<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 quarterly period ended
MARCH 31, 1995
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)
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)
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 issuer's classes
of Common Stock, as of the latest practicable date.
AS OF MARCH 31, 1995, THE COMPANY HAD 38,138,589 SHARES OF COMMON
STOCK, PAR VALUE $1 PER SHARE, OUTSTANDING.
-1-
<PAGE> 2
<TABLE>
CABOT CORPORATION
INDEX
<CAPTION>
Part I. Financial Information Page No.
--------
<S> <C>
Item 1. Financial Statements
Consolidated Statements of Income
Three Months Ended March 31, 1995 and 1994 3
Consolidated Statements of Income
Six Months Ended March 31, 1995 and 1994 4
Consolidated Balance Sheets
March 31, 1995 and September 30, 1994 5
Consolidated Statements of Cash Flows
Six Months Ended March 31, 1995 and 1994 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 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
-2-
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements
- -------
<TABLE>
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1995 and 1994
(Dollars in thousands, except per share amounts)
UNAUDITED
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues:
Net sales and other operating revenues $481,340 $434,860
Interest and dividend income 1,906 1,056
-------- --------
Total revenues 483,246 435,916
-------- --------
Costs and expenses:
Cost of sales 329,421 319,321
Selling and administrative expenses 62,460 53,655
Research and technical service 13,664 12,186
Interest expense 8,872 10,305
Other (income) expense, net 3,826 5,472
-------- --------
Total costs and expenses 418,243 400,939
-------- --------
Income before income taxes 65,003 34,977
Provision for income taxes (23,939) (12,771)
Equity in net income of affilated companies 5,316 142
-------- --------
Net income 46,380 22,348
Dividends on preferred stock, net of tax
benefit of $478 and $483, respectively (889) (897)
-------- --------
Income applicable to primary common shares $ 45,491 $ 21,451
======== ========
Weighted average common shares outstanding (000):
Primary 38,865 38,178
Fully diluted (Note A) 42,013 41,304
Income per common share:
Primary $ 1.17 $ 0.56
======== ========
Fully diluted (Note A) $ 1.09 $ 0.53
======== ========
Dividends per common share $ 0.14 $ 0.13
======== ========
</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, 1995 and 1994
(Dollars in thousands, except per share amounts)
UNAUDITED
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues:
Net sales and other operating revenues $909,299 $833,335
Interest and dividend income 4,441 2,034
-------- --------
Total revenues 913,740 835,369
-------- --------
Costs and expenses:
Cost of sales 626,250 616,072
Selling and administrative expenses 118,028 105,984
Research and technical service 26,503 23,907
Interest expense 18,908 20,564
Other (income) expense, net 7,991 7,831
-------- --------
Total costs and expenses 797,680 774,358
-------- --------
Income before income taxes 116,060 61,011
Provision for income taxes (42,771) (23,184)
Equity in net income of affilated companies 6,998 479
-------- --------
Net income 80,287 38,306
Dividends on preferred stock, net of tax
benefit of $958 and $967, respectively (1,778) (1,796)
-------- --------
Income applicable to primary common shares $ 78,509 $ 36,510
======== ========
Weighted average common shares outstanding (000):
Primary 38,740 38,168
Fully diluted (Note A) 41,955 41,282
Income per common share:
Primary $ 2.03 $ 0.96
======== ========
Fully diluted (Note A) $ 1.89 $ 0.90
======== ========
Dividends per common share $ 0.28 $ 0.26
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 5
<TABLE>
CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and September 30, 1994
(Dollars in thousands)
ASSETS
<CAPTION>
March 31 September 30
1995 1994
(Unaudited)
----------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 34,069 $ 80,917
Accounts and notes receivable
(net of reserve for doubtful
accounts of $8,459 and $7,697) 327,451 272,787
Inventories:
Raw materials 66,729 52,564
Work in process 37,902 33,139
Finished goods 117,593 94,363
Other 37,527 36,816
---------- ----------
Total inventories 259,751 216,882
Prepaid expenses 11,832 13,293
Deferred income taxes 22,512 22,509
---------- ----------
Total current assets 655,615 606,388
---------- ----------
Investments:
Equity 88,902 86,164
Other 105,537 115,768
---------- ----------
Total investments 194,439 201,932
---------- ----------
Property, plant and equipment:
At cost 1,474,988 1,381,576
Accumulated depreciation and amortization (749,177) (687,068)
---------- ----------
Net property, plant and equipment 725,811 694,508
---------- ----------
Other assets:
Intangible assets, net of amortization 70,792 74,089
Deferred income taxes 6,723 6,722
Other assets 35,604 33,117
---------- ----------
Total other assets 113,119 113,928
---------- ----------
Total assets $1,688,984 $1,616,756
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 6
<TABLE>
CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 1995 and September 30, 1994
(Dollars in thousands)
LIABILITIES & STOCKHOLDERS' EQUITY
<CAPTION>
March 31 September 30
1995 1994
(Unaudited)
----------- ------------
<S> <C> <C>
Current liabilities:
Notes payable to banks $ 148,425 $ 26,480
Current portion of long-term debt 14,747 159,724
Accounts payable and accrued liabilities 271,245 281,342
U. S. and foreign income taxes payable 20,519 3,626
Deferred income taxes 3,944 3,943
---------- ----------
Total current liabilities 458,880 475,115
---------- ----------
Long-term debt 301,380 307,828
Deferred income taxes 124,305 124,286
Other liabilities 149,183 147,038
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 $72,757 and $73,577, respectively) 75,336 75,336
Less cost of shares of preferred treasury stock (4,329) (4,003)
Common stock:
Authorized: 80,000,000 shares of $1 par value
Issued: 67,774,968 shares 67,775 67,775
Additional paid-in capital 6,764 3,783
Retained earnings 984,792 916,942
Less cost of common treasury stock
(including unearned amounts of $4,853 and $7,884, respectively) (471,537) (475,055)
Deferred employee benefits (66,670) (67,403)
Unrealized gain on marketable securities 22,995 28,787
Foreign currency transalation adjustment 40,110 16,327
---------- ----------
Total stockholders' equity 655,236 562,489
---------- ----------
Total liabilities and stockholders' equity $1,688,984 $1,616,756
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE> 7
<TABLE>
CABOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 1995 and 1994
(Dollars in thousands)
UNAUDITED
<CAPTION>
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 80,287 $ 38,306
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 47,067 42,141
Deferred tax provision 2,180 7,369
Equity in net income of affiliated companies, (2,413) 2,689
net of dividends received
Other, net 2,986 1,789
Changes in assets and liabilities:
Increase in accounts receivable (46,368) (20,504)
Increase in inventory (39,128) (21,473)
Decrease in accounts payable and accruals (14,207) (16,218)
Increase in prepayments and intangible assets (210) (1,951)
Other, net 19,243 (8,805)
--------- --------
Cash provided by operating activities 49,437 23,343
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (56,906) (28,759)
Investments (20) (284)
Sales of property, plant and equipment 176 77
--------- --------
Cash used by investing activities (56,750) (28,966)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (153,656) (38,446)
Net increase in short-term debt 121,957 48,168
Sales of treasury stock, net 3,373 2,078
Cash dividends paid to stockholders (12,437) (11,556)
--------- --------
Cash (used) provided by financing activities (40,763) 244
Effect of exchange rate changes on cash 1,228 140
--------- --------
Decrease in cash and cash equivalents (46,848) (5,239)
Cash and cash equivalents at beginning of period 80,917 40,267
--------- --------
Cash and cash equivalents at end of period $ 34,069 $ 35,028
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE> 8
CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
A. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Cabot
Corporation and majority-owned and controlled domestic and foreign
subsidiaries. Investments in majority-owned affiliates where control does
not exist and investments in 20 percent to 50 percent-owned affiliates are
accounted for on the equity method. 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, 1994.
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,
1995 and 1994. 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.
On August 17, 1994, a two-for-one stock split in the form of a stock
dividend was effected. Common share and per share amounts in fiscal 1994
have been restated to reflect the split.
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.
Reclassification
Certain amounts in fiscal 1994 have been reclassified to conform to the
fiscal 1995 presentation.
B. CONTINGENCIES
The Company has various lawsuits, claims and contingent liabilities. In
the opinion of the Company, although final disposition of all of its suits
and claims may impact the Company's financial statements in a particular
period, they should not, in the aggregate, have a material adverse
effect on the Company's financial position.
-8-
<PAGE> 9
CABOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
March 31, 1995
UNAUDITED
<TABLE>
C. STOCKHOLDERS' EQUITY
The following table summarizes the changes in stockholders' equity for the six months ended March 31, 1995.
(Dollars in thousands)
<CAPTION>
Preferred Stock Preferred Common Stock
--------------- --------- ------------
Shares Treasury Stock Shares Additional
------ -------------- ------ Paid-In Retained
Issued Value Shares Cost Issued Value Capital Earnings
------ ----- ------ ---- ------ ----- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1994 75,336 $75,336 4,504 $(4,003) 67,774,968 $67,775 $3,783 $916,942
Net income 80,287
Common stock dividends paid (10,659)
Issuance of treasury stock under
employee compensation plans 233
Purchase of treasury stock - common
Purchase of treasury stock - preferred 263 (326)
Sale of treasury stock to Cabot Retirement
Incentive Savings Plan 2,748
Preferred stock dividends paid to Employee
Stock Ownership Plan, net of tax (1,778)
Principal payment by Employee Stock
Ownership Plan under guaranteed loan
Amortization of unearned compensation
Unrealized gain/(loss), net of deferred tax
Foreign currency translation adjustment
----------------------------------------------------------------------------
Balance at March 31, 1995 75,336 $75,336 4,767 $(4,329) 67,774,968 $67,775 $6,764 $984,792
============================================================================
</TABLE>
<TABLE>
<CAPTION>
Common Unrealized Foreign
Treasury Stock Deferred Gain/(Loss) Currency Total
-------------- Unearned Employee Marketable Translation Stockholders'
Shares Cost Compensation Benefits Securities Adjustments Equity
------ ---- ------------ -------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1994 29,783,722 $(467,171) $(7,884) $(67,403) $28,787 $16,327 $562,489
Net income 80,287
Common stock dividends paid (10,659)
Issuance of treasury stock under
employee compensation plans (53,005) 558 231 1,022
Purchase of treasury stock - common 147,200 (3,894) (3,894)
Purchase of treasury stock - preferred (326)
Sale of treasury stock to Cabot Retirement
Incentive Savings Plan (241,538) 3,823 6,571
Preferred stock dividends paid to Employee
Stock Ownership Plan, net of tax (1,778)
Principal payment by Employee Stock
Ownership Plan under guaranteed loan 733 733
Amortization of unearned compensation 2,800 2,800
Unrealized gain/(loss), net of deferred tax (5,792) (5,792)
Foreign currency translation adjustment 23,783 23,783
---------------------------------------------------------------------------------
Balance at March 31, 1995 29,636,379 $(466,684) $(4,853) $(66,670) $22,995 $40,110 $655,236
=================================================================================
</TABLE>
-9-
<PAGE> 10
CABOT CORPORATION
Item 2. 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, 1995 versus
Three Months Ended March 31, 1994
Net income for the second quarter of fiscal year 1995 was $46.4 million ($1.17
per primary common share), compared to $22.3 million ($0.56 per primary common
share) in the same quarter a year ago. Net sales and other operating revenues
increased 11% to $481.3 million from last year's $434.9 million. Operating
profit increased 60% to a record $83.7 million from $52.4 million last year,
reflecting the significant improvement in sales volumes and margins for
the Specialty Chemicals and Materials Group, slightly dampened by a decline in
the operating profit of the Energy Group. The Company also benefited from
favorable currency translations due to the relative weakness of the dollar,
especially versus European currencies.
In the Specialty Chemicals and Materials Group, sales grew 26% to
$384.5 million from $305.7 million and operating profit grew by $36.8 million
to $77.1 million from $40.3 million. Volumes were up 14% for the Group overall
with improvement in most businesses. The most significant volume gains were
seen in the carbon black and fumed silica businesses. Double-digit volume
growth was achieved in each of the four geographic regions in which those
businesses operate. The Group also benefited from stronger margins than the
year ago quarter mainly due to the high capacity utilization resulting from the
sold out conditions in many of the specialty chemical businesses, partly offset
by higher raw material costs. Equity in net income of affiliates increased to
$5.3 million from $0.1 million last year mainly due to the contributions from
the new carbon black plant in the Czech Republic, the absence of losses from
the Company's Japanese affiliate, which was written off in 1994, and
improvement in the Mexican affiliate's results.
In the Energy Group, sales declined 25% to $96.8 million from $129.2 million,
and operating profit fell 45% to $6.6 million from $12.1 million. The
Company's liquefied natural gas ("LNG") business continues to be negatively
affected by reduced supplies of LNG caused by the refurbishment of the
liquefaction facilities of the Company's Algerian supplier, although an
unseasonably warm winter in the Northeastern United States has reduced the
demand and price of gas. The LNG business reduced the impact of the supply
curtailments with available domestic gas supply at competitive prices.
Six Months Ended March 31, 1995 versus
Six Months Ended March 31, 1994
For the six months ended March 31, 1995, net income was $80.3 million ($2.03 per
primary common share) compared to $38.3 million ($0.96 per primary common share)
in the same period a year ago. Net sales rose 9% to $909.3 million from $833.3
million last year.
In the Specialty Chemicals and Materials Group, sales rose 26% to $734.2 million
from $583.9 million, and operating profit increased 81% to $137.6 million from
$76.2 million. The improvement reflects revenue growth in each of the Specialty
Chemicals businesses and in each of the geographic regions in which those
businesses operate. Volumes were up in each of the Specialty Chemicals and
Materials businesses. The most significant volume growth was achieved in carbon
black and fumed silica with increases of 18% and 13%, respectively. Regionally,
Europe showed the most significant volume growth with an increase of over 18%.
Margins for the Group also improved due to better pricing and higher capacity
utilization, more than offsetting increased raw material costs. The Group does
not expect to continue to achieve such volume improvements from current
levels, as capacity is tight in many businesses and regions. The Company has
begun debottlenecking projects to increase capacity modestly in several
businesses. In addition, the Company is exploring the possibility of adding
new capacity in
-10-
<PAGE> 11
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
regions where volumes and margins can be sustained throughout the economic
cycle.
In the Energy Group, sales declined 30% to $175.1 million from $249.4 million,
and operating profit fell 28% to $12.9 million from $17.8 million during the
same period a year ago. As was true with the results in the second fiscal
quarter, the declines are due to the performance of the Company's LNG business,
where supplies of LNG have been reduced by the refurbishment of the liquefaction
facilities of the Company's Algerian supplier. During the first six months of
the fiscal year, the LNG business imported two cargoes versus thirteen cargoes
the prior year. LNG supply curtailments are expected to continue through the
1995-1996 winter. The Company expects the reduced supply to negatively impact
the Energy Group's performance for the remainder of the year and beyond. The
extent of the impact will depend on the number and timing of LNG shipments
received, weather patterns and other factors. The Company also cannot predict,
at this time, what, if any, impact the political instability in Algeria may have
on the deliveries of LNG to the Company from its supplier. The Company continues
to explore other gas supply opportunities. The Company has recently reached an
agreement in principle for the purchase of LNG from a proposed LNG plant in
Trinidad, and intends to negotiate toward a definitive agreement. Gas from this
project is not expected to be available until late 1998.
Interest expense declined 8% to $18.9 million from $20.6 million last year. The
reduction is due to lower total debt than a year ago, and the results of
refinancing long-term debt with short-term floating-rate debt currently at
lower interest rates.
The Company's effective tax rate was reduced to 37% from 38% last year,
primarily due to research and development tax credits and dividends
received deductions. The Company expects to maintain this new rate for the near
term.
The Company continues to actively consider various transaction opportunities
which would result in Cabot Safety Corporation, a wholly-owned subsidiary,
being deconsolidated. The Company expects to maintain a significant ownership
position in the safety business after completion of such a transaction.
II. CASH FLOWS AND LIQUIDITY
During the first six months of the year, the Company's operations provided
$49.4 million of cash compared to $23.3 million last year. The increase
primarily reflects the significantly higher net income than the year ago
period, partially offset by an increase in accounts receivable related to the
increase in European sales, and a planned increase in inventories in the
Company's coal handling and distribution, performance materials and plastics
businesses. In addition, operating cash flow compares favorably to 1994 due to
the timing of income tax payments.
Capital spending for the first six months of the fiscal year was $56.9
million. The Company expects capital spending for the remainder of fiscal 1995
to continue at a rate at least equal to that in the first half of the year.
Over the next several years, the Company expects to have at least $60 million
of capital expenditures associated with Clean Air Act compliance. In addition,
over the next several years, as the remediation for various environmental sites
is carried out, the Company expects to spend a significant portion of its $43
million reserve for costs associated with such remediation. Additions are made
to the reserve based on the Company's continuing analysis of costs likely to be
incurred at each site. These sites are primarily associated with divested
businesses.
Cabot decreased its borrowings by $31.7 million during the first six months of
the year. At March 31, 1995 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 39% from
42% at fiscal 1994 year-end.
Management expects cash from operations and present financing arrangements,
including the Company's unused line of credit of $250 million, to be sufficient
to meet the Company's cash requirements for the foreseeable future.
-11-
<PAGE> 12
<TABLE>
CABOT CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(Dollars in millions, except per share amounts)
UNAUDITED
<CAPTION>
Three Months Ended Six Months Ended
------------------ ------------------
3/31/95 3/31/94 3/31/95 3/31/94
------- ------- ------- -------
<S> <C> <C> <C> <C>
Industry Segment Data
- ---------------------
Sales:
Specialty Chemicals and Materials $384.5 $305.7 $734.2 $583.9
Energy 96.8 129.2 175.1 249.4
------ ------ ------ ------
Net sales $481.3 $434.9 $909.3 $833.3
====== ====== ====== ======
Operating profit:
Specialty Chemicals and Materials $ 77.1 $ 40.3 $137.6 $ 76.2
Energy 6.6 12.1 12.9 17.8
------ ------ ------ ------
Total operating profit 83.7 52.4 150.5 94.0
Interest expense (8.9) (10.3) (18.9) (20.6)
General corporate expense (9.8) (7.1) (15.5) (12.4)
------ ------ ------ ------
Income before income taxes 65.0 35.0 116.1 61.0
Provision for income taxes (23.9) (12.8) (42.8) (23.2)
Equity in net income of affiliated companies 5.3 0.1 7.0 0.5
------ ------ ------ ------
Net income 46.4 22.3 80.3 38.3
Dividends on preferred stock (0.9) (0.9) (1.8) (1.8)
------ ------ ------ ------
Income applicable to primary common shares $ 45.5 $ 21.4 $ 78.5 $ 36.5
====== ====== ====== ======
Income per common share:
Primary $ 1.17 $ 0.56 $ 2.03 $ 0.96
====== ====== ====== ======
Fully diluted $ 1.09 $ 0.53 $ 1.89 $ 0.90
====== ====== ====== ======
</TABLE>
-12-
<PAGE> 13
Part II. Other Information
Item 1. Legal Proceedings
- ----------------------------
On March 6, 1995, Cabot Corporation was named as a defendant, along with several
others, in a class action filed in the United States District Court for the
Southern District of Ohio on behalf of a group of owners of properties in the
vicinity of a former metals processing facility, located in Cambridge, Ohio (the
"Cambridge facility"). A predecessor company to Cabot is alleged in the
complaint to have sent certain radioactive materials to the Cambridge facility
for processing during the 1960s. The plaintiffs allege that radioactive waste
materials, resulting from that processing, were used many years later as fill
for various construction projects at the plaintiffs' properties and that
this fill is causing both personal injury and property damage. Relief sought
includes damages against the defendants, jointly and severally, in excess of
$500,000,000, other injunctive relief, and approximately $48,000,000 in punitive
damages against Cabot. Cabot has moved to dismiss the complaint in its
entirety.
Item 4. Submission of Matters to a Vote of Security Holders
- --------------------------------------------------------------
The Annual Meeting of Stockholders of Cabot Corporation was held on February 10,
1995. An election of Directors was held at which Lydia W. Thomas was nominated
and elected to the class of Directors whose terms expire in 1997 and Kennett F.
Burnes, John G.L. Cabot, Robert P. Henderson, John F. O'Brien and Charles P.
Siess, Jr. were nominated and elected to the class of Directors whose terms
expire in 1998. The following votes were cast for or were withheld with respect
to each of the nominees:
Director In Favor Of Withheld
-------- ---------- --------
Lydia W. Thomas 38,069,498 241,851
Kennett F. Burnes 38,030,585 280,764
John G.L. Cabot 38,099,306 212,043
Robert P. Henderson 38,164,573 146,776
John F. O'Brien 38,165,651 145,698
Charles P. Siess, Jr. 38,066,658 244,691
Other Directors whose terms of office as Directors continued after the meeting
are:
Director Term of Office Expires
-------- ----------------------
Samuel W. Bodman 1996
Jane C. Bradley 1996
Robert A. Charpie 1997
John D. Curtin, Jr. 1996
Arnold S. Hiatt 1997
Gerrit Jeelof 1996
John H. McArthur 1996
David V. Ragone 1997
Morris Tanenbaum 1997
Effective February 10, 1995, Damaris Ames resigned as a Director.
-13-
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
--------
The exhibit numbers in the following list correspond to the number
assigned to such exhibits in the Exhibit Table of Item 601 of
Regulation S-K
Exhibit
Number Description
------- -----------
11 Statements Regarding Computation of Per Share Earnings,
filed herewith.
12 Statement Regarding Computation of Ratio of Earnings to
Fixed Charges, filed herewith.
27 Financial Data Schedule, filed herewith. (Not included
with printed copy of the Form 10-Q.)
(b) Reports on Form 8-K
-------------------
No report on Form 8-K was filed by the Company during the three
months ended March 31, 1995.
-14-
<PAGE> 15
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
Date: May 15, 1995 /s/ John G.L. Cabot
-------------------------------
John G.L. Cabot
Vice Chairman and Chief Financial Officer
Date: May 15, 1995 /s/ Paul J. Gormisky
-------------------------------
Paul J. Gormisky
Vice President and Controller
(Chief Accounting Officer)
-15-
<PAGE> 1
<TABLE>
EXHIBIT 11
CABOT CORPORATION AND CONSOLIDATED SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
For the three month period ended March 31, 1995
(In thousands, except per share amounts)
<CAPTION>
Primary Fully Diluted
------- -------------
<S> <C> <C>
Shares of common stock outstanding at January 1, 1995,
less treasury stock 38,077 38,077
Plus net weighted shares of treasury stock issued 36 36
Plus common stock equivalents:
Effect of convertible preferred stock conversion - 3,086
Effect of equity incentive awards 752 814
------- -------
Weighted average shares outstanding 38,865 42,013
======= =======
Income applicable to common shares $45,491 $45,491
Dividends on preferred stock - 889
Preferred stock conversion compensation shortfall - (598)
------- -------
Earnings applicable to common shares $45,491 $45,782
======= =======
Earnings per common share $ 1.17 $ 1.09
======= =======
</TABLE>
<PAGE> 2
<TABLE>
EXHIBIT 11
CABOT CORPORATION AND CONSOLIDATED SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
For the six month period ended March 31, 1995
(In thousands, except per share amounts)
<CAPTION>
Primary Fully Diluted
------- -------------
<S> <C> <C>
Shares of common stock outstanding at October 1, 1994,
less treasury stock 37,991 37,991
Plus net weighted shares of treasury stock issued 64 64
Plus common stock equivalents:
Effect of convertible preferred stock conversion - 3,086
Effect of equity incentive awards 685 814
------- -------
Weighted average shares outstanding 38,740 41,955
======= =======
Income applicable to common shares $78,509 $78,509
Dividends on preferred stock - 1,778
Preferred stock conversion compensation shortfall - (1,198)
------- -------
Earnings applicable to common shares $78,509 $79,089
======= =======
Earnings per common share $ 2.03 $ 1.89
======= =======
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12
CABOT CORPORATION AND CONSOLIDATED SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
<CAPTION>
Six Months
Ended Years ended September 30
March 31 ----------------------------------------------------
1995 1994 1993 1992 1991 1990
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income from continuing operations $116,060 $118,325 $ 67,900 $116,599 $ 62,362 $ 63,983
Distributed income of affiliated companies 5,906 5,638 5,988 5,766 4,688 3,607
Add fixed charges:
Interest on indebtedness 18,908 41,668 44,043 41,714 38,661 41,145
Portion of rents representative of
the interest factor 2,674 5,879 4,838 4,933 5,715 5,226
------- -------- -------- -------- -------- --------
Income as adjusted $143,548 $171,510 $122,769 $169,012 $111,426 $113,961
Fixed charges:
Interest on indebtedness $ 18,098 $ 41,668 $ 44,043 $ 41,714 $ 38,661 $ 41,145
Capitalized interest _ _ _ 3,963 8,745 _
Portion of rents representative of
the interest factor 2,674 5,879 4,838 4,933 5,715 5,226
------- -------- -------- -------- -------- --------
Total fixed charges $20,772 $ 47,547 $ 48,881 $ 50,610 $ 53,121 $ 46,371
Ratio of earnings to fixed charges 6.91 3.61 2.51 3.34 2.10 2.46
======= ======== ======== ======== ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS (UNAUDITED) OF CABOT CORPORATION FOR THE SIX MONTHS ENDED
MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 34,069
<SECURITIES> 0
<RECEIVABLES> 335,910
<ALLOWANCES> 8,459
<INVENTORY> 259,751
<CURRENT-ASSETS> 655,615
<PP&E> 1,474,988
<DEPRECIATION> 749,177
<TOTAL-ASSETS> 1,688,984
<CURRENT-LIABILITIES> 458,880
<BONDS> 301,380
<COMMON> 67,775
0
75,336
<OTHER-SE> 991,556
<TOTAL-LIABILITY-AND-EQUITY> 1,688,984
<SALES> 909,299
<TOTAL-REVENUES> 913,740
<CGS> 626,250
<TOTAL-COSTS> 626,250
<OTHER-EXPENSES> 34,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,908
<INCOME-PRETAX> 116,060
<INCOME-TAX> 42,771
<INCOME-CONTINUING> 80,287
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,287
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 1.89
</TABLE>
