CABOT CORP
For the period ended Mar 31, 2025. Filed May 7, 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.
Mar 31, 2025 · Filed May 7, 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 2024-12-31; filed 2025-02-06.
0000950170-25-015513
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000950170-25-065336
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 90 previous paragraphs and 98 current paragraphs.
47 unchanged; 35 reworded; 14 added; 8 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 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 (14)
Current report
Second quarter of Fiscal 2025 versus Second quarter of Fiscal 2024—Consolidated
Current report
For the three and six months ended March 31, 2025, Net sales and other operating revenue decreased by $83 million and $86 million, respectively, compared to the same periods of fiscal 2024.
Current report
The decrease in Net sales and other operating revenues in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 was driven by lower volumes in Reinforcement Materials ($48 million), less favorable pricing and product mix in both Reinforcement Materials and Performance Chemicals ($24 million combined), and the unfavorable impact from foreign currency translations in both Reinforcement Materials and Performance Chemicals ($28 million combined), all of which were partially offset by higher volumes in Performance Chemicals ($16 million). The lower volumes in Reinforcement Materials were primarily due to lower tire demand. The less favorable pricing and product mix in both Reinforcement Materials and Performance Chemicals was driven by lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments. The higher volumes in Performance Chemicals were primarily in our Fumed Metal Oxides product line as volumes related to construction and semiconductor applications reconnected to underlying demand drivers in key end markets.
Current report
For the three and six months ended March 31, 2025, gross profit decreased by $5 million and increased by $12 million, respectively, compared to the same periods of fiscal 2024.
Current report
The decrease in Gross profit in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024 was driven primarily by lower volumes in Reinforcement Materials ($20 million) which were partially offset by higher volumes in Performance Chemicals ($9 million) and higher gross profit per ton in Performance Chemicals ($9 million). The lower volumes in Reinforcement Materials were primarily due to lower tire demand. The higher volumes in Performance Chemicals were primarily in our Fumed Metal Oxides product line as volumes related to construction and semiconductor applications reconnected to underlying demand drivers in key end markets. The higher gross profit per ton in our Performance Chemicals segment was primarily from targeted price increases, cost savings and optimization measures across the segment.
Current report
Sales in Reinforcement Materials decreased by $82 million in the second quarter of fiscal 2025 compared to the same period of fiscal 2024 primarily due to lower volumes ($48 million), the less favorable impact of foreign currency translation ($22 million) and less favorable pricing and product mix ($12 million). The lower volumes were primarily due to lower tire demand and contract outcomes in South America. The less favorable pricing and product mix was primarily due to lower raw materials costs that are generally passed through to our customers.
Current report
In the first six months of fiscal 2025, sales in Reinforcement Materials decreased by $112 million as compared to the first six months of fiscal 2024 primarily due to lower volumes ($44 million), less favorable pricing and product mix ($39 million) and the less favorable impact from foreign currency translation ($24 million). The lower volumes were primarily due to lower tire demand. The less favorable pricing and product mix was primarily due to lower raw materials costs that are generally passed through to our customers.
Current report
EBIT in Reinforcement Materials in the second quarter of fiscal 2025 decreased by $18 million compared to the same period of fiscal 2024. The decrease in EBIT was primarily driven by lower volumes from lower tire demand and contract outcomes in South America ($20 million).
Current report
In the first six months of fiscal 2025, EBIT in Reinforcement Materials decreased by $17 million compared to the same period of fiscal 2024. The decrease was primarily driven by lower volumes from lower tire demand ($18 million).
Current report
Sales in Performance Chemicals remained flat in the second quarter of fiscal 2025 as compared to the same period of fiscal 2024 as higher volumes ($16 million) were offset by less favorable pricing and product mix ($12 million) and the unfavorable impact from foreign currency translation ($6 million). The higher volumes were primarily in our Fumed Metal Oxides product line as volumes related to construction and semiconductor applications reconnected to underlying demand drivers. The less favorable pricing and product mix was primarily from lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments.
Current report
EBIT in Performance Chemicals increased by $19 million in the second quarter of fiscal 2025 as compared to the same period of fiscal 2024 primarily due to higher gross profit per ton ($9 million), and higher volumes ($9 million). The higher gross profit per ton was primarily from targeted price increases, cost savings and optimization measures across the segment. The higher volumes were primarily in our Fumed Metal Oxides product line as volumes related to construction and semiconductor applications reconnected to underlying demand drivers.
Current report
In the first six months of fiscal 2025, EBIT in Performance Chemicals increased by $30 million as compared to the same period of fiscal 2024. The increase was driven primarily by higher volumes ($29 million). The higher volumes were driven by higher demand in all product lines as volumes have reconnected to underlying demand drivers in key end markets.
Current report
As we look to the third quarter of the fiscal year, we expect the Performance Chemicals segment EBIT to be flat sequentially to the second quarter of fiscal 2025 as expected seasonal volume increases are expected to be offset by customer destocking in China.
Current report
Given the dynamic nature of the tariff announcements, related delays and ongoing negotiations between countries, we are assessing the potential impact. In most cases, Cabot manufactures products in the countries or regions in which they are sold which reduces our direct exposure to tariffs. There are small amounts of cross-border sales, where we are directly exposed to tariff increases, but we expect in those cases to be able to pass on changes in pricing through contractual formulas and increases in spot pricing that will limit the impact. The varying levels of implemented, proposed and paused tariffs around the world are causing some of our customers to be cautious in the short-term as they reduce inventory levels until the tariff guidelines are clear.
Removed paragraphs (8)
Previous report
First quarter of Fiscal 2025 versus First quarter of Fiscal 2024—Consolidated
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous report
Province of Ontario Regulation 419 Update
Previous 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.
Reworded paragraphs (35)
Previous 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.
Current wording
Our discussion under the heading “Second Quarter of Fiscal 2025 versus Second 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 “Second quarter of Fiscal 2025 versus Second 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
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.
Current wording
During the second quarter of fiscal 2025, Income (loss) before income taxes and equity in earnings of affiliated companies increased as compared to the second quarter of fiscal 2024. The increase was primarily due to lower Argentina controlled currency devaluation and other losses and higher Segment EBIT in Performance Chemicals.
Previous wording
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 wording
The decrease in Net sales and other operating revenues in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 was driven by less favorable pricing and product mix in both Reinforcement Materials and Performance Chemicals ($64 million combined), lower volumes in Reinforcement Materials ($44 million), the unfavorable impact from foreign currency translations in both Reinforcement Materials and Performance Chemicals ($27 million combined), partially offset by higher volumes in Performance Chemicals ($50 million). The less favorable pricing and product mix was driven by lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments. The lower volumes in Reinforcement Materials were primarily due to lower tire demand. The higher volumes in Performance Chemicals were across all product lines as volumes have reconnected to underlying demand drivers in key end markets.
Previous 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.
Current wording
The increase in Gross profit in the first six months of fiscal 2025 as compared to the same period in the prior year was primarily driven by higher volumes in Performance Chemicals ($29 million) which were partially offset by lower volumes in Reinforcement Materials ($18 million). The higher volumes in Performance Chemicals were driven by higher volumes across all product lines as volumes have reconnected to underlying demand drivers in key end markets. The lower volumes in Reinforcement Materials were primarily due to lower tire demand.
Previous wording
Selling and administrative expenses decreased by $1 million in the first quarter of fiscal 2025 compared to the same period of fiscal 2024.
Current wording
Selling and administrative expenses decreased by $11 million and $12 million for the three and six months ended March 31, 2025, respectively, compared to the same periods of fiscal 2024 primarily from overall cost management efforts and expenses related to our board of directors.
Previous wording
Research and technical expenses decreased by $1 million in the first quarter of fiscal 2025, compared to the same period of fiscal 2024.
Current wording
Research and technical expenses remained flat in the second quarter of fiscal 2025 and decreased by $1 million for the six months ended March 31, 2025, respectively, compared to the same periods of fiscal 2024.
Previous wording
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 wording
Interest and dividend income decreased by $1 million and $4 million in the three and six months ended March 31, 2025, respectively, compared to the same periods of fiscal 2024, primarily due to lower average interest rates, partially offset by higher average cash balances.
Previous 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.
Current wording
Interest expense decreased by $2 million and $6 million in the three and six months ended March 31, 2025, respectively, compared to the same periods of fiscal 2024, due to lower average interest rates on short term borrowings.
Previous wording
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.
Current wording
Other income (expense) increased by $2 million in the second quarter of fiscal 2025 compared to the same period of fiscal 2024, primarily due to lower foreign exchange losses primarily in Argentina. Other income (expense) increased by $32 million for the six months ended March 31, 2025, as compared to the same period of fiscal 2024, primarily due to lower foreign exchange losses primarily in Argentina.
Previous 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.
Current wording
For the three months ended March 31, 2025, the (Provision) benefit for income taxes was a provision of $49 million compared to a provision of $47 million 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
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.
Current wording
Equity in earnings of affiliated companies, net of tax, increased by $1 million in each of the three and six months ended March 31, 2025, compared to the same period of fiscal 2024 primarily due to higher profitability of our equity affiliate in Venezuela.
Previous 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.
Current wording
Net income (loss) attributable to noncontrolling interests, net of tax, decreased by $2 million in the second quarter of fiscal 2025 compared to the same period of fiscal 2024 primarily due to lower earnings of our joint ventures in China and the Czech Republic. Net income (loss) attributable to noncontrolling interests, net of tax, decreased by $2 million in the first six months of fiscal 2025 compared to the same period of fiscal 2024 primarily due to lower earnings of our joint venture in the Czech Republic.
Previous 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).
Current wording
In the first six months of fiscal 2025 and fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $187 million ($3.36 per diluted common share) and $134 million ($2.37 per dilution common share), respectively. The higher Net income in the first six months of fiscal 2025 compared with the same period in fiscal 2024 was primarily due to lower Argentina controlled currency devaluation and other losses ($41 million) and higher Segment EBIT ($13 million).
Previous wording
First quarter of Fiscal 2025 versus First quarter of Fiscal 2024—By Business Segment
Current wording
Second quarter of Fiscal 2025 versus Second 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 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.
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 six months ended March 31, 2025 and 2024 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 months ended December 31, 2024 and 2023 are as follows:
Current wording
Details of the certain items for the three and six months ended March 31, 2025 and 2024 are as follows:
Previous 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.
Current wording
Total other unallocated items remained flat and decreased by $2 million for each of the three and six months ended March 31, 2025, respectively, when compared to the same periods in fiscal 2024.
Previous wording
Sales and EBIT for Reinforcement Materials for the first quarter of fiscal 2025 and 2024 were as follows:
Current wording
Sales and EBIT for Reinforcement Materials for the second quarter of fiscal 2025 and 2024 were as follows:
Previous 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.
Current wording
As we look to the third quarter of the fiscal year, we expect the Reinforcement Materials segment EBIT to decline modestly from the second quarter of fiscal 2025 as we anticipate lower volumes in reaction to the uncertain macroeconomic backdrop.
Previous wording
Sales and EBIT for Performance Chemicals for the first quarter of fiscal 2025 and 2024 were as follows:
Current wording
Sales and EBIT for Performance Chemicals for the second quarter of fiscal 2025 and 2024 were as follows:
Previous 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.
Current wording
In the first six months of fiscal 2025, sales in Performance Chemicals increased by $26 million as compared to the first six months of fiscal 2024 primarily due to higher volumes ($50 million), partially offset by less favorable pricing and product mix ($25 million). The higher volumes were primarily due to higher demand in all product lines as volumes have reconnected 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
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:
Current wording
Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, decreased by $168 million during the first six months of fiscal 2025, which was largely due to a higher outstanding commercial paper balance at the end of the period. As of March 31, 2025, we had cash and cash equivalents of $213 million and borrowing availability under our revolving credit agreements of $1.0 billion. We have access to borrowings under the following two credit agreements:
Previous wording
A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. We generally use a combination of U.S. earnings, repatriation of certain foreign earnings, commercial paper issuances and borrowings under our U.S. Credit Agreement to meet our U.S. cash needs. With the exception of Argentina, which has currency controls that prevent the distribution of cash, we are generally able to move cash throughout the Company through our cash pooling structures, intercompany accounts and/or distributions, as needed. Although we repatriate certain foreign earnings, cash held by foreign subsidiaries is generally considered permanently reinvested and is used to finance the subsidiaries’ operational activities and future investments. We usually reduce our commercial paper balance and, if applicable, borrowings under our Credit Agreements, at quarter-end using cash derived from customer collections, including the utilization of customer supply chain financing programs, settlement of intercompany balances and short-term intercompany loans. If additional funds are needed in the U.S., we expect to be able to repatriate cash, including cash from China, while paying any withholding or other taxes. Changes in regulations and tax laws in the U.S. or foreign countries could restrict our ability to transfer funds or impose material costs on such transfers.
Current wording
A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. We generally use a combination of U.S. earnings, repatriation of certain foreign earnings, commercial paper issuances and borrowings under our U.S. Credit Agreement to meet our U.S. cash needs. With the exception of Argentina, which has some currency controls that prevent the distribution of cash, we are generally able to move cash throughout the Company through our cash pooling structures, intercompany accounts and/or distributions, as needed. Although we repatriate certain foreign earnings, cash held by foreign subsidiaries is generally considered permanently reinvested and is used to finance the subsidiaries’ operational activities and future investments. We usually reduce our commercial paper balance and, if applicable, borrowings under our Credit Agreements, at quarter-end using cash derived from customer collections, including the utilization of customer supply chain financing programs, settlement of intercompany balances and short-term intercompany loans. If additional funds are needed in the U.S., we expect to be able to repatriate cash, including cash from China, while paying any withholding or other taxes. Changes in regulations and tax laws in the U.S. or foreign countries could restrict our ability to transfer funds or impose material costs on such transfers.
Previous 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.
Current wording
As of each of March 31, 2025 and September 30, 2024, we had $114 million and $113 million, respectively, of borrowings under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit Agreement at either date. There was $190 million and $45 million of commercial paper outstanding as of March 31, 2025 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 $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.
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 $197 million in the first six months of fiscal 2025 compared to $281 million of cash provided by operating activities during the same period of fiscal 2024.
Previous 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.
Current wording
Cash provided by operating activities in the first six months of fiscal 2025 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $75 million and cash dividends received from one of our equity investments of $12 million, which was offset by an increase in net working capital of $114 million. The increase in net working capital was largely driven by a decrease in Accounts Payable and accrued liabilities, and an increase in Accounts and notes receivable.
Previous 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.
Current 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 a decrease in Accounts payable and accrued expenses and an increase in Inventories and Accounts and notes receivable.
Previous 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.
Current wording
Investing activities consumed $174 million of cash in the first six months of fiscal 2025 compared to $95 million of cash consumed in the first six months of fiscal 2024.
Previous 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.
Current wording
In the first six months of fiscal 2025 and 2024, investing activities included $149 million and $97 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 six 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 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.
Current wording
Capital expenditures for fiscal 2025 are expected to be between $250 million and $275 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 $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.
Current wording
Financing activities consumed $7 million of cash in the first six months of fiscal 2025 compared to $195 million of cash consumed during the same period of fiscal 2024.
Previous 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.
Current wording
In the first six months of fiscal 2025, financing activities primarily consisted of share repurchases of $89 million, dividend payments to stockholders of $47 million, and cash dividends paid to noncontrolling interests of $20 million. There were also net proceeds from the issuance of commercial paper of $145 million.
Previous 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.
Current wording
In the first six months of fiscal 2024, financing activities primarily consisted of net repayment of commercial paper of $85 million, share repurchases of $57 million, dividend payments to stockholders of $45 million, cash dividends paid to noncontrolling interests of $12 million, and repayments of long-term debt of $9 million. These payments were partially offset by proceeds from sales of common stock of $13 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, 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.
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, EBIT and volumes in our Reinforcement Materials segment in the third quarter of fiscal 2025, and for EBIT and volumes in our Performance Chemicals segment in the third quarter of fiscal 2025, and the principal assumptions underlying these expectations, including with respect to the impact from tariffs on demand for our products and our ability to pass on increased costs from tariffs to our customers through pricing; the possible direct and indirect impact of trade tariffs on our 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.
Previous wording
In addition to factors described elsewhere in this report, the following are some of the factors that could cause our actual results to differ materially from those expressed in our forward-looking statements: industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the price and availability of energy and raw materials, including with respect to the Russian invasion of Ukraine and the U.S.-China trade relationship; a significant adverse change in a customer or joint venture relationship or the failure of a customer or joint venture partner to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our portfolio management objectives; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; litigation or legal proceedings; interest rates, tax rates, currency exchange controls, and fluctuations in foreign currency, such as the recent currency movements in Argentina; our inability to complete capacity expansions or other development projects; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. These other factors and risks are discussed more fully in our 2024 10-K and in our subsequent SEC filings.
Current wording
In addition to factors described elsewhere in this report, the following are some of the factors that could cause our actual results to differ materially from those expressed in our forward-looking statements: industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the price and availability of energy and raw materials, including with respect to the Russian invasion of Ukraine and the U.S.-China trade relationship; a significant adverse change in a customer or joint venture relationship or the failure of a customer or joint venture partner to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our portfolio management objectives; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; litigation or legal proceedings; interest rates, tax rates, tariffs, currency exchange controls, and fluctuations in foreign currency; our inability to complete capacity expansions or other development projects; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. These other factors and risks are discussed more fully in our 2024 10-K and in our subsequent SEC filings.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
For the six months ended March 31, 2025, the (Provision) benefit for income taxes was a provision of $90 million compared to a $81 million provision for the same period in fiscal 2024, primarily due to higher earnings in the current period.
Current report — wording carried from elsewhere
In the second quarter of fiscal 2025 and fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $94 million ($1.69 per diluted common share) and $84 million ($1.49 per dilution common share), respectively. The higher Net income in the second quarter of fiscal 2025 compared with the same period in fiscal 2024 was primarily due to higher Segment EBIT in Performance Chemicals ($19 million) and lower Argentina controlled currency devaluation and other losses ($8 million), partially offset with lower Segment EBIT in Reinforcement Materials ($18 million).