Cabot Corporation Reports Strong Third Quarter Earnings and Announces Completion of the Norit Acquisition
Third quarter EPS of
Norit acquisition strengthens Cabot's portfolio
Key Highlights
- Strategic acquisition of
Norit N.V. completed with attractive financing - Value pricing and energy efficiency initiatives drive Core Segment results
- Sequential improvement in Performance Segment and Inkjet Colorants Business from higher volumes
- New products launched for adhesives and automotive markets
(In millions, except per share amounts) | Fiscal 2012 | Fiscal 2011 | |||||||||||||
Third | First | Third | First | ||||||||||||
Quarter | 9 Months | Quarter | 9 Months | ||||||||||||
Net sales | $ | 846 | $ | 2,452 | $ | 836 | $ | 2,269 | |||||||
Net income attributable to Cabot Corporation | $ | 66 | $ | 352 | $ | 60 | $ | 186 | |||||||
Net earnings per share attributable to Cabot Corporation | $ | 1.02 | $ | 5.43 | $ | 0.92 | $ | 2.81 | |||||||
Less Adjustments: | |||||||||||||||
Net income per share from discontinued operations | $ | 0.06 | $ | 3.14 | $ | 0.19 | $ | 0.68 | |||||||
Certain items per share | $ | (0.04 | ) | $ | (0.30 | ) | $ | (0.03 | ) | $ | 0.25 | ||||
Adjusted EPS | $ | 1.00 | $ | 2.59 | $ | 0.76 | $ | 1.88 | |||||||
Commenting on the quarterly results, Cabot President and CEO
Prevost continued, "We are also pleased to announce that today we completed the acquisition of Norit and welcome Norit to the Cabot team. Norit is the global leader in activated carbon with unique technology and strong financial performance. The acquisition of Norit is a natural extension of our product and process technology and applications development competencies and it diversifies Cabot's end market participation into environmental and purification applications. In connection with this acquisition, we successfully raised
Financial Detail
For the third quarter of fiscal 2012, net income attributable to
Segment EBIT for the third quarter of fiscal 2012 was
Segment Results
Core Segment -- Third quarter fiscal 2012 EBIT in the Rubber Blacks Business increased by
Global and regional volume changes for the Core Segment for the third quarter of fiscal 2012 as compared to the same quarter of the prior year and the second quarter of fiscal 2012 are included in the table below:
Third Quarter
Year over Year Change |
Third Quarter
Sequential Change | |||||
Global | (9 | %) | (5 | %) | ||
Japan | (13 | %) | (10 | %) | ||
Southeast Asia | (1 | %) | 7 | % | ||
China | (7 | %) | (1 | %) | ||
Europe, Middle East, Africa | (22 | %) | (17 | %) | ||
North America | (11 | %) | (7 | %) | ||
South America | 5 | % | (1 | %) | ||
Performance Segment -- Third quarter fiscal 2012 EBIT in the Performance Segment decreased by
Specialty Fluids -- For the third quarter of fiscal 2012, EBIT in the Specialty Fluids Segment increased by
New Business Segment -- For the third quarter of fiscal 2012, EBIT in the New Business Segment decreased by
Cash Performance -- The Company ended the third quarter of fiscal 2012 with a cash balance of
Taxes -- During the third quarter of fiscal 2012, the Company recorded a net tax provision of
Norit Acquisition -- The
We will report the results of the Norit business as a separate segment beginning in the fourth quarter of fiscal year 2012. The transaction was funded through a combination of cash on hand, borrowing under the existing revolving credit facility and proceeds from our bond offering.
Outlook
Commenting on the outlook for the Company, Prevost said, "We are cautious about the near-term demand outlook due to the uncertainty in
Prevost continued, "We remain committed to delivering upon our stated financial objectives. With the addition of Norit, our adjusted EPS target in 2014 has now increased to a range of
Earnings Call
The Company will host a conference call with industry analysts at
About
Forward-Looking Statements -- 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 our ability to meet our long-term financial targets, strategy for growth, demand for our products, the expected benefits of the
Explanation of Terms Used -- The term "LIFO" includes two factors: (i) the impact of current inventory costs being recognized immediately in cost of goods sold ("COGS") under a last-in first-out ("LIFO") method, compared to the older costs that would have been included in COGS under a first-in first-out ("FIFO") method ("COGS impact"); and (ii) the impact of reductions in inventory quantities, causing historical inventory costs to flow through COGS ("liquidation impact"). The consolidated impact of using the LIFO method to value inventories in the U.S. instead of the FIFO method for the third quarter of fiscal 2012 was a favorable
The term "operating tax rate" represents the tax rate on our recurring operating results. This rate excludes discrete tax items, which are unusual or infrequent items that are excluded from the estimated annual effective tax rate and other tax items, including the impact of the timing of losses in certain jurisdictions, cumulative rate adjustment and the impact of certain items on both operating income and tax provision.
The term "product mix" refers to the various types and grades, or mix, of products sold in a particular Business or Segment during the period, and the positive or negative impact of that mix on the revenue or profitability of the Business or Segment.
Use of Non-GAAP Financial Measures -- The preceding discussion of our results and the accompanying financial tables report adjusted EPS and Total segment earnings before interest and taxes, "Total Segment EBIT", which are non-GAAP financial measures. Our chief operating decision-maker uses adjusted EPS and Total Segment EBIT to evaluate the performance of the Company in terms of profitability. We believe that these measures also assist our investors in evaluating the changes in our results and the Company's performance.
In calculating adjusted EPS, we exclude from our net income per share from continuing operations certain items of expense and income that management does not consider representative of the Company's ongoing operations. Adjusted EPS should be considered as supplemental to, and not as a replacement for, EPS determined in accordance with GAAP. A reconciliation of adjusted EPS to EPS from continuing operations, the most directly comparable GAAP financial measure, and the certain items that are excluded from our calculation of adjusted EPS, are provided in the table titled "Certain Items and Reconciliation of Adjusted EPS."
Total Segment EBIT is a non-GAAP performance measure, and should not be considered an alternative for Income (loss) from continuing operations before taxes, the most directly comparable GAAP financial measure. In calculating Total Segment EBIT, we exclude "certain items", meaning items that management does not consider representative of our fundamental segment results, as well as items that are not allocated to our business segments, such as interest expense and other corporate costs. Our Chief Operating Decision Maker uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe that this non-GAAP measure provides useful supplemental information for our investors as it is an important indicator of the Company's operational strength and performance. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another. A reconciliation of Total Segment EBIT to Income (loss) from continuing operations before income taxes and equity in net earnings of affiliate companies is provided in the table titled, "Summary Results by Segments."
The definition of adjusted ROIC is provided in Item 6. of our most recent Annual Report on Form 10K.
CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
Periods ended June 30 | Three Months | Nine Months | ||||||||||||||||
Dollars in millions, except per share amounts (unaudited) | 2012 | 2011 | 2012 | 2011 | ||||||||||||||
Net sales and other operating revenues | $ | 846 | $ | 836 | $ | 2,452 | $ | 2,269 | ||||||||||
Cost of sales | 671 | 684 | 1,961 | 1,852 | ||||||||||||||
Gross profit | 175 |
|
152 | 491 | 417 | |||||||||||||
Selling and administrative expenses | 68 | 61 | 199 | 186 | ||||||||||||||
Research and technical expenses | 17 | 16 | 54 | 49 | ||||||||||||||
Income from operations | 90 | 75 | 238 | 182 | ||||||||||||||
Other income and (expense) | ||||||||||||||||||
Interest and dividend income | 1 | 1 | 3 | 2 | ||||||||||||||
Interest expense | (11 | ) | (9 | ) | (30 | ) | (29 | ) | ||||||||||
Other (expense) income | (2 | ) | (5 | ) | (2 | ) | 1 | |||||||||||
Total other income and (expense) | (12 | ) | (13 | ) | (29 | ) | (26 | ) | ||||||||||
Income from continuing operations before income taxes and equity in net earnings of affiliated companies |
78 | 62 | 209 | 156 | ||||||||||||||
Provision for income taxes | (16 | ) | (10 | ) | (55 | ) | (4 | ) | ||||||||||
Equity in net earnings of affiliated companies, net of tax | 4 | 2 | 8 | 6 | ||||||||||||||
Income from continuing operations | 66 | 54 | 162 | 158 | ||||||||||||||
Income from discontinued operations, net of tax (A) | 4 | 13 | 204 | 45 | ||||||||||||||
Net income | 70 | 67 | 366 | 203 | ||||||||||||||
Net income attributable to noncontrolling interests, net of tax | 4 | 7 | 14 | 17 | ||||||||||||||
Net income attributable to Cabot Corporation | $ | 66 | $ | 60 | $ | 352 | $ | 186 | ||||||||||
Diluted earnings per share of common stock attributable to Cabot Corporation |
||||||||||||||||||
Continuing operations | $ | 0.96 | $ | 0.73 | $ | 2.29 | $ | 2.13 | ||||||||||
Discontinued operations (A) | 0.06 | 0.19 | 3.14 | 0.68 | ||||||||||||||
Net income attributable to Cabot Corporation | $ | 1.02 | $ | 0.92 | $ | 5.43 | $ | 2.81 | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||
Diluted | 64.3 | 65.6 | 64.2 | 65.4 | ||||||||||||||
(A) Amounts relate to the divesture of the Supermetals Business and, in the first nine months of fiscal 2011, certain tax settlements in connection with other discontinued operations. | ||||||||||||||||||
CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS | |||||||||||||||||
Periods ended June 30 | Three Months | Nine Months | |||||||||||||||
Dollars in millions, except per share amounts (unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||||
Sales | |||||||||||||||||
Core Segment - Rubber blacks (A) | $ | 517 | $ | 528 | $ | 1,540 | $ | 1,424 | |||||||||
Performance Segment | 247 | 240 | 687 | 652 | |||||||||||||
Performance products | 181 | 173 | 505 | 464 | |||||||||||||
Fumed metal oxides | 66 | 67 | 182 | 188 | |||||||||||||
New Business Segment | 29 | 33 | 84 | 89 | |||||||||||||
Inkjet colorants | 18 | 20 | 48 | 50 | |||||||||||||
Aerogel | 3 | 8 | 12 | 19 | |||||||||||||
Superior MicroPowders | 2 | 2 | 7 | 8 | |||||||||||||
Cabot Elastomer Composites | 6 | 3 | 17 | 12 | |||||||||||||
Specialty Fluids Segment | 28 | 12 | 69 | 42 | |||||||||||||
Segment sales | 821 |
|
813 | 2,380 |
|
2,207 | |||||||||||
Unallocated and other (B) | 25 | 23 | 72 | 62 | |||||||||||||
Net sales and other operating revenues | $ | 846 | $ | 836 | $ | 2,452 | $ | 2,269 | |||||||||
Segment Earnings Before Interest and Taxes | |||||||||||||||||
Core Segment - Rubber blacks (A) | $ | 59 | $ | 57 | $ | 186 | $ | 145 | |||||||||
Performance Segment | 38 | 43 | 94 | 113 | |||||||||||||
New Business Segment | 1 | 3 | 1 | 7 | |||||||||||||
Specialty Fluids Segment | 11 | 3 | 32 | 10 | |||||||||||||
Total Segment Earnings Before Interest and Taxes (C) | 109 | 106 | 313 | 275 | |||||||||||||
Unallocated and Other | |||||||||||||||||
Interest expense | (11 | ) | (9 | ) | (30 | ) | (29 | ) | |||||||||
Certain items (D) | (7 | ) | (5 | ) | (21 | ) | (16 | ) | |||||||||
Unallocated corporate costs | (12 | ) | (13 | ) | (44 | ) | (40 | ) | |||||||||
General unallocated income (expense) (E) | 3 | (15 | ) | (1 | ) | (28 | ) | ||||||||||
Less: Equity in net earnings of affiliated companies, net of tax | (4 | ) | (2 | ) | (8 | ) | (6 | ) | |||||||||
Income from continuing operations before income taxes and equity in net earnings of affiliated companies |
78 | 62 | 209 | 156 | |||||||||||||
Provision for income taxes (including tax certain items) | (16 | ) | (10 | ) | (55 | ) | (4 | ) | |||||||||
Equity in net earnings of affiliated companies, net of tax | 4 | 2 | 8 | 6 | |||||||||||||
Income from continuing operations | 66 | 54 | 162 | 158 | |||||||||||||
Income from discontinued operations, net of tax (F) | 4 | 13 | 204 | 45 | |||||||||||||
Net income | 70 | 67 | 366 | 203 | |||||||||||||
Net income attributable to noncontrolling interests, net of tax | 4 | 7 | 14 | 17 | |||||||||||||
Net income attributable to Cabot Corporation | $ | 66 | $ | 60 | $ | 352 | $ | 186 | |||||||||
Diluted earnings per share of common stock attributable to Cabot Corporation |
|||||||||||||||||
Continuing operations (A) | $ | 0.96 | $ | 0.73 | $ | 2.29 | $ | 2.13 | |||||||||
Discontinued operations (F) | 0.06 | 0.19 | 3.14 | 0.68 | |||||||||||||
Net income attributable to Cabot Corporation | $ | 1.02 | $ | 0.92 | $ | 5.43 | $ | 2.81 | |||||||||
Adjusted earnings per share | |||||||||||||||||
Adjusted EPS (G) | $ | 1.00 | $ | 0.76 | $ | 2.59 | $ | 1.88 | |||||||||
Weighted average common shares outstanding | |||||||||||||||||
Diluted | 64.3 | 65.6 | 64.2 | 65.4 | |||||||||||||
(A) In the fourth quarter of fiscal 2011, Cabot entered into an agreement to sell the Supermetals Business ("CSM"). This transaction closed in January 2012. The results of CSM are presented as Discontinued Operations for all periods. | |||||||||||||||||
(B) Unallocated and other reflects royalties paid by equity affiliates, other operating revenues, external shipping and handling fees, and the impact of unearned revenue. | |||||||||||||||||
(C) 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 net earnings of affiliated companies, royalty income, and allocated corporate costs. | |||||||||||||||||
(D) Details of certain items are presented in the Certain Items and Reconciliation of Adjusted EPS table. | |||||||||||||||||
(E) General unallocated income (expense) includes foreign currency transaction gains (losses), interest income, dividend income, the profit related to unearned revenue, and the impact of LIFO accounting. | |||||||||||||||||
(F) Amounts relate to the divesture of the CSM business as discussed in note (A), and in the first nine months of fiscal 2011, certain tax settlements in connection with other discontinued operations. | |||||||||||||||||
(G) 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 table. | |||||||||||||||||
CABOT CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||||
June 30, | September 30, | ||||||
2012 | 2011 | ||||||
Dollars in millions, except share and per share amounts | (unaudited) | (audited) | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 407 | $ | 286 | |||
Accounts and notes receivable, net of reserve for doubtful accounts of $4 and $4 | 710 | 659 | |||||
Inventories: | |||||||
Raw materials | 113 | 120 | |||||
Work in process | 3 | 3 | |||||
Finished goods | 255 | 233 | |||||
Other | 40 | 37 | |||||
Total inventories | 411 | 393 | |||||
Prepaid expenses and other current assets | 64 | 76 | |||||
Deferred income taxes | 25 | 35 | |||||
Current assets held for sale (A) | - | 106 | |||||
Total current assets | 1,617 | 1,555 | |||||
Net property, plant and equipment | 1,073 | 1,036 | |||||
Goodwill | 40 | 40 | |||||
Equity affiliates | 69 | 60 | |||||
Assets held for rent | 47 | 46 | |||||
Notes receivable for sale of business | 243 | - | |||||
Deferred income taxes | 187 | 261 | |||||
Other assets | 93 | 104 | |||||
Non-current assets held for sale (A) | - | 39 | |||||
Total assets | $ | 3,369 | $ | 3,141 | |||
(A) Includes amounts related to the Supermetals Business. |
|||||||
CABOT CORPORATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||||||
June 30, | September 30, | ||||||||
2012 | 2011 | ||||||||
Dollars in millions, except share and per share amounts | (unaudited) | (audited) | |||||||
Current liabilities: | |||||||||
Notes payable to banks | $ | 102 | $ | 86 | |||||
Accounts payable and accrued liabilities | 440 | 461 | |||||||
Income taxes payable | 43 | 34 | |||||||
Deferred income taxes | 7 | 6 | |||||||
Current portion of long-term debt | 38 | 57 | |||||||
Current liabilities held for sale (A) | - | 12 | |||||||
Total current liabilities | 630 | 656 | |||||||
Long-term debt | 559 | 556 | |||||||
Deferred income taxes | 10 | 8 | |||||||
Other liabilities | 280 | 299 | |||||||
Non-current liabilities held for sale (A) | - | 6 | |||||||
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 value | |||||||||
Issued: 63,538,821 and 63,894,443 shares | |||||||||
Outstanding: 63,284,702 and 63,860,777 shares | 64 | 64 | |||||||
Less cost of 254,119 and 33,666 shares of common treasury stock | (8 | ) | (1 | ) | |||||
Additional paid-in capital | 16 | 18 | |||||||
Retained earnings | 1,630 | 1,314 | |||||||
Deferred employee benefits | (10 | ) | (14 | ) | |||||
Accumulated other comprehensive income | 71 | 106 | |||||||
Total Cabot Corporation stockholders' equity | 1,763 | 1,487 | |||||||
Noncontrolling interests | 127 | 129 | |||||||
Total equity | 1,890 | 1,616 | |||||||
Total liabilities and equity | $ | 3,369 | $ | 3,141 | |||||
(A) Includes amounts related to the Supermetals Business. |
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CABOT CORPORATION | ||||||||||||||||||||||||||||||||||||||||
Fiscal 2011 | Fiscal 2012 | |||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||
Core Segment - Rubber blacks (A) | 438 | 458 | 528 | 528 | 1,952 | 489 | 534 | 517 | 1,540 | |||||||||||||||||||||||||||||||
Performance Segment | 190 | 222 | 240 | 228 | 880 | 205 | 235 | 247 | 687 | |||||||||||||||||||||||||||||||
Performance products | 132 | 159 | 173 | 162 | 626 | 151 | 173 | 181 | 505 | |||||||||||||||||||||||||||||||
Fumed metal oxides | 58 | 63 | 67 | 66 | 254 | 54 | 62 | 66 | 182 | |||||||||||||||||||||||||||||||
New Business Segment | 24 | 32 | 33 | 28 | 117 | 25 | 30 | 29 | 84 | |||||||||||||||||||||||||||||||
Inkjet colorants | 14 | 16 | 20 | 15 | 65 | 15 | 15 | 18 | 48 | |||||||||||||||||||||||||||||||
Aerogel | 3 | 8 | 8 | 5 | 24 | 4 | 5 | 3 | 12 | |||||||||||||||||||||||||||||||
Superior MicroPowders | 3 | 3 | 2 | 3 | 11 | 2 | 3 | 2 | 7 | |||||||||||||||||||||||||||||||
Cabot Elastomer Composites | 4 | 5 | 3 | 5 | 17 | 4 | 7 | 6 | 17 | |||||||||||||||||||||||||||||||
Specialty Fluids Segment | 17 | 13 | 12 | 27 | 69 | 14 | 27 | 28 | 69 | |||||||||||||||||||||||||||||||
Segment Sales | 669 | 725 | 813 | 811 | 3,018 | 733 | 826 | 821 | 2,380 | |||||||||||||||||||||||||||||||
Unallocated and other (B) | 25 | 14 | 23 | 22 | 84 | 29 | 18 | 25 | 72 | |||||||||||||||||||||||||||||||
Net sales and other operating revenues | $ | 694 | $ | 739 | $ | 836 | $ | 833 | $ | 3,102 | $ | 762 | $ | 844 | $ | 846 | $ | 2,452 | ||||||||||||||||||||||
Segment Earnings Before Interest and Taxes | ||||||||||||||||||||||||||||||||||||||||
Core Segment - Rubber blacks (A) | 37 | 51 | 57 | 38 | 183 | 55 | 72 | 59 | 186 | |||||||||||||||||||||||||||||||
Performance Segment | 31 | 39 | 43 | 27 | 140 | 21 | 35 | 38 | 94 | |||||||||||||||||||||||||||||||
New Business Segment | - | 4 | 3 | 2 | 9 | - | - | 1 | 1 | |||||||||||||||||||||||||||||||
Specialty Fluids Segment | 6 | 1 | 3 | 12 | 22 | 5 | 16 | 11 | 32 | |||||||||||||||||||||||||||||||
Total Segment Earnings Before Interest and Taxes (C) | 74 | 95 | 106 | 79 | 354 | 81 | 123 | 109 | 313 | |||||||||||||||||||||||||||||||
Unallocated and Other | ||||||||||||||||||||||||||||||||||||||||
Interest expense | (10 | ) | (10 | ) | (9 | ) | (10 | ) | (39 | ) | (10 | ) | (9 | ) | (11 | ) | (30 | ) | ||||||||||||||||||||||
Certain items (D) | (4 | ) | (7 | ) | (5 | ) | (3 | ) | (19 | ) | (5 | ) | (9 | ) | (7 | ) | (21 | ) | ||||||||||||||||||||||
Unallocated corporate costs | (12 | ) | (15 | ) | (13 | ) | (13 | ) | (53 | ) | (14 | ) | (18 | ) | (12 | ) | (44 | ) | ||||||||||||||||||||||
General unallocated income (expense) (E) | 1 | (14 | ) | (15 | ) | (4 | ) | (32 | ) | 4 | (8 | ) | 3 | (1 | ) | |||||||||||||||||||||||||
Less: Equity in net earnings of affiliated companies, net of tax | (3 | ) | (1 | ) | (2 | ) | (2 | ) | (8 | ) | (1 | ) | (3 | ) | (4 | ) | (8 | ) | ||||||||||||||||||||||
Income from continuing operations before income taxes and equity in net earnings of affiliated companies |
46 | 48 | 62 | 47 | 203 | 55 | 76 | 78 | 209 | |||||||||||||||||||||||||||||||
Benefit (provision) for income taxes (including tax certain items) | 15 | (9 | ) | (10 | ) | (2 | ) | (6 | ) | (16 | ) | (23 | ) | (16 | ) | (55 | ) | |||||||||||||||||||||||
Equity in net earnings of affiliated companies, net of tax | 3 | 1 | 2 | 2 | 8 | 1 | 3 | 4 | 8 | |||||||||||||||||||||||||||||||
Income from continuing operations | 64 | 40 | 54 | 47 | 205 | 40 | 56 | 66 | 162 | |||||||||||||||||||||||||||||||
Income from discontinued operations, net of tax (F) | 16 | 16 | 13 | 8 | 53 | 11 | 189 | 4 | 204 | |||||||||||||||||||||||||||||||
Net income | 80 | 56 | 67 | 55 | 258 | 51 | 245 | 70 | 366 | |||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests, net of tax | 5 | 5 | 7 | 5 | 22 | 5 | 5 | 4 | 14 | |||||||||||||||||||||||||||||||
Net income attributable to Cabot Corporation | $ | 75 | $ | 51 | $ | 60 | $ | 50 | $ | 236 | $ | 46 | $ | 240 | $ | 66 | $ | 352 | ||||||||||||||||||||||
Diluted earnings per share of common stock attributable to Cabot Corporation |
||||||||||||||||||||||||||||||||||||||||
Continuing operations (A) | $ | 0.88 | $ | 0.52 | $ | 0.73 | $ | 0.64 | $ | 2.77 | $ | 0.55 | $ | 0.78 | $ | 0.96 | $ | 2.29 | ||||||||||||||||||||||
Discontinued operations (F) | 0.25 | 0.24 | 0.19 | 0.12 | 0.80 | 0.16 | 2.92 | 0.06 | 3.14 | |||||||||||||||||||||||||||||||
Net income attributable to Cabot Corporation | $ | 1.13 | $ | 0.76 | $ | 0.92 | $ | 0.76 | $ | 3.57 | $ | 0.71 | $ | 3.70 | $ | 1.02 | $ | 5.43 | ||||||||||||||||||||||
Adjusted earnings per share | ||||||||||||||||||||||||||||||||||||||||
Adjusted EPS (G) | $ | 0.55 | $ | 0.57 | $ | 0.76 | $ | 0.55 | $ | 2.43 | $ | 0.63 | $ | 0.96 | $ | 1.00 | $ | 2.59 | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||||||||||||||||
Diluted | 65.2 | 65.5 | 65.6 | 65.5 | 65.4 | 64.2 | 64.0 | 64.3 | 64.2 | |||||||||||||||||||||||||||||||
(A) In the fourth quarter of fiscal 2011, Cabot entered into an agreement to sell the Supermetals Business ("CSM"). This transaction closed in January 2012. The results of CSM are presented as Discontinued Operations for all periods. | ||||||||||||||||||||||||||||||||||||||||
(B) Unallocated and other reflects royalties paid by equity affiliates, other operating revenues, external shipping and handling fees, and the impact of unearned revenue. | ||||||||||||||||||||||||||||||||||||||||
(C) 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 net earnings of affiliated companies, royalty income, and allocated corporate costs. | ||||||||||||||||||||||||||||||||||||||||
(D) Details of certain items are presented in the Certain Items and Reconciliation of Adjusted EPS table. | ||||||||||||||||||||||||||||||||||||||||
(E) General unallocated income (expense) includes foreign currency transaction gains (losses), interest income, dividend income, the profit related to unearned revenue, and the impact of LIFO accounting. | ||||||||||||||||||||||||||||||||||||||||
(F) Amounts relate to the divesture of the CSM business as discussed in note (A), and in fiscal year 2011, certain tax and legal settlements in connection with other discontinued operations. | ||||||||||||||||||||||||||||||||||||||||
(G) 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 table. | ||||||||||||||||||||||||||||||||||||||||
CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS | ||||||||||||||||||||||||||||||||||||||||
TABLE 1: DETAIL OF CERTAIN ITEMS: | ||||||||||||||||||||||||||||||||||||||||
Periods ended June 30 | Three Months | Nine Months | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||
Dollars in millions, except per share amounts (unaudited) |
Dollars in Millions |
Per Share After Tax | ||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||||
$ | $ | $ | $ | per share(A) | per share(A) | per share(A) | per share(A) | |||||||||||||||||||||||||||||||||
Certain items before and after income taxes |
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Global restructuring activities | $ | (2 | ) | $ | (5 | ) | $ | (14 | ) | $ | (16 | ) | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.21 | ) | ||||||||||||||||
Acquisition costs | (5 | ) | - | (5 | ) | - | (0.09 | ) | - | (0.09 | ) | - | ||||||||||||||||||||||||||||
Environmental reserves and legal settlements | - | - | (2 | ) | - | - | - | (0.02 | ) | - | ||||||||||||||||||||||||||||||
Total certain items before tax | (7 | ) | (5 | ) | (21 | ) | (16 | ) | (0.11 | ) | (0.09 | ) | (0.31 | ) | (0.21 | ) | ||||||||||||||||||||||||
Tax impact of certain items | - | (1 | ) | 2 | 2 | |||||||||||||||||||||||||||||||||||
Tax impact of Japan foreign exchange losses | 1 | - | (2 | ) | - | 0.01 | - | (0.04 | ) | - | ||||||||||||||||||||||||||||||
Discrete tax items | 3 | 3 | 2 | 29 | 0.06 | 0.06 | 0.05 | 0.46 | ||||||||||||||||||||||||||||||||
Total tax certain items | 4 | 2 | 2 | 31 | 0.07 | 0.06 | 0.01 | 0.46 | ||||||||||||||||||||||||||||||||
Total certain items after tax | (3 | ) | (3 | ) | (19 | ) | 15 | (0.04 | ) | (0.03 | ) | (0.30 | ) | 0.25 | ||||||||||||||||||||||||||
Discontinued operations after income taxes (B) |
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CSM business divestiture after tax | 4 | 13 | 204 | 44 | 0.06 | 0.19 | 3.14 | 0.66 | ||||||||||||||||||||||||||||||||
Discontinued operations after tax - other | - | - | - | 1 | - | - | - | 0.02 | ||||||||||||||||||||||||||||||||
Total discontinued operations after tax | $ | 4 | $ | 13 | $ | 204 | $ | 45 | $ | 0.06 | $ | 0.19 | $ | 3.14 | $ | 0.68 | ||||||||||||||||||||||||
TABLE 2: CERTAIN ITEMS STATEMENT OF OPERATIONS LINE ITEM | ||||||||||||||||||||||||||||||||||||||||
Periods ended June 30 | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||
Dollars in millions, Pre-Tax (unaudited) | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||
Statement of Operations Line Item |
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Cost of sales | $ | (2 | ) | $ | (5 | ) | $ | (14 | ) | $ | (15 | ) | ||||||||||||||||||||||||||||
Selling and administrative expenses | $ | (5 | ) | - | (7 | ) | (1 | ) | ||||||||||||||||||||||||||||||||
Total certain items | $ | (7 | ) | $ | (5 | ) | $ | (21 | ) | $ | (16 | ) | ||||||||||||||||||||||||||||
TABLE 3: RECONCILIATION OF TAX CERTAIN ITEMS | ||||||||||||||||||||||||||||||||||||||||
Periods ended June 30 | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||
Dollars in millions (unaudited) | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||
Reconciliation of Provision for income taxes, excluding certain items to Provision for income taxes |
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Provision for income taxes | $ | (16 | ) | $ | (10 | ) | $ | (55 | ) | $ | (4 | ) | ||||||||||||||||||||||||||||
Less: Tax certain items | 4 | 2 | 2 | 31 | ||||||||||||||||||||||||||||||||||||
Provision for income taxes, excluding certain items | $ | (20 | ) | $ | (12 | ) | $ | (57 | ) | $ | (35 | ) | ||||||||||||||||||||||||||||
TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER FISCAL 2011 and FISCAL 2012 | ||||||||||||||||||||||||||||||||||||||||
NON-GAAP MEASURE: | ||||||||||||||||||||||||||||||||||||||||
Periods ended (unaudited) | Fiscal 2011(A) | Fiscal 2012(A) | ||||||||||||||||||||||||||||||||||||||
Per Share, After Tax | FY 2012 | |||||||||||||||||||||||||||||||||||||||
Dec. Q | Mar. Q | Jun. Q | Sept. Q | FY 2011 | Dec. Q | Mar. Q | Jun. Q | YTD | ||||||||||||||||||||||||||||||||
Reconciliation of Adjusted EPS to GAAP EPS |
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Net income per share attributable to Cabot Corporation | $ | 1.13 | $ | 0.76 | $ | 0.92 | $ | 0.76 | $ | 3.57 | $ | 0.71 | $ | 3.70 | $ | 1.02 | $ | 5.43 | ||||||||||||||||||||||
Less: Net income per share from discontinued operations(B) | 0.25 | 0.24 | 0.19 | 0.12 | 0.80 | 0.16 | 2.92 | 0.06 | 3.14 | |||||||||||||||||||||||||||||||
Net income per share from continuing operations | $ | 0.88 | $ | 0.52 | $ | 0.73 | $ | 0.64 | $ | 2.77 | $ | 0.55 | $ | 0.78 | $ | 0.96 | $ | 2.29 | ||||||||||||||||||||||
Less: Certain items after tax | 0.33 | (0.05 | ) | (0.03 | ) | 0.09 | 0.34 | (0.08 | ) | (0.18 | ) | (0.04 | ) | (0.30 | ) | |||||||||||||||||||||||||
Adjusted earnings per share | $ | 0.55 | $ | 0.57 | $ | 0.76 | $ | 0.55 | $ | 2.43 | $ | 0.63 | $ | 0.96 | $ | 1.00 | $ | 2.59 | ||||||||||||||||||||||
(A) Per share amounts are calculated after tax. | ||||||||||||||||||||||||||||||||||||||||
(B) Amounts relate primarily to the divesture of the Supermetals Business. |
Source:
Cabot Corporation
Investor Contact:
Erica McLaughlin, 617-342-6090