Inventories

12 Months Ended

Sep. 30, 2011

Inventories

Inventories

Note D. Inventories

Inventories, net of LIFO reserves, are as follows:

	September 30
	2011		2010
	(Dollars in millions)
Raw materials	$	120	$	94
Work in process		3		3
Finished goods		233		179
Other		37		31
Total	$	393	$	307

Inventories valued under the LIFO method comprised approximately 8% and 10% of total inventories at September 30, 2011 and 2010, respectively. At September 30, 2011 and 2010, the LIFO reserve was $53 million and $35 million, respectively. Other inventory is comprised of certain spare parts and supplies.

During fiscal 2009, inventory quantities were reduced at the Company's U.S. Rubber Blacks and Performance Products sites. These reductions led to liquidations of LIFO inventory quantities and resulted in a decrease of cost of goods sold of $5 million and an increase in net income of $3 million ($0.06 per diluted common share) for fiscal 2009. No such reductions occurred in either fiscal 2011 or fiscal 2010.

Cabot reviews inventory for both potential obsolescence and potential loss of value periodically. In this review, Cabot makes assumptions about the future demand for and market value of the inventory and, based on these assumptions, estimates the amount of obsolete, unmarketable or slow moving inventory. The inventory reserves were $10 million as of both September 30, 2011 and 2010.