Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 15, 2018 | Mar. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CBT | ||
Entity Registrant Name | CABOT CORP | ||
Entity Central Index Key | 16,040 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 60,029,055 | ||
Entity Public Float | $ 3,409,628,603 | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Net sales and other operating revenues | $ 3,242 | $ 2,717 | $ 2,411 | |
Cost of sales | 2,461 | 2,054 | 1,836 | |
Gross profit | 781 | 663 | 575 | |
Selling and administrative expenses | 305 | 260 | 275 | |
Research and technical expenses | 66 | 56 | 53 | |
Long-lived assets impairment charge (Note F) | 162 | 23 | ||
Goodwill impairment charge (Note F) | [1] | 92 | ||
Income (loss) from operations | 156 | 347 | 247 | |
Interest and dividend income | 10 | 9 | 5 | |
Interest expense | (54) | (53) | (54) | |
Other income (expense) | 5 | (4) | (7) | |
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 117 | 299 | 191 | |
(Provision) benefit for income taxes | (193) | (33) | (33) | |
Equity in earnings of affiliated companies, net of tax | 2 | 7 | 3 | |
Income (loss) from continuing operations | (74) | 273 | 161 | |
Income (loss) from discontinued operations, net of tax of $—, $— and $1 | 1 | |||
Net income (loss) | (74) | 273 | 162 | |
Net income (loss) attributable to noncontrolling interests, net of tax of $10, $6 and $4 | 39 | 25 | 15 | |
Net income (loss) attributable to Cabot Corporation | $ (113) | $ 248 | $ 147 | |
Weighted-average common shares outstanding: | ||||
Basic | 61.7 | 62.3 | 62.4 | |
Diluted | 61.7 | 62.7 | 62.9 | |
Basic: | ||||
Income (loss) from continuing operations attributable to Cabot Corporation | $ (1.85) | $ 3.94 | $ 2.32 | |
Income (loss) from discontinued operations | 0.02 | |||
Net income (loss) attributable to Cabot Corporation | (1.85) | 3.94 | 2.34 | |
Diluted: | ||||
Income (loss) from continuing operations attributable to Cabot Corporation | (1.85) | 3.91 | 2.30 | |
Income (loss) from discontinued operations | 0.02 | |||
Net income (loss) attributable to Cabot Corporation | (1.85) | 3.91 | 2.32 | |
Dividends per common share | $ 1.29 | $ 1.23 | $ 1.04 | |
Purification Solutions [Member] | ||||
Long-lived assets impairment charge (Note F) | $ 162 | |||
Goodwill impairment charge (Note F) | [1] | $ 92 | ||
[1] | Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | |||
Income (loss) from discontinued operations, tax amount | $ 1 | ||
Net income attributable to noncontrolling interests, tax amount | $ 10 | $ 6 | $ 4 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ (74) | $ 273 | $ 162 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustment, net of tax (provision) benefit of $1, $4, and $— | (64) | 25 | 7 |
Unrealized holding gains (losses) arising during the period, net of tax provision of $—, $—, and $— | (1) | ||
Derivatives: net investment hedges | |||
(Gains) losses reclassified to interest expense, net of tax provision (benefit) of $2, $—, and $— | (3) | ||
(Gains) losses excluded from effectiveness testing and amortized to interest expense, net of tax provision (benefit) of $(1), $—, and $— | 1 | ||
Pension and other postretirement benefit liability adjustments | |||
Pension and other postretirement benefit liability adjustments arising during the period, net of tax | 6 | 41 | (38) |
Amortization of net loss and prior service credit included in net periodic pension cost, net of tax | (1) | 2 | |
Other comprehensive income (loss) | (62) | 68 | (31) |
Comprehensive income (loss) | (136) | 341 | 131 |
Net income (loss) attributable to noncontrolling interests, net of tax | 39 | 25 | 15 |
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax | (4) | 2 | (5) |
Comprehensive income (loss) attributable to noncontrolling interests | 35 | 27 | 10 |
Comprehensive income (loss) attributable to Cabot Corporation | $ (171) | $ 314 | $ 121 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, tax (provision) benefit | $ 1 | $ 4 |
(Gains) losses reclassified to interest expense, tax provision (benefit) | 2 | |
(Gains) losses excluded from effectiveness testing and amortized to interest expense, tax provision (benefit) | $ (1) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 175 | $ 280 |
Accounts and notes receivable, net of reserve for doubtful accounts of $7 and $9 | 637 | 527 |
Inventories | 511 | 433 |
Prepaid expenses and other current assets | 63 | 59 |
Total current assets | 1,386 | 1,299 |
Property, plant and equipment | 3,520 | 3,602 |
Accumulated depreciation | (2,224) | (2,297) |
Net property, plant and equipment | 1,296 | 1,305 |
Goodwill | 93 | 154 |
Equity affiliates | 52 | 56 |
Intangible assets, net | 98 | 137 |
Assets held for rent | 118 | 104 |
Deferred income taxes | 134 | 237 |
Other assets | 67 | 46 |
Total assets | 3,244 | 3,338 |
Current liabilities: | ||
Short-term borrowings | 249 | 7 |
Accounts payable and accrued liabilities | 613 | 457 |
Income taxes payable | 29 | 22 |
Current portion of long-term debt | 35 | 256 |
Redeemable preferred stock | 26 | |
Total current liabilities | 952 | 742 |
Long-term debt | 719 | 661 |
Deferred income taxes | 42 | 38 |
Other liabilities | 252 | 245 |
Redeemable preferred stock | 27 | |
Commitments and contingencies (Note S) | ||
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: 60,566,375 and 62,087,627 shares Outstanding 60,366,569 and 61,884,347 shares | 61 | 62 |
Less cost of 199,806 and 203,280 shares of common treasury stock | (7) | (6) |
Retained earnings | 1,417 | 1,707 |
Accumulated other comprehensive income (loss) | (317) | (259) |
Total Cabot Corporation stockholders’ equity | 1,154 | 1,504 |
Noncontrolling interests | 125 | 121 |
Total stockholders’ equity | 1,279 | 1,625 |
Total liabilities and stockholders’ equity | $ 3,244 | $ 3,338 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 7 | $ 9 |
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 | 60,566,375 | 62,087,627 |
Common stock, outstanding shares | 60,366,569 | 61,884,347 |
Common treasury stock, shares | 199,806 | 203,280 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Cash Flows from Operating Activities: | ||||
Net income (loss) | $ (74) | $ 273 | $ 162 | |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||
Depreciation and amortization | 149 | 155 | 161 | |
Long-lived assets impairment charge (Note F) | 162 | 23 | ||
Goodwill impairment charge | [1] | 92 | ||
Deferred tax provision (benefit) | 91 | (31) | (36) | |
Gain on sale of land | (39) | |||
Gain on sale of investments | (10) | |||
Equity in net income of affiliated companies | (2) | (7) | (3) | |
Non-cash compensation | 22 | 16 | 17 | |
Other non-cash (income) expense | 16 | (3) | 5 | |
Changes in assets and liabilities: | ||||
Accounts and notes receivable | (127) | (64) | 25 | |
Inventories | (105) | (61) | 54 | |
Prepaid expenses and other current assets | (27) | (14) | 1 | |
Accounts payable and accrued liabilities | 122 | 91 | (27) | |
Income taxes payable | 7 | (2) | (4) | |
Other liabilities | 12 | (16) | 5 | |
Cash dividends received from equity affiliates | 9 | 11 | 9 | |
Cash provided by operating activities | 298 | 348 | 392 | |
Cash Flows from Investing Activities: | ||||
Additions to property, plant and equipment | (229) | (147) | (112) | |
Proceeds from the sale of land | 39 | 16 | ||
Change in assets held for rent | (3) | (6) | (8) | |
Cash paid for acquisition of business, net of cash acquired of $1, $— and $— | (64) | |||
Proceeds from sales of investments | 11 | |||
Other | 4 | |||
Cash used in investing activities | (246) | (149) | (104) | |
Cash Flows from Financing Activities: | ||||
Borrowings under financing arrangements | 1 | |||
Repayments under financing arrangements | (4) | (3) | (3) | |
Increase in short-term borrowings, net | (4) | 2 | ||
Proceeds (repayments) from issuance of commercial paper, net | 249 | (12) | ||
Proceeds from long-term debt, net of issuance costs | 90 | 248 | ||
Repayments of long-term debt | (251) | (2) | (301) | |
Purchases of common stock | (142) | (61) | (45) | |
Proceeds from sales of common stock | 22 | 21 | 10 | |
Cash dividends paid to noncontrolling interests | (21) | (14) | (16) | |
Cash dividends paid to common stockholders | (80) | (77) | (65) | |
Cash used in financing activities | (141) | (133) | (184) | |
Effects of exchange rate changes on cash | (16) | 14 | 19 | |
Increase (decrease) in cash and cash equivalents | (105) | 80 | 123 | |
Cash and cash equivalents at beginning of year | 280 | 200 | 77 | |
Cash and cash equivalents at end of year | 175 | 280 | 200 | |
Income taxes paid | 84 | 69 | 66 | |
Interest paid | $ 47 | $ 48 | $ 51 | |
[1] | Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Statement Of Cash Flows [Abstract] | |
Cash acquired in acquisition of business | $ 1 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock, Net of Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Cabot Corporation Stockholders' Equity [Member] | Noncontrolling Interests [Member] |
Beginning Balance at Sep. 30, 2015 | $ 1,357 | $ 55 | $ 1,497 | $ (299) | $ 1,253 | $ 104 | |
Beginning Balance, Shares at Sep. 30, 2015 | 62,458 | ||||||
Net income (loss) attributable to Cabot Corporation | 147 | 147 | 147 | ||||
Net income (loss) attributable to noncontrolling interests, net of tax | 15 | 15 | |||||
Total other comprehensive income (loss) | (31) | (26) | (26) | (5) | |||
Cash dividends paid/declared to noncontrolling interests | (16) | (16) | |||||
Cash dividends paid to common stockholders | (65) | (65) | (65) | ||||
Issuance of stock under equity compensation plans | 10 | $ 1 | $ 9 | 10 | |||
Issuance of stock under equity compensation plans, Shares | 737 | ||||||
Amortization of share-based compensation | 17 | 17 | 17 | ||||
Purchase and retirement of common stock | (45) | $ (1) | (26) | (18) | (45) | ||
Purchase and retirement of common stock, Shares | (984) | ||||||
Ending Balance at Sep. 30, 2016 | 1,389 | $ 55 | 1,561 | (325) | 1,291 | 98 | |
Ending Balance, Shares at Sep. 30, 2016 | 62,211 | ||||||
Net income (loss) attributable to Cabot Corporation | 248 | 248 | 248 | ||||
Net income (loss) attributable to noncontrolling interests, net of tax | 25 | 25 | |||||
Total other comprehensive income (loss) | 68 | 66 | 66 | 2 | |||
Contributions from noncontrolling interest | 4 | 4 | |||||
Acquisition of noncontrolling interest | (6) | (6) | 6 | ||||
Cash dividends paid/declared to noncontrolling interests | (14) | (14) | |||||
Cash dividends paid to common stockholders | (77) | (77) | (77) | ||||
Issuance of stock under equity compensation plans | 27 | $ 2 | 25 | 27 | |||
Issuance of stock under equity compensation plans, Shares | 833 | ||||||
Amortization of share-based compensation | 16 | 16 | 16 | ||||
Purchase and retirement of common stock | (61) | $ (1) | (35) | (25) | (61) | ||
Purchase and retirement of common stock, Shares | (1,160) | ||||||
Ending Balance at Sep. 30, 2017 | 1,625 | $ 56 | 1,707 | (259) | 1,504 | 121 | |
Ending Balance, Shares at Sep. 30, 2017 | 61,884 | ||||||
Net income (loss) attributable to Cabot Corporation | (113) | (113) | (113) | ||||
Net income (loss) attributable to noncontrolling interests, net of tax | 39 | 39 | |||||
Total other comprehensive income (loss) | (62) | (58) | (58) | (4) | |||
Acquisition of noncontrolling interest | (1) | (1) | 1 | ||||
Cash dividends paid/declared to noncontrolling interests | (32) | (32) | |||||
Cash dividends paid to common stockholders | (80) | (80) | (80) | ||||
Issuance of stock under equity compensation plans | 22 | 22 | 22 | ||||
Issuance of stock under equity compensation plans, Shares | 733 | ||||||
Amortization of share-based compensation | 22 | 22 | 22 | ||||
Purchase and retirement of common stock | (142) | $ (2) | $ (43) | (97) | (142) | ||
Purchase and retirement of common stock, Shares | (2,250) | ||||||
Ending Balance at Sep. 30, 2018 | $ 1,279 | $ 54 | $ 1,417 | $ (317) | $ 1,154 | $ 125 | |
Ending Balance, Shares at Sep. 30, 2018 | 60,367 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note A. Significant Accounting Policies The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”). The significant accounting policies of Cabot Corporation (“Cabot” or “the Company”) are described below. Unless otherwise indicated, all disclosures and amounts in the Notes to the Consolidated Financial Statements relate to the Company’s continuing operations. Effective October 1, 2017, the Company changed its method of accounting for its U.S. carbon black inventories from the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method. The Company applied this change retrospectively to all prior periods presented, which is discussed in further detail under the heading “Inventories” below. As discussed in Note C, in fiscal 2018, the Company acquired 8755329 Canada Inc. (“Tech Blend”) and acquired NSCC Carbon (Jiangsu) Co. Ltd. (“NSCC Carbon”). The financial position, results of operations and cash flows of Tech Blend and NSCC Carbon are included in the Company’s consolidated financial statements from the date of acquisition. Principles of Consolidation The consolidated financial statements include the accounts of Cabot and its wholly-owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights, of which there were none in the periods presented. Intercompany transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash equivalents include all highly liquid investments with a maturity of three months or less at date of acquisition. Cabot continually assesses the liquidity of cash equivalents and, as of September 30, 2018, has determined that they are readily convertible to cash. Inventories Inventories are stated at the lower of cost or market. Effective October 1, 2017, the Company changed its method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method. Total U.S. inventories accounted for utilizing the LIFO cost flow assumption represented 7% of the Company’s total worldwide inventories as of September 30, 2017. The Company believes the FIFO method is preferable because it: (i) conforms the accounting for U.S. carbon black inventories to the Company’s inventory valuation methodology for the majority of its other inventories; (ii) better represents how management assesses and reports on the performance of the Reinforcement Materials and Performance Chemicals operating segments that carry the Company’s U.S. carbon black inventories, as the impact of accounting for this inventory on a LIFO basis has historically been excluded from segment results; (iii) better aligns the accounting for U.S. carbon black inventories with the physical flow of that inventory; and (iv) improves comparability with many of the Company’s peers. The Company applied this change retrospectively to all prior periods presented. This change resulted in a $19 million increase in retained earnings as of October 1, 2015, from $1,478 million to $1,497 million. In addition, the following financial statement line items in the Company’s Consolidated Statements of Operations for the years ended September 30, 2017 and 2016, its Consolidated Balance Sheets as of September 30, 2017 and 2016, and its Consolidated Statements of Cash Flows for the years ended September 30, 2017 and 2016 were adjusted: Consolidated Statements of Operations Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions, except per share amounts) Cost of sales $ 2,065 $ (11 ) $ 2,054 $ 1,833 $ 3 $ 1,836 Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies $ 288 $ 11 $ 299 $ 194 $ (3 ) $ 191 (Provision) benefit for income taxes $ (29 ) $ (4 ) $ (33 ) $ (34 ) $ 1 $ (33 ) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Net income (loss) attributable to Cabot Corporation $ 241 $ 7 $ 248 $ 149 $ (2 ) $ 147 Earnings per common share: Basic $ 3.83 $ 0.11 $ 3.94 $ 2.38 $ (0.04 ) $ 2.34 Diluted $ 3.80 $ 0.11 $ 3.91 $ 2.36 $ (0.04 ) $ 2.32 Consolidated Balance Sheets September 30, 2017 September 30, 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) (In millions) Inventories $ 396 $ 37 $ 433 $ 342 $ 26 $ 368 Deferred income taxes (assets) $ 250 $ (13 ) $ 237 $ 216 $ (9 ) $ 207 Retained earnings $ 1,683 $ 24 $ 1,707 $ 1,544 $ 17 $ 1,561 Consolidated Statements of Cash Flows Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Deferred tax provision (benefit) $ (35 ) $ 4 $ (31 ) $ (35 ) $ (1 ) $ (36 ) Inventories $ (50 ) $ (11 ) $ (61 ) $ 51 $ 3 $ 54 If the Company had continued to account for its U.S. carbon black inventories under LIFO, there would have been an increase in Cost of Sales of $15 million, an additional benefit to the (Provision) benefit for income taxes of $4 million, an impact to the Net income (loss) attributable to Cabot Corporation of $11 million, and a decrease of $ 0.19 52 17 35 The cost of Specialty Fluids inventories that are classified as inventory and assets held for rent is determined using the average cost method. The cost of all other inventories is determined using the FIFO method. Cabot periodically reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. 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. Investments The Company has investments in equity affiliates and marketable securities. As circumstances warrant, all investments are subject to periodic impairment reviews. Unless consolidation is required, investments in equity affiliates, where Cabot generally owns between 20% and 50% of the affiliate, are accounted for using the equity method. Cabot records its share of the equity affiliate’s results of operations based on its percentage of ownership of the affiliate. Dividends declared from equity affiliates are a return on investment and are recorded as a reduction to the equity investment value. At September 30, 2018 and 2017, Cabot had equity affiliate investments of $ 52 Intangible Assets and Goodwill Impairment The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. The Company acquired Tech Blend in November 2017, which included separately identifiable intangible assets of $29 million as part of the purchase price allocation as discussed in Note C. Definite-lived intangible assets, which are comprised of trademarks, customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company recognized an impairment on intangible assets associated with the Purification Solutions business in second fiscal quarter of 2018, which is discussed in Note F. 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. Reinforcement Materials, and the Fumed Metal Oxides and Specialty Compounds businesses within Performance Chemicals, which are considered separate reporting units, carried the Company’s goodwill balances as of May 31, 2018. The Purification Solutions reporting unit had no remaining goodwill balance subsequent to the goodwill impairment charge recorded in the second quarter of fiscal 2018. As part of the Tech Blend acquisition, goodwill of $33 million was generated and is reflected in the Specialty Compounds 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. Refer to Note F and Note G for details on the Purification Solutions goodwill impairment test and the resulting charge recorded in the second quarter of fiscal 2018, and the results of the Company’s annual goodwill impairment test performed as of May 31, 2018, respectively. 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. In the second quarter of fiscal 2018, the Company determined that the long-lived asset group of Purification Solutions was not fully recoverable, and accordingly, the Company recorded an impairment charge for the carrying value in excess of the fair value of the asset group, as described in Note F. 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 of the related assets. The depreciable lives for buildings, machinery and equipment, and other fixed assets are generally between twenty and twenty-five years, ten and twenty-five years, and three and twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements 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. Non-cash capital expenditures for significant projects was approximately $29 million and $7 million for the years ended September 30, 2018 and 2017, respectively, and was included in Accounts payable and accrued liabilities in the Consolidated Balance Sheets. Cabot capitalizes interest costs when they are part of the historical cost of acquiring and constructing certain assets that require a period of time to prepare for their intended use. During fiscal 2018, 2017 and 2016, Cabot capitalized $2 million, $1 million and $1 million of interest costs, respectively. These amounts are amortized over the lives of the related assets when they are placed in service. Assets Held for Rent Assets held for rent represent Specialty Fluids cesium formate product that is available to customers in the normal course of business. At both September 30, 2018 and 2017, $5 million of cesium ore was included in assets held for rent, a majority of which will be converted into cesium formate. Assets held for rent are stated at average cost. Asset Retirement Obligations Cabot estimates incremental costs for special handling, removal and disposal of materials that may or will give rise to conditional asset retirement obligations (“ARO”) and then discounts the expected costs back to the current year using a credit adjusted risk free rate. Cabot recognizes ARO liabilities and costs when the timing and/or settlement can be reasonably estimated. In certain instances, Cabot has not recorded a reserve for AROs because of the indefinite life of certain assets. The ARO reserves were Foreign Currency Translation The functional currency of the majority of Cabot’s foreign subsidiaries is the local currency in which the subsidiary operates. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet dates. Income and expense items are translated at average monthly exchange rates during the year. Unrealized currency translation adjustments are included as a separate component of Accumulated other comprehensive income (loss) (“AOCI”) within stockholders’ equity. Realized and unrealized foreign currency gains and losses arising from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings with the exception of (i) intercompany transactions considered to be of a long-term investment nature; (ii) income taxes upon future repatriation of unremitted earnings from non-U.S. subsidiaries that are not indefinitely reinvested; and (iii) foreign currency borrowings designated as net investment hedges. Gains or losses arising from these transactions are included as a component of Other comprehensive income (loss). In fiscal 2018, 2017 and 2016, net foreign currency transaction losses of $ 4 Effective July 1, 2018, the Company began to account for its wholly-owned Argentina subsidiary as a highly inflationary economy. As a result, the functional currency of the Argentina subsidiary was changed to the U.S. dollar, Cabot’s reporting currency, which is discussed in Note L. Share Repurchases Periodically, Cabot repurchases shares of the Company’s common stock in the open market or in privately negotiated transactions under the authorization approved by the Board of Directors as discussed in Item 5 under the heading “Issuer Purchases of Equity Securities”. The Company retires the repurchased shares and records the excess of the purchase price over par value to additional paid-in capital (“APIC”) until such amount is reduced to zero and then charges the remainder against retained earnings. Financial Instruments Cabot’s financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, investments, accounts payable and accrued liabilities, short-term and long-term debt, and derivative instruments. The carrying values of Cabot’s financial instruments approximate fair value with the exception of fixed rate long-term debt, which is recorded at amortized cost. The fair values of the Company’s financial instruments are based on quoted market prices, if such prices are available. In situations where quoted market prices are not available, the Company relies on valuation models to derive fair value. Such valuation takes into account the ability of the financial counterparty to perform and the Company’s own credit risk. Cabot uses derivative financial instruments primarily for purposes of hedging the exposures to fluctuations in foreign currency exchange rates, which exist as part of its on-going business operations. Cabot does not enter into derivative contracts for speculative purposes, nor does it hold or issue any derivative contracts for trading purposes. All derivatives are recognized on the Consolidated Balance Sheets at fair value. Where Cabot has a legal right to offset derivative settlements under a master netting agreement with a counterparty, derivatives with that counterparty are presented on a net basis. The changes in the fair value of derivatives are recorded in either earnings or AOCI, depending on whether or not the instrument is designated as part of a hedge transaction and, if designated as part of a hedge transaction, the type of hedge transaction. 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 hedged item. The ineffective portion of all hedges is recognized in earnings during the period in which the ineffectiveness occurs. In accordance with Cabot’s risk management strategy, the Company may enter into certain derivative instruments that may not be designated as hedges for hedge accounting purposes. Although these derivatives are not designated as hedges, the Company believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The Company records in earnings the gains or losses from changes in the fair value of derivative instruments that are not designated as hedges. Cash movements associated with these instruments are presented in the Consolidated Statements of Cash Flows as Cash Flows from Operating Activities because the derivatives are designed to mitigate risk to the Company’s cash flow from operations. The cash flows related to the principal amount of outstanding debt instruments are presented in the Cash Flows from Financing Activities section of the Consolidated Statements of Cash Flows. Revenue Recognition 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: Years Ended September 30 2018 2017 2016 Reinforcement Materials 57 % 53 % 48 % Performance Chemicals 33 % 35 % 37 % Purification Solutions 9 % 11 % 13 % Specialty Fluids 1 % 1 % 2 % Cabot derives the substantial majority of its revenues from the sale of products in its Reinforcement Materials, Performance Chemicals, and Purification Solutions segments. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers cash discounts and volume rebates to certain of its customers as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of the rental process and from the sale of fine cesium chemicals. This revenue is recognized upon delivery of the product. Cost of Sales Cost of sales consists of the cost of raw and packaging materials, direct manufacturing costs, depreciation, internal transfer costs, inspection costs, inbound and outbound freight and shipping and handling costs, plant purchasing and receiving costs and other overhead expenses necessary to manufacture the products. Accounts and Notes Receivable Trade receivables are recorded at the invoiced amount and generally do not bear interest. Trade receivables in China may at certain times be settled with the receipt of bank issued non-interest bearing notes. These notes totaled 32 million Chinese Renminbi (“RMB”) ($5 million) and 73 million RMB ($11 million) as of September 30, 2018 and 2017, respectively, and are included in Accounts and notes receivable on the Company’s Consolidated Balance Sheets. Cabot periodically sells a portion of these bank notes and other customer receivables at a discount and such sales are accounted for as asset sales. The Company does not have any continuing involvement with these notes or other customer receivables after the sale. The difference between the proceeds from the sale and the carrying value of these assets is recognized as a loss on the sale of receivables and is included in Other income (expense) in the accompanying Consolidated Statements of Operations. During fiscal 2018, 2017 and 2016, the Company recorded charges of $3 million, $2 million, and $1 million, respectively, for the sale of these assets. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. Stock-based Compensation Cabot recognizes compensation expense for stock-based awards granted to employees using the fair value method. Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as expense over the service period, which generally represents the vesting period, and includes an estimate of what level of performance the Company will achieve for Cabot’s performance-based stock awards. Cabot calculates the fair value of its stock options using the Black-Scholes option pricing model. The fair value of restricted stock units is determined using the closing price of Cabot stock on the day of the grant. Selling and Administrative Expenses Selling and administrative expenses consist of salaries and fringe benefits of sales and office personnel, general office expenses and other expenses not directly related to manufacturing operations. Research and Technical Expenses Research and technical expenses include salaries, equipment and material expenditures, and contractor fees and are expensed as incurred. Income Taxes Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Cabot has designated to be indefinitely reinvested. Cabot records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon ultimate settlement. This analysis presumes the taxing authorities’ full knowledge of the positions taken and all relevant facts, but does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and includes such charges in its income tax provision in the Consolidated Statements of Operations. Environmental Costs Cabot accrues environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single liability amount cannot be reasonably estimated, but a range can be reasonably estimated, Cabot accrues the amount that reflects the best estimate within that range or the low end of the range if no estimate within the range is better. The amount accrued reflects Cabot’s assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number and financial viability of other potentially responsible parties. Cabot does not reduce its estimated liability for possible recoveries from insurance carriers. Proceeds from insurance carriers are recorded when realized by either the receipt of cash or a contractual agreement. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note B. Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“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 Company adopted the standard on October 1, 2017. The following guidance was updated under the new standard, and its impact to Cabot is described below: • When accounting for forfeitures the Company may elect to estimate the number of forfeitures to be recognized over the term of an award, which was also permitted under the previous guidance, or account for forfeitures as they occur. The Company elected to modify its accounting policy and account for forfeitures as they occur. The Company applied the accounting change on a modified retrospective basis, which resulted in a cumulative-effect charge of less than $1 million to Retained earnings as of October 1, 2017. • Excess tax benefits or deficiencies related to stock compensation that were previously recorded to APIC are now recognized as a discrete tax benefit or expense in (Provision) benefit for income taxes within the Consolidated Statements of Operations. The impact on the (Provision) benefit for income taxes was a discrete tax benefit of $2 million during fiscal 2018. • Excess tax benefits are no longer reclassified out of cash flows from operating activities to financing activities in the Consolidated Statements of Cash Flows. The Company elected to apply this cash flow presentation requirement retrospectively, which resulted in the reclassification of $8 million of tax benefit from share-based compensation awards from cash flows from financing activities to cash flows from operating activities in the Consolidated Statements of Cash Flows for fiscal 2017. There was no impact to the Consolidated Statements of Cash Flows for fiscal 2016 as a result of applying this standard retrospectively. • Cash paid by an employer when directly withholding shares for tax withholding purposes are required to be classified as a financing activity in the Consolidated Statements of Cash Flows. This method of presentation is consistent with the Company's historical presentation. In January 2017, the FASB issued a new standard that amends the definition of a business. The standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) should be accounted for as an asset rather than a business. In order to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The guidance also removes the evaluation of whether a market participant could replace missing elements. The Company adopted the standard on October 1, 2017. The adoption of this standard did not impact the Company’s consolidated financial statements. In August 2017, the FASB issued a new standard that amends the hedge accounting recognition and presentation requirements under hedge accounting. The new standard will make more financial and nonfinancial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements, and simplifies how companies assess effectiveness. The Company adopted the standard on October 1, 2017. The adoption of this standard did not impact the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In May 2014, the FASB issued a new standard that amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017. The Company has completed its assessment of the new standard, which included reviewing a sample of contracts across the Company’s four business segments. Based on this assessment, the adoption of this standard will not have a material impact on how the Company recognizes revenue. The Company will implement the updates that are necessary to its revenue recognition policy, internal controls, processes and financial statement disclosures. The Company will adopt this standard on October 1, 2018 and expects to apply a modified retrospective approach. 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 has established a project plan and implementation team which will analyze the current portfolio of leases to determine the impact of adopting this new standard. The implementation team will also be responsible for evaluating and designing the necessary changes to the Company’s business processes, lease policies, systems and internal controls to support recognition and disclosure under the new guidance. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows such as distributions received from equity method investees, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. 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 will adopt this standard on October 1, 2018. The adoption of this standard is not expected to materially impact 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 costs. 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 will adopt this standard on October 1, 2018. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Note C. Acquisitions Tech Blend In November 2017, the Company acquired Tech Blend, a North American producer of black masterbatches, for a purchase price of $65 million, paid in cash. The purchase price was subject to a working capital adjustment, which was immaterial. The operating results of the business are included in the Company’s Performance Chemicals segment. The acquisition extends the Company’s global footprint in black masterbatch and compounds and provides a platform to serve global customers and grow in conductive formulations. Since the date of acquisition, Tech Blend revenues have totaled approximately $26 million through September 30, 2018. The Company incurred acquisition costs of less than $1 million through September 30, 2018 associated with the transaction, which are included in Selling and administrative expenses in the Consolidated Statements of Operations. The allocation of the purchase price set forth below was based on estimates of the fair value of assets acquired and liabilities assumed. (In millions) Assets Cash $ 1 Accounts receivable 5 Inventories 3 Property, plant and equipment 7 Intangible assets 29 Goodwill 33 Total assets acquired 78 Liabilities Current liabilities (3 ) Deferred tax liabilities (10 ) Total liabilities assumed (13 ) Cash consideration paid $ 65 As part of the purchase price allocation, the Company determined the separately identifiable intangible assets are comprised of developed technologies of $21 million, which will be amortized over 25 years, and customer relationships of $8 million, which will be amortized over 12 years. The Company estimated the fair values of the identifiable acquisition-related intangible assets based on projections of cash flows that will arise from those assets. The projected cash flows were discounted to determine the fair value of the assets at the date of acquisition. The determination of the fair value of the intangible assets acquired required the use of significant judgment with regard to (i) assumptions in the discounted cash flow model used and (ii) determination of the useful lives of the developed technologies and customer relationships. The excess of the purchase price over the fair value of the tangible net assets and intangible assets acquired was recorded as goodwill. The goodwill recognized is attributable to the growth and operating synergies that the Company expects to realize from this acquisition. Goodwill generated from the acquisition will not be deductible for tax purposes. NSCC Carbon (Jiangsu) Co. Ltd In September 2018, the Company acquired NSCC Carbon, a carbon black manufacturing facility in Pizhou, Jiangsu Province, China for the purchase price of $8 million. The manufacturing facility will support the Company’s specialty carbons product line within the Performance Chemicals segment. The plant is temporarily mothballed to conduct maintenance and technology upgrades that are expected to occur over the next two years. The total purchase price of $8 million, which is payable upon satisfaction of certain conditions that are expected to be completed in less than 12 months, is recorded within Accounts payable and accrued liabilities on the Consolidated Balance Sheets. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note D. Inventories Inventories, net of obsolete, unmarketable and slow moving reserves, are as follows: September 30 2018 2017 (In millions) Raw materials $ 129 $ 93 Work in process 3 2 Finished goods 329 293 Other 50 45 Total $ 511 $ 433 Effective October 1, 2017, the Company changed its method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method. Total U.S. inventories accounted for utilizing the LIFO cost flow assumption represented 7% of the Company’s total worldwide inventories as of September 30, 2017. Refer to the discussion under the heading “Inventories” in Note A for details on the impact of the change on the consolidated financial statements. Other inventory is comprised of certain spare parts and supplies. Cabot periodically reviews inventory for both obsolescence and loss of value. In this review, Cabot makes assumptions about the future demand for and market value of the inventory and, based on these assumptions, estimates the amount of obsolete, unmarketable or slow moving inventory. At September 30, 2018 and 2017, total inventory reserves were $38 million and $19 million, respectively. During fiscal year 2018, the Company recorded a lower of cost or market charge in the amount of $13 million related to its Purification Solutions inventory held at several sites in North America and Europe. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note E. Property, Plant and Equipment Property, plant and equipment consists of the following: September 30 2018 2017 (In millions) Land and land improvements $ 142 $ 151 Buildings 514 531 Machinery and equipment 2,373 2,527 Other 249 243 Construction in progress 242 150 Total property, plant and equipment 3,520 3,602 Less: Accumulated depreciation (2,224 ) (2,297 ) Net property, plant and equipment $ 1,296 $ 1,305 Depreciation expense was $ 142 |
Purification Solutions Goodwill
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges | Note F. Purification Solutions Goodwill and Long-Lived Assets Impairment Charges During the second quarter of fiscal 2018, the Company recorded impairment charges relating to the goodwill and long-lived assets of the Purification Solutions reporting unit, and an associated deferred tax benefit, in the Consolidated Statements of Operations as follows: Three Months Ended March 31, 2018 (In millions) Purification Solutions goodwill impairment charge $ 92 Purification Solutions long-lived assets impairment charge 162 Benefit for income taxes (30 ) Impairment charges, after tax $ 224 In the second quarter of fiscal 2018, the Purification Solutions reporting unit experienced further share losses, lower customer demand and declining prices in the mercury removal and North America powdered activated carbon applications, which led the Company to reassess its previous estimates for expected growth in volumes, prices and margins in the reporting unit. The forecasted demand and profit margins in mercury removal applications were lowered reflecting further unit closures at coal-fired utility plants, lower usage levels of activated carbon and lower plant utilization levels for coal-fired utilities, as well as lower pricing due to industry overcapacity, among other factors. While development programs continue to progress, growth estimates in other environmental and specialty applications were also lowered, reflecting heightened competition and updated timelines to commercialize certain new products. Due to these revised forecasts, the Company performed the quantitative goodwill impairment test and determined that the estimated fair value of the Purification Solutions reporting unit was lower than the reporting unit's carrying value, resulting in a goodwill impairment charge of $92 million. In determining the fair value of the Purification Solutions reporting unit, the Company used an income approach (a discounted cash flow analysis) which incorporated significant estimates and assumptions related to future periods, including growth rates in environmental and specialty applications and pricing assumptions of activated carbon, among others. In addition, an estimate of the reporting unit’s weighted average cost of capital (“WACC”) was used to discount future estimated cash flows to their present value. The WACC was based upon externally available data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to the Purification Solutions reporting unit. Prior to determining the goodwill impairment charge, the Company considered whether the assets of the reporting unit, which is also considered the asset group, were recoverable. As a result of this assessment, the Company recorded an inventory reserve adjustment of $13 million and impairments to long lived assets of $162 million. The adjustment to inventory carrying value was determined based on reassessments of volumes, pricing, and margins described above and was recorded in Cost of sales in the Consolidated Statements of Operations. The impairment analysis to assess if definite-lived intangible assets and property, plant and equipment were recoverable was based on the estimated undiscounted cash flows of the reporting unit, and these cash flows were not sufficient to recover the carrying value of the long-lived assets over their remaining useful lives. Accordingly, the Company recorded impairment charges of $64 million and $98 million, to its definite-lived intangible assets and property, plant and equipment, respectively, in the second quarter of fiscal 2018 based on the lower of the carrying amount or fair value of the long-lived assets. The Company used the income approach to determine the fair value of the definite-lived intangible assets and the cost approach to determine the fair value of its property, plant and equipment. Cabot will continue to monitor for events or changes in business circumstances that may indicate that the remaining carrying value of the asset group may not be recoverable. The Company recorded a tax benefit related to the impairment charges of $30 million in the second quarter of fiscal 2018 which was subsequently reduced by $1 million after the impairment charges by tax jurisdiction were finalized. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note G. Goodwill and Intangible Assets Cabot had goodwill balances of $ 93 Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Balance at September 30, 2017 $ 53 $ 9 $ 92 $ 154 Goodwill acquired (1) — 33 — 33 Impairment charge (2) — — (92 ) (92 ) Foreign currency impact (1 ) (1 ) — (2 ) Balance at September 30, 2018 $ 52 $ 41 $ — $ 93 (1) (2) Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Accumulated impairment losses at September 30, 2017 $ — $ — $ (352 ) $ (352 ) Accumulated impairment losses at September 30, 2018 $ — $ — $ (444 ) $ (444 ) The following table provides information regarding the Company’s intangible assets: September 30, 2018 September 30, 2017 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives (1) Developed technologies $ 52 $ (2 ) $ 50 $ 49 $ (7 ) $ 42 Trademarks 8 — 8 16 (1 ) 15 Customer relationships 51 (11 ) 40 94 (14 ) 80 Total intangible assets $ 111 $ (13 ) $ 98 $ 159 $ (22 ) $ 137 (1) Refer to Note F for intangible assets impairment charges recorded in the second fiscal quarter of 2018. Intangible assets are amortized over their estimated useful lives, which range between twelve and twenty-five years, with a weighted average amortization period of approximately 19 7 |
Accounts Payable, Accrued Liabi
Accounts Payable, Accrued Liabilities and Other Liabilities | 12 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Liabilities and Other Liabilities | Note H. Accounts Payable, Accrued Liabilities and Other Liabilities Accounts payable and accrued liabilities included in current liabilities consist of the following: September 30 2018 2017 (In millions) Accounts payable $ 446 $ 339 Accrued employee compensation 70 51 Other accrued liabilities 97 67 Total $ 613 $ 457 Other long-term liabilities consist of the following: September 30 2018 2017 (In millions) Employee benefit plan liabilities $ 118 $ 122 Non-current tax liabilities 19 19 Other accrued liabilities 115 104 Total $ 252 $ 245 |
Debt and Other Obligations
Debt and Other Obligations | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Other Obligations | Note I. Debt and Other Obligations Long-term Obligations The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized below: September 30 2018 2017 (In millions) Variable Rate Debt: Revolving Credit Facility, expires fiscal 2023 $ — $ — Revolving Credit Facility - Canada, expires fiscal 2021 90 — Total variable rate debt 90 — Fixed Rate Debt: 2.55% Notes matured fiscal 2018 — 250 3.7% Notes due fiscal 2022 350 350 3.4% Notes due fiscal 2026 250 250 Medium Term Notes: Notes due fiscal 2019, 7.42% 30 30 Notes due fiscal 2022, 8.34% — 8.47% 15 15 Notes due fiscal 2028, 6.57% — 7.28% 8 8 Total Medium Term Notes 53 53 Chinese Renminbi Debt, due fiscal 2018, 4.75% — 5 Chinese Renminbi Debt, due fiscal 2019, 4.35% 4 — Total fixed rate debt 657 908 Capital lease obligations, due through fiscal 2033 11 13 Unamortized debt issuance costs and debt discount (4 ) (4 ) Total debt 754 917 Less current portion of long-term debt (35 ) (256 ) Total long-term debt $ 719 $ 661 Revolving Credit Facility, expiring fiscal 2023 —The amount available for borrowing under the revolving credit agreement was $751 million as of September 30, 2018. The revolving credit agreement, which matures on October 23, 2022, subsequent to the exercise of the two one-year options to extend the maturity on the first and second anniversaries of the effective date, supports the Company’s commercial paper program. Borrowings may be used for working capital, letters of credit and other general corporate purposes. The revolving credit agreement contains affirmative and negative covenants, a single financial covenant (consolidated total debt to consolidated EBITDA, as defined in the credit agreement) and events of default customary for financings of this type. Revolving Credit Facility-Canada expiring fiscal 2021 —In September 2018, a Canadian subsidiary entered into a revolving credit agreement with a loan commitment not to exceed $100 million United States dollars. The amount available for borrowing under this revolving credit agreement was $10 million as of September 30, 2018. The revolving credit agreement, which matures on September 24, 2021, subject to the right to request a one-year extension, may be used for working capital, capital expenditures and other general corporate purposes. The revolving credit agreement is guaranteed by Cabot Corporation. Chinese Renminbi Debt —The Company’s consolidated Chinese subsidiaries had $4 million and $5 million of unsecured long-term debt outstanding with a noncontrolling shareholder of a consolidated subsidiary as of September 30, 2018 and 2017, respectively. 2.55% Notes matured fiscal 2018 —In July 2012, Cabot issued $250 million in registered notes with a coupon of 2.55% that matured on January 15, 2018. These notes were unsecured and paid interest on January 15 and July 15. The net proceeds of this offering were $248 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and was amortized over the life of the notes. The notes were paid in full during the second quarter of fiscal 2018. 3.7% Notes due fiscal 2022 —In July 2012, Cabot issued $350 million in registered notes with a coupon of 3.7% that mature on July 15, 2022. These notes are unsecured and pay interest on January 15 and July 15. The net proceeds of this offering were $347 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and is being amortized over the life of the notes. 3.4% Notes due fiscal 2026 —In September 2016, Cabot issued $250 million in registered notes with a coupon of 3.4% that mature on September 15, 2026. These notes are unsecured and pay interest on March 15 and September 15. The net proceeds of this offering were $248 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and is being amortized over the life of the notes. Medium Term Notes —At both September 30, 2018 and 2017, there were $ 53 million of unsecured medium term notes outstanding issued to numerous lenders with various fixed interest rates and maturity dates. The weighted average maturity of the total outstanding medium term notes is 3 years 7.65 %. Capital Lease Obligations —Cabot had capital lease obligations for certain equipment and buildings with a recorded value of $11 million and $13 million at September 30, 2018 and 2017, respectively. Cabot will make payments totaling $ 17 million over the next 15 years 6 million of imputed interest. At both September 30, 2018 and 2017, the original cost of capital lease assets was $20 million. At September 30, 2018 and 2017, the associated accumulated depreciation of assets under capital leases was $13 million and $ 12 million, respectively. The amortization related to those assets under capital lease is included in depreciation expense. Future Years Payment Schedule The aggregate principal amounts of long-term debt and capital lease obligations due in each of the five years from fiscal 2019 through 2023 and thereafter are as follows: Years Ending September 30 Principal Payments on Long-Term Debt Payments on Capital Lease Obligations Total (In millions) 2019 $ 34 $ 1 $ 35 2020 — 2 2 2021 90 2 92 2022 365 2 367 2023 — 2 2 Thereafter 258 8 266 Less: Interest — (6 ) (6 ) Total $ 747 $ 11 $ 758 Standby letters of credit —At September 30, 2018, the Company had provided standby letters of credit that were outstanding and not drawn totaling $ 7 million, which expire through fiscal 2019. Short-term Borrowings Commercial Paper —The Company has a commercial paper program and the maximum aggregate balance of commercial paper notes outstanding and the amounts borrowed under the revolving credit facility may not exceed the borrowing capacity of $1 billion under the revolving credit facility. The proceeds from the issuance of the commercial paper have been used for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, and acquisitions. The revolving credit facility is available to repay the outstanding commercial paper, if necessary . There was an outstanding balance of commercial paper of $249 million as of September 30, 2018 with a weighted average interest rate of 2.36% and no balance outstanding as of September 30, 2017. Short-term Notes Payable —The Company had unsecured notes with maturities of less than one year of $7 million at September 30, 2017, with a weighted-average interest rate of 8.1%. There were no short term notes payable as of September 30, 2018. Redeemable Preferred Stock In November 2013, the Company purchased all of its joint venture partner’s common stock in the former NHUMO, S.A. de C.V. (“NHUMO”) joint venture. At the close of the transaction, NHUMO issued redeemable preferred stock to the joint venture partner with a repurchase value of $25 million and a fixed dividend rate of 6% per annum. In November 2018, the Company repurchased the preferred stock for $25 million and paid a final dividend payment of approximately $1.4 million. The preferred stock was accounted for as a financing obligation and has been separately presented in the Consolidated Balance Sheets as a current liability as of September 30, 2018 and as a long-term liability as of September 30, 2017. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Note J. Financial Instruments and Fair Value Measurements The FASB authoritative guidance on fair value measurements defines fair value, provides a framework for measuring fair value, and requires certain disclosures about fair value measurements. The required 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 fiscal 2018 or 2017. At both September 30, 2018 and 2017, Cabot had derivatives relating to foreign currency risks carried at fair value. At September 30, 2018 and 2017, the fair value of these derivatives was a net liability of $ 18 At September 30, 2018 and 2017, the fair value of Guaranteed investment contracts, included in Other assets on the Consolidated Balance Sheets, was $11 million and $12 million, respectively. 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 both September 30, 2018 and 2017, the fair values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued liabilities, and short term borrowings 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 $0.75 billion and $ 0.74 |
Derivatives
Derivatives | 12 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | Note K. Derivatives Risk Management Cabot’s business operations are exposed to changes in interest rates, foreign currency exchange rates and commodity prices because Cabot finances certain operations through long and short-term borrowings, denominates transactions in a variety of foreign currencies and purchases certain commoditized raw materials. Changes in these rates and prices may have an impact on future cash flows and earnings. The Company manages these risks through normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company has policies governing the use of derivative instruments and does not enter into financial instruments for trading or speculative purposes. By using derivative instruments, Cabot is subject to credit and market risk. If a counterparty fails to fulfill its performance obligations under a derivative contract, Cabot’s credit risk will equal the fair value of the derivative. Generally, when the fair value of a derivative contract is positive, the counterparty owes Cabot, thus creating a payment risk for Cabot. The Company minimizes counterparty credit (or repayment) risk by entering into transactions with major financial institutions of investment grade credit rating. Cabot’s exposure to market risk is not hedged in a manner that completely eliminates the effects of changing market conditions on earnings or cash flow. No significant concentration of credit risk existed at September 30, 2018. Interest Rate Risk Management Cabot’s objective is to maintain a certain fixed-to-variable interest rate mix on the Company’s debt obligations. Cabot may enter into interest rate swaps as a hedge of the underlying debt instruments to effectively change the characteristics of the interest rate without changing the debt instrument. As of both September 30, 2018 and 2017, there were no derivatives held to manage interest rate risk. Foreign Currency Risk Management Cabot’s international operations are subject to certain risks, including currency exchange rate fluctuations and government actions. Cabot endeavors to match the currency in which debt is issued to the currency of the Company’s major, stable cash receipts. In some situations, Cabot 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 September 30, 2018 and 2017 to manage foreign currency risk. Notional Amount Description Borrowing September 30, 2018 September 30, 2017 Hedge Designation Cross Currency Swaps 3.4% Notes USD 250 million swapped to EUR 223 million USD 250 million swapped to EUR 223 million Net investment Forward Foreign Currency Contracts (1) N/A USD 18 million USD 5 million No designation (1) Accounting for Derivative Instruments and Hedging Activities The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of 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 AOCI and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings. 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. 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. Effective October 1, 2017, the Company elected to de-designate its existing net investment hedge instruments in which hedge effectiveness was assessed using the method based on changes in forward exchange rates and re-designate them to use the method based on changes in spot exchange rates. The Company has 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 occur semi-annually on March 15 th th 18 The following table summarizes the impact of the cross-currency swaps to AOCI and the Consolidated Statements of Operations: Years Ended September 30 2018 2017 2016 2018 2017 2016 2018 2017 2016 Description Gain/(Loss) Recognized in AOCI (Gain)/Loss Reclassified from AOCI into Interest Expense in the Consolidated Statements of Operations (Gain)/Loss Recognized in Interest Expense in the Consolidated Statements of Operations (Amount Excluded from Effectiveness Testing) (In millions) Cross-currency swaps (1) $ (2 ) $ (10 ) $ 1 $ (5 ) $ — $ — $ 2 $ — $ — (1) As noted above, effective October 1, 2017, the Company changed the method it uses to assess effectiveness from the method based on changes in forward exchange rates, in which all gains/losses were recognized in AOCI, to the method based on changes in spot exchange rates. Other Derivative Instruments From time to time, the Company may enter into certain derivative instruments that may not be designated as hedges for accounting purposes, which may include cross-currency swaps, foreign currency forward contracts and commodity derivatives. For cross-currency swaps and foreign currency forward contracts not designated as hedges, the Company uses standard models with market-based inputs. The significant inputs to these models are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign currency for translating future cash flows. In determining the fair value of the commodity derivatives, the significant inputs to valuation models are quoted market prices of similar instruments in active markets. Although these derivatives do not qualify for hedge accounting, Cabot believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The gains or losses from changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings. At both September 30, 2018 and 2017, the fair value of derivative instruments not designated as hedges were immaterial. At September 30, 2018 and 2017, these instruments were presented in Accounts payable and accrued liabilities and Prepaid expenses and other current assets, respectively, on the Consolidated Balance Sheets. |
Hyperinflationary Economies
Hyperinflationary Economies | 12 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Hyperinflationary Economies | Note L. Hyperinflationary Economies Argentina Cabot owns 100% of a carbon black operating entity in Argentina. Due to recent negative economic trends in Argentina, including multiple periods of increasing inflation rates, devaluation of the Argentine peso, and increasing borrowing rates locally, the cumulative three-year inflation rate for the country exceeds 100%, and is expected to exceed 100% for the foreseeable future. Therefore, effective July 1, 2018, the operating entity was considered to be functioning in a highly inflationary economy and began using Cabot’s reporting currency, the U.S. dollar, as its functional currency. There was no financial statement impact at the date of conversion due to the change in functional currency. Going forward, all impacts of foreign exchange changes between the reporting currency and Argentine peso will be reflected in earnings in the accompanying Consolidated Statements of Operations. The Company’s income from operations is not expected to be significantly impacted from this change since the operating entity’s sales and a portion of its raw material purchases were already denominated in U.S. dollars. The operating entity’s net revenue represented approximately 2% of Cabot’s total net revenue for the year ended September 30, 2018. The operating entity’s monetary and non-monetary assets and liabilities held in local currency consist primarily of cash and cash equivalents, inventories, property, plant and equipment and accounts payable and accrued liabilities, which make up less than 2% of Cabot’s total assets and total liabilities as of September 30, 2018. Changes in the Argentine peso exchange rate will result in foreign currency exchange gains or losses on the operating entity’s peso-denominated monetary assets and liabilities. Subsequent to the conversion, the Company recorded a $3 million net gain within Other (income) expense in the Consolidated Statements of Operations for the year ended September 30, 2018, which reflects the remeasurement of the operating entity’s net monetary liabilities denominated in Argentine peso using an exchange rate of 39.70 Argentine peso to the U.S. dollar at September 30, 2018. The Company will continue to monitor the developments in Argentina and their potential impact the operating entity’s operations or carrying value. Venezuela Cabot owns 49% of a carbon black operating affiliate in Venezuela, which is accounted for as an equity affiliate, through wholly-owned subsidiaries that carry the investment and receive its dividends. As of September 30, 2018, these subsidiaries carried the operating affiliate investment of $ 13 During fiscal 2018, 2017 and 2016, the Company received dividends in the amounts of $ 3 A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into bolivars. The exchange rate made available to the Company as of September 30, 2017 was 3,345 bolivars to the U.S. dollar. During fiscal 2018, the bolivar experienced significant devaluation and reached 172,800 bolivars to the U.S. dollar at the end of July 2018. In August 2018, Venezuela issued the bolivar soberano to replace the existing bolivar in response to hyperinflation. The value of one bolivar soberano is equal to the value of 100,000 bolivars. The exchange rate made available to the Company as of September 30, 2018 was 62 The operating entity has historically been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment. Any future change in the exchange rate made available to the Company could cause the Company to change the exchange rate it uses and result in gains or losses on the bolivar denominated assets held by its operating affiliate and wholly-owned subsidiaries. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Sep. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Note M. Employee Benefit Plans The information below provides detail concerning the Company’s benefit obligations under the defined benefit and postretirement benefit plans it sponsors. Defined benefit plans provide pre-determined benefits to employees that are distributed upon retirement. Cabot is making all sponsor required contributions to these plans. The accumulated benefit obligation was $143 million for the U.S. defined benefit plans and $349 In addition to benefits provided under the defined benefit and postretirement benefit plans, the Company provides benefits under defined contribution plans. Cabot recognized expenses related to these plans of $19 million in fiscal 2018, $18 million in fiscal 2017 and $17 million in fiscal 2016. The following provides information about projected benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans: Years Ended September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Change in Benefit Obligations: Benefit obligation at beginning of year $ 160 $ 376 $ 175 $ 400 $ 33 $ 20 $ 37 $ 20 Service cost 1 9 1 10 — — — — Interest cost 5 7 4 6 1 1 1 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (7 ) — 16 — (1 ) — — (Gain) Loss from changes in actuarial assumptions and plan experience (10 ) 2 (7 ) (42 ) (2 ) — (2 ) (1 ) Benefits paid (7 ) (13 ) (7 ) (12 ) (3 ) (1 ) (3 ) — Settlements or curtailments (5 ) (2 ) (5 ) (3 ) — — — — Other (1 ) (1 ) (1 ) (1 ) — — — — Benefit obligation at end of year $ 143 $ 373 $ 160 $ 376 $ 29 $ 19 $ 33 $ 20 Years Ended September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Change in Plan Assets: Fair value of plan assets at beginning of year $ 156 $ 318 $ 157 $ 305 $ — $ — $ — $ — Actual return on plan assets 4 17 12 6 — — — — Employer contribution 1 9 1 9 3 1 3 — Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (7 ) — 12 — — — — Benefits paid (7 ) (13 ) (7 ) (12 ) (3 ) (1 ) (3 ) — Settlements (4 ) (2 ) (6 ) (3 ) — — — — Expenses paid from assets (1 ) (1 ) (1 ) (1 ) — — — — Fair value of plan assets at end of year $ 149 $ 323 $ 156 $ 318 $ — $ — $ — $ — Funded status $ 6 $ (50 ) $ (4 ) $ (58 ) $ (29 ) $ (19 ) $ (33 ) $ (20 ) Recognized asset (liability) $ 6 $ (50 ) $ (4 ) $ (58 ) $ (29 ) $ (19 ) $ (33 ) $ (20 ) Pension Assumptions and Strategy The following assumptions were used to determine the pension benefit obligations and periodic benefit costs as of and for the years ended September 30: 2018 2017 2016 Pension Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.2 % 2.4 % 3.6 % 2.4 % 3.4 % 1.8 % Rate of increase in compensation N/A 2.7 % N/A 2.7 % N/A 2.8 % Actuarial assumptions used to determine net periodic benefit cost during the year: Discount rate - benefit obligation 3.6 % 2.4 % 3.4 % 1.8 % 4.2 % 2.9 % Discount rate - service cost N/A 2.4 % N/A 1.8 % N/A 2.8 % Discount rate - interest cost 3.0 % 2.0 % 2.7 % 1.5 % 3.3 % 2.4 % Expected long-term rate of return on plan assets 6.8 % 4.9 % 6.8 % 4.7 % 7.5 % 5.1 % Rate of increase in compensation N/A 2.7 % N/A 2.8 % N/A 2.8 % Postretirement Assumptions and Strategy The following assumptions were used to determine the postretirement benefit obligations and net costs as of and for the years ended September 30: 2018 2017 2016 Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.1 % 3.2 % 3.4 % 3.1 % 3.0 % 2.8 % Initial health care cost trend rate 7.0 % 7.0 % 7.0 % 7.1 % 7.0 % 6.1 % Actuarial assumptions used to determine net cost during the year: Discount rate - benefit obligation 3.4 % 3.1 % 3.0 % 2.8 % 3.7 % 3.9 % Discount rate - service cost 3.1 % 3.6 % 2.6 % 3.2 % 3.4 % 4.1 % Discount rate - interest cost 2.8 % 3.0 % 2.4 % 2.6 % 2.8 % 3.7 % Initial health care cost trend rate 7.0 % 7.1 % 7.0 % 6.1 % 6.5 % 6.8 % Cabot uses discount rates as of September 30, the plans’ measurement date, to determine future benefit obligations under its U.S. and foreign defined benefit plans. The discount rates for the defined benefit plans in Canada, the Eurozone, Japan, Mexico, Switzerland, the United Arab Emirates, the United Kingdom and the U.S. are derived from yield curves that reflect high quality corporate bond yield or swap rate information in each region and reflect the characteristics of Cabot’s employee benefit plans. The discount rates for the defined benefit plans in the Czech Republic and Indonesia are based on government bond indices that best reflect the durations of the plans, adjusted for credit spreads presented in selected AA corporate bond indices. The rates utilized are selected because they represent long-term, high quality, fixed income benchmarks that approximate the long-term nature of Cabot’s pension obligations and related payouts. Amounts recognized in the Consolidated Balance Sheets at September 30, 2018 and 2017 related to the Company's defined benefit pension and postretirement benefit plans were as follows: September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Noncurrent assets $ 10 $ 21 $ 1 $ 12 $ — $ — $ — $ — Current liabilities $ — $ (1 ) $ (1 ) $ (1 ) $ (3 ) $ (1 ) $ (3 ) $ (1 ) Noncurrent liabilities $ (4 ) $ (70 ) $ (4 ) $ (69 ) $ (26 ) $ (18 ) $ (30 ) $ (19 ) Amounts recognized in AOCI at September 30, 2018 and 2017 related to the Company's defined benefit pension and postretirement benefit plans were as follows: September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Net actuarial (gain) loss $ (1 ) $ 49 $ 3 $ 52 $ (7 ) $ 4 $ (6 ) $ 5 Net prior service credit — (1 ) — (1 ) (2 ) — (5 ) — Balance in accumulated other comprehensive income (loss), pretax $ (1 ) $ 48 $ 3 $ 51 $ (9 ) $ 4 $ (11 ) $ 5 In fiscal 2019, the Company expects an estimated net loss of $3 million will be amortized from AOCI to net periodic benefit cost. In addition, the Company expects prior service credits of $2 million for other postretirement benefits will be amortized from AOCI to net periodic benefit costs in fiscal 2019. Estimated Future Benefit Payments The Company expects that the following benefit payments will be made to plan participants in the years from 2019 to 2028: Pension Benefits Postretirement Benefits Years Ending September 30 U.S. Foreign U.S. Foreign (In millions) 2019 $ 12 $ 14 $ 3 $ 1 2020 $ 11 $ 13 $ 3 $ 1 2021 $ 10 $ 17 $ 3 $ 1 2022 $ 10 $ 15 $ 3 $ 1 2023 $ 10 $ 15 $ 3 $ 1 2024 - 2028 $ 48 $ 88 $ 11 $ 4 Postretirement medical benefits are unfunded and impact Cabot’s cash flows as benefits become due, which is expected to be $4 million in fiscal 2019. The Company expects to contribute $8 million to its foreign pension plans in fiscal 2019. Net periodic defined benefit pension and other postretirement benefit costs include the following components: Years Ended September 30 2018 2017 2016 2018 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 9 $ 1 $ 10 $ 1 $ 8 $ — $ — $ — $ — $ — $ — Interest cost 5 7 4 6 4 8 1 1 1 1 1 1 Expected return on plan assets (10 ) (15 ) (9 ) (14 ) (10 ) (14 ) — — — — — — Amortization of prior service cost — — — — — — (3 ) — (3 ) — (3 ) — Net losses — 3 — 5 — 3 (1 ) — — — — — Settlements or Curtailments cost — — — — — 1 — — — — (1 ) — Net periodic (benefit) cost $ (4 ) $ 4 $ (4 ) $ 7 $ (5 ) $ 6 $ (3 ) $ 1 $ (2 ) $ 1 $ (3 ) $ 1 Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) are as follows: Years Ended September 30 2018 2017 2016 2018 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Net (gains) losses $ (4 ) $ — $ (9 ) $ (35 ) $ 7 $ 31 $ (2 ) $ (1 ) $ (3 ) $ (1 ) $ 2 $ 5 Prior service (credit) cost — — — — — — — — — — — — Amortization of prior service credit — — — — — — 3 — 3 — 3 — Amortization of prior unrecognized loss — (3 ) — (5 ) — (3 ) 1 — — — — — Other — — — — — (1 ) — — — — 1 — Net changes recognized in Total other comprehensive (income) loss (1) $ (4 ) $ (3 ) $ (9 ) $ (40 ) $ 7 $ 27 $ 2 $ (1 ) $ — $ (1 ) $ 6 $ 5 (1) The tax impact on pension and other postretirement benefit liability adjustments arising during the period was a tax provision of $1 million, tax provision of $7 million, and tax benefit of $7 million for fiscal years 2018, 2017, and 2016, respectively. Curtailments and Settlements of Employee Benefit Plans In recent years, the Company incurred curtailments and settlements of certain of its employee benefit plans. Associated with these curtailments and settlements, the Company recognized net losses of less than $1 million in each of Sensitivity Analysis Measurement of postretirement benefit expense is based on actuarial assumptions used to value the postretirement benefit liability at the beginning of the year. Assumed health care cost trend rates have an effect on the amounts reported for the health care plans. The fiscal 2018 weighted-average assumed health care cost trend rate is 1-Percentage-Point Increase Decrease U.S. Foreign U.S. Foreign (In millions) Effect on postretirement benefit obligation $ — $ 3 $ — $ (3 ) Plan Assets The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2018 and 2017 by asset category, are as follows: September 30 2018 2017 Pension Assets U.S. Foreign U.S. Foreign Equity securities 40 % 39 % 48 % 39 % Debt securities 60 % 53 % 5 % 53 % Cash and other securities (1) — % 8 % 47 % 8 % Total 100 % 100 % 100 % 100 % (1) To develop the expected long-term rate of return on plan assets assumption, the Company used a capital asset pricing model. The model considers the current level of expected returns on risk-free investments comprised of government bonds, the historical level of the risk premium associated with the other asset classes in which the portfolio is invested, and the expectations for future returns for each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return for each plan. Cabot’s investment strategy for each of its defined benefit plans in the U.S. and abroad is generally based on a set of investment objectives and policies that cover time horizons and risk tolerance levels consistent with plan liabilities. Periodic studies are performed to determine the asset mix that will meet pension obligations at a reasonable cost to the Company. The assets of the defined benefit plans are comprised principally of investments in equity and high quality fixed income securities, which are broadly diversified across the capitalization and style spectrum and are managed using both active and passive strategies. The weighted average target asset allocation for the U.S. plans is 30% in equity and 70% in fixed income and for the foreign plans is 39% in equity, 53% in fixed income, 3% in real estate and 5% in cash and other securities. For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks. The fair value of the Company’s pension plan assets at September 30, 2018 and 2017 by asset category is as follows: September 30 2018 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Total (In millions) Cash $ 3 $ — $ 3 $ 1 $ — $ 1 Direct investments: U.S government bonds 17 13 30 — — — U.S. corporate bonds — 74 74 — — — Total direct investments 17 87 104 — — — Investment funds: Equity funds (1) 44 126 170 75 124 199 Fixed income funds (2) — 169 169 8 168 176 Real estate funds (3) — 9 9 — 9 9 Cash equivalent funds 1 — 1 74 — 74 Total investment funds 45 304 349 157 301 458 Alternative investments: Insurance contracts (4) — 16 16 — 15 15 Total alternative investments — 16 16 — 15 15 Total pension plan assets $ 65 $ 407 $ 472 $ 158 $ 316 $ 474 (1) The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. (2) The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. (3) The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. (4) Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note N. Stock-Based Compensation The Company has established equity compensation plans that provide stock-based compensation to eligible employees. The 2009 Long-Term Incentive Plan (the “2009 Plan”) authorized the issuance of up to 8,854,000 shares of common stock. The 2017 Long-Term Incentive Plan (the “2017 Plan”) was approved by Cabot’s stockholders on March 9, 2017 and authorizes the issuance of up to 5,375,000 shares of common stock. The Company ceased granting awards under the 2009 Plan when the 2017 Plan was approved and, accordingly, the 2017 Plan is the only equity incentive plan under which the Company may grant equity awards to employees. The terms of awards made under Cabot’s equity compensation plans are generally determined by the Compensation Committee of Cabot’s Board of Directors. The awards made in fiscal 2018, 2017 and 2016 consist of grants of stock options, time-based restricted stock units, and performance-based restricted stock units. The options were issued with an exercise price equal to 100% of the market price of Cabot’s common stock on the date of grant, generally vest over a three year period (30% on each of the first and second anniversaries of the date of grant and 40% on the third anniversary of the date of grant) and have a ten-year term. The restricted stock units generally vest three years from the date of the grant. The number of shares issuable, if any, when a performance-based restricted stock unit award vests will depend on the degree of achievement of the corporate performance metrics for each year within the three-year performance period of the award. Accordingly, future compensation costs associated with outstanding awards of performance-based restricted stock units may increase or decrease based on the probability of the Company achieving the performance metrics. Stock-based employee compensation expense was $16 million, $10 million and $10 million, after tax, for fiscal 2018, 2017 and 2016, respectively. The expense recognized in fiscal 2016 includes a $5 million charge recorded in connection with the modification of the outstanding equity awards held by the Company’s former CEO under the terms of his transition and separation agreement with the Company. The Company recognized the full impact of its stock-based employee compensation expense in the Consolidated Statements of Operations for fiscal 2018, 2017 and 2016 and did not capitalize any such costs on the Consolidated Balance Sheets because those that qualified for capitalization were not material. The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations: Years Ended September 30 2018 2017 2016 (In millions) Cost of sales $ 2 $ 1 $ 1 Selling and administrative expenses 19 14 15 Research and technical expenses 1 1 1 Stock-based compensation expense 22 16 17 Income tax benefit (6 ) (6 ) (7 ) Net stock-based compensation expense $ 16 $ 10 $ 10 As of September 30, 2018, Cabot has $25 million and $ 2 approximately one year Equity Incentive Plan Activity The following table summarizes the total stock option and restricted stock unit activity in the equity incentive plans for fiscal 2018: Stock Options Restricted Stock Units Total Options (4) Weighted Average Exercise Price Weighted Average Grant Date Fair Value Restricted Stock Units (1) Weighted Average Grant Date Fair Value (Shares in thousands) Outstanding at September 30, 2017 1,144 $ 43.76 $ 13.40 876 $ 45.43 Granted 265 $ 62.20 $ 15.21 263 $ 62.18 Performance-based adjustment (2) — $ — $ — 83 $ 50.54 Exercised / Vested (528 ) $ 41.39 $ 13.61 (195 ) $ 45.81 Cancelled / Forfeited — $ — $ — (42 ) $ 47.54 Outstanding at September 30, 2018 881 $ 50.73 $ 13.82 985 $ 50.16 Exercisable at September 30, 2018 334 $ 44.61 Vested and expected to vest (3) 854 $ 50.52 (1) The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. (2) Represents the net incremental number of shares issuable upon vesting of performance-based restricted stock units based upon the achievement of the annual financial performance metrics for fiscal 2018. (3) Stock options vested and expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 7.36 (4) Unvested stock options were approximately 546,000 and 490,000 at September 30, 2018 and 2017 and their weighted average grant date fair values were $54.48 and $46.68, respectively. Stock Options The following table summarizes information related to the outstanding and vested options on September 30, 2018: Total Options Outstanding Exercisable Options Vested and Expected to Vest Aggregate Intrinsic Value (in millions of dollars) $ 11 $ 6 $ 10 Weighted Average Remaining Contractual Term (in years) 7.20 6.17 7.36 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, based on the Company’s closing common stock price of $ 62.72 The intrinsic value of options exercised during fiscal 2018, 2017 and 2016 was $11 million, $16 million and $8 million, respectively, and the Company received cash of $22 million, $21 million and $8 million, respectively, from these exercises. In fiscal 2018, the Company recognized a tax benefit of $1 million related to the fiscal 2018 stock option exercises which is included in (Provision) benefit for income taxes within the Consolidated Statement of Operations. Prior to the Company’s adoption of the new accounting standard for stock compensation in fiscal 2018, which is discussed in detail in Note B, tax benefits associated with stock option exercises were included in APIC. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the options at the grant date. The weighted average grant date fair values of options granted during fiscal 2018, 2017 and 2016 was $15.21, $12.76, and $11.12 Years Ended September 30 2018 2017 2016 Expected stock price volatility 28 % 32 % 33 % Risk free interest rate 2.2 % 1.8 % 2.0 % Expected life of options (years) 6 6 6 Expected annual dividends per year $ 1.26 $ 1.20 $ 1.20 The expected stock price volatility assumption was determined using the historical volatility of the Company’s common stock over the expected life of the option. The expected term reflects the anticipated time period between the measurement date and the exercise date or post-vesting cancellation date. Restricted Stock Units The value of restricted stock unit awards is the closing stock price at the date of the grant. The weighted average grant date fair values of restricted stock unit awards granted during fiscal 2018, 2017 and 2016 was $62.18, $51.03, and $40.51, Supplemental 401(k) Plan Cabot’s Deferred Compensation and Supplemental Retirement Plan (“SERP 401(k)”) provides benefits to highly compensated employees when the retirement plan limits established under the Internal Revenue Code prevent them from receiving all of the Company matching and retirement contributions that would otherwise be provided under the qualified 401(k) plan. The SERP 401(k) is non-qualified and unfunded. Contributions under the SERP 401(k) are treated as if invested in Cabot common stock. The majority of the distributions made under the SERP 401(k) are required to be paid with shares of Cabot common stock. The remaining distributions, which relate to certain grandfathered accounts, will be paid in cash based on the market price of Cabot common stock at the time of distribution. The aggregate value of the accounts that will be paid out in stock, which is equivalent to approximately 116,000 and 109,000 shares of Cabot common stock as of September 30, 2018 and 2017, respectively, is reflected at historic cost in stockholders’ equity, and the aggregate value of the accounts that will be paid in cash, which is $1 million and $2 million as of September 30, 2018 and 2017, respectively, is reflected in other long-term liabilities and marked-to-market quarterly. |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | Note O. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Years Ended September 30 2018 2017 2016 (In millions) Cost of sales $ (31 ) $ 2 $ 33 Selling and administrative expenses 1 1 9 Research and development expenses — — 5 Total $ (30 ) $ 3 $ 47 Details of all restructuring activities and the related reserves for fiscal 2016, 2017, and 2018 were as follows: Severance and Employee Benefits Environmental Remediation and Decommissioning Activities Non-Cash Asset Impairment and Accelerated Depreciation Asset Sales Other Total (In millions) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 Charges (gain) 28 — 23 (9 ) 5 47 Costs charged against assets — — (23 ) (7 ) — (30 ) Cash (paid) received (30 ) — — 16 (7 ) (21 ) Foreign currency translation adjustment — — — — — — Reserve at September 30, 2016 3 2 — — — 5 Charges (gain) 1 1 — — 1 3 Costs charged against liabilities — — — — 1 1 Cash paid (3 ) (1 ) — — (2 ) (6 ) Foreign currency translation adjustment — — — — — — Reserve at September 30, 2017 1 2 — — — 3 Charges (gain) 2 3 1 (38 ) 2 (30 ) Costs charged against assets — — (1 ) (1 ) — (2 ) Cash (paid) received (2 ) (1 ) — 39 (2 ) 34 Foreign currency translation adjustment — — — — — — Reserve at September 30, 2018 $ 1 $ 4 $ — $ — $ — $ 5 Cabot’s severance and employee benefit reserves and other closure related reserves are reflected in Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheets. Cabot’s environmental remediation reserves related to restructuring activities are reflected in Other liabilities on the Company’s Consolidated Balance Sheets. Sale of Land Rights in Thane, India During fiscal 2018, Cabot entered into a binding memorandum of understanding to sell its land rights in Thane, India for approximately $28 million. The Company received a deposit of $3 million in cash in the first quarter of fiscal 2016, an additional deposit of $3 million in cash in the third quarter of fiscal 2018, and the final balance of $22 million was received on September 14, 2018. Based on the execution of the binding agreement and non-refundable receipt of cash, the Company has no further substantial obligations regarding this property and has recorded the pre-tax gain on sale of $28 million to Cost of sales in the Consolidated Statements of Operations in September 2018. Marshall, Texas Plan In October 2017, Cabot indefinitely idled three of the seven production units at its activated carbon manufacturing facility in Marshall, Texas. The decision, affecting approximately 40 local employees, was driven by the need to better match the business’ production capacity and cost structure with the current demand for powdered activated carbon in North America. Total costs recorded in fiscal 2018 related to this plan were approximately $1 million, comprised of approximately $1 million of non-cash accelerated depreciation costs and less than $1 million of severance costs. No further charges are anticipated related to this plan. 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. Most of the charges and cash outlays related to this plan were recorded in fiscal 2016 when approximately $29 million of charges were recorded. The Company has recorded additional pre-tax cash charges of approximately $ 1 As of September 30, 2018, Cabot has less than $1 million of accrued severance and other charges in the Consolidated Balance Sheets 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. The Company completed the sale of the land in Merak on which the facility was located in the second quarter of fiscal 2018 for cash consideration totaling approximately $13 million resulting in a net pre-tax gain of approximately $11 million recorded to Cost of sales in the Company’s Consolidated Statements of Operations. The Company recorded net charges of less than $1 million in fiscal 2018, primarily for site clearing and demolition costs related to the Merak closure. The Company recorded net charges of less than $1 million in fiscal 2017 of transition related costs at the site and recorded $25 million pre-tax charges in fiscal 2016 comprised of $22 million of non-cash asset impairments and accelerated depreciation and $3 million of severance and other transition costs. As of September 30, 2018, Cabot has less than $ 1 In previous years, the Company has entered into other various restructuring actions that have been substantially completed, other than environmental remediation activities in Berre, France and Port Dickson, Malaysia. In fiscal 2018 Cabot recorded pre-tax charges of approximately $ 3 Additionally, Cabot recorded approximately $ 1 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note P. Accumulated Other Comprehensive Income (Loss) Changes in each component of AOCI, net of tax, are as follows for fiscal 2017 and 2018: Currency Translation Adjustment Unrealized Gains on Investment Pension and Other Postretirement Benefit Liability Adjustment Total (In millions) Balance at September 30, 2016 attributable to Cabot Corporation $ (227 ) $ 2 $ (100 ) $ (325 ) Other comprehensive income (loss) 25 — 41 66 Amounts reclassified from AOCI — — 2 2 Less: Other comprehensive income (loss) attributable to noncontrolling interests 2 — — 2 Balance at September 30, 2017 attributable to Cabot Corporation (204 ) 2 (57 ) (259 ) Other comprehensive income (loss) before reclassifications (64 ) (1 ) 6 (59 ) Amounts reclassified from AOCI (2 ) — (1 ) (3 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (4 ) — — (4 ) Balance at September 30, 2018 attributable to Cabot Corporation $ (266 ) $ 1 $ (52 ) $ (317 ) The amounts reclassified out of AOCI and into the Consolidated Statements of Operations for the fiscal years ended September 30, 2018, 2017 and 2016 are as follows: Affected Line Item in the Consolidated Years Ended September 30 Statements of Operations 2018 2017 2016 (In Millions) Derivatives: net investment hedges (Gains) losses reclassified to interest expense Interest expense $ (5 ) $ — $ — (Gains) losses excluded from effectiveness testing and amortized to interest expense Interest expense 2 — — Pension and other postretirement benefit liability adjustment Amortization of actuarial losses (gains) Net Periodic Benefit Cost - see Note M for details 2 5 3 Amortization of prior service (credit) cost Net Periodic Benefit Cost - see Note M for details (3 ) (3 ) (3 ) Total before tax (4 ) 2 — Tax impact Provision (benefit) for income taxes 1 — — Total after tax $ (3 ) $ 2 $ — |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note Q. Earnings Per Share The following tables summarize the components of the basic and diluted earnings per common share (“EPS”) computations: Years Ended September 30 2018 2017 2016 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ (113 ) $ 248 $ 147 Less: Dividends and dividend equivalents to participating securities 1 — — Less: Undistributed earnings allocated to participating securities (1) — 2 1 Earnings (loss) allocated to common shareholders (numerator) $ (114 ) $ 246 $ 146 Weighted average common shares and participating securities outstanding 62.4 62.8 62.9 Less: Participating securities (1) 0.7 0.5 0.5 Adjusted weighted average common shares (denominator) 61.7 62.3 62.4 Per share amounts—basic: Income (loss) from continuing operations attributable to Cabot Corporation $ (1.85 ) $ 3.94 $ 2.32 Income (loss) from discontinued operations — — 0.02 Net income (loss) attributable to Cabot Corporation $ (1.85 ) $ 3.94 $ 2.34 Diluted EPS: Earnings (loss) allocated to common shareholders $ (114 ) $ 246 $ 146 Plus: Earnings (loss) allocated to participating securities — 2 1 Less: Adjusted earnings allocated to participating securities (2) — 2 1 Earnings (loss) available to common shares (numerator) $ (114 ) $ 246 $ 146 Adjusted weighted average common shares outstanding 61.7 62.3 62.4 Effect of dilutive securities: Common shares issuable (3) — 0.4 0.5 Adjusted weighted average common shares (denominator) 61.7 62.7 62.9 Per share amounts—diluted: Income (loss) from continuing operations attributable to Cabot Corporation $ (1.85 ) $ 3.91 $ 2.30 Income (loss) from discontinued operations — — 0.02 Net income (loss) attributable to Cabot Corporation $ (1.85 ) $ 3.91 $ 2.32 (1) Participating securities consist of shares underlying outstanding and achieved performance-based restricted stock units issued during and after fiscal 2017 and all unvested time-based restricted stock units. Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Years Ended September 30 2018 2017 2016 (In millions) Calculation of undistributed earnings: Net income (loss) attributable to Cabot Corporation $ (113 ) $ 248 $ 147 Less: Dividends declared on common stock 79 77 65 Less: Dividends and dividend equivalents to participating securities 1 — — Undistributed earnings (loss) $ (193 ) $ 171 $ 82 Allocation of undistributed earnings: Undistributed earnings (loss) allocated to common shareholders $ (193 ) $ 169 $ 81 Undistributed earnings allocated to participating securities — 2 1 Undistributed earnings (loss) $ (193 ) $ 171 $ 82 (2) Undistributed earnings (loss) 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 SERP 401(k) Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based stock unit awards issued before fiscal 2017 under Cabot’s equity incentive plans using the treasury stock method. For fiscal 2018, 2017 and 2016, respectively, 229,220 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note R. Income Taxes Income from continuing operations before income taxes and equity in net earnings of affiliated companies was as follows: Years Ended September 30 2018 2017 2016 (In millions) Domestic $ (229 ) $ (8 ) $ (29 ) Foreign 346 307 220 Income from continuing operations before income taxes and equity in earnings of affiliated companies $ 117 $ 299 $ 191 Tax provision (benefit) for income taxes consisted of the following: Years Ended September 30 2018 2017 2016 (In millions) U.S. federal and state: Current $ 14 $ 5 $ 7 Deferred 114 (26 ) (34 ) Total 128 (21 ) (27 ) Foreign: Current 88 59 62 Deferred (23 ) (5 ) (2 ) Total 65 54 60 Provision (benefit) for income taxes $ 193 $ 33 $ 33 The provision (benefit) for income taxes differed from the provision for income taxes as calculated using the U.S. statutory rate as follows: Years Ended September 30 2018 2017 2016 (In millions) Computed tax expense at the federal statutory rate $ 29 $ 105 $ 67 Foreign income: Impact of taxation at different rates, repatriation, losses and other 6 (75 ) (37 ) Impact of increase (decrease) in valuation allowance on deferred taxes (16 ) (7 ) 7 Impact of foreign losses for which a current tax benefit is not available — 1 — Impact of non-deductible net currency losses 2 — 2 Impact of the Tax Cuts and Jobs Act of 2017 159 — — U.S. and state benefits from research and experimentation activities (2 ) (2 ) (2 ) Provision (settlement) of unrecognized tax benefits 1 7 1 Benefit from prior currency loss — — (3 ) Impact of goodwill impairment charge 18 — — Permanent differences, net (1 ) 5 — State taxes, net of federal effect (3 ) (1 ) (2 ) Provision (benefit) for income taxes $ 193 $ 33 $ 33 In the fiscal 2018 tax provision, Cabot recorded $120 million of net discrete tax expense, composed of $159 million net tax impact of the Act and $3 million tax expense upon the sale of assets, offset by net tax benefits of $29 million related to impairment and $15 million from a change in valuation allowance on a beginning of year tax balance, and net tax charge of $2 million related to other miscellaneous tax items. In the fiscal 2017 tax provision, Cabot recorded $25 million of net discrete tax benefits, composed of net tax benefits of $16 million associated with the generation of excess foreign tax credits upon repatriation of previously taxed foreign earnings and the accrual of U.S. tax on certain foreign earnings, a net tax benefit of $6 million from a change in valuation allowance on a beginning of year tax balance, net tax benefits of $4 million for various return to provision adjustments related to tax return filings and net tax charges of $1 million related to other miscellaneous tax items. In the fiscal 2016 tax provision, Cabot recorded less than $1 million of net discrete tax expense composed of charges of $5 million for valuation allowances on beginning of the year tax balances, partially offset by benefits of $3 million for a currency loss and $1 million each for the renewal of the U.S. research and experimentation credit and net tax settlements. Tax Reform On December 22, 2017, the U.S. enacted significant changes to federal income tax law affecting the Company, including a permanent reduction of the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018, as well as a 100% dividend received deduction for foreign dividends. Although the passage of the Act reduced the U.S. tax rate and effectively created a participation exemption regime, the Company’s future earnings could be negatively impacted by certain other aspects of the new legislation, including in particular, immediate U.S. taxation of global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries. In transitioning to this new full participation exemption regime for foreign earnings, Cabot is also subject to a one-time tax on the deemed repatriation of certain foreign earnings. A discussion of key relevant provisions of the Act and the Company’s assessment of the impact of such provisions on its consolidated financial statements is set forth below. Uncertain Impacts of the Act The accounting standard for income taxes (“ASC 740”) required the Company to recognize the effect of the tax law changes under the Act in the first quarter of fiscal 2018. However, due to the potential uncertainty or diversity of views in accounting for the impact of the Act, the Securities and Exchange Commission staff issued Staff Accounting Bulletin 118 (“SAB 118”) to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In particular, SAB 118 clarified that the impact of the Act must be accounted for and reported in one of three ways: (1) by reflecting the tax effects of the Act for which the accounting is complete; (2) by reporting provisional amounts for those specific income tax effects of the Act for which the accounting is incomplete but a reasonable estimate can be determined, with such provisional amounts (or adjustments to provisional amounts) identified in the measurement period, as defined therein, being included as an adjustment to tax expense or benefit from continuing operations in the period the amounts are determined; or (3) where the income tax effects cannot be reasonably estimated, no provisional amounts should be reported and the registrant should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the enactment of the Act. The measurement period begins in the reporting period that includes the Act’s enactment date and ends when the accounting has been completed, but not beyond one year from the enactment date. Due to various uncertainties as described below, and with the exception of the U.S. deferred tax impact of the rate change under the Act, the Company has not completed its accounting for certain other tax impacts of the Act. However, as provided in SAB 118, reasonable estimates, including any adjustments to the estimates made during the first three quarters of fiscal 2018, have been made and recorded as provisional amounts in its financial results for the fourth quarter of fiscal 2018. A discussion of the material impacts of tax law changes under the Act and the accounting for these changes follows: • As of September 30, 2018, the accounting for this item was complete. For the three and twelve months ended September 30, 2018, the Company has recorded a tax benefit of $4 million and expense of $13 million, respectively, related to the impact of the rate change on deferred tax balances. The adjustment to the amount recorded during the three months ended September 30, 2018 was primarily associated with the true-up of deferred tax assets and liabilities upon the filing of the U.S. income tax return for fiscal 2017. • As of September 30, 2018, the accounting for this item is incomplete. Significant additional information will need to be obtained and analyzed in order to complete the accounting for this item. This includes: (1) the determination of the full fiscal 2018 E&P and foreign tax credits of the specified foreign corporations; (2) clarification of the state income tax impact of the repatriation, including guidance from states in which Cabot has a taxable presence on the extent to which the state will conform with the provisions of the Act, as well as determination of the apportionment of the Company’s income for the full fiscal year 2018; and (3) further guidance from the U.S. Treasury Department on the interpretation and application of the rules. In the absence of such additional information, Cabot has made a reasonable estimate of the financial impact of this item. For the three and twelve months ended September 30, 2018, the Company recorded a provisional benefit of $6 million and a provisional expense of $138 million, respectively, for deemed repatriation. This amount is expected to be a fully non-cash charge due to the Company’s existing tax attributes. • As of September 30, 2018, the accounting for this item is incomplete. Additional information necessary to complete the accounting includes: (1) the finalization of U.S. previously taxed income resulting from the deemed repatriation of foreign earnings; (2) clarification of the state income tax impact of unremitted earnings that are not indefinitely reinvested, and (3) further guidance from the U.S. Treasury Department on the interpretation and application of the rules related to deemed repatriation. For the three and twelve months ended September 30, 2018, the Company recorded a provisional benefit of $16 million and provisional expense of $8 million, respectively, for this item. The Company will continue to evaluate the impact of the Act on its business and consolidated financial statements and will make any further adjustments to its provisional amounts in subsequent reporting periods upon obtaining, preparing or analyzing additional information affecting the income tax effects initially reported as a provisional amount. Accounting for the Global Intangible Low-Taxed Income Tax Under the Act, Cabot may be subject to a tax on GILTI in future years. In general, GILTI is a 10.5% tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. This tax is effective for taxable years beginning after December 31, 2017. The Company has adopted an accounting policy to recognize these temporary differences as period costs if and when incurred. Other Material Provisions of the Act Effective in Future Periods The Act also contains a number of other provisions that may have a material financial impact on the Company in the future. These include base erosion anti-abuse tax, foreign derived intangible income and the interest expense limitation under Internal Revenue Code section 163(j). These tax law changes apply only to tax years beginning after December 31, 2017. Therefore, the Company did not record any amounts related to these items in its fiscal 2018 financial results; however, the impact of these provisions will be accounted for in the Company’s fiscal 2019 financial results. Significant components of deferred income taxes were as follows: September 30 2018 2017 (In millions) Deferred tax assets: Deferred expenses $ 17 $ 22 Intangible assets 23 43 Inventory 4 1 Other 4 14 Pension and other benefits 45 59 Net operating loss carry-forwards 146 149 Foreign tax credit carry-forwards 12 132 R&D credit carry-forwards 41 38 Other business credit carry-forwards 39 37 Subtotal 331 495 Valuation allowance (169 ) (168 ) Total deferred tax assets $ 162 $ 327 September 30 2018 2017 (In millions) Deferred tax liabilities: Property, plant and equipment $ (56 ) $ (116 ) Unremitted earnings of non-U.S. subsidiaries (14 ) (12 ) Total deferred tax liabilities $ (70 ) $ (128 ) Approximately $ 768 Years Ending September 30 NOLs Credits (In millions) 2019 - 2025 $ 282 $ 15 2026 and thereafter 162 67 Indefinite carry-forwards 324 16 Total $ 768 $ 98 As of September 30, 2018, provisions have not been made for non-U.S. withholding taxes or other applicable taxes on approximately $ 917 As of September 30, 2018, net deferred tax assets of $ 99 As of September 30, 2018, the Company needs to generate approximately $ 472 20 The valuation allowances at September 30, 2018 and 2017 represent management’s best estimate of the non-realizable portion of the deferred tax assets. The valuation allowance increased by $1 million in 2018 due to net reductions in value of certain pre-existing and acquired future tax benefits and net operating losses generated that are included in deferred tax assets. The valuation allowance decreased by $9 million in 2017 due to net increases in the value of certain future tax benefits and net operating losses generated that are included in deferred tax assets. Cabot has filed its tax returns in accordance with the tax laws in each jurisdiction and recognizes tax benefits for uncertain tax positions when the position would more likely than not be sustained based on its technical merits and recognizes measurement adjustments when needed. As of September 30, 2018, the total amount of unrecognized tax benefits was $ 37 26 11 1 A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2018, 2017 and 2016 is as follows: Years Ended September 30 2018 2017 2016 (In millions) Balance at beginning of the year $ 36 $ 30 $ 30 Additions based on tax provisions related to the current year 2 2 2 Additions for tax positions of prior years 1 8 5 Reductions of tax provisions of prior years — (1 ) (3 ) Reductions related to settlements — (2 ) — Reductions from lapse of statute of limitations (2 ) (1 ) (4 ) Balance at end of the year $ 37 $ 36 $ 30 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 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 2014 through 2016 tax years generally remain subject to examination by the IRS and various tax years from 2005 through 2016 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2002 through 2016 remain subject to examination by their respective tax authorities. As of September 30, 2018, Cabot’s significant non-U.S. jurisdictions include Canada, China, France, Germany, Italy, Japan, and the Netherlands. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note S. Commitments and Contingencies Operating Lease Commitments Cabot leases certain transportation vehicles, warehouse facilities, office space, machinery and equipment under cancelable and non-cancelable operating leases, most of which expire within ten years and may be renewed by Cabot. Escalation clauses, lease payments dependent on existing rates/indexes and other lease incentives are included in the minimum lease payments and such lease payments are recognized on a straight-line basis over the minimum lease term. Rent expense under such arrangements for fiscal 2018, 2017 and 2016 totaled $ 32 Years Ending September 30 (In millions) 2019 $ 22 2020 13 2021 10 2022 9 2023 9 2024 and thereafter 69 Total future minimum rental commitments $ 132 Other Long-Term 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. Raw materials purchased under these agreements by segment for fiscal 2018, 2017 and 2016 are as follows: Years Ended September 30 2018 2017 2016 (In millions) Reinforcement Materials $ 375 $ 281 $ 193 Performance Chemicals 55 43 68 Purification Solutions 11 7 7 Specialty Fluids — — — Total $ 441 $ 331 $ 268 Included in the table above are raw materials purchases from noncontrolling shareholders of consolidated subsidiaries. These purchases were $ 156 8 For these purchase commitments, the amounts included in the table below are based on market prices as of September 30, 2018 which may differ from actual market prices at the time of purchase. Payments Due by Fiscal Year 2019 2020 2021 2022 2023 Thereafter Total (In millions) Reinforcement Materials $ 361 $ 234 $ 142 $ 138 $ 131 $ 1,703 $ 2,709 Performance Chemicals 70 58 57 57 33 465 740 Purification Solutions 8 5 1 — — — 14 Specialty Fluids 15 — — — — — 15 Total $ 454 $ 297 $ 200 $ 195 $ 164 $ 2,168 $ 3,478 The Company has also entered into long-term purchase agreements primarily for services related to information technology, which are not included in the table above, that total $14 million as of September 30, 2018, the majority of which is expected to be paid within the next 5 years. 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. Self-Insurance and Retention for Certain Contingencies The Company is partially self-insured for certain third-party liabilities globally, as well as workers’ compensation and employee medical benefits in the United States. The third-party and workers’ compensation liabilities are managed through a wholly-owned insurance captive and the related liabilities are included in the consolidated financial statements. The employee medical obligations are managed by a third-party provider and the related liabilities are included in the consolidated financial statements. To limit Cabot’s potential liabilities for these risks, however, the Company purchases insurance from third-parties that provides stop-loss protection. The self-insured liability in fiscal 2018 for third-party liabilities was $500,000 per accident for auto, $2 million per occurrence for all other, $1 million per accident for U.S. workers’ compensation, and the retention for medical costs in the United States is at most $250,000 per person per annum. 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 September 30, 2018 and 2017, Cabot had $ 15 Charges for environmental expense were $6 million in fiscal 2018 and less than $1 million in each of fiscal 2017 and fiscal 2016, which are included in Cost of sales in the Consolidated Statements of Operations. Cash payments related to these environmental matters were $3 million in fiscal 2018 and $2 million in each of fiscal 2017 and fiscal 2016. The Company anticipates that expenditures related to these environmental matters will be made over a number of years, and will not be concentrated in any one year, with the exception of fiscal 2019, when the Company expects to incur approximately $12 million, classified as current and included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets, to perform additional environmental remediation activities at one of its former manufacturing sites. The operation and maintenance component of the $15 million reserve for environmental matters was $ 3 In November 2013, Cabot entered into a Consent Decree with the EPA and the Louisiana Department of Environmental Quality (“LDEQ”) regarding Cabot’s three carbon black manufacturing facilities in the U.S. This settlement is related to EPA’s national enforcement initiative focused on the U.S. carbon black manufacturing sector alleging non-compliance with certain regulatory and permitting requirements under The Clean Air Act, including the New Source Review (“NSR”) construction permitting requirements. Pursuant to this settlement, Cabot is in the process of installing technology controls for reduction of sulfur dioxide and nitrogen oxide emissions at certain of its carbon black plants. 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. Generally, these respirator liabilities involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, allegedly resulting from the use of respirators that are alleged to have been negligently designed 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. The subsidiary transferred the business to Aearo Corporation (“Aearo”) in July 1995. Cabot agreed to have the subsidiary retain certain liabilities associated with exposure to asbestos and silica while using respirators prior to the 1995 transaction so long as Aearo paid, and continues to pay, Cabot an annual fee of $400,000. Aearo can discontinue payment of the fee at any time, in which case it will assume the responsibility for and indemnify Cabot against those liabilities which Cabot’s subsidiary had agreed to retain. The Company anticipates that it will continue to receive payment of the $400,000 fee from Aearo and thereby retain these liabilities for the foreseeable future. Cabot has no liability in connection with any products manufactured by Aearo after 1995. In addition to Cabot’s subsidiary and as described above, other parties are responsible for significant portions of the costs of respirator liabilities, leaving Cabot’s subsidiary with a portion of the liability in only some of the pending cases. These parties include Aearo, AO, AO’s insurers, another former owner and its insurers and a third-party manufacturer of respirators formerly sold under the AO brand and its insurers (collectively, with the Company’s subsidiary, the “Payor Group”). As of September 30, 2018 and 2017, there were approximately 35,000 and 37,000 claimants, respectively, in pending cases asserting claims against AO in connection with respiratory products. Cabot has contributed to the Payor Group’s defense and settlement costs with respect to a percentage of pending claims depending on several factors, including the period of alleged product use. In order to quantify Cabot’s estimated share of liability for pending and future respirator liability claims, Cabot has engaged, through counsel, the assistance of Nathan Associates, Inc. (“Nathan”), a leading consulting firm in the field of tort liability valuation. The methodology used by Nathan addresses the complexities surrounding Cabot’s potential liability by making assumptions about future claimants with respect to periods of asbestos, silica and coal mine dust exposure and respirator use. Using those and other assumptions, Nathan estimates the number of future asbestos, silica and coal mine dust claims that will be filed and the related costs that would be incurred in resolving both currently pending and future claims. On this basis, Nathan then estimates the value of the share of these liabilities that reflect Cabot’s period of direct manufacture and Cabot’s contractual obligations. During the three months ended September 30, 2018, Nathan updated this estimate. Based on the Nathan estimates, as of September 30, 2018, the Company increased its reserve for Cabot’s estimated share of the liability for pending and future respirator claims and recorded a charge of $10 million, which is included in Selling and administrative expenses in the Consolidated Statements of Operations. This increase reflects higher costs of defending and resolving these claims. Based on these estimates, as of September 30, 2018 and 2017, the Company had $25 million and $18 million, respectively, reserved for its estimated share of liability for pending and future respirator claims. The Company recorded a charge of $13 million related to the respirator liability in fiscal 2016, which was included in Selling and administrative expenses in the Consolidated Statements of Operations. No charge related to the respirator liability was recorded in fiscal 2017. The Company made payments related to its respirator liability of $3 million in each of fiscal 2018, 2017 and 2016. The Company’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 members of the Payor Group, (viii) a change in the availability of the insurance coverage of the members of the Payor Group or the indemnity provided by AO’s former owner, (ix) changes in the allocation of costs among the Payor Group and (x) a determination that the assumptions that were used to estimate the Company’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 Matters The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with respect to its 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. |
Financial Information by Segmen
Financial Information by Segment & Geographic Area | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Financial Information by Segment & Geographic Area | Note T. Financial Information by Segment & Geographic Area Segment Information 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 combines the rubber blacks and elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons, specialty compounds and inkjet colorants businesses into the Specialty Carbons and Formulations business, and combines the fumed metal oxides and aerogel businesses into the Metal Oxides business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and therefore have been aggregated into one reportable segment. The Purification Solutions segment represents the Company’s activated carbon business and the Specialty Fluids segment includes cesium formate oil and gas drilling fluids and high-purity fine cesium chemicals product lines. Income (loss) from continuing operations before income taxes (“Segment EBIT”) is presented for each reportable segment in the financial information by the reportable segment table below on the line entitled Income (loss) from continuing operations before taxes. Segment EBIT excludes certain items, meaning items management does not consider representative of 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 (loss) attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, general unallocated expense and unallocated corporate costs. Segment assets exclude cash, short-term investments, cost investments, income taxes receivable, deferred taxes and headquarters’ assets, which are included in unallocated and other. Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. Reinforcement Materials Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and aggregates of varied structure and surface chemistry, resulting in many different performance characteristics for a wide variety of applications. Rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. The Company’s rubber blacks products are used in tires and industrial products. Rubber blacks have traditionally been used in the tire industry as a rubber reinforcing agent to increase tread durability and are also used as a performance additive to reduce rolling resistance and improve traction. In industrial products such as hoses, belts, extruded profiles and molded goods, rubber blacks are used to improve the physical performance of the product, including the product’s physical strength, fluid resistance, conductivity and resistivity. In addition to its rubber blacks products, the Company manufactures compounds of carbon black and rubber using its patented elastomer composites manufacturing process. These compounds improve abrasion/wear resistance, reduce fatigue of rubber parts and reduce rolling resistance compared to carbon black/rubber compounds made by conventional dry mix methods. Performance Chemicals Performance Chemicals is composed of two businesses: (i) the Company’s Specialty Carbons and Formulations business, which manufactures and sells specialty grades of carbon black, specialty compounds and inkjet colorants and inks, and (ii) its Metal Oxides business, which manufactures and sells fumed silica, fumed alumina and dispersions thereof and aerogel. In Performance Chemicals, the Company designs, manufactures and sells materials that deliver performance in a broad range of customer applications across the automotive, construction, infrastructure, energy, inkjet printing, electronics, and consumer products sectors. The net sales from each of these businesses for fiscal 2018, 2017 and 2016 are as follows: Years Ended September 30 2018 2017 2016 (In millions) Specialty Carbons and Formulations $ 731 $ 623 $ 578 Metal Oxides 297 285 287 Total Performance Chemicals $ 1,028 $ 908 $ 865 Specialty Carbons and Formulations Business The Company’s specialty grades of carbon black are used to impart color, provide rheology control, enhance conductivity and static charge control, provide UV protection, enhance mechanical properties, and provide formulation flexibility through surface treatment. These specialty carbon products are used in a wide variety of applications, such as inks, coatings, cables, plastics, adhesives, toners, batteries and displays. Cabot’s masterbatch and conductive compound products, which Cabot refers to as “specialty compounds”, are formulations derived from specialty grades of carbon black mixed with polymers and other additives. These products are generally used by plastic resin producers and converters in applications for the automotive, industrial, packaging, consumer products, and electronics industries. As an alternative to directly mixing specialty carbon blacks, these formulations offer greater ease of handling and help customers achieve their desired levels of dispersion and color and manage the addition of small doses of additives. In addition, Cabot’s electrically conductive compound products generally are used to reduce risks associated with electrostatic discharge in plastics applications. The Company’s inkjet colorants are high-quality pigment-based black and color dispersions based on its patented carbon black surface modification technology. The dispersions are used in aqueous inkjet inks to impart color, sharp print characteristics and durability, while maintaining high printhead reliability. These products are used in various inkjet printing applications, including commercial printing, small office/home office and corporate office, and niche applications that require a high level of dispersibility and colloidal stability. Cabot’s inkjet inks, which utilize its pigment-based colorant dispersions, are used in the commercial printing segment for digital print. Metal Oxides Business Fumed silica is an ultra-fine, high-purity particle used as a reinforcing, thickening, abrasive, thixotropic, suspending or anti-caking agent in a wide variety of products for the automotive, construction, microelectronics, batteries, and consumer products industries. These products include adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries and pharmaceuticals. Fumed alumina, also an ultra-fine, high-purity particle, is used as an abrasive, absorbent or barrier agent in a variety of products, such as inkjet media, lighting, coatings, cosmetics and polishing slurries. Aerogel is a hydrophobic, silica-based particle with a high surface area that is used in a variety of thermal insulation and specialty chemical applications. In the building and construction industry, the product is used in insulative sprayable plasters and composite building products, as well as translucent skylight, window, wall and roof systems for insulating eco-daylighting applications. In the specialty chemicals industry, the product is used to provide matte finishing, insulating and thickening properties for use in a variety of applications. Purification Solutions The Company’s activated carbon products are used for the purification of water, air, food and beverages, pharmaceuticals and other liquids and gases, as either a colorant or a decolorizing agent in the production of products for food and beverage applications and as a chemical carrier in slow release applications. In gas and air applications, one of the uses of activated carbon is for the removal of mercury in flue gas streams. In certain applications, used activated carbon can be reactivated for further use by removing the contaminants from the pores of the activated carbon product. The most common applications for the Company’s reactivated carbon are water treatment and food and beverage purification. In addition to activated carbon production and reactivation, the Company also provides activated carbon solutions through on-site equipment and services, including delivery systems for activated carbon injection in coal-fired utilities, mobile water filter units and carbon reactivation services. Specialty Fluids The Specialty Fluids segment produces and markets a range of cesium products that include cesium formate brines and other fine cesium chemicals. Cesium formate brines are used as a drilling and completion fluid primarily in high pressure and high temperature oil and gas well construction. Cesium formate products are solids-free, high-density fluids that have a low viscosity, enabling safe and efficient well construction and workover operations. The fluid is resistant to high temperatures, minimizes damage to producing reservoirs and is readily biodegradable in accordance with the testing guidelines set by the Organization for Economic Cooperation and Development. In a majority of applications, cesium formate is blended with other formates or products. Fine cesium chemicals are used across a wide range of industries and applications that include catalysts, doping agents and brazing fluxes. Fine cesium chemicals enable process performance benefits and yield improvements, and help prevent or mitigate pollution in the applications they serve. Financial information by reportable segment is as follows: Years Ended September 30 Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1), (3) Consolidated Total (In millions) 2018 Revenues from external customers (2) $ 1,774 $ 1,028 $ 279 $ 45 $ 3,126 $ 116 $ 3,242 Depreciation and amortization $ 70 $ 48 $ 32 $ 2 $ 152 $ (3 ) $ 149 Equity in earnings of affiliated companies $ 1 $ — $ 6 $ — $ 7 $ (5 ) $ 2 Income (loss) from continuing operations before income taxes (3) $ 279 $ 200 $ (7 ) $ 8 $ 480 $ (363 ) $ 117 Assets (4) $ 1,319 $ 919 $ 460 $ 178 $ 2,876 $ 368 $ 3,244 Total expenditures for additions to long-lived assets (5) $ 97 $ 94 $ 16 $ 17 $ 224 $ 5 $ 229 2017 Revenues from external customers (2) $ 1,381 $ 908 $ 281 $ 41 $ 2,611 $ 106 $ 2,717 Depreciation and amortization $ 69 $ 46 $ 39 $ 2 $ 156 $ (1 ) $ 155 Equity in earnings of affiliated companies $ 6 $ — $ 6 $ — $ 12 $ (5 ) $ 7 Income (loss) from continuing operations before income taxes (3) $ 193 $ 201 $ 6 $ 9 $ 409 $ (110 ) $ 299 Assets (4) $ 1,189 $ 708 $ 741 $ 140 $ 2,778 $ 560 $ 3,338 Total expenditures for additions to long-lived assets (5) $ 68 $ 47 $ 19 $ 5 $ 139 $ 8 $ 147 2016 Revenues from external customers (2) $ 1,108 $ 865 $ 290 $ 47 $ 2,310 $ 101 $ 2,411 Depreciation and amortization $ 74 $ 48 $ 39 $ 3 $ 164 $ (3 ) $ 161 Equity in earnings of affiliated companies $ — $ 1 $ 7 $ — $ 8 $ (5 ) $ 3 Income (loss) from continuing operations before income taxes (3) $ 137 $ 225 $ (5 ) $ 13 $ 370 $ (179 ) $ 191 Assets (4) $ 1,093 $ 629 $ 736 $ 139 $ 2,597 $ 455 $ 3,052 Total expenditures for additions to long-lived assets (5) $ 46 $ 33 $ 30 $ 1 $ 110 $ 2 $ 112 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below. Years Ended September 30 2018 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 $ 11 $ 11 $ 13 Shipping and handling fees 105 95 88 Total $ 116 $ 106 $ 101 (3) Consolidated Total Income (loss) from continuing operations before income taxes reconciles to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Total Income (loss) from continuing operations before income taxes that are categorized as Unallocated and Other includes: Years Ended September 30 2018 2017 2016 (In millions) Interest expense $ (54 ) $ (53 ) $ (54 ) Certain items: (a) Impairment of goodwill and long-lived assets of Purification Solutions (Note F) (254 ) — — Global restructuring activities (Note O) 30 (3 ) (47 ) Legal and environmental matters and reserves (16 ) 1 (17 ) Inventory reserve adjustment (Note D) (13 ) — — Gains (losses) on sale of investments 10 — — Acquisition and integration-related charges (2 ) — — Executive transition costs (2 ) — (6 ) Non-recurring gain (loss) on foreign exchange — — (11 ) Other certain items (1 ) (1 ) — Total certain items, pre-tax (248 ) (3 ) (81 ) Unallocated corporate costs (b) (61 ) (50 ) (45 ) General unallocated income (expense) (c) 2 3 4 Less: Equity in earnings of affiliated companies, net of tax (d) 2 7 3 Total $ (363 ) $ (110 ) $ (179 ) (a) Certain items are items that management does not consider representative of operating segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, interest income, dividend income, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT. Fiscal 2017 and fiscal 2016 amounts have been recast to reflect the retrospective application of the Company’s election to change its inventory valuation method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method, which resulted in General unallocated income (expense) increasing by $ (d) Equity in earnings of affiliated companies, net of tax is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (4) Unallocated and Other assets includes cash, marketable securities, cost investments, income taxes receivable, deferred taxes, headquarters’ assets, and current and non-current assets held for sale. (5) Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. Geographic Information Sales are attributed to the U.S. and to all foreign countries based on the location from which the sale originated. Revenues from external customers and long-lived assets attributable to an individual country, other than the U.S. and China, were not material for disclosure. Revenues from external customers and long-lived asset information by geographic area are summarized as follows: Years Ended September 30 U.S. China Other Foreign Countries Consolidated Total (In millions) 2018 Revenues from external customers $ 676 $ 752 $ 1,814 $ 3,242 Net property, plant and equipment $ 493 $ 270 $ 533 $ 1,296 2017 Revenues from external customers $ 645 $ 573 $ 1,499 $ 2,717 Net property, plant and equipment $ 493 $ 261 $ 551 $ 1,305 2016 Revenues from external customers $ 605 $ 482 $ 1,324 $ 2,411 Net property, plant and equipment $ 490 $ 266 $ 534 $ 1,290 |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | Note U. Unaudited Quarterly Financial Information Unaudited financial results by quarter for fiscal 2018 and 2017 are summarized below: Quarters Ended Year Ended December 31, March 31, June 30, September 30, September 30, 2017 2018 2018 2018 2018 (In millions, except per share amounts) Net sales and other operating revenues $ 720 $ 818 $ 854 $ 850 $ 3,242 Gross profit $ 178 $ 190 $ 200 $ 213 $ 781 Net income (loss) $ (112 ) $ (163 ) $ 99 $ 102 $ (74 ) Net income (loss) attributable to Cabot Corporation $ (122 ) $ (173 ) $ 88 $ 94 $ (113 ) Earnings per common share—basic $ (1.98 ) $ (2.80 ) $ 1.41 $ 1.51 $ (1.85 ) Earnings per common share—diluted $ (1.98 ) $ (2.80 ) $ 1.40 $ 1.51 $ (1.85 ) During the fourth quarter of fiscal 2018, Cabot recorded a pre-tax gain of $28 million on the sale of its land rights in Thane, India as discussed further in Note O. In addition, the tax benefit for the quarter includes a $19 million net benefit from discrete tax items primarily related to a revision of the estimate of the impact of the recent U.S. tax reform as discussed further in Note R. Quarters Ended Year Ended December 31, March 31, June 30, September 30, September 30, 2016 2017 2017 2017 2017 (In millions, except per share amounts) Net sales and other operating revenues $ 611 $ 678 $ 705 $ 723 $ 2,717 Gross profit $ 159 $ 169 $ 161 $ 174 $ 663 Net income (loss) $ 59 $ 80 $ 55 $ 79 $ 273 Net income (loss) attributable to Cabot Corporation $ 55 $ 74 $ 47 $ 72 $ 248 Earnings per common share—basic $ 0.87 $ 1.19 $ 0.73 $ 1.15 $ 3.94 Earnings per common share—diluted $ 0.86 $ 1.19 $ 0.73 $ 1.13 $ 3.91 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cabot and its wholly-owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights, of which there were none in the periods presented. Intercompany transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include all highly liquid investments with a maturity of three months or less at date of acquisition. Cabot continually assesses the liquidity of cash equivalents and, as of September 30, 2018, has determined that they are readily convertible to cash. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Effective October 1, 2017, the Company changed its method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method. Total U.S. inventories accounted for utilizing the LIFO cost flow assumption represented 7% of the Company’s total worldwide inventories as of September 30, 2017. The Company believes the FIFO method is preferable because it: (i) conforms the accounting for U.S. carbon black inventories to the Company’s inventory valuation methodology for the majority of its other inventories; (ii) better represents how management assesses and reports on the performance of the Reinforcement Materials and Performance Chemicals operating segments that carry the Company’s U.S. carbon black inventories, as the impact of accounting for this inventory on a LIFO basis has historically been excluded from segment results; (iii) better aligns the accounting for U.S. carbon black inventories with the physical flow of that inventory; and (iv) improves comparability with many of the Company’s peers. The Company applied this change retrospectively to all prior periods presented. This change resulted in a $19 million increase in retained earnings as of October 1, 2015, from $1,478 million to $1,497 million. In addition, the following financial statement line items in the Company’s Consolidated Statements of Operations for the years ended September 30, 2017 and 2016, its Consolidated Balance Sheets as of September 30, 2017 and 2016, and its Consolidated Statements of Cash Flows for the years ended September 30, 2017 and 2016 were adjusted: Consolidated Statements of Operations Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions, except per share amounts) Cost of sales $ 2,065 $ (11 ) $ 2,054 $ 1,833 $ 3 $ 1,836 Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies $ 288 $ 11 $ 299 $ 194 $ (3 ) $ 191 (Provision) benefit for income taxes $ (29 ) $ (4 ) $ (33 ) $ (34 ) $ 1 $ (33 ) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Net income (loss) attributable to Cabot Corporation $ 241 $ 7 $ 248 $ 149 $ (2 ) $ 147 Earnings per common share: Basic $ 3.83 $ 0.11 $ 3.94 $ 2.38 $ (0.04 ) $ 2.34 Diluted $ 3.80 $ 0.11 $ 3.91 $ 2.36 $ (0.04 ) $ 2.32 Consolidated Balance Sheets September 30, 2017 September 30, 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) (In millions) Inventories $ 396 $ 37 $ 433 $ 342 $ 26 $ 368 Deferred income taxes (assets) $ 250 $ (13 ) $ 237 $ 216 $ (9 ) $ 207 Retained earnings $ 1,683 $ 24 $ 1,707 $ 1,544 $ 17 $ 1,561 Consolidated Statements of Cash Flows Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Deferred tax provision (benefit) $ (35 ) $ 4 $ (31 ) $ (35 ) $ (1 ) $ (36 ) Inventories $ (50 ) $ (11 ) $ (61 ) $ 51 $ 3 $ 54 If the Company had continued to account for its U.S. carbon black inventories under LIFO, there would have been an increase in Cost of Sales of $15 million, an additional benefit to the (Provision) benefit for income taxes of $4 million, an impact to the Net income (loss) attributable to Cabot Corporation of $11 million, and a decrease of $ 0.19 52 17 35 The cost of Specialty Fluids inventories that are classified as inventory and assets held for rent is determined using the average cost method. The cost of all other inventories is determined using the FIFO method. Cabot periodically reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. 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. |
Investments | Investments The Company has investments in equity affiliates and marketable securities. As circumstances warrant, all investments are subject to periodic impairment reviews. Unless consolidation is required, investments in equity affiliates, where Cabot generally owns between 20% and 50% of the affiliate, are accounted for using the equity method. Cabot records its share of the equity affiliate’s results of operations based on its percentage of ownership of the affiliate. Dividends declared from equity affiliates are a return on investment and are recorded as a reduction to the equity investment value. At September 30, 2018 and 2017, Cabot had equity affiliate investments of $ 52 |
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. The Company uses assumptions and estimates in determining the fair value of assets acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected cash flows are discounted to determine the fair value of the assets at the dates of acquisition. The Company acquired Tech Blend in November 2017, which included separately identifiable intangible assets of $29 million as part of the purchase price allocation as discussed in Note C. Definite-lived intangible assets, which are comprised of trademarks, customer relationships and developed technologies, are amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. The Company recognized an impairment on intangible assets associated with the Purification Solutions business in second fiscal quarter of 2018, which is discussed in Note F. 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. Reinforcement Materials, and the Fumed Metal Oxides and Specialty Compounds businesses within Performance Chemicals, which are considered separate reporting units, carried the Company’s goodwill balances as of May 31, 2018. The Purification Solutions reporting unit had no remaining goodwill balance subsequent to the goodwill impairment charge recorded in the second quarter of fiscal 2018. As part of the Tech Blend acquisition, goodwill of $33 million was generated and is reflected in the Specialty Compounds 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. Refer to Note F and Note G for details on the Purification Solutions goodwill impairment test and the resulting charge recorded in the second quarter of fiscal 2018, and the results of the Company’s annual goodwill impairment test performed as of May 31, 2018, respectively. |
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. In the second quarter of fiscal 2018, the Company determined that the long-lived asset group of Purification Solutions was not fully recoverable, and accordingly, the Company recorded an impairment charge for the carrying value in excess of the fair value of the asset group, as described in Note F. |
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 of the related assets. The depreciable lives for buildings, machinery and equipment, and other fixed assets are generally between twenty and twenty-five years, ten and twenty-five years, and three and twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the Consolidated Statements 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. Non-cash capital expenditures for significant projects was approximately $29 million and $7 million for the years ended September 30, 2018 and 2017, respectively, and was included in Accounts payable and accrued liabilities in the Consolidated Balance Sheets. Cabot capitalizes interest costs when they are part of the historical cost of acquiring and constructing certain assets that require a period of time to prepare for their intended use. During fiscal 2018, 2017 and 2016, Cabot capitalized $2 million, $1 million and $1 million of interest costs, respectively. These amounts are amortized over the lives of the related assets when they are placed in service. |
Assets Held for Rent | Assets Held for Rent Assets held for rent represent Specialty Fluids cesium formate product that is available to customers in the normal course of business. At both September 30, 2018 and 2017, $5 million of cesium ore was included in assets held for rent, a majority of which will be converted into cesium formate. Assets held for rent are stated at average cost. |
Asset Retirement Obligations | Asset Retirement Obligations Cabot estimates incremental costs for special handling, removal and disposal of materials that may or will give rise to conditional asset retirement obligations (“ARO”) and then discounts the expected costs back to the current year using a credit adjusted risk free rate. Cabot recognizes ARO liabilities and costs when the timing and/or settlement can be reasonably estimated. In certain instances, Cabot has not recorded a reserve for AROs because of the indefinite life of certain assets. The ARO reserves were |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the majority of Cabot’s foreign subsidiaries is the local currency in which the subsidiary operates. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet dates. Income and expense items are translated at average monthly exchange rates during the year. Unrealized currency translation adjustments are included as a separate component of Accumulated other comprehensive income (loss) (“AOCI”) within stockholders’ equity. Realized and unrealized foreign currency gains and losses arising from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings with the exception of (i) intercompany transactions considered to be of a long-term investment nature; (ii) income taxes upon future repatriation of unremitted earnings from non-U.S. subsidiaries that are not indefinitely reinvested; and (iii) foreign currency borrowings designated as net investment hedges. Gains or losses arising from these transactions are included as a component of Other comprehensive income (loss). In fiscal 2018, 2017 and 2016, net foreign currency transaction losses of $ 4 Effective July 1, 2018, the Company began to account for its wholly-owned Argentina subsidiary as a highly inflationary economy. As a result, the functional currency of the Argentina subsidiary was changed to the U.S. dollar, Cabot’s reporting currency, which is discussed in Note L. |
Share Repurchase | Share Repurchases Periodically, Cabot repurchases shares of the Company’s common stock in the open market or in privately negotiated transactions under the authorization approved by the Board of Directors as discussed in Item 5 under the heading “Issuer Purchases of Equity Securities”. The Company retires the repurchased shares and records the excess of the purchase price over par value to additional paid-in capital (“APIC”) until such amount is reduced to zero and then charges the remainder against retained earnings. |
Financial Instruments | Financial Instruments Cabot’s financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, investments, accounts payable and accrued liabilities, short-term and long-term debt, and derivative instruments. The carrying values of Cabot’s financial instruments approximate fair value with the exception of fixed rate long-term debt, which is recorded at amortized cost. The fair values of the Company’s financial instruments are based on quoted market prices, if such prices are available. In situations where quoted market prices are not available, the Company relies on valuation models to derive fair value. Such valuation takes into account the ability of the financial counterparty to perform and the Company’s own credit risk. Cabot uses derivative financial instruments primarily for purposes of hedging the exposures to fluctuations in foreign currency exchange rates, which exist as part of its on-going business operations. Cabot does not enter into derivative contracts for speculative purposes, nor does it hold or issue any derivative contracts for trading purposes. All derivatives are recognized on the Consolidated Balance Sheets at fair value. Where Cabot has a legal right to offset derivative settlements under a master netting agreement with a counterparty, derivatives with that counterparty are presented on a net basis. The changes in the fair value of derivatives are recorded in either earnings or AOCI, depending on whether or not the instrument is designated as part of a hedge transaction and, if designated as part of a hedge transaction, the type of hedge transaction. 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 hedged item. The ineffective portion of all hedges is recognized in earnings during the period in which the ineffectiveness occurs. In accordance with Cabot’s risk management strategy, the Company may enter into certain derivative instruments that may not be designated as hedges for hedge accounting purposes. Although these derivatives are not designated as hedges, the Company believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The Company records in earnings the gains or losses from changes in the fair value of derivative instruments that are not designated as hedges. Cash movements associated with these instruments are presented in the Consolidated Statements of Cash Flows as Cash Flows from Operating Activities because the derivatives are designed to mitigate risk to the Company’s cash flow from operations. The cash flows related to the principal amount of outstanding debt instruments are presented in the Cash Flows from Financing Activities section of the Consolidated Statements of Cash Flows. |
Revenue Recognition | Revenue Recognition 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: Years Ended September 30 2018 2017 2016 Reinforcement Materials 57 % 53 % 48 % Performance Chemicals 33 % 35 % 37 % Purification Solutions 9 % 11 % 13 % Specialty Fluids 1 % 1 % 2 % Cabot derives the substantial majority of its revenues from the sale of products in its Reinforcement Materials, Performance Chemicals, and Purification Solutions segments. Revenue from these products is typically recognized when the product is shipped and title and risk of loss have passed to the customer. The Company offers cash discounts and volume rebates to certain of its customers as sales incentives. The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized and are estimated based on historical experience and contractual obligations. Cabot periodically reviews the assumptions underlying its estimates of discounts and volume rebates and adjusts its revenues accordingly. Revenue in Specialty Fluids arises primarily from the rental of cesium formate. This revenue is recognized throughout the rental period based on the contracted rental terms. Customers are also billed and revenue is recognized, typically at the end of the job, for cesium formate product that is not returned. The Company also generates revenues from cesium formate sold outside of the rental process and from the sale of fine cesium chemicals. This revenue is recognized upon delivery of the product. |
Cost of Sales | Cost of Sales Cost of sales consists of the cost of raw and packaging materials, direct manufacturing costs, depreciation, internal transfer costs, inspection costs, inbound and outbound freight and shipping and handling costs, plant purchasing and receiving costs and other overhead expenses necessary to manufacture the products. |
Accounts and Notes Receivable | Accounts and Notes Receivable Trade receivables are recorded at the invoiced amount and generally do not bear interest. Trade receivables in China may at certain times be settled with the receipt of bank issued non-interest bearing notes. These notes totaled 32 million Chinese Renminbi (“RMB”) ($5 million) and 73 million RMB ($11 million) as of September 30, 2018 and 2017, respectively, and are included in Accounts and notes receivable on the Company’s Consolidated Balance Sheets. Cabot periodically sells a portion of these bank notes and other customer receivables at a discount and such sales are accounted for as asset sales. The Company does not have any continuing involvement with these notes or other customer receivables after the sale. The difference between the proceeds from the sale and the carrying value of these assets is recognized as a loss on the sale of receivables and is included in Other income (expense) in the accompanying Consolidated Statements of Operations. During fiscal 2018, 2017 and 2016, the Company recorded charges of $3 million, $2 million, and $1 million, respectively, for the sale of these assets. Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts, the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material changes in the allowance for any of the years presented. There is no material off-balance sheet credit exposure related to customer receivable balances. |
Stock-Based Compensation | Stock-based Compensation Cabot recognizes compensation expense for stock-based awards granted to employees using the fair value method. Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as expense over the service period, which generally represents the vesting period, and includes an estimate of what level of performance the Company will achieve for Cabot’s performance-based stock awards. Cabot calculates the fair value of its stock options using the Black-Scholes option pricing model. The fair value of restricted stock units is determined using the closing price of Cabot stock on the day of the grant. |
Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses consist of salaries and fringe benefits of sales and office personnel, general office expenses and other expenses not directly related to manufacturing operations. |
Research and Technical Expenses | Research and Technical Expenses Research and technical expenses include salaries, equipment and material expenditures, and contractor fees and are expensed as incurred. |
Income Taxes | Income Taxes Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Cabot has designated to be indefinitely reinvested. Cabot records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon ultimate settlement. This analysis presumes the taxing authorities’ full knowledge of the positions taken and all relevant facts, but does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and includes such charges in its income tax provision in the Consolidated Statements of Operations. |
Environmental Costs | Environmental Costs Cabot accrues environmental costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. When a single liability amount cannot be reasonably estimated, but a range can be reasonably estimated, Cabot accrues the amount that reflects the best estimate within that range or the low end of the range if no estimate within the range is better. The amount accrued reflects Cabot’s assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number and financial viability of other potentially responsible parties. Cabot does not reduce its estimated liability for possible recoveries from insurance carriers. Proceeds from insurance carriers are recorded when realized by either the receipt of cash or a contractual agreement. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“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 Company adopted the standard on October 1, 2017. The following guidance was updated under the new standard, and its impact to Cabot is described below: • When accounting for forfeitures the Company may elect to estimate the number of forfeitures to be recognized over the term of an award, which was also permitted under the previous guidance, or account for forfeitures as they occur. The Company elected to modify its accounting policy and account for forfeitures as they occur. The Company applied the accounting change on a modified retrospective basis, which resulted in a cumulative-effect charge of less than $1 million to Retained earnings as of October 1, 2017. • Excess tax benefits or deficiencies related to stock compensation that were previously recorded to APIC are now recognized as a discrete tax benefit or expense in (Provision) benefit for income taxes within the Consolidated Statements of Operations. The impact on the (Provision) benefit for income taxes was a discrete tax benefit of $2 million during fiscal 2018. • Excess tax benefits are no longer reclassified out of cash flows from operating activities to financing activities in the Consolidated Statements of Cash Flows. The Company elected to apply this cash flow presentation requirement retrospectively, which resulted in the reclassification of $8 million of tax benefit from share-based compensation awards from cash flows from financing activities to cash flows from operating activities in the Consolidated Statements of Cash Flows for fiscal 2017. There was no impact to the Consolidated Statements of Cash Flows for fiscal 2016 as a result of applying this standard retrospectively. • Cash paid by an employer when directly withholding shares for tax withholding purposes are required to be classified as a financing activity in the Consolidated Statements of Cash Flows. This method of presentation is consistent with the Company's historical presentation. In January 2017, the FASB issued a new standard that amends the definition of a business. The standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”) should be accounted for as an asset rather than a business. In order to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The guidance also removes the evaluation of whether a market participant could replace missing elements. The Company adopted the standard on October 1, 2017. The adoption of this standard did not impact the Company’s consolidated financial statements. In August 2017, the FASB issued a new standard that amends the hedge accounting recognition and presentation requirements under hedge accounting. The new standard will make more financial and nonfinancial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements, and simplifies how companies assess effectiveness. The Company adopted the standard on October 1, 2017. The adoption of this standard did not impact the Company’s consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued a new standard that amends the existing accounting standards for revenue recognition. The standard requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. This standard is applicable for fiscal years beginning after December 15, 2017. The Company has completed its assessment of the new standard, which included reviewing a sample of contracts across the Company’s four business segments. Based on this assessment, the adoption of this standard will not have a material impact on how the Company recognizes revenue. The Company will implement the updates that are necessary to its revenue recognition policy, internal controls, processes and financial statement disclosures. The Company will adopt this standard on October 1, 2018 and expects to apply a modified retrospective approach. 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 has established a project plan and implementation team which will analyze the current portfolio of leases to determine the impact of adopting this new standard. The implementation team will also be responsible for evaluating and designing the necessary changes to the Company’s business processes, lease policies, systems and internal controls to support recognition and disclosure under the new guidance. In August 2016, the FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows such as distributions received from equity method investees, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies. 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 will adopt this standard on October 1, 2018. The adoption of this standard is not expected to materially impact 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 costs. 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 will adopt this standard on October 1, 2018. The adoption of this standard is not expected to materially impact the Company’s consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Change Retrospectively to Prior Periods Financial Statement Line Items | The Company applied this change retrospectively to all prior periods presented. This change resulted in a $19 million increase in retained earnings as of October 1, 2015, from $1,478 million to $1,497 million. In addition, the following financial statement line items in the Company’s Consolidated Statements of Operations for the years ended September 30, 2017 and 2016, its Consolidated Balance Sheets as of September 30, 2017 and 2016, and its Consolidated Statements of Cash Flows for the years ended September 30, 2017 and 2016 were adjusted: Consolidated Statements of Operations Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions, except per share amounts) Cost of sales $ 2,065 $ (11 ) $ 2,054 $ 1,833 $ 3 $ 1,836 Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies $ 288 $ 11 $ 299 $ 194 $ (3 ) $ 191 (Provision) benefit for income taxes $ (29 ) $ (4 ) $ (33 ) $ (34 ) $ 1 $ (33 ) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Net income (loss) attributable to Cabot Corporation $ 241 $ 7 $ 248 $ 149 $ (2 ) $ 147 Earnings per common share: Basic $ 3.83 $ 0.11 $ 3.94 $ 2.38 $ (0.04 ) $ 2.34 Diluted $ 3.80 $ 0.11 $ 3.91 $ 2.36 $ (0.04 ) $ 2.32 Consolidated Balance Sheets September 30, 2017 September 30, 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) (In millions) Inventories $ 396 $ 37 $ 433 $ 342 $ 26 $ 368 Deferred income taxes (assets) $ 250 $ (13 ) $ 237 $ 216 $ (9 ) $ 207 Retained earnings $ 1,683 $ 24 $ 1,707 $ 1,544 $ 17 $ 1,561 Consolidated Statements of Cash Flows Years Ended September 30 2017 2016 As Originally Reported Effect of Change As Adjusted As Originally Reported Effect of Change As Adjusted (In millions) Net income (loss) $ 266 $ 7 $ 273 $ 164 $ (2 ) $ 162 Deferred tax provision (benefit) $ (35 ) $ 4 $ (31 ) $ (35 ) $ (1 ) $ (36 ) Inventories $ (50 ) $ (11 ) $ (61 ) $ 51 $ 3 $ 54 |
Segment Reporting Revenue Percentage | The following table shows the relative size of the revenue recognized in each of the Company’s reportable segments: Years Ended September 30 2018 2017 2016 Reinforcement Materials 57 % 53 % 48 % Performance Chemicals 33 % 35 % 37 % Purification Solutions 9 % 11 % 13 % Specialty Fluids 1 % 1 % 2 % |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Tech Blend [Member] | |
Preliminary Purchase Price Estimates Fair Value of Assets Acquired and Liabilities Assumed | The allocation of the purchase price set forth below was based on estimates of the fair value of assets acquired and liabilities assumed. (In millions) Assets Cash $ 1 Accounts receivable 5 Inventories 3 Property, plant and equipment 7 Intangible assets 29 Goodwill 33 Total assets acquired 78 Liabilities Current liabilities (3 ) Deferred tax liabilities (10 ) Total liabilities assumed (13 ) Cash consideration paid $ 65 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Company's Inventories | Inventories, net of obsolete, unmarketable and slow moving reserves, are as follows: September 30 2018 2017 (In millions) Raw materials $ 129 $ 93 Work in process 3 2 Finished goods 329 293 Other 50 45 Total $ 511 $ 433 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment consists of the following: September 30 2018 2017 (In millions) Land and land improvements $ 142 $ 151 Buildings 514 531 Machinery and equipment 2,373 2,527 Other 249 243 Construction in progress 242 150 Total property, plant and equipment 3,520 3,602 Less: Accumulated depreciation (2,224 ) (2,297 ) Net property, plant and equipment $ 1,296 $ 1,305 |
Purification Solutions Goodwi_2
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment Charges and Associated Deferred Tax Benefit | During the second quarter of fiscal 2018, the Company recorded impairment charges relating to the goodwill and long-lived assets of the Purification Solutions reporting unit, and an associated deferred tax benefit, in the Consolidated Statements of Operations as follows: Three Months Ended March 31, 2018 (In millions) Purification Solutions goodwill impairment charge $ 92 Purification Solutions long-lived assets impairment charge 162 Benefit for income taxes (30 ) Impairment charges, after tax $ 224 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Balances | The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended September 30, 2018 are as follows Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Balance at September 30, 2017 $ 53 $ 9 $ 92 $ 154 Goodwill acquired (1) — 33 — 33 Impairment charge (2) — — (92 ) (92 ) Foreign currency impact (1 ) (1 ) — (2 ) Balance at September 30, 2018 $ 52 $ 41 $ — $ 93 (1) (2) Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. Reinforcement Materials Performance Chemicals Purification Solutions Total (In millions) Accumulated impairment losses at September 30, 2017 $ — $ — $ (352 ) $ (352 ) Accumulated impairment losses at September 30, 2018 $ — $ — $ (444 ) $ (444 ) |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: September 30, 2018 September 30, 2017 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives (1) Developed technologies $ 52 $ (2 ) $ 50 $ 49 $ (7 ) $ 42 Trademarks 8 — 8 16 (1 ) 15 Customer relationships 51 (11 ) 40 94 (14 ) 80 Total intangible assets $ 111 $ (13 ) $ 98 $ 159 $ (22 ) $ 137 (1) Refer to Note F for intangible assets impairment charges recorded in the second fiscal quarter of 2018. |
Accounts Payable, Accrued Lia_2
Accounts Payable, Accrued Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Payables And Accruals [Abstract] | |
Components of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities included in current liabilities consist of the following: September 30 2018 2017 (In millions) Accounts payable $ 446 $ 339 Accrued employee compensation 70 51 Other accrued liabilities 97 67 Total $ 613 $ 457 |
Components of Other Long-Term Liabilities | Other long-term liabilities consist of the following: September 30 2018 2017 (In millions) Employee benefit plan liabilities $ 118 $ 122 Non-current tax liabilities 19 19 Other accrued liabilities 115 104 Total $ 252 $ 245 |
Debt and Other Obligations (Tab
Debt and Other Obligations (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Obligations | The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized below: September 30 2018 2017 (In millions) Variable Rate Debt: Revolving Credit Facility, expires fiscal 2023 $ — $ — Revolving Credit Facility - Canada, expires fiscal 2021 90 — Total variable rate debt 90 — Fixed Rate Debt: 2.55% Notes matured fiscal 2018 — 250 3.7% Notes due fiscal 2022 350 350 3.4% Notes due fiscal 2026 250 250 Medium Term Notes: Notes due fiscal 2019, 7.42% 30 30 Notes due fiscal 2022, 8.34% — 8.47% 15 15 Notes due fiscal 2028, 6.57% — 7.28% 8 8 Total Medium Term Notes 53 53 Chinese Renminbi Debt, due fiscal 2018, 4.75% — 5 Chinese Renminbi Debt, due fiscal 2019, 4.35% 4 — Total fixed rate debt 657 908 Capital lease obligations, due through fiscal 2033 11 13 Unamortized debt issuance costs and debt discount (4 ) (4 ) Total debt 754 917 Less current portion of long-term debt (35 ) (256 ) Total long-term debt $ 719 $ 661 |
Schedule of Future Years Payment | The aggregate principal amounts of long-term debt and capital lease obligations due in each of the five years from fiscal 2019 through 2023 and thereafter are as follows: Years Ending September 30 Principal Payments on Long-Term Debt Payments on Capital Lease Obligations Total (In millions) 2019 $ 34 $ 1 $ 35 2020 — 2 2 2021 90 2 92 2022 365 2 367 2023 — 2 2 Thereafter 258 8 266 Less: Interest — (6 ) (6 ) Total $ 747 $ 11 $ 758 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and 2017 to manage foreign currency risk. Notional Amount Description Borrowing September 30, 2018 September 30, 2017 Hedge Designation Cross Currency Swaps 3.4% Notes USD 250 million swapped to EUR 223 million USD 250 million swapped to EUR 223 million Net investment Forward Foreign Currency Contracts (1) N/A USD 18 million USD 5 million No designation (1) |
Summary Impact of Cross-currency Swaps to AOCI and Consolidated Statements of Operations | The following table summarizes the impact of the cross-currency swaps to AOCI and the Consolidated Statements of Operations: Years Ended September 30 2018 2017 2016 2018 2017 2016 2018 2017 2016 Description Gain/(Loss) Recognized in AOCI (Gain)/Loss Reclassified from AOCI into Interest Expense in the Consolidated Statements of Operations (Gain)/Loss Recognized in Interest Expense in the Consolidated Statements of Operations (Amount Excluded from Effectiveness Testing) (In millions) Cross-currency swaps (1) $ (2 ) $ (10 ) $ 1 $ (5 ) $ — $ — $ 2 $ — $ — (1) As noted above, effective October 1, 2017, the Company changed the method it uses to assess effectiveness from the method based on changes in forward exchange rates, in which all gains/losses were recognized in AOCI, to the method based on changes in spot exchange rates. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Change in Benefit Obligations and Change in Plan Assets | The following provides information about projected benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans: Years Ended September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Change in Benefit Obligations: Benefit obligation at beginning of year $ 160 $ 376 $ 175 $ 400 $ 33 $ 20 $ 37 $ 20 Service cost 1 9 1 10 — — — — Interest cost 5 7 4 6 1 1 1 1 Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (7 ) — 16 — (1 ) — — (Gain) Loss from changes in actuarial assumptions and plan experience (10 ) 2 (7 ) (42 ) (2 ) — (2 ) (1 ) Benefits paid (7 ) (13 ) (7 ) (12 ) (3 ) (1 ) (3 ) — Settlements or curtailments (5 ) (2 ) (5 ) (3 ) — — — — Other (1 ) (1 ) (1 ) (1 ) — — — — Benefit obligation at end of year $ 143 $ 373 $ 160 $ 376 $ 29 $ 19 $ 33 $ 20 Years Ended September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Change in Plan Assets: Fair value of plan assets at beginning of year $ 156 $ 318 $ 157 $ 305 $ — $ — $ — $ — Actual return on plan assets 4 17 12 6 — — — — Employer contribution 1 9 1 9 3 1 3 — Plan participants’ contribution — 2 — 2 — — — — Foreign currency exchange rate changes — (7 ) — 12 — — — — Benefits paid (7 ) (13 ) (7 ) (12 ) (3 ) (1 ) (3 ) — Settlements (4 ) (2 ) (6 ) (3 ) — — — — Expenses paid from assets (1 ) (1 ) (1 ) (1 ) — — — — Fair value of plan assets at end of year $ 149 $ 323 $ 156 $ 318 $ — $ — $ — $ — Funded status $ 6 $ (50 ) $ (4 ) $ (58 ) $ (29 ) $ (19 ) $ (33 ) $ (20 ) Recognized asset (liability) $ 6 $ (50 ) $ (4 ) $ (58 ) $ (29 ) $ (19 ) $ (33 ) $ (20 ) |
Assumptions Used to Determine Pension Benefit Obligations and Periodic Benefit Costs, Postretirement Benefit Obligations and Net Costs | Pension Assumptions and Strategy The following assumptions were used to determine the pension benefit obligations and periodic benefit costs as of and for the years ended September 30: 2018 2017 2016 Pension Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.2 % 2.4 % 3.6 % 2.4 % 3.4 % 1.8 % Rate of increase in compensation N/A 2.7 % N/A 2.7 % N/A 2.8 % Actuarial assumptions used to determine net periodic benefit cost during the year: Discount rate - benefit obligation 3.6 % 2.4 % 3.4 % 1.8 % 4.2 % 2.9 % Discount rate - service cost N/A 2.4 % N/A 1.8 % N/A 2.8 % Discount rate - interest cost 3.0 % 2.0 % 2.7 % 1.5 % 3.3 % 2.4 % Expected long-term rate of return on plan assets 6.8 % 4.9 % 6.8 % 4.7 % 7.5 % 5.1 % Rate of increase in compensation N/A 2.7 % N/A 2.8 % N/A 2.8 % Postretirement Assumptions and Strategy The following assumptions were used to determine the postretirement benefit obligations and net costs as of and for the years ended September 30: 2018 2017 2016 Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign Actuarial assumptions as of the year-end measurement date: Discount rate 4.1 % 3.2 % 3.4 % 3.1 % 3.0 % 2.8 % Initial health care cost trend rate 7.0 % 7.0 % 7.0 % 7.1 % 7.0 % 6.1 % Actuarial assumptions used to determine net cost during the year: Discount rate - benefit obligation 3.4 % 3.1 % 3.0 % 2.8 % 3.7 % 3.9 % Discount rate - service cost 3.1 % 3.6 % 2.6 % 3.2 % 3.4 % 4.1 % Discount rate - interest cost 2.8 % 3.0 % 2.4 % 2.6 % 2.8 % 3.7 % Initial health care cost trend rate 7.0 % 7.1 % 7.0 % 6.1 % 6.5 % 6.8 % |
Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the Consolidated Balance Sheets at September 30, 2018 and 2017 related to the Company's defined benefit pension and postretirement benefit plans were as follows: September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Noncurrent assets $ 10 $ 21 $ 1 $ 12 $ — $ — $ — $ — Current liabilities $ — $ (1 ) $ (1 ) $ (1 ) $ (3 ) $ (1 ) $ (3 ) $ (1 ) Noncurrent liabilities $ (4 ) $ (70 ) $ (4 ) $ (69 ) $ (26 ) $ (18 ) $ (30 ) $ (19 ) |
Amounts Recognized in AOCI | Amounts recognized in AOCI at September 30, 2018 and 2017 related to the Company's defined benefit pension and postretirement benefit plans were as follows: September 30 2018 2017 2018 2017 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Net actuarial (gain) loss $ (1 ) $ 49 $ 3 $ 52 $ (7 ) $ 4 $ (6 ) $ 5 Net prior service credit — (1 ) — (1 ) (2 ) — (5 ) — Balance in accumulated other comprehensive income (loss), pretax $ (1 ) $ 48 $ 3 $ 51 $ (9 ) $ 4 $ (11 ) $ 5 |
Estimated Future Benefit Payments | Estimated Future Benefit Payments The Company expects that the following benefit payments will be made to plan participants in the years from 2019 to 2028: Pension Benefits Postretirement Benefits Years Ending September 30 U.S. Foreign U.S. Foreign (In millions) 2019 $ 12 $ 14 $ 3 $ 1 2020 $ 11 $ 13 $ 3 $ 1 2021 $ 10 $ 17 $ 3 $ 1 2022 $ 10 $ 15 $ 3 $ 1 2023 $ 10 $ 15 $ 3 $ 1 2024 - 2028 $ 48 $ 88 $ 11 $ 4 |
Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs | Net periodic defined benefit pension and other postretirement benefit costs include the following components: Years Ended September 30 2018 2017 2016 2018 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Service cost $ 1 $ 9 $ 1 $ 10 $ 1 $ 8 $ — $ — $ — $ — $ — $ — Interest cost 5 7 4 6 4 8 1 1 1 1 1 1 Expected return on plan assets (10 ) (15 ) (9 ) (14 ) (10 ) (14 ) — — — — — — Amortization of prior service cost — — — — — — (3 ) — (3 ) — (3 ) — Net losses — 3 — 5 — 3 (1 ) — — — — — Settlements or Curtailments cost — — — — — 1 — — — — (1 ) — Net periodic (benefit) cost $ (4 ) $ 4 $ (4 ) $ 7 $ (5 ) $ 6 $ (3 ) $ 1 $ (2 ) $ 1 $ (3 ) $ 1 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss), Pre-Tax | Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) are as follows: Years Ended September 30 2018 2017 2016 2018 2017 2016 Pension Benefits Postretirement Benefits U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign (In millions) Net (gains) losses $ (4 ) $ — $ (9 ) $ (35 ) $ 7 $ 31 $ (2 ) $ (1 ) $ (3 ) $ (1 ) $ 2 $ 5 Prior service (credit) cost — — — — — — — — — — — — Amortization of prior service credit — — — — — — 3 — 3 — 3 — Amortization of prior unrecognized loss — (3 ) — (5 ) — (3 ) 1 — — — — — Other — — — — — (1 ) — — — — 1 — Net changes recognized in Total other comprehensive (income) loss (1) $ (4 ) $ (3 ) $ (9 ) $ (40 ) $ 7 $ 27 $ 2 $ (1 ) $ — $ (1 ) $ 6 $ 5 (1) The tax impact on pension and other postretirement benefit liability adjustments arising during the period was a tax provision of $1 million, tax provision of $7 million, and tax benefit of $7 million for fiscal years 2018, 2017, and 2016, respectively. |
Sensitivity Analysis | A one percentage point change in the 2018 assumed health care cost trend rate would have an immaterial impact to the aggregate of the service and interest cost components of the net periodic postretirement benefit and would have the following effect on the postretirement benefit obligation: 1-Percentage-Point Increase Decrease U.S. Foreign U.S. Foreign (In millions) Effect on postretirement benefit obligation $ — $ 3 $ — $ (3 ) |
Defined Benefit Pension Plans Weighted-Average Asset Allocations | The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2018 and 2017 by asset category, are as follows: September 30 2018 2017 Pension Assets U.S. Foreign U.S. Foreign Equity securities 40 % 39 % 48 % 39 % Debt securities 60 % 53 % 5 % 53 % Cash and other securities (1) — % 8 % 47 % 8 % Total 100 % 100 % 100 % 100 % (1) |
Fair Value of Pension Plan Assets by Asset Category | The fair value of the Company’s pension plan assets at September 30, 2018 and 2017 by asset category is as follows: September 30 2018 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Total (In millions) Cash $ 3 $ — $ 3 $ 1 $ — $ 1 Direct investments: U.S government bonds 17 13 30 — — — U.S. corporate bonds — 74 74 — — — Total direct investments 17 87 104 — — — Investment funds: Equity funds (1) 44 126 170 75 124 199 Fixed income funds (2) — 169 169 8 168 176 Real estate funds (3) — 9 9 — 9 9 Cash equivalent funds 1 — 1 74 — 74 Total investment funds 45 304 349 157 301 458 Alternative investments: Insurance contracts (4) — 16 16 — 15 15 Total alternative investments — 16 16 — 15 15 Total pension plan assets $ 65 $ 407 $ 472 $ 158 $ 316 $ 474 (1) The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. (2) The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. (3) The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. (4) Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expenses | The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of Operations: Years Ended September 30 2018 2017 2016 (In millions) Cost of sales $ 2 $ 1 $ 1 Selling and administrative expenses 19 14 15 Research and technical expenses 1 1 1 Stock-based compensation expense 22 16 17 Income tax benefit (6 ) (6 ) (7 ) Net stock-based compensation expense $ 16 $ 10 $ 10 |
Equity Incentive Plan Activity | The following table summarizes the total stock option and restricted stock unit activity in the equity incentive plans for fiscal 2018: Stock Options Restricted Stock Units Total Options (4) Weighted Average Exercise Price Weighted Average Grant Date Fair Value Restricted Stock Units (1) Weighted Average Grant Date Fair Value (Shares in thousands) Outstanding at September 30, 2017 1,144 $ 43.76 $ 13.40 876 $ 45.43 Granted 265 $ 62.20 $ 15.21 263 $ 62.18 Performance-based adjustment (2) — $ — $ — 83 $ 50.54 Exercised / Vested (528 ) $ 41.39 $ 13.61 (195 ) $ 45.81 Cancelled / Forfeited — $ — $ — (42 ) $ 47.54 Outstanding at September 30, 2018 881 $ 50.73 $ 13.82 985 $ 50.16 Exercisable at September 30, 2018 334 $ 44.61 Vested and expected to vest (3) 854 $ 50.52 (1) The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. (2) Represents the net incremental number of shares issuable upon vesting of performance-based restricted stock units based upon the achievement of the annual financial performance metrics for fiscal 2018. (3) Stock options vested and expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 7.36 (4) Unvested stock options were approximately 546,000 and 490,000 at September 30, 2018 and 2017 and their weighted average grant date fair values were $54.48 and $46.68, respectively. |
Stock Options Outstanding and Vested Options | The following table summarizes information related to the outstanding and vested options on September 30, 2018: Total Options Outstanding Exercisable Options Vested and Expected to Vest Aggregate Intrinsic Value (in millions of dollars) $ 11 $ 6 $ 10 Weighted Average Remaining Contractual Term (in years) 7.20 6.17 7.36 |
Weighted-Average Assumptions | The fair values on the grant date were calculated using the following weighted-average assumptions: Years Ended September 30 2018 2017 2016 Expected stock price volatility 28 % 32 % 33 % Risk free interest rate 2.2 % 1.8 % 2.0 % Expected life of options (years) 6 6 6 Expected annual dividends per year $ 1.26 $ 1.20 $ 1.20 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Restructuring And Related Activities [Abstract] | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows: Years Ended September 30 2018 2017 2016 (In millions) Cost of sales $ (31 ) $ 2 $ 33 Selling and administrative expenses 1 1 9 Research and development expenses — — 5 Total $ (30 ) $ 3 $ 47 |
Restructuring Activities and Related Reserves | Details of all restructuring activities and the related reserves for fiscal 2016, 2017, and 2018 were as follows: Severance and Employee Benefits Environmental Remediation and Decommissioning Activities Non-Cash Asset Impairment and Accelerated Depreciation Asset Sales Other Total (In millions) Reserve at September 30, 2015 $ 5 $ 2 $ — $ — $ 2 $ 9 Charges (gain) 28 — 23 (9 ) 5 47 Costs charged against assets — — (23 ) (7 ) — (30 ) Cash (paid) received (30 ) — — 16 (7 ) (21 ) Foreign currency translation adjustment — — — — — — Reserve at September 30, 2016 3 2 — — — 5 Charges (gain) 1 1 — — 1 3 Costs charged against liabilities — — — — 1 1 Cash paid (3 ) (1 ) — — (2 ) (6 ) Foreign currency translation adjustment — — — — — — Reserve at September 30, 2017 1 2 — — — 3 Charges (gain) 2 3 1 (38 ) 2 (30 ) Costs charged against assets — — (1 ) (1 ) — (2 ) Cash (paid) received (2 ) (1 ) — 39 (2 ) 34 Foreign currency translation adjustment — — — — — — Reserve at September 30, 2018 $ 1 $ 4 $ — $ — $ — $ 5 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, are as follows for fiscal 2017 and 2018: Currency Translation Adjustment Unrealized Gains on Investment Pension and Other Postretirement Benefit Liability Adjustment Total (In millions) Balance at September 30, 2016 attributable to Cabot Corporation $ (227 ) $ 2 $ (100 ) $ (325 ) Other comprehensive income (loss) 25 — 41 66 Amounts reclassified from AOCI — — 2 2 Less: Other comprehensive income (loss) attributable to noncontrolling interests 2 — — 2 Balance at September 30, 2017 attributable to Cabot Corporation (204 ) 2 (57 ) (259 ) Other comprehensive income (loss) before reclassifications (64 ) (1 ) 6 (59 ) Amounts reclassified from AOCI (2 ) — (1 ) (3 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (4 ) — — (4 ) Balance at September 30, 2018 attributable to Cabot Corporation $ (266 ) $ 1 $ (52 ) $ (317 ) |
Amounts Reclassified Out of AOCI | The amounts reclassified out of AOCI and into the Consolidated Statements of Operations for the fiscal years ended September 30, 2018, 2017 and 2016 are as follows: Affected Line Item in the Consolidated Years Ended September 30 Statements of Operations 2018 2017 2016 (In Millions) Derivatives: net investment hedges (Gains) losses reclassified to interest expense Interest expense $ (5 ) $ — $ — (Gains) losses excluded from effectiveness testing and amortized to interest expense Interest expense 2 — — Pension and other postretirement benefit liability adjustment Amortization of actuarial losses (gains) Net Periodic Benefit Cost - see Note M for details 2 5 3 Amortization of prior service (credit) cost Net Periodic Benefit Cost - see Note M for details (3 ) (3 ) (3 ) Total before tax (4 ) 2 — Tax impact Provision (benefit) for income taxes 1 — — Total after tax $ (3 ) $ 2 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
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: Years Ended September 30 2018 2017 2016 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ (113 ) $ 248 $ 147 Less: Dividends and dividend equivalents to participating securities 1 — — Less: Undistributed earnings allocated to participating securities (1) — 2 1 Earnings (loss) allocated to common shareholders (numerator) $ (114 ) $ 246 $ 146 Weighted average common shares and participating securities outstanding 62.4 62.8 62.9 Less: Participating securities (1) 0.7 0.5 0.5 Adjusted weighted average common shares (denominator) 61.7 62.3 62.4 Per share amounts—basic: Income (loss) from continuing operations attributable to Cabot Corporation $ (1.85 ) $ 3.94 $ 2.32 Income (loss) from discontinued operations — — 0.02 Net income (loss) attributable to Cabot Corporation $ (1.85 ) $ 3.94 $ 2.34 Diluted EPS: Earnings (loss) allocated to common shareholders $ (114 ) $ 246 $ 146 Plus: Earnings (loss) allocated to participating securities — 2 1 Less: Adjusted earnings allocated to participating securities (2) — 2 1 Earnings (loss) available to common shares (numerator) $ (114 ) $ 246 $ 146 Adjusted weighted average common shares outstanding 61.7 62.3 62.4 Effect of dilutive securities: Common shares issuable (3) — 0.4 0.5 Adjusted weighted average common shares (denominator) 61.7 62.7 62.9 Per share amounts—diluted: Income (loss) from continuing operations attributable to Cabot Corporation $ (1.85 ) $ 3.91 $ 2.30 Income (loss) from discontinued operations — — 0.02 Net income (loss) attributable to Cabot Corporation $ (1.85 ) $ 3.91 $ 2.32 (1) Participating securities consist of shares underlying outstanding and achieved performance-based restricted stock units issued during and after fiscal 2017 and all unvested time-based restricted stock units. |
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: Years Ended September 30 2018 2017 2016 (In millions) Calculation of undistributed earnings: Net income (loss) attributable to Cabot Corporation $ (113 ) $ 248 $ 147 Less: Dividends declared on common stock 79 77 65 Less: Dividends and dividend equivalents to participating securities 1 — — Undistributed earnings (loss) $ (193 ) $ 171 $ 82 Allocation of undistributed earnings: Undistributed earnings (loss) allocated to common shareholders $ (193 ) $ 169 $ 81 Undistributed earnings allocated to participating securities — 2 1 Undistributed earnings (loss) $ (193 ) $ 171 $ 82 (2) Undistributed earnings (loss) 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 SERP 401(k) Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based stock unit awards issued before fiscal 2017 under Cabot’s equity incentive plans using the treasury stock method. For fiscal 2018, 2017 and 2016, respectively, 229,220 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Taxes | Income from continuing operations before income taxes and equity in net earnings of affiliated companies was as follows: Years Ended September 30 2018 2017 2016 (In millions) Domestic $ (229 ) $ (8 ) $ (29 ) Foreign 346 307 220 Income from continuing operations before income taxes and equity in earnings of affiliated companies $ 117 $ 299 $ 191 |
Provision (Benefit) for Income Taxes | Tax provision (benefit) for income taxes consisted of the following: Years Ended September 30 2018 2017 2016 (In millions) U.S. federal and state: Current $ 14 $ 5 $ 7 Deferred 114 (26 ) (34 ) Total 128 (21 ) (27 ) Foreign: Current 88 59 62 Deferred (23 ) (5 ) (2 ) Total 65 54 60 Provision (benefit) for income taxes $ 193 $ 33 $ 33 |
Reconciliation Using U.S. Statutory Rate | The provision (benefit) for income taxes differed from the provision for income taxes as calculated using the U.S. statutory rate as follows: Years Ended September 30 2018 2017 2016 (In millions) Computed tax expense at the federal statutory rate $ 29 $ 105 $ 67 Foreign income: Impact of taxation at different rates, repatriation, losses and other 6 (75 ) (37 ) Impact of increase (decrease) in valuation allowance on deferred taxes (16 ) (7 ) 7 Impact of foreign losses for which a current tax benefit is not available — 1 — Impact of non-deductible net currency losses 2 — 2 Impact of the Tax Cuts and Jobs Act of 2017 159 — — U.S. and state benefits from research and experimentation activities (2 ) (2 ) (2 ) Provision (settlement) of unrecognized tax benefits 1 7 1 Benefit from prior currency loss — — (3 ) Impact of goodwill impairment charge 18 — — Permanent differences, net (1 ) 5 — State taxes, net of federal effect (3 ) (1 ) (2 ) Provision (benefit) for income taxes $ 193 $ 33 $ 33 |
Components of Deferred Income Taxes | Significant components of deferred income taxes were as follows: September 30 2018 2017 (In millions) Deferred tax assets: Deferred expenses $ 17 $ 22 Intangible assets 23 43 Inventory 4 1 Other 4 14 Pension and other benefits 45 59 Net operating loss carry-forwards 146 149 Foreign tax credit carry-forwards 12 132 R&D credit carry-forwards 41 38 Other business credit carry-forwards 39 37 Subtotal 331 495 Valuation allowance (169 ) (168 ) Total deferred tax assets $ 162 $ 327 September 30 2018 2017 (In millions) Deferred tax liabilities: Property, plant and equipment $ (56 ) $ (116 ) Unremitted earnings of non-U.S. subsidiaries (14 ) (12 ) Total deferred tax liabilities $ (70 ) $ (128 ) |
Expiration Dates of Carryforwards | The following table provides detail surrounding the expiration dates of these carryforwards: Years Ending September 30 NOLs Credits (In millions) 2019 - 2025 $ 282 $ 15 2026 and thereafter 162 67 Indefinite carry-forwards 324 16 Total $ 768 $ 98 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2018, 2017 and 2016 is as follows: Years Ended September 30 2018 2017 2016 (In millions) Balance at beginning of the year $ 36 $ 30 $ 30 Additions based on tax provisions related to the current year 2 2 2 Additions for tax positions of prior years 1 8 5 Reductions of tax provisions of prior years — (1 ) (3 ) Reductions related to settlements — (2 ) — Reductions from lapse of statute of limitations (2 ) (1 ) (4 ) Balance at end of the year $ 37 $ 36 $ 30 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments under Non-Cancelable Leases | Future minimum rental commitments under non-cancelable leases are as follows: Years Ending September 30 (In millions) 2019 $ 22 2020 13 2021 10 2022 9 2023 9 2024 and thereafter 69 Total future minimum rental commitments $ 132 |
Schedule of Raw Material Purchased under Long Term Purchase Agreements | 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. Raw materials purchased under these agreements by segment for fiscal 2018, 2017 and 2016 are as follows: Years Ended September 30 2018 2017 2016 (In millions) Reinforcement Materials $ 375 $ 281 $ 193 Performance Chemicals 55 43 68 Purification Solutions 11 7 7 Specialty Fluids — — — Total $ 441 $ 331 $ 268 |
Schedule of Components of Purchase Commitments | For these purchase commitments, the amounts included in the table below are based on market prices as of September 30, 2018 which may differ from actual market prices at the time of purchase. Payments Due by Fiscal Year 2019 2020 2021 2022 2023 Thereafter Total (In millions) Reinforcement Materials $ 361 $ 234 $ 142 $ 138 $ 131 $ 1,703 $ 2,709 Performance Chemicals 70 58 57 57 33 465 740 Purification Solutions 8 5 1 — — — 14 Specialty Fluids 15 — — — — — 15 Total $ 454 $ 297 $ 200 $ 195 $ 164 $ 2,168 $ 3,478 |
Financial Information by Segm_2
Financial Information by Segment & Geographic Area (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Performance Segment | The net sales from each of these businesses for fiscal 2018, 2017 and 2016 are as follows: Years Ended September 30 2018 2017 2016 (In millions) Specialty Carbons and Formulations $ 731 $ 623 $ 578 Metal Oxides 297 285 287 Total Performance Chemicals $ 1,028 $ 908 $ 865 |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Years Ended September 30 Reinforcement Materials Performance Chemicals Purification Solutions Specialty Fluids Segment Total Unallocated and Other (1), (3) Consolidated Total (In millions) 2018 Revenues from external customers (2) $ 1,774 $ 1,028 $ 279 $ 45 $ 3,126 $ 116 $ 3,242 Depreciation and amortization $ 70 $ 48 $ 32 $ 2 $ 152 $ (3 ) $ 149 Equity in earnings of affiliated companies $ 1 $ — $ 6 $ — $ 7 $ (5 ) $ 2 Income (loss) from continuing operations before income taxes (3) $ 279 $ 200 $ (7 ) $ 8 $ 480 $ (363 ) $ 117 Assets (4) $ 1,319 $ 919 $ 460 $ 178 $ 2,876 $ 368 $ 3,244 Total expenditures for additions to long-lived assets (5) $ 97 $ 94 $ 16 $ 17 $ 224 $ 5 $ 229 2017 Revenues from external customers (2) $ 1,381 $ 908 $ 281 $ 41 $ 2,611 $ 106 $ 2,717 Depreciation and amortization $ 69 $ 46 $ 39 $ 2 $ 156 $ (1 ) $ 155 Equity in earnings of affiliated companies $ 6 $ — $ 6 $ — $ 12 $ (5 ) $ 7 Income (loss) from continuing operations before income taxes (3) $ 193 $ 201 $ 6 $ 9 $ 409 $ (110 ) $ 299 Assets (4) $ 1,189 $ 708 $ 741 $ 140 $ 2,778 $ 560 $ 3,338 Total expenditures for additions to long-lived assets (5) $ 68 $ 47 $ 19 $ 5 $ 139 $ 8 $ 147 2016 Revenues from external customers (2) $ 1,108 $ 865 $ 290 $ 47 $ 2,310 $ 101 $ 2,411 Depreciation and amortization $ 74 $ 48 $ 39 $ 3 $ 164 $ (3 ) $ 161 Equity in earnings of affiliated companies $ — $ 1 $ 7 $ — $ 8 $ (5 ) $ 3 Income (loss) from continuing operations before income taxes (3) $ 137 $ 225 $ (5 ) $ 13 $ 370 $ (179 ) $ 191 Assets (4) $ 1,093 $ 629 $ 736 $ 139 $ 2,597 $ 455 $ 3,052 Total expenditures for additions to long-lived assets (5) $ 46 $ 33 $ 30 $ 1 $ 110 $ 2 $ 112 (1) Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM. (2) Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below. Years Ended September 30 2018 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 $ 11 $ 11 $ 13 Shipping and handling fees 105 95 88 Total $ 116 $ 106 $ 101 (3) Consolidated Total Income (loss) from continuing operations before income taxes reconciles to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Total Income (loss) from continuing operations before income taxes that are categorized as Unallocated and Other includes: Years Ended September 30 2018 2017 2016 (In millions) Interest expense $ (54 ) $ (53 ) $ (54 ) Certain items: (a) Impairment of goodwill and long-lived assets of Purification Solutions (Note F) (254 ) — — Global restructuring activities (Note O) 30 (3 ) (47 ) Legal and environmental matters and reserves (16 ) 1 (17 ) Inventory reserve adjustment (Note D) (13 ) — — Gains (losses) on sale of investments 10 — — Acquisition and integration-related charges (2 ) — — Executive transition costs (2 ) — (6 ) Non-recurring gain (loss) on foreign exchange — — (11 ) Other certain items (1 ) (1 ) — Total certain items, pre-tax (248 ) (3 ) (81 ) Unallocated corporate costs (b) (61 ) (50 ) (45 ) General unallocated income (expense) (c) 2 3 4 Less: Equity in earnings of affiliated companies, net of tax (d) 2 7 3 Total $ (363 ) $ (110 ) $ (179 ) (a) Certain items are items that management does not consider representative of operating segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, interest income, dividend income, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT. Fiscal 2017 and fiscal 2016 amounts have been recast to reflect the retrospective application of the Company’s election to change its inventory valuation method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method, which resulted in General unallocated income (expense) increasing by $ (d) Equity in earnings of affiliated companies, net of tax is included in Segment EBIT and is removed from Unallocated and other to reconcile to income (loss) from operations before taxes. (4) Unallocated and Other assets includes cash, marketable securities, cost investments, income taxes receivable, deferred taxes, headquarters’ assets, and current and non-current assets held for sale. (5) Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale securities) and property, plant and equipment. |
Revenues from External Customers and Long-Lived Asset Information by Geographic Area | Revenues from external customers and long-lived asset information by geographic area are summarized as follows: Years Ended September 30 U.S. China Other Foreign Countries Consolidated Total (In millions) 2018 Revenues from external customers $ 676 $ 752 $ 1,814 $ 3,242 Net property, plant and equipment $ 493 $ 270 $ 533 $ 1,296 2017 Revenues from external customers $ 645 $ 573 $ 1,499 $ 2,717 Net property, plant and equipment $ 493 $ 261 $ 551 $ 1,305 2016 Revenues from external customers $ 605 $ 482 $ 1,324 $ 2,411 Net property, plant and equipment $ 490 $ 266 $ 534 $ 1,290 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Information (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Unaudited financial results by quarter for fiscal 2018 and 2017 are summarized below: Quarters Ended Year Ended December 31, March 31, June 30, September 30, September 30, 2017 2018 2018 2018 2018 (In millions, except per share amounts) Net sales and other operating revenues $ 720 $ 818 $ 854 $ 850 $ 3,242 Gross profit $ 178 $ 190 $ 200 $ 213 $ 781 Net income (loss) $ (112 ) $ (163 ) $ 99 $ 102 $ (74 ) Net income (loss) attributable to Cabot Corporation $ (122 ) $ (173 ) $ 88 $ 94 $ (113 ) Earnings per common share—basic $ (1.98 ) $ (2.80 ) $ 1.41 $ 1.51 $ (1.85 ) Earnings per common share—diluted $ (1.98 ) $ (2.80 ) $ 1.40 $ 1.51 $ (1.85 ) During the fourth quarter of fiscal 2018, Cabot recorded a pre-tax gain of $28 million on the sale of its land rights in Thane, India as discussed further in Note O. In addition, the tax benefit for the quarter includes a $19 million net benefit from discrete tax items primarily related to a revision of the estimate of the impact of the recent U.S. tax reform as discussed further in Note R. Quarters Ended Year Ended December 31, March 31, June 30, September 30, September 30, 2016 2017 2017 2017 2017 (In millions, except per share amounts) Net sales and other operating revenues $ 611 $ 678 $ 705 $ 723 $ 2,717 Gross profit $ 159 $ 169 $ 161 $ 174 $ 663 Net income (loss) $ 59 $ 80 $ 55 $ 79 $ 273 Net income (loss) attributable to Cabot Corporation $ 55 $ 74 $ 47 $ 72 $ 248 Earnings per common share—basic $ 0.87 $ 1.19 $ 0.73 $ 1.15 $ 3.94 Earnings per common share—diluted $ 0.86 $ 1.19 $ 0.73 $ 1.13 $ 3.91 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, shares in Thousands, ¥ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2018CNY (¥) | Nov. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | Oct. 01, 2015USD ($) | |
Significant Accounting Policies [Line Items] | |||||||||||||||
Percentage of inventories utilizing LIFO cost flow assumption | 7.00% | 7.00% | 7.00% | ||||||||||||
Retained earnings | $ 1,417,000,000 | $ 1,707,000,000 | $ 1,417,000,000 | $ 1,707,000,000 | |||||||||||
Cost of sales | 2,461,000,000 | 2,054,000,000 | $ 1,836,000,000 | ||||||||||||
(Provision) benefit for income taxes | (193,000,000) | (33,000,000) | (33,000,000) | ||||||||||||
Net income (loss) attributable to Cabot Corporation | $ 94,000,000 | $ 88,000,000 | $ (173,000,000) | $ (122,000,000) | $ 72,000,000 | $ 47,000,000 | $ 74,000,000 | $ 55,000,000 | $ (113,000,000) | $ 248,000,000 | $ 147,000,000 | ||||
Earnings (loss) per common share - basic: | $ / shares | $ 1.51 | $ 1.41 | $ (2.80) | $ (1.98) | $ 1.15 | $ 0.73 | $ 1.19 | $ 0.87 | $ (1.85) | $ 3.94 | $ 2.34 | ||||
Earnings (loss) per common share - diluted: | $ / shares | $ 1.51 | $ 1.40 | $ (2.80) | $ (1.98) | $ 1.13 | $ 0.73 | $ 1.19 | $ 0.86 | $ (1.85) | $ 3.91 | $ 2.32 | ||||
Inventories | $ 511,000,000 | $ 433,000,000 | $ 511,000,000 | $ 433,000,000 | |||||||||||
Deferred income taxes | 134,000,000 | 237,000,000 | 134,000,000 | 237,000,000 | |||||||||||
Equity affiliate investments | 52,000,000 | 56,000,000 | 52,000,000 | 56,000,000 | |||||||||||
Dividends declared | 9,000,000 | 11,000,000 | $ 9,000,000 | ||||||||||||
Goodwill | 93,000,000 | 154,000,000 | 93,000,000 | 154,000,000 | |||||||||||
Capitalized interest | 2,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Inventory, assets held for rent | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||
Asset retirement obligation reserve | 28,000,000 | 26,000,000 | 28,000,000 | 26,000,000 | |||||||||||
Charges on sale of notes receivables | 3,000,000 | 2,000,000 | 1,000,000 | ||||||||||||
Changes in allowance | $ 0 | 0 | |||||||||||||
Chance of utilizing the associated benefit for valuation allowances, maximum | 50.00% | ||||||||||||||
China [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Accounts and notes receivable, net | $ 5,000,000 | 11,000,000 | $ 5,000,000 | 11,000,000 | ¥ 32 | ¥ 73 | |||||||||
Other Nonoperating Income (Expense) [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Foreign currency transaction gains (losses) | (4,000,000) | (4,000,000) | (7,000,000) | ||||||||||||
Accounts Payable and Accrued Liabilities [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Non-cash capital expenditures | $ 29,000,000 | 7,000,000 | |||||||||||||
Minimum [Member] | Buildings [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 20 years | ||||||||||||||
Minimum [Member] | Machinery and Equipment [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 10 years | ||||||||||||||
Minimum [Member] | Other Fixed Assets [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 3 years | ||||||||||||||
Minimum [Member] | Cabot [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Equity method investment, ownership percentage | 20.00% | 20.00% | 20.00% | ||||||||||||
Maximum [Member] | Buildings [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 25 years | ||||||||||||||
Maximum [Member] | Machinery and Equipment [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 25 years | ||||||||||||||
Maximum [Member] | Other Fixed Assets [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Useful life of property, plant and equipment | 25 years | ||||||||||||||
Maximum [Member] | Cabot [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | 50.00% | ||||||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Retained earnings | 1,707,000,000 | 1,707,000,000 | 1,561,000,000 | $ 1,497,000,000 | |||||||||||
Cost of sales | 2,054,000,000 | 1,836,000,000 | |||||||||||||
(Provision) benefit for income taxes | (33,000,000) | (33,000,000) | |||||||||||||
Net income (loss) attributable to Cabot Corporation | $ 248,000,000 | $ 147,000,000 | |||||||||||||
Earnings (loss) per common share - basic: | $ / shares | $ 3.94 | $ 2.34 | |||||||||||||
Earnings (loss) per common share - diluted: | $ / shares | $ 3.91 | $ 2.32 | |||||||||||||
Inventories | 433,000,000 | $ 433,000,000 | $ 368,000,000 | ||||||||||||
Deferred income taxes | 237,000,000 | 237,000,000 | 207,000,000 | ||||||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | Effect of Change [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Retained earnings | 24,000,000 | 24,000,000 | 17,000,000 | 19,000,000 | |||||||||||
Cost of sales | (11,000,000) | 3,000,000 | |||||||||||||
(Provision) benefit for income taxes | (4,000,000) | 1,000,000 | |||||||||||||
Net income (loss) attributable to Cabot Corporation | $ 7,000,000 | $ (2,000,000) | |||||||||||||
Earnings (loss) per common share - basic: | $ / shares | $ 0.11 | $ (0.04) | |||||||||||||
Earnings (loss) per common share - diluted: | $ / shares | $ 0.11 | $ (0.04) | |||||||||||||
Inventories | 37,000,000 | $ 37,000,000 | $ 26,000,000 | ||||||||||||
Deferred income taxes | (13,000,000) | (13,000,000) | (9,000,000) | ||||||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | As Originally Reported [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Retained earnings | 1,683,000,000 | 1,683,000,000 | 1,544,000,000 | $ 1,478,000,000 | |||||||||||
Cost of sales | 2,065,000,000 | 1,833,000,000 | |||||||||||||
(Provision) benefit for income taxes | (29,000,000) | (34,000,000) | |||||||||||||
Net income (loss) attributable to Cabot Corporation | $ 241,000,000 | $ 149,000,000 | |||||||||||||
Earnings (loss) per common share - basic: | $ / shares | $ 3.83 | $ 2.38 | |||||||||||||
Earnings (loss) per common share - diluted: | $ / shares | $ 3.80 | $ 2.36 | |||||||||||||
Inventories | 396,000,000 | $ 396,000,000 | $ 342,000,000 | ||||||||||||
Deferred income taxes | $ 250,000,000 | $ 250,000,000 | $ 216,000,000 | ||||||||||||
No Change in Method of Accounting for Inventories [Member] | Effect of Change [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Retained earnings | $ (35,000,000) | $ (35,000,000) | |||||||||||||
Cost of sales | 15,000,000 | ||||||||||||||
(Provision) benefit for income taxes | 4,000,000 | ||||||||||||||
Net income (loss) attributable to Cabot Corporation | $ 11,000,000 | ||||||||||||||
Earnings (loss) per common share - basic: | $ / shares | $ (0.19) | ||||||||||||||
Earnings (loss) per common share - diluted: | $ / shares | $ (0.19) | ||||||||||||||
Inventories | (52,000,000) | $ (52,000,000) | |||||||||||||
Deferred income taxes | $ 17,000,000 | $ 17,000,000 | |||||||||||||
Tech Blend and NSCC Carbon (Jiangsu) Co. Ltd. [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Business acquisition, number of shares acquired | shares | 8,755,329 | ||||||||||||||
Tech Blend [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Intangible assets | $ 29,000,000 | ||||||||||||||
Goodwill | 33,000,000 | ||||||||||||||
Tech Blend [Member] | Specialty Compounds [Member] | |||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||
Goodwill | $ 33,000,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Change Retrospectively to Prior Periods Consolidated Statements of Operations (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Significant Accounting Policies [Line Items] | |||||||||||
Cost of sales | $ 2,461 | $ 2,054 | $ 1,836 | ||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 117 | 299 | 191 | ||||||||
(Provision) benefit for income taxes | (193) | (33) | (33) | ||||||||
Net income (loss) | $ 102 | $ 99 | $ (163) | $ (112) | $ 79 | $ 55 | $ 80 | $ 59 | (74) | 273 | 162 |
Net income (loss) attributable to Cabot Corporation | $ 94 | $ 88 | $ (173) | $ (122) | $ 72 | $ 47 | $ 74 | $ 55 | $ (113) | $ 248 | $ 147 |
Earnings per common share: | |||||||||||
Basic | $ 1.51 | $ 1.41 | $ (2.80) | $ (1.98) | $ 1.15 | $ 0.73 | $ 1.19 | $ 0.87 | $ (1.85) | $ 3.94 | $ 2.34 |
Diluted | $ 1.51 | $ 1.40 | $ (2.80) | $ (1.98) | $ 1.13 | $ 0.73 | $ 1.19 | $ 0.86 | $ (1.85) | $ 3.91 | $ 2.32 |
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Cost of sales | $ 2,054 | $ 1,836 | |||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 299 | 191 | |||||||||
(Provision) benefit for income taxes | (33) | (33) | |||||||||
Net income (loss) | 273 | 162 | |||||||||
Net income (loss) attributable to Cabot Corporation | $ 248 | $ 147 | |||||||||
Earnings per common share: | |||||||||||
Basic | $ 3.94 | $ 2.34 | |||||||||
Diluted | $ 3.91 | $ 2.32 | |||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | As Originally Reported [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Cost of sales | $ 2,065 | $ 1,833 | |||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 288 | 194 | |||||||||
(Provision) benefit for income taxes | (29) | (34) | |||||||||
Net income (loss) | 266 | 164 | |||||||||
Net income (loss) attributable to Cabot Corporation | $ 241 | $ 149 | |||||||||
Earnings per common share: | |||||||||||
Basic | $ 3.83 | $ 2.38 | |||||||||
Diluted | $ 3.80 | $ 2.36 | |||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | Effect of Change [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Cost of sales | $ (11) | $ 3 | |||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | 11 | (3) | |||||||||
(Provision) benefit for income taxes | (4) | 1 | |||||||||
Net income (loss) | 7 | (2) | |||||||||
Net income (loss) attributable to Cabot Corporation | $ 7 | $ (2) | |||||||||
Earnings per common share: | |||||||||||
Basic | $ 0.11 | $ (0.04) | |||||||||
Diluted | $ 0.11 | $ (0.04) |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Change Retrospectively to Prior Periods Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Oct. 01, 2015 |
Significant Accounting Policies [Line Items] | ||||
Inventories | $ 511 | $ 433 | ||
Deferred income taxes (assets) | 134 | 237 | ||
Retained earnings | $ 1,417 | 1,707 | ||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Inventories | 433 | $ 368 | ||
Deferred income taxes (assets) | 237 | 207 | ||
Retained earnings | 1,707 | 1,561 | $ 1,497 | |
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | As Originally Reported [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Inventories | 396 | 342 | ||
Deferred income taxes (assets) | 250 | 216 | ||
Retained earnings | 1,683 | 1,544 | 1,478 | |
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | Effect of Change [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Inventories | 37 | 26 | ||
Deferred income taxes (assets) | (13) | (9) | ||
Retained earnings | $ 24 | $ 17 | $ 19 |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Change Retrospectively to Prior Periods Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Significant Accounting Policies [Line Items] | |||||||||||
Net income (loss) | $ 102 | $ 99 | $ (163) | $ (112) | $ 79 | $ 55 | $ 80 | $ 59 | $ (74) | $ 273 | $ 162 |
Deferred tax provision (benefit) | 91 | (31) | (36) | ||||||||
Inventories | $ (105) | (61) | 54 | ||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Net income (loss) | 273 | 162 | |||||||||
Deferred tax provision (benefit) | (31) | (36) | |||||||||
Inventories | (61) | 54 | |||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | As Originally Reported [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Net income (loss) | 266 | 164 | |||||||||
Deferred tax provision (benefit) | (35) | (35) | |||||||||
Inventories | (50) | 51 | |||||||||
Change in Method of Accounting for Inventories from Last-in, First-out Method to First-in, First-out Method [Member] | Effect of Change [Member] | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Net income (loss) | 7 | (2) | |||||||||
Deferred tax provision (benefit) | 4 | (1) | |||||||||
Inventories | $ (11) | $ 3 |
Significant Accounting Polici_8
Significant Accounting Policies - Segment Reporting Revenue Percentage (Detail) - Sales Revenue, Segment - Revenue from Rights Concentration Risk | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reinforcement Materials [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 57.00% | 53.00% | 48.00% |
Performance Chemicals [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 33.00% | 35.00% | 37.00% |
Purification Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 9.00% | 11.00% | 13.00% |
Specialty Fluids [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue, by segment | 1.00% | 1.00% | 2.00% |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Detail) - Accounting Standards Update 201609 [Member] - USD ($) $ in Millions | Oct. 01, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Reclassification of Excess Tax Benefit from Share-Based Compensation Awards from Cash Flows from Financing to Operating Activities [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Reclassification of tax benefit from share-based compensation awards | $ 8 | $ 0 | ||
(Provision) Benefit for Income Taxes [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Discrete tax benefit | $ 2 | |||
Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Cumulative-effect of net charge to retained earnings | $ (1) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Nov. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | |
Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, amortization period | 25 years | |||
Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, amortization period | 12 years | |||
Tech Blend [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition date | Nov. 30, 2017 | |||
Business acquisition, purchase price | $ 65,000,000 | |||
Revenues | $ 26,000,000 | |||
Intangible assets | 29,000,000 | |||
Tech Blend [Member] | Developed Technologies [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 21,000,000 | |||
Intangible assets, amortization period | 25 years | |||
Tech Blend [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 8,000,000 | |||
Intangible assets, amortization period | 12 years | |||
Tech Blend [Member] | Maximum [Member] | Selling and Administrative Expenses [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition costs | $ 1,000,000 | |||
NSCC Carbon (Jiangsu) Co. Ltd [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition date | Sep. 30, 2018 | |||
NSCC Carbon (Jiangsu) Co. Ltd [Member] | Accounts Payable and Accrued Liabilities [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, purchase price | $ 8,000,000 |
Acquisitions - Preliminary Purc
Acquisitions - Preliminary Purchase Price Estimates Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Nov. 30, 2017 | Sep. 30, 2017 |
Assets | |||
Goodwill | $ 93 | $ 154 | |
Tech Blend [Member] | |||
Assets | |||
Cash | $ 1 | ||
Accounts receivable | 5 | ||
Inventories | 3 | ||
Property, plant and equipment | 7 | ||
Intangible assets | 29 | ||
Goodwill | 33 | ||
Total assets acquired | 78 | ||
Liabilities | |||
Current liabilities | (3) | ||
Deferred tax liabilities | (10) | ||
Total liabilities assumed | (13) | ||
Cash consideration paid | $ 65 |
Inventories - Components of Com
Inventories - Components of Company's Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 129 | $ 93 |
Work in process | 3 | 2 |
Finished goods | 329 | 293 |
Other | 50 | 45 |
Total | $ 511 | $ 433 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Percentage of inventories utilizing LIFO cost flow assumption | 7.00% | |
Obsolete inventory reserve | $ 38 | $ 19 |
Lower of cost or market charge inventory | $ 13 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Property Plant And Equipment [Abstract] | |||
Land and land improvements | $ 142 | $ 151 | |
Buildings | 514 | 531 | |
Machinery and equipment | 2,373 | 2,527 | |
Other | 249 | 243 | |
Construction in progress | 242 | 150 | |
Total property, plant and equipment | 3,520 | 3,602 | |
Less: Accumulated depreciation | (2,224) | (2,297) | |
Net property, plant and equipment | $ 1,296 | $ 1,305 | $ 1,290 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 142 | $ 147 | $ 154 |
Purification Solutions Goodwi_3
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Impairment Charges and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |||
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | [1] | $ 92 | ||||
Purification Solutions long-lived assets impairment charge | 162 | $ 23 | ||||
Benefit for income taxes | 91 | $ (31) | $ (36) | |||
Purification Solutions [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Purification Solutions goodwill impairment charge | $ 92 | 92 | [1] | |||
Purification Solutions long-lived assets impairment charge | 162 | $ 162 | ||||
Benefit for income taxes | (30) | |||||
Impairment charges, after tax | $ 224 | |||||
[1] | Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. |
Purification Solutions Goodwi_4
Purification Solutions Goodwill and Long-Lived Assets Impairment Charges - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2016 | |||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill impairment charge | [1] | $ 92 | ||||
Lower of cost or market reserve inventory | $ 13 | 13 | ||||
Long-lived assets impairment charge | 162 | $ 23 | ||||
Assets impairment charges income tax benefit | $ 30 | |||||
Reducing of impairment charges and restructuring costs | $ 1 | |||||
Purification Solutions [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill impairment charge | 92 | 92 | [1] | |||
Lower of cost or market reserve inventory | 13 | |||||
Long-lived assets impairment charge | 162 | $ 162 | ||||
Impairment charges of definite lived Intangible assets | 64 | |||||
Purification Solutions [Member] | Property, Plant and Equipment [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Long-lived assets impairment charge | $ 98 | |||||
[1] | Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 93 | $ 154 | |
Amortization expense estimated for year one | 6 | ||
Amortization expense estimated for year two | 6 | ||
Amortization expense estimated for year three | 6 | ||
Amortization expense estimated for year four | 6 | ||
Amortization expense estimated for year five | 6 | ||
Cost of Sales and Selling and Administrative Expenses [Member] | |||
Goodwill And Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 7 | $ 8 | $ 7 |
Minimum [Member] | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life of intangible assets | 12 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 Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Goodwill And Intangible Assets [Line Items] | |||||
Beginning balance | $ 154 | ||||
Goodwill acquired | [1] | 33 | |||
Impairment charge | [2] | (92) | |||
Foreign currency impact | (2) | ||||
Ending balance | 93 | ||||
Accumulated impairment losses | (444) | $ (352) | |||
Reinforcement Materials [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Beginning balance | 53 | ||||
Foreign currency impact | (1) | ||||
Ending balance | 52 | ||||
Performance Chemicals [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Beginning balance | 9 | ||||
Goodwill acquired | [1] | 33 | |||
Foreign currency impact | (1) | ||||
Ending balance | 41 | ||||
Purification Solutions [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Beginning balance | 92 | ||||
Impairment charge | $ (92) | (92) | [2] | ||
Accumulated impairment losses | $ (444) | $ (352) | |||
[1] | Consists of goodwill acquired in the acquisition of Tech Blend as described in Note C. | ||||
[2] | Refer to Note F for details on the Purification Solutions goodwill impairment test and the resulting impairment charge recorded in the second fiscal quarter of 2018. Based on the Company’s most recent annual goodwill impairment test performed as of May 31, 2018, the fair values of the Reinforcement Materials, Fumed Metal Oxides, and Specialty Compounds reporting units were substantially in excess of their carrying values. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | $ 111 | $ 159 |
Accumulated Amortization | [1] | (13) | (22) |
Net Intangible Assets, finite lives | [1] | 98 | 137 |
Developed Technologies [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | 52 | 49 |
Accumulated Amortization | [1] | (2) | (7) |
Net Intangible Assets, finite lives | [1] | 50 | 42 |
Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | 8 | 16 |
Accumulated Amortization | [1] | (1) | |
Net Intangible Assets, finite lives | [1] | 8 | 15 |
Customer Relationships [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | 51 | 94 |
Accumulated Amortization | [1] | (11) | (14) |
Net Intangible Assets, finite lives | [1] | $ 40 | $ 80 |
[1] | Refer to Note F for intangible assets impairment charges recorded in the second fiscal quarter of 2018 |
Accounts Payable, Accrued Lia_3
Accounts Payable, Accrued Liabilities and Other Liabilities - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 446 | $ 339 |
Accrued employee compensation | 70 | 51 |
Other accrued liabilities | 97 | 67 |
Total | $ 613 | $ 457 |
Accounts Payable, Accrued Lia_4
Accounts Payable, Accrued Liabilities and Other Liabilities - Components of Other Long-Term Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Payables And Accruals [Abstract] | ||
Employee benefit plan liabilities | $ 118 | $ 122 |
Non-current tax liabilities | 19 | 19 |
Other accrued liabilities | 115 | 104 |
Total | $ 252 | $ 245 |
Debt and Other Obligations - Sc
Debt and Other Obligations - Schedule of Long-Term Obligations (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Total variable rate debt | $ 90 | |
Total Medium Term Notes | 53 | $ 53 |
Debt | 747 | |
Total debt | 657 | 908 |
Capital lease obligations, due through fiscal 2033 | 11 | 13 |
Unamortized debt issuance costs and debt discount | (4) | (4) |
Total debt | 754 | 917 |
Less current portion of long-term debt | (35) | (256) |
Total long-term debt | 719 | 661 |
Revolving Credit Facility - Canada, expires fiscal 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit | 90 | |
2.55% Notes matured fiscal 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Notes | 250 | |
3.7% Notes due fiscal 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Notes | 350 | 350 |
3.4% Notes due fiscal 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Notes | 250 | 250 |
Notes due fiscal 2019, 7.42% [Member] | ||
Debt Instrument [Line Items] | ||
Total Medium Term Notes | 30 | 30 |
Notes due fiscal 2022, 8.34% - 8.47% [Member] | ||
Debt Instrument [Line Items] | ||
Total Medium Term Notes | 15 | 15 |
Notes due fiscal 2028, 6.57% - 7.28% [Member] | ||
Debt Instrument [Line Items] | ||
Total Medium Term Notes | 8 | 8 |
Chinese Renminbi Debt, Due Fiscal 2018, 4.75% [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 5 | |
Chinese Renminbi Debt, Due Fiscal 2019, 4.35% [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 4 |
Debt and Other Obligations - _2
Debt and Other Obligations - Schedule of Long-Term Obligations (Parenthetical) (Detail) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revolving Credit Facility, expires fiscal 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument due, year | 2,023 | 2,023 |
Revolving Credit Facility - Canada, expires fiscal 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument due, year | 2,021 | 2,021 |
2.55% Notes Due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.55% | 2.55% |
Debt instrument due, year | 2,018 | 2,018 |
3.7% Notes due fiscal 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 3.70% | 3.70% |
Debt instrument due, year | 2,022 | 2,022 |
3.4% Notes due fiscal 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 3.40% | 3.40% |
Debt instrument due, year | 2,026 | 2,026 |
Notes due fiscal 2019, 7.42% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 7.42% | 7.42% |
Debt instrument due, year | 2,019 | 2,019 |
Notes due fiscal 2022, 8.34% - 8.47% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument due, year | 2,022 | 2,022 |
Notes due fiscal 2022, 8.34% - 8.47% [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 8.34% | 8.34% |
Notes due fiscal 2022, 8.34% - 8.47% [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 8.47% | 8.47% |
Notes due fiscal 2028, 6.57% - 7.28% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument due, year | 2,028 | 2,028 |
Notes due fiscal 2028, 6.57% - 7.28% [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 6.57% | 6.57% |
Notes due fiscal 2028, 6.57% - 7.28% [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 7.28% | 7.28% |
Chinese Renminbi Debt, Due Fiscal 2019, 4.35% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 4.35% | 4.35% |
Debt instrument due, year | 2,019 | 2,019 |
Chinese Renminbi Debt, Due Fiscal 2018, 4.75% [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 4.75% | 4.75% |
Debt instrument due, year | 2,018 | 2,018 |
Capital Lease Obligations, Due Through 2033 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity, maximum range | 2,033 | 2,033 |
Debt and Other Obligations - Ad
Debt and Other Obligations - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Sep. 30, 2016 | Nov. 30, 2013 | Jul. 31, 2012 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Revolving credit facility, committed amount | $ 1,000,000,000 | |||||
Long-term debt | 747,000,000 | |||||
Unsecured medium term notes outstanding issued | $ 53,000,000 | $ 53,000,000 | ||||
Maturity of the total outstanding medium term notes, years | 3 years | |||||
Weighted average interest of medium term notes | 7.65% | |||||
Capital lease obligations | $ 11,000,000 | 13,000,000 | ||||
Repayments of long-term capital lease obligations | $ 17,000,000 | |||||
Repayment period of capital lease obligation, years | 15 years | |||||
Payment towards imputed interest | $ 6,000,000 | |||||
Original cost of capital lease assets | 20,000,000 | 20,000,000 | ||||
Accumulated depreciation of assets under capital leases | 13,000,000 | 12,000,000 | ||||
Short-term borrowings | 249,000,000 | 7,000,000 | ||||
NHUMO [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Dividend percentage of preferred stock | 6.00% | |||||
NHUMO [Member] | Carrying Value [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Preferred stock redemption amount | $ 25,000,000 | |||||
Subsequent Event [Member] | NHUMO [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Preferred stock redemption option exercised | $ 25,000,000 | |||||
Payments of dividends | $ 1,400,000 | |||||
Commercial Paper [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term borrowings | $ 249,000,000 | 0 | ||||
Weighted-average interest rate | 2.36% | |||||
Short-term Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Short-term borrowings | $ 0 | $ 7,000,000 | ||||
Weighted-average interest rate | 8.10% | |||||
Debt instrument maturity date | 1 year | |||||
Chinese Renminbi Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 4,000,000 | $ 5,000,000 | ||||
2.55% Notes Due 2018 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Jan. 15, 2018 | |||||
Debt instrument, interest rate | 2.55% | 2.55% | ||||
Registered notes issued | $ 250,000,000 | |||||
Issuance of notes, discount recorded | $ 1,000,000 | |||||
Proceeds from issuance of debt notes | $ 248,000,000 | |||||
Debt instrument due, year | 2,018 | 2,018 | ||||
2.55% Notes Due 2018 [Member] | Fixed Rate Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 2.55% | |||||
Debt instrument due, year | 2,018 | |||||
3.7% Notes due fiscal 2022 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Jul. 15, 2022 | |||||
Debt instrument, interest rate | 3.70% | 3.70% | ||||
Registered notes issued | $ 350,000,000 | |||||
Issuance of notes, discount recorded | $ 1,000,000 | |||||
Proceeds from issuance of debt notes | $ 347,000,000 | |||||
Debt instrument due, year | 2,022 | 2,022 | ||||
3.7% Notes due fiscal 2022 [Member] | Fixed Rate Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 3.70% | |||||
Debt instrument due, year | 2,022 | |||||
3.4% Notes due fiscal 2026 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Sep. 15, 2026 | |||||
Debt instrument, interest rate | 3.40% | 3.40% | ||||
Registered notes issued | $ 250,000,000 | |||||
Issuance of notes, discount recorded | $ 1,000,000 | |||||
Proceeds from issuance of debt notes | $ 248,000,000 | |||||
Debt instrument due, year | 2,026 | 2,026 | ||||
3.4% Notes due fiscal 2026 [Member] | Fixed Rate Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 3.40% | |||||
Debt instrument due, year | 2,026 | |||||
Revolving Credit Facility, expires fiscal 2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount available under credit facility | $ 751,000,000 | |||||
Credit agreement maturity date | Oct. 23, 2022 | |||||
Debt instrument due, year | 2,023 | 2,023 | ||||
Revolving Credit Facility - Canada, expires fiscal 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Credit agreement maturity date | Sep. 24, 2021 | |||||
Revolving credit facility, committed amount | $ 100,000,000 | |||||
Credit agreement, available borrowing | $ 10,000,000 | |||||
Debt instrument due, year | 2,021 | 2,021 | ||||
Standby Letters of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument due, year | 2,019 | |||||
Standby letters of credit, outstanding amount | $ 7,000,000 |
Debt and Other Obligations - _3
Debt and Other Obligations - Schedule of Future Years Payment (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 34 |
2,021 | 90 |
2,022 | 365 |
Thereafter | 258 |
Total | 747 |
2,019 | 1 |
2,020 | 2 |
2,021 | 2 |
2,022 | 2 |
2,023 | 2 |
Thereafter | 8 |
Less: Interest | (6) |
Total | 11 |
2,019 | 35 |
2,020 | 2 |
2,021 | 92 |
2,022 | 367 |
2,023 | 2 |
Thereafter | 266 |
Total | $ 758 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
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 | 740,000,000 | 940,000,000 |
Fixed Rate Debt [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of long-term debt | 750,000,000 | 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 | 11,000,000 | 12,000,000 |
Significant Observable Inputs (Level 2) [Member] | Foreign Currency Risks [Member] | Prepaid Expenses and Other Current Assets and Other Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), at fair Value, net | $ (18,000,000) | $ (13,000,000) |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) | 12 Months Ended | |
Sep. 30, 2018USD ($)Derivative | Sep. 30, 2017USD ($)Derivative | |
Derivative [Line Items] | ||
Significant concentration of credit risk associated with our derivative instruments | $ 0 | |
Cross Currency Swaps [Member] | Prepaid Expenses And Other Asset Current And Other Liabilities [Member] | ||
Derivative [Line Items] | ||
Fair value of swaps, net liability | $ 18,000,000 | $ 13,000,000 |
Fair Value Hedging [Member] | Interest Rate Swap-Fixed to Variable [Member] | Interest Rate Risk [Member] | ||
Derivative [Line Items] | ||
Derivatives held to manage interest rate risk | Derivative | 0 | 0 |
Net Investment Hedge [Member] | Cross Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 250,000,000 | |
Net cash interest received | 3,000,000 | $ 4,000,000 |
Cumulative gain (loss) related to swaps | $ (14,000,000) | $ (9,000,000) |
Net Investment Hedge [Member] | Cross Currency Swaps [Member] | Fixed Rate Debt [Member] | ||
Derivative [Line Items] | ||
Derivative Instruments Frequency of Cash Settlements | semi-annually |
Derivatives - Details of Deriva
Derivatives - Details of Derivatives Held to Manage Foreign Currency Risk (Detail) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) | Sep. 30, 2016 | |
3.4% Notes [Member] | ||||||
Derivative [Line Items] | ||||||
Interest rate on borrowing | 3.40% | 3.40% | 3.40% | 3.40% | ||
3.4% Notes [Member] | Fixed Rate Debt [Member] | ||||||
Derivative [Line Items] | ||||||
Interest rate on borrowing | 3.40% | |||||
Net Investment Hedge [Member] | Cross Currency Swaps [Member] | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 250,000,000 | |||||
Net Investment Hedge [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 Hedge [Member] | 3.4% Notes [Member] | Fixed Rate Debt [Member] | Cross Currency Swaps [Member] | ||||||
Derivative [Line Items] | ||||||
Interest rate on borrowing | 3.40% | 3.40% | 3.40% | 3.40% | ||
Not Designated as Hedging Instrument [Member] | Forward Foreign Currency Contracts [Member] | ||||||
Derivative [Line Items] | ||||||
Notional Amount | [1] | $ 18,000,000 | $ 5,000,000 | |||
[1] | Cabot’s forward foreign exchange contracts are denominated in the Indonesian rupiah and Czech koruna. |
Derivatives - Summary Impact of
Derivatives - Summary Impact of Cross-currency Swaps to AOCI and Consolidated Statements of Operations (Detail) - Cross Currency Swaps [Member] - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Derivative Instruments Gain Loss [Line Items] | ||||
Gain/(Loss) Recognized in AOCI | [1] | $ (2) | $ (10) | $ 1 |
(Gain)/Loss Reclassified from AOCI into Interest Expense in the Consolidated Statements of Operations | [1] | (5) | ||
(Gain)/Loss Recognized in Interest Expense in the Consolidated Statements of Operations (Amount Excluded from Effectiveness Testing) | [1] | $ 2 | ||
[1] | As noted above, effective October 1, 2017, the Company changed the method it uses to assess effectiveness from the method based on changes in forward exchange rates, in which all gains/losses were recognized in AOCI, to the method based on changes in spot exchange rates |
Hyperinflationary Economies - A
Hyperinflationary Economies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018USD ($)$ / $Bs. / $ | Sep. 30, 2017USD ($)Bs. / $ | Sep. 30, 2016USD ($) | Jul. 31, 2018Bs. / $ | |
Schedule Of Equity Method Investments [Line Items] | |||||
Other income (expense) | $ 5 | $ (4) | $ (7) | ||
Argentina [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Percentage of net revenue | 2.00% | ||||
Other income (expense) | $ 3 | ||||
Foreign currency exchange rate, translation | $ / $ | 39.70 | ||||
Argentina [Member] | Maximum [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Percentage of assets and liabilities current | 2.00% | ||||
Venezuela [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Foreign currency exchange rate, translation | Bs. / $ | 3,345 | ||||
Operating affiliate investment | $ 13 | ||||
Currency exchange rate, description | The value of one bolivar soberano is equal to the value of 100,000 bolivars | ||||
Venezuela [Member] | Devaluation Of Venezuelan Bolivar [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Foreign currency exchange rate, translation | Bs. / $ | 6,200,000 | 172,800 | |||
Venezuela [Member] | Subsidiaries [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Cash dividends received from subsidiary | $ 3 | $ 4 | $ 2 | ||
Carbon Black Affiliate [Member] | Argentina [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 100.00% | ||||
Carbon Black Affiliate [Member] | Venezuela [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 49.00% |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution plans expenses | $ 19 | $ 18 | $ 17 | |
Maximum [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net losses on curtailments and settlements | (1) | (1) | $ (1) | |
Scenario, Forecast [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net loss amortized from AOCI to net periodic benefit cost | $ 3 | |||
Amortization of estimated prior service credits | 2 | |||
Scenario, Forecast [Member] | Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Postretirement medical benefits | $ 4 | |||
U.S. Defined Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligation | $ 143 | 160 | ||
Weighted-average assumed health care cost trend rate | 7.00% | |||
U.S. Defined Benefit Plans [Member] | Equity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 30.00% | |||
U.S. Defined Benefit Plans [Member] | Fixed Income Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 70.00% | |||
U.S. Defined Benefit Plans [Member] | Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net losses on curtailments and settlements | $ (5) | (5) | ||
Foreign Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligation | $ 349 | 351 | ||
Weighted-average assumed health care cost trend rate | 7.10% | |||
Foreign Plans [Member] | Equity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 39.00% | |||
Foreign Plans [Member] | Fixed Income Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 53.00% | |||
Foreign Plans [Member] | Real Estate [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 3.00% | |||
Foreign Plans [Member] | Cash and Other Securities [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Percentage of weighted-average target asset allocation | 5.00% | |||
Foreign Plans [Member] | Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected contribution | $ 8 | |||
Net losses on curtailments and settlements | $ (2) | $ (3) |
Employee Benefit Plans - Change
Employee Benefit Plans - Change in Projected Benefit Obligations and Change in Plan Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | $ 474 | ||
Fair value of plan assets at end of year | 472 | $ 474 | |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Change in Benefit Obligations: | |||
Benefit obligation at beginning of year | 160 | 175 | |
Service cost | 1 | 1 | $ 1 |
Interest cost | 5 | 4 | 4 |
(Gain) Loss from changes in actuarial assumptions and plan experience | (10) | (7) | |
Benefits paid | (7) | (7) | |
Settlements or curtailments | (5) | (5) | |
Other | (1) | (1) | |
Benefit obligation at end of year | 143 | 160 | 175 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 156 | 157 | |
Actual return on plan assets | 4 | 12 | |
Employer contribution | 1 | 1 | |
Benefits paid | (7) | (7) | |
Settlements | (4) | (6) | |
Expenses paid from assets | (1) | (1) | |
Fair value of plan assets at end of year | 149 | 156 | 157 |
Funded status | 6 | (4) | |
Recognized asset (liability) | 6 | (4) | |
Pension Benefits [Member] | Foreign Plans [Member] | |||
Change in Benefit Obligations: | |||
Benefit obligation at beginning of year | 376 | 400 | |
Service cost | 9 | 10 | 8 |
Interest cost | 7 | 6 | 8 |
Plan participants’ contribution | 2 | 2 | |
Foreign currency exchange rate changes | (7) | 16 | |
(Gain) Loss from changes in actuarial assumptions and plan experience | 2 | (42) | |
Benefits paid | (13) | (12) | |
Settlements or curtailments | (2) | (3) | |
Other | (1) | (1) | |
Benefit obligation at end of year | 373 | 376 | 400 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 318 | 305 | |
Actual return on plan assets | 17 | 6 | |
Employer contribution | 9 | 9 | |
Plan participants’ contribution | 2 | 2 | |
Foreign currency exchange rate changes | (7) | 12 | |
Benefits paid | (13) | (12) | |
Settlements | (2) | (3) | |
Expenses paid from assets | (1) | (1) | |
Fair value of plan assets at end of year | 323 | 318 | 305 |
Funded status | (50) | (58) | |
Recognized asset (liability) | (50) | (58) | |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Change in Benefit Obligations: | |||
Benefit obligation at beginning of year | 33 | 37 | |
Interest cost | 1 | 1 | 1 |
(Gain) Loss from changes in actuarial assumptions and plan experience | (2) | (2) | |
Benefits paid | (3) | (3) | |
Benefit obligation at end of year | 29 | 33 | 37 |
Change in Plan Assets: | |||
Employer contribution | 3 | 3 | |
Benefits paid | (3) | (3) | |
Funded status | (29) | (33) | |
Recognized asset (liability) | (29) | (33) | |
Postretirement Benefits [Member] | Foreign Plans [Member] | |||
Change in Benefit Obligations: | |||
Benefit obligation at beginning of year | 20 | 20 | |
Interest cost | 1 | 1 | 1 |
Foreign currency exchange rate changes | (1) | ||
(Gain) Loss from changes in actuarial assumptions and plan experience | (1) | ||
Benefits paid | (1) | ||
Benefit obligation at end of year | 19 | 20 | 20 |
Change in Plan Assets: | |||
Employer contribution | 1 | ||
Benefits paid | (1) | ||
Funded status | (20) | $ (19) | |
Recognized asset (liability) | $ (19) | $ (20) |
Employee Benefit Plans - Assump
Employee Benefit Plans - Assumptions Used to Determine Pension Benefit Obligations and Periodic Benefit Costs, Postretirement Benefit Obligations and Net Costs (Detail) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.20% | 3.60% | 3.40% |
Discount rate - benefit obligation | 3.60% | 3.40% | 4.20% |
Discount rate - interest cost | 3.00% | 2.70% | 3.30% |
Expected long-term rate of return on plan assets | 6.80% | 6.80% | 7.50% |
Pension Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.40% | 2.40% | 1.80% |
Initial health care cost trend rate | 2.70% | 2.70% | 2.80% |
Discount rate - benefit obligation | 2.40% | 1.80% | 2.90% |
Discount rate - service cost | 2.40% | 1.80% | 2.80% |
Discount rate - interest cost | 2.00% | 1.50% | 2.40% |
Expected long-term rate of return on plan assets | 4.90% | 4.70% | 5.10% |
Initial health care cost trend rate | 2.70% | 2.80% | 2.80% |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.10% | 3.40% | 3.00% |
Initial health care cost trend rate | 7.00% | 7.00% | 7.00% |
Discount rate - benefit obligation | 3.40% | 3.00% | 3.70% |
Discount rate - service cost | 3.10% | 2.60% | 3.40% |
Discount rate - interest cost | 2.80% | 2.40% | 2.80% |
Initial health care cost trend rate | 7.00% | 7.00% | 6.50% |
Postretirement Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.20% | 3.10% | 2.80% |
Initial health care cost trend rate | 7.00% | 7.10% | 6.10% |
Discount rate - benefit obligation | 3.10% | 2.80% | 3.90% |
Discount rate - service cost | 3.60% | 3.20% | 4.10% |
Discount rate - interest cost | 3.00% | 2.60% | 3.70% |
Initial health care cost trend rate | 7.10% | 6.10% | 6.80% |
Employee Benefit Plans - Amount
Employee Benefit Plans - Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent liabilities | $ (118) | $ (122) |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent assets | 10 | 1 |
Current liabilities | (1) | |
Noncurrent liabilities | (4) | (4) |
Pension Benefits [Member] | Foreign Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent assets | 21 | 12 |
Current liabilities | (1) | (1) |
Noncurrent liabilities | (70) | (69) |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current liabilities | (3) | (3) |
Noncurrent liabilities | (26) | (30) |
Postretirement Benefits [Member] | Foreign Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current liabilities | (1) | (1) |
Noncurrent liabilities | $ (18) | $ (19) |
Employee Benefit Plans - Amou_2
Employee Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial (gain) loss | $ (1) | $ 3 |
Balance in accumulated other comprehensive income (loss), pretax | (1) | 3 |
Pension Benefits [Member] | Foreign Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial (gain) loss | 49 | 52 |
Net prior service credit | (1) | (1) |
Balance in accumulated other comprehensive income (loss), pretax | 48 | 51 |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial (gain) loss | (7) | (6) |
Net prior service credit | (2) | (5) |
Balance in accumulated other comprehensive income (loss), pretax | (9) | (11) |
Postretirement Benefits [Member] | Foreign Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial (gain) loss | 4 | 5 |
Balance in accumulated other comprehensive income (loss), pretax | $ 4 | $ 5 |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated Future Benefit Payments (Detail) $ in Millions | Sep. 30, 2017USD ($) |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 12 |
2,020 | 11 |
2,021 | 10 |
2,022 | 10 |
2,023 | 10 |
2024 - 2028 | 48 |
Pension Benefits [Member] | Foreign Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 14 |
2,020 | 13 |
2,021 | 17 |
2,022 | 15 |
2,023 | 15 |
2024 - 2028 | 88 |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 3 |
2,020 | 3 |
2,021 | 3 |
2,022 | 3 |
2,023 | 3 |
2024 - 2028 | 11 |
Postretirement Benefits [Member] | Foreign Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 1 |
2,020 | 1 |
2,021 | 1 |
2,022 | 1 |
2,023 | 1 |
2024 - 2028 | $ 4 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 1 | $ 1 | $ 1 |
Interest cost | 5 | 4 | 4 |
Expected return on plan assets | (10) | (9) | (10) |
Net periodic (benefit) cost | (4) | (4) | (5) |
Pension Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 9 | 10 | 8 |
Interest cost | 7 | 6 | 8 |
Expected return on plan assets | (15) | (14) | (14) |
Net losses | 3 | 5 | 3 |
Settlements or Curtailments cost | 1 | ||
Net periodic (benefit) cost | 4 | 7 | 6 |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 1 | 1 | 1 |
Amortization of prior service cost | (3) | (3) | (3) |
Net losses | (1) | ||
Settlements or Curtailments cost | (1) | ||
Net periodic (benefit) cost | (3) | (2) | (3) |
Postretirement Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 1 | 1 | 1 |
Net periodic (benefit) cost | $ 1 | $ 1 | $ 1 |
Employee Benefit Plans - Other
Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss), Pre-Tax (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net (gains) losses | $ (4) | $ (9) | $ 7 |
Net changes recognized in Total other comprehensive (income) loss | (4) | (9) | 7 |
Pension Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net (gains) losses | (35) | 31 | |
Amortization of prior unrecognized loss | (3) | (5) | (3) |
Other | (1) | ||
Net changes recognized in Total other comprehensive (income) loss | (3) | (40) | 27 |
Postretirement Benefits [Member] | U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net (gains) losses | (2) | (3) | 2 |
Amortization of prior service credit | 3 | 3 | 3 |
Amortization of prior unrecognized loss | 1 | ||
Other | 1 | ||
Net changes recognized in Total other comprehensive (income) loss | 2 | 6 | |
Postretirement Benefits [Member] | Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net (gains) losses | (1) | (1) | 5 |
Net changes recognized in Total other comprehensive (income) loss | $ (1) | $ (1) | $ 5 |
Employee Benefit Plans - Othe_2
Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss), Pre-Tax (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Other Comprehensive (Income) Loss, pension and other postretirement tax benefit (provision) | $ (1) | $ (7) | $ 7 |
Employee Benefit Plans - Sensit
Employee Benefit Plans - Sensitivity Analysis (Detail) - Postretirement Benefits [Member] - Foreign Plans [Member] $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
1 -Percent-Point Increase, Effect on postretirement benefit obligation | $ 3 |
1 -Percent-Point Decrease, Effect on postretirement benefit obligation | $ (3) |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Benefit Pension Plans Weighted-Average Asset Allocations (Detail) | Sep. 30, 2018 | Sep. 30, 2017 | |
U.S. Defined Benefit Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Equity securities | 40.00% | 48.00% | |
Debt securities | 60.00% | 5.00% | |
Cash and other securities | [1] | 47.00% | |
Total | 100.00% | 100.00% | |
Foreign Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Equity securities | 39.00% | 39.00% | |
Debt securities | 53.00% | 53.00% | |
Cash and other securities | [1] | 8.00% | 8.00% |
Total | 100.00% | 100.00% | |
[1] | Prior to year-end 2017, within the U.S. defined benefit pension plan, the Company transitioned the majority of its fixed income assets held in a mutual fund investment to a separately managed account. This transition process temporarily resulted in a larger percentage of the assets being held in cash or cash equivalents on September 30, 2017. |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Value of Pension Plan Assets by Asset Category (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | $ 472 | $ 474 | |
Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 104 | ||
Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 349 | 458 | |
Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 16 | 15 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 65 | 158 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 17 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 45 | 157 | |
Significant Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 407 | 316 | |
Significant Observable Inputs (Level 2) [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 87 | ||
Significant Observable Inputs (Level 2) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 304 | 301 | |
Significant Observable Inputs (Level 2) [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 16 | 15 | |
Cash and Cash Equivalent Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 3 | 1 | |
Cash and Cash Equivalent Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 3 | 1 | |
U.S. Government Bonds [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 30 | ||
U.S. Government Bonds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 17 | ||
U.S. Government Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 13 | ||
U.S. Corporate Bonds [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 74 | ||
U.S. Corporate Bonds [Member] | Significant Observable Inputs (Level 2) [Member] | Total Direct Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 74 | ||
Equity Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 170 | 199 |
Equity Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 44 | 75 |
Equity Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [1] | 126 | 124 |
Fixed Income Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 169 | 176 |
Fixed Income Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 8 | |
Fixed Income Funds [Member] | Significant Observable Inputs (Level 2) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [2] | 169 | 168 |
Real Estate [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [3] | 9 | 9 |
Real Estate [Member] | Significant Observable Inputs (Level 2) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [3] | 9 | 9 |
Cash Equivalent Funds [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | 74 | |
Cash Equivalent Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Total Investment Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | 1 | 74 | |
Insurance Contracts [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [4] | 16 | 15 |
Insurance Contracts [Member] | Significant Observable Inputs (Level 2) [Member] | Alternative Investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total pension plan assets | [4] | $ 16 | $ 15 |
[1] | The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. | ||
[2] | The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. | ||
[3] | The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. | ||
[4] | Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 09, 2017 | Mar. 08, 2012 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of vesting in first anniversary | 30.00% | ||||
Percentage of vesting in second anniversary | 30.00% | ||||
Percentage of vesting in third anniversary | 40.00% | ||||
Net stock-based compensation expense | $ 16 | $ 10 | $ 10 | ||
Recognized stock-based compensation expense in connection with the modification of outstanding equity awards | 5 | ||||
Closing common stock price | $ 62.72 | ||||
(Provision) benefit for income taxes | $ 193 | 33 | 33 | ||
Stock Options, Weighted Average Grant Date Fair Value, Granted | $ 15.21 | ||||
Stock Options [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of exercise price equal to market price on the date of grant | 100.00% | ||||
Vesting period (in years) | 3 years | ||||
Expiration period, years | 10 years | ||||
Unrecognized compensation cost | $ 2 | ||||
Weighted-average period, years | 1 year | ||||
Intrinsic value of options exercised | $ 11 | 16 | 8 | ||
Cash received from exercises | 22 | $ 21 | $ 8 | ||
(Provision) benefit for income taxes | $ 1 | ||||
Stock Options, Weighted Average Grant Date Fair Value, Granted | $ 15.21 | $ 12.76 | $ 11.12 | ||
Restricted Stock Units [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Unrecognized compensation cost | $ 25 | ||||
Weighted-average period, years | 1 year | ||||
Estimated weighted average grant date fair value | $ 62.18 | $ 51.03 | $ 40.51 | ||
Intrinsic value of restricted stock units vested | $ 12 | $ 7 | $ 15 | ||
Restricted Stock [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
2009 Long-Term Incentive Plan [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, authorized shares | 8,854,000 | ||||
2017 Long-Term Incentive Plan [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, authorized shares | 5,375,000 | ||||
Supplemental 401(k) Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Supplemental retirement savings plan, aggregate value of the accounts, shares | 116,000 | 109,000 | |||
Supplemental retirement savings plan aggregate value of the accounts paid in cash | $ 1 | $ 2 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expenses (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | $ 22 | $ 16 | $ 17 |
Income tax benefit | (6) | (6) | (7) |
Net stock-based compensation expense | 16 | 10 | 10 |
Cost of Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | 2 | 1 | 1 |
Selling and Administrative Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | 19 | 14 | 15 |
Research and Technical Expenses [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense before tax | $ 1 | $ 1 | $ 1 |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plan Activity (Detail) - $ / shares shares in Thousands | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock Options, Total Options, Outstanding at September 30, 2017 | [1] | 1,144 | ||
Stock Options, Total Options, Granted | [1] | 265 | ||
Stock Options, Total Options, Exercised / Vested | [1] | (528) | ||
Stock Options, Total Options, Outstanding at September 30, 2018 | [1] | 881 | 1,144 | |
Stock Options, Total Options, Exercisable at September 30, 2018 | [1] | 334 | ||
Stock Options, Total Options, Vested and expected to vest | [1],[2] | 854 | ||
Stock Options, Weighted Average Exercise Price, Outstanding at September 30, 2017 | $ 43.76 | |||
Stock Options, Weighted Average Exercise Price, Granted | 62.20 | |||
Stock Options, Weighted Average Exercise Price, Exercised / Vested | 41.39 | |||
Stock Options, Weighted Average Exercise Price, Outstanding at September 30, 2018 | 50.73 | $ 43.76 | ||
Stock Options, Weighted Average Exercise Price, Exercisable at September 30, 2018 | 44.61 | |||
Stock Options, Weighted Average Exercise Price, Vested and expected to vest | [2] | 50.52 | ||
Stock Options, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2017 | 13.40 | |||
Stock Options, Weighted Average Grant Date Fair Value, Granted | 15.21 | |||
Stock Options, Weighted Average Grant Date Fair Value, Exercised / Vested | 13.61 | |||
Stock Options, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2018 | $ 13.82 | $ 13.40 | ||
Restricted Stock Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Restricted Stock / Units, Outstanding at September 30, 2017 | [3] | 876 | ||
Restricted Stock / Units, Granted | [3] | 263 | ||
Restricted Stock / Units, Performance-based adjustment | [3],[4] | 83 | ||
Restricted Stock / Units, Exercised / Vested | [3] | (195) | ||
Restricted Stock / Units, Cancelled / Forfeited | [3] | (42) | ||
Restricted Stock / Units, Outstanding at September 30, 2018 | [3] | 985 | 876 | |
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2017 | $ 45.43 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Granted | 62.18 | $ 51.03 | $ 40.51 | |
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Performance-based adjustment | [4] | 50.54 | ||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Exercised / Vested | 45.81 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Cancelled / Forfeited | 47.54 | |||
Restricted Stock / Units, Weighted Average Grant Date Fair Value, Outstanding at September 30, 2018 | $ 50.16 | $ 45.43 | ||
[1] | Unvested stock options were approximately 546,000 and 490,000 at September 30, 2018 and 2017 and their weighted average grant date fair values were $54.48 and $46.68, respectively. | |||
[2] | Stock options vested and expected to vest in the future, net of estimated forfeitures, have a weighted average remaining contractual life of 7.36 years. | |||
[3] | The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the three-year performance period. | |||
[4] | Represents the net incremental number of shares issuable upon vesting of performance-based restricted stock units based upon the achievement of the annual financial performance metrics for fiscal 2018. |
Stock-Based Compensation - Eq_2
Stock-Based Compensation - Equity Incentive Plan Activity (Parenthetical) (Detail) - $ / shares shares in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stock options expected to vest in the future, net of estimated forfeitures, weighted average remaining contractual life, in years | 7 years 4 months 9 days | |
Unvested stock options | 546,000 | 490,000 |
Unvested stock options, weighted average grant date fair value | $ 54.48 | $ 46.68 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options Outstanding and Vested Options (Detail) $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Total Options Outstanding, Aggregate Intrinsic Value | $ 11 |
Total Options Outstanding, Weighted Average Remaining Contractual Term (in years) | 7 years 2 months 12 days |
Exercisable Options, Aggregate Intrinsic Value | $ 6 |
Exercisable Options, Weighted Average Remaining Contractual Term (in years) | 6 years 2 months 1 day |
Vested or Expected to Vest, Aggregate Intrinsic Value | $ 10 |
Vested or Expected to Vest, Weighted Average Remaining Contractual Term (in years) | 7 years 4 months 9 days |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted-Average Assumptions (Detail) - $ / shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Expected stock price volatility | 28.00% | 32.00% | 33.00% |
Risk free interest rate | 2.20% | 1.80% | 2.00% |
Expected life of options (years) | 6 years | 6 years | 6 years |
Expected annual dividends per year | $ 1.26 | $ 1.20 | $ 1.20 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | $ (30) | $ 3 | $ 47 |
Cost of Sales [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | (31) | 2 | 33 |
Selling and Administrative Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reserve, period expense | $ 1 | $ 1 | 9 |
Research and Development 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 | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | $ 3 | $ 5 | $ 9 |
Charges (gain) | (30) | 3 | 47 |
Costs charged against liabilities (assets) | (2) | 1 | (30) |
Cash (paid) received | 34 | (6) | (21) |
Reserve balance | 5 | 3 | 5 |
Severance and Employee Benefits [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 1 | 3 | 5 |
Charges (gain) | 2 | 1 | 28 |
Cash (paid) received | (2) | (3) | (30) |
Reserve balance | 1 | 1 | 3 |
Environmental Remediation and Decommissioning Activities [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 2 | 2 | 2 |
Charges (gain) | 3 | 1 | |
Cash (paid) received | (1) | (1) | |
Reserve balance | 4 | 2 | 2 |
Non-Cash Asset Impairment and Accelerated Depreciation [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges (gain) | 1 | 23 | |
Costs charged against liabilities (assets) | (1) | (23) | |
Asset Sales [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Charges (gain) | (38) | (9) | |
Costs charged against liabilities (assets) | (1) | (7) | |
Cash (paid) received | 39 | 16 | |
Other [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Reserve balance | 2 | ||
Charges (gain) | 2 | 1 | 5 |
Costs charged against liabilities (assets) | 1 | ||
Cash (paid) received | $ (2) | $ (2) | $ (7) |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Millions | Sep. 14, 2018USD ($) | Oct. 01, 2017USD ($)ProductionUnitEmployees | Oct. 31, 2015Employees | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Proceeds from sale of land | $ 39 | $ 16 | ||||||||||
Pre-tax charge to earnings | $ 25 | 29 | ||||||||||
Maximum [Member] | Scenario, Forecast [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | $ 1 | |||||||||||
Severance Costs [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring expected charges | $ 3 | |||||||||||
Severance Costs [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued severance and other charges | $ 1 | 1 | ||||||||||
Merak, Indonesia [Member] | Non-Cash Accelerated Depreciation [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring expected charges | $ 22 | |||||||||||
Operational Restructuring [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Number of employees termination | Employees | 300 | |||||||||||
Pre-tax charge to earnings | 1 | 1 | ||||||||||
Operational Restructuring [Member] | Thane, India [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Proceeds from sale of land | 28 | $ 28 | ||||||||||
Net benefit to earnings | $ 28 | |||||||||||
Refundable cash deposit | $ 22 | $ 3 | $ 3 | |||||||||
Operational Restructuring [Member] | Merak, Indonesia [Member] | Cost of Sales [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Proceeds from sale of land | 13 | |||||||||||
Net benefit to earnings | $ 11 | |||||||||||
Operational Restructuring [Member] | Merak, Indonesia [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | 1 | $ 1 | ||||||||||
Marshall, Texas Plan [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Number of idled production units | ProductionUnit | 3 | |||||||||||
Number of production units | ProductionUnit | 7 | |||||||||||
Number of employees termination | Employees | 40 | |||||||||||
Restructuring expected charges | $ 1 | |||||||||||
Marshall, Texas Plan [Member] | Severance Costs [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring expected charges | 1 | |||||||||||
Marshall, Texas Plan [Member] | Non-Cash Accelerated Depreciation [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Restructuring expected charges | $ 1 | |||||||||||
Closure of Carbon Black Facility [Member] | Merak, Indonesia [Member] | Severance Costs [Member] | Maximum [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued severance costs | $ 1 | 1 | ||||||||||
Previous Actions and Sites Pending Sale [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Severance charges | 1 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | Port Dickson and Malaysia [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Pre-tax charge to earnings | $ 3 | |||||||||||
Previous Actions and Sites Pending Sale [Member] | Berre and Port Dickson Sites [Member] | ||||||||||||
Restructuring Cost And Reserve [Line Items] | ||||||||||||
Accrued environmental costs | $ 4 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in Each Component of AOCI, Net of Tax (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 1,625 | $ 1,389 |
Other comprehensive income (loss) before reclassifications | (59) | 66 |
Amounts reclassified from AOCI | (3) | 2 |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (4) | 2 |
Ending Balance | 1,279 | 1,625 |
Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (204) | (227) |
Other comprehensive income (loss) before reclassifications | (64) | 25 |
Amounts reclassified from AOCI | (2) | |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (4) | 2 |
Ending Balance | (266) | (204) |
Unrealized Gains on Investment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 2 | 2 |
Other comprehensive income (loss) before reclassifications | (1) | |
Ending Balance | 1 | 2 |
Pension and Other Postretirement Benefit Liability Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (57) | (100) |
Other comprehensive income (loss) before reclassifications | 6 | 41 |
Amounts reclassified from AOCI | (1) | 2 |
Ending Balance | (52) | (57) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (259) | (325) |
Amounts reclassified from AOCI | (3) | 2 |
Ending Balance | $ (317) | $ (259) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified Out of AOCI (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total after tax | $ (3) | $ 2 | |
(Gains) Losses Reclassified to Interest Expense [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (5) | ||
(Gains) Losses Excluded from Effectiveness Testing and Amortized to Interest Expense [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 2 | ||
Amortization of Actuarial Losses (Gains) [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 2 | 5 | $ 3 |
Amortization of Prior Service (Credit) Cost [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (3) | (3) | $ (3) |
Pension and Other Postretirement Benefit Liability Adjustment [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (4) | 2 | |
Tax impact | 1 | ||
Total after tax | $ (3) | $ 2 |
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 | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic EPS: | |||||||||||
Net income (loss) attributable to Cabot Corporation | $ 94 | $ 88 | $ (173) | $ (122) | $ 72 | $ 47 | $ 74 | $ 55 | $ (113) | $ 248 | $ 147 |
Less: Dividends and dividend equivalents to participating securities | 1 | ||||||||||
Less: Undistributed earnings allocated to participating securities | 2 | 1 | |||||||||
Earnings (loss) allocated to common shareholders (numerator) | $ (114) | $ 246 | $ 146 | ||||||||
Weighted average common shares and participating securities outstanding | 62.4 | 62.8 | 62.9 | ||||||||
Less: Participating securities | 0.7 | 0.5 | 0.5 | ||||||||
Adjusted weighted average common shares (denominator) | 61.7 | 62.3 | 62.4 | ||||||||
Income (loss) from continuing operations attributable to Cabot Corporation | $ (1.85) | $ 3.94 | $ 2.32 | ||||||||
Income (loss) from discontinued operations | 0.02 | ||||||||||
Net income (loss) attributable to Cabot Corporation | $ 1.51 | $ 1.41 | $ (2.80) | $ (1.98) | $ 1.15 | $ 0.73 | $ 1.19 | $ 0.87 | $ (1.85) | $ 3.94 | $ 2.34 |
Diluted EPS: | |||||||||||
Earnings (loss) allocated to common shareholders | $ (114) | $ 246 | $ 146 | ||||||||
Plus: Earnings (loss) allocated to participating securities | 2 | 1 | |||||||||
Less: Adjusted earnings allocated to participating securities | 2 | 1 | |||||||||
Earnings (loss) available to common shares (numerator) | $ (114) | $ 246 | $ 146 | ||||||||
Adjusted weighted average common shares outstanding | 61.7 | 62.3 | 62.4 | ||||||||
Common shares issuable | 0.4 | 0.5 | |||||||||
Adjusted weighted average common shares (denominator) | 61.7 | 62.7 | 62.9 | ||||||||
Income (loss) from continuing operations attributable to Cabot Corporation | $ (1.85) | $ 3.91 | $ 2.30 | ||||||||
Income (loss) from discontinued operations | 0.02 | ||||||||||
Net income (loss) attributable to Cabot Corporation | $ 1.51 | $ 1.40 | $ (2.80) | $ (1.98) | $ 1.13 | $ 0.73 | $ 1.19 | $ 0.86 | $ (1.85) | $ 3.91 | $ 2.32 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) attributable to Cabot Corporation | $ 94 | $ 88 | $ (173) | $ (122) | $ 72 | $ 47 | $ 74 | $ 55 | $ (113) | $ 248 | $ 147 |
Less: Dividends declared on common stock | 79 | 77 | 65 | ||||||||
Less: Dividends and dividend equivalents to participating securities | 1 | ||||||||||
Undistributed earnings (loss) | (193) | 171 | 82 | ||||||||
Undistributed earnings (loss) allocated to common shareholders | $ (193) | 169 | 81 | ||||||||
Undistributed earnings allocated to participating securities | $ 2 | $ 1 |
Earnings Per Share - Componen_2
Earnings Per Share - Components of Basic and Diluted Earnings Per Common Share (Parenthetical) (Detail) - shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share | 229,220 | 179,052 | 634,168 |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments [Abstract] | |||
Domestic | $ (229) | $ (8) | $ (29) |
Foreign | 346 | 307 | 220 |
Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies | $ 117 | $ 299 | $ 191 |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal and state, Current | $ 14 | $ 5 | $ 7 |
U.S. federal and state, Deferred | 114 | (26) | (34) |
U.S. federal and state, Total | 128 | (21) | (27) |
Foreign, Current | 88 | 59 | 62 |
Foreign, Deferred | (23) | (5) | (2) |
Foreign, Total | 65 | 54 | 60 |
Provision (benefit) for income taxes | $ 193 | $ 33 | $ 33 |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Using U.S. Statutory Rate (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Computed tax expense at the federal statutory rate | $ 29 | $ 105 | $ 67 |
Impact of taxation at different rates, repatriation, losses and other | 6 | (75) | (37) |
Impact of increase (decrease) in valuation allowance on deferred taxes | (16) | (7) | 7 |
Impact of foreign losses for which a current tax benefit is not available | 1 | ||
Impact of non-deductible net currency losses | 2 | 2 | |
Impact of the Tax Cuts and Jobs Act of 2017 | 159 | ||
U.S. and state benefits from research and experimentation activities | (2) | (2) | (2) |
Provision (settlement) of unrecognized tax benefits | 1 | 7 | 1 |
Benefit from prior currency loss | (3) | ||
Impact of goodwill impairment charge | 18 | ||
Permanent differences, net | (1) | 5 | |
State taxes, net of federal effect | (3) | (1) | (2) |
Provision (benefit) for income taxes | $ 193 | $ 33 | $ 33 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Income Taxes [Line Items] | |||||||
Net tax expense from impact of Tax Cuts and Job Act of 2017 | $ 159 | ||||||
Net tax expense upon sale of assets | 3 | ||||||
Net tax benefits related to impairment | 29 | ||||||
Net discrete tax (benefits) charges related to tax settlements | $ 19 | 120 | $ (25) | $ 1 | |||
Net tax benefits from excess foreign tax credits upon repatriation of prior foreign earnings and accrual on certain foreign earnings | 16 | ||||||
Net tax benefits from change in valuation allowance | 15 | 6 | |||||
Net tax benefits for return to provision adjustments related to tax return filings | (4) | ||||||
Other miscellaneous tax items | $ 2 | 1 | |||||
Foreign currency transaction gain (loss), before tax | (3) | ||||||
Cost of renewal of the U.S. research and experimentation credit | 1 | ||||||
Income tax rate | 21.00% | 35.00% | 24.53% | ||||
Percentage of dividend received deduction for foreign dividends | 100.00% | ||||||
Provisional tax expense | (4) | $ 13 | |||||
Income tax rate for aggregate cash position | 15.50% | ||||||
Income tax rate for exceeds aggregate cash position | 8.00% | ||||||
(Provision) benefit for income taxes for deemed repatriation | 6 | $ (138) | |||||
Percentage of deduction for dividends from specified foreign corporations | 100.00% | ||||||
Provisional amount to tax expense | (16) | $ 8 | |||||
Percentage of tax on foreign income in excess of a deemed return on tangible assets of foreign corporations | 10.50% | ||||||
Net operating loss carryforwards | 768 | 768 | |||||
Other tax credit carryforwards | 98 | 98 | |||||
Undistributed earnings | 917 | 917 | |||||
Required future taxable operating income | $ 472 | ||||||
Expected term to realize deferred tax asset, years | 20 years | ||||||
Increased/(decreased) valuation allowance | $ 1 | (9) | |||||
Unrecognized tax benefits | 37 | 37 | 36 | 30 | $ 30 | ||
Unrecognized tax benefits, recorded | 26 | 26 | |||||
Unrecognized tax benefits, not recorded | 11 | 11 | |||||
Accruals for penalties | 1 | 1 | 1 | ||||
Accruals for interest | 9 | 9 | 8 | ||||
Total penalties and interest | 2 | $ 2 | 2 | ||||
Favorable impact on tax provision | $ 35 | ||||||
Earliest Tax Year [Member] | State Tax Authorities [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,005 | ||||||
Earliest Tax Year [Member] | Non-U.S. Jurisdictions [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,002 | ||||||
Earliest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,014 | ||||||
Latest Tax Year [Member] | State Tax Authorities [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,016 | ||||||
Latest Tax Year [Member] | Non-U.S. Jurisdictions [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,016 | ||||||
Latest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | |||||||
Income Taxes [Line Items] | |||||||
Tax years remain subject to examination | 2,016 | ||||||
U.S. Defined Benefit Plans [Member] | |||||||
Income Taxes [Line Items] | |||||||
Net deferred tax assets | $ 99 | $ 99 | |||||
Deferred Income Tax Charge [Member] | |||||||
Income Taxes [Line Items] | |||||||
Charge for valuation allowance on deferred tax assets in foreign jurisdiction | $ 5 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Components Of Deferred Tax Assets [Abstract] | ||
Deferred expenses | $ 17 | $ 22 |
Intangible assets | 23 | 43 |
Inventory | 4 | 1 |
Other | 4 | 14 |
Pension and other benefits | 45 | 59 |
Net operating loss carry-forwards | 146 | 149 |
Foreign tax credit carry-forwards | 12 | 132 |
R&D credit carry-forwards | 41 | 38 |
Other business credit carry-forwards | 39 | 37 |
Subtotal | 331 | 495 |
Valuation allowance | (169) | (168) |
Total deferred tax assets | 162 | 327 |
Property, plant and equipment | (56) | (116) |
Unremitted earnings of non-U.S. subsidiaries | (14) | (12) |
Total deferred tax liabilities | $ (70) | $ (128) |
Income Taxes - Expiration Dates
Income Taxes - Expiration Dates of Carryforwards (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | $ 768 |
Credits | 98 |
2019 to 2025 [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 282 |
Credits | 15 |
2026 and thereafter [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 162 |
Credits | 67 |
Indefinite Carry-Forwards [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Net operating loss carryforwards | 324 |
Credits | $ 16 |
Income Taxes - Expiration Dat_2
Income Taxes - Expiration Dates of Carryforwards (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2018 | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,026 |
Minimum [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,019 |
Maximum [Member] | |
Significant Tax Attributes And Dates Of Expiration [Line Items] | |
Expiration periods | 2,025 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of the year | $ 36 | $ 30 | $ 30 |
Additions based on tax provisions related to the current year | 2 | 2 | 2 |
Additions for tax positions of prior years | 1 | 8 | 5 |
Reductions of tax provisions of prior years | (1) | (3) | |
Reductions related to settlements | (2) | ||
Reductions from lapse of statute of limitations | (2) | (1) | (4) |
Balance at end of the year | $ 37 | $ 36 | $ 30 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 12 Months Ended | ||
Sep. 30, 2018USD ($)claimants | Sep. 30, 2017USD ($)claimants | Sep. 30, 2016USD ($) | |
Loss Contingencies [Line Items] | |||
Lease expiration period, years | 10 years | ||
Rent expense under such operating lease agreement | $ 32,000,000 | $ 33,000,000 | $ 31,000,000 |
Raw material purchased | 441,000,000 | $ 331,000,000 | 268,000,000 |
Long term purchase commitment related to information technology | $ 14,000,000 | ||
Purchase agreement period | 5 years | ||
Charges for environmental expense | $ 6,000,000 | ||
Respirator Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Annual fees paid by transferee to transferor company | $ 400,000 | ||
Number of claimants | claimants | 35,000 | 37,000 | |
Respirator reserve | $ 25,000,000 | $ 18,000,000 | |
Cash payments for respirator reserves | 3,000,000 | 3,000,000 | 3,000,000 |
Respirator Liabilities [Member] | Selling and Administrative Expenses [Member] | |||
Loss Contingencies [Line Items] | |||
Respirator charge | 10,000,000 | 0 | 13,000,000 |
Accounts Payable and Accrued Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Reserve for environmental matters included in accrued expenses | 12,000,000 | ||
Environmental Matters [Member] | |||
Loss Contingencies [Line Items] | |||
Reserved for environmental matters | 15,000,000 | 12,000,000 | |
Reserve for environmental matters included in accrued expenses | 12,000,000 | 2,000,000 | |
Reserve for environmental matters included in other liabilities | 3,000,000 | 10,000,000 | |
Cash payments for environmental reserves | 3,000,000 | 2,000,000 | 2,000,000 |
Environmental Matters [Member] | Operating and Maintenance Component [Member] | |||
Loss Contingencies [Line Items] | |||
Reserved for environmental matters | 3,000,000 | ||
Per Accident for Auto [Member] | |||
Loss Contingencies [Line Items] | |||
Self-insured liability | 500,000 | ||
Per Occurrence for All Other [Member] | |||
Loss Contingencies [Line Items] | |||
Self-insured liability | 2,000,000 | ||
Per Accident for U.S. Workers' Compensation [Member] | |||
Loss Contingencies [Line Items] | |||
Self-insured liability | 1,000,000 | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Retention for medical costs per person per annum | 250,000 | ||
Charges for environmental expense | 1,000,000 | 1,000,000 | |
Non-Controlling Interests [Member] | |||
Loss Contingencies [Line Items] | |||
Raw material purchased | 156,000,000 | 116,000,000 | $ 92,000,000 |
Accounts payable and accrued liabilities | $ 8,000,000 | $ 12,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Rental Commitments under Non-Cancelable Leases (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,019 | $ 22 |
2,020 | 13 |
2,021 | 10 |
2,022 | 9 |
2,023 | 9 |
2024 and thereafter | 69 |
Total future minimum rental commitments | $ 132 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Raw Material Purchased under Long Term Purchase Agreements (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | $ 441 | $ 331 | $ 268 |
Reinforcement Materials [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | 375 | 281 | 193 |
Performance Chemicals [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | 55 | 43 | 68 |
Purification Solutions [Member] | |||
Raw Material Purchased Under Long Term Purchase Agreements [Line Items] | |||
Raw material purchased | $ 11 | $ 7 | $ 7 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Components of Purchase Commitments (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2019 | $ 454 |
Payments Due by Fiscal Year 2020 | 297 |
Payments Due by Fiscal Year 2021 | 200 |
Payments Due by Fiscal Year 2022 | 195 |
Payments Due by Fiscal Year 2023 | 164 |
Payments Due Thereafter | 2,168 |
Payments Due, Total | 3,478 |
Reinforcement Materials [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2019 | 361 |
Payments Due by Fiscal Year 2020 | 234 |
Payments Due by Fiscal Year 2021 | 142 |
Payments Due by Fiscal Year 2022 | 138 |
Payments Due by Fiscal Year 2023 | 131 |
Payments Due Thereafter | 1,703 |
Payments Due, Total | 2,709 |
Performance Chemicals [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2019 | 70 |
Payments Due by Fiscal Year 2020 | 58 |
Payments Due by Fiscal Year 2021 | 57 |
Payments Due by Fiscal Year 2022 | 57 |
Payments Due by Fiscal Year 2023 | 33 |
Payments Due Thereafter | 465 |
Payments Due, Total | 740 |
Purification Solutions [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2019 | 8 |
Payments Due by Fiscal Year 2020 | 5 |
Payments Due by Fiscal Year 2021 | 1 |
Payments Due, Total | 14 |
Specialty Fluids [Member] | |
Long-term Purchase Commitment [Line Items] | |
Payments Due by Fiscal Year 2019 | 15 |
Payments Due, Total | $ 15 |
Financial Information by Segm_3
Financial Information by Segment & Geographic Area - Additional Information (Detail) | 12 Months Ended |
Sep. 30, 2018SegmentBusiness_Unit | |
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 |
Number of business activity | Business_Unit | 2 |
Financial Information by Segm_4
Financial Information by Segment & Geographic Area - Schedule of Performance Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 850 | $ 854 | $ 818 | $ 720 | $ 723 | $ 705 | $ 678 | $ 611 | $ 3,242 | $ 2,717 | $ 2,411 |
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 3,126 | 2,611 | 2,310 | ||||||||
Performance Chemicals [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,028 | 908 | 865 | ||||||||
Performance Chemicals [Member] | Specialty Carbons and Formulations [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 731 | 623 | 578 | ||||||||
Performance Chemicals [Member] | Metal Oxides [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 297 | $ 285 | $ 287 |
Financial Information by Segm_5
Financial Information by Segment & Geographic Area - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ 850 | $ 854 | $ 818 | $ 720 | $ 723 | $ 705 | $ 678 | $ 611 | $ 3,242 | $ 2,717 | $ 2,411 |
Depreciation and amortization | 149 | 155 | 161 | ||||||||
Equity in earnings of affiliated companies | 2 | 7 | 3 | ||||||||
Income (loss) from continuing operations before income taxes | 117 | 299 | 191 | ||||||||
Assets | 3,244 | 3,338 | 3,244 | 3,338 | 3,052 | ||||||
Total expenditures for additions to long-lived assets | 229 | 147 | 112 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 3,126 | 2,611 | 2,310 | ||||||||
Depreciation and amortization | 152 | 156 | 164 | ||||||||
Equity in earnings of affiliated companies | 7 | 12 | 8 | ||||||||
Income (loss) from continuing operations before income taxes | 480 | 409 | 370 | ||||||||
Assets | 2,876 | 2,778 | 2,876 | 2,778 | 2,597 | ||||||
Total expenditures for additions to long-lived assets | 224 | 139 | 110 | ||||||||
Unallocated and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 116 | 106 | 101 | ||||||||
Depreciation and amortization | (3) | (1) | (3) | ||||||||
Equity in earnings of affiliated companies | (5) | (5) | (5) | ||||||||
Income (loss) from continuing operations before income taxes | (363) | (110) | (179) | ||||||||
Assets | 368 | 560 | 368 | 560 | 455 | ||||||
Total expenditures for additions to long-lived assets | 5 | 8 | 2 | ||||||||
Reinforcement Materials [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 1,774 | 1,381 | 1,108 | ||||||||
Depreciation and amortization | 70 | 69 | 74 | ||||||||
Equity in earnings of affiliated companies | 1 | 6 | |||||||||
Income (loss) from continuing operations before income taxes | 279 | 193 | 137 | ||||||||
Assets | 1,319 | 1,189 | 1,319 | 1,189 | 1,093 | ||||||
Total expenditures for additions to long-lived assets | 97 | 68 | 46 | ||||||||
Performance Chemicals [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 1,028 | 908 | 865 | ||||||||
Depreciation and amortization | 48 | 46 | 48 | ||||||||
Equity in earnings of affiliated companies | 1 | ||||||||||
Income (loss) from continuing operations before income taxes | 200 | 201 | 225 | ||||||||
Assets | 919 | 708 | 919 | 708 | 629 | ||||||
Total expenditures for additions to long-lived assets | 94 | 47 | 33 | ||||||||
Purification Solutions [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 279 | 281 | 290 | ||||||||
Depreciation and amortization | 32 | 39 | 39 | ||||||||
Equity in earnings of affiliated companies | 6 | 6 | 7 | ||||||||
Income (loss) from continuing operations before income taxes | (7) | 6 | (5) | ||||||||
Assets | 460 | 741 | 460 | 741 | 736 | ||||||
Total expenditures for additions to long-lived assets | 16 | 19 | 30 | ||||||||
Specialty Fluids [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 45 | 41 | 47 | ||||||||
Depreciation and amortization | 2 | 2 | 3 | ||||||||
Income (loss) from continuing operations before income taxes | 8 | 9 | 13 | ||||||||
Assets | $ 178 | $ 140 | 178 | 140 | 139 | ||||||
Total expenditures for additions to long-lived assets | $ 17 | $ 5 | $ 1 |
Financial Information by Segm_6
Financial Information by Segment & Geographic Area - Financial Information by Reportable Segment (Parenthetical) (Detail) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | |||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% |
Financial Information by Segm_7
Financial Information by Segment & Geographic Area - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 850 | $ 854 | $ 818 | $ 720 | $ 723 | $ 705 | $ 678 | $ 611 | $ 3,242 | $ 2,717 | $ 2,411 |
Unallocated and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 116 | 106 | 101 | ||||||||
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 | 11 | 11 | 13 | ||||||||
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 105 | $ 95 | $ 88 |
Financial Information by Segm_8
Financial Information by Segment & Geographic Area - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable (Parenthetical) (Detail) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | |||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% | 100.00% |
Financial Information by Segm_9
Financial Information by Segment & Geographic Area - 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 | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Interest expense | $ (54) | $ (53) | $ (54) |
Global restructuring activities | 30 | (3) | (47) |
Gains (losses) on sale of investments | 10 | ||
Unallocated and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest expense | (54) | (53) | (54) |
Unallocated corporate costs | (61) | (50) | (45) |
General unallocated income (expense) | 2 | 3 | 4 |
Less: Equity in earnings of affiliated companies, net of tax | 2 | 7 | 3 |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | (363) | (110) | (179) |
Certain Items [Member] | |||
Segment Reporting Information [Line Items] | |||
Impairment of goodwill and long-lived assets of Purification Solutions | (254) | ||
Global restructuring activities | 30 | (3) | (47) |
Legal and environmental matters and reserves | (16) | 1 | (17) |
Inventory reserve adjustment | (13) | ||
Gains (losses) on sale of investments | 10 | ||
Acquisition and integration-related charges | (2) | ||
Executive transition costs | (2) | (6) | |
Non-recurring gain (loss) on foreign exchange | (11) | ||
Other certain items | (1) | (1) | |
Total certain items, pre-tax | $ (248) | $ (3) | $ (81) |
Financial Information by Seg_10
Financial Information by Segment & Geographic Area - Schedule of Income (Loss) from Continuing Operations before Income Taxes and Equity in Earnings of Affiliated Companies for Unallocated and Other (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | ||
Increase (decrease) in general unallocated income expense | $ 11 | $ 3 |
Financial Information by Seg_11
Financial Information by Segment & Geographic Area - Revenue from External Customers and Long-Lived Asset Information by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | $ 850 | $ 854 | $ 818 | $ 720 | $ 723 | $ 705 | $ 678 | $ 611 | $ 3,242 | $ 2,717 | $ 2,411 |
Net property, plant and equipment | 1,296 | 1,305 | 1,296 | 1,305 | 1,290 | ||||||
U.S [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 676 | 645 | 605 | ||||||||
Net property, plant and equipment | 493 | 493 | 493 | 493 | 490 | ||||||
China [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 752 | 573 | 482 | ||||||||
Net property, plant and equipment | 270 | 261 | 270 | 261 | 266 | ||||||
Other Foreign Countries [Member] | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Revenues from external customers | 1,814 | 1,499 | 1,324 | ||||||||
Net property, plant and equipment | $ 533 | $ 551 | $ 533 | $ 551 | $ 534 |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Information - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales and other operating revenues | $ 850 | $ 854 | $ 818 | $ 720 | $ 723 | $ 705 | $ 678 | $ 611 | $ 3,242 | $ 2,717 | $ 2,411 |
Gross profit | 213 | 200 | 190 | 178 | 174 | 161 | 169 | 159 | 781 | 663 | 575 |
Net income (loss) | 102 | 99 | (163) | (112) | 79 | 55 | 80 | 59 | (74) | 273 | 162 |
Net income (loss) attributable to Cabot Corporation | $ 94 | $ 88 | $ (173) | $ (122) | $ 72 | $ 47 | $ 74 | $ 55 | $ (113) | $ 248 | $ 147 |
Earnings (loss) per common share - basic: | $ 1.51 | $ 1.41 | $ (2.80) | $ (1.98) | $ 1.15 | $ 0.73 | $ 1.19 | $ 0.87 | $ (1.85) | $ 3.94 | $ 2.34 |
Earnings (loss) per common share - diluted: | $ 1.51 | $ 1.40 | $ (2.80) | $ (1.98) | $ 1.13 | $ 0.73 | $ 1.19 | $ 0.86 | $ (1.85) | $ 3.91 | $ 2.32 |
Unaudited Quarterly Financial_4
Unaudited Quarterly Financial Information - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule Of Quarterly Financial Information Disclosure [Line Items] | |||||
Proceeds from the sale of land | $ 39 | $ 16 | |||
Net discrete tax (benefits) charges related to tax settlements | $ 19 | $ 120 | $ (25) | $ 1 | |
Operational Restructuring [Member] | Thane, India [Member] | |||||
Schedule Of Quarterly Financial Information Disclosure [Line Items] | |||||
Proceeds from the sale of land | $ 28 | $ 28 |