm78
Financial Information by Segment - Schedule of Performance Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 694 | $ 940 | $ 2,200 | $ 2,736 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 669 | 902 | 2,124 | 2,653 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 234 | 262 | 700 | 763 |
Performance Chemicals [Member] | Specialty Carbons and Formulations [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 159 | 182 | 478 | 531 |
Performance Chemicals [Member] | Metal Oxides [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 75 | $ 80 | $ 222 | $ 232 |
Commitments and Contingencies79
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) $ in Millions | Jun. 30, 2015USD ($) |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2015 | $ 112 |
Payments Due by Fiscal Year 2016 | 300 |
Payments Due by Fiscal Year 2017 | 225 |
Payments Due by Fiscal Year 2018 | 217 |
Payments Due by Fiscal Year 2019 | 213 |
Payments Due Thereafter | 2,129 |
Payments Due, Total | 3,196 |
Reinforcement Materials [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2015 | 86 |
Payments Due by Fiscal Year 2016 | 227 |
Payments Due by Fiscal Year 2017 | 178 |
Payments Due by Fiscal Year 2018 | 177 |
Payments Due by Fiscal Year 2019 | 173 |
Payments Due Thereafter | 1,911 |
Payments Due, Total | 2,752 |
Performance Chemicals [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2015 | 19 |
Payments Due by Fiscal Year 2016 | 60 |
Payments Due by Fiscal Year 2017 | 38 |
Payments Due by Fiscal Year 2018 | 33 |
Payments Due by Fiscal Year 2019 | 33 |
Payments Due Thereafter | 210 |
Payments Due, Total | 393 |
Purification Solutions [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2015 | 7 |
Payments Due by Fiscal Year 2016 | 13 |
Payments Due by Fiscal Year 2017 | 9 |
Payments Due by Fiscal Year 2018 | 7 |
Payments Due by Fiscal Year 2019 | 7 |
Payments Due Thereafter | 8 |
Payments Due, Total | $ 51 |