Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
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 | 62,377,934 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net sales and other operating revenues | $ 621 | $ 694 | $ 1,792 | $ 2,200 |
Cost of sales | 461 | 544 | 1,383 | 1,754 |
Gross profit | 160 | 150 | 409 | 446 |
Selling and administrative expenses | 64 | 67 | 197 | 216 |
Research and technical expenses | 13 | 15 | 40 | 44 |
Long-lived assets impairment charge (Note B) | 23 | 209 | ||
Goodwill impairment charge (Note B) | 353 | |||
Income (loss) from operations | 83 | (494) | 172 | (376) |
Interest and dividend income | 1 | 1 | 4 | 3 |
Interest expense | (13) | (13) | (40) | (40) |
Other income (expense) | 3 | (3) | (8) | (6) |
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 74 | (509) | 128 | (419) |
(Provision) benefit for income taxes | (15) | 64 | (21) | 47 |
Equity in earnings of affiliated companies, net of tax | 1 | 1 | 2 | 4 |
Income (loss) from continuing operations | 60 | (444) | 109 | (368) |
Income from discontinued operations, net of tax | 1 | 1 | ||
Net income (loss) | 60 | (443) | 109 | (367) |
Net income attributable to noncontrolling interests, net of tax | 4 | 2 | 12 | 7 |
Net income (loss) attributable to Cabot Corporation | $ 56 | $ (445) | $ 97 | $ (374) |
Weighted-average common shares outstanding: | ||||
Basic | 62.4 | 63.3 | 62.4 | 63.7 |
Diluted | 62.9 | 63.3 | 62.9 | 63.7 |
Basic: | ||||
Income (loss) from continuing operations attributable to Cabot Corporation | $ 0.90 | $ (7.05) | $ 1.55 | $ (5.89) |
Income from discontinued operations | 0.01 | 0.01 | ||
Net income (loss) attributable to Cabot Corporation | 0.90 | (7.04) | 1.55 | (5.88) |
Diluted: | ||||
Income (loss) from continuing operations attributable to Cabot Corporation | 0.88 | (7.05) | 1.53 | (5.89) |
Income from discontinued operations | 0.01 | 0.01 | ||
Net income (loss) attributable to Cabot Corporation | 0.88 | (7.04) | 1.53 | (5.88) |
Dividends per common share | $ 0.30 | $ 0.22 | $ 0.74 | $ 0.66 |
Purification Solutions [Member] | ||||
Long-lived assets impairment charge (Note B) | $ 209 | $ 209 | ||
Goodwill impairment charge (Note B) | $ 353 | $ 353 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 60 | $ (443) | $ 109 | $ (367) |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment (net of tax benefit of $-, $-, $- and $1) | (13) | 18 | 5 | (216) |
Pension and other postretirement benefit liability adjustments | ||||
Pension and other postretirement benefit liability adjustments arising during the period, net of tax | (1) | 21 | ||
Amortization of net loss and prior service credit included in net periodic pension cost, net of tax | (1) | 1 | ||
Other comprehensive (loss) income | (14) | 18 | 4 | (194) |
Comprehensive income (loss) | 46 | (425) | 113 | (561) |
Net income attributable to noncontrolling interests | 4 | 2 | 12 | 7 |
Noncontrolling interests foreign currency translation adjustment, net of tax | (3) | (5) | (3) | |
Comprehensive income attributable to noncontrolling interests, net of tax | 1 | 2 | 7 | 4 |
Comprehensive income (loss) attributable to Cabot Corporation | $ 45 | $ (427) | $ 106 | $ (565) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (Unaudited) $ in Millions | 9 Months Ended |
Jun. 30, 2015USD ($) | |
Statement Of Income And Comprehensive Income [Abstract] | |
Foreign currency translation adjustment, tax benefit | $ 1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 222 | $ 77 |
Accounts and notes receivable, net of reserve for doubtful accounts of $8 and $7 | 434 | 477 |
Inventories: | ||
Raw materials | 67 | 69 |
Work in process | 3 | 1 |
Finished goods | 223 | 287 |
Other | 37 | 40 |
Total inventories | 330 | 397 |
Prepaid expenses and other current assets | 44 | 54 |
Deferred income taxes | 49 | 43 |
Total current assets | 1,079 | 1,048 |
Property, plant and equipment, net | 1,297 | 1,383 |
Goodwill | 152 | 154 |
Equity affiliates | 55 | 57 |
Intangible assets, net | 142 | 153 |
Assets held for rent | 95 | 86 |
Deferred income taxes | 172 | 152 |
Other assets | 41 | 42 |
Total assets | 3,033 | 3,075 |
Current liabilities: | ||
Notes payable | 7 | 22 |
Accounts payable and accrued liabilities | 332 | 389 |
Income taxes payable | 20 | 28 |
Deferred income taxes | 1 | 1 |
Current portion of long-term debt | 301 | 1 |
Total current liabilities | 661 | 441 |
Long-term debt | 669 | 970 |
Deferred income taxes | 67 | 59 |
Other liabilities | 226 | 240 |
Redeemable preferred stock | 27 | 27 |
Commitments and contingencies (Note G) | ||
Preferred stock: | ||
Authorized: 2,000,000 shares of $1 par value Issued and Outstanding: None and none | ||
Common stock: | ||
Authorized: 200,000,000 shares of $1 par value Issued: 62,530,702 and 62,704,966 shares Outstanding: 62,288,963 and 62,458,396 shares | 63 | 63 |
Less cost of 241,739 and 246,570 shares of common treasury stock | (8) | (8) |
Retained earnings | 1,523 | 1,478 |
Accumulated other comprehensive loss | (290) | (299) |
Total Cabot Corporation stockholders' equity | 1,288 | 1,234 |
Noncontrolling interests | 95 | 104 |
Total stockholders' equity | 1,383 | 1,338 |
Total liabilities and stockholders’ equity | $ 3,033 | $ 3,075 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2016 | Sep. 30, 2015 |
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 | 62,530,702 | 62,704,966 |
Common stock, outstanding shares | 62,288,963 | 62,458,396 |
Common treasury stock, shares | 241,739 | 246,570 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 109 | $ (367) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 122 | 140 |
Long-lived asset impairment charge | 23 | 209 |
Goodwill impairment charge | 353 | |
Deferred tax benefit | (13) | (75) |
Employee benefit plan settlement | 18 | |
Equity in net income of affiliated companies | (2) | (4) |
Non-cash compensation | 13 | 9 |
Other non-cash expense (income) | 3 | (3) |
Changes in assets and liabilities: | ||
Accounts and notes receivable | 42 | 80 |
Inventories | 61 | 33 |
Prepaid expenses and other current assets | 9 | 4 |
Accounts payable and accrued liabilities | (56) | (84) |
Income taxes payable | (10) | (22) |
Other liabilities | (16) | (27) |
Cash dividends received from equity affiliates | 8 | 10 |
Other | 2 | 4 |
Cash provided by operating activities | 295 | 278 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (80) | (103) |
Proceeds from the sale of land | 16 | |
Change in assets held for rent | (6) | (8) |
Cash used in investing activities | (70) | (111) |
Cash Flows from Financing Activities: | ||
Repayments under financing arrangements | (3) | (4) |
Increase in notes payable, net | 1 | |
(Repayments of) proceeds from issuance of commercial paper, net | (11) | 111 |
Repayments of long-term debt | (1) | (57) |
Purchases of common stock | (27) | (85) |
Proceeds from sales of common stock | 8 | 6 |
Cash dividends paid to noncontrolling interests | (16) | (16) |
Cash dividends paid to common stockholders | (47) | (42) |
Cash used in financing activities | (97) | (86) |
Effects of exchange rate changes on cash | 17 | (64) |
Increase in cash and cash equivalents | 145 | 17 |
Cash and cash equivalents at beginning of period | 77 | 67 |
Cash and cash equivalents at end of period | $ 222 | $ 84 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2016 | |
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, 2015 (“2015 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, 2016 and 2015. 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. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2016 | |
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. Taxes collected on sales to customers are excluded from revenues. The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments. Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 Reinforcement Materials 46 % 52 % 48 % 55 % Performance Chemicals 38 % 35 % 38 % 33 % Purification Solutions 13 % 11 % 12 % 10 % Specialty Fluids 3 % 2 % 2 % 2 % Cabot derives the substantial majority of its revenues from the sale of products in the Reinforcement Materials, Performance Chemicals, and Purification Solutions segments. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. For major activated carbon injection systems projects in Purification Solutions, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of 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 were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to Performance Chemicals is recorded in the Fumed Metal Oxides reporting unit. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline below its carrying amount because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. When the Company performed its annual goodwill impairment test in the third quarter of fiscal 2015, the fair value of the Purification Solutions reporting unit was less than its carrying amount and the Company recorded impairment charges as a result. A discussion of this assessment and the charges recorded is included under “ Purification Solutions Goodwill and Long-Lived Assets Impairment Charges” Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2016, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit exceeded its carrying amount by 9%. The future growth of the Purification Solutions reporting unit is dependent on achieving the expected volumes and margins, which are generally driven by the macroeconomic environment, environmental regulations, and global and regional competition, and are highly impacted by the activated carbon based mercury removal business. The expected demand for mercury removal products significantly depends upon: (1) the volumes of activated carbon used in coal-fired energy units for the removal of pollutants and the utilization of these units for electricity generation and (2) other factors, such as environmental laws and regulations, particularly those that 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”) continuing to be in effect and enforced. 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 trademarks, customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company recognized an impairment on intangible assets associated with the Purification Solutions business in the third fiscal quarter of 2015 and no events have been subsequently identified that would require an additional impairment evaluation. 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. 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 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 the timing of MATS implementation and its legal enforcement, the anticipated size of the mercury removal industry, and growth rates and pricing assumptions of activated carbon, among others. In addition, an estimate of the reporting unit’s weighted average cost of capital (“WACC”) was 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. Based on these 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. The Company then proceeded to step two. 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 its best estimate as of June 30, 2015, the Company recorded a pre-tax goodwill impairment charge of $353 million. The Company completed the step two analysis in the fourth quarter of fiscal 2015, which resulted in recording a credit of $1 million to the pre-tax goodwill impairment charge. Based on the same factors leading to the 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 determined that 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. In the Consolidated Statements of Operations for the quarter ended June 30, 2015, the Purification Solutions long-lived assets and goodwill impairment charges were separately presented below the subtotal for income from operations. These charges should have been included in the subtotal for income from operations. The Company has corrected the presentation of these charges in the accompanying Consolidated Statements of Operations. These charges were correctly presented in the Consolidated Statements of Operations for the year ended September 30, 2015. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. 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 $28 million and $30 million higher as of June 30, 2016 and September 30, 2015, respectively. The cost of Specialty Fluids inventories, which are classified as assets held for rent, is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the first-in, first-out (“FIFO”) method. Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving, or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable value. 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, which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. Recent Accounting Pronouncements In May 2014, the FASB issued a new standard, “Revenue from Contracts with Customers”, which amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017 and for interim periods within those years and early adoption is permitted for the fiscal years beginning after December 15, 2016. The Company expects to adopt this standard on October 1, 2018. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs by requiring debt issuance costs to be presented as a reduction of the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. The Company expects to adopt this standard on October 1, 2016. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In November 2015, the FASB issued a new standard that amends the existing accounting standard for income taxes and simplifies the presentation of deferred income taxes. This will require that deferred income tax assets and liabilities be classified as noncurrent on the balance sheet. This standard is applicable for fiscal years beginning after December 15, 2016 and for interim periods within those years and early adoption is permitted. The Company is evaluating this standard and the timing of its adoption. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In February 2016, the FASB issued a new standard for the accounting for leases. This new standard requires lessees to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner that is similar to the current accounting treatment for leases. The standard is applicable for fiscal years beginning after December 15, 2018 and for interim periods within those years and early adoption is permitted. The Company expects to adopt the standard on October 1, 2019. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In March 2016, the FASB issued a new standard that amends the accounting standard for stock compensation by simplifying several aspects of the accounting for employee share-based payment transactions, including the related accounting for income taxes, forfeitures, and the withholding of shares to satisfy the employer’s tax withholding requirements, as well as classification in the statements of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those years and early adoption is permitted. The Company is evaluating this standard and the timing of its adoption. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Jun. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | C. Employee Benefit Plans Net periodic defined benefit pension and other postretirement benefit costs include the following: Three Months Ended June 30, 2016 2015 2016 2015 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 2 $ — $ 2 $ — $ — $ — $ — Interest cost 1 2 2 3 1 — — 1 Expected return on plan assets (2 ) (3 ) (3 ) (4 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — — — 1 — — — — Net periodic (credit) benefit cost $ — $ 1 $ (1 ) $ 2 $ — $ — $ (1 ) $ 1 Nine Months Ended June 30, 2016 2015 2016 2015 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 6 $ — $ 7 $ — $ — $ — $ — Interest cost 4 6 5 9 1 — 1 1 Expected return on plan assets (8 ) (10 ) (8 ) (12 ) — — — — Amortization of prior service credit — — — — (3 ) — (2 ) — Amortization of actuarial loss — 2 — 3 — — — — Settlement and curtailment cost (credit) — — — 18 (1 ) — — — Net periodic (credit) benefit cost $ (3 ) $ 4 $ (3 ) $ 25 $ (3 ) $ — $ (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. As a result of the transfer, a pre-tax charge of $18 million was 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 Accumulated other comprehensive (loss) income (“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 was recorded primarily in Cost of sales in the Consolidated Statements of Operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | D. Goodwill and Intangible Assets Cabot had goodwill balances of $152 million and $154 million at June 30, 2016 and September 30, 2015, respectively. The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the nine month period ended June 30, 2016 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2015 $ 55 $ 9 $ 90 $ 154 Foreign currency impact (2 ) — — (2 ) Balance at June 30, 2016 $ 53 $ 9 $ 90 $ 152 The following table provides information regarding the Company’s intangible assets: June 30, 2016 September 30, 2015 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives Developed technologies $ 47 $ (3 ) $ 44 $ 48 $ (1 ) $ 47 Trademarks 16 (1 ) 15 16 — 16 Customer relationships 91 (8 ) 83 96 (6 ) 90 Total intangible assets $ 154 $ (12 ) $ 142 $ 160 $ (7 ) $ 153 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, 2016 and 2015 was $1 million and $3 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Amortization expense for the nine months ended June 30, 2016 and 2015 was $5 million and $12 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, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | E. 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, Cabot repurchased 925,700 shares of its common stock under this authorization. In January 2015, the Board of Directors authorized Cabot to repurchase up to five million shares of its common stock in the open market or in privately negotiated transactions and cancelled the previous authorization. Cabot has repurchased 1,875,676 shares of its common stock under this authorization. As of June 30, 2016, 3,124,324 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 2016 and 2015, Cabot paid cash dividends in the aggregate amount of $0.74 and $0.66, respectively, per share of common stock, with a total cost of $47 million and $42 million, respectively. Noncontrolling interest The following table illustrates the noncontrolling interest activity for the periods presented: 2016 2015 (Dollars in millions) Balance at September 30 $ 104 $ 122 Net income attributable to noncontrolling interests 12 7 Noncontrolling interest foreign currency translation adjustment (5 ) (3 ) Noncontrolling interest dividends declared (16 ) (22 ) Balance at June 30 $ 95 $ 104 During the nine months ended June 30, 2016, $16 million of dividends were declared to noncontrolling interests, all of which were paid in cash during that time. During the nine months ended June 30, 2015, $22 million of dividends were declared to noncontrolling interests, $16 million of which were paid during that time with the remaining $6 million paid later in the fiscal year. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Jun. 30, 2016 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | F. 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: Currency Translation Adjustment Unrealized Gains on Investments Pension and Other Postretirement Benefit Liability Adjustments Total (Dollars in millions) Balance at September 30, 2015, attributable to Cabot Corporation $ (239 ) $ 2 $ (62 ) $ (299 ) Other comprehensive loss before reclassifications (47 ) — — (47 ) Amounts reclassified from accumulated other comprehensive loss — — (1 ) (1 ) Net other comprehensive items (286 ) 2 (63 ) (347 ) Less: Noncontrolling interest (3 ) — — (3 ) Balance at December 31, 2015, attributable to Cabot Corporation $ (283 ) $ 2 $ (63 ) $ (344 ) Other comprehensive income before reclassifications 65 — — 65 Amounts reclassified from accumulated other comprehensive loss — — 1 1 Net other comprehensive items (218 ) 2 (62 ) (278 ) Less: Noncontrolling interest 1 — — 1 Balance at March 31, 2016, attributable to Cabot Corporation $ (219 ) $ 2 $ (62 ) $ (279 ) Other comprehensive loss before reclassifications (13 ) — — (13 ) Amounts reclassified from accumulated other comprehensive loss — — (1 ) (1 ) Net other comprehensive items (232 ) 2 (63 ) (293 ) Less: Noncontrolling interest (3 ) — — (3 ) Balance at June 30, 2016, attributable to Cabot Corporation $ (229 ) $ 2 $ (63 ) $ (290 ) The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in the three months and nine months ended June 30, 2016 and 2015 are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2016 2015 2016 2015 (Dollars in millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note C for details $ — $ 1 $ 2 $ 3 Amortization of prior service credit Net Periodic Benefit Cost - see Note C for details (1 ) (1 ) (3 ) (2 ) Settlement and curtailment (credit) cost Net Periodic Benefit Cost - see Note C for details — — (1 ) 27 Total before tax (1 ) — (2 ) 28 Tax impact Provision (benefit) for income taxes — — 1 (6 ) Total after tax $ (1 ) $ — $ (1 ) $ 22 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | G. 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, 2016. Payments Due by Fiscal Year Remainder of Fiscal 2016 2017 2018 2019 2020 Thereafter Total (Dollars in millions) Reinforcement Materials $ 40 $ 134 $ 125 $ 122 $ 86 $ 1,260 $ 1,767 Performance Chemicals 14 52 38 33 30 153 320 Purification Solutions 3 9 3 — — — 15 Total $ 57 $ 195 $ 166 $ 155 $ 116 $ 1,413 $ 2,102 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, 2016 and September 30, 2015, Cabot had $14 million and $16 million, respectively, reserved for environmental matters. These environmental matters mainly relate to former operations. 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 $2 million and $1 million in the first nine months of fiscal 2016 and 2015, 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 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 2015 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. Neither Cabot, nor its past or present subsidiaries, at any time manufactured asbestos or asbestos-containing products. At no time did this respiratory product line represent a significant portion of the respirator market. As of June 30, 2016 and September 30, 2015, there were approximately 37,000 and 38,000 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, 2016 and September 30, 2015, the reserve was $8 million and $11 million, respectively. Cash payments related to this liability were $3 million in the first nine months of fiscal 2016 and $2 million in the first nine months of fiscal 2015. Other The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to the Company’s divested businesses. In the opinion of the Company, although final disposition of some or all of these other suits and claims may impact the Company’s consolidated financial statements in a particular period, they are not expected, in the aggregate, to have a material adverse effect on the Company’s consolidated financial statements. |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax | H. Income Tax Effective Tax Rate Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) (Dollars in millions) Provision (benefit) for income taxes $ 15 $ (64 ) $ 21 $ (47 ) Effective tax rate 21 % 13 % 17 % 11 % During the three and nine months ended June 30, 2016, the Company recorded tax provisions of $15 million and $21 million, resulting in effective tax rates of 21% and 17%, respectively. These amounts included a net discrete tax expense of $3 million and a net discrete tax benefit of $2 million, respectively, for the three and nine months ended June 30, 2016. During the three and nine months ended June 30, 2015, the Company recorded tax benefits of $64 million and $47 million, resulting in an effective tax rate of 13% and 11%, respectively. These amounts included a net discrete tax expense of $1 million and a net discrete tax benefit of $7 million, respectively, for the three and nine months ended June 30, 2015. Uncertainties Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The U.S. tax returns for fiscal 2013 through fiscal 2015 remain subject to examination by the United States Internal Revenue Service (“IRS”) and various state tax returns for fiscal 2005 through fiscal 2015 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax returns for fiscal 2004 through fiscal 2015 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, 2016, Cabot released uncertain tax positions of less than $1 million and $3 million, respectively, due to the expirations of statutes of limitations in various jurisdictions. During the three and nine months ended June 30, 2015, Cabot released uncertain tax positions of less than $1 million and $13 million, respectively, due to the expirations of statutes of limitations in various jurisdictions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | I. Earnings Per Share The following tables summarize the components of the basic and diluted earnings per common share computations: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars and shares in millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ 56 $ (445 ) $ 97 $ (374 ) Less: Dividends and dividend equivalents to participating securities — — — — Less: Undistributed earnings allocated to participating securities (1) — — — — Earnings (loss) allocated to common shareholders (numerator) $ 56 $ (445 ) $ 97 $ (374 ) Weighted average common shares and participating securities outstanding 62.9 63.8 62.9 64.2 Less: Participating securities (1) 0.5 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.4 63.3 62.4 63.7 Amounts per share - basic: Income (loss) from continuing operations attributable to Cabot Corporation $ 0.90 $ (7.05 ) $ 1.55 $ (5.89 ) Income from discontinued operations — 0.01 — 0.01 Net income (loss) attributable to Cabot Corporation $ 0.90 $ (7.04 ) $ 1.55 $ (5.88 ) Diluted EPS: Earnings (loss) allocated to common shareholders $ 56 $ (445 ) $ 97 $ (374 ) Plus: Earnings allocated to participating securities — — — — Less: Adjusted earnings allocated to participating securities (2) — — (1 ) — Earnings (loss) allocated to common shareholders (numerator) $ 56 $ (445 ) $ 96 $ (374 ) Adjusted weighted average common shares outstanding 62.4 63.3 62.4 63.7 Effect of dilutive securities: Common shares issuable (3) 0.5 — 0.5 — Adjusted weighted average common shares (denominator) 62.9 63.3 62.9 63.7 Amounts per share - diluted: Income (loss) from continuing operations attributable to Cabot Corporation $ 0.88 $ (7.05 ) $ 1.53 $ (5.89 ) Income from discontinued operations — 0.01 — 0.01 Net income (loss) attributable to Cabot Corporation $ 0.88 $ (7.04 ) $ 1.53 $ (5.88 ) (1) Participating securities consist of shares of unvested time-based restricted stock units. Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 56 $ (445 ) $ 97 $ (374 ) Less: Dividends declared on common stock 19 14 47 42 Less: Dividends declared on participating securities — — — — Undistributed earnings (loss) $ 37 $ (459 ) $ 50 $ (416 ) Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ 37 $ (459 ) $ 50 $ (416 ) Undistributed earnings (loss) allocated to participating shareholders — — — — Undistributed earnings (loss) $ 37 $ (459 ) $ 50 $ (416 ) (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii) assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan; and (iii) assumed issuance of shares under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. |
Restructuring
Restructuring | 9 Months Ended |
Jun. 30, 2016 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | J. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Cost of sales $ 1 $ 1 $ 32 $ 4 Selling and administrative expenses 1 1 8 10 Research and technical expenses — — 5 — Total $ 2 $ 2 $ 45 $ 14 Details of all restructuring activities and the related reserves during the three months ended June 30, 2016 are as follows: Severance and Employee Benefits Environmental Remediation Asset Sales Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at March 31, 2016 $ 11 $ 2 $ — $ — $ — $ 13 Charges — 1 — — 1 2 Costs charged against assets — — — — — — Cash paid (7 ) (1 ) — — (1 ) (9 ) Reserve at June 30, 2016 $ 4 $ 2 $ — $ — $ — $ 6 Details of all restructuring activities and the related reserves during the nine months ended June 30, 2016 are as follows: Severance and Employee Benefits Environmental Remediation Asset Sales Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 Charges (credit) 26 1 (9 ) 23 4 45 Costs charged against assets — — (7 ) (23 ) — (30 ) Cash (paid) received (27 ) (1 ) 16 — (6 ) (18 ) Reserve at June 30, 2016 $ 4 $ 2 $ — $ — $ — $ 6 2016 Plan In October 2015, in response to challenging macroeconomic conditions, the Company announced its intention to restructure its operations subject to local consultation requirements and processes in certain locations. Cabot’s plan has resulted in a reduction of approximately 300 positions across the Company’s global locations. These actions are intended to result in a more competitive cost structure. The Company has recorded pre-tax charges of approximately $2 million for the three months ended June 30, 2016 and $28 million for the first nine months of fiscal 2016 related to this plan. The Company expects to record less than $1 million through the rest of fiscal 2016 and approximately $1 million thereafter related to these actions. The charges recorded and anticipated are comprised of severance, employee benefits and other transition costs. Cumulative net cash outlays related to these actions are expected to be approximately $29 million, comprised of severance, employee benefits and other transition costs. Through June 30, 2016, the Company has made $25 million in cash payments related to this plan and expects to make $2 million in cash payments through the remainder of fiscal 2016 and $2 million thereafter. As of June 30, 2016, Cabot has $3 million of accrued restructuring costs in the Consolidated Balance Sheet related to these actions, which is mainly comprised of accrued severance charges. Additionally, in November 2015, Cabot announced that it had committed to closing its carbon black manufacturing facility in Merak, Indonesia. The decision to close this plant and to consolidate production in Asia using the Company’s Cilegon, Indonesia and other Asian and global carbon black production sites to meet regional demand was driven by the financial performance at the Merak facility in the past several years. Manufacturing operations ceased at the end of January 2016 and approximately 50 employees were affected. The Company has recorded pre-tax charges of less than $1 million in the three months ended June 30, 2016, and approximately $25 million in the first nine months of fiscal 2016 related to this closure, comprised of $22 million of asset impairments and accelerated depreciation and $3 million of severance and employee benefits. Future anticipated site closure costs for the Merak facility, comprised mainly of site demolition, clearing and environmental remediation charges, and other miscellaneous costs, are expected to total less than $1 million in the remainder of fiscal 2016 and approximately $4 million in fiscal 2017. Net cash outlays related to this closure are expected to be approximately $7 million, comprised of $4 million of site demolition, clearing and environmental remediation costs, $3 million of severance payments, and less than $1 million for other charges. Through June 30, 2016, the Company has made $2 million in cash payments related to this plan, mainly for severance and other miscellaneous charges and expects to pay $1 million through the remainder of fiscal 2016 mainly for severance and other charges, and expects to pay an additional $4 million in fiscal 2017 mainly for site demolition, clearing and environmental remediation costs. As of June 30, 2016, Cabot has approximately $1 million of accrued severance costs in the Consolidated Balance Sheet related to the Merak facility closure. Details of the 2016 restructuring activities, including the Merak facility closure, during the three and nine months ended June 30, 2016 are as follows: Severance and Employee Benefits Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2015 $ — $ — $ — $ — Charges 25 22 1 48 Costs charged against liabilities / (assets) 1 (22 ) — (21 ) Cash paid (10 ) — (1 ) (11 ) Reserve at December 31, 2015 $ 16 $ — $ — $ 16 Charges — 1 2 3 Costs charged against assets / liabilities — (1 ) — (1 ) Cash paid (7 ) — (2 ) (9 ) Reserve at March 31, 2016 $ 9 $ — $ — $ 9 Charges 1 — 1 2 Costs charged against liabilities / (assets) — — — — Cash paid (6 ) — (1 ) (7 ) Reserve at June 30, 2016 $ 4 $ — $ — $ 4 Business Service Center Transition I n January 2014, the Company announced its intention to open a new Europe, Middle East and Africa (“EMEA”) business service center in Riga, Latvia, and to close its Leuven, Belgium site, subject to the Belgian information and consultation process, which was successfully completed in June 2014. These actions were developed following an extensive evaluation of the Company’s business service capabilities in the EMEA region and a determination that the future EMEA business service center will enable the Company to provide the highest quality of service at the most competitive cost. The actions related to the transition of the business service center have been completed and have resulted in total charges of approximately $24 million, comprised of $16 million of severance charges and $8 million of other transition costs including training costs and redundant salaries. There were no charges related to this plan recorded in the first nine months of fiscal 2016 and $5 million was recorded related to this plan in the first nine months of fiscal 2015 comprised of severance charges of $1 million and $4 million of other transition costs including training costs and redundant salaries. Through June 30, 2016, the Company has made $21 million in cash payments related to this plan, comprised of $14 million of severance payments and $7 million of other transition related costs, and expects to make cash payments of less than $1 million, comprised mainly of severance, in the remainder of fiscal 2016. The difference between the initial accrual and subsequent cash payments was due to changes in foreign exchange rates. As of June 30, 2016, Cabot has less than $1 million of accrued severance charges in the Consolidated Balance Sheet related to this transaction. Closure of Port Dickson, Malaysia Manufacturing Facility In April 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, 2016, the Company recorded cumulative net pre-tax restructuring charges related to this plan of $19 million, comprised mainly of accelerated depreciation and asset write-offs of $16 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 gain from the sale of land of $2 million in the first quarter of 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 a net pre-tax charge of less than $1 million in both of the three month periods ended June 30, 2016 and 2015, and a net pre-tax gain of approximately $1 million and a net pre-tax charge of less than $1 million in the nine month periods ended June 30, 2016 and 2015, 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 net cash received related to this plan is $3 million, comprised of $7 million received from the sale of land, partially offset by approximately $2 million paid for severance, $1 million paid for site demolition, clearing and environmental remediation, and $1 million paid for other closure related charges. CMSB expects to make cash payments of less than $1 million during the remainder of fiscal 2016 and fiscal 2017 mainly for site demolition, clearing and environmental remediation costs. As of June 30, 2016, Cabot has less than $1 million of accrued restructuring costs in the Consolidated Balance Sheets related to this closure, which is mainly for accrued environmental charges. Other Activities The Company has recorded other pre-tax restructuring charges of less than $1 million and charges of $1 million during the three month periods ended June 30, 2016 and 2015, respectively, and approximately $1 million and $6 million during the nine month periods ended June 30, 2016 and 2015, respectively. Fiscal 2016 activity is comprised mainly of accelerated depreciation and severance adjustments whereas fiscal 2015 charges are comprised of severance costs. No future charges related to these actions are expected. As of June 30, 2016, Cabot has less than $1 million of accrued severance and other closure related costs in the Consolidated Balance Sheets related to these activities which are expected to be paid through early fiscal 2017. 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 a former manufacturing site in Thane, India. The Company has incurred total cumulative pre-tax charges of approximately $158 million related to these plans through June 30, 2016, 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 $8 million. Pre-tax restructuring charges were less than $1 million in the three month periods ended June 30, 2016 and 2015 related to these actions. The net pre-tax restructuring gain related to these plans was $7 million for the nine months ended June 30, 2016 driven by the sale of land, whereas charges of $2 million were recorded during the nine months ended June 30, 2015. Since fiscal 2009, Cabot has made net cash payments of $79 million related to these plans comprised of $63 million for severance payments, $10 million for environmental, demolition and site clearing costs, and $25 million for other closure related charges, partially offset by cash proceeds from asset sales of $19 million. The Company expects to pay As of June 30, 2016, Cabot has approximately $2 million of accrued environmental 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, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | K. Financial Instruments and Fair Value Measurements The FASB authoritative guidance on fair value measurements defines fair value, provides a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. The disclosures focus on the inputs used to measure fair value. The guidance establishes the following hierarchy for categorizing these inputs: Level 1 — Quoted market prices in active markets for identical assets or liabilities Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs) Level 3 — Significant unobservable inputs There were no transfers of financial assets or liabilities measured at fair value between Level 1 and Level 2 and there were no Level 3 investments during the first nine months of either fiscal 2016 or 2015. At both June 30, 2016 and September 30, 2015, the fair value of Guaranteed investment contracts, included in Other assets on the Consolidated Balance Sheets, was $12 million. 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, 2016 and September 30, 2015, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and notes payable and variable rate debt approximated their carrying values due to the short-term nature of these instruments. The carrying value and fair value of the long-term fixed rate debt were $0.96 billion and $1.02 billion, respectively, as of both June 30, 2016 and |
Derivatives
Derivatives | 9 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | L. Derivatives 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 its 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, 2016 and September 30, 2015 to manage foreign currency risk. Notional Amount, net Description Borrowing June 30, 2016 September 30, 2015 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 4 million USD 2 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Czech koruna, and Indonesian rupiah. 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. Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is recorded in Accumulated other comprehensive (loss) income and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings. 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. As of both June 30, 2016 and September 30, 2015, the fair value of derivative instruments were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. |
Venezuela
Venezuela | 9 Months Ended |
Jun. 30, 2016 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Venezuela | M. Venezuela Cabot owns 49% of an operating carbon black affiliate in Venezuela, which is accounted for as an equity affiliate, through wholly-owned subsidiaries that carry the investment and receive its dividends. As of June 30, 2016, these subsidiaries carried the operating affiliate investment of $13 million and held 15 million bolivars (less than $1 million) in cash. During the nine month periods ended June 30, 2016 and 2015, the Company received dividends in the amounts of $2 million and $5 million, respectively, which were paid in U.S. dollars. A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into bolivars. As of June 30, 2016, the exchange rate that was made available to the Company when converting these dollars to bolivars was 626 bolivars to the U.S. dollar as compared to 270 bolivars to the U.S. dollar as of March 31, 2016. The operating affiliate and the Company’s wholly-owned subsidiaries remeasured their bolivar denominated monetary accounts to reflect the current rate. The impact of the exchange rate devaluation on the operating affiliate and the Company’s wholly-owned subsidiaries’ results was a net gain of less than $1 million during both the three months ended and the nine months ended June 30, 2016. The operating entity has generally been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. Any future change in the exchange rate made available to the Company 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, 2016 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | N. Financial Information by Segment The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Company has determined that all of its businesses are operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments are determined to have similar economic characteristics and if the operating segments are similar in the following areas: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the regulatory environment. The Company has four reportable segments: Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. The Reinforcement Materials segment represents the rubber blacks and elastomer composites product lines. Performance Chemicals is comprised of two businesses: (i) our Specialty Carbons and Formulations business, which manufactures and sells specialty grades of carbon black, specialty compounds and inkjet colorants, and (ii) our Metal Oxides business, which manufactures and sells fumed silica, fumed alumina and dispersions thereof and aerogel. Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Specialty Carbons and Formulations $ 152 $ 159 $ 437 $ 478 Metal Oxides 76 75 214 222 Total Performance Chemicals $ 228 $ 234 $ 651 $ 700 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 income (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. Certain items are items that management does not consider to be representative of ongoing operating segment results and they are, therefore, excluded from Segment EBIT. In addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, the effects of LIFO accounting for inventory, general unallocated expense and unallocated corporate costs. 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, 2016 Revenues from external customers (2) $ 270 $ 228 $ 77 $ 19 $ 594 $ 27 $ 621 Income (loss) from continuing operations before taxes (3) $ 35 $ 59 $ — $ 10 $ 104 $ (30 ) $ 74 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 ) Nine Months Ended June 30, 2016 Revenues from external customers (2) $ 819 $ 651 $ 210 $ 32 $ 1,712 $ 80 $ 1,792 Income (loss) from continuing operations before taxes (3) $ 95 $ 167 $ (7 ) $ 8 $ 263 $ (135 ) $ 128 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 ) (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the Chief Operating Decision Maker. (2) “ Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (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 ) $ — $ (9 ) Shipping and handling fees 27 30 80 85 Total $ 27 $ 25 $ 80 $ 76 (3) Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Interest expense $ (13 ) $ (13 ) $ (40 ) $ (40 ) Total certain items, pre-tax (a) (6 ) (567 ) (63 ) (599 ) Equity in earnings of affiliated companies, net of tax (b) (1 ) (1 ) (2 ) (4 ) Unallocated corporate costs (c) (11 ) (12 ) (36 ) (35 ) General unallocated income (expense) (d) 1 (2 ) 6 7 Total $ (30 ) $ (595 ) $ (135 ) $ (671 ) (a) Certain items are (b) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (c) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (d) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2016 | |
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. Taxes collected on sales to customers are excluded from revenues. The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments. Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 Reinforcement Materials 46 % 52 % 48 % 55 % Performance Chemicals 38 % 35 % 38 % 33 % Purification Solutions 13 % 11 % 12 % 10 % Specialty Fluids 3 % 2 % 2 % 2 % Cabot derives the substantial majority of its revenues from the sale of products in the Reinforcement Materials, Performance Chemicals, and Purification Solutions segments. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers certain of its customers cash discounts and volume rebates as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. For major activated carbon injection systems projects in Purification Solutions, revenue is recognized using the percentage-of-completion method. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of 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 were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. |
Intangible Assets and Goodwill Impairment | Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment annually as of May 31, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value. A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business for which discrete financial information is available and regularly reviewed by segment management. The reporting units with goodwill balances are Reinforcement Materials, Purification Solutions, and Fumed Metal Oxides. The separate businesses included within Performance Chemicals are considered separate reporting units. As such, the goodwill balance relative to Performance Chemicals is recorded in the Fumed Metal Oxides reporting unit. For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional quantitative evaluation is performed under the two-step impairment test. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, the Company performs an analysis of the fair value of all assets and liabilities of the reporting unit. If the implied fair value of the reporting unit’s goodwill is determined to be less than its carrying amount, an impairment is recognized for the difference. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Should the fair value of any of the Company’s reporting units decline below its carrying amount because of reduced operating performance, market declines, changes in the discount rate, or other conditions, charges for impairment may be necessary. When the Company performed its annual goodwill impairment test in the third quarter of fiscal 2015, the fair value of the Purification Solutions reporting unit was less than its carrying amount and the Company recorded impairment charges as a result. A discussion of this assessment and the charges recorded is included under “ Purification Solutions Goodwill and Long-Lived Assets Impairment Charges” Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2016, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit exceeded its carrying amount by 9%. The future growth of the Purification Solutions reporting unit is dependent on achieving the expected volumes and margins, which are generally driven by the macroeconomic environment, environmental regulations, and global and regional competition, and are highly impacted by the activated carbon based mercury removal business. The expected demand for mercury removal products significantly depends upon: (1) the volumes of activated carbon used in coal-fired energy units for the removal of pollutants and the utilization of these units for electricity generation and (2) other factors, such as environmental laws and regulations, particularly those that 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”) continuing to be in effect and enforced. 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 trademarks, customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company recognized an impairment on intangible assets associated with the Purification Solutions business in the third fiscal quarter of 2015 and no events have been subsequently identified that would require an additional impairment evaluation. |
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. |
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | 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 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 the timing of MATS implementation and its legal enforcement, the anticipated size of the mercury removal industry, and growth rates and pricing assumptions of activated carbon, among others. In addition, an estimate of the reporting unit’s weighted average cost of capital (“WACC”) was 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. Based on these 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. The Company then proceeded to step two. 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 its best estimate as of June 30, 2015, the Company recorded a pre-tax goodwill impairment charge of $353 million. The Company completed the step two analysis in the fourth quarter of fiscal 2015, which resulted in recording a credit of $1 million to the pre-tax goodwill impairment charge. Based on the same factors leading to the 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 determined that 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. In the Consolidated Statements of Operations for the quarter ended June 30, 2015, the Purification Solutions long-lived assets and goodwill impairment charges were separately presented below the subtotal for income from operations. These charges should have been included in the subtotal for income from operations. The Company has corrected the presentation of these charges in the accompanying Consolidated Statements of Operations. These charges were correctly presented in the Consolidated Statements of Operations for the year ended September 30, 2015. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the straight-line method over the estimated useful lives. The depreciable lives for buildings, machinery and equipment, and other fixed assets are twenty to twenty-five years, ten to twenty-five years, and three to twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. |
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 $28 million and $30 million higher as of June 30, 2016 and September 30, 2015, respectively. The cost of Specialty Fluids inventories, which are classified as assets held for rent, is determined using the average cost method. The cost of other U.S. and non-U.S. inventories is determined using the first-in, first-out (“FIFO”) method. Cabot reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these assumptions estimates the amount of any obsolete, unmarketable, slow moving, or overvalued inventory. Cabot writes down the value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable value. |
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, which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued a new standard, “Revenue from Contracts with Customers”, which amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017 and for interim periods within those years and early adoption is permitted for the fiscal years beginning after December 15, 2016. The Company expects to adopt this standard on October 1, 2018. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements. In April 2015, the FASB issued a new standard simplifying the presentation of debt issuance costs by requiring debt issuance costs to be presented as a reduction of the corresponding debt liability. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. The Company expects to adopt this standard on October 1, 2016. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In November 2015, the FASB issued a new standard that amends the existing accounting standard for income taxes and simplifies the presentation of deferred income taxes. This will require that deferred income tax assets and liabilities be classified as noncurrent on the balance sheet. This standard is applicable for fiscal years beginning after December 15, 2016 and for interim periods within those years and early adoption is permitted. The Company is evaluating this standard and the timing of its adoption. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In February 2016, the FASB issued a new standard for the accounting for leases. This new standard requires lessees to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner that is similar to the current accounting treatment for leases. The standard is applicable for fiscal years beginning after December 15, 2018 and for interim periods within those years and early adoption is permitted. The Company expects to adopt the standard on October 1, 2019. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In March 2016, the FASB issued a new standard that amends the accounting standard for stock compensation by simplifying several aspects of the accounting for employee share-based payment transactions, including the related accounting for income taxes, forfeitures, and the withholding of shares to satisfy the employer’s tax withholding requirements, as well as classification in the statements of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those years and early adoption is permitted. The Company is evaluating this standard and the timing of its adoption. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
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. Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 Reinforcement Materials 46 % 52 % 48 % 55 % Performance Chemicals 38 % 35 % 38 % 33 % Purification Solutions 13 % 11 % 12 % 10 % Specialty Fluids 3 % 2 % 2 % 2 % |
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 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
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, 2016 2015 2016 2015 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 2 $ — $ 2 $ — $ — $ — $ — Interest cost 1 2 2 3 1 — — 1 Expected return on plan assets (2 ) (3 ) (3 ) (4 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — — — 1 — — — — Net periodic (credit) benefit cost $ — $ 1 $ (1 ) $ 2 $ — $ — $ (1 ) $ 1 Nine Months Ended June 30, 2016 2015 2016 2015 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (Dollars in millions) Service cost $ 1 $ 6 $ — $ 7 $ — $ — $ — $ — Interest cost 4 6 5 9 1 — 1 1 Expected return on plan assets (8 ) (10 ) (8 ) (12 ) — — — — Amortization of prior service credit — — — — (3 ) — (2 ) — Amortization of actuarial loss — 2 — 3 — — — — Settlement and curtailment cost (credit) — — — 18 (1 ) — — — Net periodic (credit) benefit cost $ (3 ) $ 4 $ (3 ) $ 25 $ (3 ) $ — $ (1 ) $ 1 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
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 nine month period ended June 30, 2016 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (Dollars in millions) Balance at September 30, 2015 $ 55 $ 9 $ 90 $ 154 Foreign currency impact (2 ) — — (2 ) Balance at June 30, 2016 $ 53 $ 9 $ 90 $ 152 |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: June 30, 2016 September 30, 2015 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (Dollars in millions) Intangible assets with finite lives Developed technologies $ 47 $ (3 ) $ 44 $ 48 $ (1 ) $ 47 Trademarks 16 (1 ) 15 16 — 16 Customer relationships 91 (8 ) 83 96 (6 ) 90 Total intangible assets $ 154 $ (12 ) $ 142 $ 160 $ (7 ) $ 153 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Activity in Noncontrolling Interests | The following table illustrates the noncontrolling interest activity for the periods presented: 2016 2015 (Dollars in millions) Balance at September 30 $ 104 $ 122 Net income attributable to noncontrolling interests 12 7 Noncontrolling interest foreign currency translation adjustment (5 ) (3 ) Noncontrolling interest dividends declared (16 ) (22 ) Balance at June 30 $ 95 $ 104 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, are as follows: Currency Translation Adjustment Unrealized Gains on Investments Pension and Other Postretirement Benefit Liability Adjustments Total (Dollars in millions) Balance at September 30, 2015, attributable to Cabot Corporation $ (239 ) $ 2 $ (62 ) $ (299 ) Other comprehensive loss before reclassifications (47 ) — — (47 ) Amounts reclassified from accumulated other comprehensive loss — — (1 ) (1 ) Net other comprehensive items (286 ) 2 (63 ) (347 ) Less: Noncontrolling interest (3 ) — — (3 ) Balance at December 31, 2015, attributable to Cabot Corporation $ (283 ) $ 2 $ (63 ) $ (344 ) Other comprehensive income before reclassifications 65 — — 65 Amounts reclassified from accumulated other comprehensive loss — — 1 1 Net other comprehensive items (218 ) 2 (62 ) (278 ) Less: Noncontrolling interest 1 — — 1 Balance at March 31, 2016, attributable to Cabot Corporation $ (219 ) $ 2 $ (62 ) $ (279 ) Other comprehensive loss before reclassifications (13 ) — — (13 ) Amounts reclassified from accumulated other comprehensive loss — — (1 ) (1 ) Net other comprehensive items (232 ) 2 (63 ) (293 ) Less: Noncontrolling interest (3 ) — — (3 ) Balance at June 30, 2016, attributable to Cabot Corporation $ (229 ) $ 2 $ (63 ) $ (290 ) |
Amounts Reclassified Out of AOCI | The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in the three months and nine months ended June 30, 2016 and 2015 are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2016 2015 2016 2015 (Dollars in millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note C for details $ — $ 1 $ 2 $ 3 Amortization of prior service credit Net Periodic Benefit Cost - see Note C for details (1 ) (1 ) (3 ) (2 ) Settlement and curtailment (credit) cost Net Periodic Benefit Cost - see Note C for details — — (1 ) 27 Total before tax (1 ) — (2 ) 28 Tax impact Provision (benefit) for income taxes — — 1 (6 ) Total after tax $ (1 ) $ — $ (1 ) $ 22 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
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, 2016. Payments Due by Fiscal Year Remainder of Fiscal 2016 2017 2018 2019 2020 Thereafter Total (Dollars in millions) Reinforcement Materials $ 40 $ 134 $ 125 $ 122 $ 86 $ 1,260 $ 1,767 Performance Chemicals 14 52 38 33 30 153 320 Purification Solutions 3 9 3 — — — 15 Total $ 57 $ 195 $ 166 $ 155 $ 116 $ 1,413 $ 2,102 |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate | Effective Tax Rate Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) (Dollars in millions) Provision (benefit) for income taxes $ 15 $ (64 ) $ 21 $ (47 ) Effective tax rate 21 % 13 % 17 % 11 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
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 Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars and shares in millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ 56 $ (445 ) $ 97 $ (374 ) Less: Dividends and dividend equivalents to participating securities — — — — Less: Undistributed earnings allocated to participating securities (1) — — — — Earnings (loss) allocated to common shareholders (numerator) $ 56 $ (445 ) $ 97 $ (374 ) Weighted average common shares and participating securities outstanding 62.9 63.8 62.9 64.2 Less: Participating securities (1) 0.5 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.4 63.3 62.4 63.7 Amounts per share - basic: Income (loss) from continuing operations attributable to Cabot Corporation $ 0.90 $ (7.05 ) $ 1.55 $ (5.89 ) Income from discontinued operations — 0.01 — 0.01 Net income (loss) attributable to Cabot Corporation $ 0.90 $ (7.04 ) $ 1.55 $ (5.88 ) Diluted EPS: Earnings (loss) allocated to common shareholders $ 56 $ (445 ) $ 97 $ (374 ) Plus: Earnings allocated to participating securities — — — — Less: Adjusted earnings allocated to participating securities (2) — — (1 ) — Earnings (loss) allocated to common shareholders (numerator) $ 56 $ (445 ) $ 96 $ (374 ) Adjusted weighted average common shares outstanding 62.4 63.3 62.4 63.7 Effect of dilutive securities: Common shares issuable (3) 0.5 — 0.5 — Adjusted weighted average common shares (denominator) 62.9 63.3 62.9 63.7 Amounts per share - diluted: Income (loss) from continuing operations attributable to Cabot Corporation $ 0.88 $ (7.05 ) $ 1.53 $ (5.89 ) Income from discontinued operations — 0.01 — 0.01 Net income (loss) attributable to Cabot Corporation $ 0.88 $ (7.04 ) $ 1.53 $ (5.88 ) (1) Participating securities consist of shares of unvested time-based restricted stock units. |
Calculation of Undistributed Earnings | Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 56 $ (445 ) $ 97 $ (374 ) Less: Dividends declared on common stock 19 14 47 42 Less: Dividends declared on participating securities — — — — Undistributed earnings (loss) $ 37 $ (459 ) $ 50 $ (416 ) Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ 37 $ (459 ) $ 50 $ (416 ) Undistributed earnings (loss) allocated to participating shareholders — — — — Undistributed earnings (loss) $ 37 $ (459 ) $ 50 $ (416 ) (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii) assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan; and (iii) assumed issuance of shares under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Cost of sales $ 1 $ 1 $ 32 $ 4 Selling and administrative expenses 1 1 8 10 Research and technical expenses — — 5 — Total $ 2 $ 2 $ 45 $ 14 |
Restructuring Activities and Related Reserves | Details of all restructuring activities and the related reserves during the three months ended June 30, 2016 are as follows: Severance and Employee Benefits Environmental Remediation Asset Sales Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at March 31, 2016 $ 11 $ 2 $ — $ — $ — $ 13 Charges — 1 — — 1 2 Costs charged against assets — — — — — — Cash paid (7 ) (1 ) — — (1 ) (9 ) Reserve at June 30, 2016 $ 4 $ 2 $ — $ — $ — $ 6 Details of all restructuring activities and the related reserves during the nine months ended June 30, 2016 are as follows: Severance and Employee Benefits Environmental Remediation Asset Sales Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 Charges (credit) 26 1 (9 ) 23 4 45 Costs charged against assets — — (7 ) (23 ) — (30 ) Cash (paid) received (27 ) (1 ) 16 — (6 ) (18 ) Reserve at June 30, 2016 $ 4 $ 2 $ — $ — $ — $ 6 |
2016 Plan [Member] | |
Restructuring Activities and Related Reserves | Details of the 2016 restructuring activities, including the Merak facility closure, during the three and nine months ended June 30, 2016 are as follows: Severance and Employee Benefits Asset Impairment and Accelerated Depreciation Other Total (Dollars in millions) Reserve at September 30, 2015 $ — $ — $ — $ — Charges 25 22 1 48 Costs charged against liabilities / (assets) 1 (22 ) — (21 ) Cash paid (10 ) — (1 ) (11 ) Reserve at December 31, 2015 $ 16 $ — $ — $ 16 Charges — 1 2 3 Costs charged against assets / liabilities — (1 ) — (1 ) Cash paid (7 ) — (2 ) (9 ) Reserve at March 31, 2016 $ 9 $ — $ — $ 9 Charges 1 — 1 2 Costs charged against liabilities / (assets) — — — — Cash paid (6 ) — (1 ) (7 ) Reserve at June 30, 2016 $ 4 $ — $ — $ 4 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Forward Foreign Currency Contracts [Member] | |
Details of Derivatives Held to Manage Foreign Currency Risk | The following table provides details of the derivatives held as of June 30, 2016 and September 30, 2015 to manage foreign currency risk. Notional Amount, net Description Borrowing June 30, 2016 September 30, 2015 Hedge Designation Forward Foreign Currency Contracts (1) N/A USD 4 million USD 2 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Czech koruna, and Indonesian rupiah. |
Financial Information by Segm33
Financial Information by Segment (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Performance Segment | The net sales from each of these businesses for the three and nine months ended June 30, 2016 and 2015 are as follows: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Specialty Carbons and Formulations $ 152 $ 159 $ 437 $ 478 Metal Oxides 76 75 214 222 Total Performance Chemicals $ 228 $ 234 $ 651 $ 700 |
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, 2016 Revenues from external customers (2) $ 270 $ 228 $ 77 $ 19 $ 594 $ 27 $ 621 Income (loss) from continuing operations before taxes (3) $ 35 $ 59 $ — $ 10 $ 104 $ (30 ) $ 74 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 ) Nine Months Ended June 30, 2016 Revenues from external customers (2) $ 819 $ 651 $ 210 $ 32 $ 1,712 $ 80 $ 1,792 Income (loss) from continuing operations before taxes (3) $ 95 $ 167 $ (7 ) $ 8 $ 263 $ (135 ) $ 128 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 ) (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the Chief Operating Decision Maker. (2) “ Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (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 ) $ — $ (9 ) Shipping and handling fees 27 30 80 85 Total $ 27 $ 25 $ 80 $ 76 (3) Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes: Three Months Ended Nine Months Ended June 30, June 30, 2016 2015 2016 2015 (Dollars in millions) Interest expense $ (13 ) $ (13 ) $ (40 ) $ (40 ) Total certain items, pre-tax (a) (6 ) (567 ) (63 ) (599 ) Equity in earnings of affiliated companies, net of tax (b) (1 ) (1 ) (2 ) (4 ) Unallocated corporate costs (c) (11 ) (12 ) (36 ) (35 ) General unallocated income (expense) (d) 1 (2 ) 6 7 Total $ (30 ) $ (595 ) $ (135 ) $ (671 ) (a) Certain items are (b) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (c) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (d) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of an equity affiliate in Purification Solutions Segment EBIT. |
Significant Accounting Polici34
Significant Accounting Policies - Segment Reporting Revenue Percentage (Detail) - Sales Revenue, Segment [Member] - Revenue from Rights Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reinforcement Materials [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 46.00% | 52.00% | 48.00% | 55.00% |
Performance Chemicals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 38.00% | 35.00% | 38.00% | 33.00% |
Purification Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 13.00% | 11.00% | 12.00% | 10.00% |
Specialty Fluids [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 3.00% | 2.00% | 2.00% | 2.00% |
Significant Accounting Polici35
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | May 31, 2016 | |
Significant Accounting Policies [Line Items] | |||||
Goodwill impairment charge | $ 353 | ||||
Long-lived asset impairment charge | $ 23 | 209 | |||
Provision (benefit) for income taxes | 13 | 75 | |||
Value of inventories under FIFO method | $ 30 | $ 28 | |||
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 | ||||
Purification Solutions [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Percentage of fair value in excess of carrying amount | 9.00% | ||||
Goodwill impairment charge | $ 353 | 353 | |||
Decrease in goodwill impairment charge during the period | $ 1 | ||||
Impairment loss of indefinite lived Intangibles | $ 39 | ||||
Impairment charges of definite lived Intangible assets | 119 | ||||
Long-lived asset impairment charge | 209 | 209 | |||
Provision (benefit) for income taxes | $ 80 | $ 80 | |||
Purification Solutions [Member] | Property, Plant and Equipment | |||||
Significant Accounting Policies [Line Items] | |||||
Long-lived asset impairment charge | $ 51 |
Significant Accounting Polici36
Significant Accounting Policies - Impairment Charges and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Significant Accounting Policies [Line Items] | |||
Goodwill impairment charge | $ 353 | ||
Long-lived asset impairment charge | $ 23 | 209 | |
Provision (benefit) for income taxes | (13) | (75) | |
Purification Solutions [Member] | |||
Significant Accounting Policies [Line Items] | |||
Goodwill impairment charge | $ 353 | 353 | |
Long-lived asset impairment charge | $ 209 | 209 | |
Provision (benefit) for income taxes | $ (80) | (80) | |
Impairment charges, after tax | $ 482 |
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
U.S. Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | ||
Interest cost | 1 | $ 2 | 4 | $ 5 |
Expected return on plan assets | (2) | (3) | (8) | (8) |
Net periodic (credit) benefit cost | (1) | (3) | (3) | |
Foreign Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | 6 | 7 |
Interest cost | 2 | 3 | 6 | 9 |
Expected return on plan assets | (3) | (4) | (10) | (12) |
Amortization of actuarial loss | 1 | 2 | 3 | |
Settlement and curtailment cost (credit) | 18 | |||
Net periodic (credit) benefit cost | 1 | 2 | 4 | 25 |
U. S. Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1 | 1 | 1 | |
Amortization of prior service credit | $ (1) | (1) | (3) | (2) |
Settlement and curtailment cost (credit) | (1) | |||
Net periodic (credit) benefit cost | (1) | $ (3) | (1) | |
Foreign Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1 | 1 | ||
Net periodic (credit) benefit cost | $ 1 | $ 1 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Compensation And Retirement Disclosure [Abstract] | ||
Settlement costs | $ 18 | |
Pre-tax charge from AOCI | $ 27 | |
Settlement charges on pension liability | 11 | |
Settlement charges on employer contributions | $ 2 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 152 | $ 152 | $ 154 | ||
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] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 1 | $ 3 | $ 5 | $ 12 | |
Minimum [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 14 years | ||||
Maximum [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 25 years | ||||
Weighted Average [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 19 years |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) $ in Millions | 9 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | $ 154 |
Foreign currency impact | (2) |
Ending balance | 152 |
Reinforcement Materials [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 55 |
Foreign currency impact | (2) |
Ending balance | 53 |
Performance Chemicals [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 9 |
Ending balance | 9 |
Purification Solutions [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 90 |
Ending balance | $ 90 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Sep. 30, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | $ 154 | $ 160 |
Accumulated Amortization | (12) | (7) |
Net Intangible Assets, finite lives | 142 | 153 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 47 | 48 |
Accumulated Amortization | (3) | (1) |
Net Intangible Assets, finite lives | 44 | 47 |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 16 | 16 |
Accumulated Amortization | (1) | |
Net Intangible Assets, finite lives | 15 | 16 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 91 | 96 |
Accumulated Amortization | (8) | (6) |
Net Intangible Assets, finite lives | $ 83 | $ 90 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | 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 | $ 47 | $ 42 | |||
Cash dividend paid per share | $ 0.74 | $ 0.66 | |||
Noncontrolling interest dividends declared | $ 16 | $ 22 | |||
Dividends paid to noncontrolling interests | $ 6 | $ 16 | $ 16 | ||
2007 Share Repurchase Authorization [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock shares repurchased | 925,700 | ||||
January 2015 Share Repurchase Authorization [Member] | |||||
Class Of Stock [Line Items] | |||||
Common stock shares repurchased | 1,875,676 | ||||
Shares remaining available for repurchase under the current authorization | 3,124,324 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Activity in Noncontrolling Interests (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Equity [Abstract] | ||||
Balance at September 30 | $ 104 | $ 122 | ||
Net income attributable to noncontrolling interests | $ 4 | $ 2 | 12 | 7 |
Noncontrolling interest foreign currency translation adjustment | (3) | (5) | (3) | |
Noncontrolling interest dividends declared | (16) | (22) | ||
Balance at June 30 | $ 95 | $ 104 | $ 95 | $ 104 |
Accumulated Other Comprehensi44
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, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance attributable to Cabot Corporation | $ (279) | $ (344) | $ (299) | $ (299) | |
Other comprehensive loss before reclassifications | (13) | 65 | (47) | ||
Amounts reclassified from accumulated other comprehensive loss | (1) | 1 | (1) | (1) | $ 22 |
Net other comprehensive items | (293) | (278) | (347) | ||
Less: Noncontrolling interest | (3) | 1 | (3) | ||
Balance attributable to Cabot Corporation | (290) | (279) | (344) | (290) | |
Currency Translation Adjustment [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance attributable to Cabot Corporation | (219) | (283) | (239) | (239) | |
Other comprehensive loss before reclassifications | (13) | 65 | (47) | ||
Net other comprehensive items | (232) | (218) | (286) | ||
Less: Noncontrolling interest | (3) | 1 | (3) | ||
Balance attributable to Cabot Corporation | (229) | (219) | (283) | (229) | |
Unrealized Gains on Investments [Member] | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance attributable to Cabot Corporation | 2 | 2 | 2 | 2 | |
Net other comprehensive items | 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 | (62) | (63) | (62) | (62) | |
Amounts reclassified from accumulated other comprehensive loss | (1) | 1 | (1) | ||
Net other comprehensive items | (63) | (62) | (63) | ||
Balance attributable to Cabot Corporation | $ (63) | $ (62) | $ (63) | $ (63) |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Loss - Amounts Reclassified Out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Total before tax | $ (1) | $ (2) | $ 28 | |||
Tax impact | 1 | (6) | ||||
Total after tax | (1) | $ 1 | $ (1) | (1) | 22 | |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||
Amortization of actuarial losses | $ 1 | 2 | 3 | |||
Amortization of prior service credit | (1) | $ (1) | (3) | (2) | ||
Settlement and curtailment (credit) cost | $ (1) | $ 27 | ||||
Total after tax | $ (1) | $ 1 | $ (1) |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) $ in Millions | Jun. 30, 2016USD ($) |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2016 | $ 57 |
Payments Due by Fiscal Year 2017 | 195 |
Payments Due by Fiscal Year 2018 | 166 |
Payments Due by Fiscal Year 2019 | 155 |
Payments Due by Fiscal Year 2020 | 116 |
Payments Due Thereafter | 1,413 |
Payments Due, Total | 2,102 |
Reinforcement Materials [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2016 | 40 |
Payments Due by Fiscal Year 2017 | 134 |
Payments Due by Fiscal Year 2018 | 125 |
Payments Due by Fiscal Year 2019 | 122 |
Payments Due by Fiscal Year 2020 | 86 |
Payments Due Thereafter | 1,260 |
Payments Due, Total | 1,767 |
Performance Chemicals [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2016 | 14 |
Payments Due by Fiscal Year 2017 | 52 |
Payments Due by Fiscal Year 2018 | 38 |
Payments Due by Fiscal Year 2019 | 33 |
Payments Due by Fiscal Year 2020 | 30 |
Payments Due Thereafter | 153 |
Payments Due, Total | 320 |
Purification Solutions [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2016 | 3 |
Payments Due by Fiscal Year 2017 | 9 |
Payments Due by Fiscal Year 2018 | 3 |
Payments Due, Total | $ 15 |
Commitments and Contingencies47
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended | ||
Jun. 30, 2016USD ($)claimants | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($)claimants | |
Respirator Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Number of claimants | claimants | 37,000 | 38,000 | |
Respirator reserve | $ 8 | $ 11 | |
Cash payments for respirator reserves | 3 | $ 2 | |
Environmental Matters [Member] | |||
Loss Contingencies [Line Items] | |||
Reserved for environmental matters | 14 | $ 16 | |
Cash payments for environmental reserves | $ 2 | $ 1 |
Income Tax - Effective Tax Rate
Income Tax - Effective Tax Rate (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) for income taxes | $ 15 | $ (64) | $ 21 | $ (47) |
Effective tax rate | 21.00% | 13.00% | 17.00% | 11.00% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes [Line Items] | ||||
Provision (benefits) for income taxes | $ 15 | $ (64) | $ 21 | $ (47) |
Effective tax rate | 21.00% | 13.00% | 17.00% | 11.00% |
Net discrete tax (benefits) charges related to tax settlements | $ 3 | $ 1 | $ (2) | $ (7) |
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Uncertain tax positions from expirations of statute of limitations | $ 1 | $ 1 | $ 3 | $ 13 |
Earliest Tax Year [Member] | Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,013 | |||
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] | Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 | |||
Latest Tax Year [Member] | State Tax Authorities [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 | |||
Latest Tax Year [Member] | Non-U.S. Jurisdictions [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 |
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basic EPS: | ||||
Net income (loss) attributable to Cabot Corporation | $ 56 | $ (445) | $ 97 | $ (374) |
Earnings (loss) allocated to common shareholders (numerator) | $ 56 | $ (445) | $ 97 | $ (374) |
Weighted average common shares and participating securities outstanding | 62.9 | 63.8 | 62.9 | 64.2 |
Less: Participating securities | 0.5 | 0.5 | 0.5 | 0.5 |
Adjusted weighted average common shares (denominator) | 62.4 | 63.3 | 62.4 | 63.7 |
Income (loss) from continuing operations attributable to Cabot Corporation | $ 0.90 | $ (7.05) | $ 1.55 | $ (5.89) |
Income from discontinued operations | 0.01 | 0.01 | ||
Net income (loss) attributable to Cabot Corporation | $ 0.90 | $ (7.04) | $ 1.55 | $ (5.88) |
Diluted EPS: | ||||
Earnings (loss) allocated to common shareholders | $ 56 | $ (445) | $ 97 | $ (374) |
Less: Adjusted earnings allocated to participating securities | (1) | |||
Earnings (loss) allocated to common shareholders (numerator) | $ 56 | $ (445) | $ 96 | $ (374) |
Adjusted weighted average common shares (denominator) | 62.4 | 63.3 | 62.4 | 63.7 |
Common shares issuable | 0.5 | 0.5 | ||
Adjusted weighted average common shares (denominator) | 62.9 | 63.3 | 62.9 | 63.7 |
Income (loss) from continuing operations attributable to Cabot Corporation | $ 0.88 | $ (7.05) | $ 1.53 | $ (5.89) |
Income from discontinued operations | 0.01 | 0.01 | ||
Net income (loss) attributable to Cabot Corporation | $ 0.88 | $ (7.04) | $ 1.53 | $ (5.88) |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Cabot Corporation | $ 56 | $ (445) | $ 97 | $ (374) |
Less: Dividends declared on common stock | 19 | 14 | 47 | 42 |
Undistributed earnings (loss) | 37 | (459) | 50 | (416) |
Undistributed earnings (loss) allocated to common shareholders | $ 37 | $ (459) | $ 50 | $ (416) |
Earnings Per Share - Calculat52
Earnings Per Share - Calculation of Undistributed Earnings (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share | 338,854 | 492,172 | 726,589 | 508,991 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 2 | $ 2 | $ 45 | $ 14 |
Cost of Sales [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | 1 | 1 | 32 | 4 |
Selling and Administrative Expenses [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 1 | $ 1 | 8 | $ 10 |
Research and Technical Expenses [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 5 |
Restructuring - Restructuring A
Restructuring - Restructuring Activities and Related Reserves (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | $ 13 | $ 9 |
Charges (credit) | 2 | 45 |
Costs charged against assets | (30) | |
Cash (paid) received | (9) | (18) |
Reserve balance | 6 | 6 |
Severance and Employee Benefits [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | 11 | 5 |
Charges (credit) | 26 | |
Cash (paid) received | (7) | (27) |
Reserve balance | 4 | 4 |
Environmental Remediation [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | 2 | 2 |
Charges (credit) | 1 | 1 |
Cash (paid) received | (1) | (1) |
Reserve balance | 2 | 2 |
Asset Sales [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges (credit) | (9) | |
Costs charged against assets | (7) | |
Cash (paid) received | 16 | |
Asset Impairment and Accelerated Depreciation [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges (credit) | 23 | |
Costs charged against assets | (23) | |
Other [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | 2 | |
Charges (credit) | 1 | 4 |
Cash (paid) received | $ (1) | $ (6) |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | Apr. 30, 2013Employees | Nov. 30, 2015Employees | Oct. 31, 2015Position | Jan. 31, 2014USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) |
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring costs in accrued expenses | $ 6,000,000 | $ 6,000,000 | $ 6,000,000 | $ 13,000,000 | $ 9,000,000 | |||||||
Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | $ 6,000,000 | ||||||||||
Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring costs in accrued expenses | 4,000,000 | 4,000,000 | 4,000,000 | 11,000,000 | 5,000,000 | |||||||
Environmental Remediation [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring costs in accrued expenses | 2,000,000 | 2,000,000 | 2,000,000 | $ 2,000,000 | $ 2,000,000 | |||||||
Maximum [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | $ 1,000,000 | ||||||||||
Maximum [Member] | Severance Costs [Member] | Restructuring Activities Other [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued severance charges | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Operational Restructuring [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Number of positions eliminated | Position | 300 | |||||||||||
Pre-tax charge to earnings | 2,000,000 | 28,000,000 | ||||||||||
Restructuring charges after current fiscal | 1,000,000 | |||||||||||
Expected cumulative net cash outlays related to plan | 29,000,000 | 29,000,000 | 29,000,000 | |||||||||
Cash payments | 25,000,000 | |||||||||||
Restructuring cash payments through the reminder of fiscal 2016 | 2,000,000 | |||||||||||
Restructuring cash payments, thereafter | 2,000,000 | |||||||||||
Operational Restructuring [Member] | Severance Costs [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued severance charges | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||
Operational Restructuring [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring charges through the reminder of fiscal 2016 | 1,000,000 | |||||||||||
Closure of Carbon Black Facility [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 25,000,000 | |||||||||||
Expected cumulative net cash outlays related to plan | 7,000,000 | 7,000,000 | 7,000,000 | |||||||||
Cash payments | 2,000,000 | |||||||||||
Restructuring cash payments through the reminder of fiscal 2016 | 1,000,000 | |||||||||||
Affected employees | Employees | 50 | |||||||||||
Site demolition, clearing and environmental remediation charges, and other miscellaneous costs, thereafter | 4,000,000 | |||||||||||
Site demolition, clearing and environmental remediation costs | 4,000,000 | |||||||||||
Severance charges | 3,000,000 | |||||||||||
Restructuring future cash payments remainder of fiscal 2017 | 4,000,000 | |||||||||||
Closure of Carbon Black Facility [Member] | Asset Impairment and Accelerated Depreciation [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 22,000,000 | |||||||||||
Closure of Carbon Black Facility [Member] | Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 3,000,000 | |||||||||||
Closure of Carbon Black Facility [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | |||||||||||
Site demolition, clearing and environmental remediation charges, and other miscellaneous costs of fiscal year 2016 | 1,000,000 | |||||||||||
Other charges | 1,000,000 | |||||||||||
Closure of Carbon Black Facility [Member] | Maximum [Member] | Severance Costs [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued severance charges | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Transition Services Agreement | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | $ 24,000,000 | 0 | 5,000,000 | |||||||||
Cash payments | 21,000,000 | |||||||||||
Severance charges | 16,000,000 | 14,000,000 | 1,000,000 | |||||||||
Other charges | $ 8,000,000 | 7,000,000 | 4,000,000 | |||||||||
Restructuring costs in accrued expenses | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Transition Services Agreement | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Expected severance charges | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Closure of Port Dickson [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 19,000,000 | |||||||||||
Affected employees | Employees | 90 | |||||||||||
Site demolition, clearing and environmental remediation costs | 2,000,000 | |||||||||||
Severance charges | 2,000,000 | |||||||||||
Other charges | 1,000,000 | |||||||||||
Accelerated depreciation and asset write-offs | 16,000,000 | |||||||||||
Net pre-tax gain | 1,000,000 | |||||||||||
Expected cumulative net cash received to this plan | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | |||||||||
Closure of Port Dickson [Member] | Land [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Gain on sale of asset | $ 2,000,000 | |||||||||||
Closure of Port Dickson [Member] | Cabot [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Equity share in CMSB | 50.10% | |||||||||||
Closure of Port Dickson [Member] | CMSB [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Portion of the charges that are allocable to the noncontrolling interest | 49.90% | 49.90% | 49.90% | |||||||||
Closure of Port Dickson [Member] | Severance and Employee Benefits [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Expected cumulative net cash received to this plan | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | |||||||||
Closure of Port Dickson [Member] | Asset Sales [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Expected cumulative net cash received to this plan | 7,000,000 | 7,000,000 | 7,000,000 | |||||||||
Closure of Port Dickson [Member] | Environmental Remediation [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Expected cumulative net cash received to this plan | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Closure of Port Dickson [Member] | Facility Closure Costs [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Expected cumulative net cash received to this plan | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Closure of Port Dickson [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Restructuring cash payments through the reminder of fiscal 2016 | 1,000,000 | |||||||||||
Restructuring future cash payments remainder of fiscal 2017 | 1,000,000 | |||||||||||
Restructuring costs in accrued expenses | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Previous Actions and Sites Pending Sale [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | $ 2,000,000 | |||||||||||
Cash payments | 79,000,000 | |||||||||||
Site demolition, clearing and environmental remediation costs | 10,000,000 | 10,000,000 | ||||||||||
Severance charges | 67,000,000 | 63,000,000 | ||||||||||
Other charges | 23,000,000 | 25,000,000 | ||||||||||
Expected severance charges | 158,000,000 | 158,000,000 | 158,000,000 | |||||||||
Gain on sale of asset | 8,000,000 | |||||||||||
Restructuring accelerated depreciation and asset impairments | 66,000,000 | |||||||||||
Proceeds from sale of Assets | 19,000,000 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | Land [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Net pre-tax gain | 7,000,000 | |||||||||||
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 | |||||||||
Previous Actions and Sites Pending Sale [Member] | Environmental and Other Closure Related Costs [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring cash payments through the reminder of fiscal 2016 and thereafter | $ 2,000,000 | |||||||||||
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 |
Restructuring - Restructuring56
Restructuring - Restructuring Activities Including Merak Facility Closure (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||||
Reserve balance | $ 13 | $ 9 | $ 9 | |
Charges | 2 | 45 | ||
Cash paid | (9) | (18) | ||
Reserve balance | 6 | $ 13 | 6 | |
Severance and Employee Benefits [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Reserve balance | 11 | 5 | 5 | |
Charges | 26 | |||
Cash paid | (7) | (27) | ||
Reserve balance | 4 | 11 | 4 | |
Asset Impairment and Accelerated Depreciation [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Charges | 23 | |||
Other [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Reserve balance | 2 | 2 | ||
Charges | 1 | 4 | ||
Cash paid | (1) | (6) | ||
2016 Plan [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Reserve balance | 9 | 16 | ||
Charges | 2 | 3 | 48 | |
Costs charged against liabilities / (assets) | (1) | (21) | ||
Cash paid | (7) | (9) | (11) | |
Reserve balance | 4 | 9 | 16 | 4 |
2016 Plan [Member] | Severance and Employee Benefits [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Reserve balance | 9 | 16 | ||
Charges | 1 | 25 | ||
Costs charged against liabilities / (assets) | 1 | |||
Cash paid | (6) | (7) | (10) | |
Reserve balance | 4 | 9 | 16 | $ 4 |
2016 Plan [Member] | Asset Impairment and Accelerated Depreciation [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Charges | 1 | 22 | ||
Costs charged against liabilities / (assets) | (1) | (22) | ||
2016 Plan [Member] | Other [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Charges | 1 | 2 | 1 | |
Cash paid | $ (1) | $ (2) | $ (1) |
Financial Instruments and Fai57
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, liabilities, Level 2 to Level 1 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, transfers into Level 3, amount | 0 | 0 | |
Fair value, assets, transfers out of Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers into Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers out of Level 3, amount | 0 | $ 0 | |
Fair value of long-term debt | 1,020,000,000 | $ 1,020,000,000 | |
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 | 960,000,000 | |
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 | $ 12,000,000 |
Derivatives - Details of Deriva
Derivatives - Details of Derivatives Held to Manage Foreign Currency Risk (Detail) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 | |
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] | $ 4,000,000 | $ 2,000,000 |
[1] | Cabot’s forward foreign exchange contracts are denominated primarily in the British pound sterling, Czech koruna, and Indonesian rupiah. |
Venezuela - Additional Informat
Venezuela - Additional Information (Detail) VEF in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016USD ($)VEB / $ | Jun. 30, 2016USD ($)VEB / $ | Jun. 30, 2015USD ($) | Jun. 30, 2016VEFVEB / $ | Mar. 31, 2016VEB / $ | |
Nature Of Operations [Line Items] | |||||
Operating affiliate investment | $ 13,000,000 | $ 13,000,000 | |||
Due from affiliates, dividends cash | VEF | VEF 15 | ||||
Conversion of Bolivars to USD | VEB / $ | 626 | 626 | 626 | 270 | |
Subsidiaries | |||||
Nature Of Operations [Line Items] | |||||
Cash dividends received from subsidiary | $ 2,000,000 | $ 5,000,000 | |||
Maximum [Member] | |||||
Nature Of Operations [Line Items] | |||||
Due from affiliates, dividends cash | $ 1,000,000 | 1,000,000 | |||
Net gain on exchange rate devaluation | $ 1,000,000 | $ 1,000,000 | |||
Venezuela [Member] | Carbon Black Affiliate [Member] | |||||
Nature Of Operations [Line Items] | |||||
Equity method investment, ownership percentage | 49.00% | 49.00% | 49.00% |
Financial Information by Segm60
Financial Information by Segment - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2016SegmentBusiness_Unit | |
Segment Reporting Information [Line Items] | |
Number of business reportable segments | Segment | 4 |
Performance Chemicals [Member] | |
Segment Reporting Information [Line Items] | |
Number of business activity | Business_Unit | 2 |
Financial Information by Segm61
Financial Information by Segment - Schedule of Performance Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 621 | $ 694 | $ 1,792 | $ 2,200 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 594 | 669 | 1,712 | 2,124 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 228 | 234 | 651 | 700 |
Performance Chemicals [Member] | Specialty Carbons and Formulations [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 152 | 159 | 437 | 478 |
Performance Chemicals [Member] | Metal Oxides [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 76 | $ 75 | $ 214 | $ 222 |
Financial Information by Segm62
Financial Information by Segment - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | $ 621 | $ 694 | $ 1,792 | $ 2,200 |
Income (loss) from continuing operations before taxes | 74 | (509) | 128 | (419) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 594 | 669 | 1,712 | 2,124 |
Income (loss) from continuing operations before taxes | 104 | 86 | 263 | 252 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 27 | 25 | 80 | 76 |
Income (loss) from continuing operations before taxes | (30) | (595) | (135) | (671) |
Reinforcement Materials [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 270 | 351 | 819 | 1,169 |
Income (loss) from continuing operations before taxes | 35 | 32 | 95 | 112 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 228 | 234 | 651 | 700 |
Income (loss) from continuing operations before taxes | 59 | 48 | 167 | 129 |
Purification Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 77 | 72 | 210 | 219 |
Income (loss) from continuing operations before taxes | 3 | (7) | 3 | |
Specialty Fluids [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 19 | 12 | 32 | 36 |
Income (loss) from continuing operations before taxes | $ 10 | $ 3 | $ 8 | $ 8 |
Financial Information by Segm63
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm64
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 621 | $ 694 | $ 1,792 | $ 2,200 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 27 | 25 | 80 | 76 |
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) | (9) | ||
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 27 | $ 30 | $ 80 | $ 85 |
Financial Information by Segm65
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm66
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Interest expense | $ (13) | $ (13) | $ (40) | $ (40) |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | (13) | (13) | (40) | (40) |
Total certain items, pre-tax | (6) | (567) | (63) | (599) |
Equity in earnings of affiliated companies, net of tax | (1) | (1) | (2) | (4) |
Unallocated corporate costs | (11) | (12) | (36) | (35) |
General unallocated income (expense) | 1 | (2) | 6 | 7 |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | $ (30) | $ (595) | $ (135) | $ (671) |
Financial Information by Segm67
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, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Restructuring reserve, period expense | $ 2 | $ 2 | $ 45 | $ 14 |
Employee benefit plan settlement charge | 18 | |||
Certain Item [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring reserve, period expense | 2 | 2 | 45 | 14 |
Asset Impairment Charges | 563 | 563 | ||
Executive transition costs | 3 | 3 | ||
Net foreign currency exchange rate, re measurement loss | $ 2 | 2 | ||
Charges for environmental expense | $ 1 | 4 | ||
Acquisition and integration related charges | 2 | |||
Employee benefit plan settlement charge | $ 18 | |||
Certain Item [Member] | Devaluation of Argentine Peso [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net foreign currency exchange rate, re measurement loss | $ 11 |