CABOT CORP
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
CBT$71.05-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000950170-24-057010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091675
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 105 current paragraphs.
55 unchanged; 44 reworded; 6 added; 6 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Third quarter of Fiscal 2024 versus Third quarter of Fiscal 2023—Consolidated
Current report
For the three and nine months ended June 30, 2024, gross profit increased by $33 million and $106 million, respectively, compared to the same periods of fiscal 2023. The increase in Gross profit in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023 was driven primarily by higher volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $27 million). The increase in Gross profit in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 was driven primarily by higher volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $58 million) and higher unit margins, net of costs within both the Reinforcement Materials and Performance Chemicals segments (combined $44 million).
Current report
Sales in Performance Chemicals increased by $25 million in the third quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to higher volumes ($31 million), partially offset by the unfavorable impact from foreign currency translation ($5 million). The higher volumes in the third quarter of fiscal 2024 were primarily in our specialty carbons and fumed metal oxides product lines.
Current report
EBIT in Performance Chemicals increased by $23 million in the third quarter of fiscal 2024 compared to the same period of fiscal 2023 primarily due to higher volumes ($17 million) and higher unit margins, net of costs ($7 million). The higher volumes in the third quarter of fiscal 2024 were primarily in our specialty carbons and fumed metal oxides product lines. The higher unit margins, net of costs, improved from a more favorable product mix as demand improved in the automotive, infrastructure and semiconductor applications.
Current report
U.S. EPA Consent Decree
Current report
As described in Part 1, Item 1 of the 2023 Form 10-K (the “2023 10-K") under the heading “Safety, Health, Environment, and Sustainability”, pursuant to the Consent Decree we entered into in November 2013 with the U.S. Environmental Protection Agency (“EPA”) and the Louisiana Department of Environmental Quality (“LDEQ”) regarding our three carbon black manufacturing facilities in the U.S., Cabot has installed technology controls for sulfur dioxide and/or nitrogen oxide at its carbon black plants in Pampa, Texas and Franklin, Louisiana, and is in the process of installing sulfur dioxide and nitrogen oxide technology controls at its plant in Ville Platte, Louisiana. We are currently in discussions with the EPA and LDEQ to extend our compliance date at the Ville Platte facility to mid-calendar year 2025 based upon force majeure events primarily related to the COVID-19 pandemic. As of June 30, 2024, we had incurred approximately $195 million to install these technology controls in the U.S. Operating these controls increases our plant operating costs. We expect that the total capital costs to install these controls will be approximately $250 million and will be incurred through 2025. The Consent Decree includes discretionary stipulated damages provisions for failure to comply outside of a force majeure event. All carbon black manufacturers in the U.S. have settled with the EPA and have installed similar controls.
Removed paragraphs (6)
Previous report
Second quarter of Fiscal 2024 versus Second quarter of Fiscal 2023—Consolidated
Previous report
For the three and six months ended March 31, 2024, gross profit increased by $36 million and $73 million, respectively, compared to the same periods of fiscal 2023. The increases were primarily due to higher unit margins and higher volumes within the Reinforcement Materials and Performance Chemicals segments.
Previous report
Sales in Performance Chemicals decreased by $15 million in the second quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to less favorable price and product mix ($25 million), partially offset by higher volumes ($10 million). The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers. The higher volumes in the second quarter of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.
Previous report
EBIT in Performance Chemicals increased by $3 million in the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 primarily due to higher volumes ($3 million). The higher volumes in the second quarter of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.
Previous report
Province of Ontario Regulation 419 Update
Previous report
As described in Part I, Item 1 of the 2023 10-K under the heading “Safety, Health, Environment, and Sustainability”, under the Province of Ontario Ministry of Environment, Conservation and Parks’ (“MECP”) Regulation 419, a new requirement for sulfur dioxide (“SO2”) emissions went into effect on July 1, 2023 for our reinforcing carbons plant in Sarnia, Ontario. We are out of compliance with the new air standards for SO2 and are in discussions with the MECP on an alternative to this requirement that we expect, in its current form, would require the installation of air pollution controls at the plant by July 1, 2028. To date, this has not restricted our ability to operate our reinforcing carbons plant in Sarnia, Ontario as we are working with the MECP for a solution. We anticipate that we will need to incur significant capital costs for the installation of these new SO2 emissions controls, particularly during the 24-month period prior to the date of installation.
Reworded paragraphs (44)
Previous wording
Our discussion under the heading “Second Quarter of Fiscal 2024 versus Second Quarter of Fiscal 2023—By Business Segment” includes a discussion of Total segment EBIT, which is a non-GAAP financial measure defined as Income (loss) from operations before income taxes and equity in earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our reportable segments, provides useful supplemental information for our investors as it is an important indicator of our operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Total segment EBIT should not be considered an alternative for Income (loss) from operations before income taxes and equity in earnings of affiliated companies, which is the most directly comparable U.S. GAAP financial measure. A reconciliation of Total segment EBIT to Income (loss) from operations before income taxes and equity in earnings of affiliated companies is provided under the heading “Second quarter of Fiscal 2024 versus Second quarter of Fiscal 2023—By Business Segment”. 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.
Current wording
Our discussion under the heading “Third Quarter of Fiscal 2024 versus Third Quarter of Fiscal 2023—By Business Segment” includes a discussion of Total segment EBIT, which is a non-GAAP financial measure defined as Income (loss) from operations before income taxes and equity in earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our reportable segments, provides useful supplemental information for our investors as it is an important indicator of our operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Total segment EBIT should not be considered an alternative for Income (loss) from operations before income taxes and equity in earnings of affiliated companies, which is the most directly comparable U.S. GAAP financial measure. A reconciliation of Total segment EBIT to Income (loss) from operations before income taxes and equity in earnings of affiliated companies is provided under the heading “Third quarter of Fiscal 2024 versus Third quarter of Fiscal 2023—By Business Segment”. 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.
Previous wording
During the second quarter of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased compared to the second quarter of fiscal 2023. The increase was driven by higher earnings in our Reinforcement Materials and Performance Chemicals segments, increased investment income in Argentina and lower foreign exchange losses primarily in Argentina.
Current wording
During the third quarter of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased compared to the third quarter of fiscal 2023. The increase was driven by higher earnings in our Reinforcement Materials and Performance Chemicals segments.
Previous wording
The $14 million decrease in Net sales and other operating revenues in the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 was driven by unfavorable price and product mix (combined $61 million) across our Reinforcement Materials and Performance Chemicals segments driven by lower pricing from the pass through of lower raw material costs, partially offset by higher volumes in both our Reinforcement Materials and Performance Chemicals segments (combined $51 million).
Current wording
The $48 million increase in Net sales and other operating revenues in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023 was driven by higher volumes in both our Reinforcement Materials and Performance Chemicals segments (combined $56 million) and favorable price and product mix in our Reinforcement Materials segment ($14 million), partially offset by the unfavorable impact from foreign currency translation in both our Reinforcement Materials and Performance Chemicals segments ($17 million).
Previous wording
The $21 million decrease in Net sales and other operating revenues in the first six months of fiscal 2024 compared to the first six months of fiscal 2023 was driven by unfavorable price and product mix (combined $110 million) across our Reinforcement Materials and Performance Chemicals segments driven by lower pricing from the pass through of lower raw material costs, partially offset by higher volumes (combined $87 million).
Current wording
The $27 million increase in Net sales and other operating revenues in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 was driven by higher volumes in both our Reinforcement Materials and Performance Chemicals segments (combined $142 million), partially offset by unfavorable price and product mix in both our Reinforcement Materials and Performance Chemicals segments in the fiscal 2024 period (combined $96 million), partially offset by the unfavorable impact from foreign currency translation in both our Reinforcement material and Performance Chemicals segments (combined $9 million). The unfavorable price and product mix was driven by lower pricing primarily due to lower raw material costs that are generally passed through to our customers.
Previous wording
Selling and administrative expenses increased by $9 million and $16 million in the second quarter of fiscal 2024 and for the six months ended March 31, 2024, respectively, compared to the same periods of fiscal 2023, primarily due to an increase in the incentive compensation expense.
Current wording
Selling and administrative expenses increased by $10 million and $26 million in the third quarter of fiscal 2024 and for the nine months ended June 30, 2024, respectively, compared to the same periods of fiscal 2023, primarily due to an increase in incentive compensation expense.
Previous wording
Research and technical expenses remained flat in the second quarter of fiscal 2024 and increased by $2 million for the six months ended March 31, 2024, compared to the same period of fiscal 2023.
Current wording
Research and technical expenses increased by $1 million in the third quarter of fiscal 2024 and increased by $3 million for the nine months ended June 30, 2024, compared to the same period of fiscal 2023, primarily due to an increase in incentive compensation expense.
Previous wording
There was no Loss on sale of business in the second quarter of fiscal 2024 or fiscal 2023. Previously reported Loss on sale of business in fiscal 2023 is associated with the fiscal 2022 divesture of the Purification Solutions business.
Current wording
There was no Loss on sale of business in the third quarter of fiscal 2024 or fiscal 2023. Previously reported Loss on sale of business in fiscal 2023 is associated with the fiscal 2022 divesture of the Purification Solutions business.
Previous wording
Interest and dividend income decreased by $1 million in the second quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to lower average balances. Interest and dividend income increased by $2 million for the six months ended March 31, 2024 compared to the same period of fiscal 2023, primarily due to higher interest rates.
Current wording
Interest and dividend income increased by $1 million in the third quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to higher rates partially offset by lower average balances. Interest and dividend income increased by $3 million for the nine months ended June 30, 2024 compared to the same period of fiscal 2023, primarily due to higher interest rates.
Previous wording
Interest expense decreased by $2 million in the three and six months ended March 31, 2024 compared to the same periods of fiscal 2023, primarily due to lower average commercial paper balances, partially offset by higher rates.
Current wording
Interest expense decreased by $5 million in the third quarter of fiscal 2024 and $7 million in the nine months ended June 30, 2024 compared to the same periods of fiscal 2023, due to lower average short-term borrowings, partially offset by higher rates.
Previous wording
Other expense decreased by $4 million in the second quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to lower foreign currency losses on the revaluation of our Argentine peso monetary assets and liability balances ($9 million), and higher investment income ($2 million) on our cash and cash equivalent balances in Argentina and Brazil, partially offset by a loss on the sale of BOPREAL bonds (standing for “Bond for the Reconstruction of a free Argentina” in Spanish) in Argentina ($8 million). Other expense increased by $20 million for the six months ended March 31, 2024, as compared to the same period of fiscal 2023, primarily due to higher foreign currency losses in Argentina including from the impact of the government devaluation of the currency that occurred during the first quarter of fiscal 2024.
Current wording
Other expense remained flat in the third quarter of fiscal 2024 compared to the same period of fiscal 2023. Other expense increased by $20 million for the nine months ended June 30, 2024, as compared to the same period of fiscal 2023, primarily due to higher foreign currency losses in Argentina including from the impact of the government devaluation of the currency that occurred during the first quarter of fiscal 2024.
Previous wording
For the three months ended March 31, 2024, the (Provision) benefit for income taxes was a provision of $47 million compared to a $29 million provision for the same period in fiscal 2023. For the six months ended March 31, 2024, the (Provision) benefit for income taxes was a provision of $81 million compared to a $49 million provision for the same period in fiscal 2023, primarily due to higher earnings in the current period and additional accruals and corresponding interest of uncertain tax positions. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we operate, and by the presence of valuation allowances in certain tax jurisdictions.
Current wording
For the three months ended June 30, 2024, the (Provision) benefit for income taxes was a provision of $40 million compared to a $41 million provision for the same period in fiscal 2023. For the nine months ended June 30, 2024, the (Provision) benefit for income taxes was a provision of $121 million compared to a $90 million provision for the same period in fiscal 2023, primarily due to higher earnings in the current period and additional accruals and corresponding interest of uncertain tax positions. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we operate, and by the presence of valuation allowances in certain tax jurisdictions.
Previous wording
For fiscal 2024, the Company expects the Operating tax rate to be in the range of 27% to 29%. We are not providing a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.
Current wording
For fiscal 2024, the Company expects the Operating tax rate to be in the range of 27% to 28%. We are not providing a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.
Previous wording
Equity in earnings of affiliated companies, net of tax, increased by $1 million in the second quarter compared to the same period of fiscal 2023 primarily due to higher profitability at our equity affiliate in Venezuela. Equity in earnings of affiliated companies, net of tax, remained flat for the first six months of fiscal 2024 compared to the same period of fiscal 2023.
Current wording
Equity in earnings of affiliated companies, net of tax, increased by $1 million in both the third quarter and the first nine months of fiscal 2024, compared to the same periods of fiscal 2023, primarily due to higher profitability at our equity affiliate in Venezuela.
Previous wording
Net income (loss) attributable to noncontrolling interests, net of tax, increased by $6 million and $5 million in the second quarter and the first six months of fiscal 2024, respectively, compared to the same periods of fiscal 2023, primarily due to higher profitability of our joint ventures in China.
Current wording
Net income (loss) attributable to noncontrolling interests, net of tax, increased by $3 million and $8 million in the third quarter and the first nine months of fiscal 2024, respectively, compared to the same periods of fiscal 2023. Net income (loss) attributable to noncontrolling interests, net of tax increased in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2024 primarily due to higher profitability of our joint venture in the Czech Republic. Net income (loss) attributable to noncontrolling interests, net of tax increased in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 primarily due to higher profitability of our joint ventures in China.
Previous wording
In the second quarter and the first six months of fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $84 million and $134 million, or $1.49 and $2.37 per diluted common share, respectively. This compares to Net income (loss) attributable to Cabot Corporation of $75 million and $129 million, or $1.29 and $2.23 per diluted common share, respectively, in the second quarter and the first six months of fiscal 2023. The higher net income in the second quarter of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($30 million) and higher General unallocated income ($13 million) partially offset by a loss on the sale of BOPREAL bonds ($8 million) in Argentina and a higher provision for income taxes ($18 million).
Current wording
In the third quarter and the first nine months of fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $109 million and $243 million, or $1.94 and $4.30 per diluted common share, respectively. This compares to Net income (loss) attributable to Cabot Corporation of $82 million and $211 million, or $1.43 and $3.65 per diluted common share, respectively, in the third quarter and the first nine months of fiscal 2023. The higher net income in the third quarter of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($27 million). The higher net income in the first nine months of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($97 million), partially offset by higher foreign currency losses and a loss on the sale of BOPREAL bonds (combined $29 million) in Argentina and a higher provision for income taxes ($31 million).
Previous wording
Second quarter of Fiscal 2024 versus Second quarter of Fiscal 2023—By Business Segment
Current wording
Third quarter of Fiscal 2024 versus Third quarter of Fiscal 2023—By Business Segment
Previous wording
Income (loss) before income taxes and equity in earnings of affiliated companies, certain items, other unallocated items and Total segment EBIT for the three and six months ended March 31, 2024 and 2023 are set forth in the table below. The details of certain items and other unallocated items are shown below and in Note K of our Notes to the Consolidated Financial Statements.
Current wording
Income (loss) before income taxes and equity in earnings of affiliated companies, certain items, other unallocated items and Total segment EBIT for the three and nine months ended June 30, 2024 and 2023 are set forth in the table below. The details of certain items and other unallocated items are shown below and in Note K of our Notes to the Consolidated Financial Statements.
Previous wording
In the second quarter of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $32 million and Total segment EBIT increased by $30 million. The increase in Income (loss) before income taxes and equity in earnings of affiliated companies was largely driven by higher Total segment EBIT. Total segment EBIT was driven by higher volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $18 million) and higher pricing and improved product mix, net of costs in Reinforcement Materials ($11 million).
Current wording
In the third quarter of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $28 million and Total segment EBIT increased by $27 million. The increase in Income (loss) before income taxes and equity in earnings of affiliated companies was driven by higher Total segment EBIT. Total segment EBIT was driven by higher volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $27 million).
Previous wording
In the first six months of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $42 million and Total Segment EBIT increased by $70 million. The increase in Income (loss) before income taxes and equity in earnings of affiliated companies was largely driven by higher Total segment EBIT partially offset by higher foreign currency losses primarily in Argentina. Total segment EBIT was driven by higher pricing and improved product mix, net of costs in Reinforcement Materials ($41 million) and higher volumes in both the Reinforcement Materials and Performance Chemicals segments (combined $31 million).
Current wording
In the first nine months of fiscal 2024, Income (loss) before income taxes and equity in earnings of affiliated companies increased by $70 million and Total segment EBIT increased by $97 million. The increase in Income (loss) before income taxes and equity in earnings of affiliated companies was driven by higher Total segment EBIT partially offset by higher foreign currency losses primarily in Argentina. Total segment EBIT was driven by higher volumes in both the Reinforcement Materials and Performance Chemicals segment (combined $58 million) and higher unit margins, net of costs, in both in Reinforcement Materials and Performance Chemicals segments (combined $44 million).
Previous wording
Details of the certain items for the three and six months ended March 31, 2024 and 2023 are as follows:
Current wording
Details of the certain items for the three and nine months ended June 30, 2024 and 2023 are as follows:
Previous wording
Total other unallocated items decreased by $12 million and $20 million for the three and six months ended March 31, 2024, respectively, when compared to the same period in fiscal 2023, due to higher General unallocated income (expense) resulting from higher investment income on our cash and cash equivalent balances in Argentina and lower foreign exchange losses primarily in Argentina.
Current wording
Total other unallocated items decreased by $2 million and $22 million for the three and nine months ended June 30, 2024, respectively, when compared to the same periods in fiscal 2023, due to lower Interest expense and higher General unallocated income (expense) partially offset by higher Unallocated corporate costs. General unallocated income increased due to higher interest income, higher investment income on our cash and cash equivalent balances in Argentina, and lower foreign exchange losses, primarily in Argentina.
Previous wording
Sales and EBIT for Reinforcement Materials for the second quarter and first six months of fiscal 2024 and 2023 were as follows:
Current wording
Sales and EBIT for Reinforcement Materials for the third quarter and first nine months of fiscal 2024 and 2023 were as follows:
Previous wording
Sales in Reinforcement Materials increased by $4 million in the second quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to higher volumes ($41 million) partially offset by less favorable price and product mix ($36 million). The higher volumes in the second quarter of fiscal 2024 were driven by higher volumes in Asia and Europe. The less favorable pricing was driven primarily from lower raw material costs that are generally passed through to our customers.
Current wording
Sales in Reinforcement Materials increased by $25 million in the third quarter of fiscal 2024 compared to the same period of fiscal 2023, primarily due to higher volumes ($25 million) and favorable price and product mix ($14 million), partially offset by the unfavorable impact from foreign currency translation ($12 million). The higher volumes in the third quarter of fiscal 2024 were driven by higher volumes in Asia Pacific and Europe. The favorable pricing was driven primarily from higher raw material costs that are generally passed through to our customers and higher pricing and product mix from our calendar year 2024 customer agreements.
Previous wording
In the first six months of fiscal 2024, sales in Reinforcement Materials increased by $2 million compared to the first six months of fiscal 2023 primarily due to higher volumes ($57 million), the favorable impact from foreign currency translation ($6 million) and higher by-product revenue ($2 million), partially offset by less favorable price and product mix ($63 million). The higher volumes in the first six months of fiscal 2024 were driven by higher volumes in Asia and Europe. The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers.
Current wording
In the first nine months of fiscal 2024, sales in Reinforcement Materials increased by $27 million compared to the same period of fiscal 2023 primarily due to higher volumes ($83 million), partially offset by less favorable price and product mix ($50 million) and the unfavorable impact from foreign currency translation ($5 million). The higher volumes in the first nine months of fiscal 2024 were driven by higher volumes in Asia Pacific and Europe. The less favorable pricing was primarily due to lower raw material costs in the first two fiscal quarters of fiscal 2024 as compared to the same quarters of fiscal 2023 that are generally passed through to our customers.
Previous wording
EBIT in Reinforcement Materials in the second quarter of fiscal 2024 increased by $27 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($11 million) and higher volumes ($15 million). The higher unit margins in the first quarter of fiscal 2024 were primarily driven by favorable price and product mix in the 2024 calendar year customer agreements. The higher volumes were driven by higher volumes in Asia and Europe.
Current wording
EBIT in Reinforcement Materials in the third quarter of fiscal 2024 increased by $4 million compared to the same period of fiscal 2023. The increase was driven by higher volumes ($10 million), higher unit margins ($2 million) partially offset by higher costs ($9 million). The higher volumes were driven by stronger demand in Asia Pacific and Europe, partially offset by lower volumes in the Americas due to weather-related events. The higher unit margins were driven by improved pricing and product mix in our calendar year 2024 customer agreements partially offset by a less favorable geographic mix and lower energy center revenue. The higher costs were primarily driven by higher selling and administrative costs.
Previous wording
In the first six months of fiscal 2024, EBIT in Reinforcement Materials increased by $62 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($41 million) and higher volumes ($20 million). The higher unit margins in the first six months of fiscal 2024 were primarily driven by favorable price and product mix in the 2023 and 2024 calendar year customer agreements. The higher volumes were driven by higher volumes in Asia and Europe.
Current wording
In the first nine months of fiscal 2024, EBIT in Reinforcement Materials increased by $66 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($35 million), and higher volumes ($30 million). The higher unit margins, net of costs, in the first nine months of fiscal 2024 were primarily driven by favorable price and product mix in the 2023 and 2024 calendar year customer agreements. The higher volumes were driven by higher volumes in Asia Pacific and Europe.
Previous wording
As we look to the third quarter of the fiscal year, we expect the Reinforcement Materials EBIT to be in line with the second quarter of fiscal 2024 as we expect modest volume improvement to be offset by higher costs associated with plant maintenance.
Current wording
As we look to the fourth quarter of the fiscal year, we expect the Reinforcement Materials EBIT to modestly improve from the third quarter of fiscal 2024 due to anticipated sequential volume improvement in the Americas and Asia Pacific regions, partially offset by seasonally weaker volumes in Europe.
Previous wording
Sales and EBIT for Performance Chemicals for the second quarter and first six months of fiscal 2024 and 2023 were as follows:
Current wording
Sales and EBIT for Performance Chemicals for the third quarter and first nine months of fiscal 2024 and 2023 were as follows:
Previous wording
In the first six months of fiscal 2024, sales in Performance Chemicals decreased by $16 million compared to the first six months of fiscal 2023, primarily due to less favorable price and product mix ($47 million), partially offset by higher volumes ($30 million). The less favorable pricing was primarily due to lower raw material costs that are generally passed through to our customers. The higher volumes in the first six months of fiscal 2024 were primarily in our specialty carbons and specialty compounds product lines.
Current wording
In the first nine months of fiscal 2024, sales in Performance Chemicals increased by $9 million compared to the same period of fiscal 2023, primarily due to higher volumes ($60 million), partially offset by less favorable price and product mix ($46 million) and the unfavorable impact from foreign currency translation ($3 million). The higher volumes in fiscal 2024 were primarily in our specialty carbons and fumed metal oxides product lines. The less favorable price and product mix was primarily due to lower raw material costs that are generally passed through to our customers.
Previous wording
In the first six months of fiscal 2024, EBIT in Performance Chemicals increased by $8 million compared to the same period of fiscal 2023. The increase was driven by higher unit margins, net of costs ($7 million) and higher volumes ($11 million), partially offset by the unfavorable impact of a reduction in inventory levels ($5 million) and the unfavorable impact of foreign currency translation ($4 million).
Current wording
In the first nine months of fiscal 2024, EBIT in Performance Chemicals increased by $31 million compared to the same period of fiscal 2023. The increase was driven by higher volumes ($28 million) and higher unit margins, net of costs ($10 million), partially offset by the unfavorable impact of foreign currency translation ($6 million). The higher volumes in the first nine months of fiscal 2024 were primarily in our specialty carbons and fumed metal oxides product lines. The higher unit margins, net of costs, improved from a more favorable product mix as demand improved in the automotive, infrastructure and semiconductor applications.
Previous wording
As we look ahead to the third quarter of the fiscal year, we expect seasonally higher volumes and relatively stable unit margins.
Current wording
As we look ahead to the fourth quarter of the fiscal year, we expect the Performance Chemicals EBIT to improve year-over- year due to anticipated higher volumes and a more favorable product mix, but decline sequentially due to lower volumes from normal seasonality impacts.
Previous wording
Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, increased by $67 million during the first six months of fiscal 2024, which was largely due to a lower outstanding commercial paper balance at the end of the period. As of March 31, 2024, we had cash and cash equivalents of $206 million and borrowing availability under our revolving credit agreements of $1.1 billion. We have access to borrowings under the following two credit agreements:
Current wording
Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, increased by $97 million during the first nine months of fiscal 2024, which was largely due to a lower outstanding commercial paper balance at the end of the period. As of June 30, 2024, we had cash and cash equivalents of $197 million and borrowing availability under our revolving credit agreements of $1.2 billion. We have access to borrowings under the following two credit agreements:
Previous wording
As of March 31, 2024, we had $1.1 billion of availability under our Credit Agreements. As of March 31, 2024, we had $114 million of borrowings under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit Agreement. There was $87 million of commercial paper outstanding as of March 31, 2024.
Current wording
As of June 30, 2024, we had $1.2 billion of availability under our Credit Agreements. As of June 30, 2024, we had $109 million of borrowings under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit Agreement. There was $49 million of commercial paper outstanding as of June 30, 2024.
Previous wording
Cash provided by operating activities, which consists of net income adjusted for the various non-cash items included in income, changes in working capital and changes in certain other balance sheet accounts, totaled $281 million in the first six months of fiscal 2024 compared to $214 million of cash provided by operating activities during the same period of fiscal 2023.
Current wording
Cash provided by operating activities, which consists of net income adjusted for the various non-cash items included in income, changes in working capital and changes in certain other balance sheet accounts, totaled $488 million in the first nine months of fiscal 2024 compared to $457 million of cash provided by operating activities during the same period of fiscal 2023.
Previous wording
Cash provided by operating activities in the first six months of fiscal 2024 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $78 million and foreign exchange losses of $36 million, primarily related to devaluation of the Argentine peso, which was partially offset by an increase in net working capital of $25 million. The increase in net working capital was largely driven by an increase in Accounts and notes receivable from higher sales volumes, partially offset by a decrease in Inventories and Accounts payable and accrued expenses driven by lower cost of raw materials.
Current wording
Cash provided by operating activities in the first nine months of fiscal 2024 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $114 million and foreign exchange losses of $38 million, primarily related to devaluation of the Argentine peso, which was partially offset by a decrease in net working capital of $18 million. The decrease in net working capital was largely driven by an increase in Accounts Payable and accrued liabilities, and a decrease in inventories, partially offset by an increase in Accounts and notes receivable.
Previous wording
Cash provided by operating activities in the first six months of fiscal 2023 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $71 million and a decrease in net working capital of $25 million. The decrease in
Current wording
Cash provided by operating activities in the first nine months of fiscal 2023 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $107 million and a decrease in net working capital of $96 million. The decrease in
Previous wording
Investing activities consumed $95 million of cash in the first six months of fiscal 2024 compared to $64 million of cash consumed in the first six months of fiscal 2023.
Current wording
Investing activities consumed $146 million of cash in the first nine months of fiscal 2024 compared to $139 million of cash consumed in the first nine months of fiscal 2023.
Previous wording
In the first six months of fiscal 2024, investing activities included $97 million of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital, including capacity expansion capital projects.
Current wording
In the first nine months of fiscal 2024, investing activities included $149 million of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital, including capacity expansion capital projects.
Previous wording
In the first six months of fiscal 2023, investing activities included $86 million of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital, including capacity expansion projects in Performance Chemicals, partially offset by proceeds from the sale of land of $7 million, proceeds from the sale of our Purification Solutions business of $6 million, and proceeds from insurance settlements of $6 million.
Current wording
In the first nine months of fiscal 2023, investing activities included $166 million of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital, including capacity expansion projects in Performance Chemicals, partially offset by proceeds from the sale of land of $7 million, proceeds from the sale of our Purification Solutions business of $6 million, and proceeds from insurance settlements of $12 million.
Previous wording
Capital expenditures for fiscal 2024 are expected to be between $250 million and $275 million. Our planned capital spending program for fiscal 2024 is for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital expenditures.
Current wording
Capital expenditures for fiscal 2024 are expected to be between $220 million and $240 million. Our planned capital spending program for fiscal 2024 is for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital expenditures.
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Previous report — wording carried elsewhere
The higher net income in the first six months of fiscal 2024 compared with the same period in fiscal 2023 is primarily due to higher Total segment EBIT ($70 million) and higher General unallocated income ($22 million) partially offset by foreign currency losses and a loss on the sale of BOPREAL bonds ($41 million combined) in Argentina and a higher provision for income taxes ($32 million).