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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
September 19, 2000
Cabot Corporation
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-5667 04-2271897
(State or other jurisdiction) (Commission File Number) (IRS Employer Identification)
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Suite 1300, Two Seaport Lane, Boston, Massachusetts 02210-2019
(Address of principal executive offices) (Zip Code)
(617) 345-0100
(Registrant's telephone number, including area code)
Page 1 of 63 Pages
Exhibit Index Appears at Page 9
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Item 2. Acquisition or Disposition of Assets.
Sale of Liquefied Natural Gas Business
On September 19, 2000, Cabot Corporation ("Cabot" or "registrant"),
through a subsidiary, sold all of the outstanding shares of Cabot LNG Business
Trust ("Cabot LNG") to Tractebel, Inc. ("Tractebel"). The agreement of sale was
previously reported in Note C to the Consolidated Financial Statements and in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations in Cabot's Form 10-Q for the quarter ended June 30, 2000. Cabot LNG
is engaged in the liquefied natural gas ("LNG") business. The assets of Cabot
LNG included the LNG terminal in Everett, Massachusetts, the LNG tanker
"Matthew", Cabot's equity interest in the Atlantic LNG liquefaction plant in
Trinidad, and all related properties and equipment. The purchase price was $688
million in cash. The price was determined through a bidding process. There is no
material relationship between Tractebel and Cabot or any of its affiliates,
directors and officers or any associate of any such director or officer. A copy
of the registrant's press release dated September 19, 2000 relating to this sale
is filed herewith as Exhibit 99.1. A copy of the Stock Purchase and Sale
Agreement, dated as of July 13, 2000, by and among Cabot Business Trust, Cabot
Corporation, Tractebel, Inc. and Tractebel, S.A. is filed herewith as Exhibit 2
and is made a part hereof. Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon request.
Spin-off of Cabot Microelectronics Corporation Stock
As previously reported in registrant's Form 8-K dated September 14,
2000, on June 25, 2000 a committee of the Board of Directors of Cabot voted to
spin-off its remaining 80.5% equity interest in Cabot Microelectronics
Corporation ("CMC") by distributing a special dividend of its equity interest in
CMC to Cabot's shareholders of record as of 5:00 p. m., Eastern time, on
September 13, 2000. Cabot owned 18,989,744 shares of common stock of CMC on the
September 13, 2000 record date. The tax-free distribution took place on
September 29, 2000. The basis for the distribution to Cabot's shareholders was
approximately 0.280473721 shares of CMC common stock for each share of Cabot
common stock owned. Fractional shares were not distributed, but were to be sold
and the net proceeds distributed to Cabot shareholders on a pro rata basis. A
copy of the registrant's press release dated October 2, 2000 relating to this
spin-off is filed herewith as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Pro Forma Financial Information
1. Unaudited Pro Forma Consolidated Statements of Income of Cabot
Corporation for the years ended September 30, 1999, 1998 and
1997.
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CABOT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
The unaudited pro forma consolidated statements of income reflect the
consolidated results of operations of Cabot Corporation ("Cabot") after the sale
of its Liquefied Natural Gas ("LNG") business and the spin-off of its Cabot
Microelectronics Corporation ("CMC") business, as discussed in Item 2 above, as
though they had occurred at the beginning of each period presented. The
unaudited pro forma consolidated statements of income have been prepared by
Cabot based upon the assumptions and adjustments it has deemed appropriate, as
described in the accompanying Notes to Unaudited Pro Forma Consolidated
Statements of Income.
Pro forma information reflecting the sale of LNG and the spin-off of CMC as of
and for the nine months ended June 30, 2000 was presented in Cabot's Form 10-Q
for the quarterly period ended June 30, 2000. The unaudited pro forma
consolidated statements of income included in this filing restate Cabot's
consolidated statements of income for fiscal years 1999, 1998 and 1997 only.
The following unaudited pro forma information may not necessarily reflect the
consolidated results of operations of Cabot, which would have actually resulted,
had the transactions occurred for the periods indicated. The unaudited pro forma
information should be read in conjunction with Cabot's Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q for the relevant time periods.
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CABOT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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PRO FORMA
HISTORICAL -----------------------------------------------------
---------- ADJUSTMENTS
Cabot ------------------------------------ Cabot
Corporation LNG (A) CMC (A) Other Corporation
----------- ------- ------- ----- -----------
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Revenues:
Net sales and other operating revenues $1,695 $(265) $(96) $20(B) $1,354
Interest and dividend income 4 -- -- -- 4
------ ----- ---- --- ------
Total revenues 1,699 (265) (96) 20 1,358
Costs and expenses:
Cost of sales 1,213 (248) (45) 20(B) 940
Selling & administrative expenses 208 (13) (16) 7(C) 186
Research & technical service 73 -- (15) -- 58
Interest expense 46 -- -- (7)(D) 39
Special Items(1) 26 -- -- -- 26
Gain on Sale of Equity securities (10) -- -- -- (10)
Other (income) expense, net 7 -- (1) -- 6
------ ----- ---- --- ------
Total costs and expenses 1,563 (261) (77) 20 1,245
Income before income taxes 136 (4) (19) -- 113
Provision for income taxes (49) 1 7 -- (41)
Equity in net income of affiliated companies 13 -- -- -- 13
Minority interest (3) -- -- -- (3)
------ ----- ---- --- ------
Income from continuing operations $ 97 $ (3) $(12) $-- $ 82
Income from operations of discontinued businesses,
net of income tax -- 3 12 -- 15
------ ----- ---- --- ------
Net income $ 97 $ -- $ -- $-- $ 97
====== ===== ==== === ======
Weighted average common shares outstanding:
Basic 64 64
Diluted 73 73
Income per common share:
Basic:
Continuing operations 1.47 1.24
Discontinued operations -- 0.23
------ -------
Net Income $ 1.47 $ 1.47
====== ======
Diluted
Continuing operations 1.31 1.11
Discontinued operations -- 0.20
------ -------
Net Income $ 1.31 $ 1.31
====== ======
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(1) Special Items consist of a $16 million charge for severance and termination
benefits and a $10 million charge for the retirement of long-lived plant assets.
These charges are in connection with Cabot's fiscal 1999 capacity utilization
and cost reduction initiatives.
See accompanying Notes to Unaudited Pro Forma Consolidated Statements of Income
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CABOT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1998
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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PRO FORMA
HISTORICAL ---------------------------------------------------------
----------- ADJUSTMENTS
Cabot ---------------------------------------- Cabot
Corporation LNG (A) CMC (A) Other Corporation
----------- ------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales and other operating revenues $1,644 $(211) $(57) $16(B) $1,392
Interest and dividend income 5 - - - 5
------ ----- ---- --- ------
Total revenues 1,649 (211) (57) 16 1,397
Costs and expenses:
Cost of sales 1,133 (187) (28) 16(B) 934
Selling & administrative expenses 216 (21) (12) 4(C) 187
Research & technical service 80 - (10) - 70
Interest expense 42 - - (6)(D) 36
Special Items(1) 85 - - - 85
Gain on Sale of Equity securities (90) - - - (90)
Other (income) expense, net 15 2 (1) - 16
------ ----- ---- --- ------
Total costs and expenses 1,481 (206) (51) 14 1,238
Income before income taxes 168 (5) (6) 2 159
Provision for income taxes (60) 2 2 (1) (57)
Equity in net income of affiliated companies 17 - - - 17
Minority interest (3) - - - (3)
------ ----- ---- --- ------
Income from continuing operations $122 $ (3) $ (4) $ 1 $116
Income from operations of discontinued businesses,
net of income tax - 3 4 (1) 6
------ ----- ---- --- ------
Net income $122 $ - $ - $ - $ 122
====== ===== ==== === ======
Weighted average common shares outstanding:
Basic 66 66
Diluted 75 75
Income per common share:
Basic:
Continuing operations 1.80 1.72
Discontinued operations - 0.08
------ ------
Net Income $ 1.80 $ 1.80
====== ======
Diluted
Continuing operations 1.61 1.53
Discontinued operations - 0.08
------ ------
Net Income $ 1.61 $ 1.61
====== ======
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(1) Special Items consist of a $60 million impairment loss for the write-down of
assets at Cabot's P.T. Continental Carbon Indonesia plant and a $25 million
charge related to the write-off of unrecoverable tantalum and capitalized
prepaid expenses.
See accompanying Notes to Unaudited Pro Forma Consolidated Statements of Income
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CABOT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
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PRO FORMA
HISTORICAL --------------------------------------------------------
---------- ADJUSTMENTS
Cabot -------------------------------------- Cabot
Corporation LNG (A) CMC (A) Other Corporation
----------- ------- ------- ----- -----------
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Revenues:
Net sales and other operating revenues $1,625 $(200) $(34) $9(B) $1,400
Interest and dividend income 7 - - - 7
------ ----- ---- -- ------
Total revenues 1,632 (200) (34) 9 1,407
Costs and expenses:
Cost of sales 1,155 (184) (19) 9(B) 961
Selling & administrative expenses 204 (10) (5) 3(C) 192
Research & technical service 80 - (8) - 72
Interest expense 43 - - (6)(D) 37
Special Items(1) 18 - - - 18
Gain on Sale of Equity securities - - - - -
Other (income) expense, net 15 1 (1) - 15
------ ----- ---- -- ------
Total costs and expenses 1,515 (193) (33) 6 1,295
Income before income taxes 117 (7) (1) 3 112
Provision for income taxes (42) 3 - (1) (40)
Equity in net income of affiliated companies 20 - - - 20
Minority interest (2) - - - (2)
------ ----- ---- -- ------
Income from continuing operations $93 $(4) $ (1) $2 $90
Income from operations of discontinued businesses,
net of income tax - 4 1 (2) 3
Net income $93 $ - $ - $- $93
====== ===== ==== == ======
Weighted average common shares outstanding:
Basic 68 68
Diluted 77 77
Income per common share:
Basic:
Continuing operations 1.33 1.29
Discontinued operations - 0.04
------ ------
Net Income $1.33 $ 1.33
====== ======
Diluted
Continuing operations 1.19 1.15
Discontinued operations - 0.04
------ ------
Net Income $1.19 $ 1.19
====== ======
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(1) Special Items consist of a $10 million charge for asset impairments and a $8
million charge for employee severance costs related to the Chemicals Group and
Performance Materials segments.
See accompanying Notes to Unaudited Pro Forma Consolidated Statements of Income
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CABOT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
1. Basis of Presentation
The unaudited pro forma information reflects the consolidated results of
operations of Cabot after the sale of LNG and spin-off of CMC and should be read
in conjunction with the historical consolidated financial statements of Cabot.
The unaudited pro forma consolidated statements of income assume that the sale
of LNG and spin-off of CMC occurred as of October 1 of each fiscal year
presented. The statements do not include the gain on the sale of LNG or costs
related to the sale.
2. Adjustments
A. To remove from Cabot's historical results of continuing operations the
results of the LNG and CMC businesses.
B. To reflect intercompany sales and cost of sales between Cabot and CMC,
which were previously eliminated in consolidation.
C. To eliminate the administrative charges historically allocated to LNG
and CMC.
D. To record the interest expense allocated to LNG and CMC, in accordance
with Accounting Principles Board Opinion No. 30.
(b) Exhibits
2. Stock Purchase and Sale Agreement, dated as of July 13, 2000,
by and among Cabot Business Trust, Cabot Corporation,
Tractebel, Inc. and Tractebel, S.A. (Registrant will furnish
supplementally a copy of any omitted schedule to the
Commission upon request.)
27. Financial Data Schedules.
99.1 Press release, dated September 19, 2000, announcing the
completion of the sale of the LNG business.
99.2 Press release, dated October 2, 2000, announcing the
completion of the spin-off of common stock of Cabot
Microelectronics Corporation.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CABOT CORPORATION
By: /s/ ROBERT L. CULVER
-----------------------------
Robert L. Culver
Executive Vice President and
Chief Financial Officer
Date: October 2, 2000
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INDEX TO EXHIBITS
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Exhibit
Number Title Page
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2. Stock Purchase and Sale Agreement, dated as of
July 13, 2000, by and among Cabot Business Trust,
Cabot Corporation, Tractebel, Inc. and Tractebel,
S.A. A copy of any omitted schedule will be
furnished supplementally to the Commission
upon request.
27. Financial Data Schedules.
99.1 Press release, dated September 19, 2000, announcing
the completion of the sale of the LNG business.
99.2 Press release, dated October 2, 2000, announcing
the completion of the spin-off of common stock of
Cabot Microelectronics Corporation.
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