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Earnings Per Share (Tables)
 6 Months Ended
Mar. 31, 2013
Earnings Per Share [Abstract]  
Components of Basic and Diluted Earnings Per Common Share

The following tables summarize the components of the basic and diluted earnings per common share computations:

 

     Three Months Ended     Six Months Ended  
     March 31     March 31  
     2013      2012     2013     2012  
     (Dollars and shares in millions, except per share amounts)  

Basic EPS:

          

Net income attributable to Cabot Corporation

    $ 27      $ 240     $ 47     $ 286  

Less: Dividends and dividend equivalents to participating securities

      —          —         —         —    

Less: Undistributed earnings allocated to participating securities(1)

      —          3       —         3  
  

 

 

     

 

 

    

 

 

    

 

 

  

Earnings allocated to common shareholders (numerator)

    $ 27      $ 237     $ 47     $ 283  
  

 

 

     

 

 

    

 

 

    

 

 

  

Weighted average common shares and participating securities outstanding

      64.3        63.8       64.2       64.0  

Less: Participating securities(1)

      0.6        0.6       0.6       0.6  
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted weighted average common shares (denominator)

      63.7        63.2       63.6       63.4  
  

 

 

     

 

 

    

 

 

    

 

 

  

Amounts per share - basic:

          

Income from continuing operations attributable to Cabot Corporation

    $ 0.43      $ 0.80      $ 0.76     $ 1.35  

Income (loss) from discontinued operations

      —          2.94       (0.02 )      3.11  
  

 

 

     

 

 

    

 

 

    

 

 

  

Net income attributable to Cabot Corporation

    $ 0.43      $ 3.74     $ 0.74     $ 4.46  
  

 

 

     

 

 

    

 

 

    

 

 

  

Diluted EPS:

          

Earnings allocated to common shareholders

    $ 27      $ 237     $ 47     $ 283  

Plus: Earnings allocated to participating securities

      —          3       —         3  

Less: Adjusted earnings allocated to participating securities(2)

      —          (3 )      —         (3 ) 
  

 

 

     

 

 

    

 

 

    

 

 

  

Earnings allocated to common shareholders (numerator)

    $ 27      $ 237     $ 47     $ 283  
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted weighted average common shares outstanding

      63.7        63.2       63.6       63.4  

Effect of dilutive securities:

          

Common shares issuable(3)

      0.7        0.8       0.7       0.7  
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted weighted average common shares (denominator)

      64.4        64.0       64.3       64.1  
  

 

 

     

 

 

    

 

 

    

 

 

  

Amounts per share - diluted:

          

Income from continuing operations attributable to Cabot Corporation

    $ 0.42      $ 0.78     $ 0.75     $ 1.33  

Income (loss) from discontinued operations

      —          2.92       (0.02 )      3.08  
  

 

 

     

 

 

    

 

 

    

 

 

  

Net income attributable to Cabot Corporation

    $ 0.42      $ 3.70     $ 0.73     $ 4.41  
  

 

 

     

 

 

    

 

 

    

 

 

  

 

(1) 

Participating securities consist of shares of unvested restricted stock, vested restricted stock awards held by employees in which Cabot has a security interest, and unvested time-based restricted stock units.
Calculation of Undistributed Earnings
The calculation of undistributed earnings is as follows:

 

     Three Months Ended      Six Months Ended  
     March 31      March 31  
     2013      2012      2013      2012  
     (Dollars in millions)      (Dollars in millions)  

Calculation of undistributed earnings:

            

Net income attributable to Cabot Corporation

    $ 27       $ 240      $ 47       $ 286  

Less: Dividends declared on common stock

      13         12        26         24  

Less: Dividends declared on participating securities

      —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Undistributed earnings

    $ 14       $ 228      $ 21       $ 262  
  

 

 

     

 

 

     

 

 

     

 

 

  

Allocation of undistributed earnings:

            

Undistributed earnings allocated to common shareholders

    $ 14       $ 225      $ 21       $ 259  

Undistributed earnings allocated to participating shareholders

      —           3        —           3  
  

 

 

     

 

 

     

 

 

     

 

 

  

Undistributed earnings

    $ 14       $ 228      $ 21       $ 262  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(2) 

Undistributed earnings are adjusted for the assumed distribution of dividends to the dilutive securities, which are described in (3) below, and then reallocated to participating securities.
(3) 

Represents incremental shares of common stock from the (i) assumed exercise of stock options issued under Cabot’s equity incentive plans; (ii) assumed issuance of shares to employees pursuant to the Company’s Supplemental Retirement Savings Plan; and (iii) assumed issuance of shares under outstanding performance-based restricted stock unit awards issued under Cabot’s equity incentive plans. For the three and six months ended March 31, 2013, 308,000 and 418,000 incremental shares of common stock, respectively, were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. For the three and six months ended March 31, 2012, 304,000 and 539,000 incremental shares of common stock, respectively, were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.