UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): April 28, 2010
CABOT
CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
DELAWARE
(State or
Other Jurisdiction of Incorporation)
|
1-5667
|
04-2271897
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
TWO
SEAPORT LANE, SUITE 1300, BOSTON, MASSACHUSETTS
|
02210-2019
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(617)
345-0100
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On April
28, 2010, Cabot Corporation issued a press release announcing its operating
results for its fiscal quarter ended March 31, 2010. A copy of the
press release is furnished herewith as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
|
|
99.1
|
Press
release issued by Cabot Corporation on April 28,
2010
|
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 hereunto duly
authorized.
| CABOT CORPORATION | |||
|
|
By:
|
/s/ James P. Kelly | |
| Name: James P. Kelly | |||
|
Title: Vice
President and Controller
|
|||
EXHIBIT
INDEX
|
|
||
|
Exhibit
Number
|
Title | |
|
99.1
|
Press
release issued by Cabot Corporation on April 28,
2010
|
| Exhibit 99.1 |
:
|
Contact:
|
Susannah
Robinson
|
|
Director,
Investor Relations
|
|||
|
617-342-6129
|
|||
|
susannah_robinson@cabot-corp.com
|
CABOT
ANNOUNCES SECOND QUARTER FISCAL 2010 OPERATING RESULTS
Strong
performance from emerging market volume and overall margin
management
BOSTON (April 28,
2010)- Cabot Corporation (NYSE: CBT) today announced results
for its second quarter of fiscal year 2010.
Key
Highlights
|
§
|
Volumes
increase 30-40% from second quarter 2009 as market demand stabilizes near
first quarter 2010 levels
|
|
§
|
Emerging
markets and robust unit margins continue to be main drivers of
recovery
|
|
§
|
Supermetals
Business profits stabilizing from restructured operations and tantalum
market rebound
|
|
§
|
New
Business Segment continues to show steady
improvement
|
|
(In
millions, except per share amounts)
|
2010
|
2009
|
||||||||||||||
|
Second
|
First
|
Second
|
First
|
|||||||||||||
|
Quarter
|
6 months
|
Quarter
|
6 months
|
|||||||||||||
|
Net
sales
|
$ | 712 | $ | 1,391 | $ | 470 | $ | 1,122 | ||||||||
|
Net
income (loss) per share attributable to Cabot Corporation
|
$ | 0.66 | $ | 1.10 | $ | (0.93 | ) | $ | (0.87 | ) | ||||||
|
Less: Certain
items per share
|
$ | (0.13 | ) | $ | (0.34 | ) | $ | (0.63 | ) | $ | (0.65 | ) | ||||
|
Adjusted
earnings (loss) per share
|
$ | 0.79 | $ | 1.44 | $ | (0.30 | ) | $ | (0.22 | ) | ||||||
Commenting
on the results, Patrick Prevost, Cabot’s President and CEO, stated, “Cabot’s
second quarter results confirm the momentum of demand recovery and robustness of
our business across all segments. Our overall efforts in the key
strategic areas of margin improvement, emerging market expansion and new
business development were instrumental in this strong
performance. Market demand has stabilized slightly ahead of first
quarter 2010 levels with emerging markets continuing to show significant
strength. New emerging market capacity and technology investments in
energy recovery and yield enhancement are contributing positively to our
results. The New Business Segment continues to show steady
progress. Our focus over the past eighteen months on our highest
value new business opportunities has yielded a significant improvement in the
segment’s financial performance.”
Financial
Detail
For the
second quarter of fiscal 2010, net income attributable to Cabot Corporation was
$43 million ($0.66 per diluted common share). Adjusted EPS was income
of $0.79 per common share, excluding $0.13 per common share of certain items
related to restructuring charges. These amounts included $14 million
($0.21 per diluted common share) of discrete tax benefits primarily associated
with audit settlements during the quarter.
Page 1 of
4
Segment
Results
Core
Segment- Second quarter fiscal 2010 profitability in the
Rubber Blacks Business increased by $56 million when compared to the same
quarter of fiscal 2009. Volumes increased by 28% globally driven by
improved demand in the tire and automotive markets. Volumes in Asia Pacific and
China increased by 50% over the second quarter of fiscal 2009, South America by
31%, North America by 14% and Europe, Middle East, Africa by
8%. Unfavorable high cost inventory effects in the second quarter of
fiscal 2009, that did not reoccur in the same period of fiscal 2010, benefited
results by $31 million. The absence of $7 million of one time revenue
recognition benefits from the first quarter was partially offset by expanded
unit margins and 1% higher volumes leading to a $3 million decrease in
sequential profitability.
Second
quarter fiscal 2010 profitability in the Supermetals Business increased by $11
million compared to the same quarter of fiscal 2009. The increase was
principally due to higher volumes from stronger demand in the electronics
market, lower raw material costs and reduced fixed costs. When
compared to the first quarter of fiscal 2010, profitability decreased by $1
million principally due to timing of shipments.
Performance
Segment- Second quarter fiscal 2010 profitability in the
Performance Segment increased by $32 million when compared to the same quarter
of fiscal 2009. The increase was driven by higher volumes from
improved demand in the automotive, construction, infrastructure and electronics
markets and increased unit margins. Volumes increased by 33% in
Performance Products and by 47% in Fumed Metal Oxides when compared to the
second quarter of fiscal 2009. Unfavorable high cost inventory
effects in the second quarter of fiscal 2009 did not reoccur in the same period
of fiscal 2010, benefiting results by $11 million. Sequentially,
profitability decreased by $3 million. Volume increases of 9% in
Performance Products and 3% in Fumed Metal Oxides were more than offset by the
absence of $2 million of one time revenue recognition benefits
from the first quarter and a $3 million unfavorable LIFO
impact.
New Business
Segment- Second quarter fiscal 2010 revenues in the New
Business Segment increased by $6 million when compared to the second quarter of
fiscal 2009 driven principally by improved revenues in Inkjet Colorants and the
Aerogel Business. During the second quarter of fiscal 2010 the New
Business Segment reported $1 million of profit, a $2 million improvement over
the second quarter of fiscal 2009 and a $4 million increase
sequentially.
Specialty Fluids
Segment- Profitability in the Specialty Fluids Segment for the
second quarter of fiscal 2010 increased by $1 million when compared to the
second quarter of fiscal 2009 due to increased rental activity and a favorable
service mix. Sequentially, profitability was flat as a favorable
service mix was offset by decreased rental activity. The business
continues to expand its activity outside of the core North Sea region, with 38%
of revenue in the second quarter of fiscal 2010 coming from other regions,
compared to 9% in the second quarter of fiscal 2009 and 22% in the first quarter
of fiscal 2010.
Cash
Performance- The Company ended the second quarter of fiscal
2010 with a cash balance of $248 million despite a $38 million increase in
working capital from higher accounts receivable balances. Capital
expenditures for the second quarter of fiscal 2010 were $18
million.
Taxes- During the
second quarter of fiscal 2010, the Company recorded a tax benefit of $1 million
including $14 million of discrete tax benefits primarily associated with
favorable audit settlements during the quarter. Excluding discrete
items, the operating tax rate for the quarter was approximately
25%.
Page 2 of
4
Outlook
Commenting
on the outlook for the Company, Prevost said, “We are optimistic about the
remainder of fiscal 2010 and beyond. As market demand has stabilized,
we have been successful at leveraging the actions we have taken over the past
year. The Company is now positioned with a solid level of earnings
and a strong balance sheet, which allows us to continue focusing on our earnings
growth strategy. We remain on track to meet our long term financial
goals.”
Earnings
Call
The
Company will host a conference call with industry analysts at 2:00 p.m. Eastern
time on April 29, 2010. The call can be accessed through Cabot’s
investor relations website at http://investor.cabot-corp.com.
Cabot
Corporation, headquartered in Boston, Massachusetts, is a global performance
materials company. Cabot’s major products are carbon black, capacitor materials,
fumed silica, cesium formate drilling fluids, inkjet colorants and
aerogels. The Company’s website is: http://www.cabot-corp.com.
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 expectations concerning demand for our
products), strategy for growth, market position, and expected financial results
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. These
statements are not guarantees of future performance and involve a number of
risks, uncertainties and assumptions. Many factors, including those
discussed more fully elsewhere in this release and in documents filed with the
Securities and Exchange Commission by Cabot, particularly its latest annual
report on Form 10-K, could cause results to differ materially from those
stated. These factors include, but are not limited to changes in raw
material costs; costs associated with the research and development of new
products, including regulatory approval and market acceptance; competitive
pressures; successful integration of structural changes, including restructuring
plans, and joint ventures; the laws, regulations, policies and economic
conditions, including inflation, interest and foreign currency exchange rates,
of countries in which the company does business; and severe weather events that
cause business interruptions, including plant and power outages, or disruptions
in supplier or customer operations.
Explanation of Terms
Used- When explaining factors affecting our performance, we
use several terms. The term “LIFO benefit” or “LIFO impact” includes two
factors: (i) the impact of current inventory costs being recognized immediately
in cost of goods sold (“COGS”) under a last-in first-out method, compared to the
older costs that would have been included in COGS under a first-in first-out
method (“COGS impact”); and (ii) the impact of reductions in inventory
quantities, causing historical inventory costs to flow through COGS
(“liquidation impact”). The LIFO impact for the Company (including
the Rubber Blacks, Performance Products and Supermetals Businesses) for the
second quarter of fiscal 2010 was a benefit of $2 million and is comprised of a
favorable $4 million liquidation impact partially offset by a $2 million
unfavorable COGS impact. The term “service mix” refers to the
positive or negative impact on revenue or profitability during a period from
changes in the combination of customers and prices in the Specialty Fluids
Business.
Page 3 of
4
Use of Non-GAAP Financial Measures- The preceding discussion of our results and the accompanying financial tables report adjusted EPS and also include information on our reportable segment sales and segment (or business) operating profit before taxes (“PBT”). Adjusted EPS and segment PBT are non-GAAP financial measures and are not intended to replace EPS and income (loss) from continuing operations before taxes, equity in net income of affiliated companies and minority interest, respectively, the most directly comparable GAAP financial measures. Both EPS and adjusted EPS are calculated on a diluted share basis. In calculating adjusted EPS and segment PBT, we exclude certain items, meaning items that are significant and unusual or infrequent and not believed to reflect the true underlying business performance, and, therefore, are not allocated to a segment’s results or included in adjusted EPS. Further, in calculating segment PBT we include equity in net income of affiliated companies, royalties paid by equity affiliates and allocated corporate costs but exclude interest expense, foreign currency translation gains and losses, interest income, dividend income and unallocated corporate costs. Our chief operating decision-maker uses adjusted EPS to evaluate the underlying earnings power of the Company. Segment PBT is used to evaluate changes in the operating results of each segment before non-operating factors and before certain items and to allocate resources to the segments. We believe that these non-GAAP measures also assist our investors in evaluating the changes in our results and the Company’s performance. A reconciliation of adjusted EPS to EPS is shown in the table titled Certain Items and Reconciliation of Adjusted EPS, and a reconciliation of total segment PBT to income (loss) from operations before taxes, equity in net income of affiliated companies and minority interest is shown in the table titled Summary Results by Segments. The certain items that are excluded from our calculation of adjusted EPS and segment PBT are detailed in the table titled Certain Items and Reconciliation of Adjusted EPS.
Page 4 of 4
Exhibit
99.1
|
Second
Quarter Earnings Announcement, Fiscal 2010
|
|||||||||
|
CABOT
CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||
|
Periods
ended March 31
|
Three
Months
|
Six
Months
|
||||||||||||||
|
Dollars
in millions, except per share amounts (unaudited)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Net
sales and other operating revenues
|
$ | 712 | $ | 470 | $ | 1,391 | $ | 1,122 | ||||||||
|
Cost
of sales
|
572 | 475 | 1,115 | 1,035 | ||||||||||||
|
Gross
profit
|
140 | (5 | ) | 276 | 87 | |||||||||||
|
Selling
and administrative expenses
|
61 | 54 | 128 | 110 | ||||||||||||
|
Research
and technical expenses
|
19 | 19 | 37 | 37 | ||||||||||||
|
Income
(loss) from operations
|
60 | (78 | ) | 111 | (60 | ) | ||||||||||
|
Other
income and expense
|
||||||||||||||||
|
Interest
and dividend income
|
- | 1 | - | 2 | ||||||||||||
|
Interest
expense
|
(11 | ) | (8 | ) | (20 | ) | (17 | ) | ||||||||
|
Other
expense
|
(4 | ) | (6 | ) | (4 | ) | (15 | ) | ||||||||
|
Total
other income and (expense)
|
(15 | ) | (13 | ) | (24 | ) | (30 | ) | ||||||||
|
Income
(loss) from continuing operations before income taxes and equity in
net
|
||||||||||||||||
|
income
of affiliated companies
|
45 | (91 | ) | 87 | (90 | ) | ||||||||||
|
Benefit
(provision) for income taxes
|
1 | 31 | (10 | ) | 30 | |||||||||||
|
Equity
in net income of affiliated companies, net of tax
|
1 | - | 4 | 2 | ||||||||||||
|
Net
income (loss)
|
$ | 47 | $ | (60 | ) | $ | 81 | $ | (58 | ) | ||||||
|
Net
income (loss) attributable to noncontrolling interests, net of
tax
|
4 | (2 | ) | 9 | (4 | ) | ||||||||||
|
Net
income (loss) attributable to Cabot Corporation
|
$ | 43 | $ | (58 | ) | $ | 72 | $ | (54 | ) | ||||||
|
Diluted
earnings per share of common stock
|
||||||||||||||||
|
Net
income (loss) attributable to Cabot Corporation (A)
|
$ | 0.66 | $ | (0.93 | ) | $ | 1.10 | $ | (0.87 | ) | ||||||
|
Weighted
average common shares outstanding
|
||||||||||||||||
|
Diluted
|
64 | 63 | 64 | 63 | ||||||||||||
|
(A)
|
Prior
year earnings per share has been recast due to Cabot’s adoption of an
accounting pronouncement in the first quarter of fiscal 2010 that changes
the methodology for allocating earnings among
shareholders. Under this guidance, certain of Cabot's unvested
share-based payment awards must be included in the earnings allocation
process in computing earnings per share. This guidance has been
applied retrospectively so that all periods are shown on a consistent
basis.
|
||||
|
Second
Quarter Earnings Announcement, Fiscal 2010
|
|||||||||
|
CABOT
CORPORATION SUMMARY RESULTS BY SEGMENTS
|
|||||||||
|
Periods
ended March 31
|
Three
Months
|
Six
Months
|
||||||||||||||
|
Dollars
in millions, except per share amounts (unaudited)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
SALES
|
||||||||||||||||
|
Core
Segment
|
$ | 453 | $ | 295 | $ | 894 | $ | 739 | ||||||||
|
Rubber
blacks
|
417 | 272 | 813 | 671 | ||||||||||||
|
Supermetals
|
36 | 23 | 81 | 68 | ||||||||||||
|
Performance
Segment
|
200 | 132 | 384 | 289 | ||||||||||||
|
Performance
products
|
138 | 90 | 260 | 195 | ||||||||||||
|
Fumed
metal oxides
|
62 | 42 | 124 | 94 | ||||||||||||
|
New
Business Segment
|
22 | 16 | 39 | 34 | ||||||||||||
|
Inkjet
colorants
|
14 | 9 | 28 | 22 | ||||||||||||
|
Aerogel
|
6 | 5 | 8 | 9 | ||||||||||||
|
Superior
MicroPowders
|
2 | 2 | 3 | 3 | ||||||||||||
|
Specialty
Fluids Segment
|
15 | 11 | 30 | 26 | ||||||||||||
|
Segment
sales
|
690 | 454 | 1,347 | 1,088 | ||||||||||||
|
Unallocated
and other (A)
|
22 | 16 | 44 | 34 | ||||||||||||
|
Net
sales and other operating revenues
|
$ | 712 | $ | 470 | $ | 1,391 | $ | 1,122 | ||||||||
|
SEGMENT
PROFIT (LOSS)
|
||||||||||||||||
|
Core
Segment
|
$ | 43 | $ | (24 | ) | $ | 90 | $ | 3 | |||||||
|
Rubber
blacks
|
39 | (17 | ) | 81 | 7 | |||||||||||
|
Supermetals
|
4 | (7 | ) | 9 | (4 | ) | ||||||||||
|
Performance
Segment
|
31 | (1 | ) | 65 | 2 | |||||||||||
|
New
Business Segment
|
1 | (1 | ) | (2 | ) | (4 | ) | |||||||||
|
Specialty
Fluids Segment
|
5 | 4 | 10 | 8 | ||||||||||||
|
Total
Segment Profit (Loss) (B)
|
80 | (22 | ) | 163 | 9 | |||||||||||
|
Interest
expense
|
(11 | ) | (8 | ) | (20 | ) | (17 | ) | ||||||||
|
Certain
items (C)
|
(9 | ) | (46 | ) | (26 | ) | (48 | ) | ||||||||
|
Unallocated
corporate costs
|
(10 | ) | (8 | ) | (21 | ) | (15 | ) | ||||||||
|
General
unallocated expense
(D)
|
(4 | ) | (7 | ) | (5 | ) | (17 | ) | ||||||||
|
Less:
Equity in net income of affiliated companies, net of tax
|
(1 | ) | - | (4 | ) | (2 | ) | |||||||||
|
Income
(loss) from continuing operations before income taxes and equity
in
|
||||||||||||||||
|
net
income of affiliated companies
|
45 | (91 | ) | 87 | (90 | ) | ||||||||||
|
Benefit
(provision) for income taxes
|
1 | 31 | (10 | ) | 30 | |||||||||||
|
Equity
in net income of affiliated companies, net of tax
|
1 | - | 4 | 2 | ||||||||||||
|
Net
income (loss)
|
$ | 47 | $ | (60 | ) | $ | 81 | $ | (58 | ) | ||||||
|
Net
income (loss) attributable to noncontrolling interests, net of
tax
|
4 | (2 | ) | 9 | (4 | ) | ||||||||||
|
Net
income (loss) attributable to Cabot Corporation
|
$ | 43 | $ | (58 | ) | $ | 72 | $ | (54 | ) | ||||||
|
Diluted
earnings per share of common stock
|
||||||||||||||||
|
Net
income (loss) attributable to Cabot Corporation
(E)
|
$ | 0.66 | $ | (0.93 | ) | $ | 1.10 | $ | (0.87 | ) | ||||||
|
Weighted
average common shares outstanding
|
||||||||||||||||
|
Diluted
|
64 | 63 | 64 | 63 | ||||||||||||
|
(A)
|
Unallocated
and other reflects royalties paid by equity affiliates and other operating
revenues and external shipping and handling fees.
|
||||
|
(B)
|
Segment
profit is a measure used by Cabot's Chief Operating Decision-Maker to
measure consolidated operating results, assess segment performance and
allocate resources. Segment profit includes equity in net income of
affiliated companies, royalty income, and allocated corporate
costs.
|
||||
|
(C)
|
Details
of certain items are presented in the Certain Items and Reconciliation of
Adjusted EPS table.
|
||||
|
(D)
|
General
unallocated expense includes foreign currency transaction gains (losses),
interest income, and dividend income.
|
||||
|
(E)
|
Prior
year earnings per share has been recast due to Cabot’s adoption of an
accounting pronouncement in the first quarter of fiscal 2010 that changes
the methodology for allocating earnings among
shareholders. Under this guidance, certain of Cabot's unvested
share-based payment awards must be included in the earnings allocation
process in computing earnings per share. This guidance has been
applied retrospectively so that all periods are shown on a consistent
basis.
|
||||
|
Second
Quarter Earnings Announcement, Fiscal 2010
|
|||||||||
|
CABOT
CORPORATION CONSOLIDATED FINANCIAL POSITION
|
|||||||||
|
March
31,
|
September
30,
|
|||||||
|
2010
|
2009
|
|||||||
|
Dollars
in millions, except share and per share amounts
|
(unaudited)
|
(audited)
|
||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 248 | $ | 304 | ||||
|
Short-term
marketable securities
|
1 | 1 | ||||||
|
Accounts
and notes receivable, net of reserve for doubtful accounts of $5 and
$6
|
548 | 452 | ||||||
|
Inventories:
|
||||||||
|
Raw
materials
|
128 | 118 | ||||||
|
Work
in process
|
40 | 44 | ||||||
|
Finished
goods
|
174 | 165 | ||||||
|
Other
|
32 | 31 | ||||||
|
Total
inventories
|
374 | 358 | ||||||
|
Prepaid
expenses and other current assets
|
65 | 53 | ||||||
|
Deferred
income taxes
|
32 | 32 | ||||||
|
Total
current assets
|
1,268 | 1,200 | ||||||
|
Investments:
|
||||||||
|
Equity
affiliates
|
59 | 60 | ||||||
|
Long-term
marketable securities and cost investments
|
1 | 1 | ||||||
|
Total
investments
|
60 | 61 | ||||||
|
Property,
plant and equipment
|
2,939 | 3,000 | ||||||
|
Accumulated
depreciation and amortization
|
(1,983 | ) | (1,988 | ) | ||||
|
Net
property, plant and equipment
|
956 | 1,012 | ||||||
|
Goodwill
|
36 | 37 | ||||||
|
Intangible
assets, net of accumulated amortization of $11 and $11
|
2 | 2 | ||||||
|
Assets
held for rent
|
41 | 43 | ||||||
|
Deferred
income taxes
|
240 | 235 | ||||||
|
Other
assets
|
84 | 86 | ||||||
|
Total
assets
|
$ | 2,687 | $ | 2,676 | ||||
|
Second
Quarter Earnings Announcement, Fiscal 2010
|
|||||||||
|
CABOT
CORPORATION CONSOLIDATED FINANCIAL POSITION
|
|||||||||
|
March
31,
|
September
30,
|
|||||||
|
2010
|
2009
|
|||||||
|
Dollars
in millions, except share and per share amounts
|
(unaudited)
|
(audited)
|
||||||
|
Current
liabilities:
|
||||||||
|
Notes
payable to banks
|
$ | 38 | $ | 29 | ||||
|
Accounts
payable and accrued liabilities
|
377 | 407 | ||||||
|
Income
taxes payable
|
23 | 31 | ||||||
|
Deferred
income taxes
|
5 | 5 | ||||||
|
Current
portion of long-term debt
|
21 | 5 | ||||||
|
Total
current liabilities
|
464 | 477 | ||||||
|
Long-term
debt
|
602 | 623 | ||||||
|
Deferred
income taxes
|
11 | 11 | ||||||
|
Other
liabilities
|
309 | 328 | ||||||
|
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:
65,412,119 and 65,401,485 shares
|
65 | 65 | ||||||
|
Outstanding:
65,351,880 and 65,309,155 shares
|
||||||||
|
Less
cost of 60,239 and 92,330 shares of common treasury stock
|
(2 | ) | (2 | ) | ||||
|
Additional
paid-in capital
|
32 | 18 | ||||||
|
Retained
earnings
|
1,067 | 1,018 | ||||||
|
Deferred
employee benefits
|
(22 | ) | (25 | ) | ||||
|
Accumulated
other comprehensive income
|
55 | 60 | ||||||
|
Total
Cabot Corporation stockholders' equity
|
1,195 | 1,134 | ||||||
|
Noncontrolling
interests
|
106 | 103 | ||||||
|
Total
equity
|
1,301 | 1,237 | ||||||
|
Total
liabilities and equity
|
$ | 2,687 | $ | 2,676 | ||||
CABOT
CORPORATION
|
Fiscal 2009
|
Fiscal 2010
|
|||||||||||||||||||||||||||||||||
|
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
|
||||||||||||||||||||||||||||||||||
|
Core
Segment
|
$ | 444 | $ | 295 | $ | 310 | $ | 377 | $ | 1,426 | $ | 441 | $ | 453 | $ | 894 | ||||||||||||||||||
|
Rubber
blacks
|
399 | 272 | 272 | 343 | 1,286 | 396 | 417 | 813 | ||||||||||||||||||||||||||
|
Supermetals
|
45 | 23 | 38 | 34 | 140 | 45 | 36 | 81 | ||||||||||||||||||||||||||
|
Performance
Segment
|
157 | 132 | 149 | 183 | 621 | 184 | 200 | 384 | ||||||||||||||||||||||||||
|
Performance
products
|
105 | 90 | 98 | 118 | 411 | 122 | 138 | 260 | ||||||||||||||||||||||||||
|
Fumed
metal oxides
|
52 | 42 | 51 | 65 | 210 | 62 | 62 | 124 | ||||||||||||||||||||||||||
|
New
Business Segment
|
18 | 16 | 14 | 19 | 67 | 17 | 22 | 39 | ||||||||||||||||||||||||||
|
Inkjet
colorants
|
13 | 9 | 10 | 14 | 46 | 14 | 14 | 28 | ||||||||||||||||||||||||||
|
Aerogel
|
4 | 5 | 2 | 4 | 15 | 2 | 6 | 8 | ||||||||||||||||||||||||||
|
Superior
MicroPowders
|
1 | 2 | 2 | 1 | 6 | 1 | 2 | 3 | ||||||||||||||||||||||||||
|
Specialty
Fluids Segment
|
15 | 11 | 19 | 14 | 59 | 15 | 15 | 30 | ||||||||||||||||||||||||||
|
Segment
Sales
|
634 | 454 | 492 | 593 | 2,173 | 657 | 690 | 1,347 | ||||||||||||||||||||||||||
|
Unallocated
and other (A)
|
18 | 16 | 19 | 17 | 70 | 22 | 22 | 44 | ||||||||||||||||||||||||||
|
Net
sales and other operating revenues
|
$ | 652 | $ | 470 | $ | 511 | $ | 610 | $ | 2,243 | $ | 679 | $ | 712 | $ | 1,391 | ||||||||||||||||||
|
Segment
Profit (Loss)
|
||||||||||||||||||||||||||||||||||
|
Core
Segment
|
$ | 27 | $ | (24 | ) | $ | 14 | $ | 16 | $ | 33 | $ | 47 | $ | 43 | $ | 90 | |||||||||||||||||
|
Rubber
blacks
|
24 | (17 | ) | 11 | 16 | 34 | 42 | 39 | 81 | |||||||||||||||||||||||||
|
Supermetals
|
3 | (7 | ) | 3 | - | (1 | ) | 5 | 4 | 9 | ||||||||||||||||||||||||
|
Performance
Segment
|
3 | (1 | ) | 10 | 28 | 40 | 34 | 31 | 65 | |||||||||||||||||||||||||
|
New
Business Segment
|
(3 | ) | (1 | ) | (4 | ) | (2 | ) | (10 | ) | (3 | ) | 1 | (2 | ) | |||||||||||||||||||
|
Specialty
Fluids Segment
|
4 | 4 | 9 | 4 | 21 | 5 | 5 | 10 | ||||||||||||||||||||||||||
|
Total
Segment Profit (Loss) (B)
|
31 | (22 | ) | 29 | 46 | 84 | 83 | 80 | 163 | |||||||||||||||||||||||||
|
Interest
expense
|
(9 | ) | (8 | ) | (6 | ) | (7 | ) | (30 | ) | (9 | ) | (11 | ) | (20 | ) | ||||||||||||||||||
|
Certain
items (C)
|
(2 | ) | (46 | ) | (19 | ) | (36 | ) | (103 | ) | (17 | ) | (9 | ) | (26 | ) | ||||||||||||||||||
|
Unallocated
corporate costs
|
(7 | ) | (8 | ) | (7 | ) | (6 | ) | (28 | ) | (11 | ) | (10 | ) | (21 | ) | ||||||||||||||||||
|
General
unallocated expense (D)
|
(10 | ) | (7 | ) | 1 | (4 | ) | (20 | ) | (1 | ) | (4 | ) | (5 | ) | |||||||||||||||||||
|
Less:
Equity in net income of affiliated companies, net of tax
|
(2 | ) | - | - | (3 | ) | (5 | ) | (3 | ) | (1 | ) | (4 | ) | ||||||||||||||||||||
|
Income
(loss) before income taxes and equity in net income of affiliated
companies
|
1 | (91 | ) | (2 | ) | (10 | ) | (102 | ) | 42 | 45 | 87 | ||||||||||||||||||||||
|
(Provision)
benefit for income taxes
|
(1 | ) | 31 | (7 | ) | (1 | ) | 22 | (11 | ) | 1 | (10 | ) | |||||||||||||||||||||
|
Equity
in net income of affiliated companies, net of tax
|
2 | - | - | 3 | 5 | 3 | 1 | 4 | ||||||||||||||||||||||||||
|
Income
(loss) from continuing operations
|
2 | (60 | ) | (9 | ) | (8 | ) | (75 | ) | 34 | 47 | 81 | ||||||||||||||||||||||
|
Loss
from discontinued operations, net of tax (E)
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
|
Net
income (loss)
|
2 | (60 | ) | (9 | ) | (8 | ) | (75 | ) | 34 | 47 | 81 | ||||||||||||||||||||||
|
Net
(loss) income attributable to noncontrolling interests, net of
tax
|
(2 | ) | (2 | ) | 3 | 3 | 2 | 5 | 4 | 9 | ||||||||||||||||||||||||
|
Net
income (loss) attributable to Cabot Corporation
|
$ | 4 | $ | (58 | ) | $ | (12 | ) | $ | (11 | ) | $ | (77 | ) | $ | 29 | $ | 43 | $ | 72 | ||||||||||||||
|
Diluted
earnings (loss) per share of common stock attributable
to Cabot Corporation
|
||||||||||||||||||||||||||||||||||
|
Continuing
operations (F)
|
$ | 0.06 | $ | (0.93 | ) | $ | (0.18 | ) | $ | (0.18 | ) | $ | (1.24 | ) | $ | 0.44 | $ | 0.66 | $ | 1.10 | ||||||||||||||
|
Discontinued
operations (E),
(F)
|
- | - | (0.01 | ) | - | (0.01 | ) | - | - | - | ||||||||||||||||||||||||
|
Net
income (loss) attributable to Cabot Corporation (F)
|
$ | 0.06 | $ | (0.93 | ) | $ | (0.19 | ) | $ | (0.18 | ) | $ | (1.25 | ) | $ | 0.44 | $ | 0.66 | $ | 1.10 | ||||||||||||||
|
Weighted
average common shares outstanding
|
||||||||||||||||||||||||||||||||||
|
Diluted
|
63 | 63 | 63 | 64 | 63 | 64 | 64 | 64 | ||||||||||||||||||||||||||
|
(A)
|
Unallocated
and other reflects royalties paid by equity affiliates and other operating
revenues and external shipping and handling fees.
|
|||||||||||||||||||||
|
(B)
|
Segment
profit is a measure used by Cabot's Chief Operating Decision-Maker to
measure consolidated operating results, assess segment performance and
allocate resources. Segment profit includes equity in net income of
affiliated companies, royalty income, and allocated corporate
costs.
|
|||||||||||||||||||||
|
(C)
|
Details
of certain items are presented in the Certain Items and Reconciliation of
Adjusted EPS table.
|
|||||||||||||||||||||
|
(D)
|
General
unallocated expense includes foreign currency transaction gains (losses),
interest income, and dividend income.
|
|||||||||||||||||||||
|
(E)
|
Amounts
relate to legal settlements in connection with our discontinued
operations.
|
|||||||||||||||||||||
|
(F)
|
Prior
year earnings per share has been recast due to Cabot’s adoption of an
accounting pronouncement in the first quarter of fiscal 2010 that changes
the methodology for allocating earnings among
shareholders. Under this guidance, certain of Cabot's unvested
share-based payment awards must be included in the earnings allocation
process in computing earnings per share. This guidance has been
applied retrospectively so that all periods are shown on a consistent
basis.
|
|||||||||||||||||||||
|
Second
Quarter Earnings Announcement, Fiscal 2010
|
|||||||||||||||
|
CABOT
CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED
EPS
|
|||||||||||||||
CERTAIN
ITEMS:
|
Periods
ended March 31
|
Three
Months
|
Six
Months
|
||||||||||||||||||||||||||||||
|
Dollars
in millions, except per share amounts (unaudited)
|
2010
|
2010
|
2009
|
2009
|
2010
|
2010
|
2009
|
2009
|
||||||||||||||||||||||||
|
$
|
per
share(A)
|
$
|
per
share(A)
|
$
|
per
share(A)
|
$
|
per
share(A)
|
|||||||||||||||||||||||||
|
Certain items before income
taxes
|
||||||||||||||||||||||||||||||||
|
Environmental
reserves and legal settlements
|
$ | - | $ | - | $ | - | $ | - | $ | (1 | ) | $ | (0.01 | ) | $ | - | $ | - | ||||||||||||||
|
Recovery
of previously impaired investment
|
- | - | - | - | 1 | 0.01 | - | - | ||||||||||||||||||||||||
|
Long-lived
asset impairment
(B)
|
- | - | - | - | (2 | ) | (0.02 | ) | - | - | ||||||||||||||||||||||
|
Write-down
of impaired investments
|
- | - | (1 | ) | (0.01 | ) | - | - | (1 | ) | (0.01 | ) | ||||||||||||||||||||
|
Restructuring
initiatives:
|
||||||||||||||||||||||||||||||||
|
-
2009 Global
|
(9 | ) | (0.13 | ) | (45 | ) | (0.62 | ) | (24 | ) | (0.32 | ) | (45 | ) | (0.62 | ) | ||||||||||||||||
|
-
2008 Global
|
- | - | 1 | 0.01 | - | - | (1 | ) | (0.01 | ) | ||||||||||||||||||||||
|
-
North America
|
- | - | (1 | ) | (0.01 | ) | - | - | (2 | ) | (0.02 | ) | ||||||||||||||||||||
|
-
Europe (C)
|
- | - | - | - | - | - | 1 | 0.01 | ||||||||||||||||||||||||
|
Total
certain items
|
(9 | ) | (0.13 | ) | (46 | ) | (0.63 | ) | (26 | ) | (0.34 | ) | (48 | ) | (0.65 | ) | ||||||||||||||||
|
Tax
impact of certain items
|
1 | - | 6 | - | 4 | - | 7 | - | ||||||||||||||||||||||||
|
Total
certain items after tax
|
$ | (8 | ) | $ | (0.13 | ) | $ | (40 | ) | $ | (0.63 | ) | $ | (22 | ) | $ | (0.34 | ) | $ | (41 | ) | $ | (0.65 | ) | ||||||||
|
Periods
ended March 31
|
Three
Months
|
Six
Months
|
||||||||||||||
|
Dollars
in millions (unaudited)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Statement of
Operations Line Item
|
||||||||||||||||
|
Cost
of sales
|
$ | (5 | ) | $ | (40 | ) | $ | (13 | ) | $ | (41 | ) | ||||
|
Selling
and administrative expenses
|
(4 | ) | (4 | ) | (13 | ) | (5 | ) | ||||||||
|
Research
and technical expenses
|
- | (2 | ) | - | (2 | ) | ||||||||||
|
Total
certain items
|
$ | (9 | ) | $ | (46 | ) | $ | (26 | ) | $ | (48 | ) | ||||
NON-GAAP
MEASURE:
|
Periods
ended March 31
|
Three
Months
|
Six
Months
|
||||||||||||||
|
Dollars
in millions, except per share amounts (unaudited)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
per
share(A)
|
per
share(A)
|
per
share(A)
|
per
share(A)
|
|||||||||||||
|
Reconciliation of
Adjusted EPS to GAAP EPS
|
||||||||||||||||
|
Total
Diluted EPS
|
$ | 0.66 | $ | (0.93 | ) | $ | 1.10 | $ | (0.87 | ) | ||||||
|
Certain
items
|
(0.13 | ) | (0.63 | ) | (0.34 | ) | (0.65 | ) | ||||||||
|
Adjusted
EPS
|
$ | 0.79 | $ | (0.30 | ) | $ | 1.44 | $ | (0.22 | ) | ||||||
|
(A)
|
Per
share amounts are calculated after tax.
|
|
|
(B)
|
Land
related to former carbon black site.
|
|
|
(C)
|
Amount
relates to former carbon black
facilities.
|
|