Financial Information by Segment

9 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Financial Information by Segment

K. 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: Reinforcement Materials and Performance Chemicals. 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.

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		Segment Total		Unallocated and Other(1)			Consolidated Total
	(In millions)
Three Months Ended June 30, 2024
Revenues from external customers(2)	$	649	$	332	$	981	$	35		$	1,016
Income (loss) before income taxes(3)	$	136	$	55	$	191	$	(33	)	$	158
Three Months Ended June 30, 2023
Revenues from external customers(2)	$	624	$	307	$	931	$	37		$	968
Income (loss) before income taxes(3)	$	132	$	32	$	164	$	(34	)	$	130
Nine Months Ended June 30, 2024
Revenues from external customers(2)	$	1,966	$	928	$	2,894	$	99		$	2,993
Income (loss) before income taxes(3)	$	414	$	120	$	534	$	(140	)	$	394
Nine Months Ended June 30, 2023
Revenues from external customers(2)	$	1,939	$	919	$	2,858	$	108		$	2,966
Income (loss) before income taxes(3)	$	348	$	89	$	437	$	(113	)	$	324

(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 external shipping and handling fees, royalties, 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
	2024		2023		2024		2023
	(In millions)
Shipping and handling fees	$	31	$	31	$	93	$	100
Other		4		6		6		8
Total	$	35	$	37	$	99	$	108

(3)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
	2024			2023			2024			2023
	(In millions)
Interest expense	$	(19	)	$	(24	)	$	(62	)	$	(69	)
Certain items(a)
Argentina controlled currency devaluation and other losses (Note B)		(2	)		—			(43	)		—
Global restructuring activities (Note H)		(1	)		—			(13	)		—
Acquisition and integration-related charges		—			(1	)		—			(2	)
Legal and environmental matters and reserves		—			—			(1	)		(2	)
Gain on sale of land		—			—			—			1
Loss on sale of business		—			—			—			(3	)
Other		1			—			1			(1	)
Total certain items		(2	)		(1	)		(56	)		(7	)
Unallocated corporate costs(b)		(16	)		(11	)		(51	)		(42	)
General unallocated income (expense)(c)		6			3			34			9
Less: Equity in earnings of affiliated companies, net    of tax(d)		2			1			5			4
Total	$	(33	)	$	(34	)	$	(140	)	$	(113	)

(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. This does not include items of income or expense that are separately treated as Certain items.

(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, 2024
	Reinforcement Materials		Performance Chemicals		Consolidated Total
	(In millions)
Americas	$	265	$	103	$	368
Asia Pacific		245		132		377
Europe, Middle East and Africa		139		97		236
Segment revenues from external customers		649		332		981
Unallocated and other						35
Net sales and other operating revenues					$	1,016

	Three Months Ended June 30, 2023
	Reinforcement Materials		Performance Chemicals		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

	Nine Months Ended June 30, 2024
	Reinforcement Materials		Performance Chemicals		Consolidated Total
	(In millions)
Americas	$	793	$	284	$	1,077
Asia Pacific		760		372		1,132
Europe, Middle East and Africa		413		272		685
Segment revenues from external customers		1,966		928		2,894
Unallocated and other						99
Net sales and other operating revenues					$	2,993

	Nine Months Ended June 30, 2023
	Reinforcement Materials		Performance Chemicals		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