1
FORM 10-Q
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
MARCH 31, 1997
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.)
75 STATE STREET 02109-1806
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 MARCH 31, 1997, THE COMPANY HAD 69,847,236 SHARES OF COMMON
STOCK, PAR VALUE $1 PER SHARE, OUTSTANDING.
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CABOT CORPORATION
INDEX
Part I. Financial Information Page No.
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Item 1. Financial Statements
Consolidated Statements of Income
Three Months Ended March 31, 1997 and 1996 3
Consolidated Statements of Income
Six Months Ended March 31, 1997 and 1996 4
Consolidated Balance Sheets
March 31, 1997 and September 30, 1996 5
Consolidated Statements of Cash Flows
Six Months Ended March 31, 1997 and 1996 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
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PART I. FINANCIAL INFORMATION
ITEM 1.
- ------
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1997 and 1996
(Dollars in thousands)
UNAUDITED
1997 1996
---- ----
Revenues:
Net sales and other operating revenues $431,964 $491,272
Interest and dividend income 1,613 2,254
-------- --------
Total revenues 433,577 493,526
-------- --------
Costs and expenses:
Cost of sales 305,627 345,298
Selling and administrative expenses 53,126 53,722
Research and technical service 22,518 17,302
Interest expense 10,590 11,213
Other charges, net 1,782 3,494
-------- --------
Total costs and expenses 393,643 431,029
-------- --------
Income before income taxes 39,934 62,497
Provision for income taxes (14,376) (23,124)
Equity in net income of affiliated companies 3,905 4,933
Minority interest (83) (1,389)
-------- --------
Net income 29,380 42,917
Dividends on preferred stock, net of tax
benefit of $522 and $475, respectively (817) (881)
-------- --------
Income applicable to primary common shares $ 28,563 $ 42,036
======== ========
Weighted average common shares outstanding (000):
Primary 70,949 72,799
Fully diluted (Note A) 76,998 78,937
Income per common share:
Primary $ 0.40 $ 0.58
======== ========
Fully diluted (Note A) $ 0.38 $ 0.54
======== ========
Dividends per common share $ 0.10 $ 0.09
======== ========
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended March 31, 1997 and 1996
(Dollars in thousands)
UNAUDITED
1997 1996
---- ----
Revenues:
Net sales and other operating revenues $ 830,789 $ 934,303
Interest and dividend income 3,292 4,715
--------- ---------
Total revenues 834,081 939,018
--------- ---------
Costs and expenses:
Cost of sales 585,310 650,432
Selling and administrative expenses 106,786 100,353
Research and technical service 43,444 31,579
Interest expense 20,260 20,634
Other charges, net 3,603 8,766
--------- ---------
Total costs and expenses 759,403 811,764
--------- ---------
Income before income taxes 74,678 127,254
Provision for income taxes (26,884) (47,084)
Equity in net income of affiliated companies 7,879 8,656
Minority Interest (1,181) (2,558)
--------- ---------
Net income 54,492 86,268
Dividends on preferred stock, net of tax
benefit of $1,047 and $950, respectively (1,637) (1,764)
--------- ---------
Income applicable to primary common shares $ 52,855 $ 84,504
========= =========
Weighted average common shares outstanding (000):
Primary 71,464 73,861
Fully diluted (Note A) 77,513 80,050
Income per common share:
Primary $ 0.74 $ 1.14
========= =========
Fully diluted (Note A) $ 0.69 $ 1.06
========= =========
Dividends per common share $ 0.20 $ 0.18
========= =========
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and September 30, 1996
(Dollars in thousands)
ASSETS
March 31 September 30
1997 1996
(Unaudited)
----------- -----------
Current assets:
Cash and cash equivalents $ 48,680 $ 58,148
Accounts and notes receivable
(net of reserve for doubtful
accounts of $4,665 and $5,267) 309,376 363,763
Inventories:
Raw materials 71,303 71,061
Work in process 68,567 72,914
Finished goods 68,377 72,163
Other 42,696 44,292
----------- -----------
Total inventories 250,943 260,430
Prepaid expenses 23,353 17,408
Deferred income taxes 10,383 10,034
----------- -----------
Total current assets 642,735 709,783
----------- -----------
Investments:
Equity 81,559 79,372
Other 113,892 95,680
----------- -----------
Total investments 195,451 175,052
----------- -----------
Property, plant and equipment, at cost 1,744,671 1,712,045
Accumulated depreciation (812,115) (809,053)
----------- -----------
Net property, plant and equipment 932,556 902,992
----------- -----------
Other assets:
Intangible assets, net of amortization 40,547 42,735
Deferred income taxes 2,485 2,402
Other assets 24,272 24,617
----------- -----------
Total other assets 67,304 69,754
----------- -----------
Total assets $ 1,838,046 $ 1,857,581
=========== ===========
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and September 30, 1996
(Dollars in thousands)
LIABILITIES & STOCKHOLDERS' EQUITY
March 31 September 30
1997 1996
(Unaudited)
----------- ------------
Current liabilities:
Notes payable to banks $ 200,002 $ 233,779
Current portion of long-term debt 115,393 16,175
Accounts payable and accrued liabilities 218,547 250,749
U.S. and foreign income taxes payable 22,285 26,083
Deferred income taxes 949 918
----------- -----------
Total current liabilities 557,176 527,704
----------- -----------
Long-term debt 296,449 321,497
Deferred income taxes 91,382 88,320
Other liabilities 145,848 147,991
Commitments and contingencies (Note B)
Minority interest 25,767 27,138
Stockholders' Equity (Note C):
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 (aggregate redemption value
of $70,231 and $71,193) 75,336 75,336
Less cost of shares of preferred treasury stock (7,577) (6,565)
Common stock:
Authorized: 200,000,000 shares of $1 par value
Issued: 135,549,936 shares 135,550 135,550
Additional paid-in capital 24,219 23,618
Retained earnings 1,215,461 1,176,708
Less cost of common treasury stock
(including unearned amounts of $11,082 and $16,611) (690,761) (650,981)
Deferred employee benefits (63,419) (64,283)
Unrealized gain on marketable securities 33,388 29,874
Foreign currency translation adjustments (773) 25,674
----------- -----------
Total stockholders' equity 721,424 744,931
----------- -----------
Total liabilities and stockholders' equity $ 1,838,046 $ 1,857,581
=========== ===========
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 1997 and 1996
(Dollars in thousands)
UNAUDITED
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 54,492 $ 86,268
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 53,214 47,683
Deferred tax provision 1,345 87
Equity in net income of affiliated companies,
net of dividends received (1,628) (2,831)
Other, net 4,084 1,342
Changes in assets and liabilities, net of consolidation
affiliates
(Increase)/decrease in accounts receivable (39,017) (30,185)
Decrease/(increase) in inventory 6,892 (16,590)
Decrease in accounts payable and accruals (28,180) (20,940)
(Increase)/decrease in prepayments and intangible assets (5,936) 652
Decrease in income taxes payable (2,321) (33,855)
Other, net (1,196) (3,828)
--------- ---------
Cash provided by operating activities 41,749 27,803
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant, property and equipment (101,461) (77,747)
Proceeds from sale of business 35,000
Investments and acquisitions (16,347) (49,315)
Cash from consolidation of equity affiliates 9,306
Other, net 409 3,009
--------- ---------
Cash used by investing activities (82,399) (114,747)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 90,000 8,759
Repayments of long-term debt (13,893) (11,637)
Increase in short-term debt 15,800 146,962
Purchases of treasury stock (47,628) (96,446)
Sales and issuances of treasury stock 2,737 6,932
Cash dividends paid to stockholders (15,739) (16,601)
--------- ---------
Cash provided by financing activities 31,277 37,969
--------- ---------
Effects of exchange rate changes on cash (95) (839)
--------- ---------
Decrease in cash and cash equivalents (9,468) (49,814)
Cash and cash equivalents at beginning of period 58,148 90,792
--------- ---------
Cash and cash equivalents at end of period $ 48,680 $ 40,978
========= =========
The accompanying notes are an integral part of these financial statements.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
A. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Cabot
Corporation and majority-owned and controlled domestic and foreign
subsidiaries. Investments in majority-owned affiliates where control does
not exist and investments in 20 percent to 50 percent-owned affiliates are
accounted for on the equity method. Intercompany transactions have been
eliminated.
The 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 the Company's Form 10-K for the year ended September 30, 1996.
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 March 31, 1997
and 1996. 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.
Earnings Per Share
The computation of fully diluted earnings per share considers the
conversion of the Company's Series B ESOP Convertible Preferred Stock held
by the Company's Employee Stock Ownership Plan, and also includes the
potentially dilutive effects of the Company's Equity Incentive Plan adopted
in 1989 and the 1996 Equity Incentive Plan.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128)
which is effective for periods ending after December 15, 1997, including
interim periods. This statement attempts to simplify current standards used
in the United States for computing earnings per share and make them more
comparable with international standards.
SFAS 128 replaces APB Opinion 15 and related interpretations (APB 15). SFAS
128 simplifies the computation of EPS by replacing the presentation of
primary earnings per share with a presentation of basic EPS. Basic EPS
includes no dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution of securities
that could share in the earnings of an entity, similar to fully diluted EPS
under APB 15. The company has not calculated the impact of the new standard
and does not expect the effects to be material.
Reclassification
Certain amounts in fiscal 1996 have been reclassified to conform to the
fiscal 1997 presentation.
B. COMMITMENTS AND CONTINGENCIES
The Company has various lawsuits, claims and contingent liabilities. In the
opinion of the Company, although final disposition of all of its suits and
claims may impact the Company's financial statements in a particular
period, they should not, in the aggregate, have a material adverse effect
on the Company's financial position.
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CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
March 31, 1997
UNAUDITED
C. STOCKHOLDERS' EQUITY
The following table summarizes the changes in stockholders' equity for the
six months ended March 31, 1997.
(Dollars in thousands)
Preferred Stock Preferred Common Stock
--------------- Treasury Stock ------------ Additional
Shares -------------- Shares Paid-in Retained
Issued Value Shares Cost Issued Value Capital Earnings
------ ----- ------ ---- ------ ----- ------- --------
Balance at September 30, 1996 75,336 $75,336 5,744 $(6,565) 135,549,936 $135,550 $23,618 $1,176,708
Net income 54,492
Common stock dividends paid (14,102)
Issuance of treasury stock under
employee compensation plans (448)
Purchase of treasury stock -
common
Purchase of treasury stock -
preferred 433 (1,012)
Sale of treasury stock to
Cabot Retirement Incentive
Savings Plan 1,049
Preferred stock dividends paid
to Employee Stock Ownership Plan,
net of tax (1,637)
Principal payment by Employee
Stock Ownership Plan under
guaranteed loan
Amortization of unearned
compensation
Unrealized gain, net of
deferred tax
Foreign currency translation
adjustments
------ ------- ----- ------- ----------- -------- ------- ----------
Balance at March 31, 1997 75,336 $75,336 6,177 (7,577) 135,549,936 $135,550 $24,219 $1,215,461
====== ======= ===== ======= =========== ======== ======= ==========
Common Unrealized Foreign
Treasury Stock Deferred Gain/(Loss) Currency Total
-------------- Unearned Employee Marketable Translation Stockholders'
Shares Cost Compensation Benefits Securities Adjustments Equity
------ ---- ------------ -------- ---------- ----------- ------
Balance at September 30, 1996 63,960,725 $(634,370) $(16,611) $(64,283) $29,874 $25,674 $744,931
Net income 54,492
Common stock dividends paid (14,102)
Issuance of treasury stock under
employee compensation plans (61,082) 566 829 947
Purchase of treasury stock -
common 1,875,941 (46,616) (46,616)
Purchase of treasury stock -
preferred (1,012)
Sale of treasury stock to
Cabot Retirement Incentive
Savings Plan (72,884) 741 1,790
Preferred stock dividends paid
to Employee Stock Ownership Plan,
net of tax (1,637)
Principal payment by Employee
Stock Ownership Plan under
guaranteed loan 864 864
Amortization of unearned
compensation 4,700 4,700
Unrealized gain, net of
deferred tax 3,514 3,514
Foreign currency translation
adjustments (26,447) (26,447)
---------- --------- -------- -------- ------- ------- --------
Balance at March 31, 1997 65,702,700 $(679,679) $(11,082) $(63,419) $33,388 $ (773) $721,424
========== ========= ======== ======== ======= ======= ========
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CABOT CORPORATION
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
I. RESULTS OF OPERATIONS
Sales and operating profit by industry segment are shown in the accompanying
table on page 13.
THREE MONTHS ENDED MARCH 31, 1997 VERSUS
THREE MONTHS ENDED MARCH 31, 1996
Net income for the second quarter of fiscal year 1997 was $29.4 million ($0.38
per common share, fully diluted), compared to $40.7 million ($0.51 per common
share, fully diluted), excluding divested businesses, in the same quarter a year
ago. Net sales and other operating revenues increased 3% to $432.0 million from
last year's $420.5 million on the same basis. Operating profit was $57.6 million
for the quarter compared to $77.8 million in the same quarter a year ago. To
form a comparative basis, net income, net sales and operating profit presented
above for 1996 is exclusive of the results of TUCO INC., the Company's former
coal handling subsidiary, which was divested in September 1996. For the three
months ended March 31, 1996, TUCO revenues and operating profit were $70.8
million and $3.5 million, respectively ($0.03 per fully diluted common share).
The Company's net income, as reported in 1996, was $42.9 million ($0.54 per
common share, fully diluted).
In the Specialty Chemicals and Materials Group, sales for the three month period
ended March 31, 1997 declined 3% to $359.2 million from $370.3 million last
year, on 1% greater volumes. The decline in sales was primarily due to the
effect of price declines in the Company's European and Pacific Asia carbon black
markets and reductions in volume in the Company's North American carbon black
and the tantalum business. Lower carbon black prices in Europe and Asia were
marginally offset by favorable prices in North America and South America.
The Group reported operating profit of $48.8 million for the second quarter,
compared to $72.4 million for the second quarter of 1996. A significant portion
of the decrease in operating profit was primarily the result of a decline in the
financial performance of the Company's European carbon black business. Carbon
black selling prices were 5% lower year-to-year as feedstock costs were higher
year-to-year due to a stronger US dollar. Pacific Asia also experienced price
reductions and the effect of currency fluctuations on feedstock costs. In North
America, feedstock costs compared favorably to a year ago and prices were higher
but were offset by an 8% reduction in volume.
The Company's Performance Materials Division (CPM), which manufactures high
grade tantalum products, experienced a 25% volume decline in the second quarter
compared to the same quarter a year ago. CPM continued to experience unfavorable
volume declines primarily from the lingering effects of a 1996 U.S. electronics
market slowdown and related inventory adjustments by it's customers.
The Cab-O-Sil fumed silica business achieved higher revenues for the second
quarter of 1997 versus the second quarter of 1996 primarily due to a 12%
increase in volumes. The earnings effect of the revenue increase was offset by
additional spending on research and development.
Research and development spending increased $5.2 million in the second quarter
from the second quarter a year ago. The Company's continued pursuit of several
new business opportunities and market development initiatives has shown results.
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CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
THREE MONTHS ENDED MARCH 31, 1997 VERSUS
THREE MONTHS ENDED MARCH 31, 1996 (CONTINUED)
In the Energy Group, sales increased 45% from $50.2 million to $72.8 million.
Operating profit was $8.8 million compared with $5.4 million in the second
quarter of 1996. As stated here, performance in 1996 is exclusive of the coal
handling business's results. The improvement in operating revenue and profits is
mainly due to increased LNG supply, resulting in increased firm commitments and
allowed the sale of interruptible amounts at higher prices compared with last
year.
SIX MONTHS ENDED MARCH 31, 1997 VERSUS
SIX MONTHS ENDED MARCH 31, 1996
For the six months ended March 31, 1997, net income was $54.5 million ($0.69 per
common share, fully diluted) compared to net income, of $80.2 million ($1.01 per
common share, fully diluted), exclusive of divested businesses, in the same
period a year ago. Net sales increased 4% to $830.8 million from $797.8 million
last year. To form a comparative basis, results for the six months ended March
31, 1996, as stated above, exclude $136.5 million of revenues and $6.4 million
of operating profit related to TUCO and a $3.3 gain associated with the
reduction of the Company's ownership position in the Trinidad joint venture. The
Company's net income, as reported in 1996, was $86.3 million ($1.06 per common
share, fully diluted).
In the Specialty Chemicals and Materials Group, sales for the six month period
ended March 31, 1997 decreased 2% to $699.4 million from $714.3 million in the
same period a year ago. The reduction in sales was primarily attributable to a
reduction in carbon black selling prices in Europe and Pacific Asia. Operating
profit for the Group decreased 34% to $94.8 million from $144.1 million last
year. Price concessions made during the year and higher year-to-year feedstock
costs (in local currency terms), which the Company did not recover from its
customers, resulted in lower margins in our European and Pacific carbon black
businesses. Higher year-to-year feedstock costs also affected North America in
the first quarter. North America carbon black volume declines in the second
quarter were only partially offset by higher selling prices. Additionally, the
Company's tantalum business experienced 21% lower volumes compared to the first
six months of fiscal 1996.
New product revenues accounted for 8% of Specialty Chemicals and Materials Group
revenues during the second quarter. A new product as referred to here is a
product first sold in commercial quantities within the last five years. As a
group these products are not expected to make a profit contribution in 1997,
however, it is expected that these products will begin to make a significant
profit contribution during fiscal 1998. As expected, increased research and
development and marketing costs associated with new product development, new
business and market development initiatives accounted for approximately $14
million of the year-to-year operating profit decrease.
In the Energy Group, sales increased 57% to $131.4 million from $83.5 million
and operating profit grew 75% to $13.3 million from $7.6 million in the same
period a year ago. Results in 1996 were exclusive of $136.5 million and $6.4
million of revenue and operating profit respectively, and a $3.3 million gain on
the sale of the Company's ownership interest in the Trinidad joint venture.
Operating results improved largely due to higher gas prices and greater
availability of liquefied natural gas.
The Company's effective tax rate was 36% compared to 37% for the same period a
year ago.
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CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
II. CASH FLOWS AND LIQUIDITY
During the first six months of the year the Company's operations provided $41.7
million of cash compared to $27.8 million last year. The change year-to-year is
primarily due to timing of tax payments and a decrease in inventory. Effective
September 30, 1996, the Company sold its TUCO INC. subsidiary for $77 million.
Accordingly, during the first quarter of fiscal 1997, the Company received $35
million in cash, which included $8 million of working capital adjustments, and
$50 million in the form of a debt repayment on the Company's behalf from the
buyer.
Capital spending for the first six months of the year was $117.8 million. The
Company plans to make approximately $210 million of capital expenditures during
the current fiscal year. The major components of the 1997 capital program
include new carbon black capacity to support the contracts with U.S. tire
manufacturers, Clean Air Act compliance, differentiated product manufacturing
capabilities, new business expansion spending and normal plant maintenance
spending. In light of softened demand in certain markets the Company will
proceed cautiously with planned expansions and may delay one or more projects
depending on how market forecasts develop over the balance of the fiscal year.
During the first six months of the year, the Company purchased approximately
1,876,000 shares of it's common stock. These purchases were primarily funded
with the proceeds from the sale of its TUCO INC. subsidiary and short-term
borrowings. At March 31, 1997, approximately 1,400,000 shares remained under the
May 1996 repurchase authorization for 4,000,000 shares. On May 9, 1997, the
Company's Board of Directors authorized the repurchase of 4,000,000 shares of
it's common stock and revoked the May 1996 repurchase authorization with
respect to shares not already purchased pursuant to such authorization.
The Company's ratio of total debt (including short-term debt net of cash) to
capital increased from 40% at September 30, 1996 to 44% at the end of the second
quarter.
On February 6, 1997, the Company issued $90 million of medium-term notes
maturing from 2004 to 2011 with a weighted average interest rate of
approximately 7%. The proceeds from the issuance were used to repay short-term
debt.
During the period, the Company renegotiated its line of credit agreement. The
facility was increased to $300 million from $250 million and was extended to
January 3, 2002. Management expects cash from operations and present financing
arrangements, including the Company's unused line of credit of $300 million, to
be sufficient to meet the Company's cash requirements for the foreseeable
future.
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13
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(Dollars in millions, except per share amounts)
UNAUDITED
Three Months Ended Six Months Ended
------------------ ----------------
3/31/97 3/31/96 3/31/97 3/31/96
------- ------- ------- -------
Industry Segment Data
- ---------------------
Sales:
Specialty Chemicals and Materials $ 359.2 $370.3 $ 699.4 $714.3
Energy 72.8 121.0 131.4 220.0
------- ------ ------- ------
Net sales $ 432.0 $491.3 $ 830.8 $934.3
======= ====== ======= ======
Operating profit:
Specialty Chemicals and Materials $ 48.8 $ 72.4 $ 94.8 $144.1
Energy 8.8 8.9 13.3 17.3
------- ------ ------- ------
Total operating profit 57.6 81.3 108.1 161.4
Interest expense (10.6) (11.2) (20.3) (20.6)
General corporate/other expenses (7.0) (7.6) (13.1) (13.5)
------- ------ ------- ------
Income before income taxes 40.0 62.5 74.7 127.3
Provision for income taxes (14.4) (23.1) (26.9) (47.1)
Equity in net income of affiliated companies 3.9 4.9 7.9 8.7
Minority interest (0.1) (1.4) (1.2) (2.6)
------- ------ ------- ------
Net income 29.4 42.9 54.5 86.3
Dividends on preferred stock (0.8) (0.9) (1.6) (1.8)
------- ------ ------- ------
Income applicable to primary common shares $ 28.6 $ 42.0 $ 52.9 $ 84.5
======= ====== ======= ======
Income per common share:
Primary $ 0.40 $ 0.58 $ 0.74 $ 1.14
======= ====== ======= ======
Fully diluted $ 0.38 $ 0.54 $ 0.69 $ 1.06
======= ====== ======= ======
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Annual Meeting of Stockholders of Cabot Corporation was held on March 13,
1997. An election of Directors was held at which Ms. Lydia W. Thomas and Messrs.
Arnold S. Hiatt, David V. Ragone, Morris Tanenbaum and Mark S. Wrighton were
nominated and elected to the class of Directors whose terms expire in 2000. The
following votes were cast for or withheld with respect to each of the nominees:
Director In Favor Of Withheld
-------- ----------- --------
Arnold S. Hiatt 68,379,533 1,153,491
David V. Ragone 68,482,994 1,050,030
Morris Tanenbaum 68,583,061 949,963
Lydia W. Thomas 68,403,572 1,129,452
Mark S. Wrighton 68,381,098 1,151,926
Other Directors whose terms of office as Directors continued after the meeting
are:
Director Term of Office Expires
-------- ----------------------
Samuel W. Bodman 1999
Jane C. Bradley 1999
Kennett F. Burnes 1998
John G.L. Cabot 1998
Arthur L. Goldstein 1999
Robert P. Henderson 1998
John H. McArthur 1999
John F. O'Brien 1998
Charles P. Siess, Jr. 1998
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
The exhibit numbers in the following list correspond to the number assigned
to such exhibits in the Exhibit Table of Item 601 of Regulation S-K:
Exhibit
Number Description
------ -----------
10 Credit Agreement, dated as of January 3, 1997,
among Cabot Corporation, the Banks listed therein
and Morgan Guaranty Trust Company of New York,
as Agent, filed herewith.
11 Statement Regarding Computation of Per Share Earnings,
filed herewith.
12 Statement Regarding Computation of Ratio of Earnings to
Fixed Charges, filed herewith.
27 Financial Data Schedule, filed herewith. (Not
included with printed copy of the Form 10-Q.)
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PART II. OTHER INFORMATION (CONTINUED)
Item 6. Exhibits and Reports on Form 8-K (continued)
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(b) Reports on Form 8-K
-------------------
No report on Form 8-K was filed by the Company during the three months
ended March 31, 1997.
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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: May 14, 1997 /s/ Robert L. Culver
--------------------
Robert L. Culver
Executive Vice President and
Chief Financial Officer
Date: May 14, 1997 /s/ William T. Anderson
----------------------
William T. Anderson
Acting Controller
(Chief Accounting Officer)
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