Note N. Restructuring

Cabot’s restructuring activities were recorded in the Consolidated Statements of Operations as follows:

	Years Ended September 30
	2017		2016		2015
	(In millions)
Cost of sales	$	2	$	33	$	10
Selling and administrative expenses		1		9		11
Research and development expenses		—		5		—
Total	$	3	$	47	$	21

Details of all restructuring activities and the related reserves for fiscal 2015, 2016, and 2017 were as follows:

	Severance and Employee Benefits			Environmental Remediation			Non-Cash Asset Impairment and Accelerated Depreciation			Asset Sales			Other			Total
	(In millions)
Reserve at September 30, 2014	$	16		$	2		$	—		$	—		$	1		$	19
Charges		9			—			5			—			7			21
Costs charged against liabilities (assets)		—			—			(5	)		—			—			(5	)
Cash paid		(18	)		—			—			—			(6	)		(24	)
Foreign currency translation adjustment		(2	)		—			—			—			—			(2	)
Reserve at September 30, 2015		5			2			—			—			2			9
Charges		28			—			23			(9	)		5			47
Costs charged against liabilities (assets)		—			—			(23	)		(7	)		—			(30	)
Cash paid		(30	)		—			—			16			(7	)		(21	)
Foreign currency translation adjustment		—			—			—			—			—			—
Reserve at September 30, 2016		3			2			—			—			—			5
Charges		1			1			—			—			1			3
Costs charged against liabilities (assets)		—			—			—			—			1			1
Cash (paid) received		(3	)		(1	)		—			—			(2	)		(6	)
Foreign currency translation adjustment		—			—			—			—			—			—
Reserve at September 30, 2017	$	1		$	2		$	—		$	—		$	—		$	3

Cabot’s severance and employee benefit reserves and other closure related reserves are reflected in Accounts payable and accrued liabilities on the Company’s Consolidated Balance Sheets. Cabot’s environmental remediation reserves related to restructuring activities are reflected in Other liabilities on the Company’s Consolidated Balance Sheets.

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 $29 million was recorded in fiscal 2016. The Company has recorded pre-tax cash charges of approximately $1 million for fiscal 2017 related to these actions and expects to incur charges of less than $1 million in fiscal 2018. The charges recorded 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 September 30, 2017, the Company has made $30 million in cash payments related to this plan, of which $27 million was paid in fiscal 2016.

As of September 30, 2017, Cabot had less than $1 million of accrued severance charges in the Consolidated Balance Sheets 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 years preceding the closure. 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 fiscal 2017 of transition related costs. The charges in fiscal 2016 were comprised of $22 million of non-cash asset impairments and accelerated depreciation and $3 million of severance and other transition costs.

Future anticipated site closure costs for the Merak facility, comprised mainly of site demolition and clearing and environmental remediation charges are expected to total approximately $2 million in fiscal 2018 when these activities are expected to be substantially complete. Future anticipated costs do not include any benefit from the potential proceeds related to the sale of land on which the facility was located.

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 September 30, 2017, the Company has made $3 million in cash payments related to this plan, mainly for severance and expects to pay approximately $3 million in fiscal 2018 mainly for site demolition, clearing, environmental, and severance costs. Total net cash outlays do not include any benefit from the potential proceeds related to the sale of land on which the facility was located.

As of September 30, 2017, Cabot has approximately $1 million of accrued severance costs in the Consolidated Balance Sheets related to the Merak facility closure.

Other Actions

Cabot has recorded approximately $2 million of severance charges in fiscal 2017, nearly all of which has been paid.

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 charge of approximately $2 million related to these plans in fiscal 2017 and a net benefit of $8 million in fiscal 2016, driven by gains from the sale of certain assets.

Cabot expects to pay approximately $3 million related to these actions in fiscal 2018 and thereafter mainly for accrued environmental and other closure related costs. As of September 30, 2017, Cabot has approximately $2 million of accrued environmental costs in the Consolidated Balance Sheets related to these activities.