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Cabot Corp Reports Third Quarter Fiscal 2019 Results

BOSTON--(BUSINESS WIRE)--

Diluted EPS of $0.55 and Adjusted EPS of $1.00

Cabot Corporation (CBT) today announced results for its third quarter of fiscal year 2019.

Key Highlights

Strong quarterly Reinforcement Materials performance with an $11 million sequential improvement in EBIT

Continued benefits from our calendar year 2019 tire customer agreements

Volumes and product mix across Reinforcement Materials and Performance Chemicals impacted by continued soft automotive production and the challenging business environment in China

Fumed silica plant in Wuhai, China commissioned in the quarter

Completed divestiture of Specialty Fluids business for $135 million

(In millions, except per share amounts)

Three Months Ended

Nine Months Ended

 

6/30/19

6/30/18

6/30/19

6/30/18

 

Net sales

$

845

 

$

854

$

2,510

 

$

2,392

 

Net income (loss) attributable to Cabot Corporation

$

32

 

$

88

$

124

 

$

(207

)

 

 

 

 

 

 

Net earnings (loss) per share attributable to Cabot Corporation

$

0.55

 

$

1.40

$

2.08

 

$

(3.36

)

Less: Certain items after tax per share

$

(0.45

)

$

0.34

$

(0.78

)

$

(6.37

)

Adjusted EPS

$

1.00

 

$

1.06

$

2.86

 

$

3.03

 

Commenting on the results, Cabot President and CEO Sean Keohane said, “We delivered solid results in the third quarter with adjusted earnings per share of $1.00 despite a challenging economic environment that impacted results in the Reinforcement Materials and Performance Chemicals segments. Among the challenges we faced were a weak business environment in China and continued softness in automotive production, particularly in China and EMEA. These factors were partially offset by the favorable impact from calendar year 2019 tire customer agreements and the improved results in our Purification Solutions segment. Given the current business environment, we continued to take actions to reduce costs and have lowered our capital expenditures forecast for the year.”

Keohane continued, “Cash generation and return remain important elements of our capital allocation framework. During the quarter we generated strong cash flows from operations of $115 million and increased our dividend by 6%. We returned $52 million in the quarter through share repurchases and dividends and a total of $307 million over the last four quarters. On the strategic front, we completed the divestiture of our Specialty Fluids business with proceeds of $135 million. We also remain committed to investing for growth in our core businesses and commissioned our fumed silica plant in Wuhai, China in the third quarter of fiscal 2019.“

Financial Detail
For the third quarter of fiscal 2019, net income attributable to Cabot Corporation was $32 million ($0.55 per diluted common share). Net income includes an after-tax per share charge of ($0.45) from certain items, principally reflecting an additional tax expense from recently finalized U.S. Treasury Regulations related to U.S. tax reform enacted in 2017. Adjusted EPS for the third quarter of fiscal 2019 was $1.00 per share.

Segment Results
Reinforcement Materials –
Third quarter fiscal 2019 EBIT in Reinforcement Materials decreased by $2 million compared to the third quarter of fiscal 2018. The decrease in EBIT was principally due to lower margins in China and reduced volumes associated with weak automotive production. These impacts were partially offset by the favorable terms of our calendar year 2019 tire customer agreements. Globally, volumes decreased 2% year-over-year as indicated in the table below. Volumes improved 2% in Asia driven by China, decreased 7% in EMEA due to softer automotive production, and declined 3% in the Americas from weaker volumes in Latin America.

 

Third quarter
Year over Year Change

Changes in Global Reinforcement Materials Volumes

(2%)

Asia

2%

Europe, Middle East, Africa (EMEA)

(7%)

Americas

(3%)

Performance Chemicals -- Third quarter fiscal 2019 EBIT in Performance Chemicals decreased by $19 million compared to the third quarter of fiscal 2018 primarily due to lower volumes and a less favorable product mix. The less favorable product mix was attributed primarily to our specialty carbons product line where we saw continued weakness in automotive and fiber products. Year-over-year, volumes decreased by 2% in the Performance Additives business primarily due to the fumed metal oxides product line and decreased 2% in the Formulated Solutions business due to lower sales in our inkjet colorants product line.

Purification Solutions – Third quarter fiscal 2019 EBIT in Purification Solutions increased by $7 million compared to the third quarter of fiscal 2018 due to higher volumes and prices in specialty applications and the benefit from lower fixed costs as a result of the transformation plan we began implementing this year.

Specialty Fluids – Third quarter fiscal 2019 EBIT in Specialty Fluids decreased by $1 million compared to the third quarter of fiscal 2018 due to the mix of project activity.

Cash Performance The Company ended the third quarter of fiscal 2019 with a cash balance of $147 million. During the third quarter of fiscal 2019, cash flows from operating activities were $115 million, which included a $16 million decrease in net working capital. Capital expenditures for the third quarter of fiscal 2019 were $58 million. We now expect full year capital expenditures to be in the range of $230 - $240 million. Additional uses of cash during the third quarter included $20 million for dividends and $32 million for repurchases of our common stock.

Taxes – During the third quarter of fiscal 2019, the Company recorded a tax charge of $30 million for an effective tax rate of 43% and an operating tax rate of 23%. The charge included a $13 million net charge from tax-related certain items.

Outlook
Commenting on the outlook for the Company, Keohane said, “While earlier in the year, we had expected strengthening automotive production in the back half of the year, as well as a resolution to the U.S. and China trade dispute, we are not seeing evidence of these yet. As a result, we now anticipate full year 2019 Adjusted EPS to be at a comparable level to fiscal 2018. This reflects a strong fourth quarter based on the startup of our new fumed silica plant, targeted customer actions and incremental cost measures. Given the challenging business environment, we also continue to manage our capital expenditures and reduce working capital levels. Finally, we are committed to generating strong cash flow, investing for the future in our core businesses and returning cash to shareholders.”

Earnings Call
The Company will host a conference call with industry analysts at 2:00 p.m. Eastern time on Tuesday, August 6, 2019. The call can be accessed through Cabot’s investor relations website at http://investor.cabot-corp.com

About Cabot Corporation
Cabot Corporation (CBT) is a global specialty chemicals and performance materials company, headquartered in Boston, Massachusetts. The company is a leading provider of rubber and specialty carbons, activated carbon, inkjet colorants, masterbatches and conductive compounds, fumed silica, and aerogel. For more information on Cabot, please visit the company’s website at: http://www.cabotcorp.com. The Company encourages investors and potential investors to consult the Cabot website regularly.

Forward-Looking Statements -- This earnings release contains forward-looking statements. All statements that address expectations or projections about the future, including with respect to our expectations for Adjusted EPS for fiscal 2019 and capital management plans, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed or implied by forward-looking statements. Important factors that could cause our results to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to volatility in the price of energy and raw materials; competition from other specialty chemical companies; safety, health and environmental requirements; a significant adverse change in a customer relationship; negative or uncertain worldwide or regional economic conditions; unanticipated delays in site development projects; fluctuations in foreign currency exchange and interest rates; and changes in global trade policies. These factors are discussed more fully in the reports we file with the Securities and Exchange Commission (“SEC”), particularly under the heading “Risk Factors” in our annual report on Form 10-K for our fiscal year ended September 30, 2018, filed with the SEC at www.sec.gov. We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Use of Non-GAAP Financial Measures
To supplement Cabot’s consolidated financial statements presented on a generally accepted accounting principle (“GAAP”) basis, the preceding discussion of our results and the accompanying financial tables report Adjusted EPS, Total Segment EBIT, Total Segment EBITDA, Adjusted EBITDA, our operating tax rate, and Discretionary Free Cash Flow, all of which are non-GAAP financial measures. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP. Reconciliations of Adjusted EPS to net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Total Segment EBIT, Total Segment EBITDA, and Adjusted EBITDA to income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure, and Discretionary Free Cash Flow to cash flow from operating activities, the most directly comparable GAAP financial measure, are provided in the tables titled “Cabot Corporation Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate and “Cabot Corporation Reconciliation of Non-GAAP Financial Measures.”

Management believes these non-GAAP measures provide investors with greater transparency to the information used by Cabot management in its financial and operational decision-making, allow investors to see Cabot’s results through the eyes of management, and better enable Cabot’s investors to understand Cabot’s operating performance and financial condition.

Adjusted EPS. In calculating Adjusted EPS, we exclude from our net income (loss) attributable to Cabot Corporation items of expense and income that management does not consider representative of the Company’s business operations. Accordingly, reporting earnings on an adjusted basis supplements the GAAP measure of performance and provides additional information related to the underlying performance of the business. For example, certain of the items we exclude are items that we are required by GAAP to recognize in one period that relate to activities extending over several periods or relate to single events that management considers to be unusual and infrequent, although not necessarily non-recurring. We refer to these items as “certain items.” Management believes excluding these items facilitates operating performance comparisons from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis and evaluates the Company’s operating performance without the impact of these costs or benefits. Management also uses Adjusted EPS as a key measure in evaluating management performance for incentive compensation purposes.

The items of income and expense that we have excluded from our calculations of Adjusted EPS, as applicable, but that have been included in our GAAP net income (loss) per share, as applicable, are described below.

  • Asset impairment charges, which primarily included charges associated with an impairment of goodwill or other long-lived assets.
  • Inventory reserve adjustment, which resulted from an evaluation performed as part of an impairment analysis.
  • Global restructuring activities, which included costs or benefits associated with cost reduction initiatives or plant closures and were primarily related to (i) employee termination costs, (ii) asset impairment charges associated with restructuring actions, (iii) costs to close facilities, including environmental costs and contract termination penalties, and (iv) gains realized on the sale of land or equipment associated with restructured plants or locations.
  • Legal and environmental reserves and matters, which consisted of costs or benefits for matters typically related to former businesses or that were otherwise incurred outside of the ordinary course of business.
  • Gains (losses) on sale of investments, which primarily related to the sale of investments accounted for under the cost-method.
  • Gains (losses) on sale of businesses
  • Executive transition costs, which included incremental charges, including stock compensation charges, associated with the retirement or termination of employment of senior executives of the Company.
  • Acquisition and integration-related charges, which included transaction costs, redundant costs incurred during the period of integration, and costs associated with transitioning certain management and business processes to Cabot’s processes.
  • Non-recurring gains (losses) on foreign currency, which primarily related to the impact of continued currency devaluations on our net monetary assets denominated in that currency.

Cabot does not provide a target GAAP EPS range or reconciliation of the Adjusted EPS range with a GAAP EPS range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on GAAP EPS in future periods.

Total Segment EBIT. Total segment EBIT reflects the sum of EBIT from our four reportable segments. In calculating Total segment EBIT we exclude from our income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, certain items and items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Total Segment EBITDA. Total Segment EBITDA is equal to Total Segment EBIT (as defined above), but further adjusted for depreciation and amortization.

Adjusted EBITDA. Adjusted EBITDA reflects Total Segment EBITDA and is further adjusted for unallocated corporate costs, which included unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Discretionary Free Cash Flow. To calculate “Discretionary Free Cash Flow” we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow from operating activities.

Operating Tax Rate. Our “operating tax rate” represents the tax rate on our recurring operating results. This rate excludes discrete tax items, which are unusual or infrequent items that are excluded from the estimated annual effective tax rate and other tax items, including the impact of the timing of losses in certain jurisdictions, cumulative tax rate adjustments and the impact of the items of expense and income we identify as certain items on both our operating income and the tax provision. Management believes that the operating tax rate is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Explanation of Terms Used

Product Mix. The term “product mix” refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.

Net Working Capital. The term “net working capital” includes accounts receivable, inventory and accounts payable and accrued liabilities.

Third Quarter Earnings Announcement, Fiscal 2019
 
 
CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
Periods ended June 30 Three Months Nine Months
Dollars in millions, except per share amounts (unaudited)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 
Net sales and other operating revenues (A)………………………………………………..

$

845

 

$

854

 

$

2,510

 

$

2,392

 

 
Cost of sales (A)(B)........................................................................................................................

 

675

 

 

657

 

 

1,996

 

 

1,831

 

 
Gross profit....................................................................................................

 

170

 

 

197

 

 

514

 

 

561

 

 
Selling and administrative expenses (B) ……………………………………………………

 

65

 

 

74

 

 

208

 

 

223

 

 
Research and technical expenses.........................................................................

 

16

 

 

17

 

 

47

 

 

48

 

 
Specialty Fluids loss on sale and asset impairment charge.....................................

 

8

 

 

28

 

 
Purification Solutions long-lived assets impairment charge.......................................

 

162

 

 
Purification Solutions goodwill impairment charge...................................................

 

92

 

 
Income (loss) from operations......................................................................

 

81

 

 

106

 

 

231

 

 

36

 

 
Other income (expense)
 
Interest and dividend income............................................................................

 

2

 

 

2

 

 

6

 

 

8

 

 
Interest expense.............................................................................................

 

(14

)

 

(14

)

 

(43

)

 

(41

)

 
Other income (expense) (B) ........................................................................................................................................

 

1

 

 

(6

)

 

13

 

 
Total other income (expense)......................................................................

 

(12

)

 

(11

)

 

(43

)

 

(20

)

 
Income (loss) from continuing operations before income taxes and equity in
earnings of affiliated companies..................................................................

 

69

 

 

95

 

 

188

 

 

16

 

 
(Provision) benefit for income taxes........................................................................

 

(30

)

 

4

 

 

(43

)

 

(194

)

 
Equity in earnings of affiliated companies, net of tax ...............................................

 

1

 

 

1

 

 

2

 

 
Net income (loss)..........................................................................................

 

40

 

 

99

 

 

146

 

 

(176

)

 
Net income (loss) attributable to noncontrolling interests.........................................

 

8

 

 

11

 

 

22

 

 

31

 

 
Net income (loss) attributable to Cabot Corporation.....................................

$

32

 

$

88

 

$

124

 

$

(207

)

 
Diluted earnings per share of common stock
attributable to Cabot Corporation
 
Net income (loss) attributable to Cabot Corporation (C)...........................................................................

$

0.55

 

$

1.40

 

$

2.08

 

$

(3.36

)

 
Weighted average common shares outstanding
 
Diluted (C)..........................................................................................................................

 

58.4

 

 

62.3

 

 

59.2

 

 

61.8

 

(A) Beginning in fiscal 2019 as part of the adoption of the new accounting standard for revenue recognition, the Company now presents revenue from by-products produced in manufacturing operations in Net sales and other operating revenues, which in prior years was included as a reduction in Cost of sales.
 
 
(B) Fiscal 2018 amounts have been recast to reflect the retrospective application of the Company’s adoption of the new accounting standard that amends the presentation of net periodic pension and postretirement benefit costs. This adoption resulted in an increase in Cost of sales of $3 million and $7 million, an increase in Selling and administrative expenses of less than $1 million and $2 million, and an increase in Other income (expense) of $3 million and $9 million for the three and nine months ended June 30, 2018, respectively.
 
 
 
(C) The weighted average common shares outstanding used to calculate earnings per share for the nine months ended June 30, 2018 excludes approximately 1 million shares as those shares would be antidilutive due to the Company’s net loss position.
 
 
Third Quarter Earnings Announcement, Fiscal 2019
 
 
CABOT CORPORATION SUMMARY RESULTS BY SEGMENT
 
 
Periods ended June 30 Three Months Nine Months
Dollars in millions, except per share amounts (unaudited)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 
Sales
 
Reinforcement Materials.......................................................................................

$

461

 

$

466

 

$

1,363

 

$

1,307

 

 
Performance Chemicals........................................................................................

 

251

 

 

274

 

 

736

 

 

771

 

Performance Additives (A)..................................................................................

 

172

 

 

188

 

 

518

 

 

524

 

 
Formulated Solutions (A)...................................................................................

 

79

 

 

86

 

 

218

 

 

247

 

 
Purification Solutions............................................................................................

 

73

 

 

70

 

 

210

 

 

206

 

 
Specialty Fluids...................................................................................................

 

13

 

 

12

 

 

56

 

 

24

 

 
Segment sales...............................................................................................

 

798

 

 

822

 

 

2,365

 

 

2,308

 

 
Unallocated and other (B)………..............................................................................................................................................

 

47

 

 

32

 

 

145

 

 

84

 

 
Net sales and other operating revenues.............................................................

$

845

 

$

854

 

$

2,510

 

$

2,392

 

 
Segment Earnings Before Interest and Taxes (C)
 
Reinforcement Materials.......................................................................................

$

72

 

$

74

 

$

195

 

$

215

 

 
Performance Chemicals........................................................................................

 

37

 

 

56

 

 

111

 

 

160

 

 
Purification Solutions............................................................................................

 

1

 

 

(6

)

 

(1

)

 

(6

)

 
Specialty Fluids...................................................................................................

 

2

 

 

3

 

 

24

 

 

(2

)

 
Total Segment Earnings Before Interest and Taxes.....................................

 

112

 

 

127

 

 

329

 

 

367

 

 
Unallocated and Other
 
Interest expense..................................................................................................

 

(14

)

 

(14

)

 

(43

)

 

(41

)

 
Certain items (D)...................................................................................................

 

(14

)

 

(3

)

 

(61

)

 

(260

)

 
Unallocated corporate costs..................................................................................

 

(14

)

 

(15

)

 

(39

)

 

(45

)

 
General unallocated income (expense) (E)...............................................................

 

3

 

 

(3

)

 
Less: Equity in earnings of affiliated companies......................................................

 

1

 

 

1

 

 

2

 

 
Income (loss) from continuing operations before income taxes and equity in
earnings of affiliated companies..................................................................

 

69

 

 

95

 

 

188

 

 

16

 

 
(Provision) benefit for income taxes (including tax certain items)...............................

 

(30

)

 

4

 

 

(43

)

 

(194

)

 
Equity in earnings of affiliated companies...............................................................

 

1

 

 

1

 

 

2

 

 
Net income (loss).....................................................................................

 

40

 

 

99

 

 

146

 

 

(176

)

 
Net income attributable to noncontrolling interests..................................................

 

8

 

 

11

 

 

22

 

 

31

 

 
Net income (loss) attributable to Cabot Corporation.....................................

$

32

 

$

88

 

$

124

 

$

(207

)

 
Diluted earnings per share of common stock
attributable to Cabot Corporation
 
Net income (loss) attributable to Cabot Corporation (F) ……………………………….

$

0.55

 

$

1.40

 

$

2.08

 

$

(3.36

)

 
Adjusted earnings per share
 
Adjusted EPS (G).............................................................................................

$

1.00

 

$

1.06

 

$

2.86

 

$

3.03

 

 
Weighted average common shares outstanding
 
Diluted (F).........................................................................................................

 

58.4

 

 

62.3

 

 

59.2

 

 

61.8

 

(A) In October 2018, the Company realigned its business reporting structure under the Performance Chemicals segment and now combines the specialty carbons, fumed metal oxides and aerogel product lines into the Performance Additives business, and the specialty compounds and inkjet product lines into the Formulated Solutions business. Prior period Performance Chemicals segment revenues have been recast to reflect the realignment.
 
 
 
(B) Unallocated and other reflects royalties, other operating revenues, external shipping and handling fees, the impact of the corporate adjustment for unearned revenue, the removal of 100% of the sales of an equity method affiliate, and discounting charges for certain Notes receivable. Beginning in fiscal 2019 as part of the adoption of the new accounting standard for revenue recognition, the Company now presents revenue from by-products produced in manufacturing operations in Unallocated and other.
 
 
 
 
(C) Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to measure consolidated operating results, assess segment performance and allocate resources. Segment EBIT includes equity in earnings of affiliated companies, royalty income, and allocated corporate costs.
 
 
(D) Details of Certain items are presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.
 
(E) General unallocated income (expense) includes foreign currency transaction gains (losses), interest income, dividend income and the profit related to the corporate adjustment for unearned revenue.
 
(F) The weighted average common shares outstanding used to calculate earnings per share for the nine months ended June 30, 2018 excludes approximately 1 million shares as those shares would be antidilutive due to the Company’s net loss position.
 
 
(G) Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.
 
Third Quarter Earnings Announcement, Fiscal 2019
 
 
CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
 
June 30, September 30,
Dollars in millions (unaudited)

2019

2018

 
Current assets:
 
Cash and cash equivalents.......................................................................................................

$

147

$

175

 
Accounts and notes receivable, net of reserve for doubtful accounts of $4 and $7..........................

 

611

 

637

 
Inventories:
 
Raw materials....................................................................................................................

 

125

 

129

 
Work in process.................................................................................................................

 

3

 
Finished goods...................................................................................................................

 

340

 

329

 
Other.................................................................................................................................

 

53

 

50

 
Total inventories............................................................................................................

 

518

 

511

 
Prepaid expenses and other current assets...............................................................................

 

59

 

63

 
Total current assets..................................................................................................

 

1,335

 

1,386

 
Property, plant and equipment, net.................................................................................................

 

1,336

 

1,296

 
Goodwill......................................................................................................................................

 

92

 

93

 
Equity affiliates.............................................................................................................................

 

39

 

52

 
Intangible assets, net ...................................................................................................................

 

100

 

98

 
Assets held for rent......................................................................................................................

 

118

 
Deferred income taxes..................................................................................................................

 

146

 

134

 
Other assets................................................................................................................................

 

71

 

67

 
Total assets.................................................................................................................................

$

3,119

$

3,244

Third Quarter Earnings Announcement, Fiscal 2019
 
 
CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
 
June 30, September 30,
Dollars in millions, except share and per share amounts (unaudited)

 

2019

 

 

2018

 

 
Current liabilities:
 
Short-term borrowings..............................................................................................................

$

84

 

$

249

 

 
Accounts payable and accrued liabilities...................................................................................

 

553

 

 

613

 

 
Income taxes payable..............................................................................................................

 

3

 

 

29

 

 
Current portion of long-term debt...............................................................................................

 

5

 

 

35

 

 
Redeemable preferred stock.....................................................................................................

 

26

 

 
Total current liabilities.........................................................................................................

 

645

 

 

952

 

 
Long-term debt.............................................................................................................................

 

1,017

 

 

719

 

 
Deferred income taxes..................................................................................................................

 

40

 

 

42

 

 
Other liabilities.............................................................................................................................

 

191

 

 

252

 

 
Stockholders' equity:
 
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: 57,952,863 and 60,566,375 shares
Outstanding: 57,758,660 and 60,366,569 shares

 

58

 

 

61

 

 
Less cost of 194,203 and 199,806 shares of common treasury stock

 

(6

)

 

(7

)

 
Additional paid-in capital...............................................................................................................
 
Retained earnings.........................................................................................................................

 

1,351

 

 

1,417

 

 
Accumulated other comprehensive income ....................................................................................

 

(311

)

 

(317

)

 
Total Cabot Corporation stockholders' equity..............................................................................

 

1,092

 

 

1,154

 

 
Noncontrolling interests............................................................................................................

 

134

 

 

125

 

 
Total stockholders' equity...............................................................................................

 

1,226

 

 

1,279

 

 
Total liabilities and stockholders' equity..........................................................................................

$

3,119

 

$

3,244

 

...
Third Quarter Earnings Announcement, Fiscal 2019
 
 
CABOT CORPORATION QUARTERLY RESULTS BY SEGMENT
 
 
Fiscal 2018 Fiscal 2019
Dollars in millions,
except per share amounts (unaudited)

Dec. Q

Mar. Q

June Q

Sept. Q

FY

Dec. Q

Mar. Q

June Q

Sept. Q

FY

 
Sales
Reinforcement Materials.............................................................

$

387

 

$

454

 

$

466

 

$

467

 

$

1,774

 

$

457

 

$

445

 

$

461

 

$

$

1,363

 

Performance Chemicals.............................................................

 

229

 

 

268

 

 

274

 

 

257

 

 

1,028

 

 

231

 

 

254

 

 

251

 

 

736

 

Performance Additives (A).......................................................

 

159

 

 

177

 

 

188

 

 

183

 

 

707

 

 

167

 

 

179

 

 

172

 

 

518

 

Formulated Solutions (A).........................................................

 

70

 

 

91

 

 

86

 

 

74

 

 

321

 

 

64

 

 

75

 

 

79

 

 

218

 

Purification Solutions.................................................................

 

70

 

 

66

 

 

70

 

 

73

 

 

279

 

 

65

 

 

72

 

 

73

 

 

210

 

Specialty Fluids........................................................................

 

6

 

 

6

 

 

12

 

 

21

 

 

45

 

 

19

 

 

24

 

 

13

 

 

56

 

Segment sales.....................................................................

 

692

 

 

794

 

 

822

 

 

818

 

 

3,126

 

 

772

 

 

795

 

 

798

 

 

2,365

 

Unallocated and other (B)…………………………………………………

 

28

 

 

24

 

 

32

 

 

32

 

 

116

 

 

49

 

 

49

 

 

47

 

 

145

 

 
Net sales and other operating revenues.......................................

$

720

 

$

818

 

$

854

 

$

850

 

$

3,242

 

$

821

 

$

844

 

$

845

 

$

$

2,510

 

 
Segment Earnings Before Interest and Taxes (C)
Reinforcement Materials.............................................................

$

62

 

$

79

 

$

74

 

$

64

 

$

279

 

$

62

 

$

61

 

$

72

 

$

$

195

 

Performance Chemicals.............................................................

 

47

 

 

57

 

 

56

 

 

40

 

 

200

 

 

36

 

 

38

 

 

37

 

 

111

 

Purification Solutions.................................................................

 

6

 

 

(6

)

 

(6

)

 

(1

)

 

(7

)

 

(3

)

 

1

 

 

1

 

 

(1

)

Specialty Fluids........................................................................

 

(2

)

 

(3

)

 

3

 

 

10

 

 

8

 

 

10

 

 

12

 

 

2

 

 

24

 

Total Segment Earnings Before Interest and Taxes..................

 

113

 

 

127

 

 

127

 

 

113

 

 

480

 

 

105

 

 

112

 

 

112

 

 

329

 

 
Unallocated and Other
Interest expense........................................................................

 

(13

)

 

(14

)

 

(14

)

 

(13

)

 

(54

)

 

(15

)

 

(14

)

 

(14

)

 

(43

)

Certain items (D)……………………………………………………………

 

7

 

 

(264

)

 

(3

)

 

12

 

 

(248

)

 

(10

)

 

(37

)

 

(14

)

 

(61

)

Unallocated corporate costs.......................................................

 

(14

)

 

(16

)

 

(15

)

 

(16

)

 

(61

)

 

(12

)

 

(13

)

 

(14

)

 

(39

)

General unallocated income (expense) (E)……………………………

 

(3

)

 

5

 

 

2

 

 

2

 

 

1

 

 

3

 

Less: Equity in earnings of affiliated companies............................

 

1

 

 

1

 

 

2

 

 

1

 

 

1

 

 
Income (loss) from continuing operations before income taxes and
equity in earnings of affiliated companies...............................

 

92

 

 

(171

)

 

95

 

 

101

 

 

117

 

 

70

 

 

49

 

 

69

 

 

188

 

(Provision) benefit for income taxes (including tax certain items)....

 

(205

)

 

7

 

 

4

 

 

1

 

 

(193

)

 

7

 

 

(20

)

 

(30

)

 

(43

)

Equity in earnings of affiliated companies.....................................

 

1

 

 

1

 

 

2

 

 

1

 

 

1