CABOT CORP
For the period ended Dec 31, 2024. Filed Feb 6, 2025.
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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.
Dec 31, 2024 · Filed Feb 6, 2025
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 2024-06-30; filed 2024-08-06.
0000950170-24-091675
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-06.
0000950170-25-015513
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 105 previous paragraphs and 90 current paragraphs.
45 unchanged; 33 reworded; 11 added; 26 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 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 (11)
Current report
First quarter of Fiscal 2025 versus First quarter of Fiscal 2024—Consolidated
Current report
The $3 million decrease in Net sales and other operating revenues in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was driven by less favorable pricing and product mix in both our Reinforcement Materials and Performance Chemicals segments ($40 million combined), partially offset by higher volumes in both our Reinforcement Materials and Performance Chemical segments ($39 million combined). The less favorable pricing and product mix in both our Reinforcement Materials and Performance Chemical segments was primarily due to lower raw material costs that are generally passed through to our customers. The higher volumes was due to higher volumes in Asia Pacific and EMEA in Reinforcement Materials and higher volumes in Performance Chemicals as volumes reconnected to underlying demand drivers in key end markets.
Current report
Selling and administrative expenses decreased by $1 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024.
Current report
Interest and dividend income decreased by $3 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, primarily due to lower interest rates and lower average cash balances.
Current report
Sales in Reinforcement Materials decreased by $30 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, primarily due to less favorable pricing and product mix ($28 million) and lower energy center revenue ($5 million), partially offset by higher volumes primarily in Asia Pacific and EMEA ($5 million). The less favorable pricing and product mix was primarily due to lower raw material costs that are generally passed through to our customers, partially offset by higher pricing in our calendar year 2024 customer agreements.
Current report
As we look to the second quarter of the fiscal year, we expect the Reinforcement Materials segment EBIT to modestly improve sequentially from the first quarter of fiscal 2025 due to an anticipated favorable geographic mix. We anticipate relatively flat volumes sequentially with seasonal improvement and calendar year 2025 customer agreement gains in EMEA, partially offset with lower volumes in Asia Pacific due to the Lunar New Year holiday.
Current report
EBIT in Performance Chemicals increased by $11 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024 primarily due to 8% higher volumes ($20 million), partially offset by lower gross profit per ton ($8 million). The higher volumes in the first quarter of fiscal 2025 was primarily due to volumes reconnecting to underlying demand drivers in key end markets. The lower gross profit per ton was primarily due to higher costs associated with maintenance spend and new assets.
Current report
Tariffs
Current report
Our current outlook does not include any adverse impacts from tariffs announced in February 2025 between the United States and Mexico, Canada and China. Given the dynamic nature of the tariff announcements, related delays and ongoing negotiations between countries, we are assessing the potential impact. In China and Mexico, we expect minimal direct impact as our production is sold mainly within the country. In Canada, a large portion of the production at our Canadian plants is sold in Canada, but also there is production sold to customers in the US. For reinforcing carbons and specialty carbons products, sales from our Canadian operations to almost all of these customers are pursuant to agreements that allow Cabot to pass through taxes and similar charges, such as tariffs. We are also working with our customers on potential alternative supply sources within our large plant network to minimize any negative impact from tariffs, where it is feasible. However, in all cases, if these (or other) tariffs are implemented, there could be a downstream impact on our customer's businesses, and this could impact underlying demand levels for our products.
Current report
Province of Ontario Regulation 419 Update
Current report
As described in Part 1, Item 1 of the 2024 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 this new air standard. MECP has approved our proposed abatement plan, which requires us to install air pollution controls at the plant by July 1, 2028. As part of our abatement plan, we will continue to engage with MECP and other stakeholders. To date, our operations in Sarnia have not been restricted because of this matter. 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.
Removed paragraphs (26)
Previous report
Charges related to the divestiture of our Purification Solutions business, which include accelerated costs associated with the change in control and employee incentive compensation.
Previous report
Benefit from the settlement of a royalty arrangement entered into in connection with the divestiture of our former Specialty Fluids business.
Previous report
Gain associated with the bargain purchase of a business.
Previous report
Third quarter of Fiscal 2024 versus Third quarter of Fiscal 2023—Consolidated
Previous report
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 report
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 report
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 report
Loss on Sale of Business
Previous report
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 report
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 report
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 report
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 report
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 report
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 report
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 report
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 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.
Previous 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.
Previous report
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 report
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 report
In addition to the currency controls that prevent the distribution of cash in Argentina, there are also government regulations that require all cash in Argentina to be held in Argentine pesos and regulations that restrict how and when suppliers of imported goods and services into Argentina can be paid. In accordance with government regulations, we purchased and sold at a discount BOPREAL bonds during the second quarter of fiscal 2024 to partially repay imported goods received on or prior to December 12, 2023. The balance of these outstanding payables was paid in April 2024. Current and future imported goods and services will be paid in accordance with new regulations enacted in the latter part of calendar year 2023. Future regulations could impact our ability to pay suppliers for our imported goods and services.
Previous report
materials and decreased sales volumes and a decrease in inventories and accounts payable and accrued expenses driven by lower
Previous report
cost of raw materials.
Previous report
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 report
U.S. EPA Consent Decree
Previous 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.
Reworded paragraphs (33)
Previous 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.
Current wording
Our discussion under the heading “First Quarter of Fiscal 2025 versus First Quarter of Fiscal 2024—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 “First quarter of Fiscal 2025 versus First quarter of Fiscal 2024—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
Legal and environmental reserves and matters, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business.
Current wording
Legal and environmental matters and reserves, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business.
Previous 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.
Current wording
During the first quarter of fiscal 2025, Income (loss) before income taxes and equity in earnings of affiliated companies increased compared to the first quarter of fiscal 2024. The increase was driven by lower foreign currency exchange losses primarily in Argentina and higher earnings in both our Reinforcement Materials and Performance Chemicals segments.
Previous wording
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 wording
For the three months ended December 31, 2024, gross profit increased by $17 million compared to the same period of fiscal 2024. The increase in Gross profit in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was driven primarily by higher volumes in both our Reinforcement Materials and Performance Chemicals segments ($22 million combined). The higher volumes in the Reinforcement Materials segment was primarily in Asia Pacific and EMEA and the higher volumes in the Performance Chemicals segment was primarily due to volumes reconnecting to underlying demand drivers in key end markets.
Previous 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.
Current wording
Research and technical expenses decreased by $1 million in the first quarter of fiscal 2025, compared to the same period of fiscal 2024.
Previous 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.
Current wording
Interest expense decreased by $4 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, due to lower average short-term borrowings and lower interest rates.
Previous 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.
Current wording
For the three months ended December 31, 2024, the (Provision) benefit for income taxes was a provision of $41 million compared to a $34 million provision for the same period in fiscal 2024, with the change primarily due to higher earnings in the current period. 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 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.
Current wording
For fiscal 2025, we expect 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.
Previous 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.
Current wording
Equity in earnings of affiliated companies, net of tax, remained flat in the first quarter of fiscal 2025, compared to the same period of fiscal 2024.
Previous 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.
Current wording
Net income (loss) attributable to noncontrolling interests, net of tax, remained flat in the first quarter of fiscal 2025, compared to the same period of fiscal 2024.
Previous 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).
Current wording
In the first quarter of fiscal 2025 and fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $93 million ($1.67 per diluted common share) and $50 million ($0.88 per dilution common share), respectively. The higher net income in the first quarter of fiscal 2025 compared with the same period in fiscal 2024 is primarily due to lower Argentina controlled currency devaluation and other losses ($33 million) and higher Total segment EBIT ($12 million).
Previous wording
Third quarter of Fiscal 2024 versus Third quarter of Fiscal 2023—By Business Segment
Current wording
First quarter of Fiscal 2025 versus First quarter of Fiscal 2024—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 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.
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 months ended December 31, 2024 and 2023 are included in the following table, and details of each item is set forth in the sections below.
Previous wording
Details of the certain items for the three and nine months ended June 30, 2024 and 2023 are as follows:
Current wording
Details of the certain items for the three months ended December 31, 2024 and 2023 are as follows:
Previous 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.
Current wording
Total other unallocated items decreased by $2 million for the three months ended December 31, 2024, when compared to the same periods in fiscal 2024, primarily due to lower Interest expense and lower Unallocated Corporate costs, partially offset by lower General unallocated income.
Previous wording
A discussion of items that we refer to as “other unallocated items” can be found under the heading “Definition of Terms and Non-GAAP Financial Measures”. The balances of unallocated corporate costs are primarily comprised of expenditures related to managing a public company that are not allocated to the segments and corporate business development costs related to ongoing corporate projects. The balances of General unallocated income (expense) consist of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. General unallocated income (expense) does not include items of income or expense that are separately treated as Certain items.
Current wording
A discussion of items that we refer to as “other unallocated items” can be found under the heading “Definition of Terms and Non-GAAP Financial Measures”. The balances of unallocated corporate costs are primarily comprised of expenditures related to managing a public company that are not allocated to the segments and corporate business development costs related to ongoing corporate projects. The balances of General unallocated income (expense) consist of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. This does not include items of income or expense from the items that are separately treated as Certain items.
Previous wording
Sales and EBIT for Reinforcement Materials for the third quarter and first nine months of fiscal 2024 and 2023 were as follows:
Current wording
Sales and EBIT for Reinforcement Materials for the first quarter of fiscal 2025 and 2024 were as follows:
Previous 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.
Current wording
EBIT in Reinforcement Materials in the first quarter of fiscal 2025 increased by $1 million compared to the same period of fiscal 2024. The increase in EBIT was driven by volume growth of approximately 1% primarily in Asia Pacific and EMEA ($2 million), partially offset by lower gross profit per ton ($1 million). The lower gross profit per ton was primarily due to lower energy center revenue and a less favorable geographic mix, partially offset with favorable pricing and product mix in our 2024 calendar year customer agreements.
Previous wording
Sales and EBIT for Performance Chemicals for the third quarter and first nine months of fiscal 2024 and 2023 were as follows:
Current wording
Sales and EBIT for Performance Chemicals for the first quarter of fiscal 2025 and 2024 were as follows:
Previous 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.
Current wording
Sales in Performance Chemicals increased by $26 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, primarily due to higher volumes ($34 million) and the favorable impact from foreign currency translation ($3 million), partially offset by less favorable pricing and product mix ($12 million). The higher volumes were primarily due to volumes reconnecting to underlying demand drivers in key end markets. The less favorable pricing and product mix was primarily due to lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments.
Previous 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.
Current wording
As we look to the second quarter of the fiscal year, we expect the Performance Chemicals segment EBIT to modestly improve sequentially from the first quarter of fiscal 2025 due to anticipated higher volumes, primarily from higher seasonal demand in North America and Europe.
Previous 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:
Current wording
Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, decreased by $118 million during the first three months of fiscal 2025, which was largely due to a higher outstanding commercial paper balance at the end of the period. As of December 31, 2024, we had cash and cash equivalents of $183 million and borrowing availability under our revolving credit agreements of $1.1 billion. We have access to borrowings under the following two credit agreements:
Previous 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.
Current wording
As of each of December 31, 2024 and September 30, 2024, we had $113 million of borrowings under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit Agreement. There was $100 million and $45 million of commercial paper outstanding as of December 31, 2024 and September 30, 2024, respectively.
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 $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.
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 $124 million in the first three months of fiscal 2025 compared to $105 million of cash provided by operating activities during the same period of fiscal 2024.
Previous 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
Current wording
Cash provided by operating activities in the first three months of fiscal 2025 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $37 million and cash dividends received from one of our equity investments of $12 million, which was partially offset by an increase in net working capital of $38 million. The increase in net working capital was largely driven by a decrease in Accounts Payable and accrued liabilities, and an increase in inventories, partially offset by a decrease in Accounts and notes receivable.
Previous 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.
Current wording
Cash provided by operating activities in the first three months of fiscal 2024 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $41 million and foreign exchange losses of $34 million, primarily related to devaluation of the Argentine peso, which was partially offset by an increase in net working capital of $46 million. The increase in net working capital was largely driven by a decrease in Accounts payable and accrued expenses and an increase in Inventories and Accounts and notes receivable.
Previous 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.
Current wording
Investing activities consumed $104 million of cash in the first three months of fiscal 2025 compared to $54 million of cash consumed in the first three months of fiscal 2024.
Previous 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.
Current wording
In the first three months of fiscal 2025 and 2024, investing activities included $77 million and $54 million, respectively, of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital. In addition, in the first three months of fiscal 2025, investing activities included $27 million for cash paid for the asset acquisition described in Note C of our Notes to the Consolidated Financial Statements.
Previous 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.
Current wording
Capital expenditures for fiscal 2025 are expected to be between $250 million and $300 million. Our planned capital spending program for fiscal 2025 is for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital expenditures.
Previous wording
Financing activities consumed $326 million of cash in the first nine months of fiscal 2024 compared to $371 million of cash consumed during the same period of fiscal 2023.
Current wording
Financing activities consumed $24 million of cash in the first three months of fiscal 2025 compared to $29 million of cash consumed during the same period of fiscal 2024.
Previous wording
In the first nine months of fiscal 2023, financing activities primarily consisted of the repayment of commercial paper of $188 million, dividend payments to stockholders of $65 million, share repurchases of $48 million, cash dividends paid to noncontrolling interests of $41 million, net repayments of short-term borrowings of $24 million and repayments of long-term debt of $88 million. These payments were partially offset by proceeds from long-term borrowings of $79 million.
Current wording
In the first three months of fiscal 2025, financing activities primarily consisted of share repurchases of $42 million, dividend payments to stockholders of $24 million, and cash dividends paid to noncontrolling interests of $20 million. These payments were partially offset by net proceeds from the issuance of commercial paper of $55 million and proceeds from long-term debt of $6 million under our Euro Credit Agreement.
Previous wording
In the first nine months of fiscal 2024, financing activities primarily consisted of net repayment of commercial paper of $123 million, share repurchases of $106 million, dividend payments to stockholders of $69 million, cash dividends paid to noncontrolling interests of $27 million, and net repayment of $12 million under our Euro Credit Agreement, which includes repayments of $26 million partially offset by proceeds of $14 million. These payments were partially offset by proceeds from sales of common stock of $15 million from stock option exercises.
Current wording
In the first three months of fiscal 2024, financing activities primarily consisted of share repurchases of $33 million, dividend payments to stockholders of $22 million, and cash dividends paid to noncontrolling interests of $12 million. These payments were partially offset by net proceeds from commercial paper of $32 million and proceeds from sales of common stock of $7 million from stock option exercises.
Previous wording
This report on Form 10-Q contains “forward-looking statements” under the Federal securities laws. These forward-looking statements address expectations or projections about the future, including our expectations regarding our future business performance and overall prospects, including for earnings and volumes in our Reinforcement Materials segment, and for earnings, volumes and product mix in our Performance Chemicals segment; the impact and cost of restructuring activities; demand for our products; anticipated transaction closing timelines; the sufficiency of our cash on hand, cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements in both the next twelve months and the foreseeable future; anticipated capital spending; regulatory developments, including regulatory compliance costs and potential impact on our operations, including the expected total cost to install air pollution controls at our carbon black plants in the United States and when we expect to incur these capital costs and complete this project at our plant in Ville Platte, Louisiana; cash requirements and uses of available cash, including future cash outlays associated with respirator liabilities and the timing of such outlays; amortization expenses; our operating tax rate; and the possible outcome of legal and environmental proceedings. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.
Current wording
This report on Form 10-Q contains “forward-looking statements” under the Federal securities laws. These forward-looking statements address expectations or projections about the future, including our expectations regarding our future business performance and overall prospects, including for earnings, geographic mix and volumes in our Reinforcement Materials segment in the second quarter of fiscal 2025, and for earnings and volumes in our Performance Chemicals segment in the second quarter of fiscal 2025, and the principal assumptions underlying these expectations; the possible impact of recently announced trade tariffs between the United States and Mexico, Canada, and China on our operations, results of operations, and demand for our products, the sufficiency of our cash on hand, cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements in both the next twelve months and the foreseeable future; anticipated capital spending; regulatory developments, including regulatory compliance costs and potential impact on our operations; cash requirements and uses of available cash, including future cash outlays associated with respirator liabilities and the timing of such outlays; amortization expenses; our operating tax rate; and the possible outcome of legal and environmental proceedings. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Other income increased by $30 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, primarily due to lower foreign exchange losses primarily in Argentina.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
net working capital was largely driven by a decrease in accounts receivable due to lower customer prices from lower cost of raw