Earnings Per Share (Tables)

3 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Components of Basic and Diluted Earnings Per Common Share

The following tables summarize the components of the basic and diluted earnings per common share computations:

	Three Months Ended
	December31,
	2015			2014
	(Dollars and shares in millions, except per share amounts)
Basic EPS:
Net (loss) income attributable to Cabot Corporation	$	(7	)	$	45
Less: Dividends and dividend equivalents to    participating securities		—			—
Less: Undistributed earnings allocated to    participating securities(1)		—			—
(Loss) earnings allocated to common    shareholders (numerator)	$	(7	)	$	45
Weighted average common shares and    participating securities outstanding		62.9			64.6
Less: Participating securities(1)		0.4			0.5
Adjusted weighted average common shares    (denominator)		62.5			64.1
Amounts per share - basic:
Net (loss) income attributable to Cabot Corporation	$	(0.11	)	$	0.70
Diluted EPS(2) :
(Loss) earnings allocated to common shareholders	$	(7	)	$	45
Plus: (Loss) earnings allocated to participating securities		—			—
Less: Adjusted earnings allocated to participating    securities(3)		—			—
(Loss) earnings allocated to common    shareholders (numerator)	$	(7	)	$	45
Adjusted weighted average common shares    outstanding		62.5			64.1
Effect of dilutive securities:
Common shares issuable(4)		—			0.5
Adjusted weighted average common shares    (denominator)		62.5			64.6
Amounts per share - diluted:
Net (loss) income attributable to Cabot Corporation	$	(0.11	)	$	0.69

(1)Participating securities consist of shares of unvested time-based restricted stock units.

Calculation of Undistributed Earnings

Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows:

	Three Months Ended
	December31,
	2015			2014
	(Dollars in millions)
Calculation of undistributed earnings:
Net (loss) income attributable to Cabot Corporation	$	(7	)	$	45
Less: Dividends declared on common stock		14			14
Less: Dividends declared on participating    securities		—			—
Undistributed (loss) earnings	$	(21	)	$	31
Allocation of undistributed (loss) earnings:
Undistributed (loss) earnings allocated to common    shareholders	$	(21	)	$	31
Undistributed (loss) earnings allocated to participating    shareholders		—			—
Undistributed (loss) earnings	$	(21	)	$	31

(2)Due to the Company’s net loss position, dividends on participating securities were not added back to the loss available to common shares for the three months ended December 31, 2015 when calculating diluted EPS.

(3)Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (4)below, and then reallocated to participating securities.

(4)Represents incremental shares of common stock from the (i)assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii)assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan; and (iii)assumed issuance of shares under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans.The weighted average common shares outstanding for the three months ending December 31, 2015 excludes 1,083,358 shares as those shares would be antidilutive due to the Company’s net loss position. For the three months ended December 31, 2014, 325,500incremental shares of common stock were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.