Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2015

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:

	Years Ended September 30
	2015			2014		2013
	(In millions, except per share amounts)
Basic EPS:
Net (loss) income attributable to Cabot Corporation	$	(334	)	$	199	$	153
Less: Dividends and dividend equivalents to participating securities		—			1		—
Less: Undistributed earnings allocated to participating securities⁽¹⁾		—			1		1
(Loss) earnings allocated to common shareholders (numerator)	$	(334	)	$	197	$	152
Weighted average common shares and participating securities outstanding		63.9			65.0		64.4
Less: Participating securities⁽¹⁾		0.5			0.6		0.6
Adjusted weighted average common shares (denominator)		63.4			64.4		63.8
Per share amounts—basic:
(Loss) income from continuing operations attributable to Cabot Corporation	$	(5.29	)	$	3.04	$	2.39
Income (loss) from discontinued operations		0.02			0.02		(0.01	)
Net (loss) income attributable to Cabot Corporation	$	(5.27	)	$	3.06	$	2.38
Diluted EPS:
(Loss) earnings allocated to common shareholders	$	(334	)	$	197	$	152
Plus: Earnings allocated to participating securities		—			1		1
Less: Adjusted earnings allocated to participating securities⁽²⁾		—			1		1
(Loss) earnings available to common shares (numerator)	$	(334	)	$	197	$	152
Adjusted weighted average common shares outstanding		63.4			64.4		63.8
Effect of dilutive securities:
Common shares issuable⁽³⁾		—			0.7		0.7
Adjusted weighted average common shares (denominator)		63.4			65.1		64.5
Per share amounts—diluted:
(Loss) income from continuing operations attributable to Cabot Corporation	$	(5.29	)	$	3.01	$	2.37
Income (loss) from discontinued operations		0.02			0.02		(0.01	)
Net (loss) income attributable to Cabot Corporation	$	(5.27	)	$	3.03	$	2.36

⁽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

Undistributed earnings are the earnings which remain after dividends declared during the period are assumed to be distributed to the common and participating shareholders. Undistributed earnings are allocated to common and participating shareholders on the same basis as dividend distributions. The calculation of undistributed earnings is as follows:

	Years Ended September 30
	2015			2014		2013
	(Dollars in millions)
Calculation of undistributed earnings:
Net (loss) income attributable to Cabot Corporation	$	(334	)	$	199	$	153
Less: Dividends declared on common stock		56			54		51
Less: Dividends and dividend equivalents to participating securities		—			1		—
Undistributed (loss) earnings	$	(390	)	$	144	$	102
Allocation of undistributed earnings:
Undistributed (loss) earnings allocated to common shareholders	$	(390	)	$	143	$	101
Undistributed earnings allocated to participating securities		—			1		1
Undistributed (loss) earnings	$	(390	)	$	144	$	102

⁽²⁾	Undistributed (loss) 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 401(k) Plan; and (iii) assumed issuance of shares for outstanding and achieved performance-based stock unit awards issued under Cabot’s equity incentive plans using the treasury stock method. For fiscal 2015, 2014 and 2013, respectively, 897,056, 197,072 and 301,328 incremental shares of common stock were not included in the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive.