Cabot Corporation Reports Fiscal 2012 EPS of $6.01, Adjusted EPS of $3.34
Fourth quarter EPS of
Key Highlights
- Strong fiscal year-over-year performance continues with 37% adjusted EPS improvement
- Value pricing drives 16% improvement in fiscal year Total Segment EBIT despite lower volumes
- Integration of Norit proceeding well
- Macroeconomic environment remains challenging
(In millions, except per share amounts) | Fiscal 2012 | Fiscal 2011 | ||||||||||||||||
Fourth |
Full |
Fourth |
Full |
|||||||||||||||
Net sales | $ | 848 | $ | 3,300 | $ | 833 | $ | 3,102 | ||||||||||
Net income attributable to Cabot Corporation | $ | 37 | $ | 389 | $ | 50 | $ | 236 | ||||||||||
Net earnings per share attributable to Cabot Corporation | $ | 0.58 | $ | 6.01 | $ | 0.76 | $ | 3.57 | ||||||||||
Less Adjustments: | ||||||||||||||||||
Net income per share from discontinued operations | $ | 0.02 | $ | 3.16 | $ | 0.12 | $ | 0.80 | ||||||||||
Certain items per share | $ | (0.19 | ) | $ | (0.49 | ) | $ | 0.09 | $ | 0.34 | ||||||||
Adjusted EPS | $ | 0.75 | $ | 3.34 | $ | 0.55 | $ | 2.43 | ||||||||||
Commenting on the results,
“As compared to the prior year, results in the fourth quarter continued
to benefit from our ongoing value pricing initiatives and the
utilization of our new fumed silica and specialty compounds capacity in
Financial Detail
For the fourth quarter of fiscal 2012, net income attributable to
Segment Results
Reinforcement Materials -- Fourth quarter fiscal 2012 EBIT in
Reinforcement Materials increased by
Global and regional volume changes for Reinforcement Materials for the fourth quarter of fiscal 2012 as compared to the same quarter of the prior year and the third quarter of fiscal 2012 are included in the table below:
Fourth Quarter Year over Year Change |
Fourth Quarter Sequential Change |
|||||
Global | (5%) | 1% | ||||
Japan | (15%) | 5% | ||||
Southeast Asia | (7%) | (20%) | ||||
China | 4% | 16% | ||||
Europe, Middle East, Africa | (13%) | 1% | ||||
North America | (4%) | - | ||||
South America | (2%) | (8%) | ||||
Performance Materials -- Fourth quarter fiscal 2012 EBIT in
Performance Materials increased by
Advanced Technologies -- For the fourth quarter of fiscal 2012,
EBIT in Advanced Technologies increased by
Purification Solutions -- On
Stand-alone Norit financial results, excluding purchase accounting
impacts, for the three months ended
Cash Performance -- The Company ended the fourth quarter of
fiscal 2012 with a cash balance of
Taxes -- During the fourth quarter of fiscal 2012, the net tax
provision recorded was zero, which included a benefit from tax certain
items of
Outlook
Commenting on the outlook for the Company, Prevost said, “Due to the uncertainty in the global economy, we are cautious about the near-term as we expect demand to remain soft at least through calendar year 2012. Due to the non-discretionary nature of the products we sell, we anticipate demand to recover in 2013. With the investments we have made in efficient and geographically attractive capacity, we are well positioned to capture volume growth when demand recovers.”
Prevost continued, “We are pleased with our fiscal year performance as
we continue on our growth trajectory towards our adjusted EPS target of
Earnings Call
The Company will host a conference call with industry analysts at
About
Forward-Looking Statements -- This earnings release contains
forward-looking statements based on management’s current expectations,
estimates and projections. All statements that address expectations or
projections about the future, including our ability to meet our
long-term financial targets, strategy for growth, and demand for our
products, including expectations for growth, are forward-looking
statements. Some of the forward-looking statements may be identified by
words like “expects,” “anticipates,” “plans,” “intends,” “projects,”
“indicates,” and similar expressions. Forward-looking statements are
based on our current expectations, assumptions, estimates and
projections about Cabot's businesses and strategies, market trends and
conditions, economic conditions and other factors. 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 in the forward-looking statement. Important
factors that could cause our results to differ materially from those
expressed in the forward-looking statements include, but are not limited
to changes in raw material costs; lower than expected demand for our
products; the loss of one or more of our important customers; our
inability to complete capacity expansions as planned; the timing of
implementation of environmental regulations; our failure to develop new
products or to keep pace with technological developments; patent rights
of others; the timely commercialization of products under development
(which 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); demand for our
customers' products; competitors' reactions to market conditions; delays
in the successful integration of structural changes, including
acquisitions or joint ventures; the laws, regulations, policies and
economic conditions, including inflation, interest and foreign currency
exchange rates, of countries where we do business; and severe weather
events that cause business interruptions, including plant and power
outages or disruptions in supplier or customer operations. These factors
are discussed more fully in the reports we file with the
Explanation of Terms Used and Use of Non-GAAP Financial Measures -- The preceding discussion of our results and the accompanying financial tables report adjusted EPS, Total segment earnings before interest and taxes, “Total Segment EBIT”, operating tax rate and EBITDA, which are non-GAAP financial measures. Our chief operating decision-maker uses these non-GAAP financial measures to evaluate the performance of the Company in terms of profitability. We believe that these measures also assist our investors in evaluating the changes in our results and the Company's performance.
In calculating adjusted EPS, we exclude from our net income per share from continuing operations certain items of expense and income that management does not consider representative of the Company's ongoing operations. Adjusted EPS should be considered as supplemental to, and not as a replacement for, EPS determined in accordance with GAAP. A reconciliation of adjusted EPS to EPS from continuing operations, the most directly comparable GAAP financial measure, and the certain items that are excluded from our calculation of adjusted EPS, are provided in the table titled "Certain Items and Reconciliation of Adjusted EPS.”
Total Segment EBIT is a non-GAAP performance measure, and should not be considered an alternative for Income (loss) from continuing operations before taxes, the most directly comparable GAAP financial measure. In calculating Total Segment EBIT, we exclude “certain items”, meaning items that management does not consider representative of our fundamental segment results, as well as items that are not allocated to our business segments, such as interest expense and other corporate costs. Our Chief Operating Decision Maker uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe that this non-GAAP measure provides useful supplemental information for our investors as it is an important indicator of the Company’s operational strength and performance. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another. A reconciliation of Total Segment EBIT to Income (loss) from continuing operations before income taxes and equity in net earnings of affiliate companies is provided in the table titled, “Summary Results by Segments.”
The term “operating tax rate” is a non-GAAP financial measure and 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 rate adjustment and the impact of certain items on both operating income and tax provision.
“Adjusted EBITDA” is a non-GAAP financial measure and refers to earnings before interest, taxes, depreciation and amortization, excluding items that management does not consider representative of the fundamental segment results.
CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
Periods ended September 30 | Three Months | Twelve Months | |||||||||||||||||
Dollars in millions, except per share amounts (unaudited) |
2012(A) |
2011 |
2012(A) |
2011 | |||||||||||||||
Net sales and other operating revenues | $ | 848 | $ | 833 | $ | 3,300 | $ | 3,102 | |||||||||||
Cost of sales | 690 | 692 | 2,651 | 2,544 | |||||||||||||||
Gross profit | 158 |
|
141 | 649 | 558 | ||||||||||||||
Selling and administrative expenses | 87 | 63 | 286 | 249 | |||||||||||||||
Research and technical expenses | 19 | 17 | 73 | 66 | |||||||||||||||
Income from operations | 52 | 61 | 290 | 243 | |||||||||||||||
Other income and (expense) | |||||||||||||||||||
Interest and dividend income | 1 | — | 4 | 2 | |||||||||||||||
Interest expense | (15 | ) | (10 | ) | (45 | ) | (39 | ) | |||||||||||
Other (expense) income | (1 | ) | (4 | ) | (3 | ) | (3 | ) | |||||||||||
Total other income and (expense) | (15 | ) | (14 | ) | (44 | ) | (40 | ) | |||||||||||
Income from continuing operations before income taxes and equity in net | |||||||||||||||||||
earnings of affiliated companies | 37 | 47 | 246 | 203 | |||||||||||||||
Provision for income taxes | - | (2 | ) | (55 | ) | (6 | ) | ||||||||||||
Equity in net earnings of affiliated companies, net of tax | 3 | 2 | 11 | 8 | |||||||||||||||
Income from continuing operations | 40 | 47 | 202 | 205 | |||||||||||||||
Income from discontinued operations, net of tax (B) | 1 | 8 | 205 | 53 | |||||||||||||||
Net income | 41 | 55 | 407 | 258 | |||||||||||||||
Net income attributable to noncontrolling interests, net of tax | 4 | 5 | 18 | 22 | |||||||||||||||
Net income attributable to Cabot Corporation | $ | 37 | $ | 50 | $ | 389 | $ | 236 | |||||||||||
Diluted earnings per share of common stock | |||||||||||||||||||
attributable to Cabot Corporation | |||||||||||||||||||
Continuing operations | $ | 0.56 | $ | 0.64 | $ | 2.85 | $ | 2.77 | |||||||||||
Discontinued operations (B) | 0.02 | 0.12 | 3.16 | 0.80 | |||||||||||||||
Net income attributable to Cabot Corporation | $ | 0.58 | $ | 0.76 | $ | 6.01 | $ | 3.57 | |||||||||||
Weighted average common shares outstanding | |||||||||||||||||||
Diluted | 64.2 | 65.5 | 64.2 | 65.4 | |||||||||||||||
(A) The three and twelve months periods ended September 30, 2012 include two months of results of Norit N.V. which was acquired by Cabot Corporation on July 31, 2012. |
|||||||||||||||||||
(B) Amounts relate to the divesture of the Supermetals Business and, in the first twelve months of fiscal 2011, certain tax settlements in connection with other discontinued operations. |
CABOT CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||||||
September 30, | September 30, | ||||||||
2012(A) |
2011 | ||||||||
Dollars in millions, except share and per share amounts | (unaudited) | (audited) | |||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 120 | $ | 286 | |||||
Accounts and notes receivable, net of reserve for doubtful accounts of $5 and $4 | 687 | 659 | |||||||
Inventories: | |||||||||
Raw materials | 131 | 120 | |||||||
Work in process | 5 | 3 | |||||||
Finished goods | 352 | 233 | |||||||
Other | 47 | 37 | |||||||
Total inventories | 535 | 393 | |||||||
Prepaid expenses and other current assets | 73 | 76 | |||||||
Deferred income taxes | 11 | 35 | |||||||
Current assets held for sale (B) | — | 106 | |||||||
Total current assets | 1,426 | 1,555 | |||||||
Net property, plant and equipment | 1,552 | 1,036 | |||||||
Goodwill | 480 | 40 | |||||||
Equity affiliates | 115 | 60 | |||||||
Intangible assets, net of accumulated amortization of $6 and $2 | 330 | 3 | |||||||
Assets held for rent | 46 | 46 | |||||||
Notes receivable for sale of business | 243 | — | |||||||
Deferred income taxes | 64 | 261 | |||||||
Other assets | 93 | 101 | |||||||
Non-current assets held for sale (B) | - | 39 | |||||||
Total assets | $ | 4,349 | $ | 3,141 | |||||
(A) The September 30, 2012 balances include those of Norit N.V. based on the preliminary purchase accounting. | |||||||||
(B) Includes amounts related to the sale of Supermetals Business, which was pending as of September 30, 2011. This transaction closed in January 2012. |
CABOT CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||
September 30, | September 30, | |||
2012 (A) | 2011 | |||
Dollars in millions, except share and per share amounts | (unaudited) | (audited) | ||
Current liabilities: | ||||
Notes payable to banks | $ 62 | $ 86 | ||
Accounts payable and accrued liabilities | 606 | 461 | ||
Income taxes payable | 62 | 34 | ||
Deferred income taxes | 8 | 6 | ||
Current portion of long-term debt | 185 | 57 | ||
Current liabilities held for sale (B) | — | 12 | ||
Total current liabilities | 923 | 656 | ||
Long-term debt | 1,172 | 556 | ||
Deferred income taxes | 8 | 8 | ||
Other liabilities | 306 | 299 | ||
Non-current liabilities held for sale (B) | — | 6 | ||
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: 63,600,928 and 63,894,443 shares | ||||
Outstanding: 63,347,362 and 63,860,777 shares | 64 | 64 | ||
Less cost of 253,565 and 33,666 shares of common treasury stock | (8) | (1) | ||
Additional paid-in capital | 20 | 18 | ||
Retained earnings | 1,654 | 1,314 | ||
Deferred employee benefits | (8) | (14) | ||
Accumulated other comprehensive income | 92 | 106 | ||
Total Cabot Corporation stockholders' equity | 1,814 | 1,487 | ||
Noncontrolling interests | 126 | 129 | ||
Total equity | 1,940 | 1,616 | ||
Total liabilities and equity | $ 4,349 | $ 3,141 | ||
(A) The September 30, 2012 balances include those of Norit N.V. based on the preliminary purchase accounting. | ||||
(B) Includes amounts related to the sale of Supermetals Business, which was pending as of September 30, 2011. This transaction closed in January 2012. |
CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS | ||||||||||||||||||
Periods ended September 30 | Three Months | Twelve Months | ||||||||||||||||
Dollars in millions, except per share amounts (unaudited) |
2012(A),(H) |
2011 |
2012(A),(H) |
2011 | ||||||||||||||
Sales | ||||||||||||||||||
Reinforcement Materials (A) | $ | 479 | $ | 528 | $ | 2,019 | $ | 1,952 | ||||||||||
Performance Materials | 227 | 228 | 914 | 880 | ||||||||||||||
Specialty Carbons and Compounds | 159 | 162 | 664 | 626 | ||||||||||||||
Fumed metal oxides | 68 | 66 | 250 | 254 | ||||||||||||||
Advanced Technologies | 57 | 55 | 210 | 186 | ||||||||||||||
Inkjet colorants | 18 | 15 | 66 | 65 | ||||||||||||||
Aerogel | 6 | 5 | 18 | 24 | ||||||||||||||
Security Materials | 2 | 3 | 9 | 11 | ||||||||||||||
Elastomer Composites | 6 | 5 | 23 | 17 | ||||||||||||||
Specialty Fluids | 25 | 27 | 94 | 69 | ||||||||||||||
Purification Solutions | 61 | - | 61 | - | ||||||||||||||
Segment sales | 824 |
|
811 | 3,204 |
|
3,018 | ||||||||||||
Unallocated and other (B) | 24 | 22 | 96 | 84 | ||||||||||||||
Net sales and other operating revenues | $ | 848 | $ | 833 | $ | 3,300 | $ | 3,102 | ||||||||||
Segment Earnings Before Interest and Taxes | ||||||||||||||||||
Reinforcement Materials Segment - Rubber blacks (A) | $ | 41 | $ | 38 | $ | 227 | $ | 183 | ||||||||||
Performance Materials Segment | 34 | 27 | 128 | 140 | ||||||||||||||
Advanced Technologies Segment | 16 | 14 | 49 | 31 | ||||||||||||||
Purification Solutions Segment | 5 | - | 5 | - | ||||||||||||||
Total Segment Earnings Before Interest and Taxes (C) | 96 | 79 | 409 | 354 | ||||||||||||||
Unallocated and Other | ||||||||||||||||||
Interest expense | (15 | ) | (10 | ) | (45 | ) | (39 | ) | ||||||||||
Certain items (D) | (30 | ) | (3 | ) | (51 | ) | (19 | ) | ||||||||||
Unallocated corporate costs | (12 | ) | (13 | ) | (56 | ) | (53 | ) | ||||||||||
General unallocated income (expense) (E) | 1 | (4 | ) | - | (32 | ) | ||||||||||||
Less: Equity in net earnings of affiliated companies, net of tax | (3 | ) | (2 | ) | (11 | ) | (8 | ) | ||||||||||
Income from continuing operations before income taxes and equity in | ||||||||||||||||||
net earnings of affiliated companies | 37 | 47 | 246 | 203 | ||||||||||||||
Provision for income taxes (including tax certain items) | - | (2 | ) | (55 | ) | (6 | ) | |||||||||||
Equity in net earnings of affiliated companies, net of tax | 3 | 2 | 11 | 8 | ||||||||||||||
Income from continuing operations | 40 | 47 | 202 | 205 | ||||||||||||||
Income from discontinued operations, net of tax (F) | 1 | 8 | 205 | 53 | ||||||||||||||
Net income | 41 | 55 | 407 | 258 | ||||||||||||||
Net income attributable to noncontrolling interests, net of tax | 4 | 5 | 18 | 22 | ||||||||||||||
Net income attributable to Cabot Corporation | $ | 37 | $ | 50 | $ | 389 | $ | 236 | ||||||||||
Diluted earnings per share of common stock | ||||||||||||||||||
attributable to Cabot Corporation | ||||||||||||||||||
Continuing operations (A) | $ | 0.56 | $ | 0.64 | $ | 2.85 | $ | 2.77 | ||||||||||
Discontinued operations (F) |
0.02 | 0.12 | 3.16 | 0.80 | ||||||||||||||
Net income attributable to Cabot Corporation | $ | 0.58 | $ | 0.76 | $ | 6.01 | $ | 3.57 | ||||||||||
Adjusted earnings per share | ||||||||||||||||||
Adjusted EPS (G) |
$ | 0.75 | $ | 0.55 | $ | 3.34 | $ | 2.43 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||
Diluted | 64.2 | 65.5 | 64.2 | 65.4 | ||||||||||||||
(A) | In the fourth quarter of fiscal 2011, Cabot entered into an agreement to sell the Supermetals Business ("CSM"). This transaction closed in January 2012. The results of CSM are presented as Discontinued Operations for all periods. | |||||||||||||||||
(B) | Unallocated and other reflects royalties paid by equity affiliates, other operating revenues, external shipping and handling fees, the impact of unearned revenue and the removal of 100% of the sales of an equity method affiliate. | |||||||||||||||||
(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 net 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 table. | |||||||||||||||||
(E) | General unallocated income (expense) includes foreign currency transaction gains (losses), interest income, dividend income, the profit related to unearned revenue, and the impact of LIFO accounting. | |||||||||||||||||
(F) | Amounts relate to the divesture of the CSM business as discussed in note (A), and in the first twelve months of fiscal 2011, certain tax settlements in connection with other discontinued operations. | |||||||||||||||||
(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 table. | |||||||||||||||||
(H) | The three and twelve months periods ended September 30, 2012 include two months of results of Norit N.V. which was acquired by Cabot Corporation on July 31, 2012. |
CABOT CORPORATION | ||||||||||||||||||||||||||||||||||||||||||
Fiscal 2011 | Fiscal 2012 (H) | |||||||||||||||||||||||||||||||||||||||||
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 (A) | 438 | 458 | 528 | 528 | 1,952 | 489 | 534 | 517 | 479 | 2,019 | ||||||||||||||||||||||||||||||||
Performance Materials | 190 | 222 | 240 | 228 | 880 | 205 | 235 | 247 | 227 | 914 | ||||||||||||||||||||||||||||||||
Specialty Carbons and Compounds | 132 | 159 | 173 | 162 | 626 | 151 | 173 | 181 | 159 | 664 | ||||||||||||||||||||||||||||||||
Fumed metal oxides | 58 | 63 | 67 | 66 | 254 | 54 | 62 | 66 | 68 | 250 | ||||||||||||||||||||||||||||||||
Advanced Technologies | 41 | 45 | 45 | 55 | 186 | 39 | 57 | 57 | 57 | 210 | ||||||||||||||||||||||||||||||||
Inkjet colorants | 14 | 16 | 20 | 15 | 65 | 15 | 15 | 18 | 18 | 66 | ||||||||||||||||||||||||||||||||
Aerogel | 3 | 8 | 8 | 5 | 24 | 4 | 5 | 3 | 6 | 18 | ||||||||||||||||||||||||||||||||
Security Materials | 3 | 3 | 2 | 3 | 11 | 2 | 3 | 2 | 2 | 9 | ||||||||||||||||||||||||||||||||
Elastomer Composites | 4 | 5 | 3 | 5 | 17 | 4 | 7 | 6 | 6 | 23 | ||||||||||||||||||||||||||||||||
Specialty Fluids | 17 | 13 | 12 | 27 | 69 | 14 | 27 | 28 | 25 | 94 | ||||||||||||||||||||||||||||||||
Purification Solutions | - | - | - | - | - | - | - | - | 61 | 61 | ||||||||||||||||||||||||||||||||
Segment Sales | 669 | 725 | 813 | 811 | 3,018 | 733 | 826 | 821 | 824 | 3,204 | ||||||||||||||||||||||||||||||||
Unallocated and other (B) | 25 | 14 | 23 | 22 | 84 | 29 | 18 | 25 | 24 | 96 | ||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||
Net sales and other operating revenues | $ | 694 | $ | 739 | $ | 836 | $ | 833 | $ | 3,102 | $ | 762 | $ | 844 | $ | 846 | 848 | $ | 3,300 | |||||||||||||||||||||||
Segment Earnings Before Interest and Taxes | ||||||||||||||||||||||||||||||||||||||||||
Reinforcement Materials Segment - Rubber blacks (A) | 37 | 51 | 57 | 38 | 183 | 55 | 72 | 59 | 41 | 227 | ||||||||||||||||||||||||||||||||
Performance Materials Segment | 31 | 39 | 43 | 27 | 140 | 21 | 35 | 38 | 34 | 128 | ||||||||||||||||||||||||||||||||
Advanced Technologies Segment | 6 | 5 | 6 | 14 | 31 | 5 | 16 | 12 | 16 | 49 | ||||||||||||||||||||||||||||||||
Purification Solutions Segment | - | - | - | - | - | - | - | - | 5 | 5 | ||||||||||||||||||||||||||||||||
Total Segment Earnings Before Interest and Taxes (C) | 74 | 95 | 106 | 79 | 354 | 81 | 123 | 109 | 96 | 409 | ||||||||||||||||||||||||||||||||
Unallocated and Other | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | (10 | ) | (10 | ) | (9 | ) | (10 | ) | (39 | ) | (10 | ) | (9 | ) | (11 | ) | (15 | ) | (45 | ) | ||||||||||||||||||||||
Certain items (D) | (4 | ) | (7 | ) | (5 | ) | (3 | ) | (19 | ) | (5 | ) | (9 | ) | (7 | ) | (30 | ) | (51 | ) | ||||||||||||||||||||||
Unallocated corporate costs | (12 | ) | (15 | ) | (13 | ) | (13 | ) | (53 | ) | (14 | ) | (18 | ) | (12 | ) | (12 | ) | (56 | ) | ||||||||||||||||||||||
General unallocated income (expense) (E) | 1 | (14 | ) | (15 | ) | (4 | ) | (32 | ) | 4 | (8 | ) | 3 | 1 | - | |||||||||||||||||||||||||||
Less: Equity in net earnings of affiliated companies, net of tax | (3 | ) | (1 | ) | (2 | ) | (2 | ) | (8 | ) | (1 | ) | (3 | ) | (4 | ) | (3 | ) | (11 | ) | ||||||||||||||||||||||
Income from continuing operations before income taxes and | ||||||||||||||||||||||||||||||||||||||||||
equity in net earnings of affiliated companies | 46 | 48 | 62 | 47 | 203 | 55 | 76 | 78 | 37 | 246 | ||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||
Benefit (provision) for income taxes (including tax certain items) | 15 | (9 | ) | (10 | ) | (2 | ) | (6 | ) | (16 | ) | (23 | ) | (16 | ) | - | (55 | ) | ||||||||||||||||||||||||
Equity in net earnings of affiliated companies, net of tax | 3 | 1 | 2 | 2 | 8 | 1 | 3 | 4 | 3 | 11 | ||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | 64 | 40 | 54 | 47 | 205 | 40 | 56 | 66 | 40 | 202 | ||||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax (F) | 16 | 16 | 13 | 8 | 53 | 11 | 189 | 4 | 1 | 205 | ||||||||||||||||||||||||||||||||
Net income | 80 | 56 | 67 | 55 | 258 | 51 | 245 | 70 | 41 | 407 | ||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests, net of tax | 5 | 5 | 7 | 5 | 22 | 5 | 5 | 4 | 4 | 18 | ||||||||||||||||||||||||||||||||
Net income attributable to Cabot Corporation | $ | 75 | $ | 51 | $ | 60 | $ | 50 | $ | 236 | $ | 46 | $ | 240 | $ | 66 | $ | 37 | $ | 389 | ||||||||||||||||||||||
Diluted earnings per share of common stock | ||||||||||||||||||||||||||||||||||||||||||
attributable to Cabot Corporation | ||||||||||||||||||||||||||||||||||||||||||
Continuing operations (A) | $ | 0.88 | $ | 0.52 | $ | 0.73 | $ | 0.64 | $ | 2.77 | $ | 0.55 | $ | 0.78 | $ | 0.96 | $ | 0.56 | $ | 2.85 | ||||||||||||||||||||||
Discontinued operations (F) | 0.25 | 0.24 | 0.19 | 0.12 | 0.80 | 0.16 | 2.92 | 0.06 | 0.02 | 3.16 | ||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||
Net income attributable to Cabot Corporation | $ | 1.13 | $ | 0.76 | $ | 0.92 | $ | 0.76 | $ | 3.57 | $ | 0.71 | $ | 3.70 | $ | 1.02 | $ | 0.58 | $ | 6.01 | ||||||||||||||||||||||
Adjusted earnings per share | ||||||||||||||||||||||||||||||||||||||||||
Adjusted EPS (G) | $ | 0.55 | $ | 0.57 | $ | 0.76 | $ | 0.55 | $ | 2.43 | $ | 0.63 | $ | 0.96 | $ | 1.00 | $ | 0.75 | $ | 3.34 | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||||||||||||||||||
Diluted | 65.2 | 65.5 | 65.6 | 65.5 | 65.4 | 64.2 | 64.0 | 64.3 | 64.2 | 64.2 |
(A) | In the fourth quarter of fiscal 2011, Cabot entered into an agreement to sell the Supermetals Business ("CSM"). This transaction closed in January 2012. The results of CSM are presented as Discontinued Operations for all periods. | |
(B) | Unallocated and other reflects royalties paid by equity affiliates, other operating revenues, external shipping and handling fees, the impact of unearned revenue and the removal of 100% of the sales of an equity method affiliate. | |
(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 net 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 table. | |
(E) | General unallocated income (expense) includes foreign currency transaction gains (losses), interest income, dividend income, the profit related to unearned revenue, and the impact of LIFO accounting. | |
(F) | Amounts relate to the divesture of the CSM business as discussed in note (A), and in fiscal year 2011, certain tax and legal reserves in connection with other discontinued operations. | |
(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 table. | |
(H) | The three and twelve months periods ended September 30, 2012 include two months of results of Norit N.V. which was acquired by Cabot Corporation on July 31, 2012. |
CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS | |||||||||||||||||||||||||||||||||||||||||||||
TABLE 1: DETAIL OF CERTAIN ITEMS: | |||||||||||||||||||||||||||||||||||||||||||||
Periods ended September 30 | Three Months | Twelve Months | Three Months | Twelve Months | |||||||||||||||||||||||||||||||||||||||||
Dollars in millions, except per share amounts (unaudited) | Dollars in Millions | Per Share After Tax | |||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | per share(A) | per share(A) | per share(A) | per share(A) | ||||||||||||||||||||||||||||||||||||||
Certain items before and after income taxes |
|||||||||||||||||||||||||||||||||||||||||||||
Global restructuring activities | $ | (3 | ) | $ | (2 | ) | $ | (17 | ) | $ | (18 | ) | $ | (0.04 | ) | $ | (0.03 | ) | (0.24 | ) | $ | (0.24 | ) | ||||||||||||||||||||||
Acquisition related charges | (21 | ) | — | (26 | ) | — | (0.23 | ) | — | (0.32 | ) | — | |||||||||||||||||||||||||||||||||
Environmental and legal reserves | (6 | ) | (1 | ) | (8 | ) | (1 | ) | (0.07 | ) | (0.01 | ) | (0.09 | ) | (0.01 | ) | |||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||
Certain items before tax | (30 | ) | (3 | ) | (51 | ) | (19 | ) | (0.34 | ) | (0.04 | ) | (0.65 | ) | (0.25 | ) | |||||||||||||||||||||||||||||
Tax impact of certain items | 7 | 1 | 9 | 3 | |||||||||||||||||||||||||||||||||||||||||
Certain items after tax | (23 | ) | (2 | ) | (42 | ) | (16 | ) | (0.34 | ) | (0.04 | ) | (0.65 | ) | (0.25 | ) | |||||||||||||||||||||||||||||
Tax-related certain items | |||||||||||||||||||||||||||||||||||||||||||||
Tax impact of certain foreign exchange losses | 3 | — | 1 | — | 0.06 | — | 0.02 | — | |||||||||||||||||||||||||||||||||||||
Tax impact of non-deductible interest expense | (2 | ) | — | (2 | ) | — | (0.03 | ) | — | (0.03 | ) | — | |||||||||||||||||||||||||||||||||
Discrete tax items | 9 | 9 | 11 | 39 | 0.12 | 0.13 | 0.17 | 0.59 | |||||||||||||||||||||||||||||||||||||
Total tax-related certain items | 10 | 9 | 10 | 39 | 0.15 | 0.13 | 0.16 | 0.59 | |||||||||||||||||||||||||||||||||||||
Total certain items after tax | (13 | ) | 7 | (32 | ) | 23 | (0.19 | ) | 0.09 | (0.49 | ) | 0.34 | |||||||||||||||||||||||||||||||||
Discontinued operations after income taxes (B) |
|||||||||||||||||||||||||||||||||||||||||||||
CSM business divestiture after tax | 1 | 10 | 205 | 54 | 0.02 | 0.16 | 3.16 | 0.82 | |||||||||||||||||||||||||||||||||||||
Discontinued operations after tax - other | — | (1 | ) | — | — | — | (0.02 | ) | — | — | |||||||||||||||||||||||||||||||||||
Total discontinued operations after tax | $ | 1 | $ | 9 | $ | 205 | $ | 54 | $ | 0.02 | $ | 0.14 | $ | 3.16 | $ | 0.82 | |||||||||||||||||||||||||||||
TABLE 2: CERTAIN ITEMS STATEMENT OF OPERATIONS LINE ITEM | |||||||||||||||||||||||||||||||||||||||||||||
Periods ended September 30 | Three Months | Twelve Months | |||||||||||||||||||||||||||||||||||||||||||
Dollars in millions, Pre-Tax (unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||
Statement of Operations Line Item |
|||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | $ | 11 | $ | (1 | ) | $ | 25 | $ | (16 | ) | |||||||||||||||||||||||||||||||||||
Selling and administrative expenses | 18 | (2 | ) | 25 | (3 | ) | |||||||||||||||||||||||||||||||||||||||
Other | 1 | — | 1 | — | |||||||||||||||||||||||||||||||||||||||||
Total certain items | $ | 30 | $ | (3 | ) | $ | 51 | $ | (19 | ) | |||||||||||||||||||||||||||||||||||
TABLE 3: RECONCILIATION OF TAX CERTAIN ITEMS | |||||||||||||||||||||||||||||||||||||||||||||
Periods ended September 30 | Three Months | Twelve Months | |||||||||||||||||||||||||||||||||||||||||||
Dollars in millions (unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||
Reconciliation of Provision for income taxes, excluding |
|||||||||||||||||||||||||||||||||||||||||||||
certain items to Provision for income taxes |
|||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes |
$ |
― |
$ | (2 | ) | $ | (55 | ) | $ | (6 | ) | ||||||||||||||||||||||||||||||||||
Tax impact of certain items | 7 | 1 | 9 | 3 | |||||||||||||||||||||||||||||||||||||||||
Less: Tax related certain items | 10 | 9 | 10 | 39 | |||||||||||||||||||||||||||||||||||||||||
Provision for income taxes, excluding certain items | $ | (17 | ) | $ | (12 | ) | $ | (74 | ) | $ | (48 | ) | |||||||||||||||||||||||||||||||||
TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER FISCAL 2011 and FISCAL 2012 | |||||||||||||||||||||||||||||||||||||||||||||
NON-GAAP MEASURE: | |||||||||||||||||||||||||||||||||||||||||||||
Periods ended (unaudited) | Fiscal 2011(A) | Fiscal 2012(A) | |||||||||||||||||||||||||||||||||||||||||||
Per Share, After Tax | FY 2012 | ||||||||||||||||||||||||||||||||||||||||||||
Dec. Q | Mar. Q | Jun. Q | Sept. Q | FY 2011 | Dec. Q | Mar. Q | Jun. Q | Sept. Q | YTD | ||||||||||||||||||||||||||||||||||||
Reconciliation of Adjusted EPS to GAAP EPS |
|||||||||||||||||||||||||||||||||||||||||||||
Net income per share attributable to Cabot Corporation | $ | 1.13 | $ | 0.76 | $ | 0.92 | $ | 0.76 | $ | 3.57 | $ | 0.71 | $ | 3.70 | $ | 1.02 | $ | 0.58 | $ | 6.01 | |||||||||||||||||||||||||
Less: Net income per share from discontinued operations(B) | 0.25 | 0.24 | 0.19 | 0.12 | 0.80 | 0.16 | 2.92 | 0.06 | 0.02 | 3.16 | |||||||||||||||||||||||||||||||||||
Net income per share from continuing operations | $ | 0.88 | $ | 0.52 | $ | 0.73 | $ | 0.64 | $ | 2.77 | $ | 0.55 | $ | 0.78 | $ | 0.96 | $ | 0.56 | $ | 2.85 | |||||||||||||||||||||||||
Less: Certain items after tax | 0.33 | (0.05 | ) | (0.03 | ) | 0.09 | 0.34 | (0.08 | ) | (0.18 | ) | (0.04 | ) | (0.19 | ) | (0.49 | ) | ||||||||||||||||||||||||||||
Adjusted earnings per share | $ | 0.55 | $ | 0.57 | $ | 0.76 | $ | 0.55 | $ | 2.43 | $ | 0.63 | $ | 0.96 | $ | 1.00 | $ | 0.75 | $ | 3.34 | |||||||||||||||||||||||||
(A) Per share amounts are calculated after tax. |
|||||||||||||||||||||||||||||||||||||||||||||
(B) Amounts relate primarily to the divesture of the Supermetals Business. |
Source:
Cabot Corporation
Investor Contact:
Erica McLaughlin,
617-342-6090