Financial Information By Segment

6 Months Ended

Mar. 31, 2012

Financial Information By Segment [Abstract]

Financial Information By Segment

N. Financial Information by Segment

Cabot is organized into four business segments: the Core Segment, the Performance Segment, the New Business Segment and the Specialty Fluids Segment. While the Chief Operating Decision Maker uses a number of performance measures to manage the performance of the segments and allocate resources to them, segment earnings before interest and taxes ("EBIT") is the measure that is most consistently used and is, therefore, the measure presented in the table below.

	Core Segment		Performance Segment		New Business Segment		Specialty Fluids Segment		Segment Total		Unallocated and Other			Consolidated Total
	(Dollars in millions)
Three months ended March 31, 2012
Revenues from external customers(1)	$	534	$	235	$	30	$	27	$	826	$	18		$	844
Income (loss) before taxes(2)	$	72	$	35	$	—	$	16	$	123	$	(47	)	$	76
Three months ended March 31, 2011
Revenues from external customers(1)	$	458	$	222	$	32	$	13	$	725	$	14		$	739
Income (loss) before taxes(2)	$	51	$	39	$	4	$	1	$	95	$	(47	)	$	48
Six months ended March 31, 2012
Revenues from external customers(1)	$	1,023	$	440	$	55	$	41	$	1,559	$	47		$	1,606
Income (loss) before taxes(2)	$	127	$	56	$	—	$	21	$	204	$	(73	)	$	131
Six months ended March 31, 2011
Revenues from external customers(1)	$	896	$	412	$	56	$	30	$	1,394	$	39		$	1,433
Income (loss) before taxes(2)	$	88	$	70	$	4	$	7	$	169	$	(75	)	$	94

⁽¹⁾  Unallocated and Other reflects royalties paid by equity affiliates, external shipping and handling fees, and other operating revenues, which includes the impact of the corporate adjustment for unearned revenue.

⁽²⁾  Unallocated and Other includes certain items and eliminations that are not allocated to the operating segments. Management does not consider these items necessary for an understanding of the operating results of these segments and such amounts are excluded in the segment reporting to the Chief Operating Decision Maker. Income (loss) from continuing operations before taxes that are categorized as Unallocated and Other includes:

	Three Months Ended March 31						Six Months Ended March 31
	2012			2011			2012			2011
	(Dollars in millions)
Interest expense	$	(9	)	$	(10	)	$	(19	)	$	(20	)
Total certain items, pre-tax(a)		(9	)		(7	)		(14	)		(11	)
Equity in net earnings of affiliated companies(b)		(3	)		(1	)		(4	)		(4	)
Unallocated corporate costs(c)		(18	)		(15	)		(32	)		(27	)
General unallocated expense(d)		(8	)		(14	)		(4	)		(13	)
Total	$	(47	)	$	(47	)	$	(73	)	$	(75	)

^(a) Certain items are items that management does not consider to be representative of segment results and they are, therefore, excluded from segment EBIT. Certain items, pre-tax, for the three months ended March 31, 2012 include global restructuring charges of $9 million as discussed in Note I. Certain items, pre-tax, for the six months ended March 31, 2012 include charges of $12 million related to global restructuring and $2 million for environmental reserves and legal settlements. For the three and six months ended March 31, 2012, the impact of tax certain items was $1 million and $2 million, respectively. Certain items, pre-tax, for the three and six months ended March 31, 2011 primarily relate to global restructuring charges as discussed in Note I. For the three and six months ended March 31, 2011, the benefit of tax certain items was $3 million and $29 million, respectively.

^(b) Equity in net earnings of affiliated companies is included in segment EBIT and is removed from Unallocated and Other to reconcile to segment EBIT.

^(c) Unallocated corporate costs are not controlled by the segments and primarily benefit corporate interests.

^(d) General unallocated expense consists of gain (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, the impact of accounting for certain inventory on a LIFO basis, and the profit or loss related to the corporate adjustment for unearned revenue.

The Performance Segment is comprised of two product lines: specialty grades of carbon black and masterbatch products (referred to together as "Performance Products"); and fumed silica, fumed alumina and dispersions thereof (referred to together as "Fumed Metal Oxides"). The net sales from each of these businesses for the three and six months ended March 31, 2012 and 2011 are as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2012		2011		2012		2011
	(Dollars in millions)
Performance Products Business	$	173	$	159	$	324	$	291
Fumed Metal Oxides Business		62		63		116		121
Total Performance Segment	$	235	$	222	$	440	$	412

The New Business Segment is comprised of the Inkjet Colorants, Aerogel, Cabot Superior MicroPowders, and Cabot Elastomer Composites Businesses. The net sales from each of these businesses for the three and six months ended March 31, 2012 and 2011 are as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2012		2011		2012		2011
	(Dollars in millions)
Inkjet Colorants Business	$	15	$	16	$	30	$	30
Aerogel Business		5		8		9		11
Cabot Superior MicroPowders Business		3		3		5		6
Cabot Elastomer Composites Business		7		5		11		9
Total New Business Segment	$	30	$	32	$	55	$	56