1
FORM 10-Q
____________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
JUNE 30, 2001
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
COMMISSION FILE NUMBER 1-5667
CABOT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2271897
(State of Incorporation) (I.R.S. Employer Identification No.)
TWO SEAPORT LANE 02210-2019
BOSTON, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (617) 345-0100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES __X__ NO _____
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
AS OF AUGUST 1, 2001, THE COMPANY HAD 62,698,282 SHARES OF COMMON
STOCK, PAR VALUE $1 PER SHARE, OUTSTANDING.
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CABOT CORPORATION
INDEX
PAGE
----
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income
Three Months Ended June 30, 2001 and 2000 3
Consolidated Statements of Income
Nine Months Ended June 30, 2001 and 2000 4
Consolidated Balance Sheets
June 30, 2001 and September 30, 2000 5
Consolidated Statements of Cash Flows
Nine Months Ended June 30, 2001 and 2000 7
Consolidated Statement of Changes in Stockholders' Equity
Nine Months Ended June 30, 2001 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 20
Part II. Other Information
Item 1. Legal Proceedings 24
Item 6. Exhibits and Reports on Form 8-K 24
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended June 30
(In millions, except per share amounts)
UNAUDITED
2001 2000
------- -------
Revenues:
Net sales and other operating revenues $ 436 $ 414
Interest and dividend income 6 1
----- -----
Total revenues 442 415
----- -----
Costs and expenses:
Cost of sales 316 311
Selling and administrative expenses 55 42
Research and technical service 12 12
Interest expense 8 7
Special item 4 (8)
Other charges (income), net 1 (2)
----- -----
Total costs and expenses 396 362
----- -----
Income before income taxes 46 53
Provision for income taxes (13) (19)
Equity in net income of affiliated companies 7 5
Minority interest in net income (2) (1)
----- -----
Income from continuing operations 38 38
Discontinued Operations:
Income from operations of discontinued businesses,
net of income taxes -- 8
----- -----
Net income 38 46
Dividends on preferred stock, net of tax benefit -- (1)
----- -----
Net income available to common shares $ 38 $ 45
===== =====
Weighted-average common shares outstanding:
Basic 62 65
===== =====
Diluted 73 73
===== =====
Income per common share
Basic:
Continuing operations $0.59 $0.56
Discontinued operations:
Income from operations of discontinued businesses -- 0.13
----- -----
Net income $0.59 $0.69
===== =====
Diluted:
Continuing operations $0.51 $0.51
Discontinued operations:
Income from operations of discontinued businesses -- 0.11
----- -----
Net income $0.51 $0.62
===== =====
Dividends per common share $0.13 $0.11
===== =====
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended June 30
(In millions, except per share amounts)
UNAUDITED
2001 2000
------- -------
Revenues:
Net sales and other operating revenues $ 1,289 $ 1,187
Interest and dividend income 24 4
------- -------
Total revenues 1,313 1,191
------- -------
Costs and expenses:
Cost of sales 961 870
Selling and administrative expenses 152 127
Research and technical service 35 32
Interest expense 25 26
Special items 21 (8)
Other charges, net 2 --
------- -------
Total costs and expenses 1,196 1,047
------- -------
Income before income taxes 117 144
Provision for income taxes (34) (52)
Equity in net income of affiliated companies 15 8
Minority interest in net income (5) (4)
------- -------
Income from continuing operations 93 96
Discontinued Operations:
Income from operations of discontinued businesses, net of
income taxes -- 28
Gain on sale of businesses, net of income taxes 3 --
------- -------
Net income 96 124
Dividends on preferred stock, net of tax benefit (2) (2)
------- -------
Net income available to common shares $ 94 $ 122
======= =======
Weighted-average common shares outstanding:
Basic 63 65
======= =======
Diluted 75 73
======= =======
Income per common share
Basic:
Continuing operations $ 1.44 $ 1.45
Discontinued operations:
Income from operations of discontinued businesses -- 0.43
Gain on sale of business 0.05 --
------- -------
Net income $ 1.49 $ 1.88
======= =======
Diluted:
Continuing operations $ 1.24 $ 1.31
Discontinued operations:
Income from operations of discontinued businesses -- 0.38
Gain on sale of business 0.04 --
------- -------
Net income $ 1.28 $ 1.69
======= =======
Dividends per common share $ 0.35 $ 0.33
======= =======
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 2001 and September 30, 2000
(In millions)
ASSETS
June 30 September 30
2001 2000
----------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 394 $ 638
Accounts and notes receivable (net of reserve for doubtful
accounts of $3 and $3) 306 280
Inventories:
Raw materials 78 73
Work in process 45 45
Finished goods 102 83
Other 32 31
------- -------
Total inventories 257 232
Prepaid expenses 22 23
Deferred income taxes 18 17
------- -------
Total current assets 997 1,190
------- -------
Investments:
Equity 74 74
Other 43 27
------- -------
Total investments 117 101
Property, plant and equipment 1,804 1,794
Accumulated depreciation and amortization (1,037) (988)
------- -------
Net property, plant and equipment 767 806
Other assets:
Intangible assets, net of accumulated amortization 19 21
Deferred income taxes 2 2
Other assets 14 14
------- -------
Total other assets 35 37
------- -------
Total assets $ 1,916 $ 2,134
======= =======
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 2001 and September 30, 2000
(In millions, except for share amounts)
LIABILITIES & STOCKHOLDERS' EQUITY
June 30 September 30
2001 2000
----------- ------------
(Unaudited)
Current liabilities:
Notes payable to banks $ 17 $ 20
Current portion of long-term debt 2 48
Accounts payable and accrued liabilities 233 425
Deferred income taxes 1 1
------- -------
Total current liabilities 253 494
------- -------
Long-term debt 437 329
Deferred income taxes 90 90
Other liabilities 144 143
Commitments and contingencies (Note E)
Minority interest 35 31
Stockholders' equity:
Preferred stock:
Authorized: 2,000,000 shares of $1 par value
Series A Junior Participating Preferred Stock
Issued and outstanding: none
Series B ESOP Convertible Preferred Stock 7.75% Cumulative
Issued: 75,336 shares, outstanding: 59,592 and 62,285 shares
(aggregate redemption value of $60 and $62) 75 75
Less cost of shares of preferred treasury stock (31) (24)
Common stock:
Authorized: 200,000,000 shares of $1 par value
Issued and outstanding: 62,387,308 and 67,700,060 shares 62 68
Additional paid-in capital -- 111
Retained earnings 1,059 1,040
Unearned compensation (19) (39)
Deferred employee benefits (54) (56)
Notes receivable for restricted stock (16) (27)
Accumulated other comprehensive loss (119) (101)
------- -------
Total stockholders' equity 957 1,047
------- -------
Total liabilities and stockholders' equity $ 1,916 $ 2,134
======= =======
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30, 2001 and 2000
(In millions)
UNAUDITED
2001 2000
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 96 $ 124
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 87 96
Deferred tax expense (benefit) (6) 5
Equity in income of affiliated companies,
net of dividends received (6) (2)
Special items 13 --
Gain on sale of business, net of income taxes (3) --
Non-cash compensation 16 11
Other, net 6 4
Changes in assets and liabilities, net of the effect of
the consolidation of equity affiliates:
Increase in accounts and notes receivable (33) (61)
(Increase) decrease in inventory (31) 11
(Increase) decrease in prepayments and other assets 1 (6)
Decrease in accounts payable and accrued liabilities (15) (17)
Increase (decrease) in income taxes payable (164) 29
Increase (decrease) in other liabilities 2 (14)
Other, net (7) 1
----- -----
Cash provided by (used in) operating activities (44) 181
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of business 5 --
Proceeds from sale of property, plant and equipment 2 2
Additions to property, plant and equipment (65) (87)
Purchase of investments (5) --
Acquisitions, excluding cash acquired -- (14)
----- -----
Cash used in investing activities (63) (99)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 129 17
Repayments of long-term debt (63) (37)
Decrease in short-term debt (2) (76)
Proceeds from initial public offering of Cabot Microelectronics Corporation -- 83
Purchases of preferred and common stock (192) (45)
Sales and issuances of preferred and common stock 7 9
Cash dividends paid to stockholders (25) (24)
Employee loan repayments 11 4
----- -----
Cash used in financing activities (135) (69)
----- -----
Effect of exchange rate changes on cash (2) (4)
----- -----
Increase (decrease) in cash and cash equivalents (244) 9
Cash and cash equivalents at beginning of period 638 35
----- -----
Cash and cash equivalents at end of period $ 394 $ 44
===== =====
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Nine Months Ended June 30, 2001
(In millions)
UNAUDITED
Accumu- Notes
lated Recei-
Pre- Addit- Other Un- vable Total Total
Pre- ferred ional Compre- earned Deferred for Rest- Stock- Comp-
ferred Treasury Common Paid-in Retained hensive Compen- Employee ricted holders' rehensive
Stock Stock Stock Capital Earnings Loss sation Benefits Stock Equity Income
--------------------------------------------------------------------------------------------------------
Balance at
September 30, 2000 $ 75 $ (24) $ 68 $ 111 $ 1,040 $ (101) $ (39) $ (56) $ (27) $ 1,047
--------------------------------------------------------------------------------------------
Net income 96 $ 96
Foreign currency
translation adjustments (27) (27)
Change in unrealized
gain on available-for-
sale securities 9 9
----
Total comprehensive
income $ 78
====
Common dividends
paid (23)
Issuance of stock
under employee
compensation plans,
net of tax benefit 6
Issuance of common
stock to CRISP 1
Purchase and retirement
of common stock (6) (127) (52)
Purchase of treasury
stock - preferred (7)
Preferred dividends
paid to Employee
Stock Ownership
Plan, net of tax (2)
Principal payment by
Employee Stock Ownership
Plan under guaranteed
loan 2
Amortization of unearned
compensation 9 20
Notes Receivable -
issuances, payments,
and forfeitures 11
--------------------------------------------------------------------------------------------
Balance at June 30, 2001 $ 75 $ (31) $ 62 $ - $ 1,059 $ (119) $ (19) $ (54) $ (16) $ 957
============================================================================================
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001
UNAUDITED
A. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Cabot
Corporation and majority-owned and controlled U.S. and non-U.S.
subsidiaries (Cabot). Investments in 20 to 50 percent owned affiliates are
accounted for on the equity method. Intercompany transactions have been
eliminated.
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 Form 10-K for the year ended September
30, 2000.
The financial information submitted herewith is unaudited and reflects all
adjustments which are, in the opinion of management, necessary to provide a
fair statement of the results for the interim periods ended June 30, 2001
and 2000. 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.
B. SPECIAL ITEMS AND BUSINESS DEVELOPMENTS
During the quarter a $4 million charge was recorded, related to the
resignation of Cabot's Chief Financial Officer. Included in the charge is a
$3 million non-cash charge to accelerate the vesting of common stock issued
under the company's long term incentive compensation plan and a $1 million
cash payment. Also included in special items for fiscal 2001 is the $17
million charge recorded in the second quarter, related to the retirement of
Cabot's Chief Executive Officer. The $17 million charge included a $10
million non-cash charge to accelerate the vesting of common stock issued
under the company's long term incentive compensation plan and a $7 million
cash payment.
On June 16, 2001, the open offer for approximately 3.5 million shares of
Cabot India Limited closed. Cabot India Limited is a majority-owned
subsidiary of Cabot Corporation and its shares are traded on Indian stock
exchanges. The tender offer was for the 40% ownership of Cabot India
Limited held by minority interest shareholders. The approval and share
transfer procedures occurred in July 2001. Approximately 2.8 million of the
outstanding shares were acquired for $6 million, raising Cabot's total
ownership to 92.5%. Cabot intends to make a follow-on offer at the same
price for the remaining shares.
In March 2001, Cabot exercised an option to purchase 1 million shares of
Angus & Ross Plc common stock. In May 2001, Cabot purchased an additional 4
million shares of Angus & Ross Plc common stock. The total purchase price
of the 5 million shares was approximately $1 million. The purchase of the
additional 4 million shares increased Cabot's ownership in Angus & Ross Plc
to approximately 21%. The investment is accounted for under the equity
method. As part of the agreement, Cabot received an option to purchase an
additional 5 million shares of common stock. The option has not yet been
exercised.
During fiscal 2000, Cabot approved plans to close two plants. In relation
to the plant closings, Cabot recorded an $18 million charge in the fourth
quarter of fiscal 2000. Included in the charge were accruals of $2 million
for severance and termination benefits for approximately 40 employees of
the Chemical and Performance Materials Businesses and $7 million for
facility closing costs, of which none were paid out in fiscal 2000. The
remainder of the charge included $9 million for the impairment of
long-lived assets. During the quarter ended June 30, 2001, $1 million of
severance and termination benefits, $1 million of facility closing costs
and the impact of foreign exchange reduced the reserve by $3 million. It
was determined during the quarter that the recovery value of fixed assets
were overvalued by $2 million and the required facility closing costs would
be $2 million less than originally accrued. As of June 30, 2001, $4 million
is accrued for the remaining severance and facility closing cost
obligations.
9
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
UNAUDITED
During 1999, Cabot began implementation of initiatives to reduce costs and
improve operating efficiencies. In connection with these efforts, Cabot
recorded a $26 million charge for capacity utilization and cost reduction
initiatives. These initiatives included $16 million for severance and
termination benefits for approximately 265 employees, of which $15 million
has been paid out as of June 30, 2001.
C. DISCONTINUED OPERATIONS
On September 19, 2000, Cabot completed a transaction to sell its liquefied
natural gas (LNG) business for approximately $688 million cash. The sale
included Cabot's LNG terminal in Everett, Massachusetts, its LNG tanker,
the Matthew, and its equity interest in the Atlantic LNG liquefaction plant
in Trinidad. The gain on the sale of the LNG business recorded in the
fourth quarter of fiscal 2000 was approximately $309 million, net of taxes
of $178 million.
In February 2001, Cabot received additional cash proceeds of $5 million
from the sale. The receipt net of taxes is classified as a gain on the sale
of LNG in the Consolidated Statement of Income.
On April 4, 2000, Cabot Microelectronics Corporation, then a subsidiary of
Cabot, sold 4.6 million shares of its common stock in an initial public
offering (IPO). The 4.6 million shares represented approximately 19.5% of
Cabot Microelectronics. The net proceeds from the IPO were approximately
$83 million. Cabot received an aggregate of approximately $81 million in
dividends from Cabot Microelectronics.
On July 25, 2000, a committee of Cabot's Board of Directors voted to spin
off its remaining 80.5% equity interest in Cabot Microelectronics by
distributing a special dividend of its remaining interest in Cabot
Microelectronics to its common stockholders of record as of the close of
regular trading on the New York Stock Exchange on September 13, 2000. The
tax-free distribution took place on September 29, 2000.
Operating results for fiscal 2000 have been reclassified to present these
businesses as discontinued operations.
D. RECLASSIFICATION
Certain amounts were reclassified in fiscal 2000 to conform to the fiscal
2001 presentation.
E. COMMITMENTS AND CONTINGENCIES
In July 2001 Cabot replaced its revolving credit and term loan facility
with a new agreement. Under the new agreement Cabot may borrow up to $250
million at floating rates. The new credit facility matures on July 13,
2006. The agreement contains specific covenants, including maximum
indebtedness limitations and earnings before interest, taxes, depreciation,
and amortization ("EBITDA") requirements, that would limit the amount
available for future borrowings. Commitment fees are paid based on the used
and unused portions of the credit facility. At June 30, 2001, no amount was
outstanding under the previous credit facility.
Cabot is a defendant, or potentially responsible party, in various lawsuits
and environmental proceedings wherein substantial amounts are claimed or at
issue.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
UNAUDITED
As of June 30, 2001, Cabot has approximately $33 million reserved for
environmental matters, primarily related to divested businesses. The amount
represents Cabot's current best estimate of its share of costs likely to be
incurred at those sites where costs are reasonably estimable based on its
analysis of the extent of cleanup required, alternative cleanup methods
available, abilities of other responsible parties to contribute, and its
interpretation of applicable laws and regulations at each site. Cabot
reviews the adequacy of this reserve as circumstances change at individual
sites. Cabot is unable to reasonably estimate the amount of possible loss
in excess of the accrued amount.
In the opinion of Cabot, although final disposition of these suits and
claims may impact Cabot's financial statements in a particular period, they
will not, in the aggregate, have a material adverse effect on Cabot's
financial position.
F. NEW ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141, Business Combinations
("SFAS 141"), which requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001, establishes
specific criteria for the recognition of intangible assets separately from
goodwill, and requires that unallocated negative goodwill be written off
immediately as an extraordinary gain instead of being deferred and
amortized. Cabot will account for its future business combinations in
accordance with the guidance in SFAS 141.
In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). Under SFAS 142
goodwill and indefinite lived intangible assets will no longer be
amortized. Instead, goodwill will be subject to annual impairment tests
performed under the guidance of the statement. Additionally, the
amortization period of intangible assets with finite lives will no longer
be limited to forty years. The general provisions for SFAS 142 will be
effective for Cabot at the beginning of fiscal 2003. Cabot is currently
assessing the potential impact of implementing SFAS No 142 and expects
amortization expense to be reduced in future periods.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(Preferred shares in thousands and common shares in millions)
UNAUDITED
G. STOCKHOLDERS' EQUITY
The following table summarizes the changes in shares of stock for the three
months ended June 30:
2001
----------
PREFERRED STOCK
Balance at March 31, 2001 75
=====
Balance at June 30, 2001 75
=====
PREFERRED TREASURY STOCK
Balance at March 31, 2001 15
Purchased preferred treasury stock 1
-----
Balance at June 30, 2001 16
=====
COMMON STOCK
Balance at March 31, 2001 65
Purchased and retired common stock (3)
-----
Balance at June 30, 2001 62
=====
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(Preferred shares in thousands and common shares in millions)
UNAUDITED
G. STOCKHOLDERS' EQUITY (CONTINUED)
The following table summarizes the changes in shares of stock for the nine
months ended June 30:
2001
------------
PREFERRED STOCK
Balance at September 30, 2000 75
======
Balance at June 30, 2001 75
======
PREFERRED TREASURY STOCK
Balance at September 30, 2000 13
Purchased preferred treasury stock 3
------
Balance at June 30, 2001 16
======
COMMON STOCK
Balance at September 30, 2000 68
Purchased and retired common stock (6)
------
Balance at June 30, 2001 62
======
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions)
UNAUDITED
H. COMPREHENSIVE INCOME
The pre-tax, tax, and after-tax effects of the components of other
comprehensive loss for the three months ended June 30 are shown below:
Pre-tax Tax After-tax
------- --- ---------
2001
Foreign currency translation adjustments $ (7) - $ (7)
Unrealized holding gain arising during period on
marketable equity securities 3 - 3
---- ---- ----
Other comprehensive loss $ (4) $ - $ (4)
===== ==== ====
Pre-tax Tax After-tax
------- --- ---------
2000
Foreign currency translation adjustments $ (9) $ - $ (9)
Unrealized holding gain arising during period on
marketable equity securities 1 - 1
---- ---- ----
Other comprehensive loss $ (8) $ - $ (8)
===== ==== ====
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions)
UNAUDITED
H. COMPREHENSIVE INCOME (CONTINUED)
The pre-tax, tax, and after-tax effects of the components of other
comprehensive loss for the nine months ended June 30 are shown below:
Pre-tax Tax After-tax
------- --- ---------
2001
Foreign currency translation adjustments $ (27) $ - $ (27)
Unrealized holding gain arising during period on
marketable equity securities 14 (5) 9
----- ---- -----
Other comprehensive loss $ (13) $ (5) $ (18)
===== ==== =====
Pre-tax Tax After-tax
------- --- ---------
2000
Foreign currency translation adjustments $ (35) $ - $ (35)
Unrealized holding gain arising during period on
marketable equity securities 3 (1) 2
----- ---- -----
Other comprehensive loss $ (32) $ (1) $ (33)
===== ==== =====
The balance of related after-tax components comprising accumulated other
comprehensive loss is summarized below:
June 30, September 30,
2001 2000
-------- -------------
Foreign currency translation adjustment $ (132) $ (105)
Unrealized gain on marketable equity securities 13 4
------ ------
Accumulated other comprehensive loss $ (119) $ (101)
====== ======
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions, except per share amounts)
UNAUDITED
I. EARNINGS PER SHARE
Basic and diluted earnings per share ("EPS") were calculated for the
three months ended June 30 as follows:
2001 2000
------ ------
BASIC EPS
Income available to common shares (numerator) $ 38 $ 45
===== =====
Weighted-average common shares outstanding 64 67
Less: Contingently issuable shares(1) (2) (2)
----- -----
Adjusted weighted-average shares (denominator) 62 65
===== =====
Basic EPS $0.59 $0.69
===== =====
DILUTED EPS
Income available to common shares $ 38 $ 45
Dividends on preferred stock -- 1
Less: Income effect of assumed conversion of preferred stock -- (1)
----- -----
Income available to common shares plus assumed conversions (numerator) $ 38 $ 45
===== =====
Weighted-average common shares outstanding 64 67
Effect of dilutive securities:
Conversion of preferred stock 9 6
Conversion of incentive stock options(2) -- --
----- -----
Adjusted weighted-average shares (denominator) 73 73
===== =====
Diluted EPS $0.51 $0.62
===== =====
(1) Represents restricted stock issued under Cabot Equity Incentive Plans.
(2) Of the options to purchase shares of common stock outstanding at June 30,
2000, 0.2 million shares were not included in the computation of diluted
EPS because those options' exercise price was greater than the average
market price of the common shares for 2000. As of June 30, 2001, the
average fair value of Cabot's stock price exceeded the exercise price of all
options outstanding. As such, all options outstanding have been included in
the calculation of fully diluted earnings per share.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions, except per share amounts)
UNAUDITED
I. EARNINGS PER SHARE (CONTINUED)
Basic and diluted earnings per share ("EPS") were calculated for the nine
months ended June 30 as follows:
2001 2000
------ ------
BASIC EPS
Income available to common shares (numerator) $ 94 $ 122
===== =====
Weighted-average common shares outstanding 66 67
Less: Contingently issuable shares(1) (3) (2)
----- -----
Adjusted weighted-average shares (denominator) 63 65
===== =====
Basic EPS $1.49 $1.88
===== =====
DILUTED EPS
Income available to common shares $ 94 $ 122
Dividends on preferred stock 2 2
Less: Income effect of assumed conversion of preferred stock -- (1)
----- -----
Income available to common shares plus assumed conversions (numerator) $ 96 $ 123
===== =====
Weighted-average common shares outstanding 66 67
Effect of dilutive securities:
Conversion of preferred stock 9 6
Conversion of incentive stock options(2) -- --
----- -----
Adjusted weighted-average shares (denominator) 75 73
===== =====
Diluted EPS $1.28 $1.69
===== =====
(1) Represents restricted stock issued under Cabot Equity Incentive Plans.
(2) Of the options to purchase shares of common stock outstanding at June 30,
2000, 0.3 million shares were not included in the computation of diluted
EPS because those options' exercise price was greater than the average
market price of the common shares for 2000. As of June 30, 2001, the
average fair value of Cabot's stock price exceeded the exercise price of
all options outstanding. As such, all options outstanding have been
included in the calculation of fully diluted earnings per share.
17
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions)
UNAUDITED
J. FINANCIAL INFORMATION BY SEGMENT
The framework for segment reporting is intended to give analysts and other
financial statement users a view of Cabot "through the eyes of management".
It designates Cabot's internal management reporting structure as the basis
for determining Cabot's reportable segments, as well as the basis for
determining the information to be disclosed for those segments. The
following table provides financial information by segment for the three
months ended June 30:
- ------------------------------------------------------------------------------------------------------------------------------------
CHEMICAL PERFORMANCE SPECIALTY SEGMENT UNALLOCATED CONSOLIDATED
BUSINESSES MATERIALS FLUIDS TOTAL AND OTHER TOTAL
---------- --------- ------ ----- --------- -----
2001
Net sales and other operating revenues(1)(2) $336 $ 99 $ 6 $441 $ (5) $436
Profit (loss) before taxes(3) $ 30 $ 31 $ (1) $ 60 $(14) $ 46
- ------------------------------------------------------------------------------------------------------------------------------------
2000
Net sales and other operating revenues(1)(2) $357 $ 56 $ 6 $419 $ (5) $414
Profit (loss) before taxes(3) $ 48 $ 10 $ -- $ 58 $ (5) $ 53
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated and other net sales and other operating revenues includes the
following:
- --------------------------------------------------------------------------------
2001 2000
---- ----
Equity affiliate sales $(16) $(20)
Royalties paid by equity affiliates 2 2
Interoperating segment revenues (2) (3)
Shipping and handling fees 11 16
---- ----
Total $ (5) $ (5)
==== ====
- --------------------------------------------------------------------------------
Unallocated and other profit (loss) before taxes includes the following:
- --------------------------------------------------------------------------------
2001 2000
---- ----
Interest expense $ (8) $ (7)
General unallocated income (expense)(4) 5 (1)
Equity in net income of affiliated companies (7) (5)
Special item(5)(6) (4) 8
---- ----
Total $(14) $ (5)
==== ====
- --------------------------------------------------------------------------------
(1) Segment sales for certain operating segments within Chemical Businesses
include 100% of equity affiliate sales and transfers of materials at cost
and market-based prices.
(2) Unallocated and other reflects an adjustment for equity affiliate sales and
interoperating segment revenues and includes royalties paid by equity
affiliates offset by external shipping and handling costs.
(3) Segment profit is a measure used by Cabot's chief operating decision-makers
to measure consolidated operating results and assess segment performance.
It includes equity in net income of affiliated companies, royalties paid by
equity affiliates, minority interest, and corporate governance costs, and
excludes special items, foreign currency transaction gains (losses),
interest income (expense) and dividend income.
(4) General unallocated income (expense) includes foreign currency transaction
gains (losses), interest income, dividend income, and corporate allocations
previously allocated to discontinued segments.
(5) Results for the third quarter of 2001 include a charge, related to the
resignation of the Chief Financial Officer, consisting of $3 million to
accelerate the vesting of shares issued under the Long Term Incentive
Compensation Plan and a $1 million cash payment.
(6) Results for the third quarter of 2000 include an $8 million pretax
settlement of insurance litigation.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
June 30, 2001
(In millions)
UNAUDITED
J. FINANCIAL INFORMATION BY SEGMENT (CONTINUED)
The framework for segment reporting is intended to give analysts and other
financial statement users a view of Cabot "through the eyes of management".
It designates Cabot's internal management reporting structure as the basis
for determining Cabot's reportable segments, as well as the basis for
determining the information to be disclosed for those segments. The
following table provides financial information by segment for the nine
months ended June 30:
- ------------------------------------------------------------------------------------------------------------------------------------
CHEMICAL PERFORMANCE SPECIALTY SEGMENT UNALLOCATED CONSOLIDATED
BUSINESSES MATERIALS FLUIDS TOTAL AND OTHER TOTAL
---------- --------- ------ ----- --------- -----
2001
Net sales and other operating revenues(1) (2) $1,027 $257 $ 19 $1,303 $(14) $1,289
Profit (loss) before taxes(3) $ 106 $ 53 $ (1) $ 158 $(41) $ 117
- ------------------------------------------------------------------------------------------------------------------------------------
2000
Net sales and other operating revenues(1) (2) $1,025 $161 $ 16 $1,202 $(15) $1,187
Profit (loss) before taxes(3) $ 150 $ 26 $ (3) $ 173 $(29) $ 144
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated and other net sales and other operating revenues includes the
following:
- --------------------------------------------------------------------------------
2001 2000
---- ----
Equity affiliate sales $(47) $(61)
Royalties paid by equity affiliates 5 6
Interoperating segment revenues (5) (7)
Shipping and handling fees 33 47
---- ----
Total $(14) $(15)
==== ====
- --------------------------------------------------------------------------------
Unallocated and other profit (loss) before taxes includes the following:
- --------------------------------------------------------------------------------
2001 2000
---- ----
Interest expense $(25) $(26)
General unallocated income (expense)(4) 20 (3)
Equity in net income of affiliated companies (15) (8)
Special items (5)(6) (21) 8
---- ----
Total $(41) $(29)
==== ====
- --------------------------------------------------------------------------------
(1) Segment sales for certain operating segments within Chemical Businesses
include 100% of equity affiliate sales and transfers of materials at cost
and market-based prices.
(2) Unallocated and other reflects an adjustment for equity affiliate sales and
interoperating segment revenues and includes royalties paid by equity
affiliates offset by external shipping and handling costs.
(3) Segment profit is a measure used by Cabot's chief operating decision-makers
to measure consolidated operating results and assess segment performance.
It includes equity in net income of affiliated companies, royalties paid by
equity affiliates, minority interest, and corporate governance costs, and
excludes special items, foreign currency transaction gains (losses),
interest income (expense) and dividend income.
(4) General unallocated income (expense) includes foreign currency transaction
gains (losses), interest income, dividend income, and corporate allocations
previously allocated to discontinued segments.
(5) Results for fiscal 2001 include a $21 million charge related to the
retirement of the Chief Executive Officer and the resignation of the Chief
Financial Officer. Included in the charge is $13 million to accelerate the
vesting of shares issued under the Long Term Incentive Compensation Plan
and $8 million of cash payments.
(6) Results for fiscal 2000 include an $8 million pretax settlement of
insurance litigation.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
I. RESULTS OF OPERATIONS
Net sales and operating profit before taxes by segment are shown in Note J to
the Consolidated Financial Statements.
THREE MONTHS ENDED JUNE 30, 2001 VERSUS
THREE MONTHS ENDED JUNE 30, 2000
Net income from continuing operations for the third quarter of fiscal 2001 was
$38 million ($0.51 per diluted common share) compared to $38 million ($0.51 per
diluted common share) in the same quarter a year ago. Included in this quarter's
results is a $4 million ($0.04 per diluted share) special charge related to the
resignation of Cabot's Chief Financial Officer, consisting of a $3 million
non-cash charge to accelerate the vesting of stock issued under the Company's
long term incentive compensation plan and a $1 million cash payment. Included in
results for the third quarter of 2000 is an $8 million ($0.07 per diluted share)
special item benefit from the settlement of insurance litigation.
Cabot's sales increased 5% from $414 million last year to $436 million this year
due to higher prices in the Chemical Businesses and higher volumes and prices in
the Performance Materials segment. Overall operating profit before taxes and the
special charge increased 11% from $45 million in the third quarter of fiscal
2000 to $50 million in the third quarter of fiscal 2001. Lower volumes, higher
feedstock costs, and a stronger US dollar offset the benefits of higher prices
and lower production costs in the Chemical Businesses. In addition, the Company
benefited from higher tantalum margins resulting from customer contracts entered
into in the first quarter of fiscal 2001.
Sales for the Chemical Businesses decreased from $357 million to $336 million.
Operating profit decreased from $48 million to $30 million. The $18 million, or
38%, decrease in profitability is primarily attributed to slower industrial
growth in North America and Europe, increased carbon black feedstock costs,
higher natural gas costs, and unfavorable currency movements.
For the third quarter of fiscal 2001, global carbon black volumes decreased 9%
versus the third quarter of last year. Sales volumes decreased 22% in North
America and 10% in Europe due to weakened economic conditions. South America
experienced a 5% decrease in volumes, largely due to the Brazilian energy
crisis. However, increased sales in Indonesia and China resulted in a 15% volume
increase in Asia Pacific. While the business benefited from lower production
costs, carbon black profitability was negatively impacted by weaker demand, a
strong US dollar and increased oil-based feedstock and natural gas costs.
Overall volumes in the fumed metal oxides business declined 11% due to decreased
demand in North America and Asia from traditional markets including the silicone
rubber and construction industries. Demand from the electronics sector remained
flat. Results were negatively impacted by higher energy prices and
administrative costs. In addition, the business absorbed increased costs
associated with capacity expansions put in place in fiscal 2000.
Cabot's inkjet colorants business reported a 9% increase in volumes; however,
higher administrative costs resulted in a $1 million decrease in operating
profit in the third quarter of 2001.
Performance Materials sales were $99 million in the third quarter of fiscal 2001
compared with $56 million in the same quarter of fiscal 2000. Volumes of
tantalum sold were 11% higher in the third quarter of 2001 than in the
comparative quarter a year ago. As a result of the customer contracts entered
into during the first fiscal quarter of 2001, average prices increased
approximately 62% quarter over quarter. At the same time, total costs increased
approximately 48% due to higher volumes and higher ore costs. It is
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anticipated that Cabot's earnings in the tantalum business will increase by
as much as 100% in fiscal 2001, year over year.
Specialty Fluids sales in the third quarter were flat at $6 million versus the
year ago quarter. However, higher administrative and selling costs resulted in a
$1 million decrease in profit. Through the third quarter of 2001, cesium formate
has been successfully used in a total of 41 completion and drill-in applications
involving challenging high pressure, high temperature wells in the North Sea.
Additionally, recent indications of the flow-rate tests of the initial three
drill-in jobs have been very positive. Cesium formate improved drilling speed,
minimized skin damage, and substantially improved flow rates.
Interest income in the third quarter of this year was $5 million higher than in
the same quarter last year due to an increase in Cabot's cash position related
to the sales proceeds of the Liquefied Natural Gas business and an increase in
operating income.
Research and technical service spending was flat at $12 million for the third
quarter versus the year ago quarter. Selling and administrative expenses were
$55 million for the third quarter of fiscal 2001, a 31% increase from $42
million spent last year. The increase is largely due to non-capitalized expenses
associated with the development and implementation of our Enterprise Resource
Planning system, accounting for stock-based incentive compensation and our
e-commerce initiative which has been expanded this year. Selling and
administrative expenses as a percentage of sales increased from 10% to 13% in
the third fiscal quarter of 2001. Research and technical service spending
remained flat at 3% as a percentage of sales for the same time period.
In fiscal 2000, Cabot initiated a reorganization of its international legal
entity structure. As a result of the reorganization, Cabot's overall effective
income tax rate is anticipated to decrease from 36% in fiscal 2000 to 29% in
fiscal 2001.
During fiscal 2000, Cabot approved plans to close two plants. In relation to the
plant closings, Cabot recorded an $18 million charge in the fourth quarter of
fiscal 2000. Included in the charge were accruals of $2 million for severance
and termination benefits for approximately 40 employees and $7 million for
facility closing costs, of which none were paid out in fiscal 2000. The
remainder of the charge included $9 million for the impairment of long-lived
assets. During the quarter ended June 30, 2001, $1 million of severance and
termination benefits, $1 million of facility closing costs, and the impact of
foreign exchange reduced the reserve by $3 million. In addition, it was
determined during the quarter that the recovery value of fixed assets was
overvalued by $2 million and the required facility closing costs would be $2
million less than originally accrued. As of June 30, 2001, $4 million remains in
the accrual.
During 1999, Cabot began implementation of initiatives to reduce costs and
improve operating efficiencies. In connection with these efforts, Cabot recorded
a $26 million charge for capacity utilization and cost reduction initiatives.
These initiatives included $16 million for severance and termination benefits
for approximately 265 employees, of which $15 million has been paid out as of
June 30, 2001.
NINE MONTHS ENDED JUNE 30, 2001 VERSUS
NINE MONTHS ENDED JUNE 30, 2000
Net income from continuing operations for the nine months ended June 30, 2001
was $93 million compared to $96 million for the same period in fiscal 2000.
Included in these results from operations for fiscal 2001 are special charges of
$21 million ($0.20 per diluted share) related to the retirement of Cabot's Chief
Executive Officer and the resignation of Cabot's Chief Financial Officer.
Included in results for the nine months ended June 30, 2000 is an $8 million
($0.07 per diluted share) special item benefit from the settlement of insurance
litigation.
Sales increased 9% from $1,187 million last year to $1,289 million this year due
to strong volumes and pricing in the Performance Materials segment and higher
prices in the Chemical Businesses. Operating profit before taxes and special
charges increased slightly from $136 million for the nine months ended June 30,
2000 to $138 million for the nine months ended June 30, 2001. Increased
feedstock costs in the Chemical Businesses, higher raw material costs in the
Performance Materials business, and unfavorable currency trends somewhat offset
increased pricing in the Performance Materials and carbon black businesses.
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Sales for the Chemical Businesses increased slightly to $1,027 million this year
from $1,025 million last year. Operating profit decreased from $150 million to
$106 million. The $44 million, or 29%, decrease in profitability is primarily
attributed to lower volumes, increased oil-based feedstock and natural gas
costs, and unfavorable currency trends.
Performance Materials sales were $257 million, a 60% increase from $161 million
in the first nine months of fiscal 2000. Operating profit increased 104% from
$26 million in the first nine months of last year to $53 million in the first
nine months of this year driven by higher volumes and higher prices.
Specialty Fluids realized a $3 million improvement in sales for the nine months
ended June 30, 2001. Sales increased from $16 million last year to $19 million
this year. Similarly, Specialty Fluids realized a $2 million improvement in
profitability for the nine months ended June 30, 2001, largely as a result of
improved pricing and increased volumes.
In February 2001, Cabot received $3 million, net of tax, ($0.04 per diluted
common share) of additional proceeds from the September 2000 sale of the
Liquefied Natural Gas business.
II. CASH FLOW AND LIQUIDITY
During the first nine months of the fiscal year, cash used in operating
activities totaled $44 million as compared to cash provided by operating
activities of $181 million for the same period last year. The uses of cash
during the nine months of fiscal 2001 included a tax payment of $179 million
related to the September 2000 disposition of the Liquefied Natural Gas business.
Capital spending for the first nine months of the year was $70 million. The
majority of capital spending related to improvements to existing assets. Cabot
plans to spend approximately $130 million on capital expenditures during the
fiscal year.
Cash used by financing activities was $135 million for the nine months ended
June 30, 2001 as compared to $69 million used by financing activities for the
same period last year. The key components of the change in net cash from
financing activities were the repurchase of $185 million of common stock and the
repayment of $63 million in long-term debt net of proceeds from the issuance of
a 3-year EURO note for $129 million.
In November 2000, a Cabot subsidiary issued a 150 million EURO Note ($129
million) to a group of institutional lenders. The loan bears interest at EURIBOR
plus 0.70% and is scheduled to mature in November 2003. The loan is guaranteed
by Cabot Corporation.
On October 4, 2000, Cabot purchased $17 million of its Medium Term Notes at par
plus accrued interest. The 7.28% Medium Term Notes were issued on October 21,
1997 and were subject to a put at par in 2004.
On September 8, 2000, Cabot's Board of Directors authorized the repurchase of up
to 10 million shares of Cabot's common stock, superseding prior authorizations.
As of June 30, 2001, approximately 5.7 million shares have been purchased at an
average price of approximately $32 per share under this new authorization.
In the third quarter of fiscal 2001, Cabot entered into an equity contract for
the purchase of Cabot Corporation common stock. During the contract period Cabot
purchased 100,000 shares for approximately $35 per share.
On March 16, 2001, Cabot UK Holdings Limited, a wholly-owned subsidiary of Cabot
Corporation, announced an open offer for approximately 3.5 million shares of
Cabot India Limited, at 100 Rupees per share. Cabot India Limited is a
majority-owned subsidiary of Cabot Corporation and its shares are traded on the
Bombay Stock Exchange and the National Stock Exchange of India. The tender offer
was for the 40% ownership of Cabot India Limited currently held by minority
interest shareholders. The open offer closed on June 16, 2001 and the approval
and share transfer procedures occurred in
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23
July 2001. Approximately 2.8 million of the outstanding shares were acquired for
$6 million, raising Cabot's total ownership to 92.5%. Cabot intends to make a
follow-on offer at the same price for the remaining shares.
As a result of the operating and financing activities during the quarter,
Cabot's ratio of total debt (including short-term debt net of cash) to capital
increased from 2% at March 31, 2001 to 6% at June 30, 2001.
In July 2001, Cabot replaced its revolving credit and term loan facility with a
new agreement. Under the new agreement Cabot may, under certain conditions,
borrow up to $250 million at floating rates. The new credit facility matures on
July 13, 2006. At June 30, 2001, Cabot had no borrowings outstanding under the
previous credit facility. Management expects cash on hand, cash from operations
and present financing arrangements, including Cabot's unused line of credit and
shelf registration for debt securities, to be sufficient to meet Cabot's cash
requirements for the foreseeable future.
III. RECENT ACCOUNTING DEVELOPMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141, Business Combinations ("SFAS 141"),
which requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001, establishes specific criteria for
the recognition of intangible assets separately from goodwill, and requires that
unallocated negative goodwill be written off immediately as an extraordinary
gain instead of being deferred and amortized. Cabot will account for its future
business combinations in accordance with the guidance in SFAS 141.
In June 2001, the FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets ("SFAS 142"). Under SFAS 142 goodwill
and indefinite lived intangible assets will no longer be amortized. Instead,
goodwill will be subject to annual impairment tests performed under the guidance
of the statement. Additionally, the amortization period of intangible assets
with finite lives will no longer be limited to forty years. The general
provisions for SFAS 142 will be effective for Cabot at the beginning of
fiscal 2003. Cabot is currently assessing the potential impact of implementing
SFAS No 142 and expects amortization expense to be reduced in future periods.
FORWARD-LOOKING INFORMATION: Included above are statements relating to
management's expectations of future profits, the possible achievement of Cabot's
financial goals and objectives and management's expectations for shareholder
value creation initiatives and for Cabot's product development program. Actual
results may differ materially from the results anticipated in the statements
included herein due to a variety of factors, including market supply and demand
conditions, fluctuations in currency exchange rates, costs of raw materials,
patent rights of others, stock market conditions, demand for our customers'
products and competitors' reactions to market conditions, and other factors
referred to in Cabot's filings with the Securities and Exchange Commission.
Timely commercialization of products under development by Cabot may be disrupted
or delayed by technical difficulties, market acceptance, competitors' new
products, as well as difficulties in moving from the experimental stage to the
production stage. Cabot undertakes no obligation to update forward-looking
statements or reflect events or circumstances after the date of this document.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
(a) In June, 2001 Cabot signed a Consent Order with the West Virginia
Department of Environmental Protection, Office of Air Quality (the
"Agency") regarding Cabot's carbon black manufacturing facility in
Waverly, West Virginia. The Consent Order resolves claims by the
Agency that the Waverly facility was not in compliance with certain
air permitting and regulatory requirements. Under the Consent Order,
Cabot was required to submit a penalty payment of $200,000 to the
Agency's Air Pollution and Education Fund. Cabot is also required to
submit an air permit application to the Agency by September 1, 2001.
The Consent Order also imposes certain operational and recordkeeping
requirements on the Waverly facility, none of which are expected to
have a material adverse effect on the Company.
(b) A number of lawsuits and claims have been filed against other
corporate entities which relate to the Company's former safety
respiratory product business. The Company may be liable with respect
to numerous lawsuits involving respirators sold by American Optical
Corporation prior to April 1990 or a subsidiary of the Company from
April 1990 to July 1995. These lawsuits typically involve plaintiffs
alleging that they suffer from asbestosis or silicosis, and that such
condition results in part from respirators which were negligently
designed or manufactured. The defendants in these lawsuits are often
numerous, and include, in addition to respirator manufacturers,
employers of the plaintiffs and manufacturers of sand used in sand
blasting and asbestos. Responsibility for legal costs, as well as for
settlements and judgments, is shared contractually by the Company,
American Optical Corporation and a prior owner of American Optical
Corporation. The Company disposed of the respirator business in July
1995 to Aearo Corporation ("Aearo"). The Company and Aearo have
entered into an arrangement whereby, so long as Aearo pays to Cabot an
annual fee of $400,000, which Aearo has elected to pay, Cabot will
retain responsibility and liability for, and indemnify Aearo against,
certain legal claims asserted after July 11, 1995 (the date of Aearo's
formation) to the extent these claims are alleged to arise out of the
use of American Optical respirators prior to July 1995. Aearo has the
right to discontinue the payment of such annual fee at any time, in
which case Aearo will assume responsibility for and indemnify Cabot
with respect to such claims. It is management's opinion, taking into
account currently available information, past experience, contractual
obligations and insurance coverage which may be applicable to such
matters, that these suits and claims should not result in final
judgments or settlements that, in the aggregate, would have a material
effect on the Company's financial condition or results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
None.
(b) REPORTS ON FORM 8-K
No report on Form 8-K was filed by the Company during the three months
ended June 30, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABOT CORPORATION
Date: August 13, 2001 /s/ WILLIAM T. ANDERSON
-----------------------------------
William T. Anderson
Vice President and Controller
(Duly Authorized Officer and Chief
Accounting Officer)
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