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Financial Information by Segment (Tables)

3 Months Ended

Dec. 31, 2019

The net sales from each of these businesses for the three months ended December 31, 2019 and 2018 were as follows:

	Three Months Ended December 31
	2019		2018
	(In millions)
Performance Additives	$	170	$	167
Formulated Solutions		72		64
Total Performance Chemicals	$	242	$	231

Financial Information by Reportable Segment

Financial information by reportable segment is as follows:

	Reinforcement Materials		Performance Chemicals		Purification Solutions			Specialty Fluids⁽¹⁾		Segment Total		Unallocated and Other⁽²⁾			Consolidated Total
	(In millions)
Three Months Ended December 31, 2019
Revenues from external customers⁽³⁾	$	379	$	242	$	59		$	—	$	680	$	47		$	727
Income (loss) from continuing operations before income taxes⁽⁴⁾	$	47	$	41	$	(2	)	$	—	$	86	$	(36	)	$	50

Three Months Ended December 31, 2018
Revenues from external customers⁽³⁾	$	457	$	231	$	65		$	19	$	772	$	49		$	821
Income (loss) from continuing operations before income taxes⁽⁴⁾	$	62	$	36	$	(3	)	$	10	$	105	$	(35	)	$	70

⁽¹⁾

^{Cabot divested its Specialty Fluids business during the third quarter of fiscal 2019. The agreement to divest this business did not meet the criteria for reporting this business as a discontinued operation, and therefore, the prior period’s financial statements and disclosures have not been recast. For more detail on the sale of the Specialty Fluids business, please refer to the Company's fiscal 2019 10-K filing.}

⁽²⁾	^{Unallocated and Other includes certain items and eliminations necessary to reflect management’s reporting of operating segment results. These items are reflective of the segment reporting presented to the CODM.}

⁽³⁾

Consolidated Total Revenues from external customers reconciles to Net sales and other operating revenues on the Consolidated Statements of Operations. Revenues from external customers that are categorized as Unallocated and Other reflects royalties, external shipping and handling fees, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and by-product revenue. Details are provided in the table below:

	Three Months Ended December 31
	2019			2018
	(In millions)
Royalties, the impact of unearned revenue, the removal of 100% of the sales of an equity method affiliate and discounting charges for certain notes receivable	$	(1	)	$	(3	)
Shipping and handling fees		31			32
By-product sales		17			20
Total	$	47		$	49

⁽⁴⁾

Consolidated Total Income (loss) from continuing operations before income taxes reconciles to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies on the Consolidated Statements of Operations. Income (loss) from continuing operations before income taxes that are categorized as Unallocated and Other includes:

	Three Months Ended December 31
	2019			2018
	(In millions)
Interest expense	$	(14	)	$	(15	)
Certain items^(a)
Global restructuring activities (Note K)		(8	)		(9	)
Legal and environmental matters and reserves		1			—
Employee benefit plan settlements		(2	)		3
Acquisition and integration-related charges		(1	)		(3	)
Other		(1	)		(1	)
Total certain items, pre-tax		(11	)		(10	)
Unallocated corporate costs^(b)		(10	)		(12	)
General unallocated income (expense)^(c)		(1	)		2
Less: Equity in earnings of affiliated companies, net of tax^(d)		—			—
Total	$	(36	)	$	(35	)

^(a)

Certain items are items of expense and income that management does not consider representative of the Company’s fundamental on-going segment results and they are, therefore, excluded from Segment EBIT.

^(b)

Unallocated corporate costs are costs that are not controlled by the segments and primarily benefit corporate interests.

^(c)

General unallocated income (expense) consists of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, Interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue, the impact of including the full operating results of a contractual joint venture in Purification Solutions Segment EBIT and unrealized holding gains (losses) for equity securities.

^(d)

Equity in earnings of affiliated companies, net of tax, is included in Segment EBIT and is removed in Unallocated and other to reconcile to Income (loss) from operations before income taxes and equity in earnings from affiliated companies.

Revenues from External Customers by Geographic Region

The Company’s segments operate globally. In addition to presenting Revenue from external customers by reportable segment, the following tables further disaggregate Revenues from external customers by geographic region.

	Three Months Ended December 31, 2019
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Consolidated Total
	(In millions)
Americas	$	141	$	76	$	26	$	243
Asia Pacific		170		94		9		273
Europe, Middle East and Africa		68		72		24		164
Segment revenues from external customers		379		242		59		680
Unallocated and other								47
Net sales and other operating revenues							$	727

	Three Months Ended December 31, 2018
	Reinforcement Materials		Performance Chemicals		Purification Solutions		Specialty Fluids		Consolidated Total
	(In millions)
Americas	$	167	$	72	$	29	$	2	$	270
Asia Pacific		202		85		9		1		297
Europe, Middle East and Africa		88		74		27		16		205
Segment revenues from external customers		457		231		65		19		772
Unallocated and other										49
Net sales and other operating revenues									$	821