J. Restructuring

Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations in the three and six months ended March 31, 2017 and 2016 as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2017		2016			2017		2016
	(In millions)
Cost of sales	$	2	$	(6	)	$	2	$	31
Selling and administrative expenses		—		1			—		8
Research and technical expenses		—		—			—		4
Total	$	2	$	(5	)	$	2	$	43

Details of all restructuring activities and the related reserves during the three months ended March 31, 2017 were as follows:

	Severance and Employee Benefits			Environmental Remediation		Other			Total
	(In millions)
Reserve at December 31, 2016	$	2		$	2	$	—		$	4
Charges		1			—		1			2
Cash paid		(1	)		—		(1	)		(2	)
Reserve at March 31, 2017	$	2		$	2	$	—		$	4

Details of all restructuring activities during the six months ended March 31, 2017 were as follows:

	Severance and Employee Benefits			Environmental Remediation		Other			Total
	(In millions)
Reserve at September 30, 2016	$	3		$	2	$	—		$	5
Charges		1			—		1			2
Cash paid		(2	)		—		(1	)		(3	)
Reserve at March 31, 2017	$	2		$	2	$	—		$	4

2016 Plan

In October 2015, in response to challenging macroeconomic conditions, the Company announced its intention to restructure its operations subject to local consultation requirements and processes in certain locations. Cabot’s plan resulted in the termination of employment for approximately 300 employees across the Company’s global locations.

Total charges related to these actions are expected to be $30 million, of which approximately $29 million was recorded in fiscal 2016. The Company recorded pre-tax charges of approximately $1 million in the first six months of fiscal 2017, most of which was recorded in the second quarter, and expects to record less than $1 million through the rest of fiscal 2017 related to these actions. The Company recorded pre-tax charges of approximately $26 million in the first six months of fiscal 2016, and pre-tax charges of $2 million for the three months ended March 31, 2016 related to these actions. The charges recorded and anticipated are comprised of severance, employee benefits and other transition costs.

Cumulative net cash outlays related to these actions are expected to be approximately $30 million, comprised of severance, employee benefits and other transition costs. Through March 31, 2017, the Company has made $29 million in cash payments related to this plan, of which $27 million was paid in fiscal 2016. The Company expects to make $1 million in cash payments through the remainder of fiscal 2017.

As of March 31, 2017, Cabot has $1 million of accrued severance charges in the Consolidated Balance Sheet related to these actions.

Additionally, in fiscal 2016 Cabot closed its carbon black manufacturing facility in Merak, Indonesia to consolidate production in Asia using the Company’s Cilegon, Indonesia and other Asian and global carbon black production sites to meet regional demand. The decision was driven by the financial performance at the Merak facility in the past several years. Manufacturing operations ceased at the end of January 2016.

Total charges related to the Merak closure are expected to be $27 million, of which $25 million was recorded in fiscal 2016. The Company has recorded net charges of less than $1 million in the six months ended March 31, 2017 and charges of $25 million in the six months ended March 31, 2016 related to this closure. The charges in the first six months of fiscal 2016 were comprised of $23 million of asset impairments and accelerated depreciation and $2 million of severance and employee benefits. Pre-tax charges related to this plan were less than $1 million and $1 million in the three months ended March 31, 2017 and 2016, respectively.

Future anticipated site closure costs for the Merak facility, comprised mainly of site demolition, clearing and environmental remediation charges, and other miscellaneous costs, are expected to total approximately $2 million in the remainder of fiscal 2017 and thereafter.

Total net cash outlays related to this closure are expected to be approximately $6 million, comprised of $3 million of severance payments, and $3 million of site demolition, clearing, environmental and other costs. Through March 31, 2017, the Company has made $3 million in cash payments related to this plan, mainly for severance, and expects to pay approximately $3 million through the remainder of fiscal 2017 and thereafter mainly for site demolition, clearing and environmental remediation costs.

As of March 31, 2017, Cabot has approximately $1 million of accrued severance costs in the Consolidated Balance Sheet related to the Merak facility closure.

Other Actions

Cabot has recorded $1 million of severance charges in the second quarter of fiscal 2017, nearly all of which was paid within the quarter.

Additionally, in previous years, the Company has entered into other various restructuring actions that have been substantially completed, other than the sale of assets from certain closed sites that remain to be completed. The Company has recorded a total net charge of less than $1 million related to these plans in the six months ended March 31, 2017 and a net benefit of $8 million in the six months ended March 31, 2016 driven by gains from the sale of certain assets. Pre-tax charges related to these actions were less than $1 million in the three months ended March 31, 2017 as compared to a net benefit of $8 million in the three months ended March 31, 2016.

Cabot expects to pay $3 million related to these actions in the remainder of fiscal 2017 and thereafter mainly for accrued environmental and other closure related costs. As of March 31, 2017, Cabot has approximately $2 million of accrued environmental costs in the Consolidated Balance Sheets related to these activities.