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Financial Information by Segment | 9 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Financial Information by Segment | P. Financial Information by Segment The Company identifies a business as an operating segment if: (i) it engages in business activities from which it may earn revenues and incur expenses; (ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Cabot’s President and Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and (iii) it has available discrete financial information. The Company has determined that all of its businesses are operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable segment if the operating segments are determined to have similar economic characteristics and if the operating segments are similar in the following areas: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if applicable, the nature of the regulatory environment. The Company has four reportable segments: Reinforcement Materials, Performance Chemicals, Purification Solutions and Specialty Fluids. The Reinforcement Materials segment represents the rubber blacks and elastomer composites product lines. The Performance Chemicals segment combines the specialty carbons, specialty compounds and inkjet colorants product lines into the Specialty Carbons and Formulations business, and combines the fumed metal oxides and aerogel product lines into the Metal Oxides business. These businesses are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods, and, therefore, have been aggregated into one reportable segment. The net sales from each of these businesses for the three and nine months ended June 30, 2018 and 2017 were as follows:
|  | Three Months Ended June 30 |  |  | Nine Months Ended June 30 |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In millions) |
Specialty Carbons and Formulations |  | $ | 195 |  |  | $ | 154 |  |  | $ | 548 |  |  | $ | 454 |
Metal Oxides |  |  | 79 |  |  |  | 75 |  |  |  | 223 |  |  |  | 208 |
Total Performance Chemicals |  | $ | 274 |  |  | $ | 229 |  |  | $ | 771 |  |  | $ | 662 |
The Purification Solutions segment represents the Company’s activated carbon business and the Specialty Fluids segment includes cesium formate oil and gas drilling fluids and high-purity fine cesium chemicals product lines. Income (loss) from continuing operations before income taxes (“Segment EBIT”) is presented for each reportable segment in the table below. Segment EBIT excludes certain items, meaning items management does not consider representative of on-going operating segment results. In addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, the full operating results of a contractual joint venture in Purification Solutions, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign currency transaction gains and losses, interest income, dividend income, unearned revenue, general unallocated expense and unallocated corporate costs. Financial information by reportable segment is as follows:
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Specialty Fluids |  |  | Segment Total |  |  | Unallocated and Other(1) |  |  | Consolidated Total |
|  | (In millions) |
Three Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2) |  | $ | 466 |  |  | $ | 274 |  |  | $ | 70 |  |  | $ | 12 |  |  | $ | 822 |  |  | $ | 32 |  |  | $ | 854 |
Income (loss) from continuing operations before income taxes(3) |  | $ | 74 |  |  | $ | 56 |  |  | $ | (6 | ) |  | $ | 3 |  |  | $ | 127 |  |  | $ | (32 | ) |  | $ | 95 |
Three Months Ended June 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2) |  | $ | 367 |  |  | $ | 229 |  |  | $ | 71 |  |  | $ | 12 |  |  | $ | 679 |  |  | $ | 26 |  |  | $ | 705 |
Income (loss) from continuing operations before income taxes(3) |  | $ | 51 |  |  | $ | 46 |  |  | $ | (2 | ) |  | $ | 4 |  |  | $ | 99 |  |  | $ | (31 | ) |  | $ | 68 |
Nine Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2) |  | $ | 1,307 |  |  | $ | 771 |  |  | $ | 206 |  |  | $ | 24 |  |  | $ | 2,308 |  |  | $ | 84 |  |  | $ | 2,392 |
Income (loss) from continuing operations before income taxes(3) |  | $ | 215 |  |  | $ | 160 |  |  | $ | (6 | ) |  | $ | (2 | ) |  | $ | 367 |  |  | $ | (351 | ) |  | $ | 16 |
Nine Months Ended June 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2) |  | $ | 1,014 |  |  | $ | 662 |  |  | $ | 207 |  |  | $ | 30 |  |  | $ | 1,913 |  |  | $ | 81 |  |  | $ | 1,994 |
Income (loss) from continuing operations before income taxes(3) |  | $ | 145 |  |  | $ | 146 |  |  | $ | 4 |  |  | $ | 6 |  |  | $ | 301 |  |  | $ | (80 | ) |  | $ | 221 |
(1) | Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM.
(2) | Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain Notes receivable. Details are provided in the table below:
|  | Three Months Ended June 30 |  |  | Nine Months Ended June 30 |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In millions) |
Royalties, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain notes receivable |  | $ | (2 | ) |  | $ | (4 | ) |  | $ | (10 | ) |  | $ | (6 | )
Shipping and handling fees |  |  | 34 |  |  |  | 30 |  |  |  | 94 |  |  |  | 87 |
Total |  | $ | 32 |  |  | $ | 26 |  |  | $ | 84 |  |  | $ | 81 |
(3) | Consolidated Total Income (loss) from continuing operations before income taxes reconciles to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) from continuing operations before income taxes that are categorized as Unallocated and Other includes:
|  | Three Months Ended June 30 |  |  | Nine Months Ended June 30 |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In millions) |
Interest expense |  | $ | (14 | ) |  | $ | (13 | ) |  | $ | (41 | ) |  | $ | (39 | )
Certain items(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purification Solutions goodwill and long-lived assets impairment charge |  |  | — |  |  |  | — |  |  |  | (254 | ) |  |  | — |
Inventory reserve adjustment |  |  | — |  |  |  | — |  |  |  | (13 | ) |  |  | — |
Global restructuring activities |  |  | (1 | ) |  |  | (1 | ) |  |  | 7 |  |  |  | (3 | )
Legal and environmental matters and reserves |  |  | — |  |  |  | — |  |  |  | (6 | ) |  |  | 2 |
Gains (losses) on sale of investments |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | — |
Executive transition costs |  |  | (1 | ) |  |  | — |  |  |  | (1 | ) |  |  | — |
Acquisition and integration-related charges |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |
Non-recurring gains (losses) on foreign exchange |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | )
Other |  |  | (1 | ) |  |  | — |  |  |  | (2 | ) |  |  | — |
Total certain items, pre-tax |  |  | (3 | ) |  |  | (2 | ) |  |  | (260 | ) |  |  | (2 | )
Unallocated corporate costs(b) |  |  | (15 | ) |  |  | (11 | ) |  |  | (45 | ) |  |  | (37 | )
General unallocated income (expense)(c) |  |  | — |  |  |  | (2 | ) |  |  | (3 | ) |  |  | 4 |
Less: Equity in earnings of affiliated companies, net of tax(d) |  |  | — |  |  |  | 3 |  |  |  | 2 |  |  |  | 6 |
Total |  | $ | (32 | ) |  | $ | (31 | ) |  | $ | (351 | ) |  | $ | (80 | )
| (a) | Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT.
| (b) | Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests.
| (c) | General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the profit or loss related to the corporate adjustment for unearned revenue, and the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT. Fiscal 2017 amounts have been recast to reflect the retrospective application of the Company’s election to change its inventory valuation method of accounting for its U.S. carbon black inventories from the LIFO method to the FIFO method, which resulted in General unallocated income (expense) decreasing by $2 million and increasing by $4 million, respectively, for the three and nine months ended June 30, 2017.
| (d) | Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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