Business Wire | Nov 8, 2021 04:30PM EST

Cabot Corp Reports Fourth Quarter Diluted EPS of $0.50 and Adjusted EPS of $1.11

Nov. 08, 2021

BOSTON--(BUSINESS WIRE)--Nov. 08, 2021--Cabot Corporation (NYSE: CBT) today announced results for its fourth quarter and full fiscal year 2021.

Key Highlights

* GAAP EPS of $4.34 and record full year Adjusted EPS of $5.02 driven by record Reinforcement Materials EBIT of $329 million and strong Performance Chemicals EBIT of $211 million * Solid fourth quarter results with year over year increases across all segments * Battery Materials revenue doubled year over year and fiscal 2021 financial results in line with expectations * Liquidity remained strong at approximately $1.3 billion; Net Debt to EBITDA ratio of 1.6 times as of September 30, 2021

(In millions, except per share amounts) Three Months Ended Twelve Months Ended

9/30/21 9/30/20 9/30/21 9/30/20



Net sales $ 904 $ 659 $ 3,409 $ 2,614

Net income (loss) attributable to Cabot $ 29 $ (272 ) $ 250 $ (238 )Corporation



Net earnings (loss) per share $ 0.50 $ (4.81 ) $ 4.34 $ (4.21 )attributable to Cabot Corporation

Less: Certain items after tax per share $ (0.61 ) $ (5.49 ) $ (0.68 ) $ (6.29 )

Adjusted EPS $ 1.11 $ 0.68 $ 5.02 $ 2.08

Commenting on the results, Cabot President and CEO Sean Keohane said, "I am very pleased that we delivered record Adjusted EPS in fiscal 2021, with significant year over year growth across the segments. Reinforcement Materials led the way delivering an increase in EBIT of $167 million while Performance Chemicals also recorded strong results across all major product lines with an increase in segment EBIT of $93 million. The Cabot team executed extraordinarily well during the fiscal year as we navigated through the continuing COVID-19 pandemic. In addition, discretionary free cash flow reached a historical high of $353 million in the fiscal year and we paid $80 million in dividends to shareholders. We also reduced our net debt to EBITDA ratio from 2.5 times at the end of fiscal 2020 to 1.6 times at the end of fiscal 2021."

Keohane continued, "In the fourth quarter, we delivered 63% growth year over year in Adjusted EPS from higher volumes and improved margins. We delivered these results while managing through plant outages, global supply chain disruptions, and the impact to our businesses from the semiconductor chip shortage on automotive production."

Keohane concluded, "Our record fiscal 2021 financial performance demonstrates the strength of our businesses and successful execution of our corporate strategy. Furthermore, the investments that we have made throughout the year have laid the foundation for advantaged growth in the future."

Financial Detail

For the fourth quarter of fiscal 2021, net income attributable to Cabot Corporation was $29 million ($0.50 per diluted common share). Net income reflects an after-tax per share charge from certain items of $0.61. Adjusted EPS for the fourth quarter of fiscal 2021 was $1.11 per share.

Segment Results

Reinforcement Materials - Fourth quarter fiscal 2021 EBIT in Reinforcement Materials increased by $8 million compared to the fourth quarter of fiscal 2020. The increase in EBIT was driven by higher volumes and strong pricing in Asia. Higher volumes were driven by demand increases across all regions compared to the same quarter last year, which was still recovering from COVID-19 customer shutdowns in fiscal 2020.

Global and regional volume changes for Reinforcement Materials for the fourth quarter of fiscal 2021 as compared to the same quarter of the prior year are set forth in the table below:

Fourth Quarter Year-over-Year Change

Global Reinforcement Materials Volumes 6 %

Asia 7 %

Europe, Middle East, Africa 5 %

Americas 6 %

Performance Chemicals - Fourth quarter fiscal 2021 EBIT in Performance Chemicals increased by $20 million compared to the fourth quarter of fiscal 2020, primarily due to improved product mix driven by higher sales into automotive and conductive applications in our specialty carbons product line and higher pricing in our fumed silica product line. Performance Additives volumes increased 2% as compared to the fourth quarter of the prior year and Formulated Solutions decreased 8% as compared to the fourth quarter of the prior year, with both comparisons reflecting the impact of plant outages on sales volumes.

Purification Solutions - Fourth quarter fiscal 2021 EBIT in Purification Solutions increased by $4 million compared to the fourth quarter of fiscal 2020. The increase in EBIT was largely due to higher prices in our specialty applications and lower fixed costs resulting from the sale of our mine in Texas and the related long-term activated carbon supply agreement.

Cash Performance- The Company ended the fourth quarter of fiscal 2021 with a cash balance of $168 million. During the fourth quarter of fiscal 2021, cash flows from operating activities were a source of $100 million. Capital expenditures for the fourth quarter of fiscal 2021 were $80 million. Additional uses of cash during the fourth quarter included $20 million for the payment of dividends.

Taxes - During the fourth quarter of fiscal 2021, the Company recorded a tax provision of $30 million for an effective tax rate of 48%. The provision reflected a $7 million net charge for non-GAAP tax adjustments. The operating tax rate for fiscal year 2021 was 27%. We expect our operating tax rate for fiscal 2022 to be in the range of 27% to 29%.

Outlook

Commenting on the outlook for the Company, Keohane said, "Looking forward to fiscal 2022, we believe robust end-market demand will continue and the benefits from our growth investments will support another year of strong results. In our Reinforcement Materials segment, we expect to benefit from higher volumes driven by strong forecasted levels of tire production and higher pricing in our calendar year 2022 customer agreements as customers are placing a premium on supply security. In our Performance Chemicals segment, we anticipate continued demand growth across our broad set of applications, with particular strength in battery materials and inkjet packaging. While external challenges, such as rising input costs, global supply chain disruptions and the semi-conductor chip shortage, are likely to remain in the short-term, we expect they will moderate as we move through the fiscal year. Consistent with this outlook, we expect fiscal year 2022 adjusted earnings per share to be in the range of $5.20 to $5.60.

Keohane continued, "Overall, we are excited about the outlook for our high growth investments, particularly in batteries as electrification of the car fleet continues to build momentum. At the same time, we remain focused on generating strong discretionary free cash flow and returning cash to shareholders. We will share more about our long-term strategic and financial outlook at our upcoming Investor Day on December 2, 2021."

Earnings Call

The Company will host a conference call with industry analysts at 8:00 a.m. Eastern time on Tuesday, November 9, 2021. The call can be accessed through Cabot's investor relations website at http://investor.cabot-corp.com.

About Cabot Corporation

Cabot Corporation (NYSE: CBT) is a global specialty chemicals and performance materials company, headquartered in Boston, Massachusetts. The company is a leading provider of reinforcement bber and specialty carbons, activated carbon, inkjet colorants, masterbatches and conductive compounds, fumed silica, and aerogel. For more information on Cabot, please visit the company's website at: http://www.cabotcorp.com. The Company encourages investors and potential investors to consult the Cabot website regularly.

Forward-Looking Statements - This earnings release contains forward-looking statements. All statements that address expectations or projections about the future, including with respect to our expectations for our performance in fiscal year 2022, including our expectations for adjusted earnings per share and the strength of demand and the benefits of our investments, the factors that we expect will impact our results of operations, and our expected operating tax rate for fiscal 2022, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed or implied by forward-looking statements. Important factors that could cause our results to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to, competition from other specialty chemical companies; volatility in the price of energy and raw materials; a significant adverse change in a customer relationship; safety, health and environmental requirements; unanticipated delays in, or increased cost of, site development projects; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations or global health matters; and fluctuations in foreign currency exchange and interest rates. These factors are discussed more fully in the reports we file with the Securities and Exchange Commission ("SEC"), particularly under the heading "Risk Factors" in our annual report on Form 10-K for our fiscal year ended September 30, 2020, filed with the SEC at www.sec.gov. We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Use of Non-GAAP Financial Measures

To supplement Cabot's consolidated financial statements presented on a generally accepted accounting principle ("GAAP") basis, the preceding discussion of our results and the accompanying financial tables report Adjusted EPS, Total Segment EBIT, Total Segment EBITDA, Adjusted EBITDA, our operating tax rate, Free Cash Flow and Discretionary Free Cash Flow, all of which are non-GAAP financial measures. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP, and the definitions of these measures may not be comparable to those used by other companies. Reconciliations of Adjusted EPS to net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Total Segment EBIT, Total Segment EBITDA, and Adjusted EBITDA to income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure and Free Cash Flow and Discretionary Free Cash Flow to Cash flow from operating activities, the most directly comparable GAAP financial measure, are provided in the tables titled "Cabot Corporation Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate" and "Cabot Corporation Reconciliation of Non-GAAP Financial Measures."

Management believes these non-GAAP measures provide investors with greater transparency to the information used by Cabot management in its financial and operational decision-making, allow investors to see Cabot's results through the eyes of management, and better enable Cabot's investors to understand Cabot's operating performance and financial condition.

Adjusted EPS. In calculating Adjusted EPS, we exclude from our net income (loss) attributable to Cabot Corporation items of expense and income that management does not consider representative of the Company's business operations. Accordingly, reporting earnings on an adjusted basis supplements the GAAP measure of performance and provides additional information related to the underlying performance of the business. For example, certain of the items we exclude are items that we are required by GAAP to recognize in one period that relate to activities extending over several periods or relate to single events that management considers to be unusual and infrequent, although not necessarily non-recurring. We refer to these items as "certain items." Management believes excluding these items facilitates operating performance comparisons from period to period by eliminating differences caused by the existence and timing of certain expense and income items that would not otherwise be apparent on a GAAP basis and evaluates the Company's operating performance without the impact of these costs or benefits. Management also uses Adjusted EPS as a key measure in evaluating management performance for incentive compensation purposes.

The items of income and expense that we exclude from our calculations of Adjusted EPS but that are included in our GAAP net income (loss) per share, as applicable in a particular reporting period, include, but are not limited to, the following:

* Global restructuring activities, which include costs or benefits associated with cost reduction initiatives or plant closures and are primarily related to (i) employee termination costs, (ii) asset impairment charges associated with restructuring actions, (iii) costs to close facilities, including environmental costs and contract termination penalties, and (iv) gains realized on the sale of land or equipment associated with restructured plants or locations. * Non-recurring gains (losses) on foreign currency, which are primarily related to the impact of continued currency devaluations on our net monetary assets denominated in that currency. * Legal and environmental reserves and matters, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business. * Executive transition costs, which include incremental charges, including stock compensation charges, associated with the retirement or termination of employment of senior executives of the Company. * Asset impairment charges, which primarily include charges associated with an impairment of goodwill or other long-lived assets. * Acquisition and integration-related charges, which include transaction costs, redundant costs incurred during the period of integration, and costs associated with transitioning certain management and business processes to Cabot's processes. * Gains (losses) on sale of investments, which primarily relate to the sale of investments accounted for under the cost-method. * Inventory reserve adjustment, which generally results from an evaluation performed as part of an impairment analysis. * Indirect tax settlement credits, which includes favorable settlements resulting in the recoveries of indirect taxes. * Gains (losses) on sale of a business. * Employee benefit plan settlements, which consist of either charges or benefits associated with the termination of a pension plan or the transfer of a pension plan to a multi-employer plan.

Cabot does not provide an expected GAAP EPS range or reconciliation of the Adjusted EPS range with an expected GAAP EPS range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on GAAP EPS in future periods.

Total Segment EBIT. Total segment EBIT reflects the sum of EBIT from our three reportable segments. In calculating Total segment EBIT we exclude from our income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, certain items and items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Total Segment EBITDA. Total Segment EBITDA is equal to Total Segment EBIT (as defined above), but further adjusted for depreciation and amortization.

Adjusted EBITDA. Adjusted EBITDA reflects Total Segment EBITDA and is further adjusted for unallocated corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to corporate projects and initiatives.

Free Cash Flow. To calculate "Free Cash Flow" we deduct Additions to property, plant and equipment from cash flow from operating activities.

Discretionary Free Cash Flow. To calculate "Discretionary Free Cash Flow" we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow from operating activities.

Operating Tax Rate. Our "operating tax rate" is calculated by excluding the income tax (expense) benefit on certain items and discrete tax items. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Cabot does not provide a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.

Explanation of Terms Used

Product Mix. The term "product mix" refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.

Net Working Capital. The term "net working capital" includes accounts receivable, inventory and accounts payable and accrued expenses.

Fourth Quarter Earnings Announcement,Fiscal 2021 CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Periods ended September 30 Three Months Twelve MonthsDollars in millions, except per share 2021 2020 2021 2020 amounts (unaudited) Net sales and other operating revenues $ 904 $ 659 $ 3,409 $ 2,614

Cost of sales 726 522 2,610 2,114

Gross profit 178 137 799 500

Selling and administrative expenses 89 62 289 292

Research and technical expenses 15 16 56 57

Specialty Fluids loss on sale and asset - - - 1 impairment charge Marshall Mine loss on sale and asset - 129 - 129 impairment charge Income (loss) from operations 74 (70 ) 454 21

Other income (expense) Interest and dividend income 2 1 8 8

Interest expense (12 ) (12 ) (49 ) (53 )

Other income (expense) 2 (3 ) (7 ) (9 )

Total other income (expense) (8 ) (14 ) (48 ) (54 )

Income (loss) before income taxes andequity inearnings of affiliated companies 66 (84 ) 406 (33 )

(Provision) benefit for income taxes (30 ) (182 ) (123 ) (191 )

Equity in earnings of affiliated - 1 3 3 companies, net of tax Net income (loss) 36 (265 ) 286 (221 )

Net income (loss) attributable to 7 7 36 17 noncontrolling interests Net income (loss) attributable to Cabot $ 29 $ (272 ) $ 250 $ (238 )Corporation Diluted earnings (loss) per share ofcommon stockattributable to Cabot Corporation $ 0.50 $ (4.81 ) $ 4.34 $ (4.21 )

Diluted weighted average common shares 56.9 56.5 56.8 56.6 outstanding CABOT CORPORATION SUMMARY RESULTS BY SEGMENT Periods ended September 30 Three Months Twelve MonthsDollars in millions, except per 2021 2020 2021 2020 share amounts (unaudited) Sales Reinforcement Materials $ 493 $ 325 $ 1,781 $ 1,256

Performance Chemicals 284 226 1,148 933

Performance Additives 201 156 796 645

Formulated Solutions 83 70 352 288

Purification Solutions 66 67 257 253

Segment sales 843 618 3,186 2,442

Unallocated and other ^(A) 61 41 223 172

Net sales and other operating $ 904 $ 659 $ 3,409 $ 2,614 revenues Segment Earnings Before Interest andTaxes ^(B) Reinforcement Materials $ 67 $ 59 $ 329 $ 162

Performance Chemicals 45 25 211 118

Purification Solutions 4 - 10 3

Total Segment Earnings Before 116 84 550 283 Interest and Taxes Unallocated and Other Interest expense (12 ) (12 ) (49 ) (53 )

Certain items ^(C) (27 ) (144 ) (34 ) (218 )

Unallocated corporate costs (15 ) (9 ) (58 ) (41 )

General unallocated income (expense) 4 (2 ) - (1 )^(D) Less: Equity in earnings of - 1 3 3 affiliated companies Income (loss) before income taxes andequity inearnings of affiliated companies 66 (84 ) 406 (33 )

(Provision) benefit for income taxes (30 ) (182 ) (123 ) (191 )(including tax certain items) Equity in earnings of affiliated - 1 3 3 companies Net income (loss) 36 (265 ) 286 (221 )

Net income (loss) attributable to 7 7 36 17 noncontrolling interests Net income (loss) attributable to $ 29 $ (272 ) $ 250 $ (238 )Cabot Corporation Diluted earnings (loss) per share ofcommon stockattributable to Cabot Corporation $ 0.50 $ (4.81 ) $ 4.34 $ (4.21 )

Adjusted earnings (loss) per share^ $ 1.11 $ 0.68 $ 5.02 $ 2.08 (E) Diluted weighted average common 56.9 56.5 56.8 56.6 shares outstanding(A)Unallocated and other reflects royalties, other operating revenues, external shipping and handling fees, the impact of the corporate adjustment for unearned revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and indirect tax settlement credits.(B)Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to measure consolidated operating results, assess segment performance and allocate resources. Segment EBIT includes equity in earnings of affiliated companies, royalty income, and allocated corporate costs.(C)Details of Certain items are presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.(D)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.(E)Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table. Unallocated and other reflects royalties, other operating revenues, external^ shipping and handling fees, the impact of the corporate adjustment for unearned(A) revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and indirect tax settlement credits. Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to^ measure consolidated operating results, assess segment performance and allocate(B) resources. Segment EBIT includes equity in earnings of affiliated companies, royalty income, and allocated corporate costs.^ Details of Certain items are presented in the Certain Items and Reconciliation(C) of Adjusted EPS and Operating Tax Rate table. General unallocated income (expense) consists of gains (losses) arising from^ foreign currency transactions, net of other foreign currency risk management(D) 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.^ Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to(E) GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table. CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION September September 30, 30,Dollars in millions (unaudited) 2021 2020

Current assets: Cash and cash equivalents $ 168 $ 151

Accounts and notes receivable, net of reserve for 645 418doubtful accounts of $4 and $2 Inventories: Raw materials 168 82

Finished goods 300 225

Other 55 52

Total inventories 523 359

Prepaid expenses and other current assets 89 50

Total current assets 1,425 978

Property, plant and equipment, net 1,376 1,314

Goodwill 140 134

Equity affiliates 40 39

Intangible assets, net 100 103

Deferred income taxes 53 53

Other assets 172 160

Total assets $ 3,306 $ 2,781

CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION September September 30, 30,Dollars in millions, except share and per share amounts 2021 2020(unaudited) Current liabilities: Short-term borrowings $ 72 $ 14

Accounts payable and accrued liabilities 667 488

Income taxes payable 35 20

Current portion of long-term debt 373 7

Total current liabilities 1,147 529

Long-term debt 717 1,094

Deferred income taxes 73 58

Other liabilities 279 286

Stockholders' equity: Preferred stock:Authorized: 2,000,000 shares of $1 par valueIssued and Outstanding: None and none - -

Common stock:Authorized: 200,000,000 shares of $1 par value, Issued:56,870,237 and 56,616,030 shares, Outstanding: 57 5756,726,818 and 56,466,638 sharesLess cost of 143,419 and 149,392 shares of common (4 ) (4 )treasury stock Additional paid-in capital - -

Retained earnings 1,183 989

Accumulated other comprehensive income (loss) (289 ) (351 )

Total Cabot Corporation stockholders' equity 947 691

Noncontrolling interests 143 123

Total stockholders' equity 1,090 814

Total liabilities and stockholders' equity $ 3,306 $ 2,781

CABOT CORPORATION QUARTERLY RESULTS BY SEGMENT Fiscal 2020 Fiscal 2021Dollars inmillions,except pershare amounts Dec. Q Mar. Q June Q Sept. Q FY Dec. Q Mar. Q June Q Sept. Q FY(unaudited) SalesReinforcement $ 379 $ 355 $ 197 $ 325 $ 1,256 $ 375 $ 434 $ 479 $ 493 $ 1,781 MaterialsPerformance 242 245 220 226 933 267 294 303 284 1,148 ChemicalsPerformance 170 168 151 156 645 184 203 208 201 796 AdditivesFormulated 72 77 69 70 288 83 91 95 83 352 SolutionsPurification 59 64 63 67 253 59 63 69 66 257 SolutionsSegment sales 680 664 480 618 2,442 701 791 851 843 3,186

Unallocated 47 46 38 41 172 45 51 66 61 223 and other^ (A) Net sales andother $ 727 $ 710 $ 518 $ 659 $ 2,614 $ 746 $ 842 $ 917 $ 904 $ 3,409 operatingrevenues SegmentEarningsBeforeInterest andTaxes ^(B)Reinforcement $ 47 $ 61 $ (5 ) $ 59 $ 162 $ 88 $ 89 $ 85 $ 67 $ 329 MaterialsPerformance 41 31 21 25 118 54 58 54 45 211 ChemicalsPurification (2 ) 3 2 - 3 (2 ) 2 6 4 10 SolutionsTotal SegmentEarnings 86 95 18 84 283 140 149 145 116 550 BeforeInterest andTaxes Unallocatedand OtherInterest (14 ) (14 ) (13 ) (12 ) (53 ) (12 ) (13 ) (12 ) (12 ) (49 )expenseCertain items^ (11 ) (56 ) (7 ) (144 ) (218 ) (11 ) (1 ) 5 (27 ) (34 )(C)Unallocated (10 ) (12 ) (10 ) (9 ) (41 ) (13 ) (16 ) (14 ) (15 ) (58 )corporatecostsGeneralunallocated (1 ) - 2 (2 ) (1 ) (5 ) - 1 4 - income(expense) ^(D)Less: Equityin earnings of - 1 1 1 3 - 1 2 - 3 affiliatedcompanies Income (loss)before incometaxes andequity inearnings of 50 12 (11 ) (84 ) (33 ) 99 118 123 66 406 affiliatedcompanies(Provision)benefit for (4 ) (10 ) 5 (182 ) (191 ) (29 ) (34 ) (30 ) (30 ) (123 )income taxes(including taxcertain items)Equity inearnings of - 1 1 1 3 - 1 2 - 3 affiliatedcompanies Net income 46 3 (5 ) (265 ) (221 ) 70 85 95 36 286 (loss) Net income(loss)attributable 5 4 1 7 17 10 10 9 7 36 tononcontrollinginterests Net income(loss) $ 41 $ (1 ) $ (6 ) $ (272 ) $ (238 ) $ 60 $ 75 $ 86 $ 29 $ 250 attributableto CabotCorporation Dilutedearnings(loss) pershare ofcommon stockattributable $ 0.70 $ (0.01 ) $ (0.12 ) $ (4.81 ) $ (4.21 ) $ 1.06 $ 1.30 $ 1.48 $ 0.50 $ 4.34 to CabotCorporation Adjustedearnings $ 0.69 $ 0.77 $ (0.07 ) $ 0.68 $ 2.08 $ 1.18 $ 1.38 $ 1.35 $ 1.11 $ 5.02 (loss) pershare^ (E) Dilutedweighted 57.0 56.6 56.5 56.5 56.6 56.6 56.7 57.0 56.9 56.8 average commonsharesoutstanding(A)Unallocated and other reflects royalties, other operating revenues, external shipping and handling fees, the impact of the corporate adjustment for unearned revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and indirect tax settlement credits.(B)Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to measure consolidated operating results, assess segment performance and allocate resources. Segment EBIT includes equity in earnings of affiliated companies, royalty income, and allocated corporate costs.(C)Details of certain items are presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.(D)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.(E)Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table. Unallocated and other reflects royalties, other operating revenues,^ external shipping and handling fees, the impact of the corporate adjustment(A) for unearned revenue, the removal of 100% of the sales of an equity method affiliate, discounting charges for certain Notes receivable, and indirect tax settlement credits.

^ Segment EBIT is a measure used by Cabot's Chief Operating Decision-Maker to(B) measure consolidated operating results, assess segment performance and allocate resources. Segment EBIT includes equity in earnings of affiliated companies, royalty income, and allocated corporate costs.^ Details of certain items are presented in the Certain Items and(C) Reconciliation of Adjusted EPS and Operating Tax Rate table.

^ General unallocated income (expense) consists of gains (losses) arising(D) 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.

^ Adjusted EPS is a non-GAAP measure, and a reconciliation of Adjusted EPS to(E) GAAP EPS is presented in the Certain Items and Reconciliation of Adjusted EPS and Operating Tax Rate table.

CABOT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Periods ended September 30 Three Months Twelve MonthsDollars in millions (unaudited) 2021 2020 2021 2020

Cash Flows from Operating Activities: Net income (loss) $ 36 $ (265 ) $ 286 $ (221 )

Adjustments to reconcile net income tocash provided by operating activities: Depreciation and amortization 43 41 160 158

Other non-cash charges, net 19 290 53 277

Cash dividends received from equity - - 2 1 affiliates

Changes in assets and liabilities: Changes in certain working capital items 4 7 (222 ) 185 ^(A) Changes in other assets and liabilities, (2 ) 26 (22 ) (23 )net Cash provided by (used in) operating 100 99 257 377 activities Cash Flows from Investing Activities: Additions to property, plant and (80 ) (38 ) (195 ) (200 )equipment Cash paid for acquisition of business, - - - (92 )net of cash acquired of $0, $0, $0, and$1 Other investing activities, net 4 2 9 4

Cash provided by (used in) investing (76 ) (36 ) (186 ) (288 )activities Cash Flows from Financing Activities: Change in debt, net 7 (75 ) 36 15

Cash dividends paid to common (20 ) (20 ) (80 ) (80 )stockholders Other financing activities, net 1 - (16 ) (67 )

Cash provided by (used in) financing (12 ) (95 ) (60 ) (132 )activities Effect of exchange rates on cash (15 ) 21 8 25

Increase (decrease) in cash, cash (3 ) (11 ) 19 (18 )equivalents and restricted cash Cash and cash equivalents and restricted 173 162 151 169 cash at beginning of period Cash, cash equivalents and restricted $ 170 $ 151 $ 170 $ 151 cash at end of period ^(B)(A)Includes Accounts and notes receivable, Inventories, and Accounts payable and accrued liabilities.(B)Restricted cash was $2 million as of September 30, 2021. There was no restricted cash as of September 30, 2020.^ Includes Accounts and notes receivable, Inventories, and Accounts payable and(A) accrued liabilities.^ Restricted cash was $2 million as of September 30, 2021. There was no(B) restricted cash as of September 30, 2020. CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS ANDOPERATING TAX RATE TABLE 1: DETAIL OF CERTAIN ITEMSPeriods ended Three Months Twelve MonthsSeptember 30Dollars in millions, 2021 2020 2021 2020except per shareamounts (unaudited) Certain items beforeand after income taxes Indirect tax $ - - $ 12 3 settlement creditsLegal and (25 ) (3 ) (25 ) (54 )environmental mattersand reservesGlobal restructuring (3 ) (3 ) (11 ) (19 )activitiesAcquisition and (1 ) (2 ) (5 ) (5 )integration-relatedchargesEmployee benefit plan 2 (5 ) (4 ) (10 )settlement and otherchargesMarshall Mine loss on - (129 ) - (129 )sale and assetimpairment chargeInventory reserve - (2 ) - (2 )adjustmentSpecialty Fluids loss - - - (1 )on sale and assetimpairment chargesOther certain items - - (1 ) (1 )

Total certain items, (27 ) (144 ) (34 ) (218 )pre-tax Non-GAAP tax (7 ) (166 ) (4 ) (139 )adjustments^(A) Total certain items $ (34 ) $ (310 ) $ (38 ) $ (357 )after taxTotal certain items $ (0.61 ) $ (5.49 ) $ (0.68 ) $ (6.29 )after tax per shareimpact TABLE 2: CERTAIN ITEMS STATEMENT OF OPERATIONS LINE ITEMPeriods ended Three Months Twelve MonthsSeptember 30Dollars in millions, 2021 2020 2021 2020Pre-Tax (unaudited) Statement ofOperations Line Item ^(B) Net sales and other $ - $ - $ 9 $ - operating revenuesCost of sales (5 ) (3 ) (12 ) (9 )

Selling and (25 ) (6 ) (29 ) (68 )administrativeexpensesResearch and technical - - (1 ) - expensesOther income (expense) 3 (6 ) (1 ) (11 )

Specialty Fluids loss - - - (1 )on sale and assetimpairment chargesMarshall Mine loss on - (129 ) - (129 )sale and assetimpairment chargesTotal certain items, $ (27 ) $ (144 ) $ (34 ) $ (218 )pre-tax TABLE 3: RECONCILIATION OF EFFECTIVE TAX RATE TO OPERATING TAX RATEThree months ended 2021 2020September 30 (Provision) (Provision)Dollars in millions / /(unaudited) Benefit for Rate Benefit for Rate Income Income Taxes Taxes Effective Tax Rate $ (30 ) 48 % $ (182 ) -217 %

Less: Non-GAAP tax (7 ) (166 )adjustments^(A) Operating tax rate^ $ (23 ) 26 % $ (16 ) 28 %(C) Twelve months ended 2021 2020September 30 (Provision) (Provision)Dollars in millions / /(unaudited) Benefit for Rate Benefit for Rate Income Income Taxes Taxes Effective Tax Rate $ (123 ) 30 % $ (191 ) -587 %

Less: Non-GAAP tax (4 ) (139 )adjustments^(A) Operating tax rate^ $ (119 ) 27 % $ (52 ) 28 %(C) TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER FOR FISCAL 2021 and FISCAL2020 Fiscal 2021 ^(D)Periods ended Dec. Q Mar. Q June Q Sept. Q FY 2021(unaudited)Reconciliation ofAdjusted EPS to GAAPEPSNet income (loss) per $ 1.06 $ 1.30 $ 1.48 $ 0.50 $ 4.34 share attributable toCabot CorporationLess: Certain items (0.12 ) (0.08 ) 0.13 (0.61 ) (0.68 )after tax per shareAdjusted earnings $ 1.18 $ 1.38 $ 1.35 $ 1.11 $ 5.02 (loss) per share Fiscal 2020 ^(D)Periods ended Dec. Q Mar. Q June Q Sept. Q FY 2020(unaudited)Reconciliation ofAdjusted EPS to GAAPEPSNet income (loss) per $ 0.70 $ (0.01 ) $ (0.12 ) $ (4.81 ) $ (4.21 )share attributable toCabot CorporationLess: Certain items 0.01 (0.78 ) (0.05 ) (5.49 ) (6.29 )after tax per shareAdjusted earnings $ 0.69 $ 0.77 $ (0.07 ) $ 0.68 $ 2.08 (loss) per share(A)Non-GAAP tax adjustments are made to arrive at the operating tax provision. It includes the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes.(B)This table indicates the line items where certain items are recorded in the Consolidated Statements of Operations.(C)Our operating tax rate for fiscal 2022 is expected to be in the range of 27% to 29%.(D)Per share amounts are calculated after tax. Non-GAAP tax adjustments are made to arrive at the operating tax provision. It includes the income tax (expense) benefit on certain items, discrete tax items,^ and, on a quarterly basis the timing of losses in certain jurisdictions. The(A) income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes.

^ This table indicates the line items where certain items are recorded in the(B) Consolidated Statements of Operations.^ Our operating tax rate for fiscal 2022 is expected to be in the range of 27% to(C) 29%.^ Per share amounts are calculated after tax.(D) CABOT CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Fiscal 2021 ^(A) Dec. Q Mar. Q June Q Sept. Q FY 2021Reconciliation of AdjustedEPS to GAAP EPSNet income (loss) per share $ 1.06 $ 1.30 $ 1.48 $ 0.50 $ 4.34 attributable to CabotCorporationLess: Certain items after (0.12 ) (0.08 ) 0.13 (0.61 ) (0.68 )tax per shareAdjusted earnings (loss) per $ 1.18 $ 1.38 $ 1.35 $ 1.11 $ 5.02 share Fiscal 2020 ^(A) Dec. Q Mar. Q June Q Sept. Q FY 2020Reconciliation of AdjustedEPS to GAAP EPSNet income (loss) per share $ 0.70 $ (0.01 ) $ (0.12 ) $ (4.81 ) $ (4.21 )attributable to CabotCorporationLess: Certain items after 0.01 (0.78 ) (0.05 ) (5.49 ) (6.29 )tax per shareAdjusted earnings (loss) per $ 0.69 $ 0.77 $ (0.07 ) $ 0.68 $ 2.08 share (A) Per share amounts are calculated after tax. Dollars in millions Fiscal 2021 Dec. Q Mar. Q June Q Sept. Q FY 2021Reconciliation of TotalSegment EBIT, Total SegmentEBITDA and Adjusted EBITDAto Net Income and SegmentEBITDA MarginNet income (loss) $ 60 $ 75 $ 86 $ 29 $ 250 attributable to CabotCorporationNet income (loss) 10 10 9 7 36 attributable tononcontrolling interestsEquity in earnings of - (1 ) (2 ) - (3 )affiliated companies, net oftaxProvision (benefit) for 29 34 30 30 123 income taxesIncome (loss) before income $ 99 $ 118 $ 123 $ 66 $ 406 taxes and equity in earningsof affiliated companiesInterest expense 12 13 12 12 49

Certain items 11 1 (5 ) 27 34

Unallocated corporate costs 13 16 14 15 58

General unallocated (income) 5 - (1 ) (4 ) - expenseLess: Equity in earnings of - (1 ) (2 ) - (3 )affiliated companiesTotal Segment EBIT $ 140 $ 149 $ 145 $ 116 $ 550

Depreciation and 39 38 40 43 160 amortizationAdjustments to depreciation - 2 (1 ) (2 ) (1 )^(B)Total Segment EBITDA $ 179 $ 189 $ 184 $ 157 $ 709

Less: Unallocated corporate 13 16 14 14 57 costs before corporatedepreciationAdjusted EBITDA $ 166 $ 173 $ 170 $ 143 $ 652

(B) Adjustments to depreciation includes the addition of the depreciationexpense of a contractual joint venture in Purification Solutions lessaccelerated depreciation expense not allocated to a business. Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2021Reinforcement Materials EBIT $ 88 $ 89 $ 85 $ 67 $ 329

Reinforcement Materials 17 18 17 18 70 Depreciation andamortizationReinforcement Materials $ 105 $ 107 $ 102 $ 85 $ 399 EBITDAReinforcement Materials $ 375 $ 434 $ 479 $ 493 $ 1,781 SalesReinforcement Materials 28 % 25 % 21 % 17 % 22 %EBITDA Margin Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2021Performance Chemicals EBIT $ 54 $ 58 $ 54 $ 45 $ 211

Performance Chemicals 18 19 18 18 73 Depreciation andamortizationPerformance Chemicals EBITDA $ 72 $ 77 $ 72 $ 63 $ 284

Performance Chemicals Sales $ 267 $ 294 $ 303 $ 284 $ 1,148

Performance Chemicals EBITDA 27 % 26 % 24 % 22 % 25 %Margin Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2021Purification Solutions EBIT $ (2 ) $ 2 $ 6 $ 4 $ 10

Purification Solutions 4 3 4 5 16 Depreciation andamortizationPurification Solutions $ 2 $ 5 $ 10 $ 9 $ 26 EBITDAPurification Solutions Sales $ 59 $ 63 $ 69 $ 66 $ 257

Purification Solutions 3 % 8 % 14 % 14 % 10 %EBITDA Margin Dollars in millions Fiscal 2021Reconciliation of Free CashFlow and Discretionary Free Dec. Q Mar. Q June Q Sept. Q FY 2021Cash Flow to Cash Flow fromOperating ActivitiesCash flow from operating $ 21 $ 65 $ 71 $ 100 $ 257 activities ^(C)Less: Additions to property, 29 40 46 80 195 plant and equipmentFree cash flow $ (8 ) $ 25 $ 25 $ 20 $ 62

Plus: Additions to property, 29 40 46 80 195 plant and equipmentLess: Changes in net working (99 ) (80 ) (47 ) 4 (222 )capital ^(D)Less: Sustaining and 21 27 26 52 126 compliance capitalexpendituresDiscretionary free cash flow $ 99 $ 118 $ 92 $ 44 $ 353

(C) As provided in the Condensed Consolidated Statements of Cash Flows.(D) Defined as changes in accounts receivable, inventory and accounts payableand accrued liabilities as presented on the Condensed Consolidated Statementsof Cash Flows. View source version on businesswire.com: https://www.businesswire.com/news/home/20211108006019/en/

CONTACT: Investors: Steve Delahunt (617) 342-6255