Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2021 | Feb. 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CBT | |
Entity Registrant Name | Cabot Corporation | |
Entity Central Index Key | 0000016040 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 56,586,811 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-5667 | |
Entity Tax Identification Number | 04-2271897 | |
Entity Address, Address Line One | Two Seaport Lane | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02210-2019 | |
City Area Code | 617 | |
Local Phone Number | 345-0100 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $1 par value per share | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales and other operating revenues | $ 968 | $ 746 |
Cost of sales | 770 | 553 |
Gross profit | 198 | 193 |
Selling and administrative expenses | 71 | 61 |
Research and technical expenses | 13 | 14 |
Purification Solutions assets held for sale impairment charge (Note D) | 197 | |
Income (loss) from operations | (83) | 118 |
Interest and dividend income | 3 | 2 |
Interest expense | (12) | (12) |
Other income (expense) | (1) | (9) |
Income (loss) before income taxes and equity in earnings of affiliated companies | (93) | 99 |
(Provision) benefit for income taxes | 12 | (29) |
Equity in earnings of affiliated companies, net of tax | 1 | 0 |
Net income (loss) | (80) | 70 |
Net income (loss) attributable to noncontrolling interests, net of tax | 9 | 10 |
Net income (loss) attributable to Cabot Corporation | $ (89) | $ 60 |
Weighted-average common shares outstanding: | ||
Basic | 56.8 | 56.5 |
Diluted | 56.8 | 56.6 |
Earnings (loss) per common share: | ||
Basic | $ (1.57) | $ 1.06 |
Diluted | $ (1.57) | $ 1.06 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ (80) | $ 70 |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustment, net of tax | (28) | 94 |
Derivatives: net investment hedges | ||
(Gains) losses reclassified to interest expense, net of tax | (1) | (1) |
Pension and other postretirement benefit liability adjustments, net of tax | 1 | 3 |
Other comprehensive income (loss), net of tax of $— and $(3) | (28) | 96 |
Comprehensive income (loss) | (108) | 166 |
Net income (loss) attributable to noncontrolling interests, net of tax | 9 | 10 |
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax | 2 | 7 |
Comprehensive income (loss) attributable to noncontrolling interests | 11 | 17 |
Comprehensive income (loss) attributable to Cabot Corporation | $ (119) | $ 149 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) $ in Millions | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Statement Of Income And Comprehensive Income [Abstract] | |
Net of tax | $ (3) |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 179 | $ 168 |
Accounts and notes receivable, net of reserve for doubtful accounts of $4 and $4 | 660 | 645 |
Inventories: | ||
Raw materials | 154 | 168 |
Finished goods | 341 | 300 |
Other | 51 | 55 |
Total inventories | 546 | 523 |
Prepaid expenses and other current assets | 113 | 89 |
Assets held for sale | 111 | |
Total current assets | 1,609 | 1,425 |
Property, plant and equipment, net | 1,267 | 1,376 |
Goodwill | 140 | 140 |
Equity affiliates | 14 | 40 |
Intangible assets, net | 70 | 100 |
Deferred income taxes | 57 | 53 |
Other assets | 158 | 172 |
Total assets | 3,315 | 3,306 |
Current liabilities: | ||
Short-term borrowings | 226 | 72 |
Accounts payable and accrued liabilities | 620 | 667 |
Income taxes payable | 37 | 35 |
Current portion of long-term debt | 373 | 373 |
Liabilities held for sale | 71 | |
Total current liabilities | 1,327 | 1,147 |
Long-term debt | 714 | 717 |
Deferred income taxes | 73 | 73 |
Other liabilities | 253 | 279 |
Contingencies (Note H) | ||
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: 56,723,411 and 56,870,237 shares, Outstanding: 56,579,992 and 56,726,818 shares | 57 | 57 |
Less cost of 143,419 and 143,419 shares of common treasury stock | (4) | (4) |
Additional paid-in capital | 11 | 24 |
Retained earnings | 1,049 | 1,159 |
Accumulated other comprehensive income (loss) | (319) | (289) |
Total Cabot Corporation stockholders' equity | 794 | 947 |
Noncontrolling interests | 154 | 143 |
Total stockholders' equity | 948 | 1,090 |
Total liabilities and stockholders' equity | $ 3,315 | $ 3,306 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 |
Statement Of Financial Position [Abstract] | ||
Accounts and notes receivable, reserve for doubtful accounts | $ 4 | $ 4 |
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 | 56,723,411 | 56,870,237 |
Common stock, outstanding shares | 56,579,992 | 56,726,818 |
Common treasury stock, shares | 143,419 | 143,419 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ (80) | $ 70 |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 39 | 39 |
Purification Solutions assets held for sale impairment charge | 197 | |
Deferred tax provision (benefit) | (36) | (2) |
Employee benefit plan settlement | 6 | |
Equity in earnings of affiliated companies | (1) | 0 |
Non-cash compensation | 6 | 4 |
Other non-cash (income) expense | 5 | 5 |
Changes in assets and liabilities: | ||
Accounts and notes receivable | (57) | (76) |
Inventories | (95) | (37) |
Prepaid expenses and other assets | (27) | (10) |
Accounts payable and accrued liabilities | 9 | 14 |
Income taxes payable | 3 | 7 |
Other liabilities | (12) | 1 |
Cash provided (used) by operating activities | (49) | 21 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (30) | (29) |
Other | 1 | |
Cash provided (used) by investing activities | (29) | (29) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance (repayments) of commercial paper, net | 156 | |
Proceeds from long-term debt | 50 | |
Repayments of long-term debt | (5) | (66) |
Purchases of common stock | (19) | (2) |
Proceeds from sales of common stock | 1 | |
Cash dividends paid to noncontrolling interests | (8) | (1) |
Cash dividends paid to common stockholders | (21) | (20) |
Cash provided (used) by financing activities | 103 | (38) |
Effects of exchange rate changes on cash | (15) | 42 |
Increase (decrease) in cash, cash equivalents and restricted cash | 10 | (4) |
Cash, cash equivalents and restricted cash at beginning of period | 170 | 151 |
Cash, cash equivalents and restricted cash at end of period | $ 180 | $ 147 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) $ in Millions | Dec. 31, 2021USD ($) |
Cash and cash equivalents | $ 179 |
Cash, cash equivalents and restricted cash | 180 |
Prepaid Expenses and Other Current Assets | |
Restricted cash classified within Prepaid expenses and other current assets | $ 1 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - 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, 2020 | $ 814 | $ 53 | $ 989 | $ (351) | $ 691 | $ 123 | |
Beginning Balance, Shares at Sep. 30, 2020 | 56,467 | ||||||
Net income (loss) | 70 | 60 | 60 | 10 | |||
Total other comprehensive income (loss) | 96 | 89 | 89 | 7 | |||
Cash dividends paid, Common stock, per share | (20) | (20) | (20) | ||||
Cash dividends declared to noncontrolling interests | (1) | (1) | |||||
Issuance of stock under equity compensation plans | 1 | $ 1 | 1 | ||||
Issuance of stock under equity compensation plans, Shares | 192 | ||||||
Amortization of share-based compensation | 4 | 4 | 4 | ||||
Purchase and retirement of common stock | (2) | (2) | (2) | ||||
Purchase and retirement of common stock, Shares | (53) | ||||||
Amount reclassified to retained earnings in excess of additional paid in capital | (3) | 3 | |||||
Ending Balance at Dec. 31, 2020 | 962 | $ 53 | 1,032 | (262) | 823 | 139 | |
Ending Balance, Shares at Dec. 31, 2020 | 56,606 | ||||||
Beginning Balance at Sep. 30, 2021 | 1,090 | $ 53 | 24 | 1,159 | (289) | 947 | 143 |
Beginning Balance, Shares at Sep. 30, 2021 | 56,727 | ||||||
Net income (loss) | (80) | (89) | (89) | 9 | |||
Total other comprehensive income (loss) | (28) | (30) | (30) | 2 | |||
Cash dividends paid, Common stock, per share | (21) | (21) | (21) | ||||
Issuance of stock under equity compensation plans, Shares | 202 | ||||||
Amortization of share-based compensation | 6 | 6 | 6 | ||||
Purchase and retirement of common stock | (19) | (19) | (19) | ||||
Purchase and retirement of common stock, Shares | (349) | ||||||
Ending Balance at Dec. 31, 2021 | $ 948 | $ 53 | $ 11 | $ 1,049 | $ (319) | $ 794 | $ 154 |
Ending Balance, Shares at Dec. 31, 2021 | 56,580 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement Of Stockholders Equity [Abstract] | ||
Common stock, cash dividends paid, per share | $ 0.37 | $ 0.35 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting policies generally accepted in the United States (“U.S.”) and include the accounts of Cabot Corporation (“Cabot” or the “Company”) and its wholly-owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights. Intercompany transactions have been eliminated in consolidation. The unaudited consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to Cabot’s Annual Report on Form 10-K for its fiscal year ended September 30, 2021 (“2021 10-K”). The financial information submitted herewith is unaudited and reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods ended December 31, 2021 and 2020. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | B. Significant Accounting Policies Recently Adopted Accounting Standards In December 2019, the FASB issued a new standard Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance that reduces complexity in certain areas. The new standard is effective for fiscal years beginning after December 15, 2020. The Company adopted this standard on October 1, 2021. The adoption of this standard did not materially impact the Company’s consolidated financial statements. Recent Accounting Pronouncements In March 2020, the FASB issued a new standard on Reference Rate Reform, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The standard was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on its consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | C. Acquisitions Tokai Carbon (Tianjin) Co. In November 2021, Cabot entered into an agreement with Tokai Carbon Group to purchase its carbon black manufacturing facility in Tianjin, China, Tokai Carbon (Tianjin) Co., for approximately $9 million, which is subject to the satisfaction or waiver of customary closing adjustments. The purchase is expected to close in the second quarter of fiscal 2022. |
Divestiture
Divestiture | 3 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Divestiture | D. Divestiture Pending Sale of Purification Solutions Business In November 2021, the Company and an affiliate of funds advised by One Equity Partners (“OEP”) entered into a Share Purchase Agreement (the “Agreement”) for the sale of Cabot’s Purification Solutions business (the “Business”), a reporting segment of the Company, subject to the satisfaction or waiver of the conditions set forth in the Agreement. Under the terms of the Agreement, OEP will acquire the Business on a cash-free and debt-free basis in a transaction valued at approximately $111 million, subject to certain debt-like and other closing adjustments, including a customary working capital adjustment. The net cash proceeds from the transaction are expected to be approximately $80 million, to be paid at the closing. The transaction is expected to close in the second quarter of fiscal 2022. During the first quarter of fiscal 2022, the assets and liabilities of the Business met the criteria for assets held for sale. The sale of the Business does not meet the criteria to be reported as a discontinued operation as it does not constitute a significant strategic business shift that will have a major effect on the Company’s operations and financial results. In addition, based on the carrying value of the Business as of December 31, 2021 and an estimate of its fair value less costs to sell, Cabot recorded a pre-tax impairment charge of $197 million ($160 million after-tax) in the first quarter of fiscal 2022. The following table summarizes the carrying amounts of the major classes of assets and liabilities of the Business classified as held for sale as of December 31, 2021, and the associated impairment charge: (In millions) Assets Accounts and notes receivable, net of reserve for doubtful accounts $ 37 Inventories 67 Prepaid expenses and other current assets 2 Property, plant and equipment, net 106 Equity affiliates 28 Intangible assets, net 27 Deferred income taxes 31 Other assets 10 Total assets held for sale 308 Impairment of assets held for sale (197 ) Adjusted assets held for sale $ 111 Liabilities Short-term borrowings $ (2 ) Accounts payable and accrued liabilities (51 ) Income taxes payable (1 ) Long-term debt (17 ) Total liabilities assumed (71 ) Total net assets held for sale $ 40 Sale of Marshall Mine In September 2020, the Company entered into an agreement to sell its lignite mine located in Marshall, Texas to ADA Carbon Solutions, LLC (“ADACS”) for a nominal amount. As part of the transaction, the Company agreed to fund a portion of the costs ADACS expects to incur to close the mine. Additionally, in conjunction with the sale, the Business entered into a long-term supply agreement with ADACS, a producer of lignite-based activated carbon, which included an agreement for the Company to fund certain capital expenditures. As of December 31, 2021, $11 million was included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets for these mine closure costs and capital expenditures. In connection with the sale of the Business, the Company plans to settle this liability in full with ADACS in the second quarter of fiscal 2022. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | E. Employee Benefit Plans Net periodic defined benefit pension costs include the following: Three Months Ended December 31 2021 2020 Pension Benefits (In millions) Service cost $ 1 $ 1 Interest cost 1 1 Expected return on plan assets (2 ) (2 ) Amortization of actuarial loss — 1 Settlement charge (1) — 6 Net periodic benefit (credit) cost $ — $ 7 (1) In the first quarter of fiscal 2021, the Company recognized a $ 6 million settlement charge in Other income (expense) in the Consolidated Statements of Operations related to the final asset transfers associated with the termination of the Company’s U.S. qualified pension plan. Other postretirement benefit costs were less than $1 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | F. Goodwill and Intangible Assets The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the three months ended December 31, 2021 are as follows: Reinforcement Materials Performance Chemicals Total (In millions) Balance at September 30, 2021 $ 48 $ 92 $ 140 Foreign currency impact — — — Balance at December 31, 2021 $ 48 $ 92 $ 140 The following table provides information regarding the Company’s intangible assets: December 31, 2021 September 30, 2021 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives Developed technologies (1) $ 36 $ (7 ) $ 29 $ 62 $ (12 ) $ 50 Trademarks (1) 2 — 2 11 (1 ) 10 Customer relationships 60 (21 ) 39 60 (20 ) 40 Total intangible assets $ 98 $ (28 ) $ 70 $ 133 $ (33 ) $ 100 (1) Developed technologies intangible assets with a carrying value of $25 million and accumulated amortization of $5 million and trademark intangible assets with a carrying value of $8 million and accumulated amortization of $1 million related to the Purification Solutions business were classified as assets held for sale as of December 31, 2021. Intangible assets are amortized over their estimated useful lives, which range between ten and twenty-five years, with a weighted average amortization period of approximately seventeen years. Amortization expense was $2 million for each of the three months ended December 31, 2021 and 2020 and is included in Cost of sales, Selling and administrative expenses and Research and technical expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $6 million each year for the next five fiscal years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) (“AOCI”) | 3 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Accumulated Other Comprehensive Income (Loss) (“AOCI”) | G. Accumulated Other Comprehensive Income (Loss) (“AOCI”) Comprehensive income combines net income (loss) and other comprehensive income items, which are reported as components of stockholders’ equity in the accompanying Consolidated Balance Sheets. Changes in each component of AOCI, net of tax, were as follows: Currency Translation Adjustment Pension and Other Postretirement Benefit Liability Adjustments Total (In millions) Balance at September 30, 2021, attributable to Cabot Corporation $ (265 ) $ (24 ) $ (289 ) Other comprehensive income (loss) before reclassifications (28 ) 1 (27 ) Amounts reclassified from AOCI (1 ) — (1 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests 2 — 2 Balance at December 31, 2021, attributable to Cabot Corporation $ (296 ) $ (23 ) $ (319 ) The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in each of the three months ended December 31, 2021 and 2020 were as follows: Affected Line Item in the Consolidated Three Months Ended December 31 Statements of Operations 2021 2020 (In millions) Derivatives: net investment hedges (Gains) losses reclassified to interest expense Interest expense $ (1 ) $ (1 ) Pension and other postretirement Amortization of actuarial losses and prior service cost (credit) Net Periodic Benefit Cost (Note E) — 1 Settlement charge Net Periodic Benefit Cost (Note E) — 6 Total before tax $ (1 ) $ 6 |
Contingencies
Contingencies | 3 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | H. Contingencies Respirator Liabilities Cabot has exposure in connection with a safety respiratory products business that a subsidiary acquired from American Optical Corporation (“AO”) in an April 1990 asset purchase transaction. The subsidiary manufactured respirators under the AO brand and disposed of that business in July 1995. In connection with its acquisition of the business, the subsidiary agreed, in certain circumstances, to assume a portion of AO’s liabilities, including costs of legal fees together with amounts paid in settlements and judgments, allocable to AO respiratory products used prior to the 1990 purchase by the Cabot subsidiary. In exchange for the subsidiary’s assumption of certain of AO’s respirator liabilities, AO agreed to provide to the subsidiary the benefits of: (i) AO’s insurance coverage for the period prior to the 1990 acquisition and (ii) a former owner’s indemnity of AO holding it harmless from any liability allocable to AO respiratory products used prior to May 1982. As more fully described in the 2021 10-K, the respirator liabilities generally involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, allegedly resulting from the use of respirators that are alleged to have been negligently designed and/or labeled. At no time did this respiratory product line represent a significant portion of the respirator market. In addition to Cabot’s subsidiary, other parties are responsible for significant portions of the costs of these respirator liabilities (as defined in the 2021 10-K, the “Payor Group”). Cabot has a reserve to cover its expected share of liabilities for pending and future respirator liability claims, which is included in Other liabilities and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. The Company expects these liabilities to be incurred over a number of years. The reserve was $44 million at both December 31, 2021 and September 30, 2021. The Company’s current estimate of the cost of its share of pending and future respirator liability claims is based on facts and circumstances existing at this time, including the number and nature of the remaining claims. 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, including potential settlements of groups of claims, (iv) significant changes in the legal costs of defending these claims, (v) changes in the nature of claims received or changes in our assessment of the viability of these claims, (vi) trial and appellate outcomes, (vii) changes in the law and procedure applicable to these claims, (viii) the financial viability of the parties that contribute to the payment of respirator claims, (ix) exhaustion or changes in the recoverability of the insurance coverage maintained by certain members of the Payor Group, or a change in the availability of the indemnity provided by a former owner of AO, (x) changes in the allocation of costs among the various parties paying legal and settlement costs, and (xi) a determination that the assumptions that were used to estimate Cabot’s share of liability are no longer reasonable. The Company cannot determine the impact of these potential developments on its current estimate of its share of liability for existing and future claims. Because reserves are limited to amounts that are probable and estimable as of a relevant measurement date, and there is inherent difficulty in projecting the impact of potential developments on Cabot’s share of liability for these existing and future claims, it is reasonably possible that the liabilities for existing and future claims could change in the near term and that change could be material. Insurance Recoveries - Pepinster, Belgium In July 2021, the Company’s Specialty Compounds manufacturing and research and development facility in Pepinster, Belgium experienced significant flooding. Full production is temporarily halted and is not expected to resume until the second quarter of fiscal 2022. During fiscal 2021, the Company recorded expenses of $17 million for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds. During the first quarter of fiscal 2022 the Company recorded additional expenses of $5 million for clean-up costs, inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance proceeds as the Company expects insurance proceeds in excess of the total incurred costs and policy deductibles. The flood-related expenses and loss recovery are both included within Cost of sales in the Consolidated Statements of Operations for the first quarter of fiscal 2022. During fiscal 2021, the Company received insurance proceeds of $8 million. During the first quarter of fiscal 2022, the Company received additional insurance proceeds of $5 million which is included in Cash provided by operating activities in the Consolidated Statements of Cash Flows for the first quarter of fiscal 2022. At both December 31, 2021 and September 30, 2021 the receivable for insurance recoveries was $9 million and is included in Accounts and notes receivable on the Consolidated Balance Sheet. 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. |
Income Tax
Income Tax | 3 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax | I. Income Tax Effective Tax Rate Three Months Ended December 31 2021 2020 (Dollars in millions) (Provision) benefit for income taxes $ 12 $ (29 ) Effective tax rate 13 % 29 % For the three months ended December 31, 2021, the (Provision) benefit for income taxes included a net discrete tax benefit of $37 million Income tax in Interim Periods The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. The income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction. Valuation allowances are provided against the future tax benefits that arise from the deferred tax assets in jurisdictions for which no benefit can be recognized. The estimated annual effective tax rate may be significantly impacted by nondeductible expenses and the Company’s projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised. Uncertainties Ca bot 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 change in the unrecognized tax benefits may also occur within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of limitations. However, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time. Cabot files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2018 through 2020 tax years generally remain subject to examination by the IRS and various tax years from 2005 through 2020 remain subject to examination by the respective state tax authorities. In significant non-U.S. jurisdictions, various tax years from 2005 through 2020 remain subject to examination by their respective tax authorities. During each of the three months ended December 31, 2021 and 2020, Cabot released uncertain tax positions of $1 million, due to the expiration of statutes of limitations in various jurisdictions. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | J. Earnings Per Share The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations: Three Months Ended December 31 2021 2020 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ (89 ) $ 60 Less: Dividends and dividend equivalents to participating securities — — Less: Undistributed earnings allocated to participating securities (1) — — Earnings (loss) allocated to common shareholders (numerator) $ (89 ) $ 60 Weighted average common shares and participating securities outstanding 57.7 57.2 Less: Participating securities (1) 0.9 0.7 Adjusted weighted average common shares (denominator) 56.8 56.5 Earnings (loss) per common share - basic: $ (1.57 ) $ 1.06 Diluted EPS: Earnings (loss) allocated to common shareholders $ (89 ) $ 60 Plus: Earnings allocated to participating securities — — Less: Adjusted earnings allocated to participating securities (2) — — Earnings (loss) allocated to common shareholders (numerator) $ (89 ) $ 60 Adjusted weighted average common shares outstanding 56.8 56.5 Effect of dilutive securities: Common shares issuable (3) — 0.1 Adjusted weighted average common shares (denominator) 56.8 56.6 Earnings (loss) per common share - diluted: $ (1.57 ) $ 1.06 (1) Participating securities consist of shares underlying all outstanding and achieved performance-based restricted stock units and all unvested time-based restricted stock units. The holders of these units are entitled to receive dividend equivalents payable in cash to the extent dividends are paid on the Company’s outstanding common stock and equal in value to the dividends that would have been paid in respect of the shares underlying such units. Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended December 31 2021 2020 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ (89 ) $ 60 Less: Dividends declared on common stock 21 20 Less: Dividends declared on participating securities — — Undistributed earnings (loss) $ (110 ) $ 40 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ (110 ) $ 40 Undistributed earnings allocated to participating shareholders — — Undistributed earnings (loss) $ (110 ) $ 40 (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; and (ii) assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan. For the three months ended December 31, 2021, 2,356,941 incremental shares of common stock, which includes shares of participating securities as described in (1) above, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive due to the Company’s net loss position. For the three months ended December 31, 2020, 1,305,993 incremental shares of common stock were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring
Restructuring | 3 Months Ended |
Dec. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | K. Restructuring Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three months ended December 31, 2021 and 2020 as follows: Three Months Ended December 31 2021 2020 (In millions) Cost of sales $ 1 $ 3 Selling and administrative expenses 1 — Total $ 2 $ 3 Details of all restructuring activities and the related reserves during the three months ended December 31, 2021 were as follows: Severance and Employee Benefits Environmental Remediation Total (In millions) Reserve at September 30, 2021 $ 5 $ 4 $ 9 Charges (gain) 2 — 2 Cash paid (2 ) — (2 ) Reserve at December 31, 2021 $ 5 $ 4 $ 9 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. Reorganization Actions Beginning in fiscal 2020, the Company has been undertaking various actions that it believes will enable it to perform certain activities more effectively. These actions have primarily consisted of the reorganization of Cabot’s leadership structure, the creation of a Global Business Services function and other operational efficiency initiatives. As of December 31, 2021, the Company had recorded total charges of $24 million, of which $22 million was recorded in prior fiscal years, primarily related to severance costs, and also had $4 million of accrued severance charges in the Consolidated Balance Sheets related to these actions. The Company expects to record additional restructuring charges of approximately $1 million throughout the rest of fiscal 2022 and $2 million thereafter, primarily related to severance and site demolition costs associated with these reorganization activities. As of December 31, 2021, the Company had paid a total of $19 million in cash, of which $18 million was paid in prior fiscal years, and expects to have future cash outlays of approximately $4 million in the remainder of fiscal 2022 and $3 million thereafter related to these reorganization activities. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | L. 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 the first three months of either fiscal 2022 or 2021. At December 31, 2021 and September 30, 2021, Cabot had derivatives relating to foreign currency risks, including a net investment hedge and forward foreign currency contracts, carried at fair value. At December 31, 2021, the fair value of these derivatives was a net asset of $3 million and was included in Prepaid expenses and other current assets, and Other assets on the Consolidated Balance Sheets. At September 30, 2021, the fair value of these derivatives was a net asset of $3 million and was included in Prepaid expenses and other current assets, Accounts payable and accrued liabilities, and Other assets on the Consolidated Balance Sheets. These derivatives are classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on observable inputs. At each of December 31, 2021 and September 31, 2021, the fair value of guaranteed investment contracts included in Other assets on the Consolidated Balance Sheets was $10 million. Guaranteed investment contracts were classified as Level 2 instruments within the fair value hierarchy as the fair value determination was based on other observable inputs. At December 31, 2021 and September 30, 2021, 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 $1.06 billion and $1.12 billion, respectively, as of December 31, 2021, and $1.06 billion and $1.13 billion, respectively, as of September 30, 2021. The fair values of Cabot’s fixed rate long-term debt are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of Cabot’s floating rate long-term debt and finance and operating lease obligations approximate their fair values. All such measurements are based on observable inputs and are classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model. |
Derivatives
Derivatives | 3 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | M. Derivatives Foreign Currency Risk Management Cabot’s international operations are subject to certain risks, including currency exchange rate fluctuations and government actions. Cabot endeavors to match the currency in which debt is issued to the currency of the Company’s major, stable cash receipts. In some situations, Cabot has issued debt denominated in U.S. dollars and then entered into cross-currency swaps that exchange the dollar principal and interest payments into Euro-denominated principal and interest payments. Additionally, the Company has foreign currency exposure arising from its net investments in foreign operations. Cabot may enter into cross-currency swaps to mitigate the impact of currency rate changes on the Company’s net investments. The Company also has foreign currency exposure arising from the denomination of monetary assets and liabilities in foreign currencies other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the dollar value of future cash flows generated in foreign currencies. Accordingly, Cabot uses short-term forward contracts to minimize the exposure to foreign currency risk. In certain situations where the Company has forecasted purchases under a long-term commitment or forecasted sales denominated in a foreign currency, Cabot may enter into appropriate financial instruments in accordance with the Company’s risk management policy to hedge future cash flow exposures. The following table provides details of the derivatives held as of December 31, 2021 and September 30, 2021 to manage foreign currency risk. Notional Amount Description Borrowing December 31, 2021 September 30, 2021 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 36 million USD 48 million No designation (1) Accounting for Derivative Instruments and Hedging Activities 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 The following table summarizes the impact of the cross-currency swaps to AOCI and the Consolidated Statements of Operations: Three Months Ended December 31 2021 2020 2021 2020 2021 2020 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 $ — $ (13 ) $ (1 ) $ (1 ) $ — $ — |
Financial Information by Segmen
Financial Information by Segment | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | N. Financial Information by Segment The Company identifies a product line 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 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 three reportable segments: Reinforcement Materials, Performance Chemicals and Purification Solutions. In November 2021, the Company entered into an agreement to sell the Purification Solutions business as discussed in Note D. Upon consummation of the transaction, the Company will be organized into two reportable segments. The Reinforcement Materials segment combines the reinforcing carbons and engineered elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons, fumed metal oxides, battery materials and aerogel product lines into the Performance Additives business, and combines the specialty compounds and inkjet colorants product lines into the Formulated Solutions business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and therefore have been aggregated into one reportable segment. The net sales from each of these businesses for the three months ended December 31, 2021 and 2020 were as follows: Three Months Ended December 31 2021 2020 (In millions) Performance Additives $ 227 $ 184 Formulated Solutions 75 83 Total Performance Chemicals $ 302 $ 267 The Purification Solutions segment consists of the Company’s activated carbon business. Income (loss) before income taxes (“Segment EBIT”) is presented for each reportable segment in the table below. Segment EBIT excludes Interest expense, general unallocated income (expense), unallocated corporate costs, and certain items, meaning items management does not consider representative of on-going operating segment results. In addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable. Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Segment Total Unallocated and Other (1) Consolidated Total (In millions) Three Months Ended December 31, 2021 Revenues from external customers (2) $ 541 $ 302 $ 61 $ 904 $ 64 $ 968 Income (loss) before income taxes (3) $ 85 $ 52 $ — $ 137 $ (230 ) $ (93 ) Three Months Ended December 31, 2020 Revenues from external customers (2) $ 375 $ 267 $ 59 $ 701 $ 45 $ 746 Income (loss) before income taxes (3) $ 88 $ 54 $ (2 ) $ 140 $ (41 ) $ 99 ( 1 ) ( 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 , discounting charges for certain Notes receivable , and by-product revenue . Details are provided in the table below: Three Months Ended December 31 2021 2020 (In millions) Shipping and handling fees $ 39 $ 33 By-product sales 28 17 Other (3 ) (5 ) Total $ 64 $ 45 ( 3 ) Consolidated Total Income (loss) before income taxes Three Months Ended December 31 2021 2020 (In millions) Interest expense $ (12 ) $ (12 ) Certain items (a) Purification Solutions assets held for sale impairment charge (Note D) (197 ) — Divestiture related charges (4 ) — Global restructuring activities (Note K) (2 ) (3 ) Legal and environmental matters and reserves (1 ) — Acquisition and integration-related charges (1 ) (1 ) Employee benefit plan settlement and other charges — (6 ) Other 1 (1 ) Total certain items, pre-tax (204 ) (11 ) Unallocated corporate costs (b) (14 ) (13 ) General unallocated income (expense) (c) 1 (5 ) Less: Equity in earnings of affiliated companies, net of tax (d) 1 — Total $ (230 ) $ (41 ) (a) Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue, the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT and unrealized holding gains (losses) for equity securities. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region. Three Months Ended December 31, 2021 Reinforcement Materials Performance Chemicals Purification Solutions Consolidated Total (In millions) Americas $ 206 $ 90 $ 27 $ 323 Asia Pacific 240 136 8 384 Europe, Middle East and Africa 95 76 26 197 Segment revenues from external customers 541 302 61 904 Unallocated and other 64 Net sales and other operating revenues $ 968 Three Months Ended December 31, 2020 Reinforcement Materials Performance Chemicals Purification Solutions Consolidated Total (In millions) Americas $ 149 $ 69 $ 25 $ 243 Asia Pacific 155 118 9 282 Europe, Middle East and Africa 71 80 25 176 Segment revenues from external customers 375 267 59 701 Unallocated and other 45 Net sales and other operating revenues $ 746 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued a new standard Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance that reduces complexity in certain areas. The new standard is effective for fiscal years beginning after December 15, 2020. The Company adopted this standard on October 1, 2021. The adoption of this standard did not materially impact the Company’s consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued a new standard on Reference Rate Reform, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The standard was effective upon issuance and may generally be applied through December 31, 2022 to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on its consolidated financial statements. |
Divestiture (Tables)
Divestiture (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Major Classes of Assets and Liabilities of the Business Classified as Held for Sale | The following table summarizes the carrying amounts of the major classes of assets and liabilities of the Business classified as held for sale as of December 31, 2021, and the associated impairment charge: (In millions) Assets Accounts and notes receivable, net of reserve for doubtful accounts $ 37 Inventories 67 Prepaid expenses and other current assets 2 Property, plant and equipment, net 106 Equity affiliates 28 Intangible assets, net 27 Deferred income taxes 31 Other assets 10 Total assets held for sale 308 Impairment of assets held for sale (197 ) Adjusted assets held for sale $ 111 Liabilities Short-term borrowings $ (2 ) Accounts payable and accrued liabilities (51 ) Income taxes payable (1 ) Long-term debt (17 ) Total liabilities assumed (71 ) Total net assets held for sale $ 40 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Net Periodic Defined Benefit Pension Costs | Net periodic defined benefit pension costs include the following: Three Months Ended December 31 2021 2020 Pension Benefits (In millions) Service cost $ 1 $ 1 Interest cost 1 1 Expected return on plan assets (2 ) (2 ) Amortization of actuarial loss — 1 Settlement charge (1) — 6 Net periodic benefit (credit) cost $ — $ 7 (1) In the first quarter of fiscal 2021, the Company recognized a $ 6 million settlement charge in Other income (expense) in the Consolidated Statements of Operations related to the final asset transfers associated with the termination of the Company’s U.S. qualified pension plan. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
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 three months ended December 31, 2021 are as follows: Reinforcement Materials Performance Chemicals Total (In millions) Balance at September 30, 2021 $ 48 $ 92 $ 140 Foreign currency impact — — — Balance at December 31, 2021 $ 48 $ 92 $ 140 |
Schedule of Intangible Assets | The following table provides information regarding the Company’s intangible assets: December 31, 2021 September 30, 2021 Gross Carrying Value Accumulated Amortization Net Intangible Assets Gross Carrying Value Accumulated Amortization Net Intangible Assets (In millions) Intangible assets with finite lives Developed technologies (1) $ 36 $ (7 ) $ 29 $ 62 $ (12 ) $ 50 Trademarks (1) 2 — 2 11 (1 ) 10 Customer relationships 60 (21 ) 39 60 (20 ) 40 Total intangible assets $ 98 $ (28 ) $ 70 $ 133 $ (33 ) $ 100 (1) Developed technologies intangible assets with a carrying value of $25 million and accumulated amortization of $5 million and trademark intangible assets with a carrying value of $8 million and accumulated amortization of $1 million related to the Purification Solutions business were classified as assets held for sale as of December 31, 2021. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (“AOCI”) (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Changes in Each Component of AOCI, Net of Tax | Changes in each component of AOCI, net of tax, were as follows: Currency Translation Adjustment Pension and Other Postretirement Benefit Liability Adjustments Total (In millions) Balance at September 30, 2021, attributable to Cabot Corporation $ (265 ) $ (24 ) $ (289 ) Other comprehensive income (loss) before reclassifications (28 ) 1 (27 ) Amounts reclassified from AOCI (1 ) — (1 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests 2 — 2 Balance at December 31, 2021, attributable to Cabot Corporation $ (296 ) $ (23 ) $ (319 ) |
Amounts Reclassified Out of AOCI | The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in each of the three months ended December 31, 2021 and 2020 were as follows: Affected Line Item in the Consolidated Three Months Ended December 31 Statements of Operations 2021 2020 (In millions) Derivatives: net investment hedges (Gains) losses reclassified to interest expense Interest expense $ (1 ) $ (1 ) Pension and other postretirement Amortization of actuarial losses and prior service cost (credit) Net Periodic Benefit Cost (Note E) — 1 Settlement charge Net Periodic Benefit Cost (Note E) — 6 Total before tax $ (1 ) $ 6 |
Income Tax (Tables)
Income Tax (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Effective Tax Rate | Effective Tax Rate Three Months Ended December 31 2021 2020 (Dollars in millions) (Provision) benefit for income taxes $ 12 $ (29 ) Effective tax rate 13 % 29 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) | The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations: Three Months Ended December 31 2021 2020 (In millions, except per share amounts) Basic EPS: Net income (loss) attributable to Cabot Corporation $ (89 ) $ 60 Less: Dividends and dividend equivalents to participating securities — — Less: Undistributed earnings allocated to participating securities (1) — — Earnings (loss) allocated to common shareholders (numerator) $ (89 ) $ 60 Weighted average common shares and participating securities outstanding 57.7 57.2 Less: Participating securities (1) 0.9 0.7 Adjusted weighted average common shares (denominator) 56.8 56.5 Earnings (loss) per common share - basic: $ (1.57 ) $ 1.06 Diluted EPS: Earnings (loss) allocated to common shareholders $ (89 ) $ 60 Plus: Earnings allocated to participating securities — — Less: Adjusted earnings allocated to participating securities (2) — — Earnings (loss) allocated to common shareholders (numerator) $ (89 ) $ 60 Adjusted weighted average common shares outstanding 56.8 56.5 Effect of dilutive securities: Common shares issuable (3) — 0.1 Adjusted weighted average common shares (denominator) 56.8 56.6 Earnings (loss) per common share - diluted: $ (1.57 ) $ 1.06 (1) Participating securities consist of shares underlying all outstanding and achieved performance-based restricted stock units and all unvested time-based restricted stock units. The holders of these units are entitled to receive dividend equivalents payable in cash to the extent dividends are paid on the Company’s outstanding common stock and equal in value to the dividends that would have been paid in respect of the shares underlying such units. |
Calculation of Undistributed Earnings | Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows: Three Months Ended December 31 2021 2020 (In millions) Calculation of undistributed earnings (loss): Net income (loss) attributable to Cabot Corporation $ (89 ) $ 60 Less: Dividends declared on common stock 21 20 Less: Dividends declared on participating securities — — Undistributed earnings (loss) $ (110 ) $ 40 Allocation of undistributed earnings (loss): Undistributed earnings (loss) allocated to common shareholders $ (110 ) $ 40 Undistributed earnings allocated to participating shareholders — — Undistributed earnings (loss) $ (110 ) $ 40 (2) Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities. (3) Represents incremental shares of common stock from the (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; and (ii) assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan. For the three months ended December 31, 2021, 2,356,941 incremental shares of common stock, which includes shares of participating securities as described in (1) above, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive due to the Company’s net loss position. For the three months ended December 31, 2020, 1,305,993 incremental shares of common stock were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Recorded Restructuring Activities | Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three months ended December 31, 2021 and 2020 as follows: Three Months Ended December 31 2021 2020 (In millions) Cost of sales $ 1 $ 3 Selling and administrative expenses 1 — Total $ 2 $ 3 |
Restructuring Activities and Related Reserves | Details of all restructuring activities and the related reserves during the three months ended December 31, 2021 were as follows: Severance and Employee Benefits Environmental Remediation Total (In millions) Reserve at September 30, 2021 $ 5 $ 4 $ 9 Charges (gain) 2 — 2 Cash paid (2 ) — (2 ) Reserve at December 31, 2021 $ 5 $ 4 $ 9 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
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 December 31, 2021 and September 30, 2021 to manage foreign currency risk. Notional Amount Description Borrowing December 31, 2021 September 30, 2021 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 36 million USD 48 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: Three Months Ended December 31 2021 2020 2021 2020 2021 2020 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 $ — $ (13 ) $ (1 ) $ (1 ) $ — $ — |
Financial Information by Segm_2
Financial Information by Segment (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Performance Segment | The net sales from each of these businesses for the three months ended December 31, 2021 and 2020 were as follows: Three Months Ended December 31 2021 2020 (In millions) Performance Additives $ 227 $ 184 Formulated Solutions 75 83 Total Performance Chemicals $ 302 $ 267 |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Reinforcement Materials Performance Chemicals Purification Solutions Segment Total Unallocated and Other (1) Consolidated Total (In millions) Three Months Ended December 31, 2021 Revenues from external customers (2) $ 541 $ 302 $ 61 $ 904 $ 64 $ 968 Income (loss) before income taxes (3) $ 85 $ 52 $ — $ 137 $ (230 ) $ (93 ) Three Months Ended December 31, 2020 Revenues from external customers (2) $ 375 $ 267 $ 59 $ 701 $ 45 $ 746 Income (loss) before income taxes (3) $ 88 $ 54 $ (2 ) $ 140 $ (41 ) $ 99 ( 1 ) ( 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 , discounting charges for certain Notes receivable , and by-product revenue . Details are provided in the table below: Three Months Ended December 31 2021 2020 (In millions) Shipping and handling fees $ 39 $ 33 By-product sales 28 17 Other (3 ) (5 ) Total $ 64 $ 45 ( 3 ) Consolidated Total Income (loss) before income taxes Three Months Ended December 31 2021 2020 (In millions) Interest expense $ (12 ) $ (12 ) Certain items (a) Purification Solutions assets held for sale impairment charge (Note D) (197 ) — Divestiture related charges (4 ) — Global restructuring activities (Note K) (2 ) (3 ) Legal and environmental matters and reserves (1 ) — Acquisition and integration-related charges (1 ) (1 ) Employee benefit plan settlement and other charges — (6 ) Other 1 (1 ) Total certain items, pre-tax (204 ) (11 ) Unallocated corporate costs (b) (14 ) (13 ) General unallocated income (expense) (c) 1 (5 ) Less: Equity in earnings of affiliated companies, net of tax (d) 1 — Total $ (230 ) $ (41 ) (a) Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT. (b) Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests. (c) General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue, the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT and unrealized holding gains (losses) for equity securities. (d) Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies. |
Revenues from External Customers by Geographic Region | The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region. Three Months Ended December 31, 2021 Reinforcement Materials Performance Chemicals Purification Solutions Consolidated Total (In millions) Americas $ 206 $ 90 $ 27 $ 323 Asia Pacific 240 136 8 384 Europe, Middle East and Africa 95 76 26 197 Segment revenues from external customers 541 302 61 904 Unallocated and other 64 Net sales and other operating revenues $ 968 Three Months Ended December 31, 2020 Reinforcement Materials Performance Chemicals Purification Solutions Consolidated Total (In millions) Americas $ 149 $ 69 $ 25 $ 243 Asia Pacific 155 118 9 282 Europe, Middle East and Africa 71 80 25 176 Segment revenues from external customers 375 267 59 701 Unallocated and other 45 Net sales and other operating revenues $ 746 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Millions | 1 Months Ended |
Nov. 30, 2021USD ($) | |
Tokai Carbon Group(Tianjin) Co. [Member] | |
Business Acquisition [Line Items] | |
Business acquisition, purchase price | $ 9 |
Divestiture - Additional Inform
Divestiture - Additional Information (Detail) - USD ($) $ in Millions | Nov. 30, 2021 | Dec. 31, 2021 |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Impairment charge | $ 197 | |
Purification Solutions [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Disposal value for the sale of business | $ 111 | |
Proceeds from sale of business | $ 80 | |
Impairment charge | 197 | |
Impairment charge after tax | 160 | |
Marshall Mine | ADA Carbon Solutions, LLC [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Accounts payable and accrued liabilities | $ 11 |
Divestiture - Summary of Major
Divestiture - Summary of Major Classes of Assets and Liabilities of the Business Classified as Held for Sale (Detail) $ in Millions | Dec. 31, 2021USD ($) |
Assets | |
Accounts and notes receivable, net of reserve for doubtful accounts | $ 37 |
Inventories | 67 |
Prepaid expenses and other current assets | 2 |
Property, plant and equipment, net | 106 |
Equity affiliates | 28 |
Intangible assets, net | 27 |
Deferred income taxes | 31 |
Other assets | 10 |
Total assets held for sale | 308 |
Impairment of assets held for sale | (197) |
Adjusted assets held for sale | 111 |
Liabilities | |
Short-term borrowings | (2) |
Accounts payable and accrued liabilities | (51) |
Income taxes payable | (1) |
Long-term debt | (17) |
Total liabilities assumed | (71) |
Total net assets held for sale | $ 40 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Defined Benefit Pension Costs (Detail) - Pension Benefits [Member] - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 1 | 1 |
Expected return on plan assets | $ (2) | (2) |
Amortization of actuarial loss | 1 | |
Settlement charge | 6 | |
Net periodic benefit (credit) cost | $ 7 |
Employee Benefit Plans - Net _2
Employee Benefit Plans - Net Periodic Defined Benefit Pension Costs (Parenthetical) (Detail) - U.S. Defined Benefit Plans [Member] $ in Millions | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Settlement charge | $ 6 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible List] | Other income (expense) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other postretirement benefit costs (gains) | $ 1,000,000 | $ 1,000,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill Balances (Detail) $ in Millions | Dec. 31, 2021USD ($) |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | $ 140 |
Ending balance | 140 |
Reinforcement Materials [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 48 |
Ending balance | 48 |
Performance Chemicals [Member] | |
Goodwill And Intangible Assets [Line Items] | |
Beginning balance | 92 |
Ending balance | $ 92 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 | |
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | $ 98 | $ 133 | |
Accumulated Amortization | (28) | (33) | |
Net Intangible Assets, finite lives | 70 | 100 | |
Developed Technologies [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | 36 | 62 |
Accumulated Amortization | [1] | (7) | (12) |
Net Intangible Assets, finite lives | [1] | 29 | 50 |
Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | [1] | 2 | 11 |
Accumulated Amortization | [1] | (1) | |
Net Intangible Assets, finite lives | [1] | 2 | 10 |
Customer Relationships [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Value, finite lives | 60 | 60 | |
Accumulated Amortization | (21) | (20) | |
Net Intangible Assets, finite lives | $ 39 | $ 40 | |
[1] | Developed technologies intangible assets with a carrying value of $25 million and accumulated amortization of $5 million and trademark intangible assets with a carrying value of $8 million and accumulated amortization of $1 million related to the Purification Solutions business were classified as assets held for sale as of December 31, 2021. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 | |
Finite Lived Intangible Assets [Line Items] | |||
Carrying value of intangible assets | $ 98 | $ 133 | |
Accumulated amortization of intangible assets | 28 | 33 | |
Developed Technologies [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Carrying value of intangible assets | [1] | 36 | 62 |
Accumulated amortization of intangible assets | [1] | 7 | 12 |
Developed Technologies [Member] | Purification Solutions [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Carrying value of intangible assets | 25 | ||
Accumulated amortization of intangible assets | 5 | ||
Trademarks [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Carrying value of intangible assets | [1] | 2 | 11 |
Accumulated amortization of intangible assets | [1] | $ 1 | |
Trademarks [Member] | Purification Solutions [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Carrying value of intangible assets | 8 | ||
Accumulated amortization of intangible assets | $ 1 | ||
[1] | Developed technologies intangible assets with a carrying value of $25 million and accumulated amortization of $5 million and trademark intangible assets with a carrying value of $8 million and accumulated amortization of $1 million related to the Purification Solutions business were classified as assets held for sale as of December 31, 2021. |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill And Intangible Assets [Line Items] | ||
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, Selling and Administrative Expenses and Research and Technical Expenses [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 2 | $ 2 |
Minimum [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Useful life of intangible assets | 10 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 | 17 years |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Changes in Each Component of AOCI, Net of Tax (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | $ 1,090 |
Ending Balance | 948 |
Currency Translation Adjustment [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (265) |
Other comprehensive income (loss) before reclassifications | (28) |
Amounts reclassified from AOCI | (1) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 2 |
Ending Balance | (296) |
Pension and Other Postretirement Benefit Liability Adjustments [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (24) |
Other comprehensive income (loss) before reclassifications | 1 |
Ending Balance | (23) |
Accumulated Other Comprehensive Income (Loss) [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (289) |
Other comprehensive income (loss) before reclassifications | (27) |
Amounts reclassified from AOCI | (1) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 2 |
Ending Balance | $ (319) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Amounts Reclassified Out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
(Gains) Losses Reclassified to Interest Expense [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total before tax | $ (1) | $ (1) |
Amortization of Actuarial Losses and Prior Service Cost (Credit) [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total before tax | 1 | |
Settlement Charge [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total before tax | 6 | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total before tax | $ (1) | $ 6 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | |
Pepinster, Belgium [Member] | Flood [Member] | ||
Loss Contingencies [Line Items] | ||
Flood-related expenses | $ 5 | $ 17 |
Insurance proceeds | 5 | 8 |
Insurance settlements receivable | 9 | 9 |
Respirator Liabilities [Member] | ||
Loss Contingencies [Line Items] | ||
Respirator reserve | $ 44 | $ 44 |
Income Tax - Effective Tax Rate
Income Tax - Effective Tax Rate (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
(Provision) benefit for income taxes | $ 12 | $ (29) |
Effective tax rate | 13.00% | 29.00% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes [Line Items] | ||
Net discrete tax (benefits) expense related to tax settlements | $ (37) | $ 2 |
Uncertain tax positions from expirations of statute of limitations | $ 1 | $ 1 |
Earliest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2018 | |
Latest Tax Year [Member] | United States Internal Revenue Service (IRS) [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2020 | |
State Tax Authorities [Member] | Earliest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2005 | |
State Tax Authorities [Member] | Latest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2020 | |
Non-U.S. Jurisdictions [Member] | Earliest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2005 | |
Non-U.S. Jurisdictions [Member] | Latest Tax Year [Member] | ||
Income Taxes [Line Items] | ||
Tax years remain subject to examination | 2020 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Basic EPS: | ||
Net income (loss) attributable to Cabot Corporation | $ (89) | $ 60 |
Earnings (loss) allocated to common shareholders (numerator) | $ (89) | $ 60 |
Weighted average common shares and participating securities outstanding | 57.7 | 57.2 |
Less: Participating securities | 0.9 | 0.7 |
Adjusted weighted average common shares (denominator) | 56.8 | 56.5 |
Earnings (loss) per common share - basic: | $ (1.57) | $ 1.06 |
Diluted EPS: | ||
Earnings (loss) allocated to common shareholders | $ (89) | $ 60 |
Earnings (loss) allocated to common shareholders (numerator) | $ (89) | $ 60 |
Adjusted weighted average common shares outstanding | 56.8 | 56.5 |
Common shares issuable | 0.1 | |
Adjusted weighted average common shares (denominator) | 56.8 | 56.6 |
Earnings (loss) per common share - diluted: | $ (1.57) | $ 1.06 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Undistributed Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Cabot Corporation | $ (89) | $ 60 |
Less: Dividends declared on common stock | 21 | 20 |
Undistributed earnings (loss) | (110) | 40 |
Undistributed earnings (loss) allocated to common shareholders | $ (110) | $ 40 |
Earnings Per Share - Componen_2
Earnings Per Share - Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS) (Parenthetical) (Detail) - shares | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share | 2,356,941 | 1,305,993 |
Restructuring - Recorded Restru
Restructuring - Recorded Restructuring Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve, period expense | $ 2 | $ 3 |
Cost of Sales [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve, period expense | 1 | $ 3 |
Selling and Administrative Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring reserve, period expense | $ 1 |
Restructuring - Restructuring A
Restructuring - Restructuring Activities and Related Reserves (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Reserve balance | $ 9 |
Charges (gain) | 2 |
Cash paid | (2) |
Reserve balance | 9 |
Severance and Employee Benefits [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Reserve balance | 5 |
Charges (gain) | 2 |
Cash paid | (2) |
Reserve balance | 5 |
Environmental Remediation [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Reserve balance | 4 |
Reserve balance | $ 4 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) - Reorganization Actions [Member] - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | |
Restructuring Cost And Reserve [Line Items] | ||
Severance costs | $ 24 | $ 22 |
Accrued severance charges | 4 | |
Restructuring charges expected throughout rest of 2022 related to site demolition costs | 1 | |
Restructuring charges expected thereafter fiscal year related to severance and site demolition costs | 2 | |
Restructuring cash payments of fiscal year | 19 | $ 18 |
Restructuring cash payments through the reminder of fiscal 2022 | 4 | |
Restructuring future cash payments thereafter fiscal year | $ 3 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, liabilities, Level 2 to Level 1 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, assets, transfers into Level 3, amount | 0 | 0 | |
Fair value, assets, transfers out of Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers into Level 3, amount | 0 | 0 | |
Fair value, liabilities, transfers out of Level 3, amount | 0 | $ 0 | |
Fair value of long-term debt | 1,120,000,000 | $ 1,130,000,000 | |
Fixed Rate Debt [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of long-term debt | 1,060,000,000 | 1,060,000,000 | |
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 | 10,000,000 | 10,000,000 | |
Significant Observable Inputs (Level 2) [Member] | Foreign Currency Risks [Member] | Prepaid Expenses and Other Current Assets and Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets (liabilities), at fair Value, net | $ 3,000,000 | ||
Significant Observable Inputs (Level 2) [Member] | Foreign Currency Risks [Member] | Prepaid Expenses and Other Current Assets Accounts Payable and Accrued Liabilities and Other Assets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets (liabilities), at fair Value, net | $ 3,000,000 |
Derivatives - Details of Deriva
Derivatives - Details of Derivatives Held to Manage Foreign Currency Risk (Detail) | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Sep. 30, 2021USD ($) | Sep. 30, 2021EUR (€) | |
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] | $ 36,000,000 | $ 48,000,000 | ||
[1] | As of both December 31, 2021 and September 30, 2021, Cabot’s forward foreign exchange contracts were denominated in Indonesian rupiah and Czech koruna and the fair value of these derivative instruments were a nominal amount. |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - Cross Currency Swaps [Member] - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
Derivative [Line Items] | ||
Fair value of swaps, net assets | $ 3,000,000 | |
Fair value of swaps, net liability | $ 3,000,000 | |
Net Investment Hedge [Member] | ||
Derivative [Line Items] | ||
Notional Amount | 250,000,000 | |
Cumulative gain (loss) related to swaps | $ 5,000,000 | $ 6,000,000 |
Net Investment Hedge [Member] | Fixed Rate Debt [Member] | ||
Derivative [Line Items] | ||
Derivative Instruments Frequency of Cash Settlements | semi-annually |
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 | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments Gain Loss [Line Items] | ||
Gain/(Loss) Recognized in AOCI | $ (13) | |
(Gain)/Loss Reclassified from AOCI into Interest Expense in the Consolidated Statements of Operations | $ (1) | $ (1) |
Financial Information by Segm_3
Financial Information by Segment - Additional Information (Detail) - Segment | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Number of business reportable segments | 3 | |
Performance Chemicals [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of business reportable segments | 1 | |
Scenario, Forecast [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of business reportable segments | 2 |
Financial Information by Segm_4
Financial Information by Segment - Schedule of Performance Segment (Detail) - Performance Chemicals [Member] - Operating Segments [Member] - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 302 | $ 267 |
Performance Additives [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 227 | 184 |
Formulated Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 75 | $ 83 |
Financial Information by Segm_5
Financial Information by Segment - Financial Information by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 968 | $ 746 |
Income (loss) before income taxes | (93) | 99 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 904 | 701 |
Income (loss) before income taxes | 137 | 140 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 64 | 45 |
Income (loss) before income taxes | (230) | (41) |
Reinforcement Materials [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 541 | 375 |
Income (loss) before income taxes | 85 | 88 |
Performance Chemicals [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 302 | 267 |
Income (loss) before income taxes | 52 | 54 |
Purification Solutions [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 61 | 59 |
Income (loss) before income taxes | $ (2) |
Financial Information by Segm_6
Financial Information by Segment - Financial Information by Reportable Segment (Parenthetical) (Detail) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Percentage of sale of an equity method affiliate | 100.00% | 100.00% |
Financial Information by Segm_7
Financial Information by Segment - Sales of Equity Method Affiliate and Discounting Charges for Certain Notes Receivable, by-product Revenue and Indirect Tax Settlement Credits (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ 968 | $ 746 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 64 | 45 |
Unallocated and Other [Member] | Shipping and Handling Costs [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 39 | 33 |
Unallocated and Other [Member] | By-product Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | 28 | 17 |
Unallocated and Other [Member] | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues from external customers | $ (3) | $ (5) |
Financial Information by Segm_8
Financial Information by Segment - Schedule of Income (Loss) from Continuing Operations before Income Taxes and Equity in Earnings of Affiliated Companies for Unallocated and Other (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Interest expense | $ (12) | $ (12) |
Purification Solutions assets held for sale impairment charge (Note D) | (197) | |
Global restructuring activities | (2) | (3) |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest expense | (12) | (12) |
Unallocated corporate costs | (14) | (13) |
General unallocated income (expense) | 1 | (5) |
Less: Equity in earnings of affiliated companies, net of tax | 1 | |
Income from continuing operations before income taxes and equity in earnings of affiliated companies | (230) | (41) |
Certain Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Purification Solutions assets held for sale impairment charge (Note D) | (197) | |
Divestiture related charges | (4) | |
Global restructuring activities | (2) | (3) |
Legal and environmental matters and reserves | (1) | |
Acquisition and integration-related charges | (1) | (1) |
Employee benefit plan settlement and other charges | (6) | |
Other | 1 | (1) |
Total certain items, pre-tax | $ (204) | $ (11) |
Financial Information by Segm_9
Financial Information by Segment - Revenue from External Customers by Geographic Region (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | $ 968 | $ 746 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 904 | 701 |
Unallocated and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 64 | 45 |
Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 323 | 243 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 384 | 282 |
Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 197 | 176 |
Reinforcement Materials [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 541 | 375 |
Reinforcement Materials [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 206 | 149 |
Reinforcement Materials [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 240 | 155 |
Reinforcement Materials [Member] | Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 95 | 71 |
Performance Chemicals [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 302 | 267 |
Performance Chemicals [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 90 | 69 |
Performance Chemicals [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 136 | 118 |
Performance Chemicals [Member] | Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 76 | 80 |
Purification Solutions [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 61 | 59 |
Purification Solutions [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 27 | 25 |
Purification Solutions [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | 8 | 9 |
Purification Solutions [Member] | Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales and other operating revenues | $ 26 | $ 25 |