Cabot Corp Reports Fourth Quarter and Fiscal Year 2024 Results

Fourth Quarter 2024 Diluted earnings per share (“EPS”) of $2.43 and Adjusted EPS of $1.80 Fiscal Year 2024 Diluted EPS of $6.72 and Adjusted EPS of $7.06

Cabot Corporation (NYSE: CBT) today announced results for its fourth quarter and fiscal year 2024.

Fiscal Year Highlights

Fiscal year Diluted EPS of $6.72 and Adjusted EPS of $7.06, which represents a 31% increase in Adjusted EPS year over year, driven by EBIT growth in both segments
Fiscal year segment EBIT increased 11% in Reinforcement Materials and 31% in Performance Chemicals year-over-year
Fiscal year 2024 Cash Flows from Operations of $692 million enabled capital investments of $241 million and the payment of $93 million in dividends and $172 million in share repurchases during the fiscal year
Achieved the top end of our 2021 Investor Day target range for Adjusted EPS CAGR and exceeded cumulative Discretionary Free Cash Flow (DFCF) target

Fourth Quarter Highlights

Fourth Quarter Diluted EPS of $2.43 and Adjusted EPS of $1.80, which represents a 9% increase in Adjusted EPS compared to the same quarter in the prior year and includes a benefit from a lower operating tax rate
Cash Flows from Operations of $204 million in the fiscal fourth quarter supported the return of $90 million of cash to shareholders in the quarter through a combination of share repurchases and dividends
Selected by the U.S. Department of Energy (DOE) for a $50 million award to build the first commercial-scale facility for battery-grade carbon nanotubes (CNTs) and conductive additive dispersions in the U.S.; final terms expected to be negotiated by January 2025

(In millions, except per share amounts)

Three Months Ended

Twelve Months Ended

9/30/24

9/30/23

9/30/24

9/30/23

Net sales and other operating revenues

1,001

965

3,994

3,931

Net income (loss) attributable to Cabot Corporation

137

234

380

445

Net earnings (loss) per share attributable to Cabot Corporation

2.43

4.10

6.72

7.73

Less: Certain items after tax per share

0.63

2.45

(0.34

)

2.35

Adjusted EPS

1.80

1.65

7.06

5.38

Sean Keohane, Cabot President and Chief Executive Officer commented: "I am pleased to end the fiscal year with a solid fourth quarter with Adjusted EPS of $1.80, which represents an increase of 9% over the fourth quarter of fiscal 2023. Our strong Adjusted EPS results of $7.06 for the fiscal year, which represent an increase of 31% over fiscal 2023, were driven by EBIT growth in both segments as our teams around the world did a fantastic job executing and delivering growth despite the continued challenging business environment. Strong operating performance in the year resulted in the Company generating $692 million in operating cash flow, which enabled us to continue to deliver on our capital allocation priorities. In the fiscal year, we paid $93 million in dividends, including an 8% increase announced in May, and we repurchased $172 million of shares. We also made progress in our sustainability and growth agenda with the launch of new products under our EVOLVE® Sustainable Solutions platform and with our selection as a recipient of a DOE award as part of the Bipartisan Infrastructure Law that we are currently in negotiations to finalize terms to build the first commercial scale CNT and dispersions plant in the U.S. to support the mobility transition to electric vehicles.”

Keohane continued, “In addition, we successfully achieved our 3-year corporate financial targets that were set at our 2021 Investor Day, which were an Adjusted EPS CAGR of 8% to 12% and cumulative Discretionary Free Cash Flow generation of over $1 billion. Our Adjusted EPS CAGR was 12%, representing the top end of our targeted range, and we generated $1.2 billion of DFCF for the cumulative 3-year period. We continue to execute well against our objectives and our strong fiscal 2024 financial performance demonstrates the strength of our businesses and our position as a leader in our industry. Furthermore, we believe the investments that we have made over the last three years have laid the foundation for continued advantaged growth in the future.”

Financial Detail

For the fourth quarter of fiscal 2024, net income attributable to Cabot Corporation was $137 million ($2.43 per common share). Net income reflects an after-tax per share income from certain items of $0.63. Adjusted EPS for the fourth quarter of fiscal 2024 was $1.80 per share.

Segment Results

Reinforcement Materials – Fourth quarter fiscal 2024 EBIT in Reinforcement Materials decreased by $11 million compared to the fourth quarter of fiscal 2023. The decrease in EBIT was largely driven by lower volumes in the Americas, less favorable geographic mix and higher costs, partially offset by improved pricing and product mix in our calendar year 2024 customer agreements. Volumes in the Americas were impacted by the lingering effects of a weather-related event in Mexico that the Company experienced in the third fiscal quarter and lower production levels at our tire customers in the Americas given the higher levels of tire imports from Asia into the region.

Global and regional volume changes for Reinforcement Materials for the fourth quarter of fiscal 2024 as compared to the same quarter of the prior year are set forth in the table below:

Fourth Quarter

Year-over-Year Change

Global Reinforcement Materials Volumes

(1%)

Asia Pacific

Europe, Middle East, Africa

Americas

(7%)

Performance Chemicals – Fourth quarter fiscal 2024 EBIT in Performance Chemicals increased by $8 million compared to the fourth quarter of fiscal 2023 primarily due to a 2% increase in volumes and a more favorable product mix from higher sales into automotive and electronics end markets. We also had higher costs in the quarter due to the timing of plant maintenance expenses.

Cash Performance – The Company ended the fourth quarter of fiscal 2024 with a cash balance of $223 million. During the fourth quarter of fiscal 2024, cash flows from operating activities were a source of $204 million. Capital expenditures for the fourth quarter of fiscal 2024 were $92 million. Additional uses of cash during the fourth quarter included $24 million for the payment of dividends and $66 million for share repurchases.

Taxes – During the fourth quarter of fiscal 2024, the Company recorded a tax benefit of $10 million with an effective tax rate of (7%). The provision reflected a $37 million net benefit for certain items subject to non-GAAP tax adjustments primarily related to the partial release of a valuation allowance on U.S. deferred tax assets. The operating tax rate for the fourth quarter of fiscal 2024 was 20% and the operating tax rate for fiscal 2024 was 26%. Our operating tax rate for fiscal 2025 is expected to be in the range of 27% to 29%.

Outlook

Commenting on the outlook for the Company, Keohane said, “Looking ahead to fiscal 2025, we expect Adjusted EPS to be in the range of $7.40 to $7.80, driven by continued growth in the Reinforcement Materials segment and steady recovery in the Performance Chemicals segment. This Adjusted EPS range represents growth of 5% to 10% from our strong fiscal 2024 results. In addition, we anticipate strong operating cash flow and discretionary free cash flow driven by robust EBITDA to support the continued investment in growth projects and return of capital to shareholders.”

Keohane concluded, “We believe our global scale, broad geographic footprint, and foundation of operational excellence will continue to drive earnings growth and strong cash flow generation. We will continue our track record of employing a disciplined and balanced approach to capital allocation and remain committed to our investment grade credit rating. We look forward to sharing more about our company strategy, key growth initiatives, sustainability leadership and our next set of long-term financial targets at our upcoming Investor Day on December 4, 2024, in Boston, Massachusetts. We hope you will join us in person or virtually.”

Earnings Call

The Company will host a conference call with industry analysts at 8:00 a.m. Eastern time on Tuesday, November 5, 2024. The call can be accessed through Cabot’s investor relations website at http://investor.cabot-corp.com

About Cabot Corporation

Cabot Corporation (NYSE: CBT) is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts. The company is a leading provider of reinforcing carbons, specialty carbons, battery materials, engineered elastomer composites, inkjet colorants, masterbatches and conductive compounds, fumed metal oxides and aerogel. For more information on Cabot, please visit the company’s website at cabotcorp.com. The Company regularly posts important information on its website and encourages investors and potential investors to consult the Cabot website regularly.

Forward-Looking Statements – This earnings release contains forward-looking statements. All statements that address expectations or projections about the future, including with respect to our expectations for our performance in fiscal year 2025, including our expectations for growth in our businesses and for Adjusted earnings per share for fiscal 2025, our expectations for capital allocation and operating cash flow and discretionary free cash flow for fiscal 2025, our expectations for finalizing the terms of our DOE award, and our expected operating tax rate for fiscal 2025 are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed or implied by forward-looking statements. Important factors that could cause our results to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to, industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the price and availability of energy and raw materials, including with respect to the Russian invasion of Ukraine and the U.S.-China trade relationship; a significant adverse change in a customer relationship or the failure of a customer to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our portfolio management objectives; unanticipated delays in, or increased cost of site development projects; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; litigation or legal proceedings; interest rates, tax rates, currency exchange controls and fluctuations in foreign currency rates such as the recent currency movements in Argentina; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. These factors are discussed more fully in the reports we file with the Securities and Exchange Commission (“SEC”), particularly under the heading “Risk Factors” in our annual report on Form 10-K for our fiscal year ended September 30, 2023, which are filed with the SEC at www.sec.gov. We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Use of Non-GAAP Financial Measures

To supplement Cabot’s consolidated financial statements presented on a generally accepted accounting principle (“GAAP”) basis, the preceding discussion of our results and the accompanying financial tables report Adjusted EPS, Total Segment EBIT, Total Segment EBITDA, Adjusted EBITDA, our operating tax rate, Free Cash Flow and Discretionary Free Cash Flow, all of which are non-GAAP financial measures. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP, and the definitions of these measures may not be comparable to those used by other companies. Reconciliations of Adjusted EPS to net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Total Segment EBIT, Total Segment EBITDA, and Adjusted EBITDA to Income (loss) from operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure and Free Cash Flow and Discretionary Free Cash Flow to Cash flow provided by (used in) operating activities, the most directly comparable GAAP financial measure, are provided in the tables titled “Cabot Corporation Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate” and “Cabot Corporation Reconciliation of Non-GAAP Financial Measures.”

Management believes these non-GAAP measures provide investors with greater transparency to the information used by Cabot management in its financial and operational decision-making, allow investors to see Cabot’s results through the eyes of management, and better enable Cabot’s investors to understand Cabot’s operating performance and financial condition.

Adjusted EPS. In calculating Adjusted EPS, we exclude from our net income (loss) attributable to Cabot Corporation items of expense and income that management does not consider representative of the Company’s business operations. Accordingly, reporting earnings on an adjusted basis supplements the GAAP measure of performance and provides additional information related to the underlying performance of the business. For example, certain of the items we exclude are items that we are required by GAAP to recognize in one period that relate to activities extending over several periods or relate to single events that management considers to be unusual and infrequent, although not necessarily non-recurring. We refer to these items as “certain items.” Management believes excluding these items facilitates operating performance comparisons from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis and evaluates the Company’s operating performance without the impact of these costs or benefits. Management also uses Adjusted EPS as a key measure in evaluating management performance for incentive compensation purposes.

The items of income and expense that we exclude from our calculations of Adjusted EPS but that are included in our GAAP net income (loss) per share, as applicable in a particular reporting period, include, but are not limited to, the following:

Argentina controlled currency devaluation loss related to the foreign exchange loss from government-controlled currency devaluations on our net monetary assets denominated in the Argentine peso and investment losses related to the utilization of government bond programs established for the settlement of certain foreign payables.
Global restructuring activities, which include costs or benefits associated with cost reduction initiatives or plant closures and are primarily related to (i) employee termination costs, (ii) asset impairment charges associated with restructuring actions, (iii) costs to close facilities, including environmental costs and contract termination penalties, and (iv) gains realized on the sale of land or equipment associated with restructured plants or locations.
Legal and environmental matters and reserves, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business.
Acquisition and integration-related charges, which include transaction costs, redundant costs incurred during the period of integration, and costs associated with transitioning certain management and business processes to Cabot’s processes.
Asset impairment charges, which primarily include charges associated with an impairment of goodwill, other long-lived assets or assets held for sale.
Charges related to the divestiture of our Purification Solutions business, which include accelerated costs associated with the change in control and employee incentive compensation.
Benefit from the settlement of a royalty arrangement entered into in connection with the divestiture of our former Specialty Fluids business.
Gains (losses) on sale of a business.
Employee benefit plan settlements, which consist of either charges or benefits associated with the termination of a pension plan or the transfer of a pension plan to a multi-employer plan.
Gain associated with the bargain purchase of a business.

Cabot does not provide an expected GAAP EPS range or reconciliation of the Adjusted EPS range with an expected GAAP EPS range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on GAAP EPS in future periods.

Total Segment EBIT. Total Segment EBIT reflects the sum of EBIT from our two reportable segments. In calculating Total Segment EBIT we exclude from our Income (loss) from operations before income taxes and equity in earnings of affiliated companies, certain items and items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Total Segment EBITDA. Total Segment EBITDA is equal to Total Segment EBIT (as defined above), but further adjusted for depreciation and amortization.

Adjusted EBITDA. Adjusted EBITDA reflects Total Segment EBITDA and is further adjusted for unallocated corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Free Cash Flow. To calculate “Free Cash Flow” we deduct Additions to property, plant and equipment from cash flow provided by (used in) operating activities.

Discretionary Free Cash Flow. To calculate “Discretionary Free Cash Flow” we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow provided by (used in) operating activities.

Operating Tax Rate. Our “operating tax rate” is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Cabot does not provide a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.

Explanation of Terms Used

Product Mix. The term “product mix” refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.

Net Working Capital. The term “net working capital” includes accounts receivable, inventory and accounts payable and accrued expenses.

CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Periods ended September 30 Three Months Twelve Months Dollars in millions, except per share amounts (unaudited)

2024

2023

2024

2023

Net sales and other operating revenues

1,001

965

3,994

3,931

Cost of sales

761

740

3,034

3,092

Gross profit

240

225

960

839

Selling and administrative expenses

283

253

Research and technical expenses

Loss on sale of business

—

Income (loss) from operations

150

142

614

526

Other income (expense) Interest and dividend income

Interest expense

(19

)

(21

)

(81

)

(90

)

Other income (expense)

)

(36

)

(16

)

Total other income (expense)

(15

)

(15

)

(85

)

(75

)

Income (loss) from operations before income taxes and equity in earnings of affiliated companies

135

127

529

451

(Provision) benefit for income taxes

118

(111

)

Equity in earnings of affiliated companies, net of tax

Net income (loss)

146

246

424

484

Net income (loss) attributable to noncontrolling interests, net of tax

Net income (loss) attributable to Cabot Corporation

137

234

380

445

Diluted earnings (loss) per share of common stock attributable to Cabot Corporation

2.43

4.10

6.72

7.73

Diluted weighted average common shares outstanding

55.2

56.1

55.7

56.5

CABOT CORPORATION SUMMARY RESULTS BY SEGMENT Periods ended September 30 Three Months Twelve Months Dollars in millions, except per share amounts (unaudited)

2024

2023

2024

2023

Sales Reinforcement Materials

644

624

2,610

2,563

Performance Chemicals

322

306

1,250

1,225

Segment sales

966

930

3,860

3,788

Unallocated and other (A)

134

143

Net sales and other operating revenues

1,001

965

3,994

3,931

Segment Earnings Before Interest and Taxes (B) Reinforcement Materials

123

134

537

482

Performance Chemicals

164

125

Total Segment Earnings Before Interest and Taxes

167

170

701

607

Unallocated and Other Interest expense

(19

)

(21

)

(81

)

(90

)

Certain items (C)

)

(22

)

(59

)

(29

)

Unallocated corporate costs

(17

)

(12

)

(68

)

(54

)

General unallocated income (expense) (D)

Less: Equity in earnings of affiliated companies, net of tax

Income (loss) from operations before income taxes and equity in earnings of affiliated companies

135

127

529

451

(Provision) benefit for income taxes (including tax certain items)

118

(111

)

Equity in earnings of affiliated companies, net of tax

Net income (loss)

146

246

424

484

Net income (loss) attributable to noncontrolling interests, net of tax

Net income (loss) attributable to Cabot Corporation

137

234

380

445

Diluted earnings (loss) per share of common stock attributable to Cabot Corporation

2.43

4.10

6.72

7.73

Adjusted earnings (loss) per share (E)

1.80

1.65

7.06

5.38

Diluted weighted average common shares outstanding

55.2

56.1

55.7

56.5

(A)

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.

(B)

Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to measure consolidated operating results, assess segment performance and allocate resources. 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.

(C)

Details of Certain items are presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.

(D)

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 from the items that are separately treated as Certain items.

(E)

Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table. CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION September 30, September 30, Dollars in millions (unaudited)

2024

2023

Current assets: Cash and cash equivalents

223

238

Accounts and notes receivable, net of reserve for doubtful accounts of $5 and $2

733

695

Inventories: Raw materials

150

148

Finished goods

333

374

Other

Total inventories

552

585

Prepaid expenses and other current assets

108

Total current assets

1,605

1,626

Property, plant and equipment

4,082

3,827

Accumulated Depreciation

(2,548

)

(2,415

)

Net property, plant and equipment

1,534

1,412

Goodwill

133

134

Equity affiliates

Intangible assets, net

Deferred income taxes

216

180

Other assets

172

172

Total assets

3,736

3,604

CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION September 30, September 30, Dollars in millions, except share and per share amounts (unaudited)

2024

2023

Current liabilities: Short-term borrowings

174

Accounts payable and accrued liabilities

676

600

Income taxes payable

Current portion of long-term debt

Total current liabilities

772

822

Long-term debt

1,087

1,094

Deferred income taxes

Other liabilities

245

231

Stockholders' equity: Preferred stock: Authorized: 2,000,000 shares of $1 par value Issued and Outstanding: None and none

—

Common stock: Authorized: 200,000,000 shares of $1 par valueIssued: 54,430,316 and 55,379,636 sharesOutstanding: 54,297,251 and 55,243,804 shares

Less cost of 133,065 and 135,832 shares of common treasury stock

)

Additional paid-in capital

—

Retained earnings

1,734

1,574

Accumulated other comprehensive income (loss)

(360

)

(362

)

Total Cabot Corporation stockholders' equity

1,425

1,264

Noncontrolling interests

165

143

Total stockholders' equity

1,590

1,407

Total liabilities and stockholders' equity

3,736

3,604

CABOT CORPORATION QUARTERLY RESULTS BY SEGMENT Fiscal 2023 Fiscal 2024 Dollars in millions, except per share amounts (unaudited) Dec. Q Mar. Q June Q Sept. Q FY Dec. Q Mar. Q June Q Sept. Q FY Sales Reinforcement Materials

643

672

624

2,563

641

676

649

644

2,610

Performance Chemicals

286

326

307

306

1,225

285

311

332

322

1,250

Segment sales

929

998

931

930

3,788

926

987

981

966

3,860

Unallocated and other (A)

143

134

Net sales and other operating revenues

965

1,033

968

965

3,931

958

1,019

1,016

1,001

3,994

Segment Earnings Before Interest and Taxes (B) Reinforcement Materials

122

132

134

482

129

149

136

123

537

Performance Chemicals

125

164

Total Segment Earnings Before Interest and Taxes

123

150

164

170

607

163

180

191

167

701

Unallocated and Other Interest expense

(22

)

(23

)

(24

)

(21

)

(90

)

(22

)

(21

)

(19

)

(19

)

(81

)

Certain items (C)

)

(22

)

(29

)

(42

)

(12

)

(59

)

Unallocated corporate costs

(15

)

(16

)

(11

)

(12

)

(54

)

(17

)

(18

)

(16

)

(17

)

(68

)

General unallocated income (expense) (D)

Less: Equity in earnings of affiliated companies, net of tax

Income (loss) from operations before income taxes and equity in earnings of affiliated companies

110

130

127

451

142

158

135

529

(Provision) benefit for income taxes (including tax certain items)

(20

)

(29

)

(41

)

118

(34

)

(47

)

(40

)

(111

)

Equity in earnings of affiliated companies, net of tax.

Net income (loss)

246

484

120

146

424

Net income (loss) attributable to noncontrolling interests, net of tax

Net income (loss) attributable to Cabot Corporation

234

445

109

137

380

Diluted earnings (loss) per share of common stock attributable to Cabot Corporation

0.93

1.29

1.43

4.10

7.73

0.88

1.49

1.94

2.43

6.72

Adjusted earnings (loss) per share (E)

0.98

1.33

1.42

1.65

5.38

1.56

1.78

1.92

1.80

7.06

Diluted weighted average common shares outstanding

56.7

56.8

56.5

56.1

56.5

55.8

55.7

55.2

55.7

(A)

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.

(B)

(C)

Details of certain items are presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.

(D)

(E)

Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table. CABOT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Periods ended September 30 Three Months Twelve Months Dollars in millions (unaudited)

2024

2023

2024

2023

Cash Flows from Operating Activities: Net income (loss)

146

246

424

484

Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization

151

144

Other non-cash charges (gains), net

(36

)

(149

)

(135

)

Cash dividends received from equity affiliates

—

Changes in assets and liabilities: Changes in net working capital (A)

Changes in other assets and liabilities, net

Cash provided by (used in) operating activities

204

138

692

595

Cash Flows from Investing Activities: Additions to property, plant and equipment

(92

)

(78

)

(241

)

(244

)

Proceeds from sale of business

—

Other investing activities, net

Cash provided by (used in) investing activities

(89

)

(75

)

(235

)

(214

)

Cash Flows from Financing Activities: Change in debt, net

)

(143

)

(179

)

Cash dividends paid to common stockholders

(24

)

(23

)

(93

)

(88

)

Other financing activities, net

(61

)

(51

)

(179

)

(136

)

Cash provided by (used in) financing activities

(89

)

(32

)

(415

)

(403

)

Effect of exchange rate changes on cash

—

(13

)

(57

)

Increase (decrease) in cash and cash equivalents

(15

)

Cash and cash equivalents at beginning of period

197

220

238

206

Cash and cash equivalents at end of period

223

238

223

238

(A)

Includes Accounts and notes receivable, Inventories, and Accounts payable and accrued liabilities. CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS AND OPERATING TAX RATE TABLE 1: DETAIL OF CERTAIN ITEMS Periods ended September 30 Three Months Twelve Months Dollars in millions, except per share amounts (unaudited)

2024

2023

2024

2023

Certain items before and after income taxes Argentina controlled currency devaluation and other losses

—

)

(43

)

Global restructuring activities

—

)

(13

)

Legal and environmental matters and reserves

)

(10

)

Acquisition and integration-related charges

—

)

—

)

Gain on sale of land

—

Loss on sale of business

—

)

Other Certain Items

)

Total certain items, pre-tax

)

(22

)

(59

)

(29

)

Non-GAAP tax adjustments(A)

158

161

Total certain items after tax

136

(19

)

132

Total certain items after tax per share

0.63

2.45

(0.34

)

2.35

TABLE 2: CERTAIN ITEMS STATEMENT OF OPERATIONS LINE ITEM Periods ended September 30 Three Months Twelve Months Dollars in millions, Pre-Tax (unaudited)

2024

2023

2024

2023

Statement of Operations Line Item (B) Cost of sales

)

(15

)

(10

)

Selling and administrative expenses

—

)

Other income (expense)

—

)

(43

)

Loss on sale of business

—

)

Total certain items

)

(22

)

(59

)

(29

)

TABLE 3: RECONCILIATION OF EFFECTIVE TAX RATE TO OPERATING TAX RATE Three months September 30

2024

2023

Dollars in millions (unaudited) (Provision) / Benefit for Income Taxes Rate (Provision) / Benefit for Income Taxes Rate Effective Tax Rate

-7

118

-93

Less: Non-GAAP tax adjustments(A)

158

Operating tax rate (C) (D)

(27

)

(40

)

Twelve months ended September 30

2024

2023

Dollars in millions (unaudited) (Provision) / Benefit for Income Taxes Rate (Provision) / Benefit for Income Taxes Rate Effective Tax Rate

(111

)

-6

Less: Non-GAAP tax adjustments(A)

161

Operating tax rate (C) (D)

(151

)

(133

)

TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER FOR FISCAL 2024 and FISCAL 2023 Fiscal 2024 (E) Periods ended (unaudited) Dec. Q Mar. Q June Q Sept. Q FY 2024 Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation

0.88

1.49

1.94

2.43

6.72

Less: Certain items after tax per share

(0.68

)

(0.29

)

0.02

0.63

(0.34

)

Adjusted earnings (loss) per share

1.56

1.78

1.92

1.80

7.06

Fiscal 2023 (E) Periods ended (unaudited) Dec. Q Mar. Q June Q Sept. Q FY 2023 Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation

0.93

1.29

1.43

4.10

7.73

Less: Certain items after tax per share

(0.05

)

(0.04

)

0.01

2.45

2.35

Adjusted earnings (loss) per share

0.98

1.33

1.42

1.65

5.38

(A)

Non-GAAP tax adjustments are made to arrive at the operating tax provision. It includes the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions.

(B)

This table indicates the line items where certain items are recorded in the Consolidated Statements of Operations.

(C)

The operating tax rate is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions.

(D)

Our operating tax rate for fiscal 2025 is expected to be in the range of 27% to 29%.

(E)

Per share amounts are calculated after tax. CABOT CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Fiscal 2024 (A) Dec. Q Mar. Q June Q Sept. Q FY 2024 Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation

0.88

1.49

1.94

2.43

6.72

Less: Certain items after tax per share

(0.68

)

(0.29

)

0.02

0.63

(0.34

)

Adjusted earnings (loss) per share

1.56

1.78

1.92

1.80

7.06

Fiscal 2023 (A) Dec. Q Mar. Q June Q Sept. Q FY 2023 Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation

0.93

1.29

1.43

4.10

7.73

Less: Certain items after tax per share

(0.05

)

(0.04

)

0.01

2.45

2.35

Adjusted earnings (loss) per share

0.98

1.33

1.42

1.65

5.38

(A) Per share amounts are calculated after tax.

Dollars in millions Fiscal 2024 Dec. Q Mar. Q June Q Sept. Q FY 2024 Reconciliation of Total Segment EBIT, Total Segment EBITDA and Adjusted EBITDA to Net Income and Segment EBITDA Margin Net income (loss) attributable to Cabot Corporation

109

137

380

Net income (loss) attributable to noncontrolling interests

Equity in earnings of affiliated companies, net of tax

)

Provision (benefit) for income taxes

(10

)

111

Income (loss) from operations before income taxes and equity in earnings of affiliated companies

142

158

135

529

Interest expense

Certain items

Unallocated corporate costs

General unallocated (income) expense

(13

)

(15

)

(42

)

Less: Equity in earnings of affiliated companies

)

Total Segment EBIT

163

180

191

167

701

Depreciation and amortization excluding corporate depreciation and amortization

144

Total Segment EBITDA

198

217

227

203

845

Less: Unallocated corporate costs before corporate depreciation and amortization

Adjusted EBITDA

181

199

211

186

777

Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2024 Reinforcement Materials EBIT

129

149

136

123

537

Reinforcement Materials Depreciation and amortization

Reinforcement Materials EBITDA

146

165

152

140

603

Reinforcement Materials Sales

641

676

649

644

2,610

Reinforcement Materials EBITDA Margin

Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2024 Performance Chemicals EBIT

164

Performance Chemicals Depreciation and amortization

Performance Chemicals EBITDA

242

Performance Chemicals Sales

285

311

332

322

1,250

Performance Chemicals EBITDA Margin

Dollars in millions Fiscal 2024 Reconciliation of Free Cash Flow and Discretionary Free Cash Flow to Cash provided by (used in) operating activities Dec. Q Mar. Q June Q Sept. Q FY 2024 Cash provided by (used in) operating activities (B)

105

176

207

204

692

Less: Additions to property, plant and equipment

241

Free cash flow

133

155

112

451

Plus: Additions to property, plant and equipment

241

Less: Changes in net working capital (C)

(46

)

Less: Sustaining and compliance capital expenditures

156

Discretionary free cash flow

118

128

105

479

(B) As provided in the Condensed Consolidated Statements of Cash Flows.

(C) Defined as changes in Accounts and notes receivable, Inventories, and Accounts payable and accrued liabilities as presented on the Condensed Consolidated Statements of Cash Flows.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241101205825/en/

Investor Contact: Steve Delahunt (617) 342-6255

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