Cabot Announces Second Quarter Operating Results

April 30, 2008

- Solid performance in Carbon Black and Metal Oxides arising from strong demand

- Carbon Black continued to experience an unfavorable contract lag due to rising feedstock costs

- Supermetals and Specialty Fluids had a weaker than anticipated quarter

- High feedstock costs unfavorably affected cash and working capital

BOSTON, April 30 /PRNewswire-FirstCall/ -- Cabot Corporation (NYSE: CBT) today announced net income of $11 million ($0.17 per diluted common share) for the second quarter of 2008, including $8 million after-tax ($0.13 per diluted common share) of charges from certain items and a $4 million ($0.06 per diluted common share) charge related to tax reserves. This compares to net income of $30 million ($0.45 per diluted common share) for the second quarter of fiscal 2007, which included $12 million after-tax ($0.17 per diluted common share) of charges from certain items. Cabot's results during the quarter were unfavorably impacted by approximately $20 million from the time lag of the feedstock related pricing adjustments in the Company's rubber blacks supply contracts and the immediate recognition of higher feedstock costs in North America, due to the use of LIFO accounting. This compares to a $5 million positive impact from these factors during the same quarter of 2007. The $4 million tax charge resulted from the reversal of tax benefits from China investment credits approved and recorded during the first quarter of 2008 due to changes to Chinese tax regulations issued during the quarter. Details of the Company's financial results and certain items included in net income are provided in the accompanying tables.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000323/CABOTLOGO )

In commenting, Patrick Prevost, Cabot's President and CEO, said, "Our performance during the quarter did not meet our expectations due to the continued rise of carbon black feedstock costs and weaker than anticipated results in our other businesses. Despite higher feedstock costs, the Carbon Black Business significantly improved profitability compared to the first quarter of 2008. Both the rubber blacks and performance products product lines were able to expand unit margins. Performance products volumes continued to grow at rates in excess of 5%. Unfortunately the increase in raw material costs, once again, led to a significant unfavorable contract lag effect. We are aggressively managing margins on our non-contracted business and pursuing opportunities to reduce working capital given the environment of rapidly rising feedstock costs. Our inkjet colorants product line improved its volumes significantly over the previous quarter as a result of a recovery in both the OEM and aftermarket segments of the small office home office inkjet market. However, the development in the high speed market segment remains slow."

Prevost continued, "The Metal Oxides Business continues to perform solidly, although the business was negatively affected by extreme weather conditions in China during the quarter, forcing the shutdown of our manufacturing facility for nearly three weeks. Sales in the silicones portion of this business showed some signs of weakness in Europe and North America. Demand in our electronics and niche segments, however, continues to be strong. The Supermetals Business continues to be impacted by a highly competitive market environment and slower demand in the U.S.. We remain focused on generating cash in this business. Our Specialty Fluids Business performed solidly during the second quarter. The business is pursuing multiple opportunities in new geographic regions. More broadly, although the impact of rising carbon black feedstock costs on our working capital is significant, we remain confident in the fundamental strength of the Company and our ability to withstand a volatile environment."

Business Financial Detail

The following discussion of our results includes information on our reportable segment sales and operating profit before taxes ("PBT") and should be read in conjunction with the accompanying financial tables. Our Chief Operating Decision Maker uses total segment PBT to measure our consolidated operating results and segment PBT to assess segment performance and allocate resources. Segment PBT includes equity in net income of affiliated companies, royalties paid by equity affiliates, minority interest and allocated corporate costs and excludes interest expense, foreign currency transaction gains and losses, interest income, dividend income, as well as certain items that have not been allocated to a segment as they are significant and unusual or infrequent. Segment PBT is a non-GAAP financial measure and is not intended to replace income (loss) from continuing operations, the most directly comparable GAAP financial measure. We believe segment PBT assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses before non-operating factors and before items that are unusual or infrequent that affect net income. Certain items, which are included in net income, are not included in segment PBT. A reconciliation of segment PBT to income (loss) from continuing operations is shown in the accompanying tables.

When explaining the changes in our PBT period on period, we use several terms. The term "fixed costs" means fixed manufacturing costs, including utilities. The term "inventory related changes" means differences attributable to items such as (i) inventory obsolescence and valuation reserves; (ii) utilization variances; and (iii) other increases or decreases in costs associated with the production of inventory. The term "product mix" refers to the various types and grades of products sold by a particular business or product line during the quarter, and the positive or negative impact of that mix on the variable margin and profitability of the business or product line. The term "market segment mix" refers to the various market segments into which a particular business or product line sold its products during the quarter, and the positive or negative impact of that mix on the variable margin and profitability of the business or product line.

Carbon Black Business

The following chart details the percentage change in volume by product line for the second fiscal quarter of 2008, as compared to the second fiscal quarter of 2007 and the first fiscal quarter of 2008:



                             Second quarter 2008 vs.   Second quarter 2008 vs.
                              second quarter 2007        first quarter 2008

    Rubber Blacks                  flat volumes                  (1%)
      North America                    (4%)                       6%
      South America                   (10%)                     (16%)
      Europe                           (2%)                       8%
      Asia Pacific                      9%                       (3%)
      China                             2%                       (8%)

    Performance Products                5%                        8%

    Inkjet Colorants                  (13%)                      21%


When comparing the second quarter of 2008 to the second quarter of 2007, rubber blacks volume declines in Europe and South America were driven by decisions we made to change our customer and product mix to maximize profits, with the resulting loss of shorter term volumes. When comparing the second quarter of 2008 to the first quarter of 2008, rubber blacks volume declines in China and Asia Pacific were driven by seasonality due to holidays in those regions.

Revenue Variance Analysis
-- The $137 million increase in revenue from the second quarter of 2007 to the second quarter of 2008 was driven by increased selling prices ($78 million), the positive impact of foreign currency translation on our selling prices ($50 million) and increased volumes ($7 million). -- The $70 million increase in revenue from the first to the second quarter of 2008 was driven by increased selling prices ($46 million), the positive impact of foreign currency translation on our selling prices ($18 million) and increased volumes ($5 million). Profit Variance Analysis -- The $21 million decrease in PBT from the second quarter of 2007 to the second quarter of 2008 was driven by raw material cost increases ($109 million) and higher fixed costs ($6 million). These factors were only partially offset by increased selling prices and favorable product mix ($86 million), the favorable impact of inventory related changes ($3 million), the positive impact of foreign currency translation ($3 million) and higher volumes ($2 million). -- The $15 million increase in PBT from the first to the second quarter of 2008 was driven by higher selling prices and favorable product mix ($47 million), increased volumes ($6 million) and the positive impact of foreign currency translation ($2 million). These positive factors were partially offset by higher raw material costs ($32 million) and higher selling and administrative costs ($7 million).

Variability in feedstock costs significantly impacts financial results for both the Carbon Black Business segment and the Company as a whole on a quarterly basis. The table below quantifies, in millions of dollars, the absolute impact on PBT during a quarter of both the time lag of our feedstock related pricing adjustments in our rubber blacks supply contracts ("contract lag") and the immediate recognition of feedstock costs in North America due to the use of LIFO accounting ("LIFO impact").



    (millions of dollars)             Fiscal Year 2007       Fiscal Year 2008

    Quarter 1
      Contract lag                          8                      (9)
      LIFO impact                           5                      (8)
    Quarter 2
      Contract lag                          7                     (17)
      LIFO impact                          (2)                     (3)
    Quarter 3
      Contract lag                         (8)
      LIFO impact                          (8)
    Quarter 4
      Contract lag                        (13)
      LIFO impact                          (1)


Metal Oxides Business

Volumes in the fumed metal oxides product line increased by 3% during the second quarter of 2008, when compared to both the second quarter of 2007 and the first quarter of 2008 as increases in the niche and electronics segments more than offset declines in the silicones segment.

Revenue Variance Analysis
-- The $5 million increase in revenue from the second quarter of 2007 to the second quarter of 2008 was driven by the positive impact of foreign currency translation on our selling prices ($3 million) and increased volumes ($2 million).

-- The $3 million increase in revenue from the first to the second quarter of 2008 was driven by increased volumes ($2 million) and the positive impact of foreign currency translation on our selling prices ($1 million).

Profit Variance Analysis
-- The $2 million decrease in PBT from the second quarter of 2007 to the second quarter of 2008 was driven by higher fixed costs ($3 million), principally higher utility costs, higher raw material costs ($1 million) and the unfavorable impact of inventory related changes ($1 million). These factors were only partially offset by increased volumes ($2 million) and a favorable product and market segment mix ($1 million).

-- PBT was flat from the first to the second quarter of 2008 as increased volumes ($2 million) and a favorable product and market segment mix ($1 million) were offset by higher raw material costs ($3 million).

Supermetals Business
Revenue Variance Analysis
-- The $4 million increase in revenue from the second quarter of 2007 to the second quarter of 2008 was driven by higher volumes ($7 million) principally associated with customer inventory build, and the positive effect of foreign currency translation on our selling prices ($1 million), partially offset by lower selling prices ($4 million).

-- The $4 million increase in revenue from the first to the second quarter of 2008 was driven by higher volumes ($6 million) and the positive effect of foreign currency translation on our selling prices ($1 million), partially offset by lower selling prices ($3 million).

Profit Variance Analysis
-- PBT was flat from the second quarter of 2007 to the second quarter of 2008 as higher volumes ($2 million) and lower costs ($7 million) were offset by lower selling prices ($4 million), the unfavorable impact of inventory related changes ($4 million) and higher raw material costs ($1 million).

-- The $3 million decrease in PBT from the first to the second quarter of 2008 was driven principally by lower selling prices ($3 million), higher raw material costs ($1 million) and higher expenses ($1 million). These unfavorable factors were only partially offset by higher volumes ($3 million).

Specialty Fluids Business
Profit Variance Analysis
-- PBT increased by $2 million from the second quarter of 2007 to the second quarter of 2008 as a higher volume of fluid sold from completed jobs more than offset a reduction in our rental volume. This decline in rental volume was due to an unfavorable mix of shorter and smaller jobs.

-- PBT decreased by $2 million from the first to the second quarter of 2008 as a reduction in our rental volume, and hence a significantly lower utilization rate, more than offset a higher volume of fluid sold from completed jobs.

The table below quantifies the absolute fluid utilization percentage, which is the percentage of our total available fluid inventory used during a period, by quarter for fiscal 2007 and 2008.



                   Fiscal Year 2007     Fiscal Year 2008
    Quarter 1             17%                 21%
    Quarter 2             13%                 13%
    Quarter 3             19%
    Quarter 4             12%


Corporate Financial Detail

Capital Expenditures -- Cabot invested approximately $40 million in capital expenditures during the second fiscal quarter of 2008.

Open Market Share Repurchases -- During the second fiscal quarter of 2008, the Company repurchased 732,000 shares of its common stock on the open market for a cash cost of approximately $21 million at an average price of approximately $29 per share.

Working Capital -- Working capital increased by $27 million on a constant dollar basis (an increase of $74 million at actual exchange rates) during the second fiscal quarter of 2008, driven principally by higher carbon black feedstock costs impacting accounts receivable and inventory values.

Tax Rate -- The Company's overall tax rate for net income from continuing operations was 48% for the second fiscal quarter of 2008. During the quarter, the Company reserved against tax benefits from China investment credits approved and recorded during the first quarter of 2008 due to changes to Chinese tax regulations issued during the quarter. This reserve unfavorably impacted the Company's operating results by $4 million ($0.06 per diluted common share). Excluding the impact of this reserve, the Company's tax rate would have been a provision of approximately 27% for the second fiscal quarter of 2008.

This earnings release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Cabot, particularly its latest annual report on Form 10-K, could cause results to differ materially from those stated. These factors include, but are not limited to changes in cost of raw materials; costs associated with the research and development of new products, including regulatory approval and market acceptance; competitive pressures; successful integration of structural changes, including restructuring plans, and joint ventures; the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations.

Cabot Corporation is a global specialty chemicals and materials company headquartered in Boston, MA. Cabot's major products are carbon black, fumed silica, inkjet colorants, capacitor materials, and cesium formate drilling fluids. The Company's website is: http://www.cabot-corp.com.

    Contact: Susannah R. Robinson
             Director, Investor Relations
             (617) 342-6129



    CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

    Periods ended March 31
    Dollars in millions, except per share   Three Months      Six Months
     amounts (unaudited)                    2008    2007     2008     2007

    Net sales and other operating revenues  $786    $637   $1,497   $1,292
    Cost of sales                            668     499    1,263    1,005
      Gross profit                           118     138      234      287

    Selling and administrative expenses       66      73      123      127
    Research and technical expenses           19      17       35       32
      Income from operations                  33      48       76      128

    Other income and expense
      Interest and dividend income             1       3        2        5
      Interest expense                        (9)     (9)     (18)     (18)
      Other income (expense)                  (2)     (1)      (4)       1
       Total other income and expense        (10)     (7)     (20)     (12)

    Income from operations before income
     taxes                                    23      41       56      116

    Provision for income taxes               (11)    (11)      (5)     (30)
    Equity in net income of affiliated
     companies, net of tax                     2       3        4        6
    Minority interest in net income, net
     of tax                                   (3)     (2)      (8)      (7)

    Net income                                11      31       47       85
    Dividends on preferred stock, net of
     tax benefit                               -      (1)       -       (1)
    Net income available to common shares    $11     $30      $47      $84

    Diluted earnings per share of common
     stock
      Diluted                              $0.17   $0.45    $0.73    $1.24

    Weighted average common shares
     outstanding
      Diluted                                 64      69       64       69



    CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS

    Periods ended March 31
    Dollars in millions, except per share   Three Months      Six Months
     amounts (unaudited)                    2008    2007     2008     2007

    SALES

    Carbon Black Business (A)               $630    $493   $1,191     $978
      Rubber blacks                          453     346      863      697
      Performance products                   165     134      307      257
      Inkjet colorants                        11      13       19       23
      Superior MicroPowders                    1       -        2        1

    Metal Oxides Business                     73      68      143      133
      Fumed metal oxides                      72      68      142      133
      Aerogel                                  1       -        1        -
    Supermetals Business                      57      53      109      130
    Specialty Fluids Business                 16      10       32       26
      Segment sales                          776     624    1,475    1,267
    Unallocated and other (B)                 10      13       22       25
      Net sales and other operating
       revenues                             $786    $637   $1,497   $1,292
    SEGMENT PROFIT
    Carbon Black Business                    $36     $57      $57     $111
    Metal Oxides Business                      8      10       16       19
    Supermetals Business                      (2)     (2)      (1)      14
    Specialty Fluids Business                  5       3       12       11
      Total Segment Profit ( C )              47      68       84      155

    Interest expense                          (9)     (9)     (18)     (18)
    General unallocated expense (D)          (13)    (15)      (6)     (15)
    Less: Equity in net income of
     affiliated companies, net of tax         (2)     (3)      (4)      (6)
    Income from operations before income
     taxes                                    23      41       56      116
    Provision for income taxes               (11)    (11)      (5)     (30)
    Equity in net income of affiliated
     companies, net of tax                     2       3        4        6
    Minority interest in net income, net
     of tax                                   (3)     (2)      (8)      (7)
    Net income                                11      31       47       85
    Dividends on preferred stock, net of
     tax benefit                               -      (1)       -       (1)
    Net income available to common shares    $11     $30      $47      $84

    Diluted earnings per share of common
     stock
      Diluted                              $0.17   $0.45    $0.73    $1.24

    Weighted average common shares
     outstanding
      Diluted                                 64      69       64       69

    (A)   Segment sales for certain operating segments within the Carbon Black
          Business include 100% of sales of one equity affiliate at market-
          based prices.

    (B)   Unallocated and other reflects an elimination for sales of one
          equity affiliate offset by royalties paid by equity affiliates and
          external shipping and handling fees.

    ( C ) Segment profit is a measure used by Cabot's Chief Operating
          Decision-Maker to measure consolidated operating results, assess
          segment performance and allocate resources. Segment profit includes
          equity in net income of affiliated companies, royalties paid by
          equity affiliates, minority interest and allocated corporate costs.

    (D)   General unallocated expense includes foreign currency transaction
          gains (losses), interest income, dividend income, and the certain
          items listed in Exhibit I.



    CABOT CORPORATION CONDENSED CONSOLIDATED FINANCIAL POSITION

                                                 March 31,       September 30,
                                                    2008              2007
    Dollars in millions, except share and
     per share amounts                          (unaudited)        (audited)

    Current assets:
      Cash and cash equivalents                      $111              $154
      Short-term marketable securities                  1                 2
      Accounts and notes receivable, net
       of reserve for doubtful accounts
       of $6 and $6                                   644               563
      Inventories:
        Raw materials                                 181               154
        Work in process                                63                77
        Finished goods                                237               184
        Other                                          32                27
          Total inventories                           513               442
      Prepaid expenses and other current assets        84                72
      Deferred income taxes                            37                35
      Assets held for sale                              7                 7
        Total current assets                        1,397             1,275

    Investments:
      Equity affiliates                                69                65
      Long-term marketable securities and
       cost investments                                 2                 3
        Total investments                              71                68

    Property, plant and equipment                   3,005             2,823
    Accumulated depreciation and amortization      (1,951)           (1,807)
      Net property, plant and equipment             1,054             1,016

    Other assets:
      Goodwill                                         38                34
      Intangible assets, net of accumulated
       amortization of $11 and $10                      3                 4
      Assets held for rent                             45                42
      Deferred income taxes                           121               120
      Other assets                                     92                77
        Total other assets                            299               277

    Total assets                                   $2,821            $2,636



    CABOT CORPORATION CONDENSED CONSOLIDATED FINANCIAL POSITION

                                                  March 31,      September 30,
    Dollars in millions, except share and            2008              2007
    per share amounts                            (unaudited)        (audited)

    Current liabilities:

      Notes payable to banks                          $147               $67
      Accounts payable and accrued liabilities         402               427
      Income taxes payable                              42                36
      Deferred income taxes                              1                 2
      Current portion of long-term debt                 39                15
        Total current liabilities                      631               547

    Long-term debt                                     487               503
    Deferred income taxes                               11                16
    Other liabilities                                  341               300

    Minority interest                                   89                76

    Stockholders' equity:
      Preferred stock:
        Authorized:  2,000,000 shares of
         $1 par value                                    -                 -
          Series B ESOP Convertible Preferred
           Stock 7.75% Cumulative
             Authorized: 200,000 shares
             Issued: None
             Outstanding: None
      Common stock:
        Authorized:  200,000,000 shares
         of $1 par value                                65                65
        Issued:  64,626,502 and
         65,424,674 shares
        Outstanding: 64,484,058 and
         65,279,803 shares
        Less cost of 142,443 and 144,871
         shares of common treasury stock                (5)               (5)
    Additional paid-in capital                           -                 -
    Retained earnings                                1,132             1,119
    Deferred employee benefits                         (32)              (34)
    Notes receivable for restricted stock              (19)              (19)
    Accumulated other comprehensive income             121                68
             Total stockholders' equity              1,262             1,194

    Total liabilities and stockholders' equity      $2,821            $2,636



    CABOT CORPORATION

    In millions,
    except per share amounts (unaudited)
                                               Fiscal 2007
                                    Dec. Q.  Mar. Q. June Q. Sept. Q.    FY

    Sales
    Carbon Black Business (A)         $485    $493    $506    $521     $2,005
      Rubber blacks                    351     346     351     368      1,416
      Performance products             123     134     142     142        541
      Inkjet colorants                  10      13      13      10         46
      Superior MicroPowders              1       -       -       1          2
    Metal Oxides Business               65      68      67      71        271
      Fumed metal oxides                65      68      66      71        270
      Aerogel                            -       -       1       -          1
    Supermetals Business                77      53      48      55        233
    Specialty Fluids Business           16      10      16      16         58
      Segment Sales                    643     624     637     663      2,567
    Unallocated and other (B)           12      13      12      12         49
    Net sales and other operating
     revenues                         $655    $637    $649    $675     $2,616

    Segment Profit
    Carbon Black Business              $54     $57     $25     $20       $156
    Metal Oxides Business                9      10       9       8         36
    Supermetals Business                16      (2)      -       1         15
    Specialty Fluids Business            8       3       7       7         25
    Total Segment Profit ( C )          87      68      41      36        232

    Interest expense                    (9)     (9)     (8)     (8)       (34)
    General unallocated
     income (expense) (D)                -     (15)      1      (5)       (18)
    Less: Equity in net income of
     affiliated companies, net of tax   (3)     (3)     (3)     (3)       (12)
    Income from continuing operations
     before income taxes                75      41      31      20        168
    Benefit (provision) for
     income taxes                      (19)    (11)     (9)      2        (38)
    Equity in net income of
     affiliated companies, net of tax    3       3       3       3         12
    Minority interest in net income,
     net of tax                         (5)     (2)     (4)     (4)       (15)

    Net income from continuing
     operations                         54      31      21      21        127
    Discontinued operations,
     net of tax (E)                      -       -      (1)      3          2
    Net income                          54      31      20      24        129
    Dividends on preferred stock,
     net of tax benefit                  -      (1)      -       -         (1)

      Net income available to
       common shares                   $54     $30     $20     $24       $128

    Diluted earnings per share of
     common stock
    Net income from continuing
     operations                      $0.79   $0.45   $0.31   $0.32      $1.87
    Discontinued operations,
     net of tax (E)                      -       -   (0.01)   0.04       0.03
    Net income                       $0.79   $0.45   $0.30   $0.36      $1.90
    Weighted average common
     shares outstanding
    Diluted                             69      69      68      66         68




    In millions,
    except per share amounts (unaudited)
                                                  Fiscal 2008
                                      Dec. Q. Mar. Q. June Q. Sept. Q.   FY

    Sales
    Carbon Black Business (A)          $560    $630                    $1,191
      Rubber blacks                     409     453                       863
      Performance products              142     165                       307
      Inkjet colorants                    8      11                        19
      Superior MicroPowders               1       1                         2
    Metal Oxides Business                70      73                       143
      Fumed metal oxides                 70      72                       142
      Aerogel                             -       1                         1
    Supermetals Business                 53      57                       109
    Specialty Fluids Business            16      16                        32
      Segment Sales                     699     776                     1,475
    Unallocated and other (B)            12      10                        22
    Net sales and other operating
     revenues                          $711    $786                    $1,497

    Segment Profit
    Carbon Black Business               $21     $36                       $57
    Metal Oxides Business                 8       8                        16
    Supermetals Business                  1      (2)                       (1)
    Specialty Fluids Business             7       5                        12
      Total Segment Profit ( C )         37      47                        84

    Interest expense                     (9)     (9)                      (18)
    General unallocated income
     (expense) (D)                        8     (13)                       (6)
    Less: Equity in net income of
     affiliated companies, net of tax    (2)     (2)                       (4)
    Income from continuing operations
     before income taxes                 34      23                        56
    Benefit (provision) for income
     taxes                                6     (11)                       (5)
    Equity in net income of affiliated
     companies, net of tax                2       2                         4
    Minority interest in net income,
     net of tax                          (6)     (3)                       (8)
    Net income from continuing
     operations                          36      11                        47
    Discontinued operations,
     net of tax (E)                       -       -                         -
    Net income                           36      11                        47
    Dividends on preferred stock,
     net of tax benefit                   -       -                         -
      Net income available to
       common shares                    $36     $11                       $47
    Diluted earnings per share of
     common stock
    Net income from continuing
     operations                       $0.56   $0.17                     $0.73
    Discontinued operations,
     net of tax (E)                       -       -                         -
    Net income                        $0.56   $0.17                     $0.73
    Weighted average common shares
     outstanding
    Diluted                              64      64                        64

    (A)   Segment sales for certain operating segments within the Carbon Black
          Business include 100% of sales of one equity affiliate at market-
          based prices.
    (B)   Unallocated and other reflects an elimination for sales for one
          equity affiliate offset by royalties paid by equity affiliates and
          external shipping and handling fees.
    ( C ) Segment profit is a measure used by Cabot's Chief Operating
          Decision-Maker to measure consolidated operating results, assess
          segment performance and allocate resources. Segment profit includes
          equity in net income of affiliated companies, royalties paid by
          equity affiliates, minority interest and allocated corporate costs.
    (D)   General unallocated expense includes foreign currency transaction
          gains (losses), interest income, dividend income and certain items
          listed in Exhibit I.
    (E)   Amounts relate to legal and tax settlements in connection with our
          discontinued operations.



    CABOT CORPORATION  CERTAIN ITEMS - Exhibit I

    Periods ended March 31
    Dollars in millions, except per share amounts (unaudited)

                                                     Three Months
                                          2008     2008    2007      2007
                                            $  per share(A)  $   per share (A)

    Certain items before income taxes
    Environmental reserves/settlement       $-       $-     $(5)   $(0.06)
    Carbon Black antitrust litigation        -        -     (10)    (0.09)
    CEO transition costs                    (4)   (0.04)      -         -
    Restructuring initiatives:
      - Global                               -        -      (2)    (0.02)
      - Altona, Australia                    -        -       -         -
      - North America                       (7)   (0.08)      -         -
      - Europe (B)                          (1)   (0.01)      -         -
      Total certain items                  (12)   (0.13)    (17)    (0.17)
    Tax impact of certain items              4                5
    Total certain items                    $(8)  $(0.13)   $(12)   $(0.17)



                                                      Six Months
                                          2008     2008    2007      2007
                                            $  per share(A)  $   per share (A)

    Certain items before income taxes
    Environmental reserves/settlement      $(1)  $(0.01)    $(5)   $(0.06)
    Carbon Black antitrust litigation        -        -     (10)    (0.09)
    CEO transition costs                    (4)   (0.04)      -         -
    Restructuring initiatives:
      - Global                               -        -      (4)    (0.04)
      - Altona, Australia                   18     0.20      (1)    (0.01)
      - North America                      (13)   (0.15)      -         -
      - Europe (B)                          (2)   (0.02)      -         -
      Total certain items                   (2)   (0.02)    (20)    (0.20)
    Tax impact of certain items              1                6
    Total certain items                    $(1)  $(0.02)   $(14)   $(0.20)



    Periods ended March 31                  Three Months      Six Months
    Dollars in millions (unaudited)         2008    2007     2008    2007

    Statement of Operations Line Item
    Cost of sales                            (8)    $(6)       3     $(8)
    Selling and administrative expenses      (4)    (11)      (5)    (12)
      Total certain items                  $(12)   $(17)     $(2)   $(20)



    Periods ended March 31                  Three Months      Six Months
    Dollars in millions (unaudited)         2008    2007     2008    2007

    Certain items by Segment ( C )
    Carbon Black Business                  $(11)   $(14)      $-    $(17)
    Supermetals Business                      -      (2)       -      (2)
    Metal Oxides                             (1)      -       (1)      -
    Other                                     -      (1)      (1)     (1)
      Total certain items                  $(12)   $(17)     $(2)   $(20)

    (A)    Per share amounts are calculated after tax.
    (B)    Charges relate to former carbon black facilities.
    ( C ) Amounts are included in general unallocated expenses and are not
          included in Segment PBT.
Downloadable Earnings Tables and Supplemental Infomation

SOURCE Cabot Corporation

CONTACT: Susannah R. Robinson, Director, Investor Relations of Cabot Corporation
1-617-342-6129
Web site: http://www.cabot-corp.com