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Earnings Per Share (Tables)
 3 Months Ended
Dec. 31, 2016
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

 

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Dollars and shares in millions, except per share amounts)

 

Basic EPS:

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot Corporation

 

$

54

 

 

$

(7

)

Less: Dividends and dividend equivalents to

   participating securities

 

 

—

 

 

 

—

 

Less: Undistributed earnings allocated to

   participating securities(1)

 

 

—

 

 

 

—

 

Earnings (loss) allocated to common

   shareholders (numerator)

 

$

54

 

 

$

(7

)

Weighted average common shares and

   participating securities outstanding

 

 

62.7

 

 

 

62.9

 

Less: Participating securities(1)

 

 

0.5

 

 

 

0.4

 

Adjusted weighted average common shares

   (denominator)

 

 

62.2

 

 

 

62.5

 

Amounts per share - basic:

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot Corporation

 

$

0.85

 

 

$

(0.11

)

Diluted EPS:

 

 

 

 

 

 

 

 

Earnings (loss) allocated to common shareholders

 

$

54

 

 

$

(7

)

Plus: Earnings (loss) allocated to participating securities

 

 

—

 

 

 

—

 

Less: Adjusted earnings allocated to participating

   securities(2)

 

 

—

 

 

 

—

 

Earnings (loss) allocated to common

   shareholders (numerator)

 

$

54

 

 

$

(7

)

Adjusted weighted average common shares

   outstanding

 

 

62.2

 

 

 

62.5

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

Common shares issuable(3)

 

 

0.6

 

 

 

—

 

Adjusted weighted average common shares

   (denominator)

 

 

62.8

 

 

 

62.5

 

Amounts per share - diluted:

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot Corporation

 

$

0.85

 

 

$

(0.11

)

 

(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

 

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Dollars in millions)

 

Calculation of undistributed earnings (loss):

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot Corporation

 

$

54

 

 

$

(7

)

Less: Dividends declared on common stock

 

 

19

 

 

 

14

 

Less: Dividends declared on participating

   securities

 

 

—

 

 

 

—

 

Undistributed earnings (loss)

 

$

35

 

 

$

(21

)

Allocation of undistributed earnings (loss):

 

 

 

 

 

 

 

 

Undistributed earnings (loss) allocated to common

   shareholders

 

$

35

 

 

$

(21

)

Undistributed earnings (loss) allocated to participating

   shareholders

 

 

—

 

 

 

—

 

Undistributed earnings (loss)

 

$

35

 

 

$

(21

)

 

(2)

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

(3)

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 Supplemental 401(K) Plan; and (iii) assumed issuance of shares under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. For the three months ended December 31, 2016 and 2015, respectively, 173,927 and 1,083,358, incremental shares of common stock were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.