Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2017 | Aug. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
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 | 62,229,151 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales and other operating revenues | $ 705 | $ 621 | $ 1,994 | $ 1,792 |
Cost of sales | 546 | 461 | 1,509 | 1,383 |
Gross profit | 159 | 160 | 485 | 409 |
Selling and administrative expenses | 63 | 64 | 191 | 197 |
Research and technical expenses | 14 | 13 | 40 | 40 |
Income (loss) from operations | 82 | 83 | 254 | 172 |
Interest and dividend income | 3 | 1 | 7 | 4 |
Interest expense | (13) | (13) | (39) | (40) |
Other income (expense) | (6) | 3 | (5) | (8) |
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 66 | 74 | 217 | 128 |
(Provision) benefit for income taxes | (16) | (15) | (32) | (21) |
Equity in earnings of affiliated companies, net of tax | 3 | 1 | 6 | 2 |
Net income (loss) | 53 | 60 | 191 | 109 |
Net income (loss) attributable to noncontrolling interests, net of tax | 8 | 4 | 18 | 12 |
Net income (loss) attributable to Cabot Corporation | $ 45 | $ 56 | $ 173 | $ 97 |
Weighted-average common shares outstanding: | ||||
Basic | 62.4 | 62.4 | 62.3 | 62.4 |
Diluted | 62.7 | 62.9 | 62.8 | 62.9 |
Earnings per common share: | ||||
Basic | $ 0.71 | $ 0.90 | $ 2.75 | $ 1.55 |
Diluted | 0.71 | 0.88 | 2.74 | 1.53 |
Dividends per common share | $ 0.315 | $ 0.30 | $ 0.915 | $ 0.74 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 53 | $ 60 | $ 191 | $ 109 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment, net of tax provision (benefit) of $(4), $—, $(1) and $— | 54 | (13) | (15) | 5 |
Pension and other postretirement benefit liability adjustments | ||||
Pension and other postretirement benefit liability adjustments arising during the period, net of tax | (1) | |||
Amortization of net loss and prior service credit included in net periodic benefit cost, net of tax | (1) | 2 | ||
Other comprehensive income (loss) | 54 | (14) | (13) | 4 |
Comprehensive income (loss) | 107 | 46 | 178 | 113 |
Net income (loss) attributable to noncontrolling interests, net of tax | 8 | 4 | 18 | 12 |
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax | 3 | (3) | (5) | |
Comprehensive income (loss) attributable to noncontrolling interests, net of tax | 11 | 1 | 18 | 7 |
Comprehensive income (loss) attributable to Cabot Corporation | $ 96 | $ 45 | $ 160 | $ 106 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, tax provision | $ (4) | $ (1) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 198 | $ 200 |
Accounts and notes receivable, net of reserve for doubtful accounts of $9 and $8 | 517 | 456 |
Inventories: | ||
Raw materials | 83 | 66 |
Work in process | 2 | 1 |
Finished goods | 272 | 237 |
Other | 41 | 38 |
Total inventories | 398 | 342 |
Prepaid expenses and other current assets | 51 | 49 |
Total current assets | 1,164 | 1,047 |
Property, plant and equipment, net | 1,267 | 1,290 |
Goodwill | 153 | 152 |
Equity affiliates | 55 | 53 |
Intangible assets, net | 137 | 140 |
Assets held for rent | 103 | 97 |
Deferred income taxes | 254 | 216 |
Other assets | 45 | 40 |
Total assets | 3,178 | 3,035 |
Current liabilities: | ||
Notes payable | 7 | 7 |
Accounts payable and accrued liabilities | 394 | 364 |
Income taxes payable | 27 | 25 |
Current portion of long-term debt | 251 | 1 |
Total current liabilities | 679 | 397 |
Long-term debt | 665 | 914 |
Deferred income taxes | 47 | 41 |
Other liabilities | 283 | 285 |
Redeemable preferred stock | 27 | 26 |
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: 62,433,746 and 62,449,425 shares Outstanding: 62,229,151 and 62,210,711 shares | 62 | 62 |
Less cost of 204,595 and 238,714 shares of common treasury stock | (6) | (7) |
Retained earnings | 1,655 | 1,544 |
Accumulated other comprehensive income (loss) | (338) | (325) |
Total Cabot Corporation stockholders' equity | 1,373 | 1,274 |
Noncontrolling interests | 104 | 98 |
Total stockholders' equity | 1,477 | 1,372 |
Total liabilities and stockholders’ equity | $ 3,178 | $ 3,035 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 9 | $ 8 |
Preferred stock, authorized shares | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, Outstanding shares | 0 | 0 |
Common stock, authorized shares | 200,000,000 | 200,000,000 |
Common stock, par value | $ 1 | $ 1 |
Common stock, issued shares | 62,433,746 | 62,449,425 |
Common stock, outstanding shares | 62,229,151 | 62,210,711 |
Common treasury stock, shares | 204,595 | 238,714 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 191 | $ 109 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 115 | 122 |
Long-lived asset impairment charge | 23 | |
Deferred tax benefit | (26) | (13) |
Equity in net income of affiliated companies | (6) | (2) |
Non-cash compensation | 10 | 13 |
Tax benefit from stock based compensation awards | (8) | (2) |
Other non-cash (income) expense | (2) | 3 |
Changes in assets and liabilities: | ||
Accounts and notes receivable | (64) | 42 |
Inventories | (57) | 61 |
Prepaid expenses and other current assets | (7) | 9 |
Accounts payable and accrued liabilities | 34 | (56) |
Income taxes payable | 3 | (8) |
Other liabilities | (9) | (14) |
Cash dividends received from equity affiliates | 9 | 8 |
Cash provided by operating activities | 183 | 295 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (86) | (80) |
Proceeds from the sale of land | 16 | |
Change in assets held for rent | (5) | (6) |
Other | 2 | |
Cash used in investing activities | (89) | (70) |
Cash Flows from Financing Activities: | ||
Repayments under financing arrangements | (3) | (3) |
Increase in notes payable, net | 2 | |
Proceeds from (repayments of) issuance of commercial paper, net | (11) | |
Repayments of long-term debt | (1) | (1) |
Purchases of common stock | (43) | (27) |
Proceeds from sales of common stock | 21 | 6 |
Tax benefit from stock based compensation awards | 8 | 2 |
Cash dividends paid to noncontrolling interests | (13) | (16) |
Cash dividends paid to common stockholders | (57) | (47) |
Cash used in financing activities | (86) | (97) |
Effects of exchange rate changes on cash | (10) | 17 |
Increase (decrease) in cash and cash equivalents | (2) | 145 |
Cash and cash equivalents at beginning of period | 200 | 77 |
Cash and cash equivalents at end of period | $ 198 | $ 222 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting policies generally accepted in the United States (U.S.) and 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, 2016 (“2016 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, 2017 and 2016. 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. Effective October 1, 2016, the Company adopted a new accounting standard simplifying the presentation of debt issuance costs by presenting debt issuance costs as a reduction of the corresponding debt liability. In addition, the Company early adopted a new accounting standard that simplifies the presentation of deferred income taxes by classifying all deferred taxes as noncurrent assets or liabilities. These new standards were applied retrospectively. The retrospective application of the standard that simplifies the presentation of debt issuance costs resulted in the reclassification of $1 million and $3 million of unamortized debt issuance costs from Prepaid expenses and other current assets and Other assets, respectively, to Long-term debt within the Consolidated Balance Sheets as of September 30, 2016. The retrospective application of the standard that simplifies the presentation of deferred income taxes resulted in the reclassification of $41 million of current deferred tax assets and $1 million of current deferred tax liabilities to noncurrent deferred tax accounts within the Consolidated Balance Sheets as of September 30, 2016. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017 2016 2017 2016 Reinforcement Materials 54 % 46 % 53 % 48 % Performance Chemicals 34 % 38 % 35 % 38 % Purification Solutions 10 % 13 % 11 % 12 % Specialty Fluids 2 % 3 % 1 % 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 the sale of fine cesium chemicals in which revenue is recognized upon delivery of the product. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the periods presented. There is no material off-balance sheet credit exposure related to customer receivable balances. Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. 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. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, a goodwill impairment loss would result. The goodwill impairment loss would be the amount by which the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2017, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit exceeded its carrying amount by 13%. The fair value of the Purification Solutions reporting unit includes certain growth assumptions that are primarily dependent on: (1) growth in demand for Cabot’s existing portfolio of activated carbon products and new products developed for environmental and specialty applications; and (2) stable demand in the mercury removal related portion of the business, which is largely dependent on the amount of coal-based power generation used in the United States and the continued regulation of those utilities under the U.S. Mercury and Air Toxics Standards regulation (“MATS”). In April 2017, the U.S. Environmental Protection Agency (EPA) indicated that it intends to review the cost benefit analysis previously prepared by the EPA in support of MATS to determine if the EPA should reconsider MATS or some part of it. Realizing the Company’s growth assumptions in the Purification Solutions reporting unit is generally driven by macroeconomic conditions, environmental regulations, technology advances, and global and regional competition. Failure to achieve the Company’s projected growth in environmental and/or specialty applications and/or actions taken by the EPA related to MATS that decrease demand for the Company’s products for mercury removal, could have a negative impact on the financial results and fair value of the Purification Solutions reporting unit, which may lead to impairment. 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. 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. 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 $31 million and $27 million higher as of June 30, 2017 and September 30, 2016, respectively. The cost of Specialty Fluids inventories that 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 (loss), net of tax, the actuarial gains/losses and prior service costs/credits that arise but were not previously required to be recognized as components of net periodic benefit cost. Other comprehensive income (loss) is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) (“AOCI”), which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (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 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 expects to adopt the standard on October 1, 2017. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows such as distributions received from equity method investees, proceeds from settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. The new standard is effective for fiscal years beginning after December 15, 2017, 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. In January 2017, the FASB issued a new standard that amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019, and early adoption is permitted for any impairment tests performed after January 1, 2017. The Company adopted this standard on January 1, 2017. The adoption of this standard had no impact on the Company’s consolidated financial statements. In March 2017, the FASB issued a new standard that amends the requirements on the presentation of net periodic pension and postretirement benefit cost. Currently, net benefit costs are reported as employee costs within operating income. The new standard requires the service cost component to be presented with other employee compensation costs. The other components will be reported separately outside of operations. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and early adoption is permitted as of the beginning of any annual period for which an entity’s financial statements (interim or annual) have not been issued. 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, 2017 | |
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, 2017 2016 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 2 $ 1 $ 2 $ — $ — $ — $ — Interest cost 1 1 1 2 1 — 1 — Expected return on plan assets (3 ) (3 ) (2 ) (3 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — 1 — — — — — — Settlement and curtailment cost (credit) — — — — — — — — Net periodic benefit (credit) cost $ (1 ) $ 1 $ — $ 1 $ — $ — $ — $ — Nine Months Ended June 30, 2017 2016 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 7 $ 1 $ 6 $ — $ — $ — $ — Interest cost 3 4 4 6 1 — 1 — Expected return on plan assets (8 ) (10 ) (8 ) (10 ) — — — — Amortization of prior service credit — — — — (2 ) — (3 ) — Amortization of actuarial loss — 4 — 2 — — — — Settlement and curtailment cost (credit) — — — — — — (1 ) — Net periodic benefit (credit) cost $ (4 ) $ 5 $ (3 ) $ 4 $ (1 ) $ — $ (3 ) $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | D. Goodwill and Intangible Assets Cabot had goodwill balances of $153 million and $152 million at June 30, 2017 and September 30, 2016, 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, 2017 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Balance at September 30, 2016 $ 52 $ 9 $ 91 $ 152 Foreign currency impact 1 — — 1 Balance at June 30, 2017 $ 53 $ 9 $ 91 $ 153 The following table provides information regarding the Company’s intangible assets: June 30, 2017 September 30, 2016 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives Developed technologies $ 48 $ (6 ) $ 42 $ 48 $ (4 ) $ 44 Trademarks 16 (1 ) 15 16 (1 ) 15 Customer relationships 93 (13 ) 80 90 (9 ) 81 Total intangible assets $ 157 $ (20 ) $ 137 $ 154 $ (14 ) $ 140 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 month periods ended June 30, 2017 and 2016 was $2 million and $1 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 month periods ended June 30, 2017 and 2016 was $6 million and $5 million, respectively, and is included in the Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $7 million each year for the next five fiscal years. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | E. Stockholders’ Equity 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. Cabot has repurchased 2,934,176 shares of its common stock under this authorization. As of June 30, 2017, 2,065,824 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 2017 and 2016, Cabot paid cash dividends in the aggregate amount of $0.915 and $0.74, respectively, per share of common stock, with a total cost of $57 million and $47 million, respectively. Noncontrolling interest The following table illustrates the noncontrolling interest activity for the periods presented: 2017 2016 (In millions) Balance at September 30 $ 98 $ 104 Net income (loss) attributable to noncontrolling interests 18 12 Foreign currency translation adjustment attributable to noncontrolling interests, net of tax — (5 ) Dividends declared to noncontrolling interests (14 ) (16 ) Contribution from noncontrolling interest 2 — Balance at June 30 $ 104 $ 95 During the nine months ended June 30, 2017, $14 million of dividends were declared to noncontrolling interests, $13 million of which were paid during the period. During the nine months ended June 30, 2016, $16 million of dividends were declared to noncontrolling interests, all of which were paid during the period. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | F. Accumulated Other Comprehensive Income (Loss) Comprehensive income combines net income (loss) 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, were as follows: Currency Translation Adjustment Unrealized Gains on Investments Pension and Other Postretirement Benefit Liability Adjustments Total (In millions) Balance at September 30, 2016, attributable to Cabot Corporation $ (227 ) $ 2 $ (100 ) $ (325 ) Other comprehensive income (loss) (125 ) — 1 (124 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (4 ) — — (4 ) Balance at December 31, 2016, attributable to Cabot Corporation (348 ) 2 (99 ) (445 ) Other comprehensive income (loss) 56 — 1 57 Less: Other comprehensive income (loss) attributable to noncontrolling interests 1 — — 1 Balance at March 31, 2017, attributable to Cabot Corporation (293 ) 2 (98 ) (389 ) Other comprehensive income (loss) 54 — — 54 Less: Other comprehensive income (loss) attributable to noncontrolling interests 3 — — 3 Balance at June 30, 2017, attributable to Cabot Corporation $ (242 ) $ 2 $ (98 ) $ (338 ) The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in the three and nine months ended June 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2017 2016 2017 2016 (In millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note C for details $ 1 $ — $ 4 $ 2 Amortization of prior service credit Net Periodic Benefit Cost - see Note C for details (1 ) (1 ) (2 ) (3 ) Settlement and curtailment (credit) cost Net Periodic Benefit Cost - see Note C for details — — — (1 ) Total before tax — (1 ) 2 (2 ) Tax impact Provision (benefit) for income taxes — — — 1 Total after tax $ — $ (1 ) $ 2 $ (1 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017. Payments Due by Fiscal Year Remainder of Fiscal 2017 2018 2019 2020 2021 Thereafter Total (In millions) Reinforcement Materials $ 59 $ 213 $ 209 $ 135 $ 102 $ 1,458 $ 2,176 Performance Chemicals 10 36 35 30 28 201 340 Purification Solutions 3 9 7 6 — — 25 Total $ 72 $ 258 $ 251 $ 171 $ 130 $ 1,659 $ 2,541 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, 2017 and September 30, 2016, Cabot had $12 million and $14 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 in the first nine months of both fiscal 2017 and fiscal 2016. 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 2016 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, 2017 and September 30, 2016, 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, 2017 and September 30, 2016, the reserve was $18 million and $21 million, respectively. Cash payments related to this liability were approximately $3 million in the first nine months of both fiscal 2017 and fiscal 2016. Cabot’s current estimate of the cost of its share of existing and future respirator liability claims is based on facts and circumstances existing at this time. Developments that could affect the Company’s estimate include, but are not limited to, (i) significant changes in the number of future claims, (ii) changes in the rate of dismissals without payment of pending claims, (iii) significant changes in the average cost of resolving claims, (iv) significant changes in the legal costs of defending these claims, (v) changes in the nature of claims received, (vi) changes in the law and procedure applicable to these claims, (vii) the financial viability of other parties which contribute to the settlement of respirator claims, (viii) a change in the availability of insurance coverage maintained by certain of the other parties which contribute to the settlement of respirator claims, or the indemnity provided by a former owner of the business, (ix) changes in the allocation of costs among the various parties paying legal and settlement costs, and (x) a determination that the assumptions that were used to estimate Cabot’s share of liability are no longer reasonable. The Company cannot determine the impact of these potential developments on its current estimate of its share of liability for existing and future claims. Accordingly, the actual amount of these liabilities for existing and future claims could be different than the reserved amount. Other The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to the Company’s divested businesses. The Company does not believe that any of these matters will have a material adverse effect on its financial position; however, litigation is inherently unpredictable. Cabot could incur judgments, enter into settlements or revise its expectations regarding the outcome of certain matters, and such developments could have a material impact on its results of operations in the period in which the amounts are accrued or its cash flows in the period in which the amounts are paid. |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax | H. Income Tax Effective Tax Rate Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (Dollars in millions) Provision (benefit) for income taxes $ 16 $ 15 $ 32 $ 21 Effective tax rate 22 % 21 % 14 % 17 % During the three and nine months ended June 30, 2017, the Company recorded tax provisions of $16 million and $32 million, respectively, resulting in effective tax rates of 22% and 14%, respectively. For the three and nine months ended June 30, 2017, these amounts included a net discrete tax expense of $5 million and a net discrete tax benefit of $15 million, respectively, primarily comprised of a tax expense associated with various return to provision adjustments related to tax return filings and a tax benefit associated with the generation of excess foreign tax credits upon repatriation of previously taxed foreign earnings. During the three and nine months ended June 30, 2016, the Company recorded tax provisions of $15 million and $21 million, respectively, resulting in effective tax rates of 21% and 17%, respectively. For the three and nine months ended June 30, 2016, these amounts included a net discrete tax expense of $3 million and a net discrete tax benefit of $2 million, respectively, Uncertainties Cabot and certain subsidiaries are under audit in a number of jurisdictions. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a further change in the unrecognized tax benefits may also occur within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of limitations. However, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time. Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2012 through 2015 tax years generally remain subject to examination by the United States Internal Revenue Service and various tax years from 2005 through 2015 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2002 through 2015 remain subject to examination by their respective tax authorities. As of June 30, 2017, Cabot’s significant non-U.S. jurisdictions include Canada, China, France, Germany, Italy, Japan, and the Netherlands. During the three and nine months ended June 30, 2017, 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, 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2017 | |
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 (EPS) computations: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ 45 $ 56 $ 173 $ 97 Less: Undistributed earnings allocated to participating securities (1) — — 1 — Earnings (loss) allocated to common shareholders (numerator) $ 45 $ 56 $ 172 $ 97 Weighted average common shares and participating securities outstanding 62.9 62.9 62.8 62.9 Less: Participating securities (1) 0.5 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.4 62.4 62.3 62.4 Earnings per common share - basic: $ 0.71 $ 0.90 $ 2.75 $ 1.55 Diluted EPS: Earnings (loss) allocated to common shareholders $ 45 $ 56 $ 172 $ 97 Plus: Earnings (loss) allocated to participating securities — — 1 — Less: Adjusted earnings allocated to participating securities (2) — — 1 1 Earnings (loss) allocated to common shareholders (numerator) $ 45 $ 56 $ 172 $ 96 Adjusted weighted average common shares outstanding 62.4 62.4 62.3 62.4 Effect of dilutive securities: Common shares issuable (3) 0.3 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.7 62.9 62.8 62.9 Earnings per common share - diluted: $ 0.71 $ 0.88 $ 2.74 $ 1.53 (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, 2017 2016 2017 2016 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 45 $ 56 $ 173 $ 97 Less: Dividends declared on common stock 19 19 57 47 Undistributed earnings (loss) $ 26 $ 37 $ 116 $ 50 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ 26 $ 37 $ 115 $ 50 Undistributed earnings (loss) allocated to participating shareholders — — 1 — Undistributed earnings (loss) $ 26 $ 37 $ 116 $ 50 (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 Supplemental 401(K) 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, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | J. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three and nine months ended June 30, 2017 and 2016 as follows: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Cost of sales $ 1 $ 1 $ 2 $ 32 Selling and administrative expenses — 1 1 8 Research and technical expenses — — — 5 Total $ 1 $ 2 $ 3 $ 45 Details of all restructuring activities and the related reserves during the three months ended June 30, 2017 were as follows: Severance and Employee Benefits Environmental Remediation Other Total (In millions) Reserve at March 31, 2017 $ 2 $ 2 $ — $ 4 Charges — — 1 1 Cash paid (1 ) — (1 ) (2 ) Reserve at June 30, 2017 $ 1 $ 2 $ — $ 3 Details of all restructuring activities during the nine months ended June 30, 2017 were as follows: Severance and Employee Benefits Environmental Remediation Other Total (In millions) Reserve at September 30, 2016 $ 3 $ 2 $ — $ 5 Charges 1 — 2 3 Cash paid (3 ) — (2 ) (5 ) Reserve at June 30, 2017 $ 1 $ 2 $ — $ 3 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 resulted in the termination of employment for approximately 300 employees across the Company’s global locations. Total charges related to these actions are expected to be $30 million, of which approximately $29 million was recorded in fiscal 2016. The Company recorded pre-tax charges of approximately $1 million in the first nine months of fiscal 2017, and expects to record less than $1 million through the rest of fiscal 2017 related to these actions. The Company recorded pre-tax charges of approximately $28 million in the first nine months of fiscal 2016, and pre-tax charges of $2 million for the three months ended June 30, 2016 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 $30 million, comprised of severance, employee benefits and other transition costs. Through June 30, 2017, the Company has made $29 million in cash payments related to this plan, of which $27 million was paid in fiscal 2016. The Company expects to make $1 million in cash payments through the remainder of fiscal 2017. As of June 30, 2017, Cabot has less than $1 million of accrued severance charges in the Consolidated Balance Sheet related to these actions. Additionally, in fiscal 2016 Cabot closed its carbon black manufacturing facility in Merak, Indonesia to consolidate production in Asia using the Company’s Cilegon, Indonesia and other Asian and global carbon black production sites to meet regional demand. The decision was driven by the financial performance at the Merak facility in the years preceding the closure. Manufacturing operations ceased at the end of January 2016. Total charges related to the Merak closure are expected to be $27 million, of which $25 million was recorded in fiscal 2016. The Company has recorded net charges of less than $1 million in the nine months ended June 30, 2017 and charges of $25 million in the nine months ended June 30, 2016 related to this closure. The charges in the first nine months of fiscal 2016 were comprised of $22 million of non-cash asset impairments and accelerated depreciation and $3 million of severance and employee benefits. Pre-tax charges related to this plan were less than $1 million in the three month periods ended June 30, 2017 and 2016. 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 approximately $2 million in the remainder of fiscal 2017 and thereafter. Total net cash outlays related to this closure are expected to be approximately $6 million, comprised of $3 million of severance payments, and $3 million of site demolition, clearing, environmental and other costs. Through June 30, 2017, the Company has made $3 million in cash payments related to this plan, mainly for severance, and expects to pay approximately $3 million through the remainder of fiscal 2017 and thereafter for site demolition, clearing, environmental remediation, and severance costs. As of June 30, 2017, Cabot has approximately $1 million of accrued severance costs in the Consolidated Balance Sheet related to the Merak facility closure. Other Actions Cabot has recorded approximately $1 million of severance charges in the nine months ended June 30, 2017, nearly all of which has been paid. Additionally, in previous years, the Company has entered into other various restructuring actions that have been substantially completed, other than the sale of assets from certain closed sites that remain to be completed. The Company has recorded a total net charge of less than $1 million related to these plans in the nine months ended June 30, 2017 and a net benefit of $7 million in the nine months ended June 30, 2016, driven by gains from the sale of certain assets. Pre-tax charges related to these actions were less than $1 million in the three month periods ended both June 30, 2017 and 2016. Cabot expects to pay $2 million related to these actions in the remainder of fiscal 2017 and thereafter mainly for accrued environmental and other closure related costs. As of June 30, 2017, Cabot has approximately $2 million of accrued environmental 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, 2017 | |
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 2017 or 2016. At June 30, 2017 and September 30, 2016, Cabot had derivatives relating to foreign currency risks carried at fair value. At June 30, 2017, the fair value of these derivatives was a net liability of $3 million and was included in Accounts payable and accrued liabilities, Other liabilities, and Prepaid expenses and other current assets on the Consolidated Balance Sheets. At September 30, 2016, the fair value of these derivatives was a net asset of $1 million and was included in Prepaid expenses and other current assets and Other assets on the Consolidated Balance Sheets. These derivatives are classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on observable inputs. At both June 30, 2017 and September 30, 2016, 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, 2017 and September 30, 2016, 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 $0.91 billion and $0.94 billion, respectively, as of June 30, 2017 and $0.91 billion and $0.98 billion, respectively, as of September 30, 2016. The fair values of Cabot’s fixed rate long-term debt are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of Cabot’s floating rate long-term debt and capital lease obligations approximate their fair values. All such measurements are based on observable inputs and are classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model. |
Derivatives
Derivatives | 9 Months Ended |
Jun. 30, 2017 | |
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 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 Euro denominated principal and interest payments. Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot may enter into cross-currency swaps to mitigate the impact of currency rate changes on the Company’s net investments. The Company also has foreign currency exposure arising from the denomination of 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, 2017 and September 30, 2016 to manage foreign currency risk. Notional Amount Description Borrowing June 30, 2017 September 30, 2016 Hedge Designation Cross Currency Swaps 3.4% Notes USD 250 million swapped to EUR 223 million USD 250 million swapped to EUR 223 million Net investment Forward Foreign Currency Contracts (1) N/A USD 5 million USD 4 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the Indonesian rupiah and Czech koruna. Accounting for Derivative Instruments and Hedging Activities The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of Cabot or 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 and are adjusted for credit risk. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. Fair Value Hedge For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current period earnings. Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is recorded in Accumulated other comprehensive income (loss) 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. Net Investment Hedge For net investment hedges, changes in the fair value of the effective portion of the derivatives’ gains or losses are reported as foreign currency translation gains or losses in AOCI while changes in the ineffective portion are reported in earnings. Effectiveness is assessed based on the hypothetical derivative method. There was no ineffectiveness for the nine months ended June 30, 2017. The gains or losses on derivative instruments reported in AOCI are reclassified to earnings in the period in which earnings are affected by the underlying item, such as a disposal or substantial liquidations of the entities being hedged. During the fourth quarter of fiscal 2016, the Company entered into cross currency swaps with a notional amount of $250 million, which are designated as hedges of its net investments in certain Euro denominated subsidiaries. Cash settlements periodically occur for fixed rate interest payments and a cash exchange of the notional currency amount will occur at the end of the term in 2026 under these cross currency swaps. During the nine month period ended June 30, 2017, the Company received net cash interest of $2 million. During the three and nine months ended June 30, 2017, the Company recognized a loss of $10 million and $2 million, respectively, related to these swaps through Foreign currency translation adjustment in other comprehensive income (loss). As of June 30, 2017, the fair value of these swaps was a net liability of $3 million and was included in Prepaid expenses and other current assets and Other liabilities and the cumulative loss of $1 million was included in AOCI on the Consolidated Balance Sheets. As of September 30, 2016, the fair value of these swaps was a net asset of $1 million and was included in Other assets and the cumulative gain of $1 million was included in AOCI on the Consolidated Balance Sheets. There were no gains or losses reclassified from AOCI into earnings during the first nine months of fiscal 2017 or fiscal 2016. Other Derivative Instruments From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes, which may include cross currency swaps, foreign currency forward contracts and commodity derivatives. For cross currency swaps and foreign currency forward contracts not designated as hedges, the Company uses standard models with market-based inputs. The significant inputs to these models are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. In determining the fair value of the commodity derivatives, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. Although these derivatives do not qualify for hedge accounting, Cabot believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings. At both June 30, 2017 and September 30, 2016, the fair value of derivative instruments not designated as hedges were immaterial and were presented in Prepaid expenses and other current assets and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. |
Venezuela
Venezuela | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017, these subsidiaries carried the operating affiliate investment of $15 million. During the nine month periods ended June 30, 2017 and 2016, the Company received dividends in the amounts of $3 million and $2 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. During the third quarter of fiscal 2017, the exchange rate that was made available to the Company when converting these dollars to bolivars was changed from 709 bolivars to the U.S. dollar to 2,640 bolivars to the U.S. dollar. The operating affiliate remeasured its bolivar denominated monetary accounts to reflect the new rate. The impact of the exchange rate devaluation on the operating affiliate’s results was a net gain of $1 million during the third quarter of fiscal 2017. The operating entity has generally been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. Any future change in the exchange rate made available to the Company 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, 2017 | |
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”), who is Cabot’s President and Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) 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. The Performance Chemicals segment combines the specialty carbons and compounds and inkjet colorants product lines into the Specialty Carbons and Formulations business, and combines the fumed metal oxides and aerogel product lines into the Metal Oxides business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and, therefore, have been aggregated into one reportable segment. The net sales from each of these businesses for the three and nine months ended June 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Specialty Carbons and Formulations $ 154 $ 152 $ 454 $ 437 Metal Oxides 75 76 208 214 Total Performance Chemicals $ 229 $ 228 $ 662 $ 651 The Purification Solutions segment represents the Company’s activated carbon business and the Specialty Fluids segment includes cesium formate oil and gas drilling fluids and high-purity fine cesium chemicals product lines. Income (loss) from continuing operations before income taxes (“Segment EBIT”) is presented for each reportable segment in the table below. Segment EBIT excludes certain items, meaning items management does not consider representative of on-going operating segment results. In addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, 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 (In millions) Three Months Ended June 30, 2017 Revenues from external customers (2) $ 367 $ 229 $ 71 $ 12 $ 679 $ 26 $ 705 Income (loss) from continuing operations before income taxes (3) $ 51 $ 46 $ (2 ) $ 4 $ 99 $ (33 ) $ 66 Three Months Ended June 30, 2016 Revenues from external customers (2) $ 270 $ 228 $ 77 $ 19 $ 594 $ 27 $ 621 Income (loss) from continuing operations before income taxes (3) $ 35 $ 59 $ — $ 10 $ 104 $ (30 ) $ 74 Nine Months Ended June 30, 2017 Revenues from external customers (2) $ 1,014 $ 662 $ 207 $ 30 $ 1,913 $ 81 $ 1,994 Income (loss) from continuing operations before income taxes (3) $ 145 $ 146 $ 4 $ 6 $ 301 $ (84 ) $ 217 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 income taxes (3) $ 95 $ 167 $ (7 ) $ 8 $ 263 $ (135 ) $ 128 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statement of Operations. Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Royalties, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain notes receivable $ (4 ) $ — $ (6 ) $ — Shipping and handling fees 30 27 87 80 Total $ 26 $ 27 $ 81 $ 80 (3) Consolidated Total Income (loss) from continuing operations before income taxes Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Interest expense $ (13 ) $ (13 ) $ (39 ) $ (40 ) Certain Items: (a) Global restructuring activities (1 ) (2 ) (3 ) (45 ) Non-recurring gains (losses) on foreign exchange (1 ) — (1 ) (11 ) Legal and environmental matters and reserves — (1 ) 2 (4 ) Executive transition costs — (3 ) — (3 ) Total certain items, pre-tax (2 ) (6 ) (2 ) (63 ) Unallocated corporate costs (b) (11 ) (11 ) (37 ) (36 ) General unallocated income (expense) (c) (4 ) 1 — 6 Less: Equity in earnings of affiliated companies, net of tax (d) 3 1 6 2 Total $ (33 ) $ (30 ) $ (84 ) $ (135 ) (a) Certain items are (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the 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. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017 2016 2017 2016 Reinforcement Materials 54 % 46 % 53 % 48 % Performance Chemicals 34 % 38 % 35 % 38 % Purification Solutions 10 % 13 % 11 % 12 % Specialty Fluids 2 % 3 % 1 % 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 the sale of fine cesium chemicals in which revenue is recognized upon delivery of the product. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the periods presented. There is no material off-balance sheet credit exposure related to customer receivable balances. |
Intangible Assets and Goodwill Impairment | 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. Alternatively, the Company may elect to proceed directly to the quantitative goodwill impairment test. If based on the quantitative evaluation the fair value of the reporting unit is less than its carrying amount, a goodwill impairment loss would result. The goodwill impairment loss would be the amount by which the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The fair value of a reporting unit is based on discounted estimated future cash flows. The fair value is also benchmarked against a market approach using the guideline public companies method. The assumptions used to estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and discount rates over an estimate of the remaining operating period at the reporting unit level. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2017, the fair values of the Reinforcement Materials and Fumed Metal Oxides reporting units were substantially in excess of their carrying values. The fair value of the Purification Solutions reporting unit exceeded its carrying amount by 13%. The fair value of the Purification Solutions reporting unit includes certain growth assumptions that are primarily dependent on: (1) growth in demand for Cabot’s existing portfolio of activated carbon products and new products developed for environmental and specialty applications; and (2) stable demand in the mercury removal related portion of the business, which is largely dependent on the amount of coal-based power generation used in the United States and the continued regulation of those utilities under the U.S. Mercury and Air Toxics Standards regulation (“MATS”). In April 2017, the U.S. Environmental Protection Agency (EPA) indicated that it intends to review the cost benefit analysis previously prepared by the EPA in support of MATS to determine if the EPA should reconsider MATS or some part of it. Realizing the Company’s growth assumptions in the Purification Solutions reporting unit is generally driven by macroeconomic conditions, environmental regulations, technology advances, and global and regional competition. Failure to achieve the Company’s projected growth in environmental and/or specialty applications and/or actions taken by the EPA related to MATS that decrease demand for the Company’s products for mercury removal, could have a negative impact on the financial results and fair value of the Purification Solutions reporting unit, which may lead to impairment. 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. |
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. |
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 $31 million and $27 million higher as of June 30, 2017 and September 30, 2016, respectively. The cost of Specialty Fluids inventories that 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 (loss), net of tax, the actuarial gains/losses and prior service costs/credits that arise but were not previously required to be recognized as components of net periodic benefit cost. Other comprehensive income (loss) is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) (“AOCI”), which is included as a component of stockholders’ equity, includes unrealized gains or losses on available-for-sale marketable securities and derivative instruments, currency translation adjustments in foreign subsidiaries, translation adjustments on foreign equity securities and minimum pension liability adjustments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (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 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 expects to adopt the standard on October 1, 2017. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows such as distributions received from equity method investees, proceeds from settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. The new standard is effective for fiscal years beginning after December 15, 2017, 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. In January 2017, the FASB issued a new standard that amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019, and early adoption is permitted for any impairment tests performed after January 1, 2017. The Company adopted this standard on January 1, 2017. The adoption of this standard had no impact on the Company’s consolidated financial statements. In March 2017, the FASB issued a new standard that amends the requirements on the presentation of net periodic pension and postretirement benefit cost. Currently, net benefit costs are reported as employee costs within operating income. The new standard requires the service cost component to be presented with other employee compensation costs. The other components will be reported separately outside of operations. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and early adoption is permitted as of the beginning of any annual period for which an entity’s financial statements (interim or annual) have not been issued. 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, 2017 | |
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, 2017 2016 2017 2016 Reinforcement Materials 54 % 46 % 53 % 48 % Performance Chemicals 34 % 38 % 35 % 38 % Purification Solutions 10 % 13 % 11 % 12 % Specialty Fluids 2 % 3 % 1 % 2 % |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017 2016 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 2 $ 1 $ 2 $ — $ — $ — $ — Interest cost 1 1 1 2 1 — 1 — Expected return on plan assets (3 ) (3 ) (2 ) (3 ) — — — — Amortization of prior service credit — — — — (1 ) — (1 ) — Amortization of actuarial loss — 1 — — — — — — Settlement and curtailment cost (credit) — — — — — — — — Net periodic benefit (credit) cost $ (1 ) $ 1 $ — $ 1 $ — $ — $ — $ — Nine Months Ended June 30, 2017 2016 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 7 $ 1 $ 6 $ — $ — $ — $ — Interest cost 3 4 4 6 1 — 1 — Expected return on plan assets (8 ) (10 ) (8 ) (10 ) — — — — Amortization of prior service credit — — — — (2 ) — (3 ) — Amortization of actuarial loss — 4 — 2 — — — — Settlement and curtailment cost (credit) — — — — — — (1 ) — Net periodic benefit (credit) cost $ (4 ) $ 5 $ (3 ) $ 4 $ (1 ) $ — $ (3 ) $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017 are as follows: Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Balance at September 30, 2016 $ 52 $ 9 $ 91 $ 152 Foreign currency impact 1 — — 1 Balance at June 30, 2017 $ 53 $ 9 $ 91 $ 153 |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: June 30, 2017 September 30, 2016 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives Developed technologies $ 48 $ (6 ) $ 42 $ 48 $ (4 ) $ 44 Trademarks 16 (1 ) 15 16 (1 ) 15 Customer relationships 93 (13 ) 80 90 (9 ) 81 Total intangible assets $ 157 $ (20 ) $ 137 $ 154 $ (14 ) $ 140 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Activity in Noncontrolling Interests | The following table illustrates the noncontrolling interest activity for the periods presented: 2017 2016 (In millions) Balance at September 30 $ 98 $ 104 Net income (loss) attributable to noncontrolling interests 18 12 Foreign currency translation adjustment attributable to noncontrolling interests, net of tax — (5 ) Dividends declared to noncontrolling interests (14 ) (16 ) Contribution from noncontrolling interest 2 — Balance at June 30 $ 104 $ 95 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, were as follows: Currency Translation Adjustment Unrealized Gains on Investments Pension and Other Postretirement Benefit Liability Adjustments Total (In millions) Balance at September 30, 2016, attributable to Cabot Corporation $ (227 ) $ 2 $ (100 ) $ (325 ) Other comprehensive income (loss) (125 ) — 1 (124 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (4 ) — — (4 ) Balance at December 31, 2016, attributable to Cabot Corporation (348 ) 2 (99 ) (445 ) Other comprehensive income (loss) 56 — 1 57 Less: Other comprehensive income (loss) attributable to noncontrolling interests 1 — — 1 Balance at March 31, 2017, attributable to Cabot Corporation (293 ) 2 (98 ) (389 ) Other comprehensive income (loss) 54 — — 54 Less: Other comprehensive income (loss) attributable to noncontrolling interests 3 — — 3 Balance at June 30, 2017, attributable to Cabot Corporation $ (242 ) $ 2 $ (98 ) $ (338 ) |
Amounts Reclassified Out of AOCI | The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in the three and nine months ended June 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated June 30, June 30, Statements of Operations 2017 2016 2017 2016 (In millions) Pension and other postretirement benefit liability adjustment Amortization of actuarial losses Net Periodic Benefit Cost - see Note C for details $ 1 $ — $ 4 $ 2 Amortization of prior service credit Net Periodic Benefit Cost - see Note C for details (1 ) (1 ) (2 ) (3 ) Settlement and curtailment (credit) cost Net Periodic Benefit Cost - see Note C for details — — — (1 ) Total before tax — (1 ) 2 (2 ) Tax impact Provision (benefit) for income taxes — — — 1 Total after tax $ — $ (1 ) $ 2 $ (1 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
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, 2017. Payments Due by Fiscal Year Remainder of Fiscal 2017 2018 2019 2020 2021 Thereafter Total (In millions) Reinforcement Materials $ 59 $ 213 $ 209 $ 135 $ 102 $ 1,458 $ 2,176 Performance Chemicals 10 36 35 30 28 201 340 Purification Solutions 3 9 7 6 — — 25 Total $ 72 $ 258 $ 251 $ 171 $ 130 $ 1,659 $ 2,541 |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate | Effective Tax Rate Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (Dollars in millions) Provision (benefit) for income taxes $ 16 $ 15 $ 32 $ 21 Effective tax rate 22 % 21 % 14 % 17 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings Per Common Share (EPS) | The following tables summarize the components of the basic and diluted earnings per common share (EPS) computations: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ 45 $ 56 $ 173 $ 97 Less: Undistributed earnings allocated to participating securities (1) — — 1 — Earnings (loss) allocated to common shareholders (numerator) $ 45 $ 56 $ 172 $ 97 Weighted average common shares and participating securities outstanding 62.9 62.9 62.8 62.9 Less: Participating securities (1) 0.5 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.4 62.4 62.3 62.4 Earnings per common share - basic: $ 0.71 $ 0.90 $ 2.75 $ 1.55 Diluted EPS: Earnings (loss) allocated to common shareholders $ 45 $ 56 $ 172 $ 97 Plus: Earnings (loss) allocated to participating securities — — 1 — Less: Adjusted earnings allocated to participating securities (2) — — 1 1 Earnings (loss) allocated to common shareholders (numerator) $ 45 $ 56 $ 172 $ 96 Adjusted weighted average common shares outstanding 62.4 62.4 62.3 62.4 Effect of dilutive securities: Common shares issuable (3) 0.3 0.5 0.5 0.5 Adjusted weighted average common shares (denominator) 62.7 62.9 62.8 62.9 Earnings per common share - diluted: $ 0.71 $ 0.88 $ 2.74 $ 1.53 (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, 2017 2016 2017 2016 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ 45 $ 56 $ 173 $ 97 Less: Dividends declared on common stock 19 19 57 47 Undistributed earnings (loss) $ 26 $ 37 $ 116 $ 50 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ 26 $ 37 $ 115 $ 50 Undistributed earnings (loss) allocated to participating shareholders — — 1 — Undistributed earnings (loss) $ 26 $ 37 $ 116 $ 50 (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 Supplemental 401(K) 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, 2017 | |
Restructuring And Related Activities [Abstract] | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three and nine months ended June 30, 2017 and 2016 as follows: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Cost of sales $ 1 $ 1 $ 2 $ 32 Selling and administrative expenses — 1 1 8 Research and technical expenses — — — 5 Total $ 1 $ 2 $ 3 $ 45 |
Restructuring Activities and Related Reserves | Details of all restructuring activities and the related reserves during the three months ended June 30, 2017 were as follows: Severance and Employee Benefits Environmental Remediation Other Total (In millions) Reserve at March 31, 2017 $ 2 $ 2 $ — $ 4 Charges — — 1 1 Cash paid (1 ) — (1 ) (2 ) Reserve at June 30, 2017 $ 1 $ 2 $ — $ 3 Details of all restructuring activities during the nine months ended June 30, 2017 were as follows: Severance and Employee Benefits Environmental Remediation Other Total (In millions) Reserve at September 30, 2016 $ 3 $ 2 $ — $ 5 Charges 1 — 2 3 Cash paid (3 ) — (2 ) (5 ) Reserve at June 30, 2017 $ 1 $ 2 $ — $ 3 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Details of Derivatives Held to Manage Foreign Currency Risk | The following table provides details of the derivatives held as of June 30, 2017 and September 30, 2016 to manage foreign currency risk. Notional Amount Description Borrowing June 30, 2017 September 30, 2016 Hedge Designation Cross Currency Swaps 3.4% Notes USD 250 million swapped to EUR 223 million USD 250 million swapped to EUR 223 million Net investment Forward Foreign Currency Contracts (1) N/A USD 5 million USD 4 million No designation (1) Cabot’s forward foreign exchange contracts are denominated primarily in the Indonesian rupiah and Czech koruna. |
Financial Information by Segm33
Financial Information by Segment (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Performance Segment | The net sales from each of these businesses for the three and nine months ended June 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Specialty Carbons and Formulations $ 154 $ 152 $ 454 $ 437 Metal Oxides 75 76 208 214 Total Performance Chemicals $ 229 $ 228 $ 662 $ 651 |
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 (In millions) Three Months Ended June 30, 2017 Revenues from external customers (2) $ 367 $ 229 $ 71 $ 12 $ 679 $ 26 $ 705 Income (loss) from continuing operations before income taxes (3) $ 51 $ 46 $ (2 ) $ 4 $ 99 $ (33 ) $ 66 Three Months Ended June 30, 2016 Revenues from external customers (2) $ 270 $ 228 $ 77 $ 19 $ 594 $ 27 $ 621 Income (loss) from continuing operations before income taxes (3) $ 35 $ 59 $ — $ 10 $ 104 $ (30 ) $ 74 Nine Months Ended June 30, 2017 Revenues from external customers (2) $ 1,014 $ 662 $ 207 $ 30 $ 1,913 $ 81 $ 1,994 Income (loss) from continuing operations before income taxes (3) $ 145 $ 146 $ 4 $ 6 $ 301 $ (84 ) $ 217 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 income taxes (3) $ 95 $ 167 $ (7 ) $ 8 $ 263 $ (135 ) $ 128 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statement of Operations. Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Royalties, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain notes receivable $ (4 ) $ — $ (6 ) $ — Shipping and handling fees 30 27 87 80 Total $ 26 $ 27 $ 81 $ 80 (3) Consolidated Total Income (loss) from continuing operations before income taxes Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 (In millions) Interest expense $ (13 ) $ (13 ) $ (39 ) $ (40 ) Certain Items: (a) Global restructuring activities (1 ) (2 ) (3 ) (45 ) Non-recurring gains (losses) on foreign exchange (1 ) — (1 ) (11 ) Legal and environmental matters and reserves — (1 ) 2 (4 ) Executive transition costs — (3 ) — (3 ) Total certain items, pre-tax (2 ) (6 ) (2 ) (63 ) Unallocated corporate costs (b) (11 ) (11 ) (37 ) (36 ) General unallocated income (expense) (c) (4 ) 1 — 6 Less: Equity in earnings of affiliated companies, net of tax (d) 3 1 6 2 Total $ (33 ) $ (30 ) $ (84 ) $ (135 ) (a) Certain items are (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the 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. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Basis Of Presentation [Line Items] | ||
Prepaid expenses and other current assets | $ 51 | $ 49 |
Other assets | $ 45 | 40 |
Accounting Standards Update 2015-03 [Member] | Restatement Adjustment [Member] | ||
Basis Of Presentation [Line Items] | ||
Prepaid expenses and other current assets | 1 | |
Other assets | 3 | |
Adjustments for New Accounting Principle Early Adoption [Member] | ||
Basis Of Presentation [Line Items] | ||
Reclassification of current deferred tax assets to noncurrent deferred tax assets | 41 | |
Reclassification of current deferred tax liabilities to noncurrent deferred tax liabilities | $ 1 |
Significant Accounting Polici35
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, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reinforcement Materials [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 54.00% | 46.00% | 53.00% | 48.00% |
Performance Chemicals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 34.00% | 38.00% | 35.00% | 38.00% |
Purification Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 10.00% | 13.00% | 11.00% | 12.00% |
Specialty Fluids [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, by segment | 2.00% | 3.00% | 1.00% | 2.00% |
Significant Accounting Polici36
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | May 31, 2017 | Sep. 30, 2016 | |
Significant Accounting Policies [Line Items] | |||
Value of inventories under FIFO method | $ 31 | $ 27 | |
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 | 13.00% |
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, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
U.S. Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | $ 1 | $ 1 |
Interest cost | 1 | 1 | 3 | 4 |
Expected return on plan assets | (3) | (2) | (8) | (8) |
Net periodic benefit (credit) cost | (1) | (4) | (3) | |
Foreign Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 2 | 7 | 6 |
Interest cost | 1 | 2 | 4 | 6 |
Expected return on plan assets | (3) | (3) | (10) | (10) |
Amortization of actuarial loss | 1 | 4 | 2 | |
Net periodic benefit (credit) cost | 1 | 1 | 5 | 4 |
U. S. Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 1 | 1 | 1 | 1 |
Amortization of prior service credit | $ (1) | $ (1) | (2) | (3) |
Settlement and curtailment cost (credit) | (1) | |||
Net periodic benefit (credit) cost | $ (1) | $ (3) |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 153 | $ 153 | $ 152 | ||
Amortization expense estimated for year one | 7 | 7 | |||
Amortization expense estimated for year two | 7 | 7 | |||
Amortization expense estimated for year three | 7 | 7 | |||
Amortization expense estimated for year four | 7 | 7 | |||
Amortization expense estimated for year five | 7 | 7 | |||
Cost of Sales and Selling and Administrative Expenses [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 2 | $ 1 | $ 6 | $ 5 | |
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 Asset39
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) $ in Millions | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | $ 152 |
Foreign currency impact | 1 |
Ending balance | 153 |
Reinforcement Materials [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 52 |
Foreign currency impact | 1 |
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 | 91 |
Ending balance | $ 91 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | $ 157 | $ 154 |
Accumulated Amortization | (20) | (14) |
Net Intangible Assets, finite lives | 137 | 140 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 48 | 48 |
Accumulated Amortization | (6) | (4) |
Net Intangible Assets, finite lives | 42 | 44 |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 16 | 16 |
Accumulated Amortization | (1) | (1) |
Net Intangible Assets, finite lives | 15 | 15 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value, finite lives | 93 | 90 |
Accumulated Amortization | (13) | (9) |
Net Intangible Assets, finite lives | $ 80 | $ 81 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jan. 31, 2015 | |
Class Of Stock [Line Items] | |||
Repurchase authorization, shares | 5,000,000 | ||
Cash dividends paid to common stockholders | $ 57 | $ 47 | |
Cash dividend paid per share | $ 0.915 | $ 0.74 | |
Dividends declared to noncontrolling interests | $ 14 | $ 16 | |
Dividends paid to noncontrolling interests | $ 13 | $ 16 | |
January 2015 Share Repurchase Authorization [Member] | |||
Class Of Stock [Line Items] | |||
Common stock shares repurchased | 2,934,176 | ||
Shares remaining available for repurchase under the current authorization | 2,065,824 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Activity in Noncontrolling Interests (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Equity [Abstract] | ||||
Balance at September 30 | $ 98 | $ 104 | ||
Net income (loss) attributable to noncontrolling interests, net of tax | $ 8 | $ 4 | 18 | 12 |
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax | 3 | (3) | (5) | |
Dividends declared to noncontrolling interests | (14) | (16) | ||
Contribution from noncontrolling interest | 2 | |||
Balance at June 30 | $ 104 | $ 95 | $ 104 | $ 95 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Loss) - Changes in Each Component of AOCI, Net of Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | $ 1,372 | $ 1,372 | ||||
Other comprehensive income (loss) | $ 54 | $ 57 | (124) | $ (14) | (13) | $ 4 |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 3 | 1 | (4) | |||
Ending Balance | 1,477 | 1,477 | ||||
Currency Translation Adjustment [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | (293) | (348) | (227) | (227) | ||
Other comprehensive income (loss) | 54 | 56 | (125) | |||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 3 | 1 | (4) | |||
Ending Balance | (242) | (293) | (348) | (242) | ||
Unrealized Gains on Investments [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | 2 | 2 | 2 | 2 | ||
Ending Balance | 2 | 2 | 2 | 2 | ||
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | (98) | (99) | (100) | (100) | ||
Other comprehensive income (loss) | 1 | 1 | ||||
Ending Balance | (98) | (98) | (99) | (98) | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | (389) | (445) | (325) | (325) | ||
Ending Balance | $ (338) | $ (389) | $ (445) | $ (338) |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified Out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Amortization of Actuarial Losses [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | $ 1 | $ 4 | $ 2 | |
Amortization of Prior Service Credit [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | $ (1) | $ (1) | (2) | (3) |
Settlement and Curtailment (Credit) Cost [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | (1) | |||
Pension and Other Postretirement Benefit Liability Adjustments [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | (1) | 2 | (2) | |
Tax impact | 1 | |||
Total after tax | $ (1) | $ 2 | $ (1) |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) $ in Millions | Jun. 30, 2017USD ($) |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2017 | $ 72 |
Payments Due by Fiscal Year 2018 | 258 |
Payments Due by Fiscal Year 2019 | 251 |
Payments Due by Fiscal Year 2020 | 171 |
Payments Due by Fiscal Year 2021 | 130 |
Payments Due Thereafter | 1,659 |
Payments Due, Total | 2,541 |
Reinforcement Materials [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2017 | 59 |
Payments Due by Fiscal Year 2018 | 213 |
Payments Due by Fiscal Year 2019 | 209 |
Payments Due by Fiscal Year 2020 | 135 |
Payments Due by Fiscal Year 2021 | 102 |
Payments Due Thereafter | 1,458 |
Payments Due, Total | 2,176 |
Performance Chemicals [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2017 | 10 |
Payments Due by Fiscal Year 2018 | 36 |
Payments Due by Fiscal Year 2019 | 35 |
Payments Due by Fiscal Year 2020 | 30 |
Payments Due by Fiscal Year 2021 | 28 |
Payments Due Thereafter | 201 |
Payments Due, Total | 340 |
Purification Solutions [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Remainder of Fiscal Year 2017 | 3 |
Payments Due by Fiscal Year 2018 | 9 |
Payments Due by Fiscal Year 2019 | 7 |
Payments Due by Fiscal Year 2020 | 6 |
Payments Due, Total | $ 25 |
Commitments and Contingencies46
Commitments and Contingencies - Additional Information (Detail) | 9 Months Ended | ||
Jun. 30, 2017USD ($)claimants | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($)claimants | |
Respirator Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Number of claimants | claimants | 37,000 | 38,000 | |
Respirator reserve | $ 18,000,000 | $ 21,000,000 | |
Cash payments for respirator reserves | 3,000,000 | $ 3,000,000 | |
Environmental Matters [Member] | |||
Loss Contingencies [Line Items] | |||
Reserved for environmental matters | 12,000,000 | $ 14,000,000 | |
Cash payments for environmental reserves | $ 2,000,000 | $ 2,000,000 |
Income Tax - Effective Tax Rate
Income Tax - Effective Tax Rate (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) for income taxes | $ 16 | $ 15 | $ 32 | $ 21 |
Effective tax rate | 22.00% | 21.00% | 14.00% | 17.00% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Taxes [Line Items] | ||||
Provisions for income taxes | $ 16 | $ 15 | $ 32 | $ 21 |
Effective tax rate | 22.00% | 21.00% | 14.00% | 17.00% |
Net discrete tax (benefits) charges related to tax settlements | $ 5 | $ 3 | $ (15) | $ (2) |
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Uncertain tax positions from expirations of statute of limitations | $ 1 | $ 1 | $ 3 | $ 3 |
Earliest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,012 | |||
Latest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 | |||
State Tax Authorities [Member] | Earliest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,005 | |||
State Tax Authorities [Member] | Latest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 | |||
Non-U.S. Jurisdictions [Member] | Earliest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,002 | |||
Non-U.S. Jurisdictions [Member] | Latest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years remain subject to examination | 2,015 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (EPS) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic EPS: | ||||
Net income (loss) attributable to Cabot Corporation | $ 45 | $ 56 | $ 173 | $ 97 |
Less: Undistributed earnings allocated to participating securities | 1 | |||
Earnings (loss) allocated to common shareholders (numerator) | $ 45 | $ 56 | $ 172 | $ 97 |
Weighted average common shares and participating securities outstanding | 62.9 | 62.9 | 62.8 | 62.9 |
Less: Participating securities | 0.5 | 0.5 | 0.5 | 0.5 |
Adjusted weighted average common shares (denominator) | 62.4 | 62.4 | 62.3 | 62.4 |
Earnings per common share - basic: | $ 0.71 | $ 0.90 | $ 2.75 | $ 1.55 |
Diluted EPS: | ||||
Earnings (loss) allocated to common shareholders | $ 45 | $ 56 | $ 172 | $ 97 |
Plus: Earnings (loss) allocated to participating securities | 1 | |||
Less: Adjusted earnings allocated to participating securities | 1 | 1 | ||
Earnings (loss) allocated to common shareholders (numerator) | $ 45 | $ 56 | $ 172 | $ 96 |
Adjusted weighted average common shares (denominator) | 62.4 | 62.4 | 62.3 | 62.4 |
Common shares issuable | 0.3 | 0.5 | 0.5 | 0.5 |
Adjusted weighted average common shares (denominator) | 62.7 | 62.9 | 62.8 | 62.9 |
Earnings per common share - diluted: | $ 0.71 | $ 0.88 | $ 2.74 | $ 1.53 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to Cabot Corporation | $ 45 | $ 56 | $ 173 | $ 97 |
Less: Dividends declared on common stock | 19 | 19 | 57 | 47 |
Undistributed earnings (loss) | 26 | 37 | 116 | 50 |
Undistributed earnings (loss) allocated to common shareholders | $ 26 | $ 37 | 115 | $ 50 |
Undistributed earnings (loss) allocated to participating shareholders | $ 1 |
Earnings Per Share - Componen51
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share | 191,616 | 338,854 | 172,969 | 726,589 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 1 | $ 2 | $ 3 | $ 45 |
Cost of Sales [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 1 | 1 | 2 | 32 |
Selling and Administrative Expenses [Member] | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring reserve, period expense | $ 1 | $ 1 | 8 | |
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, 2017 | Jun. 30, 2017 | |
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | $ 4 | $ 5 |
Charges | 1 | 3 |
Cash paid | (2) | (5) |
Reserve balance | 3 | 3 |
Severance and Employee Benefits [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | 2 | 3 |
Charges | 1 | |
Cash paid | (1) | (3) |
Reserve balance | 1 | 1 |
Environmental Remediation [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Reserve balance | 2 | 2 |
Reserve balance | 2 | 2 |
Other [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Charges | 1 | 2 |
Cash paid | $ (1) | $ (2) |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2015Employees | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | |
Restructuring Cost And Reserve [Line Items] | ||||||||
Cash payments | $ 2 | $ 5 | ||||||
Severance and Employee Benefits [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Cash payments | 1 | 3 | ||||||
Operational Restructuring [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Number of employees termination | Employees | 300 | |||||||
Restructuring expected charges | 30 | 30 | ||||||
Pre-tax charge to earnings | $ 2 | 1 | $ 28 | $ 29 | ||||
Expected cumulative net cash outlays related to plan | 30 | 30 | ||||||
Cash payments | 29 | $ 27 | ||||||
Restructuring cash payments through the reminder of fiscal 2017 | 1 | |||||||
Operational Restructuring [Member] | Maximum [Member] | Severance Costs [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Accrued severance charges | 1 | 1 | ||||||
Operational Restructuring [Member] | Maximum [Member] | Scenario, Forecast | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Pre-tax charge to earnings | $ 1 | |||||||
Closure of Carbon Black Facility [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Restructuring expected charges | 27 | 27 | ||||||
Pre-tax charge to earnings | 25 | $ 25 | ||||||
Expected cumulative net cash outlays related to plan | 6 | 6 | ||||||
Cash payments | 3 | |||||||
Restructuring cash payments through the reminder of fiscal 2017 | 3 | |||||||
Site demolition, clearing and environmental remediation charges, and other miscellaneous costs remainder of fiscal year 2017 | 2 | |||||||
Site demolition, clearing and environmental remediation charges, and other miscellaneous costs, thereafter | 2 | |||||||
Site demolition, clearing and environmental remediation costs | 3 | |||||||
Severance charges | 3 | |||||||
Restructuring cash payments, thereafter | 3 | |||||||
Closure of Carbon Black Facility [Member] | Severance Costs [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Accrued severance charges | 1 | 1 | ||||||
Closure of Carbon Black Facility [Member] | Non-Cash Asset Impairment and Accelerated Depreciation [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Pre-tax charge to earnings | 22 | |||||||
Closure of Carbon Black Facility [Member] | Severance and Employee Benefits [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Pre-tax charge to earnings | 3 | |||||||
Closure of Carbon Black Facility [Member] | Maximum [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Pre-tax charge to earnings | 1 | 1 | 1 | |||||
Previous Actions and Sites Pending Sale [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Severance charges | 1 | |||||||
Net benefit to earnings | $ 7 | |||||||
Previous Actions and Sites Pending Sale [Member] | Severance Costs [Member] | Restructuring Activities Other [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Accrued severance charges | 2 | 2 | ||||||
Restructuring cash payments through the reminder of fiscal 2017 and thereafter | 2 | |||||||
Previous Actions and Sites Pending Sale [Member] | Maximum [Member] | ||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||
Pre-tax charge to earnings | $ 1 | $ 1 | $ 1 |
Financial Instruments and Fai55
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
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 | 940,000,000 | $ 980,000,000 | |
Fixed Rate Debt [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of long-term debt | 910,000,000 | 910,000,000 | |
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 | |
Significant Observable Inputs (Level 2) [Member] | Foreign Currency Risks [Member] | Accounts Payable And Accrued Liabilities, Other Liabilities And Prepaid Expenses And Other Current Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets (liabilities), at fair Value, net | $ (3,000,000) | ||
Significant Observable Inputs (Level 2) [Member] | Foreign Currency Risks [Member] | Prepaid Expenses And Other Current Asset And Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets (liabilities), at fair Value, net | $ 1,000,000 |
Derivatives - Details of Deriva
Derivatives - Details of Derivatives Held to Manage Foreign Currency Risk (Detail) | Jun. 30, 2017USD ($) | Jun. 30, 2017EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | |
Net Investment [Member] | Cross Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 250,000,000 | ||||
Net Investment [Member] | 3.4% Notes [Member] | Cross Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 250,000,000 | € 223,000,000 | 250,000,000 | € 223,000,000 | |
Net Investment [Member] | 3.4% Notes [Member] | Fixed Rate Debt [Member] | Cross Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Interest rate on borrowing | 3.40% | 3.40% | |||
Not Designated as Hedging Instrument [Member] | Forward Foreign Currency Contracts [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | [1] | $ 5,000,000 | $ 4,000,000 | ||
[1] | Cabot’s forward foreign exchange contracts are denominated primarily in the Indonesian rupiah and Czech koruna. |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
Derivative [Line Items] | |||||
Loss on foreign currency translation adjustment | $ (54,000,000) | $ 13,000,000 | $ 15,000,000 | $ (5,000,000) | |
Cross Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Net investment hedge, ineffectiveness | 0 | ||||
Cross Currency Swaps [Member] | Prepaid Expenses And Other Asset Current And Other Liabilities [Member] | |||||
Derivative [Line Items] | |||||
Fair value of swaps, net liability | 3,000,000 | 3,000,000 | |||
Cross Currency Swaps [Member] | Other Assets [Member] | |||||
Derivative [Line Items] | |||||
Fair value of swaps, net asset | $ 1,000,000 | ||||
Cross Currency Swaps [Member] | Net Investment Hedge [Member] | |||||
Derivative [Line Items] | |||||
Notional amount | 250,000,000 | ||||
Net cash interest received | 2,000,000 | ||||
Loss on foreign currency translation adjustment | 10,000,000 | 2,000,000 | |||
Cumulative gain (loss) related to swaps | $ (1,000,000) | (1,000,000) | $ 1,000,000 | ||
Gains or losses reclassified from accumulated other comprehensive income (loss) into earnings | $ 0 | $ 0 |
Venezuela - Additional Informat
Venezuela - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2017USD ($)VEB / $ | Jun. 30, 2017USD ($)VEB / $ | Jun. 30, 2016USD ($) | |
Schedule Of Equity Method Investments [Line Items] | |||
Operating affiliate investment | $ 15 | $ 15 | |
Conversion of Bolivars to USD | VEB / $ | 709 | 709 | |
Devaluation Of Venezuelan Bolivar | |||
Schedule Of Equity Method Investments [Line Items] | |||
Conversion of Bolivars to USD | VEB / $ | 2,640 | 2,640 | |
Net gain on exchange rate devaluation | $ 1 | ||
Subsidiaries | |||
Schedule Of Equity Method Investments [Line Items] | |||
Cash dividends received from subsidiary | $ 3 | $ 2 | |
Venezuela [Member] | Carbon Black Affiliate [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 49.00% | 49.00% |
Financial Information by Segm59
Financial Information by Segment - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of business reportable segments | 4 |
Performance Chemicals [Member] | |
Segment Reporting Information [Line Items] | |
Number of business reportable segments | 1 |
Financial Information by Segm60
Financial Information by Segment - Schedule of Performance Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 705 | $ 621 | $ 1,994 | $ 1,792 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 679 | 594 | 1,913 | 1,712 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 229 | 228 | 662 | 651 |
Performance Chemicals [Member] | Specialty Carbons and Formulations [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 154 | 152 | 454 | 437 |
Performance Chemicals [Member] | Metal Oxides [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 75 | $ 76 | $ 208 | $ 214 |
Financial Information by Segm61
Financial Information by Segment - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | $ 705 | $ 621 | $ 1,994 | $ 1,792 |
Income (loss) from continuing operations before income taxes | 66 | 74 | 217 | 128 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 679 | 594 | 1,913 | 1,712 |
Income (loss) from continuing operations before income taxes | 99 | 104 | 301 | 263 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 26 | 27 | 81 | 80 |
Income (loss) from continuing operations before income taxes | (33) | (30) | (84) | (135) |
Reinforcement Materials [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 367 | 270 | 1,014 | 819 |
Income (loss) from continuing operations before income taxes | 51 | 35 | 145 | 95 |
Performance Chemicals [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 229 | 228 | 662 | 651 |
Income (loss) from continuing operations before income taxes | 46 | 59 | 146 | 167 |
Purification Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 71 | 77 | 207 | 210 |
Income (loss) from continuing operations before income taxes | (2) | 4 | (7) | |
Specialty Fluids [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 12 | 19 | 30 | 32 |
Income (loss) from continuing operations before income taxes | $ 4 | $ 10 | $ 6 | $ 8 |
Financial Information by Segm62
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm63
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, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 705 | $ 621 | $ 1,994 | $ 1,792 |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 26 | 27 | 81 | 80 |
Unallocated and Other [Member] | Royalties, 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 | (4) | (6) | ||
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 30 | $ 27 | $ 87 | $ 80 |
Financial Information by Segm64
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, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting [Abstract] | ||||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% | 100.00% |
Financial Information by Segm65
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Income Taxes and Equity in Earnings of Affiliated Companies for Unallocated and Other (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Interest expense | $ (13) | $ (13) | $ (39) | $ (40) |
Global restructuring activities | (1) | (2) | (3) | (45) |
Unallocated and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | (13) | (13) | (39) | (40) |
Unallocated corporate costs | (11) | (11) | (37) | (36) |
General unallocated income (expense) | (4) | 1 | 6 | |
Less: Equity in earnings of affiliated companies, net of tax | 3 | 1 | 6 | 2 |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | (33) | (30) | (84) | (135) |
Certain Item [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Global restructuring activities | (1) | (2) | (3) | (45) |
Non-recurring gains (losses) on foreign exchange | (1) | (1) | (11) | |
Legal and environmental matters and reserves | (1) | 2 | (4) | |
Executive transition costs | (3) | (3) | ||
Total certain items, pre-tax | $ (2) | $ (6) | $ (2) | $ (63) |