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Earnings Per Share (Tables)
 6 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Components of Basic and Diluted Earnings (Loss) Per Common Share (EPS)

The following tables summarize the components of the basic and diluted earnings (loss) per common share (“EPS”) computations:

 

 

 

Three Months Ended March 31

 

 

Six Months Ended March 31

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(In millions, except per share amounts)

 

Basic EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot

   Corporation

 

$

75

 

 

$

(1

)

 

$

135

 

 

$

40

 

Less: Undistributed earnings allocated to

   participating securities(1)

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

Earnings (loss) allocated to common

   shareholders (numerator)

 

$

74

 

 

$

(1

)

 

$

134

 

 

$

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares and

   participating securities outstanding

 

 

57.4

 

 

 

57.3

 

 

 

57.3

 

 

 

57.5

 

Less: Participating securities(1)

 

 

0.8

 

 

 

0.7

 

 

 

0.7

 

 

 

0.8

 

Adjusted weighted average common

   shares (denominator)

 

 

56.6

 

 

 

56.6

 

 

 

56.6

 

 

 

56.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share - basic:

 

$

1.31

 

 

$

(0.01

)

 

$

2.37

 

 

$

0.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) allocated to common

   shareholders

 

$

74

 

 

$

(1

)

 

$

134

 

 

$

40

 

Plus: Earnings allocated to

   participating securities

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

Less: Adjusted earnings allocated to

   participating securities(2)

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

Earnings (loss) allocated to common

   shareholders (numerator)

 

$

74

 

 

$

(1

)

 

$

134

 

 

$

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common

   shares outstanding

 

 

56.6

 

 

 

56.6

 

 

 

56.6

 

 

 

56.7

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issuable(3)

 

 

0.1

 

 

 

—

 

 

 

0.1

 

 

 

0.1

 

Adjusted weighted average common

   shares (denominator)

 

 

56.7

 

 

 

56.6

 

 

 

56.7

 

 

 

56.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share - diluted:

 

$

1.30

 

 

$

(0.01

)

 

$

2.36

 

 

$

0.70

 

 

 

(1)

Participating securities consist of shares underlying all outstanding and achieved performance-based restricted stock units and all unvested time-based restricted stock units. The holders of these units are entitled to receive dividend equivalents payable in cash to the extent dividends are paid on the Company’s outstanding common stock and equal in value to the dividends that would have been paid in respect of the shares underlying such 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:

 

 

 

Three Months Ended March 31

 

 

Six Months Ended March 31

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(In millions)

 

Calculation of undistributed earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cabot Corporation

 

$

75

 

 

$

(1

)

 

$

135

 

 

$

40

 

Less: Dividends declared on common stock

 

 

20

 

 

 

20

 

 

 

40

 

 

 

40

 

Less: Dividends declared on participating

   securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Undistributed earnings (loss)

 

$

55

 

 

$

(21

)

 

$

95

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allocation of undistributed earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Undistributed earnings (loss) allocated to

   common shareholders

 

$

54

 

 

$

(21

)

 

$

94

 

 

$

—

 

Undistributed earnings allocated to

   participating shareholders

 

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

Undistributed earnings (loss)

 

$

55

 

 

$

(21

)

 

$

95

 

 

$

—

 

 

(2)

Undistributed 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; and (ii) assumed issuance of shares to employees pursuant to the Company’s Deferred Compensation and Supplemental Retirement Plan. For the three and six months ended March 31, 2021, 1,120,460 and 1,377,609 incremental shares of common stock were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. For the six months ended March 31, 2020, 1,113,013 incremental shares of common stock were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive. For the three months ended March 31, 2020, 1,858,582 incremental shares of common stock, which includes shares of participating securities as described in (1) above, were excluded from the calculation of diluted earnings per share because the inclusion of these shares would have been antidilutive due to the Company’s net loss position.