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Venezuela
6 Months Ended
Mar. 31, 2015
Equity Method Investments and Joint Ventures [Abstract]  
Venezuela

O. Venezuela

Cabot owns 49% of an operating carbon black affiliate in Venezuela, which is accounted for as an equity affiliate, through wholly-owned subsidiaries that carry the investment and receive its dividends. As of March 31, 2015, these subsidiaries carried the operating affiliate investment of $15 million and held 19 million bolivars (less than $1 million) in cash.

During each of the six months ended March 31, 2015 and 2014, the operating affiliate declared a dividend in the amount of $4 million which were paid in U.S. dollars and repatriated to the Company’s wholly-owned subsidiaries.

A significant portion of the Company’s operating affiliate’s sales are exports denominated in U.S. dollars. The Venezuelan government mandates that a certain percentage of the dollars collected from these sales be converted into bolivars. The operating affiliate and the Company’s wholly owned subsidiaries used an exchange rate that is available to the Company when converting these dollars into bolivars to remeasure their bolivar denominated monetary accounts. The exchange rate made available to the Company on March 31, 2015 was 52 bolivars to the U.S. dollar (B/$).

The operating entity has generally been profitable. The Company continues to closely monitor developments in Venezuela and their potential impact on the recoverability of its equity affiliate investment.

 

The Company closely monitors its ability to convert its bolivar holdings into U.S. dollars, as the Company intends to convert substantially all bolivars held by its wholly-owned subsidiaries in Venezuela to U.S. dollars as soon as practical. Any future change in the exchange rate made available to the Company or opening of additional parallel markets could cause the Company to change the exchange rate it uses and result in gains or losses on the bolivar denominated assets held by its operating affiliate and wholly-owned subsidiaries.