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Financial Information by Segment | 9 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
Financial Information by Segment | L. Financial Information by Segment The Company identifies a product line 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 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 two reportable segments consisting of Reinforcement Materials and Performance Chemicals. The Company’s former Purification Solutions business was a separate reporting segment prior to divestiture in the second quarter of fiscal 2022. The Reinforcement Materials segment combines the reinforcing carbons and engineered elastomer composites product lines. The Performance Chemicals segment aggregates the specialty carbons, specialty compounds, fumed metal oxides, battery materials, inkjet colorants, and aerogel product lines. 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 Purification Solutions segment consisted of the Company’s activated carbon business. Income (loss) before income taxes (“Segment EBIT”) is presented for each reportable segment in the table below. Segment EBIT excludes Interest expense, general unallocated income (expense), unallocated corporate costs, and 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, royalties, Net income attributable to noncontrolling interests, net of tax, and discounting charges for certain Notes receivable. Financial information by reportable segment is as follows:
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Segment Total |  |  | Unallocated and Other(1) |  |  | Consolidated Total |
|  | (In millions) |
Three Months Ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(3) |  | $ | 624 |  |  | $ | 307 |  |  | $ | — |  |  | $ | 931 |  |  | $ | 37 |  |  | $ | 968 |
Income (loss) before income taxes(4) |  | $ | 132 |  |  | $ | 32 |  |  | $ | — |  |  | $ | 164 |  |  | $ | (34 | ) |  | $ | 130 |
Three Months Ended June 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2)(3) |  | $ | 730 |  |  | $ | 376 |  |  | $ | — |  |  | $ | 1,106 |  |  | $ | 43 |  |  | $ | 1,149 |
Income (loss) before income taxes(4) |  | $ | 113 |  |  | $ | 63 |  |  | $ | — |  |  | $ | 176 |  |  | $ | (24 | ) |  | $ | 152 |
Nine Months Ended June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(3) |  | $ | 1,939 |  |  | $ | 919 |  |  | $ | — |  |  | $ | 2,858 |  |  | $ | 108 |  |  | $ | 2,966 |
Income (loss) before income taxes(4) |  | $ | 348 |  |  | $ | 89 |  |  | $ | — |  |  | $ | 437 |  |  | $ | (113 | ) |  | $ | 324 |
Nine Months Ended June 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers(2)(3) |  | $ | 1,947 |  |  | $ | 1,045 |  |  | $ | 97 |  |  | $ | 3,089 |  |  | $ | 120 |  |  | $ | 3,209 |
Income (loss) before income taxes(4) |  | $ | 299 |  |  | $ | 185 |  |  | $ | — |  |  | $ | 484 |  |  | $ | (278 | ) |  | $ | 206 |
(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) Beginning in fiscal 2023, the Company began allocating energy center by-product revenue within the applicable segment’s Revenue from external customers. The Company recast prior period financial information to conform to the new presentation. The allocation of such revenue resulted in an increase of $23 million in the Reinforcement Materials segment and $4 million in the Performance Chemicals segment, respectively, with an offsetting decrease in Unallocated and Other revenue for the three months ended June 30, 2022. The allocation of such revenue resulted in an increase of $72 million in the Reinforcement Materials segment and $11 million in the Performance Chemicals segment, respectively, with an offsetting decrease in Unallocated and Other revenue for the nine months ended June 30, 2022. There was no impact to the Consolidated Total Revenues from external customers. (3) 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, discounting charges for certain Notes receivable, and other by-product revenue. Details are provided in the table below:
|  | Three Months Ended June 30 |  |  | Nine Months Ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | (In millions) |
Shipping and handling fees |  | $ | 31 |  |  | $ | 44 |  |  | $ | 100 |  |  | $ | 124 |
Other |  |  | 6 |  |  |  | (1 | ) |  |  | 8 |  |  |  | (4 | )
Total |  | $ | 37 |  |  | $ | 43 |  |  | $ | 108 |  |  | $ | 120 |
(4) Consolidated Total Income (loss) before income taxes reconciles to Income (loss) before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) before income taxes that are categorized as Unallocated and Other includes:
|  | Three Months Ended June 30 |  |  | Nine Months Ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | (In millions) |
Interest expense |  | $ | (24 | ) |  | $ | (15 | ) |  | $ | (69 | ) |  | $ | (38 | )
Certain items(a) |  |  |  |  |  |  |  |  |  |  |  |
Gain on bargain purchase of a business (Note C) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24 |
Gain on sale of land |  |  | — |  |  |  | 17 |  |  |  | 1 |  |  |  | 17 |
Loss on sale of business and asset impairment charge (Note D) |  |  | — |  |  |  | (2 | ) |  |  | (3 | ) |  |  | (206 | )
Legal and environmental matters and reserves |  |  | — |  |  |  | (1 | ) |  |  | (2 | ) |  |  | (9 | )
Acquisition and integration-related charges |  |  | (1 | ) |  |  | (1 | ) |  |  | (2 | ) |  |  | (4 | )
Divestiture related charges |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5 | )
Global restructuring activities |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (3 | )
Other |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | 1 |
Total certain items, pre-tax |  |  | (1 | ) |  |  | 12 |  |  |  | (7 | ) |  |  | (185 | )
Unallocated corporate costs(b) |  |  | (11 | ) |  |  | (15 | ) |  |  | (42 | ) |  |  | (45 | )
General unallocated income (expense)(c) |  |  | 3 |  |  |  | (3 | ) |  |  | 9 |  |  |  | (3 | )
Less: Equity in earnings of affiliated companies, net of tax(d) |  |  | 1 |  |  |  | 3 |  |  |  | 4 |  |  |  | 7 |
Total |  | $ | (34 | ) |  | $ | (24 | ) |  | $ | (113 | ) |  | $ | (278 | )
(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, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. (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. The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region.
|  | Three Months Ended June 30, 2023 |
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Consolidated Total |
|  | (In millions) |
Americas |  | $ | 260 |  |  | $ | 94 |  |  | $ | — |  |  | $ | 354 |
Asia Pacific |  |  | 234 |  |  |  | 119 |  |  |  | — |  |  |  | 353 |
Europe, Middle East and Africa |  |  | 130 |  |  |  | 94 |  |  |  | — |  |  |  | 224 |
Segment revenues from external customers |  |  | 624 |  |  |  | 307 |  |  |  | — |  |  |  | 931 |
Unallocated and other |  |  |  |  |  |  |  |  |  |  |  | 37 |
Net sales and other operating revenues |  |  |  |  |  |  |  |  |  |  | $ | 968 |
|  | Three Months Ended June 30, 2022 |
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Consolidated Total |
|  | (In millions) |
Americas |  | $ | 302 |  |  | $ | 114 |  |  | $ | — |  |  | $ | 416 |
Asia Pacific |  |  | 265 |  |  |  | 147 |  |  |  | — |  |  |  | 412 |
Europe, Middle East and Africa |  |  | 163 |  |  |  | 115 |  |  |  | — |  |  |  | 278 |
Segment revenues from external customers |  |  | 730 |  |  |  | 376 |  |  |  | — |  |  |  | 1,106 |
Unallocated and other |  |  |  |  |  |  |  |  |  |  |  | 43 |
Net sales and other operating revenues |  |  |  |  |  |  |  |  |  |  | $ | 1,149 |
|  | Nine Months Ended June 30, 2023 |
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Consolidated Total |
|  | (In millions) |
Americas |  | $ | 781 |  |  | $ | 283 |  |  | $ | — |  |  | $ | 1,064 |
Asia Pacific |  |  | 752 |  |  |  | 368 |  |  |  | — |  |  |  | 1,120 |
Europe, Middle East and Africa |  |  | 406 |  |  |  | 268 |  |  |  | — |  |  |  | 674 |
Segment revenues from external customers |  |  | 1,939 |  |  |  | 919 |  |  |  | — |  |  |  | 2,858 |
Unallocated and other |  |  |  |  |  |  |  |  |  |  |  | 108 |
Net sales and other operating revenues |  |  |  |  |  |  |  |  |  |  | $ | 2,966 |
|  | Nine Months Ended June 30, 2022 |
|  | Reinforcement Materials |  |  | Performance Chemicals |  |  | Purification Solutions |  |  | Consolidated Total |
|  | (In millions) |
Americas |  | $ | 767 |  |  | $ | 314 |  |  | $ | 43 |  |  | $ | 1,124 |
Asia Pacific |  |  | 773 |  |  |  | 422 |  |  |  | 14 |  |  |  | 1,209 |
Europe, Middle East and Africa |  |  | 407 |  |  |  | 309 |  |  |  | 40 |  |  |  | 756 |
Segment revenues from external customers |  |  | 1,947 |  |  |  | 1,045 |  |  |  | 97 |  |  |  | 3,089 |
Unallocated and other |  |  |  |  |  |  |  |  |  |  |  | 120 |
Net sales and other operating revenues |  |  |  |  |  |  |  |  |  |  | $ | 3,209 |

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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