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