1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended MARCH 31, 1994 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ COMMISSION FILE NUMBER 1-5667 CABOT CORPORATION (Exact name of registrant as specified in its charter) Registrant's telephone number, including area code: (617) 345-0100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---------------------- -------------------- Indicate the number of shares outstanding of each of the classes of Common Stock, as of the latest practicable date. AS OF MARCH 31, 1994, THE COMPANY HAD 18,788,487 SHARES OF COMMON STOCK, PAR VALUE $1 PER SHARE, OUTSTANDING.
DELAWARE 04-2271897 (State of Incorporation) (I.R.S. Employer Identification No.) 75 STATE STREET 02109-1806 BOSTON, MASSACHUSETTS (Zip Code) (Address of principal executive offices) 2 CABOT CORPORATION INDEX TO FINANCIAL STATEMENTS - 2 -
Part I. Financial Information Page No. -------- Item 1. Financial Statements (Unaudited) Consolidated Statements of Income Three Months Ended March 31, 1994 and 1993 3 Consolidated Statements of Income Six Months Ended March 31, 1994 and 1993 4 Consolidated Balance Sheets March 31, 1994 and September 30, 1993 5 Consolidated Statements of Cash Flows Six Months Ended March 31, 1994 and 1993 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Part II. Other Information Item 4. Submissions of Matters to a Vote of Security Holders 13 Item 6. Exhibits and Reports on Form 8-K 13 3 CABOT CORPORATION CONSOLIDATED STATEMENTS OF INCOME Three Months Ended March 31, 1994 and 1993 (Dollars in thousands, except per share amounts) UNAUDITED The accompanying notes are an integral part of these financial statements. - 3 -
1994 1993 Revenues: Net sales and other operating revenues $ 434,860 $ 407,580 Interest and dividend income 1,056 903 ------------- ------------ Total revenues 435,916 408,483 ------------- ------------ Costs and expenses: Cost of sales 319,321 305,992 Selling and administrative expenses 52,855 50,155 Research and technical service 12,186 10,475 Interest expense 10,305 11,493 Other (income) expense, net 6,272 7,768 ------------- ------------ Total costs and expenses 400,939 385,883 ------------- ------------ Income before income taxes 34,977 22,600 Provision for income taxes (12,771) (9,380) Equity in net income of affiliated companies 142 736 ------------- ------------ Net income 22,348 13,956 ------------- ------------ Dividends on preferred stock, net of tax benefit of $483 and $474, respectively (897) (919) ------------- ------------ Income applicable to primary common shares $ 21,451 $ 13,037 ============= ============ Weighted average common shares outstanding (000): Primary 19,089 18,602 Fully diluted (Note A) 20,652 20,193 Income per common share: Primary $ 1.12 $ 0.70 ============= ============ Fully diluted (Note A) $ 1.05 $ 0.66 ============= ============ Dividends per common share $ 0.26 $ 0.26 ============= ============ 4 CABOT CORPORATION CONSOLIDATED STATEMENTS OF INCOME Six Months Ended March 31, 1994 and 1993 (Dollars in thousands, except per share amounts) UNAUDITED
The accompanying notes are an integral part of these financial statements. - 4 -1994 1993 Revenues: Net sales and other operating revenues $ 833,335 $ 803,684 Interest and dividend income 2,034 2,352 ----------- ---------- Total revenues 835,369 806,036 ----------- ---------- Costs and expenses: Cost of sales 616,072 606,302 Selling and administrative expenses 103,884 100,804 Research and technical service 23,907 20,504 Interest expense 20,564 22,489 Other (income) expense, net 9,931 10,987 ----------- ---------- Total costs and expenses 774,358 761,086 ----------- ---------- Income before income taxes 61,011 44,950 Provision for income taxes (23,184) (18,465) Equity in net income (loss) of affiliated companies 479 (602) ----------- ---------- Income before cumulative effect of accounting changes 38,306 25,883 Cumulative effect of accounting changes - (26,109) ----------- ---------- Net income (loss) 38,306 (226) ----------- ---------- Dividends on preferred stock, net of tax benefit of $967 and $948, respectively (1,796) (1,839) ----------- ---------- Income (loss) applicable to primary common shares $ 36,510 $ (2,065) =========== ========== Weighted average common shares outstanding (000): Primary 19,084 18,644 Fully diluted (Note A) 20,641 20,216 Income (loss) per common share: Primary Continuing operations $ 1.91 $ 1.29 Cumulative effect of accounting changes - (1.40) ----------- ---------- Income (loss) per share $ 1.91 $ (0.11) =========== ========== Fully diluted (Note A) Continuing operations $ 1.80 $ 1.29 Cumulative effect of accounting changes - (1.40) ----------- ---------- Income (loss) per share $ 1.80 $ (0.11) =========== ========== Dividends per common share $ 0.52 $ 0.52 =========== ========== 5 CABOT CORPORATION CONSOLIDATED BALANCE SHEETS March 31, 1994 and September 30, 1993 (Dollars in thousands) ASSETS The accompanying notes are an integral part of these financial statements. - 5 -
March 31 September 30 1994 1993 (Unaudited) Current assets: Cash and cash equivalents $ 35,028 $ 40,267 Accounts and notes receivable (net of reserve for doubtful accounts of $6,831and $6,321) 278,724 258,057 Inventories: Raw materials 50,490 45,589 Work in process 31,181 36,923 Finished goods 99,420 77,747 Other 35,805 35,091 ---------- ---------- Total inventories 216,896 195,350 Prepaid expenses 15,086 8,771 Deferred income taxes 33,828 41,761 ---------- ---------- Total current assets 579,562 544,206 ---------- ---------- Investments: At equity 163,258 166,669 At cost 7,915 7,911 ---------- ---------- Total investments 171,173 174,580 ---------- ---------- Property, plant and equipment: At cost 1,272,090 1,250,228 Accumulated depreciation and amortization (635,739) (603,708) ---------- ---------- Net property, plant and equipment 636,351 646,520 Other assets: Intangible assets, net of amortization 75,779 78,873 Deferred income taxes 7,311 5,752 Other assets 34,626 39,542 ---------- ---------- Total other assets 117,716 124,167 ---------- ---------- Total assets $1,504,802 $1,489,473 =========== =========== 6 CABOT CORPORATION CONSOLIDATED BALANCE SHEETS March 31, 1994 and September 30, 1993 (Dollars in thousands) LIABILITIES & STOCKHOLDERS' EQUITY
The accompanying notes are an integral part of these financial statements. - 6 -March 31 September 30 1994 1993 (Unaudited) Current liabilities: Notes payable to banks $ 49,650 $ 1,501 Current portion of long-term debt 156,148 29,205 Accounts payable and accrued liabilities 280,609 297,201 U.S. and foreign income taxes payable 14,191 25,029 Deferred income taxes 1,193 1,285 ---------- ---------- Total current liabilities 501,791 354,221 Long-term debt 294,279 459,275 Deferred income taxes 98,790 86,344 Other liabilities 136,999 147,360 Commitments and contingencies (Note B) Stockholders' Equity: (Note C) Preferred stock: Authorized: 2,000,000 shares of $1 par value Series A Junior Participating Preferred Stock Issued and outstanding: none Series B ESOP Convertible Preferred Stock 7.75% Cumulative Issued: 75,336 shares (aggregate redemption value $73,975 and $74,982) 75,336 75,336 Less cost of shares of preferred treasury stock (3,548) (3,003) Common stock: Authorized: 80,000,000 shares of $1 par value Issued: 33,887,484 shares 33,887 33,887 Additional paid-in capital 34,610 33,621 Retained earnings 888,552 861,803 Less cost of common treasury stock (including unearned amounts of $6,195 and $7,321) (480,158) (483,184) Deferred employee benefits (68,106) (68,781) Foreign currency translation adjustments (7,630) (7,406) ---------- ---------- Total stockholders' equity 472,943 442,273 ---------- ---------- Total liabilities and stockholders' equity $1,504,802 $1,489,473 ========== ========== 7 CABOT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended March 31, 1994 and 1993 (Dollars in thousands) UNAUDITED
The accompanying notes are an integral part of these financial statements. - 7 -1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 38,306 $ (226) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation and amortization 42,141 42,126 Deferred tax provision 7,369 1,125 Gain on sale of investments - (2,841) Effects of accounting changes - 26,109 Equity in net income/loss of affiliated companies, net of dividends received 2,689 3,119 Other, net 1,789 (856) Changes in assets and liabilities: Increase in accounts receivable (20,504) (22,181) Increase in inventory (21,473) (232) (Decrease) increase in accounts payable and accruals (16,218) 9,932 (Increase) decrease in prepayments and intangible assets (1,951) 10,461 Other, net (8,805) (138) -------- -------- Cash provided by operating activities 23,343 66,398 Cash flows from investing activities: Additions to property, plant and equipment (28,759) (29,446) Investments (284) (16,198) Sales of investments and property, plant and equipment 77 3,156 --------- --------- Cash used by investing activities (28,966) (42,488) Cash flows from financing activities: Proceeds from long-term debt - 7,789 Reduction in long-term debt (15,221) (4,567) Increase (decrease) in short-term debt 24,943 (20,449) Sales of treasury stock, net 2,078 6,434 Cash dividends paid to stockholders (11,556) (11,444) --------- --------- Cash provided (used) by financing activities 244 (22,237) Effect of exchange rate changes on cash 140 (2,246) --------- --------- Decrease in cash and cash equivalents (5,239) (573) Cash and cash equivalents at beginning of period 40,267 30,656 --------- --------- Cash and cash equivalents at end of period $ 35,028 $ 30,083 ========= ========= 8 CABOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1994 A. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Cabot Corporation and all majority-owned and controlled domestic and foreign subsidiaries. Investments in majority-owned affiliates where control is temporary and investments in 20 percent- to 50 percent-owned affiliates are accounted for on the equity method. All significant intercompany transactions have been eliminated. The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to the Company's Form 10-K for the year ended September 30, 1993. The financial information submitted herewith is unaudited and reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods ended March 31, 1994 and 1993. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the fiscal year. During the fourth quarter of fiscal 1993, the Company adopted two new accounting standards related to postretirement benefits and income taxes. Both of these standards were adopted as of October 1, 1992, and as a result, the income statement and the statement of cash flows for the six months ending March 31, 1993 have been restated. Earnings Per Share The computation of fully diluted earnings per share considers the conversion of the Company's Series B ESOP Convertible Preferred Stock held by the Company's Employee Stock Ownership Plan, and also includes the potentially dilutive effects of the Company's Equity Incentive Plan. B. CONTINGENCIES The Company is a defendant in various lawsuits and is involved in other gas contract issues and environmental proceedings wherein substantial amounts are claimed. In the opinion of the Company's management, these suits and claims should not result in final judgments or settlements which, in the aggregate, would have a material adverse effect on the Company's financial condition. Fumed silica supplied by Cabot was used by others in the manufacture of silicone breast implant envelopes. There are currently pending more than 10,000 lawsuits in state and federal courts alleging injuries arising from the use of silicone breast implants. The federal cases have been consolidated in the Multi-District Litigation pending in the United States District Court for the Northern District of Alabama. Generally, the various state cases have been similarly consolidated in each jurisdiction. In addition, arrangements have been made for consolidated discovery in all actions. Cabot has been named as a defendant in fewer than 100 of those lawsuits, although additional lawsuits have been threatened and are expected to be brought in due course. Cabot believes that it has adequate defenses in each of the lawsuits in which it is a defendant. However, the scientific, legal and societal issues raised by these cases are complex and the outcome is uncertain. Cabot is still evaluating the litigation and therefore cannot predict with any assurance the course this litigation will take, the number of cases to which Cabot will be added as a defendant, the amount of damages, if any, that may be assessed against Cabot or the defense costs that will be incurred by Cabot. - 8 - 9 CABOT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) March 31, 1994 UNAUDITED C. STOCKHOLDERS' EQUITY The following table summarizes the changes in stockholders' equity for the six months ended March 31, 1994. (Dollars in thousands)
Preferred Stock Preferred Common Stock Additional --------------- ------------ Shares Treasury Stock Shares Paid-In Retained -------------- Issued Value Shares Cost Issued Value Capital Earnings ------ ----- ------ ---- ------ ----- ------- -------- Balance at September 30, 1993 75,336 $75,336 3,686 $(3,003) 33,887,484 $33,887 $33,621 $861,803 Net income 38,306 Common stock dividends paid (9,761) Net issuance of treasury stock under employee compensation plans 356 Purchase of treasury stock-preferred 435 (545) Sale of treasury stock to Profit Sharing and Savings Plan 633 Preferred stock dividends paid to Employee Stock Ownership Plan, net of tax (1,796) Principal payment by Employee Stock Ownership Plan under guaranteed loan Amortization of unearned compensation Foreign currency translation adjustments ------ ------- ----- -------- ---------- ------- ------- -------- Balance at March 31, 1994 75,336 $75,336 4,121 $(3,548) 33,887,484 $33,887 $34,610 $888,552 ====== ======= ===== ======== ========== ======= ======= ======== 9
Foreign Total Common Deferred Currency Stock- Treasury Stock Unearned Employee Translation Holders' -------------- Shares Cost Compensation Benefits Adjustments Equity ------ ---- ------------ -------- ------------ ------ Balance at September 30, 1993 15,161,103 $(475,863) $(7,321) $(68,781) $(7,406) $ 442,273 Net income 38,306 Common stock dividends paid (9,761) Net issuance of treasury stock under employee compensation plans (42,316) 1,275 (266) 1,365 Purchase of treasury stock-preferred (545) Sale of treasury stock to Profit Sharing and Savings Plan (19,790) 625 1,258 Preferred stock dividends paid to Employee Stock Ownership Plan, net of tax (1,796) Principal payment by Employee Stock Ownership Plan under guaranteed loan 675 675 Amortization of unearned compensation 1,392 1,392 Foreign currency translation adjustments (224) (224) ---------- ---------- -------- --------- ---------- --------- Balance at March 31, 1994 15,098,997 $(473,963) $(6,195) $(68,106) $ (7,630) $ 472,943 ========== ========== ======== ========= ========== ========= 10 CABOT CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations I. RESULTS OF OPERATIONS Sales and operating profit by industry segment are shown in the accompanying table on page 12. Three Months Ended March 31, 1994 versus Three Months Ended March 31, 1993 Net income for the second quarter of fiscal year 1994 was $22.3 million ($1.12 per primary common share), compared to $14.0 million ($0.70 per primary common share) in the same quarter a year ago. Net sales and other operating revenues increased $27.3 million to $434.9 million from $407.6 million last year. Total operating profit increased 26% to $52.4 million from $41.6 million last year, reflecting growth in both the Specialty Chemicals and Materials and Energy segments. In the Company's Specialty Chemicals and Materials Group, sales grew 3% to $305.7 million from $296.4 million, and operating profits increased 9% to $40.3 million from $37.0 million in the same quarter a year ago. Volume growth in most businesses more than offsets the volume declines which were expected in the Pacific Asia Carbon Black and the Cabot Performance Materials divisions. The Group also benefited from stronger margins than in the year ago quarter due primarily to lower raw material costs. Regionally, the Group benefited from strength in South America and has begun to see some signs of improvement in the Company's European businesses. The recessionary environment continues in Japan, and has negatively impacted overall performance in the Pacific region. In the Energy Group, sales rose 16%, or $18.0 million, to $129.2 million from $111.2 million. Operating profit grew to $12.1 million from $4.6 million. The gain is entirely attributable to the Company's LNG business, which benefited from improved margins helped by the unusually cold winter in the Northeast. By comparison, the March quarter, traditionally the strongest in Cabot's LNG business, was unusually weak in 1993 due to lower natural gas prices and changes in federal energy regulations. The LNG business imported 6 cargoes during the second quarter of 1994 versus 5 cargoes in the same quarter last year. Six Months Ended March 31, 1994 versus Six Months Ended March 31, 1993 For the six months ended March 31, 1994, net income was $38.3 million ($1.91 per primary common share) compared to a loss of $0.2 million ($0.11 loss per primary common share) in the same period a year ago. Prior year results include a $26.1 million after-tax charge ($1.40 per primary common share) associated with required accounting changes. Net income before these charges was $25.9 million ($1.29 per primary common share). Net sales rose 4% to $833.3 million compared with $803.7 million last year. Total operating profit increased 21% to $94.0 million from $77.4 million a year ago, reflecting gains in both business segments. In the Specialty Chemicals and Materials Group, sales were virtually unchanged from a year ago. Operating profit grew 14% to $76.2 million from $66.6 million due to higher volumes and improved margins derived from lower raw material costs. In the Energy Group, sales grew 14% to $249.4 million compared to $219.1 million a year ago. Operating profit increased 65% to $17.8 million from $10.8 million. The year-to-year improvement results from a strong second quarter in the Company's LNG business. A recovery in energy prices during the second quarter of fiscal 1994, and an improved pricing structure, more than offset first quarter shortfalls. As previously stated, favorable year-to-year comparisons are magnified by the unusually weak performance of the Company's LNG business during the first half of fiscal 1993. - 10 - 11 CABOT CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Interest expense declined 8% to $20.6 million in the first six months of fiscal 1994 compared to $22.5 million last year primarily as a result of lower average debt from a year ago and lower effective interest rates. The Company's tax rate was reduced from 40% to 38% for the fiscal year beginning October 1, 1993 due to more effective utilization of foreign tax credits. Although some signs of improvement have been seen in Europe, the Company's margins continue to be under pressure. The Company remains cautious about business conditions in that region. In Japan, operating results have worsened, and the Company expects to closely review carbon black capacity in that area. The Company's LNG business may experience reductions in supplies of LNG over the next year or so due to the previously announced refurbishment of its Algerian supplier's liquifaction facility. The effect on the Company will depend on the extent and timing of any reductions. The political uncertainties in Algeria have not, to date, adversely affected the Company's LNG supplies. The Company currently owns a 34.5% interest in American Oil and Gas Corporation (AOG/NYSE), whose operating results are reflected in Cabot's equity in net income of affiliates. On March 24, 1994, American Oil and Gas Corporation and K N Energy, Inc. (KNE/NYSE) jointly announced a merger that would combine the two companies. After completion of the transaction, Cabot is expected to own approximately 15% of the combined entity. The Company supports the recommendation of American Oil and Gas Corporation's board of directors in favor of the merger. II. CASH FLOWS AND LIQUIDITY During the first six months of fiscal 1994, the Company's operations provided $23.3 million of cash. This represents a 65% decrease from the same period last year reflecting a rebuilding of inventory levels by the Company's TUCO and LNG businesses, and a decrease in accounts payable and accrued expenses due to the settlement of the last significant, and previously reserved for, take-or-pay case. Spending on property, plant and equipment remained stable. Cabot increased its borrowings by $9.7 million during the first six months of the fiscal year. At March 31, 1994 there were no amounts borrowed under a $250 million line of credit available to the Company. The Company's ratio of total debt (including short term debt net of cash) to capital decreased to 49.6% from 50.4% at fiscal 1993 year-end. The Company believes its businesses can support higher-than-targeted leverage for an interim period as a result of investment in businesses that will contribute materially to the growth and stability of the Company's earnings. Management expects cash from operations and present financing arrangements, including the Company's unused line of credit, to be sufficient to meet the Company's cash requirements for the foreseeable future. - 11 - 12 CABOT CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions, except per share amounts)
Three Months Ended Six Months Ended 3/31/94 3/31/93 3/31/94 3/31/93 Industry Segment Data - - --------------------- Sales: Specialty Chemicals & Materials $ 305.7 $ 296.4 $ 583.9 $ 584.6 Energy 129.2 111.2 249.4 219.1 -------- -------- -------- -------- Net Sales $ 434.9 $ 407.6 $ 833.3 $ 803.7 ======== ========= ======== ======== Operating Profit: Specialty Chemicals & Materials $ 40.3 $ 37.0 $ 76.2 $ 66.6 Energy 12.1 4.6 17.8 10.8 -------- -------- -------- -------- Total operating profit $ 52.4 $ 41.6 $ 94.0 $ 77.4 Interest expense (10.3) (11.5) (20.6) (22.5) General corporate expense (7.1) (7.5) (12.4) (10.0) -------- -------- -------- -------- Income from continuing operations before income taxes 35.0 22.6 61.0 44.9 Provision for income taxes (12.8) (9.4) (23.2) (18.4) Equity in net income (loss) of affiliated companies 0.1 0.8 0.5 (0.6) -------- -------- -------- -------- Net income before the cumulative effect of accounting changes 22.3 14.0 38.3 25.9 Cumulative effect of accounting changes - - - (26.1) -------- -------- -------- -------- Net income (loss) $ 22.3 $ 14.0 $ 38.3 $ (0.2) Dividends on preferred stock (0.9) (0.9) (1.8) (1.8) -------- -------- -------- -------- Income (loss) applicable to primary common shares $ 21.4 $ 13.1 $ 36.5 $ (2.0) ======== ======== ======== ======== Income (loss) per common share: Primary Continuing operations $ 1.12 $ 0.70 $ 1.91 $ 1.29 Cumulative effect of accounting changes - - - (1.40) -------- -------- -------- -------- Income (loss) per share $ 1.12 $ 0.70 $ 1.91 $ (0.11) ======== ======== ======== ======== Fully Diluted Continuing operations $ 1.05 $ 0.66 $ 1.80 $ 1.29 Cumulative effect of accounting changes - - - (1.40) -------- -------- -------- -------- Income (loss) per share $ 1.05 $ 0.66 $ 1.80 $ (0.11) ======== ======== ======== ======== - 12 - 13 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders. - - ------------------------------------------------------------- The Annual Meeting of Stockholders of Cabot Corporation was held on February 11, 1994. An election of Directors was held at which Damaris Ames, Robert A. Charpie, Arnold S. Hiatt, David V. Ragone and Morris Tanenbaum were nominated and elected for terms which expire in 1997. The following votes were cast for or were withheld with respect to each of the nominees: No abstentions or broker nonvotes were cast in the election of Directors. Other Directors whose terms of office as Directors continued after the meeting are:
Director In Favor Of Withheld - - -------- ----------- -------- Damaris Ames 18,610,865 139,954 Robert A. Charpie 18,535,124 215,695 Arnold S. Hiatt 18,645,682 105,137 David V. Ragone 18,633,424 117,395 Morris Tanenbaum 18,651,092 99,727 Item 6. Exhibits and Reports on Form 8-K - - ------------------------------------------ (a) Exhibits -------- The Exhibit number corresponds to the number assigned to such Exhibits in the Exhibit Table of Item 601 of Regulation S-K.
Director Term of Office Expires - - -------- ---------------------- Samuel W. Bodman 1996 Jane C. Bradley 1996 Kennett F. Burnes 1995 John G.L. Cabot 1995 John D. Curtin, Jr. 1996 Robert P. Henderson 1995 Gerrit Jeelof 1996 John H. McArthur 1996 John F. O'Brien 1995 Charles P. Siess, Jr. 1995 (b) Reports on Form 8-K ------------------- No report on Form 8-K was filed by the Company during the six months ended March 31, 1994. - 13 -
Exhibit Number Description ------- ----------- 11 Statements regarding Computation of Per Share Earnings filed herewith. 12 Statement regarding Computation of Ratio of Earnings to Fixed Charges filed herewith. 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CABOT CORPORATION - 14 -
Date: May 13, 1994 /s/ John G.L. Cabot ---------------------------------------- John G.L. Cabot Vice Chairman and Chief Financial Officer Date: May 13, 1994 /s/ William R. Thompson ---------------------------------------- William R. Thompson Vice President and Controller (Chief Accounting Officer)
1 Exhibit 11 CABOT CORPORATION Earnings per Common Share for the Three Month Period Ended March 31, 1994 Statement Regarding Computation of Per Share Earnings (In thousands, except per share amounts)
========= =========Primary Fully Diluted Shares of common stock outstanding at January 1, 1994, less treasury stock 18,779 18,779 Plus net weighted shares of treasury stock issued 6 6 Plus common stock equivalents: Effect of convertible preferred stock conversion - 1,557 Effect of equity incentive awards 304 310 --------- --------- Weighted average shares outstanding 19,089 20,652 ========= ========= Income applicable to common shares $ 21,451 $ 21,451 Dividends on preferred stock - 897 Preferred stock conversion compensation shortfall - (624) --------- --------- Earnings applicable to common shares $ 21,451 $ 21,724 ========= ========= Earnings per common share $ 1.12 $ 1.05 2 EXHIBIT 11 CABOT CORPORATION Earnings per Common Share for the Six Month Period Ended March 31, 1994 Statement Regarding Computation of Per Share Earnings (In thousands, except per share amounts)
========= ========Primary Fully Diluted Shares of common stock outstanding at October 1, 1993, less treasury stock 18,726 18,726 Plus net weighted shares of treasury stock issued 44 44 Plus common stock equivalents: Effect of convertible preferred stock conversion - 1,557 Effect of equity incentive awards 314 314 --------- -------- Weighted average shares outstanding 19,084 20,641 ========= ======== Income applicable to common shares $ 36,510 $ 36,510 Dividends on preferred stock - 1,796 Preferred stock conversion compensation shortfall - (1,250) --------- -------- Earnings applicable to common shares $ 36,510 $ 37,056 ========= ======== Earnings per common share $ 1.91 $ 1.80
1 EXHIBIT 12 CABOT CORPORATION AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollar amounts in thousands)
* Earnings in fiscal 1989 were inadequate to cover fixed charges by $23,776. Operating profit for 1989 includes a $71,716 loss associated with the energy group restructuring and aggregate charges of $18,933 related to the reorganization of the Company's carbon black operations, streamlining of the ceramic packaging business, and provisions for environmental issues. Without these charges, the ratio of earnings to fixed charges would be 2.72 for 1989.Six Months Ended March 31 Years ended September 30 --------------------------------------------------------- 1994 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- ---- Earnings: Pre-tax income from continuing operations $61,011 $67,900 $116,599 $62,362 $63,983 $(25,480) Distributed income of affiliated companies 3,168 5,988 5,766 4,688 3,607 1,704 Add fixed charges: Interest on indebtedness 20,564 44,043 41,714 38,661 41,145 34,059 Portion of rents representative of the interest factor 2,576 4,838 4,933 5,715 5,226 4,764 ------- -------- -------- -------- -------- -------- Income as adjusted $87,319 $122,769 $169,012 $111,426 $113,961 $ 15,047 Fixed charges: Interest on indebtedness $20,564 $ 44,043 $ 41,714 $ 38,661 $ 41,145 $ 34,059 Capitalized interest - - 3,963 8,745 - - Portion of rents representative of the interest factor 2,576 4,838 4,933 5,715 5,226 4,764 ------- -------- -------- -------- -------- -------- Total fixed charges $23,140 $ 48,881 $ 50,610 $ 53,121 $ 46,371 $ 38,823 Ratio of earnings to fixed charges 3.77 2.51 3.34 2.10 2.46 * ======= ======== ======== ======== ========