Cabot

CABOT CORPORATION

ANNUAL
REPORT
2023

CABOT: A COMPELLING INVESTMENT

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Reinforcement Materials is
structurally stronger

Performance Chemicals is poised
for recovery and growth

Advancing high growth vectors
of Batteries and Inkjet

Strong Discretionary Free Cash
Flow to fund growth investment
and return cash to shareholders

Continued environmental, social,
and governance (ESG) leadership

HIGHLIGHTS 2023

Diluted EPS of $7.73
Adjusted EPS1 of $5.38

Adjusted EBITDA1 of $695M

Record Reinforcement Materials
EBIT1 of $482M

Operating cash flow of $595M

Returned $186M to
shareholders through dividends
and share repurchases

Launched EVOLVE® Sustainable
Solutions technology platform

1 Non-GAAP measures. For definitions and reconciliation to the most directly comparable U.S. GAAP measure,
see supplemental information for Non-GAAP Reconciliations located at cabotcorp.com/investors under Financials.

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CABOT CORPORATION ANNUAL REPORT 2023

A MESSAGE TO
OUR SHAREHOLDERS

Sean D. Keohane
President and Chief Executive Officer

The Cabot team demonstrated incredible agility and resilience in 2023, adapting to the circumstances to
serve our customers and advance our purpose of “creating materials that improve daily life and enable
a more sustainable future.” Fiscal year 2023 was one characterized by significant macro-economic and
geopolitical turbulence. Companies faced the impacts of a protracted war in Ukraine, rising geopolitical
tensions, a sharp increase in inflation and interest rates, and weak economic growth in Europe and
China. Additionally, most industrial sectors experienced a significant inventory destocking cycle in 2023,
particularly upstream companies in the chemicals and materials sector. Despite these challenges, Cabot
delivered an impressive year of financial results and strategic milestones.

Cabot offers a compelling investment opportunity, built on a portfolio of global leading businesses
with robust cash flow characteristics, exposure to emerging high growth sectors, an investment grade
credit rating, and a recognized leadership position in sustainability. The turbulence of fiscal year 2023
showcased the enduring strengths of Cabot, as we delivered the second highest adjusted earnings per
share in company history and generated $351 million of free cash flow1. I am immensely proud of the way
the Cabot team executed in the year and the strategic momentum that we established for the future.

The world is in a state of transition on many levels. The need for more sustainable solutions is evident
across virtually every sector in which we participate, and we are witnessing a recalibration of global
supply chains due to geopolitical concerns. On both fronts, I believe that Cabot is extremely well
positioned to meet our customers’ needs. From the energy transition to the electrification of mobility and
the digital transformation of the printing sector, I believe our innovative products are critical to enabling
our customers’ performance goals. Furthermore, as our customers seek greater supply chain reliability,
our balanced geographic footprint allows us to offer that assurance in all major regions of production.
Our Creating for Tomorrow strategy is centered on growth and innovation to enable this sustainability
transition and we are excited by the potential.

"Our strong financial performance
in fiscal 2023 helped fuel strategic
investments for growth as well as
embed sustainability more deeply
in our organization."

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STRONG FINANCIAL RESULTS

While demand in fiscal year 2023 was significantly
impacted by weak end-market activity and
destocking, we delivered the second highest
adjusted earnings per share1 (EPS) in the
company’s history of $5.38 and diluted EPS
of $7.73. Our cash flow performance was very
strong in the year, as we generated operating
cash flow of $595 million. This strong level of
cash flow generation enabled us to fund strategic
growth projects and return $186 million to our
shareholders through an increased dividend and
share repurchases.

I am particularly pleased with the record level
of financial performance in our Reinforcement
Materials segment in fiscal year 2023. This
business is the largest in our portfolio and
has undergone positive structural change
over the years. The business is supported by
favorable supply/demand fundamentals in
mature economies and a strong desire from
our customers for the in-region supply security
we provide from our broad global footprint.
Furthermore, we have implemented numerous
customer contractual enhancements that have
reduced the volatility of earnings, and we have
driven a relentless pursuit of plant productivity
and energy recovery actions that have contributed
to increased segment earnings. Overall, earnings
before interest and taxes (EBIT)1 in this segment
has increased approximately 3X compared to
2015 levels. Given the structural improvements

and the expected forward-looking needs of our
customers for innovative sustainable solutions, we
are excited about the continued growth prospects
in this segment.

Results in our Performance Chemicals segment
were impacted by weak end-market demand and
a very pronounced level of destocking in fiscal
year 2023. Despite this headwind, the segment is
comprised of a strong group of product lines that
are characterized by solid long-term growth rates
and a diverse set of specialty applications with
robust unit margins. Looking forward, we expect
results to improve as key end-markets recover.

SUSTAINABILITY DRIVEN INNOVATION

Through our Creating for Tomorrow strategy, we
are focused on growing, innovating and optimizing
to enable a more sustainable future. Simply
put, sustainability is a critical component of our
strategy, from running our operations to the focus
of our product and process innovations.

In fiscal year 2023, we made notable
advancements in our sustainability agenda.
First and foremost, we are very proud of our
industry leading safety performance, as our total
recordable incident rate (TRIR) of 0.14 places us
in the top decile of manufacturing companies. We
have also made substantial progress against our
2025 sustainability goals, having achieved five of
these goals ahead of schedule. Of particular note
is the achievement of our goal to export 200%
of the energy that we import, as I believe it is an
excellent example of our commitment to circularity
by using the waste heat from our manufacturing
process to produce cogeneration power which is
generated with zero incremental CO2 emissions.

1 Non-GAAP measures. For definitions and reconciliation to the most directly comparable U.S. GAAP measure,
see supplemental information for Non-GAAP Reconciliations located at cabotcorp.com/investors under Financials.

4

CABOT CORPORATION ANNUAL REPORT 2023

While operating our plants responsibly is the
foundation of our sustainability commitment, we
are also focused on bringing enabling chemistries
to market to help our customers achieve their
sustainability goals. The electrification of mobility
is one such example. I believe that the growth
of lithium-ion batteries represents a significant
opportunity for Cabot, and we are focusing
research and development resources and
strategic capacity investments to capitalize on
this transition to electric vehicles. Our primary
focus remains on conductive additives for
these batteries, and we continue to build our
position with leading battery manufacturers and
automotive original equipment manufacturers
(OEMs). We expect our battery materials business
to have the potential to become a material
earnings contributor for Cabot in the coming
years as battery plants come online in Europe and
North America. We are also investing in additional
targeted areas of the battery chemistry where we
believe our materials and competencies have a
strong fit. To this aim, we recently expanded our
offerings with the launch of our ENTERA™ aerogel
particle. These thermal insulation additives are
designed to help protect lithium-ion batteries
from thermal runaway and provide customers
with formulation flexibility to develop very thin
application forms to serve this market.

Furthermore, our leadership in sustainability
continues to be recognized by external parties,
including EcoVadis, which awarded Cabot its
top rating of platinum for the third consecutive
year. EcoVadis is one of the world's leading
sustainability ratings platforms and one that
many of our customers rely on to evaluate their
supply chains. The platinum rating recognizes
our environmental, social and governance efforts
and places Cabot among the top 1% of companies
assessed by EcoVadis.

ENHANCING CIRCULARITY AND
SUSTAINABLE SOLUTIONS

The transition to a more sustainable future
presents significant opportunities for Cabot and
is central to our purpose. In direct response to
customer demand, we are investing to advance

our circular and low carbon offerings across
our portfolio. To achieve this aim, we launched
our EVOLVE® Sustainable Solutions technology
platform. I believe that the introduction of EVOLVE
Sustainable Solutions is an important step
in our journey to develop new ways to create
materials that improve daily life and enable a
more sustainable future. The platform is focused
on the development of breakthrough sustainable
products and process technologies that offer
sustainable content with reliable performance and
importantly, at industrial scale.

The EVOLVE platform is built on three pillars

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RECOVERED — where we are focused on
developing solutions made from circular
value chains, such as end of life tire recycling
and the plastics recycling value chain.

RENEWABLE — where we are advancing
solutions made from renewable materials
or bio-based feedstocks.

REDUCED — where we seek to innovate
new products made from processes with
a demonstrably lower GHG footprint.

RECOVERED

E2C™
Solutions

REDUCED

EVOLVE®
Sustainable Solutions

RENEWABLE

During the year we launched several new circular
reinforcing carbons and masterbatch products
under the EVOLVELL
platform that are International
Sustainability & Carbon Certification (ISCC PLUS)
certified solutions. Achieving ISCC PLUS certification

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OUR STRATEGY

CREATING FOR TOMORROW
We will leverage our strengths to lead in performance
and sustainability — today and into the future.

INNOVATE
Developing innovative products and
processes that enable a better future.

GROW
Investing for advantaged growth.

OPTIMIZE
Driving continuous improvement in
everything we do.

furthers our commitment to advancing circularity
and traceability, while helping our customers
achieve their sustainability goals by delivering
sustainable solutions at a global scale.

We believe our EVOLVE Sustainable Solutions
platform will play a critical role in our sustainability
journey and we are excited about the revenue
potential over the long-term.

I extend my sincere appreciation for your trust
and collaboration, and we look forward to further
strengthening our partnerships.

I am excited about our prospects and am
optimistic about our future. Thank you for your
continued trust in Cabot Corporation, and we
look forward to sharing more achievements and
milestones in the coming years.

CREATING FOR TOMORROW

As we look to the future, I believe that Cabot
is poised for continued growth and success.
I am confident in our ability to navigate an
ever-changing business landscape while
capitalizing on emerging opportunities. We
have a clear strategy focused on sustainability
driven innovation, and we remain committed to
disciplined capital allocation and value creation
for our shareholders.

I would like to express my heartfelt gratitude to our
employees, whose dedication and commitment to
Cabot have been outstanding this year. It is their
dedication and hard work that have propelled
our success. To our customers and partners,

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CABOT CORPORATION ANNUAL REPORT 2023

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K

☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2023
or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number 1-5667
Cabot Corporation

(ExaEE ct name of Registii

rant as specifii ed in itstt Charter)

Delaware
ii

(State or other jurisdi
ction of
tion)
incorporation or organizaii
Two Seaport Lane, Suite 1400
Boston, Massachusetts

(Address of Principal

i

Executive Offiff ces)

04-2271897
(I.R.S. Employer
Identifii cation No.)

02210
(ZipZZ Code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Registrant’s telephone number, including area code: (617) 345-0100

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value per share

CBT

The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None.
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit such files). Yes ☒

No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller
reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer

☒

☐

Accelerated filer

☐

Smaller reporting company ☐

Emerging growth company ☐
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period

for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of

incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐
As of the last business day of the Registrant’s most recently completed second fiscal quarter (March 31, 2023), the aggregate

No ☒

market value of the Registrant’s common stock held by non-affiliates was $4,276,465,633. As of November 13, 2023, there were
55,309,058 shares of the Registrant’s common stock outstanding.

Portions of the Registrant’s definitive proxy statement for its 2024 Annual Meeting of Shareholders are incorporated by

reference into Part III of this report.

TABLE OF CONTENTS

PART I

ITEM 1.

Business.........................................................................................................................................................................

ITEM 1A.

Risk Factors....................................................................................................................................................................

ITEM 1B.

Unresolved Staff Comments .........................................................................................................................................

ITEM 2.

Properties......................................................................................................................................................................

ITEM 3.

Legal Proceedings..........................................................................................................................................................

ITEM 4.

Mine Safety Disclosures ................................................................................................................................................

PART II

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ...

ITEM 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ........................................

ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk ......................................................................................

ITEM 8.

Financial Statements and Supplementary Data............................................................................................................

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .......................................

ITEM 9A.

Controls and Procedures...............................................................................................................................................

ITEM 9B.

Other Information .........................................................................................................................................................

ITEM 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ..........................................................................

PART III

ITEM 10.

Directors, Executive Officers and Corporate Governance ............................................................................................

ITEM 11.

Executive Compensation...............................................................................................................................................

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters....................

ITEM 13.

Certain Relationships and Related Transactions, and Director Independence ............................................................

ITEM 14.

Principal Accounting Fees and Services ........................................................................................................................

ITEM 15.

Exhibits, Financial Statement Schedules.......................................................................................................................

ITEM 16.

Form 10-K Summary......................................................................................................................................................

Signatures...........................................................................................................................................................................................

PART IV

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Information Relating to Forward-Looking Statements

This annual report on Form 10-K contains “forward-looking statements” under the Federal securities laws. These forward-

looking statements address expectations or projections about the future, including our expectations regarding our future business
performance and overall prospects; segment and product line growth and the assumptions underlying our growth expectations;
demand for our products, customer destocking in our end markets and the short-term nature of customer cautious buying behavior,
particularly in our Performance Chemicals segment; research and development activities; the recommencing of work on our Cilegon,
Indonesia plant expansion for reinforcing carbons and the start-up of this facility; when we expect the conversion for battery
applications at our site in Tianjin to be completed; our expectations with respect to our new EMEA Technology Center in Münster,
Germany; the extension of the compliance date for the installation of technology controls at our facility in Ville Platte, Louisiana and
the extension of the compliance date for the installation of technology controls at our facility in Sarnia, Ontario; our 2025
Sustainability Goals; our ambitions for our EVOLVE® Sustainable Solutions technology platform; the sufficiency of our cash on hand,
cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements;
anticipated capital spending, including environmental-related and technology controls capital expenditures; regulatory
developments; our ability to manage workplace exposures to carbon nanotubes; cash requirements and uses of available cash,
including future cash outlays associated with long-term contractual obligations, contributions to employee benefit plans,
environmental remediation costs and future respirator liabilities and the timing of such outlays; exposure to interest rate and
foreign exchange risk; future benefit plan payments we expect to make; future amortization expenses; our ability to recover
deferred tax assets; our operating tax rate; and the possible outcome of legal and environmental proceedings. From time to time,
we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized
officers.

Forward-looking 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 or difficult to predict. If known or unknown risks
materialize, our actual results could differ materially from past results and from those expressed in the forward-looking statements.
Important factors that could cause our actual results to differ materially from those expressed in our forward-looking statements are
described in Item 1A in this report.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future

events or otherwise, except as required by law. Investors are advised, however, to consult any further disclosures we make on
related subjects in our 10-Q and 8-K reports filed with the Securities and Exchange Commission (the “SEC”).

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Item 1. Busineii

ss

General

PART I

Cabot is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts. Our
principal products are reinforcing and specialty carbons, specialty compounds, conductive additives, carbon nanotubes, fumed metal
oxides, inkjet colorants and aerogel. Cabot and its affiliates have manufacturing facilities and operations in the United States (“U.S.”)
and over 20 other countries. Cabot’s business was founded in 1882 and incorporated in the State of Delaware in 1960. The terms
“Cabot”, “Company”, “we”, and “our” as used in this report refer to Cabot Corporation and its consolidated subsidiaries.

In early fiscal 2022, we introduced our “Creating for Tomorrow” growth strategy. This strategy is focused on investing for
advantaged growth, developing innovative products and processes that enable a better future, and driving continuous improvement
in all we do. Our products are generally based on technical expertise and innovation in one or more of our four core competencies:
making and handling very fine particles; modifying the surfaces of very fine particles to alter their functionality; designing particles to
impart specific properties to a formulation; and combining particles with other ingredients to deliver a formulated performance
intermediate or composite. We focus on creating particles, and formulations of those particles, with the composition, morphology
and surface functionalities to deliver the requisite performance to support our customers’ existing and emerging applications.

Our business is currently organized into two reportable segments: Reinforcement Materials and Performance Chemicals. Our

business segments are discussed in more detail later in this section.

Both of our segments operate globally, and a significant portion of our revenues and operating profits is derived from
operations outside the U.S. In particular, China continues to be an important producer of tires and products for automotive
applications and since we made our initial investment in China in 1988, we have increased our operations in China to support
increased demand for our products in China. In addition, a significant portion of battery manufacturers for electric vehicles are
located in China, and, in the near term, we anticipate a material portion of the future growth of our Battery Materials product line to
be derived from our business and operations in China. We employ local management teams for our operations in China, and our
business model in China is predominantly to make and sell product in-country to established local and multi-national customers with
operations in China. In fiscal 2023, sales in China across our segments constituted approximately 25% of our revenues, and our
property, plant and equipment located in China constituted approximately 25% of our total property, plant and equipment as of
September 30, 2023, as disclosed in Note T to our Consolidated Financial Statements. There are legal, operational and other risks
associated with having substantial operations in China, which are more fully described under the heading “Risk Factors”, including
the risks described under the headings: “We are exposed to political or country risk inherent in doing business in some countries,
including China”; “Information technology systems failures, data security breaches, cybersecurity attacks or network disruptions
have harmed us in the past, and could compromise our information, disrupt our operations and expose us to liability, which may
adversely impact our operations”; “The continued protection of patents, trade secrets and other proprietary intellectual property
rights is important to our success”; “Negative or uncertain worldwide or regional economic conditions or trade relations, as well as
regional conflicts, may adversely impact our business” and “Our tax rate and other tax obligations are dependent upon a number of
factors, a change in any of which could impact our future tax rates and financial results”. Given the size of our current operations in
China and the future growth we anticipate from those operations, if our ability to operate in China were to be constrained by legal,
regulatory and operational risks, it could have a material negative impact on our overall operations and the value of our securities.

Our internet address is www.cabotcorp.com. We make available free of charge on or through our website our annual reports

on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after electronically filing
such material with, or furnishing it to, the SEC. Information appearing on our website is not a part of, and is not incorporated in, this
Annual Report on Form 10-K.

Reinforcement Materials

Produc

r

ts

Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and
aggregates of varied size, structure and surface chemistry, resulting in many different performance characteristics for a wide variety
of applications. Reinforcing carbons (a class of carbon blacks manufactured by Cabot) are used to enhance the physical properties of
the systems and applications in which they are incorporated.

Our reinforcing carbons products are used in tires and industrial products. Reinforcing carbons have traditionally been used in

the tire industry as a rubber reinforcing agent to increase tread durability and are also used as a performance additive to reduce
rolling resistance and improve traction. In industrial products such as hoses, belts, extruded profiles and molded goods, reinforcing
carbons are used to improve the physical performance of the product, including the product’s physical strength, fluid resistance,
conductivity and resistivity.

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In addition to our reinforcing carbons, we manufacture engineered elastomer composites (“E2C®”) solutions that are

composites of reinforcing carbons and rubber made using our patented elastomer composites manufacturing process. These
composites improve abrasion/wear resistance, reduce fatigue of rubber parts and reduce rolling resistance compared to reinforcing
carbons/rubber compounds made entirely by conventional rubber mix methods enabling rubber product manufacturers to reduce
the need to make performance trade-offs. The use of E2C®solutions enables our customers to produce better performing tires,
including giant off-the-road tires and on-road commercial tires, as well as other rubber products used in aggressive applications.
Additionally, because E2C®solutions can be integrated into current product methods without additional significant capital
investment, and require fewer mixing stages, lower mixing temperatures and shorter mixing cycles than conventional products,
operating and production costs may be reduced. E2C® is one of our focus areas for growth, which we refer to as “growth vectors”.

In fiscal 2023, we launched EVOLVE® Sustainable Solutions, our technology platform focused on developing sustainable
reinforcing carbons and other performance materials with reliable performance at industrial scale. Our ambition under this platform
is to work with customers and technology partners to develop products across three sustainability categories: Renewable,
Recovered and Reduced, meaning products made with renewable materials or materials recovered from end-of-life tires and/or
using processes that result in reduced greenhouse gas emissions.

Drivrr ersrr of Demand and Sales and Customers

Demand for our Reinforcement Materials products is largely driven by the growth and development of the tire and
automotive industries. In addition to general global economic conditions, demand for reinforcing carbons in tires is mainly
influenced by the number of replacement and original equipment tires produced, which in turn is driven by (i) vehicle and driving
trends, including the number of miles driven, and the number of vehicles produced and registered, (ii) changes in supply chain
inventory levels to adapt to end-market demand, (iii) demand for high-performance tires, (iv) demand for larger tires and larger
vehicles, such as trucks, buses, off-road vehicles used in agriculture, mining and similar vehicles, (v) consumer and industrial
spending on new vehicles and (vi) changes in regulatory requirements impacting vehicle fuel efficiency and tire regulations. Demand
for reinforcing carbons for industrial products is mainly influenced by vehicle production and design trends, construction activity and
general industrial production.

Demand in the developed Western European, Japanese, and North American regions is mainly driven by demographic
changes, customers’ high-quality requirements, stringent tire regulation standards, changes in consumer preference (e.g., different
tire sizes, model and powertrain types), and relatively stable tire replacement demand. Demand in developing markets, such as
China, Southeastern Asia, South America and Eastern Europe, is mainly driven by the growing middle class, rapid industrialization,
infrastructure spending and increasing car ownership trends. The growth in vehicle production in turn drives demand for both
original equipment tires and replacement tires in developing regions.

Sales of reinforcing carbons and E2C®solutions are made primarily by Cabot employees and secondarily through distributors

and sales representatives. We typically “make and sell” in region, which, among other advantages, provides our customers a regional
supply chain and typically reduces transportation costs. Sales to five major tire customers represent a material portion of
Reinforcement Materials’ total net sales and operating revenues. The loss of any of these customers, or a significant reduction in
volumes sold to them, could have a material adverse effect on the segment.

Under appropriate circumstances, we have entered into supply arrangements with certain customers, the typical duration of

which is one year. These arrangements typically provide for sales price adjustments to account for changes in relevant feedstock
indices including natural gas and, in many cases, changes in other relevant costs (such as the cost of CO2 credits in Europe). In fiscal
2023, approximately two-thirds of our reinforcing carbons volume was sold under these supply arrangements. The majority of the
volumes sold under these arrangements are sold to customers in the Americas and Europe.

We licensed our patented elastomer composites manufacturing process to Manufacture Francaise des Pneumatiques Michelin
for their exclusive use in tire applications through fiscal 2017, and for a period of limited exclusivity in tire applications through fiscal
2019. As consideration, we received quarterly royalty payments extending through calendar year 2022.

Much of the reinforcing carbons we sell is used in tires and automotive products and, therefore, our financial results may be

affected by the cyclical nature of the automotive industry. However, a large portion of the market for our products is in replacement
tires that historically has been less cyclical as demand for replacement tires is correlated to miles driven.

Competition

We are one of the leading manufacturers of carbon black in the world. We compete in the sale of reinforcing carbons with four
companies that operate globally and numerous other companies that operate regionally, a number of which export product outside
their region of manufacture. Competition for our Reinforcement Materials products is based on product performance, quality,
reliability, price, service, technical innovation, sustainability performance, and logistics. We believe our product differentiation,
technological leadership, global manufacturing presence, operations and logistics excellence, sustainability performance, and
customer service provide us with a competitive advantage.

6

Raw Materials

The principal raw material used in the manufacture of our reinforcing carbons is composed of residual heavy oils derived from
petroleum refining operations, the distillation of coal tars, and the production of ethylene throughout the world. Natural gas is also
used in the production of our reinforcing carbons. Raw materials are, in general, readily available and in adequate supply. Raw
material costs generally are influenced by the availability of various types of our feedstocks and natural gas, supply and demand of
such raw materials and related transportation costs.

Operations

We own, or have a controlling interest in, and operate plants that produce reinforcing carbons in Argentina, Brazil, Canada,

China, Colombia, the Czech Republic, France, Indonesia, Italy, Japan, Mexico, the Netherlands and the U.S. An equity affiliate
operates a reinforcing carbons plant in Venezuela. In addition, we have a 98% ownership interest in an entity that manufactures our
E2C® products in Port Dickson, Malaysia.

The following table shows our ownership interest as of September 30, 2023 in operations in which we own less than 100%:

Location
Shanghai, China
Tianjin, China
Xingtai City, China
Valasske Mezirici (Valmez), Czech Republic
Cilegon, Indonesia
Port Dickson, Malaysia
Valencia, Venezuela

Percentage Interest
70% (consolidated subsidiary)
70% (consolidated subsidiary)
60% (consolidated subsidiary)
52% (consolidated subsidiary)
98% (consolidated subsidiary)
98% (consolidated subsidiary)
49% (equity affiliate)

During fiscal 2019, we began engineering work on an expansion of our Cilegon, Indonesia plant to add approximately 80,000
metric tons of capacity for reinforcing carbons to our network. In fiscal 2020, after a review of our capital allocation priorities, we
temporarily suspended further work on this expansion. We are restarting work on this project and anticipate this additional capacity
becoming available in fiscal 2025.

One of the main environmental challenges of a carbon black plant is the management of exhaust gas from production
processes. This exhaust gas contains a number of regulated pollutants, including carbon monoxide and sulfur compounds. Our most
common method for controlling these gases is through combustion, which produces useable energy as a by-product. Currently, nine
reinforcing carbons manufacturing sites and four reinforcing carbons/specialty carbons manufacturing sites have energy centers,
which allow us to utilize these gases through some form of energy co-generation, such as the sale or reuse of steam, gas or
electricity. Depending on our capacity utilization, our energy centers generally reduce our manufacturing operating costs. In
addition, we generate revenues from our energy center sales.

Performance Chemicals

In Performance Chemicals, we design, manufacture and sell materials that deliver performance in a broad range of customer
applications across the automotive, construction, infrastructure, inkjet printing, electronics, and consumer products sectors and in
applications related to the generation, transmission and storage of energy. In this reporting segment we combine our specialty
carbons, specialty compounds, battery materials, fumed metal oxides, aerogel and inkjet product lines. Our focus areas for growth,
which we refer to as “growth vectors”, include conductive additives and other materials for battery applications, and inkjet
dispersions for post print corrugated packaging applications. The recent investments we have made for growth in this segment,
including in respect of these specific areas of focus, are described below under the heading “Operations”.

Produc

r

ts

Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and
aggregates of varied structure and surface chemistry, resulting in many different performance characteristics for a wide variety of
applications.

Our specialty carbons are used to impart color, provide rheology control, enhance conductivity and static charge control,

provide UV protection, enhance mechanical properties, and provide formulation flexibility through surface treatment. These
specialty carbon products are used in a wide variety of applications, such as plastics, which applications represent the largest use for
our products, inks, coatings, adhesives, toners, batteries, and displays.

Our masterbatch and conductive compound products, which we refer to as “specialty compounds”, are formulations derived
from specialty carbons mixed with polymers and other additives. These products are generally used by plastic resin producers and
converters in applications for the automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics

7

industries. As an alternative to directly mixing specialty carbon blacks, these formulations offer greater ease of handling and help
customers achieve their desired levels of dispersion and color and manage the addition of small doses of additives. In addition, our
electrically conductive compound products generally are used to help ensure uniform conductive performance and reduce risks
associated with electrostatic discharge in plastics applications.

Our battery materials products include our conductive additives and fumed alumina, which are used principally in advanced

lead acid and lithium-ion batteries used in electric vehicles. Our conductive additives consist of conductive carbons, carbon
nanotubes and carbon nano structures, and blends of these materials, each of which offers different levels of conductivity and
formulation flexibility for battery manufacturers to address performance (energy density, fast charging), cost and safety. In lithium-
ion batteries, our conductive additives are used in both cathode and anode applications to increase energy density by providing a
conductive network between active materials. Fumed alumina is used to reduce cathode material and electrolyte decomposition
and improve capacity retention leading to longer battery cycle life.

Fumed silica is an ultra-fine, high-purity particle used as a reinforcing, thickening, abrasive, thixotropic, suspending or anti-

caking agent in a wide variety of products for the automotive, construction, microelectronics, batteries and consumer products
industries. These products include adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing
slurries and pharmaceuticals. In addition to its battery applications discussed above, fumed alumina, also an ultra-fine, high-purity
particle, is used as an abrasive, absorbent or barrier agent in a variety of products, such as inkjet media, lighting, coatings, cosmetics
and polishing slurries.

Aerogel is a hydrophobic, silica-based particle with a high surface area that is used in a variety of thermal insulation and

specialty chemical applications. In the building and construction industry, the product is used in insulative sprayable plasters and
composite building products, as well as translucent skylight, window, wall and roof systems for insulating eco-daylighting
applications. In the specialty chemicals industry, the product is used to provide matte finishing, insulating and thickening properties
for use in a variety of applications including thermal runaway management for lithium-ion batteries.

Our inkjet colorants are high-quality pigment-based black and color dispersions and inks. Our dispersions are based on our
patented pigment surface modification technology and polymer encapsulation technology. The dispersions are used in aqueous
inkjet inks to impart color, sharp print characteristics and durability, while maintaining high printhead reliability. These products are
used in various inkjet printing applications, including traditional work-from-home and corporate office settings, and, increasingly, in
commercial and corrugated packaging, all of which require a high level of dispersibility and colloidal stability. Our inkjet inks, which
utilize our pigment-based colorant dispersions, are used in the commercial printing segment for graphic arts.

Drivrr ersrr of Demand and Sales and Customers

Our specialty carbons products have a wide variety of end-uses and demand is largely driven by the growth and development

of the construction and infrastructure, automotive, electronics and consumer products industries. Demand for our conductive
additives for use in batteries is largely driven by the trend in electrification of vehicles. Demand for fumed silica is mainly influenced
by trends in key markets for silicones, adhesives and coatings applications, notably, structural adhesives for automobile light-
weighting, epoxy bonding paste for wind turbines, high-performance coatings and hybrid sealants for construction and silicones for
medical devices and the proliferation of electronics. Demand for specialty compounds is mainly influenced by growth and
development of the automotive, infrastructure, consumer goods and electronic devices, packaging and agriculture industries.

Demand for our inkjet colorants is mainly influenced by developments in print media, pages printed in office and work-from-

home environments, as well as press sales and utilization levels as digital aqueous pigment-based inks penetrate commercial and
packaging applications historically served by analog printing methods.

Sales of these products are made by Cabot employees and through distributors and sales representatives. In our specialty
carbons and specialty compounds product lines, sales are generally to a broad number of customers. In our fumed metal oxides
product line, sales under contracts with five customers account for approximately one-third of the revenue. In our battery materials
product line, sales to three customers account for approximately 50% of revenue.

8

Competition

We are a leading producer of the products we sell in this segment. We compete in the sale of carbon black with three
companies that operate globally and numerous other companies that operate regionally, a number of which export product outside
their region of manufacture. For battery applications, we compete primarily with two global companies that manufacture
conductive carbons as well as a number of smaller regional manufacturers. For carbon nanotubes, we compete primarily with one
Chinese-based company. For battery applications, we compete primarily with one manufacturer of fumed alumina that operates
globally. For fumed silica, we compete with two companies with a global presence and several other companies that have a regional
presence. For aerogel, we compete globally principally with one other company that produces aerogel products. We also compete
with non-aerogel insulation products manufactured by regional companies throughout the world. For specialty compounds, we
compete with many regional companies and a small number of global companies. Our inkjet colorants and inks are designed to
replace traditional pigment dispersions and dyes used in inkjet printing applications. Competitive products for inkjet colorants are
organic dyes and other dispersed pigments manufactured and marketed by large chemical companies and small independent
producers.

Competition for our Performance Chemicals products is based on product performance, quality, reliability, service, technical
innovation and price. We believe our product differentiation, technological leadership, operations excellence and customer service
provide us with a competitive advantage.

Raw Materials

Raw materials for our products are, in general, readily available and in adequate supply. The principal raw material used in the

manufacture of our specialty carbons and conductive additives is composed of residual heavy oils derived from petroleum refining
operations, the distillation of coal tars, and the production of ethylene throughout the world. Natural gas is also used in the
production of our specialty carbons. As product purity is one of the most critical requirements for conductive carbons, we obtain raw
materials for those products from select key suppliers. Our raw material costs generally are influenced by the availability of various
types of our feedstocks and natural gas, supply and demand of such raw materials and related transportation costs. Changes in
certain of our raw material supplier’s operating conditions could reduce the availability of certain very specialized feedstocks.

The primary raw materials for our carbon nanotubes are catalysts that we synthesize and propylene. Raw materials for the

production of fumed silica are various chlorosilane feedstocks. We purchase feedstocks and for certain customers convert their
feedstock to product on a fee-basis (so called “toll conversion”). We also purchase aluminum chloride as feedstock for the
production of fumed alumina. We have long-term procurement contracts or arrangements in place for the purchase of fumed silica
feedstock primarily from fence-line partners, which we believe will enable us to meet our raw material requirements for the
foreseeable future. In addition, we buy some raw materials in the spot market to help ensure flexibility and minimize costs. The
principal raw materials for the production of aerogel are silica sol and/or sodium silicate.

The primary raw materials used for our specialty compounds include carbon black, primarily sourced from our carbon black

plants, prime and recycled thermoplastic resins and mineral fillers supplied from various sources. Raw materials for inkjet colorants
include carbon black sourced from our carbon black plants, organic pigments and other treating agents available from various
sources. Raw materials for inkjet inks include pigment dispersions, solvents and other additives.

Operations

We own, or have a controlling interest in, and operate plants that produce specialty carbons primarily in China, the
Netherlands and the U.S. We produce our conductive additives in China, and at our specialty carbon plants in the U.S. and in the
Netherlands. We also own, or have a controlling interest in, manufacturing plants that produce fumed metal oxides in China,
Germany, the United Kingdom (“U.K.”), and the U.S. and a manufacturing plant that produces aerogel in Frankfurt, Germany. An
equity affiliate operates a fumed metal oxides plant in India. Our specialty compounds are predominately produced in facilities that
we own, or have a controlling interest in, located in Belgium, Canada, China and the United Arab Emirates. Our inkjet colorants and
inks are manufactured at our facility in the U.S.

The following table shows our ownership interest as of September 30, 2023 in operations in which we own less than 100%:

Location
Tianjin, China
Jiangxi Province, China
Wuhai, China
Mettur Dam, India

Percentage Interest
90% (consolidated subsidiary)
90% (consolidated subsidiary)
80% (consolidated subsidiary)
50% (equity affiliate)

Currently, four of our reinforcing carbons/specialty carbons manufacturing sites have energy centers. These are described

above in the discussion of our Reinforcement Materials segment.

9

Over the last several years, we have been investing for growth with a number of capacity expansion projects and other
transactions, particularly to increase manufacturing capacity for our specialty carbons and battery materials products. These
investments include our purchase in 2022 from Tokai Carbon Group of its carbon black manufacturing facility in Tianjin, China where
we continue to make technical upgrades to convert certain manufacturing units to allow us to produce conductive additives. We
expect to complete the conversion of the first unit at the site in early fiscal 2026. We intend to pace our investments in additional
battery materials manufacturing capacity to meet demand. Further, in fiscal 2023, we established our EMEA Technology Center in
Münster, Germany. We expect this will enable us to enhance our battery materials development capability and strengthen our
technology collaboration in Europe with other participants in the battery materials industry.

To meet the growing demand in the inkjet market for digital printing applications, in fiscal 2023 we commenced operations at

a new production line at our manufacturing plant in Haverhill, Massachusetts, U.S., to increase our global capacity for aqueous
pigment dispersions.

In our specialty compounds business, to meet anticipated demand we expanded our manufacturing capacity with a new

specialty compounds unit at our reinforcing carbons plant in Cilegon, Indonesia, which was completed in fiscal 2023.

Patents and Trademarks

We own and are a licensee of various patents, which expire at different times, covering many of our products as well as
processes and product uses. Although the products made and sold under these patents and licenses are important to Cabot, the loss
of any particular patent or license would not materially affect our business, taken as a whole. We sell our products under a variety of
trademarks we own and take reasonable measures to protect them. While our trademarks are important to Cabot, the loss of any
one of our trademarks would not materially affect our business, taken as a whole.

Research and Development

Our products are highly versatile and meet specific performance requirements across many industries, creating opportunities

for innovation. In fiscal 2023, we spent approximately $57 million on technology development. Our R&D activities included those
focused in the areas of conductive additives, inkjet dispersions and engineered elastomer composites. We are also focused on
process innovation across our product lines. We are investing in furthering our sustainability efforts across various areas in order to
reduce waste, reduce emissions and utilize more sustainable material in our production processes.

Seasonality

Our businesses are generally not seasonal in nature, although we may experience some regional seasonal declines during

holiday periods.

Human Capital Resources

Our success is realized through the engagement and commitment of our people. We believe that our globally distributed

workforce positions us well to serve our broad customer base in the regions and geographies in which they operate. As fof
September 30, 2023, we had approximately 4,300 employees across our global network off office and manufacturing locations, with
41% off our employees located in the Americas (61% off whom are in the United States), 33% in Asia Pacific (76% off whom are in
China), and 26% in Europe, Middle East and Africa (“EMEA”). Off this global employee population, 43% are employed in
manufacturing roles.

Our Management Executive Committee (“Executive Committee”) is comprised of our CEO and his nine direct reports who,

collectively, have management responsibility for our businesses and regional operations, our financial, legal, safety, health,
environment and sustainability, human resources, research and development, global business services and digital functions.

Our primary human capital objectives are to attract, retain and develop the highest quality talent and ensure they feel safe,

supported and empowered to do their best work. Accordingly, our management team places significant focus and attention on
matters concerning Cabot’s workforce – particularly in the areas of diversity, talent, engagement, retention and development, total
rewards, and employee health and safety. These areas of focus are also represented in our 2025 Sustainability Goals, which include:

•

•
•

fostering an environment where employees report high levels of inclusion and support for their professional
development;
increasing diverse representation in leadership and professional roles; and
reducing injuries and frequency of significant process safety events by 50%.

10

Diversity,t Equity and Inclusion (DE&I)

In support off our commitment to foster a diverse and inclusive environment, in fiscal 2023 we established DE&I objectives
which were factors that were considered in establishing the funding levels off our short-term incentive awards. These objectives
were:

•

•

•

Demonstrate improvement in the percentage off jjob searches in which candidates from underrepresented groups (for this
purpose, defined as women in all regions and in the U.S. defined as women and people off color) are interviewed. We saw
a significant improvement during the fiscal year.
Ensure strong pay equity is maintained by putting action plans in place to address any pay inequities identified through
our global compensation review process. As noted below, we maintained strong pay parity during the fiscal year and have
developed action plans to address the small percentage off cases where pay inequity was found.
Require all people managers to attend inclusive leadership training. We ended the fiscal year with a 99.7% completion
rate for all people managers.

We also conducted our biennial global employee engagement survey, which included five questions related to inclusion.

Employees reported strong sentiments of inclusion with scores across all questions either remaining stable or increasing.
Additionally, we were pleased to receive external recognition, being named to Newsweek's America’s Greatest Workplaces for
Diversity 2023, based on an independent review off over 350,000 companies.

Demographic information with respect to gender representation among all Cabot employees and with respect to racial and

ethnic representation among Cabot employees located in the United States, as of September 30, 2023, is set forth in the tables
below:

Gender Diversity

Executive Committee
Management*
Professional Contributor
Hourly & Associate Staff
Total Population

Racial and Ethnic Diversity

Male

% of total

Female

% of total

7
584
835
1,831
3,257

70%
73%
71%
80%
76%

3
219
339
450
1,011

30%
27%
29%
20%
24%

Total
Employees

10
803
1,174
2,281
4,268

People of Color % of total

Total
Employees

Executive Committee
Management*
Professional Contributor
Hourly & Associate Staff
Total Population
* Management includes both people managers, excluding members of the Executive Committee, and senior-level individual
contributor roles.
** People of Color consists of U.S. based employees who identify as a race or ethnicity other than white.

Non-Minority % of total
8
237
193
358
796

100%
78%
81%
71%
75%

0%
22%
19%
29%
25%

-
67
46
149
262

8
304
239
507
1,058

Talent Retention and Development

We have numerous initiatives and programs to attract, develop and retain our talent tailored to specific employee populations

and geographies, including leadership and executive development programs, technical training, and other skill-based training. In
fiscal 2023, we focused on building awareness for managers and employees on the tools and resources available to support
employee development. This included senior leader workshops sharing best practices, manager packs to make it easy to share and
promote use with their teams, and training for managers, employees and HR. We also expanded our investment and internal
promotion of the online learning platform introduced last fiscal year. We continued to see strong engagement and use of this
platform to support our leadership development programs, DE&I knowledge and skill building, and self-directed learning through
our career development portal for employees.

We believe that our continued focus and investment on employee development continues to be well received by our
employees. In our biennial global employee engagement survey, employees reported high levels of support for their professional

11

development with an increase in scores on questions related to feedback received from managers and opportunities to learn and
grow.

We have well-established performance management and talent development processes in which managers provide regular
feedback and coaching to develop employees. Throughout the year, managers and employees engage in annual objective setting,
quarterly reviews of goal progress, performance feedback, career development discussions, and a year-end performance evaluation.
In addition, we regularly review talent development and succession plans for each of our functions and business segments to
identify and develop a pipeline of talent.

Some of our employees in the U.S. and abroad are covered by collective bargaining or similar agreements. We have generally

positive and productive employee relations with our employees, unions and works councils globally.

Cabot’s global voluntary turnover rate for fiscal 2023 was approximately 7.3%, which represents a decrease in the Company’s

attrition rate relative to fiscal 2022, which was 9.0%.

Total Rewardsdd

We strive to provide a total rewards program that enables us to attract, retain and motivate the best talent to support our

businesses. Our compensation programs embrace a pay for performance philosophy and are designed to be competitive within the
markets in which we compete for talent. Our pay practices reward individual and Company performance and are equitably
differentiated based on role, experience, contributions, and performance. We value our employees' efforts and reward those
contributions through our recognition and incentive programs. We regularly assess these practices to ensure we are market
competitive in each of our geographic locations, offering what we believe is a compelling and attractive place to work.

Cabot is committed to ensuring that employees are paid fairly, without discrimination while taking into account job-related

factors such as responsibilities, location, work experience, education, performance, and contributions. We conduct reviews annually
to monitor our pay practices and develop pay actions where appropriate. Our overall findings for this fiscal year (which did not
include employees under certain collective bargaining or similar agreements) continue to indicate that we have strong pay parity
between females and males globally as well as with under-represented groups in the United States across all pay components
(annual base salary, short-term incentives, and long-term incentives) for those in the same job and location.

We also aim to provide highly competitive benefits programs in all the locations where we operate, including meeting or
exceeding local regulations and focusing on health and welfare, employee well-being, employee assistance program (EAP), and
retirement savings. Examples of benefit programs we offer in the U.S. include a 401(k) plan, expansive health benefits (including
medical, dental and/or vision), life and accident insurance, disability coverage, paid time off, tuition reimbursement and other
voluntary benefits. We recognize employee needs are changing as they continue to adjust to new work environments, deal with
stress and balance home and work life while managing their own health and safety, along with that of their loved ones. We believe
that advancing employee health and well-being is important to Cabot’s success, and as a result, in fiscal 2023 we:

•

•

Introduced well-being guiding principles to clarify operating norms and to reinforce the Company's support for healthy
and safe work environments;
Offered a global movement challenge to encourage physical activity; and
Developed a well-being guide for all people leaders to encourage discussions, participation and engagement with our
teams.

Employee Health & Safea ty

We believe that one of our primary responsibilities as an employer is to provide a safe work environment and promote
wellness across the workforce. Our goal is for all employees, contractors, and visitors to return home in the same condition as when
they arrived at work that day. As part of our “Drive to Zero” initiative, we have set a long-term goal of achieving zero injuries at our
facilities worldwide. We intend to achieve this ambitious objective by following a number of measures, including training employees
in hazard recognition, ensuring procedures are established to mitigate risks and equipping supervisory personnel with the tools and
skills required to execute our work safely. As part of this effort, members of our leadership team participate in root cause
determinations and the results are shared throughout our network of operating facilities. Recognizing that it may take many years to
achieve our Drive to Zero goal, we have established a continuous improvement goal for personal safety to achieve a 50% reduction
in our recordable and severe injury rate from our baseline measurement in 2019 by 2025. For fiscal 2023, our Total Recordable
Incident Rate (TRIR) based upon the number of injuries per 200,000 work hours for both employees and contractors was 0.14 and
our Lost Time Incident Rate (LTIR) was 0.05. For comparison, the US Bureau of Labor Statistics reports for chemical manufacturing an
average TRIR of 1.9 and LTIR of 0.6 in calendar year 2022.

We continue to be recognized as an American Chemistry Counsel Responsible Care® company and as part off our commitment

to Responsible Care, we remain focused on continuously improving the health and safety off our processes and products. In

12

accordance with this certification, we report our safety performance metrics annually and undergo external audits regularly to
evaluate our program, identify gaps, and undertake corrective actions as needed.

Through our global SHE & Sustainability Commitment, which is endorsed by our Executive Committee and adopted by our Board
of Directors, we hold ourselves accountable to demonstrate our company values and continuously improve the way we operate. The
SHE & Sustainability Commitment defines several important objectives for our continuous improvement in safety, including:

Complying with all applicable regulations;
Sharing complete information about the safe handling and appropriate use of our products;

•
•
• Maintaining the safety and security of our employees, contractors and neighbors;
• Managing our operations to minimize any impacts on our communities;
•
•
•

Exemplifying the Responsible Care® Guiding Principles;
Partnering with customers and suppliers to advance innovative and sustainable solutions; and
Improving efficiencies, reducing environmental impacts and ensuring that we are prepared for emergencies that could
occur.

Safety, Health, Environment and Sustainability

In recognition of the importance of safety, health, environment and sustainability matters to Cabot, our Board of Directors has

a Safety, Health, Environment, and Sustainability Committee. The Committee, which is comprised of independent directors, meets
regularly and oversees our safety, health, and environmental performance, process safety, security, product stewardship,
community engagement and governmental affairs. In particular, the Committee reviews metrics, audit results, emerging trends,
overall performance, risks and opportunity assessments and management processes related to our safety, health, environmental
and sustainability program.

Our ongoing operations are subject to extensive federal, state, local, and foreign laws, regulations, rules, and ordinances
relating to safety, health, and environmental matters (“SH&E Requirements”). The SH&E Requirements to which our operations are
subject include requirements to obtain and comply with various environmental-related permits for constructing any new facilities
and operating all of our existing facilities and for product registrations. We have expended and will continue to expend considerable
resources to construct, maintain, operate, and improve our facilities throughout the world for safety, health and environmental
protection and to comply with SH&E Requirements. We spent $72 million in environmental-related capital expenditures in fiscal
2023. We anticipate spending approximately $74 million for such matters in fiscal 2024, a significant portion of which will continue
to be for the installation of air pollution control equipment at our plant in Ville Platte, Louisiana. These costs include costs associated
with our compliance with the Consent Decree we entered into in November 2013 with the U.S. Environmental Protection Agency
(“EPA”) and the Louisiana Department of Environmental Quality (“LDEQ”) regarding Cabot’s three carbon black manufacturing
facilities in the U.S. This settlement is related to the EPA’s national enforcement initiative focused on the U.S. carbon black
manufacturing sector alleging non-compliance with certain regulatory and permitting requirements under The Clean Air Act,
including the New Source Review (“NSR”) construction permitting requirements. Pursuant to this settlement, Cabot has installed
technology controls for sulfur dioxide and/or nitrogen oxide at its carbon black plants in Pampa, Texas and Franklin, Louisiana, and is
in the process of installing such technology controls at its plant in Ville Platte. We are currently in discussions with the EPA and LDEQ
to extend our compliance date at the Ville Platte facility to 2024 based upon force majeure events primarily related to the COVID-19
pandemic. We expect that the total capital costs to install these technology controls will be in the range of $225 million to $250
million and will be incurred through 2024. As of September 30, 2023, we have incurred approximately $180 million to install these
controls in the U.S. Operating these controls increases our plant operating costs. All carbon black manufacturers in the U.S. have
settled with the EPA and are installing similar controls. In addition, under the Province of Ontario Ministry of Environment,
Conservation and Parks’ (“MECP”) Regulation 419, a new requirement for sulfur dioxide (“SO2”) emissions went into effect on July 1,
2023 for our reinforcing carbons plant in Sarnia, Ontario. On June 30, 2023, we received a letter from the MECP indicating that as of
July 1, 2023 we would be out of compliance with the new air standards for SO2, and, in response, we submitted our required
abatement plan in accordance with Regulation 419. We are continuing discussions with the MECP on a new technical standard for
SO2 emissions controls at our plant as an alternative to this requirement, which in its current form would require the installation of
air pollution controls at the plant by July 1, 2028. We intend to continue to engage with the MECP on this alternative, or another
compliance approach that is acceptable to the MECP. We anticipate that we will need to incur significant capital costs for the
installation of these new SO2 emissions controls, particularly during the 24-month period prior to the date of installation.

13

As described above, environmental agencies worldwide are increasingly implementing regulations and other requirements
resulting in more restrictive air emission limits globally, particularly as they relate to nitrogen oxide, sulfur dioxide and particulate
matter emissions. In addition, growing concerns about climate change have led to global efforts to reduce greenhouse gas (“GHG”)
emissions with a goal of achieving net zero GHG emissions in the future, which will impact the carbon black industry and our
business as carbon dioxide is emitted from those manufacturing processes. Currently, in Europe, our four carbon black facilities are
subject to the EU Emissions Trading Scheme (“EU ETS”). The fourth phase of the EU ETS began in January 2021, with updated
product benchmarks for our carbon black facilities. As a result of revisions to the EU ETS program in late 2022, the free allowances
under the program will be phased out over time likely resulting in increased costs to the Company. We are currently evaluating
future potential applicability of the new carbon border adjustment mechanism (“CBAM”) program in the EU as an alternative to
coverage under the EU ETS. Our carbon black facility in The Netherlands is subject to The Netherlands CO2 tax, which is a top up tax
to the EU ETS scheme. In China, a national emissions trading program is currently in place for the power sector and has not yet been
expanded beyond that sector. We continue to monitor that program’s further implementation and expect it may apply to the carbon
black industry in the future with the existing regional pilot programs expected to continue to operate until the national program
becomes effective. In Canada, our carbon black facility has been subject to the Canadian federal carbon tax program. The Ontario
Emissions Performance Standard trading system replaced the Canadian federal Output-Based Pricing System for our carbon black
facility in Ontario, and specific transition requirements became effective on January 1, 2022. In Mexico, our carbon black facility is
participating in the pilot national ETS program, which is expected to be effective by the end of calendar 2023. In other regions
where we operate, some of our facilities are required to report their greenhouse gas emissions but are not currently subject to
programs requiring trading or emission controls but may be subject to limited carbon tax programs affecting fuels we purchase. We
generally expect to pay any incurred taxes or purchase emission credits as needed to respond to any allocation shortfalls and pass
these costs on to our customers. In addition, further air emission regulations may be adopted in the future in regions and countries
where we operate, which could have an impact on our operations. In addition, further air emission regulations may be adopted in
the future in regions and countries where we operate, which could have an impact on our operations. Increasing regulatory
programs associated with emissions and concerns regarding climate change are expected to increase our capital and operational
costs in the future.

Cabot has been named as a potentially responsible party under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (the “Superfund law”) and comparable state statutes with respect to several sites primarily associated with
our divested businesses. (See “Legal Proceedings” in Item 3 below, and Note S in Item 8 below, under the heading “Contingencies”.)
During the next several years, as remediation of various environmental sites is carried out, we expect to spend against our
environmental reserve for costs associated with such remediation. As of September 30, 2023, our environmental reserve was
approximately $5 million. Adjustments are made to the reserve based on our continuing analysis of our share of costs likely to be
incurred at each site. Inherent uncertainties exist in these estimates due to unknown conditions at the various sites, changing
governmental regulations and legal standards regarding liability, and changing technologies for handling site investigation and
remediation. While the reserve represents our best estimate of the costs we expect to incur, the actual costs to investigate and
remediate these sites may exceed the amounts accrued in the environmental reserve. While it is always possible that an unusual
event may occur with respect to a given site and have a material adverse effect on our results of operations in a particular period,
we do not believe that the costs relating to these sites, in the aggregate, are likely to have a material adverse effect on our
consolidated financial position. Furthermore, it is possible that we may also incur future costs relating to environmental liabilities
not currently known to us or as to which it is currently not possible to make an estimate.

The International Agency for Research on Cancer (“IARC”) classifies carbon black as a Group 2B substance (known animal

carcinogen, possible human carcinogen). We have communicated IARC’s classification of carbon black to our customers and
employees and have included that information in our safety data sheets and elsewhere, as appropriate. We continue to believe that
the available evidence, taken as a whole, indicates that carbon black is not carcinogenic to humans, and does not present a health
hazard when handled in accordance with good housekeeping and safe workplace practices as described in our safety data sheets.

Our products are subject to the chemical control laws and regulatory requirements of the countries in which they are
manufactured or imported and distributed commercially. These laws include the regulation of chemical substances and inventories
under the Toxic Substances Control Act (“TSCA”) in the U.S. and the Registration, Evaluation and Authorization of Chemicals
(“REACh”) in the European Union. Manufacturers or importers of these chemical substances are required to submit specified health,
safety, environment, risk and use information about these substances. Under the “Evaluation” portion of the REACh framework, the
European Chemicals Agency (ECHA) and European Union Member States assess the information submitted by companies within
registration dossiers and testing proposals to determine whether the associated substances are safe for use. The silica substance
evaluation was concluded in 2022, and from this, a proposal for additional regulatory requirements related to silica is expected to be
issued. Carbon black is scheduled for a substance review in 2025. Analogous regimes exist in other parts of the world, including the
UK, Turkey, China, South Korea, and Taiwan. Many of these chemical control regulations are in the process of a multi-year
implementation period for product/substance registrations or notifications.

14

Additional requirements for nanomaterials apply to many of our existing products including carbon black, fumed silica, inkjet

pigments, fumed alumina, and advanced carbons such as carbon nano structures and carbon nanotubes. Country-specific
nanomaterial reporting programs have been implemented in some countries and are being developed by others. In the European
Union, application-specific safety evaluations are ongoing for nanomaterials. Additionally, in 2022, an opinion was adopted to
classify a subset of multi-walled carbon nanotubes that includes a carbon nanotube grade we currently manufacture, as carcinogen
category 1B and specific target organ toxicant (lung) after repeated exposure category 1 under European Union regulations. The
opinion has not yet been published in the Adaptation to Technical Progress (ATP), which would make the classification legally
binding. Our carbon nanotubes are bound in a matrix or contained within conductive materials in batteries, molded parts, plastics,
coatings, adhesives, and sealants, and we do not believe they present a health risk to end users under normal use conditions.
Exposure to carbon nanotubes could occur in the workplace. However, we believe workplace exposures can be appropriately
managed with engineering controls in place at our manufacturing facilities and the use of required personal protective equipment at
our sites.

A number of organizations and regulatory agencies have become increasingly focused on the issue of water scarcity, water
conservation and water quality, particularly in certain geographic regions. We are engaged in various activities to promote water
conservation and wastewater recycling, particularly given that some of our manufacturing processes are water intensive. The costs
associated with these activities are not expected to have a material adverse effect on our operations.

Various U.S. agencies and international bodies have adopted security requirements applicable to certain manufacturing and
industrial facilities and marine port locations. These security-related requirements involve the preparation of security assessments
and security plans in some cases, and in other cases the registration of certain facilities with specified governmental authorities. We
closely monitor all security-related regulatory developments and believe we are in compliance with all existing requirements.
Compliance with such requirements is not expected to have a material adverse effect on our operations.

Item 1A. Riskii

Factorsrr

In addition to factors described elsewhere in this report, the following are important factors that could adversely affect our
business. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations and financial results.

Industry Risks

ii

Industry capacity utilization and competition from other specialty chemical companies may adversely impact our business.

Our businesses are sensitive to industry capacity utilization, and pricing tends to fluctuate when capacity utilization changes

occur, which could affect our financial performance. Further, we operate in a highly competitive marketplace. Our ability to compete
successfully depends in part upon our ability to maintain a superior technological capability and to continue to identify, develop and
commercialize new and innovative, high value-added products for existing and future customers. Increased competition from
existing or newly developed products offered by our competitors or companies whose products offer a similar functionality as our
products, particularly those with an improved environmental footprint, and could be substituted for our products, may negatively
affect demand for our products. In addition, actions by our competitors could impair our ability to maintain or raise prices,
successfully enter new markets or maintain or grow our market position.

Environmental regulations and restrictions that affect the carbon black industry impose constraints on our operations, and could
threaten our competitive position and increase our operating costs, which may adversely impact our business and results of
operations.

Our ongoing carbon black operations are subject to extensive federal, state, local and foreign laws, regulations, rules and
ordinances relating to environmental matters, many of which provide for substantial monetary fines and civil and criminal sanctions
for violations. These include requirements to obtain and comply with various environmental-related and other permits for
constructing any new facilities and operating all of our existing facilities, as well as settlements with agencies regarding
environmental matters and environmental requirements. These environmental regulatory requirements and restrictions impose
constraints on our operations, and could threaten our competitive position. We have expended and will continue to expend
considerable amounts to construct, maintain, operate, and improve our facilities around the world for environmental protection. In
addition, the increased emphasis on environmental justice, which is the fair treatment and meaningful involvement of all individuals
and communities in which we operate, regardless of race, color, national origin, or income, with respect to the development,
implementation and enforcement of environmental laws, regulations, and policies, could result in increased compliance
requirements and costs. Furthermore, our actual or perceived failure to adhere to these principles could harm our reputation.

Further, environmental agencies worldwide are increasingly implementing regulations and other requirements resulting in

more restrictive air emission limits globally, particularly as they relate to nitrogen oxides, sulfur dioxide and particulate matter
emissions. We expect complying with existing regulations and other regulatory and tax changes being proposed in regions where we
operate, if approved, will require us to incur significant additional costs for compliance, capital improvements or limit our current or

15

planned operations. We may not be able to offset the effects of these compliance costs through price increases. Our ability to
implement price increases is largely influenced by competitive and economic conditions and could vary significantly depending on
the segment served. Such increases may not be accepted by our customers, may not be sufficient to compensate for increased
regulatory costs or may decrease demand for our products and our volume of sales.

A description of these matters is included in the discussion under the heading “Safety, Health, Environment, and

Sustainability” in Item 1 above, and in Note S in Item 8 below under the heading “Contingencies”.

We may be exposed to certain regulatory and financial risks related to climate change developments and an increased focus on
carbon neutrality, which may adversely affect our business and results of operations, and increased pressures and adverse
publicity about potential impacts on climate change by us or other companies in our industry could harm our reputation.

Carbon dioxide, a greenhouse gas, is emitted in carbon black manufacturing processes. Concerns about the relationship

between greenhouse gases and global climate change, and an increased focus on carbon neutrality, may result in additional
regulations on both national and supranational levels, to monitor, regulate, control and tax emissions of carbon dioxide and other
greenhouse gases. Climate changes include extreme weather impacts, such as changes in rainfall and in storm patterns and
intensities, water shortages, significantly changing sea levels and increasing atmospheric and water temperatures. A number of
governmental bodies have introduced or are contemplating regulatory changes in response to climate change, including regulating
greenhouse gas emissions. Specifically, in certain geographic areas, our carbon black facilities are or may become subject to
greenhouse gas emission trading schemes or carbon tax programs under which we may be required to pay any incurred taxes or
purchase emission credits if our emission levels exceed our free allocation. The outcome of new legislation or regulation in the U.S.
and other jurisdictions in which we operate may result in new or additional requirements and fees or restrictions on certain
activities. Compliance with greenhouse gas and climate change initiatives may result in additional costs to us, including, among other
things, increased production costs, increased feedstock costs, additional taxes, reduced emission allowances or additional
restrictions on production or operations. In addition, certain of our carbon black products for specialty applications have higher
greenhouse gas emissions than our other products, which may increase our compliance costs and make it more challenging to
achieve our emissions goals without technology developments. We may not be able to offset the effects of these new or more
stringent laws and regulations and compliance costs through price increases, which could adversely affect our business and
negatively impact our growth. Our ability to implement price increases is largely influenced by competitive and economic conditions
and could vary significantly depending on the segment served. Such increases may not be accepted by our customers, may not be
sufficient to compensate for increased regulatory costs or may decrease demand for our products and our volume of sales. Any
adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not
subject to such limitations.

Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change or
environmental harm from us or our industry could harm our reputation or otherwise impact the Company adversely. In recent years,
investors have also begun to show increased interest in sustainability and climate change as it relates to their investment decisions.
Our failure to develop and execute a sustainability strategy that adequately responds to these environmental concerns could harm
our reputation and negatively impact the value of our securities. In addition, new disclosure requirements related to GHG emissions
and climate change, including the European Sustainability Reporting Standards, any final rules approved by the SEC, and state laws
requiring climate disclosure, may negatively impact our business by diverting resources, increasing our compliance costs and
harming our reputation. Further, increasing weather-related impacts on our operations and plant sites may impact the cost or
availability of insurance. Furthermore, the potential impact of climate change and related regulation on our feedstock suppliers and
customers is highly uncertain and there can be no assurance that it will not have an adverse effect on the availability, over time, of
our traditional carbon black feedstocks, our customers’ businesses and sourcing arrangements, and on our financial condition and
results of operations. For instance, lower demand for oil refinery products may reduce the availability and increase the cost of
certain of the key raw materials we use. In addition, many of our tire customers have set sustainability goals for the 2030 to 2050
time period to purchase more sustainable raw materials, including reduced use of fossil-derived materials, which could reduce
demand for our traditional carbon black products. We cannot predict how legal, regulatory and social responses to concerns about
climate change, as well as other sustainability and environmental matters, will impact our business.

16

Volatility in the price and availability of raw materials and energy could impact our margins and working capital and our revenues
from our energy center operations.

Our manufacturing processes consume significant amounts of energy and raw materials, the costs of which are subject to

worldwide supply and demand as well as other factors beyond our control. Our carbon black businesses use a variety of feedstocks
as raw material including high sulfur fuel oils, low sulfur fuel oils, coal tar distillates, and ethylene cracker residue, the cost and
availability of which vary, based in part on geography. Significant movements or volatility in our carbon black feedstock costs could
have an adverse effect on our working capital and results of operations. In addition, regulatory changes or geopolitical conflict may
impact the availability and prices of our raw materials. For example, the Russian invasion of Ukraine has disrupted and may continue
to disrupt the price and availability of natural gas in Europe.

Certain of our carbon black supply arrangements contain provisions that adjust prices to account for changes in relevant
feedstock and natural gas price indices. We also attempt to offset the effects of increases in raw material and energy costs through
selling price increases in our non-contract sales, productivity improvements and cost reduction efforts. Success in offsetting
increased raw material and energy costs with price increases is largely influenced by competitive and economic conditions and could
vary significantly depending on the segment served. Such increases may not be accepted by our customers, may not be sufficient to
compensate for increased raw material and energy costs or may decrease demand for our products and our volume of sales. If we
are not able to fully offset the effects of increased raw material or energy costs, it could have a significant impact on our financial
results. Rapid declines in energy prices and raw material costs can also negatively impact our financial results, as such changes can
negatively affect the revenues we receive from our energy centers and yield improvement investments, and may negatively impact
our contract pricing adjustments. In addition, we use a variety of feedstock indices in our supply arrangements to adjust our prices
for changes in raw materials costs. Depending on feedstock markets and our choice of feedstocks, the indices we use in our supply
arrangements may not precisely track our actual costs. This could result in an incongruity between our pricing adjustments and
changes in our actual feedstock costs, which can affect our net working capital and our margins. Further, the timing of the
implementation of any of these pricing adjustments may not precisely track our actual costs as reflected in our financial statements.

In addition, we obtain certain of our raw materials from selected key suppliers. Although we typically maintain raw material

inventory, if any sole source supplier of raw materials ceases supplying raw materials to us, or if any of our key suppliers is unable to
meet its obligations under supply agreements with us on a timely basis or at an acceptable price, or at all, we may be forced to incur
higher costs to obtain the necessary raw materials elsewhere or, in certain limited cases, may not be able to obtain the required raw
materials.

A significant adverse change in a customer or joint venture relationship or the failure of a customer or joint venture partner to
perform its obligations under agreements with us could harm our business or cash flows.

Our success in strengthening relationships and growing business with our largest customers and retaining their business over

extended time periods is important to our future results. We have a group of key customers across our businesses that together
represent a significant portion of our total net sales and operating revenues. The loss of any of our important customers, or a
significant reduction in volumes sold to them, could adversely affect our results of operations until such business is replaced or any
temporary disruption ends. Further, in our Reinforcement Materials segment we enter into supply arrangements with a number of
key customers that typically have a duration of one year, which account for approximately two-thirds of our total reinforcing
carbons volumes. Our success in negotiating the price and volume terms under these arrangements could have a material effect on
our results. In addition, a number of our operations are conducted through joint venture arrangements that operate pursuant to
long-term contracts, including for the supply of raw materials for the joint venture operations. Any dispute as to the terms of these
contractual arrangements or deterioration in the relationship between us and our joint venture partner could disrupt the operations
of the joint venture, which could affect our financial results and harm our reputation. In addition, any deterioration in the financial
condition of any of our customers that impairs our customers’ ability to make payments to us also could increase our uncollectible
receivables and could affect our future results and financial condition.

We are exposed to political or country risk inherent in doing business in some countries, including China.

Sales outside off the U.S. constituted the majority off our revenues in fiscal 2023. We conduct business in several countries,
including China, that have less stable legal systems and financial markets, and potentially more corrupt, or less predictable, business
environments than the U.S. As set forth in Note T to our Consolidated Financial Statements, sales in China constituted approximately
25% off our revenues in fiscal 2023 and our property, plant and equipment located in China constituted approximately 25% off our
total property, plant and equipment as off September 30, 2023. Our operations outside off the U.S., including in China, expose us to
risks related to uncertain enforcement of laws by foreign governments as well as risks that foreign governmental entities will change
applicable rules and regulations with minimal advance notice. These risks could result in a material change in our operations, which
could negatively impact the value off our securities. Additionally, our operations in some countries, including China, are subject to
the following risks: changes in the rate off economic growth; unsettled political or economic conditions; non-renewal off operating
permits or licenses; possible expropriation or other governmental actions; corruption by government officials and other third

17

parties; social unrest, war, terrorist activities or other armed conflict; confiscatory taxation or other adverse tax policies; deprivation
off contract rights; trade regulations affecting production, pricing and marketing off products; reduced protection off intellectual
property rights; restrictions or additional costs associated with repatriating cash; exchange controls; inflation; currency fluctuations
and devaluation; political tension that could result in sanctions being imposed against our customers or suppliers in countries where
sanctions have not been imposed in the past; the effect off global health, safety and environmental matters on economic conditions
and market opportunities; and changes in financial policy and availability off credit.

For example, the Chinese government has, from time to time, curtailed manufacturing operations, with little or no notice, in

industrial regions out of concerns over air quality and in response to COVID-19 outbreaks. The timing and length of these
curtailments has been difficult to predict and, at times, were applied to manufacturing operations without regard to whether the
operations being curtailed comply with environmental regulations in the area. Accordingly, our manufacturing operations in China
have been subject to these curtailments in the past and may be subject to them in the future. In addition, the Chinese government
has instituted energy intensity and energy consumption targets in a number of provinces in its efforts to reduce energy
consumption, resulting in energy quotas and shortages in energy supply. We are unable to predict how any power outages related
to these targets will impact our operations. These events could negatively impact our results of operations and cash flows both
during and after the period of any government-imposed curtailment or power outages affecting our operations. Further, any such
curtailments on the operations at our customers’ facilities could reduce demand for our products and our volumes.

Operational Risks

ii

As a chemical manufacturing company, our operations are subject to operational risks and have the potential to cause
environmental or other damage as well as personal injury, or disrupt our ability to supply our customers, any of which could
adversely affect our business, results of operations and cash flows.

The operation of a chemical manufacturing business as well as the sale and distribution of chemical products are subject to

operational as well as safety, health and environmental risks. For example, the production and/or processing of carbon black,
specialty compounds, fumed metal oxides, aerogel, carbon nanotubes and other chemicals involve the handling, transportation,
manufacture or use of certain substances or components that may be considered toxic or hazardous. While we take precautions to
handle and transport these materials in a safe manner, if they are mishandled or released into the environment, they could cause
property damage or result in personal injury claims against us.

Our manufacturing processes and the transportation of our chemical products and/or the raw materials used to manufacture

our products are subject to risks inherent in chemical manufacturing, including leaks, fires, explosions, toxic releases, severe
weather, mechanical failures or unscheduled downtime. In addition, the occurrence of material operating problems at our facilities,
particularly at a facility that is the sole source of a particular product we manufacture, or a disruption in our supply chain or
distribution operations may result in loss of production, which, in turn, may make it difficult for us to meet customer needs. For
example, in recent years we have experienced unplanned plant outages at our plants in Franklin, Louisiana and Altamira, Mexico
that caused reduced volumes and earnings during the period the plant was down and increased our fixed cost Ot
supply chains and distribution channels, including those caused by global or regional logistics delays and constraints, such as rail or
other transportation interruptions, could disrupt our business operations. These events and their consequences could negatively
impact our results of operations and cash flows, both during and after the period of operational difficulties, and could harm our
reputation.

her disruptions in

s.

An interruption in our operations as a result of fence-line arrangements or a joint venture partner's actions could disrupt our
manufacturing operations and adversely affect our financial results.

At certain of our fumed metal oxides facilities we have fence-line arrangements (many of which are closed-loop) with adjacent

third-party manufacturing operations (“fence-line partners”), who provide raw materials for our manufacturing operations and/or
take by-products generated from our operations. Accordingly, any disruptions or curtailments in a fence-line partner’s production
facilities that impacts their ability to supply us with raw materials or to take our manufacturing by-products could disrupt our
manufacturing operations or cause us to incur increased operating costs to mitigate such disruption. We have experienced
disruptions in the supply of raw materials from certain of our fence-line partners in recent years, which have caused us to curtail our
operations or incur higher operating costs. In addition, we operate certain of our carbon black facilities through joint venture
arrangements, pursuant to which our joint venture partners provide feedstock and/or take by-products generated from our
operations. A dispute with a joint venture partner concerning the terms of those arrangements could impact our joint venture
operations and could decrease our income from such operations. Significant events at neighboring industrial facilities, such as
environmental releases, could also disrupt our operations and result in negative publicity about us and harm our reputation.

18

Our products are subject to extensive safety, health and environmental requirements, which could impair our ability to
manufacture and sell certain products.

In order to secure and maintain the right to produce or sell our products, we must satisfy product related regulatory
requirements in different jurisdictions. Obtaining and maintaining these approvals requires a significant amount of product testing
and data, and there is no certainty these approvals will be obtained.

Certain national and international health organizations have classified carbon black as a possible or suspected human
carcinogen. To the extent that, in the future, (i) these organizations re-classify carbon black as a known or confirmed carcinogen, (ii)
other organizations or government authorities in other jurisdictions classify carbon black or any of our other finished products, raw
materials or intermediates as suspected or known carcinogens or otherwise hazardous, or (iii) there is discovery of adverse health
effects attributable to production or use of carbon black or any of our other finished products, raw materials or intermediates, we
could be required to incur significantly higher costs to comply with environmental, health and safety laws, or to comply with
restrictions on sales of our products, be subject to legal claims, and our reputation and business could be adversely affected.
Further, a subset of multi-walled carbon nanotubes that includes a carbon nanotube grade we currently manufacture have been
classified as carcinogen category 1B and specific target organ toxicant (lung) after repeated exposure category 1 under European
Union regulations. Although our carbon nanotubes are bound in a matrix or contained within conductive materials, exposure to
carbon nanotubes could occur in the workplace. We could be required to incur additional costs to comply with requirements for the
safe manufacturing and handling of these materials and we could be subject to legal claims associated with our products. In
addition, chemicals that are currently classified as non-hazardous may be classified as hazardous in the future, and our products may
have characteristics that are not recognized today but may be found in the future to impair human health or to be carcinogenic.

Information technology systems failures, data security breaches, cybersecurity attacks or network disruptions have harmed us in
the past and could compromise our information, disrupt our operations and expose us to liability, which may adversely impact
our operations.

We rely on information technology, some of which is managed by third parties, to manage the day-to-day operations and
activities of our business, operate elements of our manufacturing facilities, manage our customer and vendor transactions, and
maintain our financial, accounting and business records. In addition, we collect and store certain data, including proprietary business
information, and may have access to confidential or personal information that is subject to privacy and security laws and
regulations.

The secure processing, maintenance and transmission of this data is critical to our operations and business strategy.

Information technology systems failures, including those associated with our managed service provider or related to maintaining or
upgrading our systems or integrating information technology and other systems in connection with the integration of businesses we
acquire, or network disruptions could disrupt our operations by impeding our processing of transactions and our financial reporting,
and our operations, including by contributing to a process safety event, any of which could have a material adverse effect on our
business or results of operations. In the past, our networks have been subject to an attack, potentially by suspected foreign nation-
state attackers, who conducted reconnaissance and deployed malware. While our systems were able to isolate and expel the
attacker before we believe material harm was caused, criminals, rogue insiders, nation-state, and other attackers may continue to
attack our network, and our defenses may be unable to succeed in detecting their actions or stop them from inflicting potentially
material harms including by theft, destruction, misuse, or corruption of our data or systems or those of other entities whose systems
may interconnect with ours.

In addition, our information technology systems could be compromised by outside parties intent on extracting information,

corrupting information or disrupting business processes. Despite our security design and controls, and those of our third-party
providers, we may be vulnerable to cyber-attacks, computer viruses, security breaches, inadvertent or intentional employee actions,
system failures and other risks that could potentially lead to the compromising of sensitive, confidential or personal data, improper
use of our, or our third-party provider systems, solutions or networks, unauthorized access, use, disclosure, modification or
destruction of information, or operational disruptions. We face increased information technology security and fraud risks due to our
increased reliance on working remotely, which may create additional information security vulnerabilities and/or magnify the impact
of any disruption in information technology systems. Additionally, we have in the past and may in the future be exposed to
unauthorized access to our information technology systems through undetected vulnerabilities in our or our service providers’
information systems or software. With the evolving nature of cybersecurity threats, the scope and impact of any information
security incident cannot be predicted. In addition, more than a dozen states in the United States have also passed comprehensive
data protection legislation, and the global regulatory environment pertaining to information security and privacy is increasingly
demanding, with new and changing requirements, such as the European Union’s General Data Protection Regulation, The Personal
Information Protection Law of the People’s Republic of China, and Brazil’s Lei Geral de Protecao de Dados. Complying with these
laws and regulations may be more costly or take longer than we anticipate, and any failure to comply could result in fines or
penalties.

19

Breaches of our security measures, cyber incidents and disruptions, or the accidental loss, inadvertent disclosure, or
unapproved dissemination of proprietary information or sensitive or confidential information about the Company, our employees,
our vendors, or our customers, or failure to comply with laws and regulations related to information security or privacy, could result
in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties and judgments,
disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, and could
otherwise harm our business and our results of operations.

Natural disasters and severe weather events could affect our operations and financial results.

We operate facilities in areas of the world that are exposed to natural hazards, such as floods, windstorms, hurricanes, and
earthquakes. In addition, extreme weather events and changing weather patterns present physical risks on existing infrastructure
that may become more frequent or more severe as a result of factors related to climate change. Such events could disrupt our
supply of raw materials or otherwise affect production, transportation and delivery of our products or affect demand for our
products and otherwise harm our business and our results of operations, potentially in material ways that may exceed available
insurance coverage in the particular circumstances.

We have experienced recent disruptions of the type described above. For example, the severe flooding that occurred in

Western Europe in July 2021 caused significant damage to our specialty compounds plant in Pepinster, Belgium. That disruption
resulted in a near-term reduction in earnings from lower volumes and certain increases in our operating costs.

ii
Financ

iall andd Otherr Risks

ii

Negative or uncertain worldwide or regional economic conditions or trade relations, as well as regional conflicts, may adversely
impact our business.

Our operations and performance are affected by worldwide and regional economic conditions. Uncertainty or a deterioration
in the economic conditions affecting the businesses to which, or geographic areas in which, we sell products could reduce demand
for our products and inflationary pressures may increase our costs. We may also experience pricing pressure on products and
services, or be unsuccessful in passing along to our customers an increase in our raw materials costs or energy prices, which could
decrease our revenues and have an adverse effect on our financial condition and cash flows. In addition, during periods off economic
uncertainty, our customers may temporarily pursue inventory reduction (“destocking”) measures that exceed declines in the actual
underlying demand. Given our position in the value chains for our principal products, we typically experience greater destocking
impacts in our results off operations early in a recessionary cycle.

Regional conflicts may also adversely impact our business. While we do not have manufacturing operations in Russia or

raine, and we do not have material sales in Ukraine and have stopped sales into Russia, Russia’s continuing invasion off Ukraine is
negatively impacting economic conditions in Europe. This could reduce demand for our products in our EMEA region, and negatively
impact our and our customers’ ability to operate plants in Europe, and harm our suppliers and otherwise increase our operating
costs.

In addition, changes in, or tensions relating to, U.S. trade relations with countries where we do business may adversely impact

our business. For example, tensions in the U.S.-China trade relationship have led to an increased risk of sanctions being imposed
against our suppliers and customers in China which, if imposed, could restrict our ability to do business with such companies. In
addition, we may encounter unexpected operating difficulties in China, more restrictive investment opportunities in China, greater
difficulty transferring funds, more restrictive travel in and out of China, or negative currency impacts. Further, the cost of our capital
projects may be higher than anticipated because of trade tariffs. In addition, escalating tensions in the U.S.-China trade relationship
and/or restrictive policies by either country could require us to duplicate the technology resources and capabilities we have in China,
particularly those related to our battery materials product line, in a geography outside China, thereby increasing our costs.

Litigation or legal proceedings could expose us to significant liabilities and thus negatively affect our financial results.

As more fully described in Note S in Item 8 below under the heading “Contingencies”, we are a party to or the subject of
lawsuits, claims, and proceedings, including, but not limited to, those involving environmental, and health and safety matters as well
as product liability and personal injury claims relating to asbestosis, silicosis, and coal worker’s pneumoconiosis. We are also a
potentially responsible party in various environmental proceedings and remediation matters wherein substantial amounts are at
issue. Adverse rulings, judgments or settlements in pending or future litigation (including liabilities associated with respirator claims)
or in connection with environmental remediation activities could adversely affect our financial results or cause our results to differ
materially from those expressed or forecasted in any forward-looking statements.

20

Our tax rate and other tax obligations are dependent upon a number of factors, a change in any of which could impact our future
tax rates and financial results.

Our future tax rates may be adversely affected by a number of factors, including: changes in the jurisdictions in which our
profits are determined to be earned and taxed; changes in the estimated realization of our net deferred tax assets; the repatriation
of non-U.S. earnings for which we have not previously provided for non-U.S. withholding taxes; adjustments to estimated taxes upon
finalization of various tax returns; increases in expenses that are not deductible for tax purposes; changes in available tax credits; the
resolution of issues arising from tax audits with various tax authorities; and changes in tax laws or the interpretation of such tax
laws. In addition, losses for which no tax benefits can be recorded could materially impact our tax rate and its volatility from one
quarter to another.

Fluctuations in foreign currency exchange and interest rates affect our financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar. In
fiscal 2023, we derived a majority of our revenues from sales outside the U.S. Because our consolidated financial statements are
presented in U.S. dollars, we must translate revenues and expenses, as well as assets and liabilities, into U.S. dollars at exchange
rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against
other currencies in countries where we operate will affect our results of operations and the value of balance sheet items
denominated in foreign currencies. For example, in fiscal 2023, we recorded foreign exchange losses related to the remeasurement
of our net monetary assets denominated in Argentine pesos, as the official Argentine exchange rate weakened compared to the U.S.
dollar throughout the year. In addition, we may have foreign currency losses from government-controlled currency devaluations,
such as the foreign currency losses we recorded in fiscal 2023 related to the impact of the sharp devaluation of the Argentine peso
that was guided by the Argentine central bank. Due to the geographic diversity of our operations, weaknesses in some currencies
might be offset by strengths in others over time. In addition, we are exposed to adverse changes in interest rates. We use a
combination of commercial paper and borrowings under our Credit Agreements to meet our short-term cash needs, with
borrowings intra-quarter that may be higher than at quarter-end. As this debt is at variable interest rates, the higher interest rate
environment as compared to recent years increases our borrowing costs. We manage both these risks through normal operating
and financing activities and, when deemed appropriate, through the use of derivative instruments as well as foreign currency debt.
We cannot be certain, however, that we will be successful in reducing the risks inherent in exposures to foreign currency and
interest rate fluctuations.

Any future outbreak off a widespread health epidemic could materially and adversely impact our business in the future.

Our global operations expose us to risks associated with public health crises and outbreaks off epidemics, pandemics, or
contagious diseases, such as the outbreak of a novel strain off coronavirus beginning in December 2019 (“COVID-19”). A global health
isis could have a serious adverse impact on the economy and on our business, results off operations and cash flows as the COVID-
19 pandemic and associated containment efforts did in fiscal 2020. Specifically, a pandemic or future global health crisis may disrupt
operations at our customers and reduce demand for our products, require or cause us to cease operations or idle production lines at
our facilities, could materially affect our ability to adequately stafff and maintain our operations, including in the event government
authorities impose mandatory closures, such as those imposed in China as part off that country’s “Zero COVID” policy, work-from-
home orders and social distancing protocols, and seek voluntary facility closures and impose other restrictions to mitigate the

rther spread off disease. A global health crisis could also disrupt our supply chain and materially and adversely impact our ability to

secure supplies for our facilities and to provide personal protective equipment for our employees, which could materially and
adversely affect our operations. For example, the COVID-19 pandemic has also contributed to increased costs and decreased
availability off labor and materials for construction projects, and these factors have increased the costs off our capital improvement
projects and delayed our completion of such projects. Factors that will influence the impact on our business and operations include
the duration and extent off the pandemic, the extent off imposed or recommended containment and mitigation measures and their
impact on our operations and the operations of our customers, and the general economic consequences off the pandemic.

We have entered into a number of derivative contracts with financial counterparties. The effectiveness of these contracts is
dependent on the ability of these financial counterparties to perform their obligations and their nonperformance could harm our
financial condition.

We have entered into forward foreign currency contracts and cross-currency swaps as part of our financial risk management

strategy. The effectiveness of our risk management program using these instruments is dependent, in part, upon the counterparties
to these contracts honoring their financial obligations. If any of our counterparties are unable to perform their obligations in the
future, we could be exposed to increased earnings and cash flow volatility due to an instrument’s failure to hedge or adequately
address a financial risk.

21

Technology Risks

ii

We may not be successful achieving our growth expectations from new products, new applications and technology
developments, and money we spend on these efforts may not result in an increase in revenues or profits commensurate with our
investment.

We may not be successful achieving our growth expectations from developing new products or product applications.
Moreover, we cannot be certain that the costs we incur investing in new product and technology development will result in an
increase in revenues or profits commensurate with our investment or within the time period we expect. For example, our
investments to further develop our E2C® solutions, inkjet dispersions and inks, and battery materials applications may not result in
the earnings growth expectations on which these investments are being made, or we may not realize such growth in line with our
expectations when we made such investments. Similarly, we cannot be certain that the investments we are making in our EVOLVE®
Sustainable Solutions technology platform to develop products for our customers using sustainable reinforcing carbons from
renewable or recycled materials or using processes that result in lower GHG emissions will be successful, including within the time
period our customers expect. In addition, the timely commercialization of products that we are developing may be disrupted or
delayed by manufacturing or other technical difficulties, market acceptance or insufficient market size to support a new product,
competitors’ new products, and difficulties in moving from the experimental stage to the production stage. These disruptions or
delays could affect our future business results.

The continued protection of our patents, trade secrets and other proprietary intellectual property rights is important to our
success.

Our patents, trade secrets and other intellectual property rights are important to our success and competitive position. We

own various patents and other intellectual property rights in the U.S. and other countries covering many of our products, as well as
processes and product uses. Where we believe patent protection is not appropriate or obtainable, we rely on trade secret laws and
practices to protect our proprietary technology and processes, such as physical security, limited dissemination and access and
confidentiality agreements with our employees, customers, consultants, business partners, potential licensees and others to protect
our trade secrets and other proprietary information. However, trade secrets can be difficult to protect and the protective measures
we have put in place may not prevent disclosure or unauthorized use of our proprietary information or provide an adequate remedy
in the event of misappropriation or other violations of our proprietary rights. In addition, we are a licensee of various patents and
intellectual property rights belonging to others in the U.S. and other countries. Because the laws and enforcement mechanisms of
some countries may not allow us to protect our proprietary rights to the same extent as we are able to do in the U.S., the strength of
our intellectual property rights will vary from country to country.

Irrespective of our proprietary intellectual property rights, we may be subject to claims that our products, processes or
product uses infringe the intellectual property rights of others. These claims, even if they are without merit, could be expensive and
time consuming to defend and if we were to lose such claims, we could be enjoined from selling our products or using our processes
and/or be subject to damages, or be required to enter into licensing agreements requiring royalty payments and/or use restrictions.
Licensing agreements may not be available to us, or if available, may not be available on acceptable terms.

Portfot

lio Management,tt Capacityt Expan

xx

sion and Integration Risks

ii

Any failure to realize benefits from acquisitions, alliances or joint ventures or to achieve our portfolio management objectives
could adversely affect future financial results.

In achieving our strategic plan objectives, we may pursue acquisitions, alliances or joint ventures intended to complement or

expand our existing businesses globally or add product technology, or both. The success of acquisitions of businesses, new
technologies and products, or arrangements with third parties is not always predictable and we may not be successful in realizing
our objectives as anticipated. We may not be able to integrate any acquired businesses successfully into our existing businesses,
make such businesses profitable, or realize anticipated cost savings or synergies, if any, from these acquisitions, which could
adversely affect our business results. In addition to strategic acquisitions, we evaluate our portfolio in light of our objectives and
alignment with our growth strategy. In implementing this strategy, we may not be successful in separating non-strategic assets. The
gains or losses on the divestiture of, or lost operating income from, such assets may affect our earnings. Moreover, we have in the
past, and may again in the future, incur asset impairment charges related to acquisitions or divestitures that reduce earnings. As
described in Note D in Item 8 below under the heading “Divestitures”, we recorded an asset impairment charge and a loss on sale fof
business in fiscal 2022 in connection with the disposition off our Purification Solutions business.

22

Plant capacity expansions and site development projects may impact existing plant operations, be delayed and/or not achieve the
expected benefits.

Our ability to complete capacity expansions and site development projects, including capacity conversions from reinforcing

carbons to specialty carbons and other site development projects, as planned may be delayed or interrupted by the need to obtain
environmental and other regulatory approvals, unexpected cost increases, availability of labor and materials, unforeseen hazards
such as weather conditions, and other risks customarily associated with construction projects. These risks include the risk that
existing plant operations are disrupted as well as the risk associated with delays in the start-up of operations using new
technologies, which disruptions could make it difficult for us to meet our customer needs. Moreover, in the case of capacity
expansions, the cost of these activities could have a negative impact on the financial performance of the relevant business until
capacity utilization at the particular facility is sufficient to absorb the incremental costs associated with an expansion. In addition,
our ability to expand capacity in emerging regions depends in part on economic and political conditions in these regions and, in
some cases, on our ability to establish operations, construct additional manufacturing capacity or form strategic business alliances.

Item 1B. Unresolved Staffff Comments

None.

Item 2. Properties

Cabot’s corporate headquarters are in leased office space in Boston, Massachusetts. We also own or lease office,

manufacturing, storage, distribution, marketing and research and development facilities in the U.S. and in foreign countries. The
locations of our principal manufacturing and/or administrative facilities are set forth in the table below. Unless otherwise indicated,
all the properties are owned.

Location by Region
Americas Region

Alpharetta, Georgia*
Tuscola, Illinois
Carrollton, Kentucky**
Franklin, Louisiana
Ville Platte, Louisiana
Billerica, Massachusetts
Haverhill, Massachusetts
Midland, Michigan
Pampa, Texas
Campana, Argentina
Maua, Brazil
Sao Paulo, Brazil*(1)
Saint-Jean-sur-Richelieu, Québec, Canada
Sarnia, Ontario, Canada
Cartagena, Colombia
Altamira, Mexico

Europe, Middle East and Africa Region

Loncin, Belgium
Pepinster, Belgium
Valasske Mezirici (Valmez), Czech Republic**
Port Jerome, France**
Frankfurt, Germany*
Münster, Germany*
Rheinfelden, Germany
Ravenna, Italy
Riga, Latvia*(1)
Schaffhausen, Switzerland*
Botlek, Netherlands**
Dubai, United Arab Emirates*
Barry, United Kingdom (Wales)**

23

Reinforcement
Materials

Performance
Chemicals

X

X
X
X

X
X
X
X

X
X
X

X
X

X
X
X
X

X
X
X
X

X
X
X
X

X
X
X
X

X
X

X
X
X

X
X
X
X
X

Location by Region
Asia Pacific Region

Jiangsu Province, China**
Jiangxi Province, China**
Tianjin, China** (2 plants)
Shanghai, China*(1)
Shanghai, China** (plant)
Xingtai City, China**
Wuhai, China**
Shenzhen, China**
Zhuhai, China**
Mumbai, India*
Cilegon, Indonesia**
Jakarta, Indonesia*(1)
Chiba, Japan
Shimonoseki, Japan**
Tokyo, Japan*(1)
Port Dickson, Malaysia**

(1)

Business service center

* Leased premises
** Building(s) owned by Cabot on leased land

Reinforcement
Materials

Performance
Chemicals

X
X
X
X

X
X
X
X
X
X

X

X
X
X
X

X
X
X
X
X
X
X

We conduct research and development for our various businesses primarily at facilities in Billerica, Massachusetts; Pampa,

Texas; Pepinster, Belgium; Frankfurt and Münster, Germany; and Zhuhai and Shanghai, China.

With our existing manufacturing plants and planned expansions, we generally have sufficient production capacity to meet

current requirements and expected near-term growth. These plants are generally well maintained, in good operating condition and
suitable and adequate for their intended use. Our administrative offices and other facilities are suitable and adequate for their
intended purposes.

24

Item 3. Legal Procr eedindd gs

Cabot is a party in various lawsuits and environmental proceedings wherein substantial amounts are claimed. Additional
information regarding legal proceedings involving Cabot is disclosed in Note S in Item 8 below, under the heading “Contingencies”,
which disclosure is incorporated herein by reference.

Item 4. Mineii

Safea ty Discii

losures

Not applicable.

Information about our Executive Officers

Set forth below is certain information about Cabot’s executive officers as of November 13, 2023.

Sean D. Keohane, age 56, is President and Chief Executive Officer and a member of Cabot’s Board of Directors, positions he has

held since March 2016. Mr. Keohane joined Cabot in 2002. From November 2014 until March 2016 he was Executive Vice President
and President of Reinforcement Materials. From March 2012 until November 2014, he was Senior Vice President and President of
Performance Chemicals, and from May 2008 until March 2012, he was General Manager of Performance Chemicals. He was
appointed Vice President in March 2005, Senior Vice President in March 2012 and Executive Vice President in November 2014. He
was a member of the Interim Office of the Chief Executive Officer, which was in place from December 2015 until March 2016.

Erica McLaughlin, age 47, is Executive Vice President, Chief Financial Officer and Head of Corporate Strategy. Ms. McLaughlin
joined Cabot in 2002. She was elected Executive Vice President effective December 2022, Senior Vice President and Chief Financial
Officer in May 2018, and in October 2018 she assumed responsibility for Corporate Strategy and Development. From June 2016 until
May 2018 she was Vice President of Business Operations for Reinforcement Materials and General Manager of the tire business, and
from July 2011 until June 2016, she was Vice President of Investor Relations and Corporate Communications. Prior to July 2011, she
held a variety of leadership positions in Finance and Corporate Planning.

Karen A. Kalita, age 44, is Senior Vice President and General Counsel. Ms. Kalita joined Cabot in 2008. Prior to assuming her

current position in June 2019, she held several key positions in Cabot’s Law Department, including Chief Counsel to the Company’s
Reinforcement Materials segment from November 2015 to June 2019 and Purification Solutions segment from June 2013 to June
2019, and senior legal counsel to the Company’s previous Advanced Technologies segment. Prior to joining the Company, Ms. Kalita
was in private practice at WilmerHale LLP in Boston, MA.

Hobart C. Kalkstein, age 53, is Executive Vice President and President, Reinforcement Materials Segment and President,
Americas Region. Mr. Kalkstein joined Cabot in 2005. He was elected Executive Vice President effective December 2022, and Senior
Vice President and President, Reinforcement Materials Segment and President, Americas Region in April 2016. Prior to this, he was
Vice President of Corporate Strategy and Development from December 2015 to April 2016. From October 2013 to December 2015,
he served as Vice President of Global Business Operations for Purification Solutions and from November 2012 to December 2015 as
General Manager of Global Emission Control Solutions for Purification Solutions, and from January 2012 to November 2012 he
served as Vice President of Business Operations and Executive Director of Marketing and Business Strategy for Performance
Chemicals. Prior to that, he served as General Manager of the Aerogel business from October 2007 to February 2010.

Jeff Zhu, age 55, is Executive Vice President and President, Performance Chemicals Segment and President, Asia Pacific Region.

Mr. Zhu joined Cabot in 2012. He was elected Executive Vice President effective December 2022 and Senior Vice President and
President, Performance Additives business and President, Asia Pacific Region in October 2019. Prior to this, he had served as
President, Asia Pacific Region since joining Cabot. Prior to joining Cabot, Mr. Zhu served in a variety of regional and global business
leadership roles at Rhodia from 1994 until 2010, including Asia Pacific regional commercial director from 1994 to 2002, regional vice
president and general manager of Rhodia Novacare Asia Pacific from 2002 to 2008, and vice president and global director of Rhodia
electronics and catalysis from 2008 to 2010. In addition, Mr. Zhu served as head of global pulp and paper sales at Asia Pacific
Resources International Holdings Limited from 2010 to 2012.

25

Item 5. Market for Registii

rant’s Common Equity,yy Related Stockholder Mattersrr and Issuer Purchases of Equity Securities

Cabot’s common stock is listed for trading (symbol CBT) on the New York Stock Exchange. As of November 13, 2023, there

PART II

were 508 holders of record of Cabot’s common stock.

Issuer Purchases of Equity Securities

The table below sets forth information regarding Cabot’s purchases of its equity securities during the quarter ended

September 30, 2023:

Period
July 1, 2023 — July 31, 2023
August 1, 2023 — August 31, 2023
September 1, 2023 — September 30, 2023

Total

Total Number
of Shares
Purchased(1)(2)

Average
Price Paid
per Share

— $
430,000 $
276,602 $
706,602

—
70.66
70.95

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(1)

Maximum Number (or
Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans or
Programs(1)

—
430,000
276,602
706,602

3,691,572
3,261,572
2,984,970

(1)

(2)

On July 13, 2018, Cabot publicly announced that the Board of Directors authorized the Company to repurchase up to an
additional ten million shares of its common stock on the open market or in privately negotiated transactions, increasing the
amount of shares available for repurchase at that time to approximately eleven million shares. The current authorization does
not have a set expiration date.
Total number of shares purchased does not include 881 shares withheld to pay taxes on the vesting of equity awards made
under the Company's equity incentive plans or to pay the exercise price of options exercised during the period.

26

Comparative Stock Performance

The graph compares the cumulative total stockholder return on Cabot common stock for the five-year period ended
September 30, 2023 with the S&P 400 Chemical Index and the S&P Midcap 400 Index. The comparisons assume the investment of
$100 on October 1, 2018 in Cabot’s common stock and in each of the indices and the reinvestment of all dividends.

We have historically included the S&P 500 Chemical Index as a point of reference in our Comparative Stock Performance chart;

however, we have made the decision to remove the S&P 500 Chemical Index from this chart beginning with our next Annual Report
on Form 10-K. The decision to remove the S&P 500 Chemical Index was based on our belief that the S&P 500 Chemical Index is no
longer the most relevant benchmark for assessing our stock performance due to Cabot's smaller size relative to the companies in
that index.

We are adding the S&P 400 Chemical Index, which we believe provides a more representative index based on our market

capitalization.

The stock price performance on the graph below is not necessarily indicative of future price performance.

The information included under the heading comparative stock performance in Item 5 shall not be deemed to be “soliciting

material” or subject to Regulation 14A, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise be
subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act.

27

Item 7. Management’s Discii ussion and Analysl

ii
is of Financ

ial Conditdd ion and Resultstt of Operations

Critical Accounting Estimates

Our consolidated financial statements have been prepared in conformity with U.S. GAAP. This preparation of our financial
statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues,
and expenses and related disclosure of contingent assets and liabilities. We consider an accounting estimate to be critical to the
financial statements if (i) the estimate is complex in nature or requires a high degree of judgment and if (ii) different estimates and
assumptions were used, the results could have a material impact on the consolidated financial statements. On an ongoing basis, we
evaluate our estimates and the application of our policies. We base our estimates on historical experience, current conditions and
on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates. We believe the following critical accounting estimates are the most significant to understanding
our consolidated financial statements.

Defee rred Taxaa Assets

We have established valuation allowances against a variety of deferred tax assets, including net operating loss carryforwards,

capital loss carryforwards, foreign tax credits, and other income tax credits. We assess the realizability of our deferred tax assets
quarterly and recognize a valuation allowance when it is more likely than not that some or all of our deferred tax assets are not
realizable. This assessment is completed on a jurisdiction-by-jurisdiction basis and relies on the weight of all positive and negative
evidence available. Cumulative pre-tax losses for a three-year period are considered significant objective negative evidence that
some or all of our deferred tax assets may not be realizable. Cumulative reported pre-tax income is considered objectively verifiable
positive evidence of our ability to generate positive pretax income in the future.

In accordance with U.S. GAAP, when there is a recent history of pre-tax losses, there is little weight placed on forecasts for
purposes of assessing the recoverability of our deferred tax assets. Judgment is required when considering the relative impact of
positive and negative evidence. The weight given to the potential effect of positive and negative evidence is commensurate with the
extent that it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary to support
a conclusion that a valuation allowance is not needed. We consider the availability of objectively verifiable evidence, such as positive
recent core operating results after adjusting for nonrecurring items in determining our ability to utilize deferred tax assets. We use
systematic and logical methods to estimate when deferred tax liabilities will reverse and generate taxable income and when
deferred tax assets will reverse and generate tax deductions. Assumptions, judgment, and estimates are required when estimating
future income and scheduling the reversal of deferred tax assets and liabilities, and the exercise is inherently complex and
subjective.

Management concluded that, based on the weight of all available evidence at September 30, 2023, it is more likely than not

that a portion of our U.S. deferred tax assets will be realized, resulting in a $152 million release of valuation allowance.

Refer to Note A and Note Q of our Notes to the Consolidated Financial Statements for description of our policies related to

income taxes.

Contingencies

We have recorded a significant reserve for respirator liability claims. Our current estimate of the cost of our share of pending

and future respirator liability claims is based on facts and circumstances existing at this time, including the number and nature of the
remaining claims. Developments that could affect our estimate include, but are not limited to, (i) significant changes in the number
of future claims, (ii) changes in the rate of dismissals without payment of pending claims, (iii) significant changes in the average cost
of resolving claims, including potential settlements of groups of claims, (iv) significant changes in the legal costs of defending these
claims, (v) changes in the nature of claims received or changes in our assessment of the viability of these claims, (vi) trial and
appellate outcomes, (vii) changes in the law and procedure applicable to these claims, (viii) the financial viability of the parties that
contribute to the payment of respirator claims, (ix) exhaustion or changes in the recoverability of the insurance coverage maintained
by certain of the parties that contribute to the settlement of respirator claims, or a change in the availability of the indemnity
provided by a former owner of the business, (x) changes in the allocation of costs among the various parties paying legal and
settlement costs, and (xi) a determination that the assumptions that were used to estimate our share of liability are no longer
reasonable. We cannot determine the impact of these potential developments on our current estimate of our share of liability for
these existing and future claims. Because reserves are limited to amounts that are probable and estimable as of a relevant
measurement date, and there is inherent difficulty in projecting the impact of potential developments on our share of liability for
these existing and future claims, it is reasonably possible that the liabilities for existing and future claims could change in the near
term and that change could be material. Refer to Note A and Note S of our Notes to the Consolidated Financial Statements for
description of our policies related to contingencies.

28

Goodwillii

Impairmii

ent

Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and

identifiable intangible assets acquired. Goodwill is not amortized and is subject to impairment testing annually, or when events or
changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value.

Evaluating goodwill for impairment involves applying significant assumptions including discount rates and forecasted results

for the applicable reporting unit, including earnings before interest and tax (“EBIT”), market multiples and growth rates. These
assumptions are forward looking and could be affected by future economic and market conditions. We engage third-party valuation
specialists as needed to develop the assumptions used in the calculation and the evaluation of goodwill balances. Refer to Note A
and Note G of our Notes to the Consolidated Financial Statements for a description of our policies related to goodwill.

Recently Issued Accounting Pronr

ouncements

Refer to the discussion in Note B of our Notes to the Consolidated Financial Statements.

Results of Operations

Cabot is organized into two reportable segments: Reinforcement Materials and Performance Chemicals. The Company’s
former Purification Solutions business was a separate reportable segment prior to divestiture in the second quarter of fiscal 2022.
Cabot is also organized for operational purposes into three geographic regions: the Americas; EMEA; and Asia Pacific. The
discussions of our results of operations for the periods presented reflect these structures.

Our analysis of financial condition and operating results should be read with our consolidated financial statements and
accompanying notes. Unless a calendar year is specified, all references to years in this discussion are to our fiscal years ended
September 30.

This section discusses our fiscal 2023 and fiscal 2022 results of operations and year-to-year comparisons between fiscal 2023

and fiscal 2022. For the discussions of our fiscal 2021 results and year-to-year comparisons between fiscal 2022 and fiscal 2021, refer
to our discussions under the headings “Results of Operations” and “Cash Flows and Liquidity” in Item 7 of the Company’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2022, which was filed with the United States Securities and Exchange
Commission on November 23, 2022.

ii
Defie ni

tion of Terms and Non-GAAP Financ

ii

ial Measures

When discussing our results of operations, we use several terms as described below.

The term “product mix” refers to the mix of types and grades 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 and/or segment.

Our discussion under the heading “(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating
Tax Rate” includes a discussion and reconciliation of our “effective tax rate” and our “operating tax rate” for the periods presented,
as well as management’s projection of our operating tax rate range for the next fiscal year. Our operating tax rate is a non-GAAP
financial measure and should not be considered as an alternative to our effective tax rate, the most comparable GAAP financial
measure. The operating tax rate excludes 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 and tax accruals on historic earnings due to changes in indefinite reinvestment assertions. Our
definition of the operating tax rate may not be comparable to the definition used by other companies. 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.

Our discussion under the heading “Fiscal 2023 compared to Fiscal 2022—By Business Segment” includes a discussion of Total
segment EBIT, which is a non-GAAP financial measure defined as Income (loss) from operations before income taxes and equity in
earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our
President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources
to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our reportable segments, provides useful
supplemental information for our investors as it is an important indicator of our operational strength and performance, allows
investors to see our results through the eyes of management, and provides context for our discussion of individual business segment
performance. Total segment EBIT should not be considered an alternative for Income (loss) from operations before income taxes
and equity in earnings of affiliated companies, which is the most directly comparable U.S. GAAP financial measure. A reconciliation
of Total segment EBIT to Income (loss) from operations before income taxes and equity in earnings of affiliated companies is
provided under the heading “Fiscal 2023 compared to Fiscal 2022—By Business Segment”. Investors should consider the limitations
associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another.

29

In calculating Total segment EBIT, we exclude from our Income (loss) from operations before income taxes and equity in

earnings of affiliated companies (i) items of expense and income that management does not consider representative of our
fundamental on-going segment results, which we refer to as “certain items”, and (ii) 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 special projects and initiatives, which we refer to as “other unallocated items”.
Management believes excluding the items identified as certain items facilitates operating performance comparisons from period to
period by eliminating differences that would not otherwise be apparent on a U.S. GAAP basis and also facilitates an evaluation of our
operating performance without the impact of these costs or benefits. The items of income and expense that we have excluded from
Total segment EBIT, as applicable, but that are included in our U.S. GAAP Income (loss) from operations before income taxes and
equity in earnings of affiliated companies, as applicable, are described below.

•

•

•

•

•

•

•

•

•

•

•

•

Asset impairment charges, which primarily include charges associated with an impairment of goodwill, other long-lived
assets or assets held for sale.

Charges related to the divestiture of our Purification Solutions business, which include accelerated costs associated with
the change in control and employee incentive compensation.

Benefit from the settlement of a royalty arrangement entered into in connection with the divestiture of our former
Specialty Fluids business.

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.

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.

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.

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.

Gain associated with the bargain purchase of a business.

Gain realized on the sale of land.

Argentina controlled currency devaluation loss relates to the foreign exchange loss from government-controlled currency
devaluations on our net monetary assets denominated in the Argentine peso.

Drivrr ersrr of Demand and Key Factorsrr Affeff cting Profitff ability

Drivers of demand and key factors affecting our profitability differ by segment. In Reinforcement Materials, longer term
demand is driven primarily by: i) the number of vehicle miles driven globally; ii) the number of original equipment and replacement
tires produced; iii) the number of automotive builds; and iv) changes in supply chain inventory levels to adapt to end-market
demand and other market dynamics. Over the past several years, operating results have been driven by a number of factors,
including: i) increases or decreases in our sales volumes driven by changes in production levels for tires or industrial rubber products
and the level at which we service that demand; ii) changes in raw material costs and our ability to adjust the sales price for our
products commensurate with changes in raw material costs; iii) changes in pricing and product mix, which includes customer pricing
as well as the mix of products sold or the region in which they are sold; iv) global and regional capacity utilization for carbon black; v)
fixed cost savings achieved through restructuring and other cost saving activities; vi) the growth of our volumes and market position
in emerging economies; vii) capacity management and technology investments, including the impact of energy utilization and yield
improvement technologies at our manufacturing facilities; viii) royalties and technology payments related to our patented elastomer
composites technology that is used in tire applications; and ix) changes in energy prices associated with our energy center sales and
the cost of utilities.

30

In Performance Chemicals, longer term demand is driven primarily by the construction and infrastructure, automotive,

including sales into batteries for electric vehicles, electronics, inkjet printing, and consumer products industries. In recent years,
operating results in Performance Chemicals have been driven by: i) increases or decreases in sales volumes to the industries
previously noted; ii) changes in pricing and product mix, which includes customer pricing as well as the mix of products sold or the
region in which they are sold; iii) our ability to deliver differentiated products that drive enhanced performance in customers’
applications; iv) our ability to obtain value pricing for this differentiation; v) the cost of new capacity; vi) changes in selling prices
relative to variations in the cost of raw materials; vii) the adoption of new products for use in our customers’ applications; and viii)
changes in supply chain inventory levels to adapt to end-market demand and other market dynamics.

Overview of Resultstt for Fiscii al 2023

During fiscal 2023, Income (loss) from operations before income taxes and equity in earnings of affiliated companies increased

compared to fiscal 2022 primarily due to the impairment and loss on sale charges related to the divestiture of the Purification
Solutions business, which did not recur in fiscal 2023, and higher earnings in our Reinforcement Materials segment partially offset by
lower earnings in our Performance Chemicals segment.

Fiscii al 2023 compared to Fiscii al 2022—Consolidll ated

Net Sales and Other Operating Revenues and Gross Profitff

Net sales and other operating revenues
Gross profit

Years Ended September 30
2022
2023

$
$

(In millions)

3,931
839

$
$

4,321
885

Net sales decreased by $390 million in fiscal 2023 as compared to fiscal 2022. The decrease in net sales was primarily driven by
lower volumes in both segments ($212 million), the negative impact from foreign currency translation ($128 million), and the impact
of the divestiture of our Purification Solutions business in fiscal 2022 ($97 million), partially offset by a favorable price and product
mix ($98 million).The favorable price and product mix was driven by favorable 2023 calendar year tire customer contracts
agreements within the Reinforcement Materials segment, partially offset by a weaker price and product mix in the Performance
Chemicals segment. The volume decrease is primarily due to destocking in both segments, soft demand in key markets, and, for the
Performance Chemicals segment, a prolonged weakness in China following the impact of COVID-19 outbreaks in the first half of
fiscal 2023.

Gross profit decreased by $46 million in fiscal 2023 as compared to fiscal 2022. The decrease was primarily due to lower

volumes within both the Reinforcement Materials and Performance Chemicals segments and the negative impact of foreign
currency translation, partially offset by higher unit margins in our Reinforcement Materials segment.

Selling and Administii

rative Expex nses

Selling and administrative expenses

Years Ended September 30
2022
2023

$

(In millions)
253

$

258

Selling and administrative expenses decreased by $5 million in fiscal 2023 as compared to fiscal 2022. The decrease in selling
and administrative expenses in fiscal 2023 was primarily due to a decrease in the incentive compensation accrual for the fiscal 2023
period and prior year charges related to the Purification Solutions divestiture, partially offset by a $17 million benefit from the sale
of land in fiscal 2022 that did not recur.

Research and Technical Expex nses

Research and technical expenses

Years Ended September 30
2022
2023

$

(In millions)
57

$

55

Research and technical expenses increased by $2 million in fiscal 2023 as compared to fiscal 2022 primarily due to higher costs

related to our battery materials and inkjet product lines.

31

Impairment Charges and Loss on Sale

Loss on sale of business and asset impairment charge

$

Years Ended September 30
2022
2023

(In millions)

3

$

207

The loss on sale and asset impairment charges associated with the sale of the Purification Solutions business are described in

Note D of our Notes to the Consolidated Financial Statements.

Interest and Dividend Income

Interest and dividend income

Years Ended September 30
2022
2023

$

(In millions)
31

$

11

Interest and dividend income in fiscal 2023 increased by 2$ 0 million as compared to fiscal 2022 primarily due to higher interest

rates.

Interest Expex nse

Interest expense

Years Ended September 30
2022
2023

$

(In millions)
90

$

56

Interest expense increased by $34 million in fiscal 2023 as compared to fiscal 2022 primarily due to higher interest rates.

Other Income (ExpEE ense)

Other income (expense)

Years Ended September 30
2022
2023

$

(In millions)
(16) $

(9)

Other expense increased during fiscal 2023 by $7 million as compared to fiscal 2022. The change was driven by higher foreign

currency losses, primarily in Argentina, partially offset by an increase in investment income in Argentina and Brazil.

(Provisiii on) Benefie t for Income Taxes and Reconciliation of Effeff ctive Tax Rate to Operating Tax Rate

(Dollars in millions)
Effective tax rate(1)
Less: Non-GAAP tax adjustments(2)
Operating tax rate

Years Ended September 30

2023

(Provision) /
Benefit for
Income Taxes

Rate

2022

(Provision) /
Benefit for
Income Taxes

Rate

$

$

28
161
(133)

-6% $

28% $

(102)
32
(134)

30%

26%

(1)

(2)

Refer to the reconciliation of computed tax expense at the federal statutory rate to the Provision (benefit) for income taxes in
Note Q of our Notes to the Consolidated Financial Statements.
Non-GAAP tax adjustments made to arrive at the operating tax provision include the income tax (expense) benefit on certain
items and discrete tax items, as further described above under the heading “Definition of Terms and Non-GAAP Financial
Measures”.

For the year ended September 30, 2023, the (Provision) benefit for income taxes was a $28 million benefit compared to a $102

million expense for fiscal 2022. Included in the (provision) benefit for income taxes for the year ended September 30, 2023 is a tax
benefit of $152 million related to a partial valuation allowance release on the Company’s U.S. net deferred tax assets. Included in
the (Provision) benefit for income taxes for the year ended September 30, 2022 is the tax impact of the divestiture of our
Purification Solutions business, and withholding tax accruals on historical and current earnings due to changes in indefinite
reinvestment assertion on certain entities. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we
operate, and the presence of valuation allowances in certain tax jurisdictions.

32

For fiscal 2024, we expect our Operating tax rate to be in the range of 28% to 30%. We are not providing 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.

Equity in Earnings of Affiff liated Companies and Net Income (Loss) Attributable to Noncontrolling Interest,t Net of Tax

Equity in earnings of affiliated companies, net of tax
Net income (loss) attributable to noncontrolling interests,

net of tax

Years Ended September 30
2022
2023

(In millions)

5

39

$

$

10

34

$

$

Equity in earnings of affiliated companies, net of tax, decreased by $5 million in fiscal 2023 compared to fiscal 2022 primarily

due to lower profitability at our equity affiliates in India and Venezuela.

Net income (loss) attributable to noncontrolling interests, net of tax, increased by $5 million in fiscal 2023 compared to fiscal

2022 primarily due to increased earnings of our joint venture in the Czech Republic, partially offset by lower earnings of our joint
ventures in China.

Net Income (Loss) Attributable to Cabot Corporation

In fiscal 2023, we reported net income attributable to Cabot Corporation of $445 million ($7.73 earnings per diluted common

share). In fiscal 2022, we reported net income attributable to Cabot Corporation of $209 million ($3.62 earnings per diluted common
share). The increase in fiscal 2023 was primarily due to a partial release of the valuation allowance on our U.S. deferred tax assets of
$152 million, the absence of the Purification Solutions loss on sale and asset impairment charge of $207 million that occurred in
fiscal 2022, and higher segment EBIT of $74 million in the Reinforcement Materials segment, partially offset by lower segment EBIT
of $109 million in the Performance Chemicals segment.

Fiscii al 2023 compared to Fiscii al 2022—By Busineii

ss Segment

Income (loss) from operations before income taxes and equity in earnings of affiliated companies, pre-tax certain items, other
unallocated items and Total segment EBIT for fiscal 2023 and 2022 are set forth in the table below. The details of certain items and
other unallocated items are shown below and in Note T of our Notes to the Consolidated Financial Statements.

Income (loss) from operations before income

taxes and equity in earnings of affiliated companies

Less: Certain items, pre-tax
Less: Other unallocated items
Total segment EBIT

Years Ended September 30
2022
2023

(In millions)

$

$

451
(29)
(127)
607

$

$

335
(183)
(124)
642

In fiscal 2023, Income (loss) from operations before income taxes and equity in earnings of affiliated companies increased by
$116 million. The increase is primarily due to the absence of the Purification Solutions loss on sale and asset impairment charge of
$207 million that occurred in fiscal 2022, partially offset by the gain on the Tokai Carbon acquisition of $24 million that did not
reoccur in fiscal 2023. Total segment EBIT decreased by $35 million in fiscal 2023 compared to fiscal 2022 driven by lower volumes,
the unfavorable impact of foreign currency movements, partially offset by higher unit margins in the Reinforcement Materials
segment. Lower volumes in the Reinforcement Materials ($48 million) and Performance Chemicals ($51 million) segments were
primarily due to demand softness in key end markets and destocking. Higher unit margins in the Reinforcement Materials segment
($128 million) were primarily due to improved pricing and product mix in our calendar year 2023 annual tire customer agreements.

33

Certain Items:

Details of the certain items for fiscal 2023 and 2022 are as follows:

Gain on sale of land
Legal and environmental matters and reserves (Note S)
Argentina controlled currency devaluation loss
Acquisition and integration-related charges
Global restructuring activities
Loss on sale of business and asset impairment charge (Note D)
Other certain items
Gain on bargain purchase of a business (Note C)
Specialty Fluids divestiture related benefit
Employee benefit plan settlement and other charges
Purification Solutions divestiture related charges

Total certain items, pre-tax

Non-GAAP tax adjustments
Total certain items, net of tax

Years Ended September 30
2022
2023

(In millions)

1
(10)
(7)
(4)
(4)
(3)
(2)
—
—
—
—
(29)
161
132

$

$

17
(9)
—
(6)
(3)
(207)
—
24
5
1
(5)
(183)
32
(151)

$

$

An explanation of these items of expense and income is included in our discussion under the heading “Definition of Terms and

Non-GAAP Financial Measures”.

Other Unallocated Items:

Interest expense
Unallocated corporate costs
General unallocated income (expense)
Less: Equity in earnings of affiliated companies, net of tax

Total other unallocated items

Years Ended September 30
2022
2023

(In millions)
(90) $
(54)
22
5
(127) $

(56)
(59)
1
10
(124)

$

$

A discussion of items that we refer to as “other unallocated items” can be found under the heading “Definition of Terms and

Non-GAAP Financial Measures”. The balances of unallocated corporate costs are primarily comprised of expenditures related to
managing a public company that are not allocated to the segments and corporate business development costs related to ongoing
corporate projects. The balances of General unallocated income (expense) consist of gains (losses) arising from foreign currency
transactions, net of other foreign currency risk management activities, interest and dividend income, and the profit or loss related to
the corporate adjustment for unearned revenue.

In fiscal 2023, total other unallocated items increased by $3 million as compared to fiscal 2022 primarily due to increased

interest expense from higher interest rates, partially offset by higher general unallocated income due to higher interest and
investment income.

Reinfon rcement Materials

Sales and EBIT for Reinforcement Materials for fiscal 2023 and 2022 are as follows:

Reinforcement Materials Sales (1)
Reinforcement Materials EBIT

Years Ended September 30
2022
2023

$
$

(In millions)

2,563
482

$
$

2,673
408

(1)

Beginning in fiscal 2023, the Company began allocating energy center revenue to the applicable segment’s Sales. The
Company recast prior period financial information to conform to the new presentation.

34

In fiscal 2023, sales in Reinforcement Materials decreased by $110 million compared to fiscal 2022. The decrease was primarily

due to lower volumes ($147 million), the unfavorable impact from foreign currency translation ($86 million) and lower by-product
revenue ($24 million), partially offset by improved price and product mix (combined $148 million). Lower volumes were primarily
due to lower replacement tire demand and customer destocking. The improved price and product mix was primarily due to
favorable 2023 calendar year customer agreements. The lower by-product revenue was due to lower utility and energy costs in fiscal
2023 compared to fiscal 2022, particularly in Europe.

EBIT in Reinforcement Materials increased by $74 million compared to fiscal 2022. The increase was driven by higher unit

margins, net of higher costs ($128 million) partially offset by lower volumes ($48 million) and the unfavorable impact from foreign
currency translation ($6 million). The higher unit margins net of higher costs was primarily driven by favorable pricing and product
mix in 2023 calendar year customer agreements. Volumes were lower across all regions primarily due to lower replacement tire
demand and destocking at our major tire customers.

Perforff marr

nce Chemicals

Sales and EBIT for Performance Chemicals for fiscal 2023 and 2022 are as follows:

Performance Chemicals Sales (1)
Performance Chemicals EBIT

Years Ended September 30
2022
2023

$
$

(In millions)

1,225
125

$
$

1,388
234

(1)

Beginning in fiscal 2023, the Company began allocating energy center revenue to the applicable segment’s Sales. The
Company recast prior period financial information to conform to the new presentation.

In fiscal 2023, sales in Performance Chemicals decreased by $163 million compared to the same period of fiscal 2022 due to

lower volumes ($65 million), the unfavorable impact of foreign currency translation ($42 million), less favorable pricing and product
mix (combined $49 million) and lower by-product revenue ($6 million). The lower volumes were primarily due to customer
destocking, demand softness in key end markets and prolonged weakness in China following the impact from COVID-19 outbreaks in
the first half of fiscal 2023. The less favorable pricing and product mix was primarily due to lower raw material prices that are
generally passed through to our customers and a less favorable pricing and product mix within the battery materials product line.

EBIT in Performance Chemicals decreased by $109 million compared to the same period of fiscal 2022 due to lower volumes

($51 million), lower unit margins ($43 million), the unfavorable impact of a reduction in inventory levels ($10 million) and the
unfavorable impact of foreign currency translation ($10 million). Lower volumes were driven by customer destocking, demand
softness in key end markets, and prolonged weakness in China following the impact from COVID-19 outbreaks in the first half of
fiscal 2023. The decrease in unit margins were largely due to a less favorable pricing and product mix in the battery materials and
specialty carbons product lines.

Purifii cation Solutions

Sales and EBIT for Purification Solutions for fiscal 2023 and 2022 are as follows:

Purification Solutions Sales
Purification Solutions EBIT

Years Ended September 30
2022
2023

$
$

(In millions)
— $
— $

97
—

We divested the Purification Solutions business in March 2022. Refer to Note D of our Notes to the Consolidated Financial

Statements.

Fiscii al 2024 Outlook

Looking forward to fiscal 2024, we remain focused on our strategy of Creating for Tomorrow, advancing several strategic

initiatives, generating strong cash flows, and maintaining a disciplined approach to capital allocation. While we believe that
customer destocking is largely over in our key end markets, both for our Reinforcement Materials and Performance Chemicals
segments, we expect the challenging macroeconomic conditions seen in fiscal 2023 to persist into fiscal 2024 which may drive
certain customers to be cautious in their short-term purchasing behavior, particularly those of our Performance Chemicals segment,
which could impact our fiscal 2024 results. We do not expect this short-term behavior to have a long-term impact on the business as
the conditions subside.

35

Liquidity and Capital Resources

Overview

Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, increased by $200 million during
fiscal 2023, primarily due to a higher cash balance and lower outstanding commercial paper balance at the end of the period. As of
September 30, 2023, we had cash and cash equivalents of $238 million and borrowing availability under our revolving credit
agreements of $1 billion.

We have access to borrowings under the following two credit agreements:

•

•

$1 billion unsecured revolving credit agreement (the “U.S. Credit Agreement”) with JPMorgan Chase Bank, N.A., as
Administrative Agent, Citibank, N.A., as Syndication Agent, and the other lenders party thereto, which matures in August
2027. The U.S. Credit Agreement supports our issuance of commercial paper, and borrowings under it may be used for
working capital, letters of credit and other general corporate purposes.

€300 million unsecured revolving credit agreement (the “Euro Credit Agreement”, and together with the U.S. Credit
Agreement, the “Credit Agreements”), with PNC Bank, National Association, as Administrative Agent, and the other
lenders party thereto, which matures in August 2027. Borrowings under the Euro Credit Agreement may be used for the
repatriation of earnings of our foreign subsidiaries to the United States, the repayment of indebtedness of our foreign
subsidiaries owing to us or any of our subsidiaries and for working capital and general corporate purposes.

As of September 30, 2023, we were in compliance with the debt covenants under the Credit Agreements, which, with limited

exceptions, require us to comply on a quarterly basis with a leverage test requiring the ratio of consolidated net debt to
consolidated EBITDA not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt offset by the lesser of (i)
unrestricted cash and cash equivalents and (ii) $150 million.

A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with

our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. We generally use a
combination of U.S. earnings, repatriation of certain foreign earnings, commercial paper issuances and borrowings under our U.S.
Credit Agreement to meet our U.S. cash needs. With the exception of Argentina, which has currency controls that prevent the
distribution of cash, we are generally able to move cash throughout the Company through our cash pooling structures,
intercompany accounts and/or distributions, as needed. Although we repatriate certain foreign earnings, cash held by foreign
subsidiaries is generally considered permanently reinvested and is used to finance the subsidiaries’ operational activities and future
investments. We usually reduce our commercial paper balance and, if applicable, borrowings under our Credit Agreements, at
quarter-end using cash derived from customer collections, settlement of intercompany balances and short-term intercompany
loans. If additional funds are needed in the U.S., we expect to be able to repatriate cash, including cash from China, while paying any
withholding or other taxes. Changes in tax laws in the U.S. or foreign countries could restrict our ability to transfer funds or impose
material costs on such transfers.

As of September 30, 2023, we had $1 billion of availability under our Credit Agreements. As of September 30, 2023, we had

$120 million of borrowings outstanding under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit
Agreement. There was $172 million and $322 million of commercial paper outstanding at September 30, 2023 and 2022,
respectively.

We anticipate sufficient liquidity from (i) cash on hand; (ii) cash flows from operating activities; and (iii) cash available from the

Credit Agreements and our commercial paper program to meet our operational and capital investment needs and financial
obligations for the foreseeable future. The liquidity we derive from cash flows from operations is, to a large degree, predicated on
our ability to collect our receivables in a timely manner, the cost of our raw materials, and our ability to manage inventory levels.

The following discussion of the changes in our cash balance refers to the various sections of our Consolidated Statements of

Cash Flows.

Cash Flowsww from Operating Activities

Cash provided by operating activities, which consists of net income adjusted for the various non-cash items included in

income, changes in working capital and changes in certain other balance sheet accounts, totaled $595 million in fiscal 2023.
Operating activities provided $100 million of cash in fiscal 2022.

Cash provided by operating activities in fiscal 2023 was driven by business earnings excluding the non-cash impacts of
depreciation and amortization of $144 million, plus a decrease in net working capital of $97 million. The decrease in net working
capital was largely driven by a decrease in accounts receivable due to lower customer prices from lower cost of raw materials and
decreased sales volumes and a decrease in inventories, partially offset by a decrease in accounts payable and accrued expenses
driven by lower cost of raw materials.

36

Cash provided by operating activities in fiscal 2022 was driven by business earnings excluding the non-cash impacts of
depreciation and amortization of $146 million, which was partially offset by an increase in net working capital of $431 million. The
increase in net working capital was driven by an increase in accounts receivable due to higher sales, including the pass through of
higher raw material costs, and an increase in inventory driven by a higher cost of raw materials, partially offset by an increase in
accounts payable.

Cash Flowsww from Investing Activities

Investing activities consumed $214 million of cash in fiscal 2023 compared to $118 million in fiscal 2022. In fiscal 2023, the use

of cash by investing activities primarily consisted of $244 million of capital expenditures for sustaining and compliance capital
projects at our operating facilities as well as growth-related capital, including a capacity expansion project in Performance
Chemicals, partially offset by proceeds from insurance settlements of $12 million, proceeds from the sale of land of $7 million, and
proceeds from the sale of our Purification Solutions business of $6 million.

In fiscal 2022, the use of cash by investing activities primarily consisted of $211 million of capital expenditures for sustaining

and compliance capital projects at our operating facilities as well as growth-related capital, including a capacity expansion project in
Performance Chemicals, partially offset by proceeds from the sale of our Purification Solutions business of $79 million and proceeds
from the sale of land of $18 million.

Capital expenditures for fiscal 2024 are expected to be between $250 million and $275 million. Our planned capital spending
program for fiscal 2024 is primarily for sustaining, compliance and improvement capital projects at our operating facilities as well as
capacity expansion capital expenditures.

Cash Flowsww from Financ

ii

ing Activities

Financing activities consumed $403 million of cash in fiscal 2023 compared to $145 million provided in fiscal 2022. The cash

consumed by financing activities in fiscal 2023 primarily consisted of net repayments of long-term debt of $6 million, which
consisted of repayments of $90 million partially offset by proceeds of $84 million, net repayments of commercial paper of $149
million, net repayments of credit facility borrowings of $24 million, dividend payments to stockholders of $88 million, purchases of
common stock of $98 million and dividend payments to noncontrolling interests of $42 million.

The cash provided by financing activities in fiscal 2022 primarily consisted of net proceeds from long-term debt of $22 million,
which consisted of proceeds of $394 million less repayments of $372 million, net proceeds from the issuance of commercial paper of
$250 million, and proceeds from short-term borrowings of $26 million, partially offset by dividend payments to stockholders of $84
million, purchases of common stock of $53 million and dividend payments to noncontrolling interests of $22 million.

Our long-term total debt, of which $8 million is current, matures at various times as presented in Note I of our Notes to the

Consolidated Financial Statements. The weighted-average interest rate on our fixed rate long-term debt was 4.29% as of September
30, 2023.

Share Repurchases

In fiscal 2018, our Board of Directors authorized us to repurchase up to an additional ten million shares of common stock. In

fiscal 2023, we repurchased approximately 1.3 million shares of common stock on the open market for $91 million. In fiscal 2022 we
repurchased approximately 0.8 million shares of common stock on the open market for $49 million. Additionally, during both fiscal
2023 and fiscal 2022 we repurchased 0.1 million shares of our common stock associated with employee tax obligations on stock-
based compensation awards for $7 million and $4 million, respectively. As of September 30, 2023, we had approximately 3.0 million
shares available for repurchase under the Board of Directors’ share repurchase authorization.

Dividend Payments

In fiscal 2023 and fiscal 2022, we paid cash dividends on our common stock of $1.54 and $1.48 per share, respectively. These

cash dividend payments totaled $88 million and $84 million in fiscal 2023 and fiscal 2022, respectively.

Employee Benefie t Plans

As of September 30, 2023, we had a consolidated pension obligation, net of the fair value of plan assets, of $22 million,

primarily associated with postretirement benefit plan liabilities.

In fiscal 2023, we made cash contributions totaling $4 million to our defined benefit pension plans. In fiscal 2024, we expect to

make cash contributions of $4 million to our defined benefit pension plans.

The $25 million of unfunded postretirement benefit plan liabilities is comprised of $14 million for our U.S. and $11 million for
our foreign postretirement benefit plans. These postretirement benefit plans provide certain health care and life insurance benefits
for retired employees. Typical of such plans, our postretirement plans are unfunded and, therefore, have no plan assets. We fund
these plans as claims or insurance premiums come due. In fiscal 2023, we paid postretirement benefits of $3 million. For fiscal 2024,
our benefit payments for our postretirement plans are expected to be $3 million.

37

In fiscal 2023, we commenced the plan termination process for the Cabot Carbon Limited Pension Plan and Carbon Plastics

Pension Plan and expect to complete this process in fiscal 2024.

Contractual Obligations

The following table sets forth our long-term contractual obligations.

2024

2025

2026

Purchase commitments
Long-term debt
Fixed interest on long-term debt
Variable interest on long-term debt
Finance leases(1)
Operating leases(1)

Total

$

$

249
4
41
6
5
18
323

$

$

223
—
41
6
4
16
290

$

$

(1)

Lease liabilities include interest.

Purchase Commitments

$

Payments Due by Fiscal Year
2027
(In millions)
197
$
120
33
6
3
12
371

217
250
41
6
4
13
531

$

$

2028

Thereafter

Total

122
8
32
—
3
10
175

$

$

1,477
700
82
—
15
51
2,325

$

$

2,485
1,082
270
24
34
120
4,015

We have entered into long-term, volume-based purchase agreements primarily for the purchase of raw materials and natural

gas with various key suppliers for all of our business segments. Under certain of these agreements the quantity of material being
purchased is fixed, but the price we pay changes as market prices change. For purposes of the table above, current purchase prices
have been used to quantify total commitments. We have also entered into long-term purchase agreements primarily for services
related to information technology, which are not included in the table above, that total $19 million as of September 30, 2023, the
majority of which is expected to be paid within the next 5 years.

Leases

We have entered into various leases as the lessee, primarily related to certain transportation vehicles, warehouse facilities,

office space, and machinery and equipment. These leases have remaining lease terms between one and sixteen years, some of
which may include options to extend the leases for up to fifteen years or options to terminate the leases. Our land leases have
remaining lease terms up to seventy-nine years.

Item 7A. Quantitative and Qualitll ative Discii

losures About Market Riskii

We are exposed to changes in interest rates and foreign currency exchange rates because we finance certain operations
through long- and short-term borrowings and denominate our transactions in a variety of foreign currencies. Changes in these rates
may have an impact on future cash flows and earnings. We manage these risks through normal operating and financing activities
and, when deemed appropriate, through the use of derivative financial instruments.

We have policies governing our use of derivative instruments, and we do not enter into financial instruments for trading or

speculative purposes.

By using derivative instruments, we are subject to credit and market risk. The derivative instruments are booked in our

balance sheet at fair value and reflect the asset or liability position as of September 30, 2023. If a counterparty fails to fulfill its
performance obligations under a derivative contract, our exposure will equal the fair value of the derivative. Generally, when the fair
value of a derivative contract is positive, the counterparty owes Cabot, thus creating a payment risk for Cabot. We minimize
counterparty credit or repayment risk by entering into these transactions with major financial institutions of investment grade credit
rating. Our exposure to market risk is not hedged in a manner that completely eliminates the effects of changing market conditions
on earnings or cash flow.

38

Foreign Currency Riskii

Our international operations are subject to certain risks, including currency exchange rate fluctuations and government
actions. We have cross-currency swaps designated as hedges of our net investments in certain Euro denominated subsidiaries. The
following table summarizes the principal terms of our cross-currency swaps, including the aggregate notional amount of the swaps,
the interest rate payment we receive from and pay to our swap counterparties, the term and fair value at September 30, 2023 and
September 30, 2022.

Description

Cross Currency Swaps

Notional Amount
USD 250 million swapped
to EUR 223 million

Interest Rate
Received

Interest
Rate Paid

Fiscal Year
Entered Into

Maturity
Year

Fair Value at
September 30,
2023

Fair Value at
September 30,
2022

3.40%

1.94%

2016

2026

$12 million

$29 million

We also have foreign currency exposures arising from the denomination of monetary assets and liabilities in foreign currencies

other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the dollar value of
future cash flows generated in foreign currencies. Accordingly, we use short-term forward contracts to minimize the exposure to
foreign currency risk. At September 30, 2023, we had $82 million in notional foreign currency contracts, which were denominated in
Indonesian rupiah, Czech koruna, and Colombian peso. At September 30, 2022, we had $42 million in notional foreign currency
contracts, which were denominated in Indonesian rupiah and Czech koruna. These forwards had a fair value of less than $1 million
as of both September 30, 2023 and 2022.

In certain situations where we have forecasted purchases under a long-term commitment or forecasted sales denominated in

a foreign currency, we may enter into appropriate financial instruments in accordance with our risk management policy to hedge
future cash flow exposures.

In fiscal 2023, due to the weakening of most foreign currencies against the U.S. dollar, foreign currency translations in the

aggregate decreased our business segment EBIT by $16 million, which affected the results of the Reinforcement Materials and
Performance Materials segments. In fiscal 2022, due to the weakening of most foreign currencies against the U.S. dollar, foreign
currency translations in the aggregate decreased our business segment EBIT by $24 million, which affected the results of the
Reinforcement Materials and Performance Materials segments. We recognized a net foreign exchange loss of $35 million in Other
income (expense) in fiscal 2023 from the revaluation of monetary assets and liabilities from transactional currencies to functional
currency, largely attributable to changes in the value of the Argentine peso. In fiscal 2022, we recognized a net foreign exchange loss
of $13 million in Other income (expense) from the revaluation of monetary assets and liabilities from transactional currencies to
functional currency, largely attributable to changes in the value of the Argentine peso and to a lesser extent Colombian peso.

39

Item 8.

ii
Financ

ial Statements and Supplementaryr Data

INDEX TO FINANCIAL STATEMENTS

Description
p
(1)
(2)
(3)
(4)
(5)
(6)
(7)

Consolidated Statements of Operations .............................................................................................................................
Consolidated Statements of Comprehensive Income.........................................................................................................
Consolidated Balance Sheets ..............................................................................................................................................
Consolidated Statements of Cash Flows .............................................................................................................................
Consolidated Statements of Changes in Stockholders’ Equity ...........................................................................................
Notes to the Consolidated Financial Statements................................................................................................................
Reports of Independent Registered Public Accounting Firm (PCAOB ID 34) ......................................................................

Pageg

41
42
43
45
46
47
80

40

CABOT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

Net sales and other operating revenues
Cost of sales

Gross profit

Selling and administrative expenses
Research and technical expenses
Loss on sale of business and asset impairment charge (Note D)
Gain on bargain purchase of a business (Note C)

Income (loss) from operations

Interest and dividend income
Interest expense
Other income (expense)

Income (loss) from operations before income taxes and

equity in earnings of affiliated companies

(Provision) benefit for income taxes
Equity in earnings of affiliated companies, net of tax

Net income (loss)

Net income (loss) attributable to noncontrolling interests, net of tax

of $9, $8 and $10

Net income (loss) attributable to Cabot Corporation

Weighted-average common shares outstanding:

Basic
Diluted

Earnings (loss) per common share:

Basic
Diluted

2023

$

$

$

Years Ended September 30
2022
(In millions, except per share amounts)
3,931
3,092
839
253
57
3
—
526
31
(90)
(16)

4,321
3,436
885
258
55
207
(24)
389
11
(56)
(9)

451
28
5
484

39
445

56.1
56.5

335
(102)
10
243

$

34
209

$

56.5
56.9

7.79
7.73

$
$

3.65
3.62

$
$

$

$
$

2021

3,409
2,610
799
289
56
—
—
454
8
(49)
(7)

406
(123)
3
286

36
250

56.7
56.8

4.35
4.34

The accompanying notes are an integral part of these consolidated financial statements.

41

CABOT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

2023

Years Ended September 30
2022
(In millions)

2021

$

484

$

243

$

Net income (loss)
Other comprehensive income (loss), net of tax

Foreign currency translation adjustment, net of tax
Derivatives: net investment hedges

(Gains) losses reclassified to interest expense, net of tax
(Gains) losses excluded from effectiveness testing and amortized to

interest expense, net of tax

Pension and other postretirement benefit liability adjustments,

net of tax

Other comprehensive income (loss), net of tax of $1, $3 and $8

Comprehensive income (loss)

Net income (loss) attributable to noncontrolling interests, net of tax
Foreign currency translation adjustment attributable to noncontrolling

interests, net of tax

Comprehensive income (loss) attributable to noncontrolling interests
Comprehensive income (loss) attributable to Cabot Corporation

$

80

(6)

2

1
77
561
39

—
39
522

(175)

(6)

2

14
(165)
78
34

(15)
19
59

$

$

286

52

(5)

2

20
69
355
36

7
43
312

The accompanying notes are an integral part of these consolidated financial statements.

42

CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS

Current assets:

Cash and cash equivalents
Accounts and notes receivable, net of reserve for doubtful accounts of $2 and $3
Inventories
Prepaid expenses and other current assets

Total current assets
Property, plant and equipment
Accumulated depreciation

Net property, plant and equipment

Goodwill
Equity affiliates
Intangible assets, net
Deferred income taxes
Other assets
Total assets

September 30

2023

2022

(In millions, except
share and per share amounts)

238
695
585
108
1,626
3,827
(2,415)
1,412
134
20
60
180
172
3,604

$

$

206
836
664
114
1,820
3,554
(2,284)
1,270
129
20
63
45
178
3,525

$

$

The accompanying notes are an integral part of these consolidated financial statements.

43

CABOT CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Short-term borrowings
Accounts payable and accrued liabilities
Income taxes payable
Current portion of long-term debt
Total current liabilities

Long-term debt
Deferred income taxes
Other liabilities
Commitments and contingencies (Note S)
Stockholders’ equity:
Preferred stock:

Authorized: 2,000,000 shares of $1 par value, Issued and Outstanding: None and
none

Common stock:

Authorized: 200,000,000 shares of $1 par value, Issued: 55,379,636 and 56,385,963
shares, Outstanding: 55,243,804 and 56,248,559 shares
Less cost of 135,832 and 137,404 shares of common treasury stock

Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Total Cabot Corporation stockholders’ equity

Noncontrolling interests

Total stockholders’ equity
Total liabilities and stockholders’ equity

September 30

2023

2022

(In millions, except
share and per share amounts)

$

174
600
40
8
822
1,094
50
231

347
707
44
7
1,105
1,089
65
234

—

—

55
(3)
—
1,574
(362)
1,264
143
1,407
3,604

$

56
(4)
1
1,284
(439)
898
134
1,032
3,525

$

$

The accompanying notes are an integral part of these consolidated financial statements.

44

CABOT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows from Operating Activities:

Net income (loss)
Adjustments to reconcile net income (loss) to cash provided by operating activities:

2023

Years Ended September 30
2022
(In millions)

2021

$

484

$

243

$

Depreciation and amortization
Loss on sale of a business and asset impairment charge
Gain on bargain purchase of a business
Gain on sale of land
Deferred tax provision (benefit)
Employee benefit plan settlement
Equity in net income of affiliated companies
Stock-based compensation
Other non-cash (income) expense
Cash dividends received from equity affiliates
Changes in assets and liabilities:
Accounts and notes receivable
Inventories
Prepaid expenses and other current assets
Accounts payable and accrued liabilities
Income taxes payable
Other liabilities

Cash provided by operating activities

Cash Flows from Investing Activities:

Additions to property, plant and equipment
Proceeds from sale of a business
Cash paid for acquisition of business, net of cash acquired of $—, $5 and $—
Proceeds from sale of land
Proceeds from insurance settlements
Other

Cash used in investing activities

Cash Flows from Financing Activities:

Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from (repayments of) issuance of commercial paper, net
Proceeds from long-term debt, net of issuance costs
Repayments of long-term debt
Purchases of common stock
Proceeds from sales of common stock
Cash dividends paid to noncontrolling interests
Cash dividends paid to common stockholders

Cash provided by (used in) financing activities

Effects of exchange rate changes on cash
Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year

The following table presents the Company’s cash, cash equivalents and restricted cash by category
within the Consolidated Balance Sheets:
Cash and cash equivalents
Restricted cash classified within Prepaid expenses and other current assets
Cash, cash equivalents and restricted cash

Non-cash investing activities and supplemental cash flow information:

Additions to property, plant and equipment included in Accounts payable and accrued

liabilities

Income taxes paid
Interest paid

144
3
—
(1)
(156)
—
(5)
20
4
2

153
96
1
(152)
(4)
6
595

(244)
6
—
7
12
5
(214)

24
(48)
(149)
84
(90)
(98)
4
(42)
(88)
(403)
54
32
206
238

238
—
238

41
140
85

$

$

$

$
$
$

146
207
(24)
(17)
(40)
(1)
(10)
23
20
1

(287)
(259)
(25)
115
15
(7)
100

(211)
79
(9)
18
1
4
(118)

26
—
250
394
(372)
(53)
6
(22)
(84)
145
(91)
36
170
206

206
—
206

24
129
46

$

$

$

$
$
$

$

$

$

$
$
$

The accompanying notes are an integral part of these consolidated financial statements.

286

160
—
—
—
9
5
(3)
21
21
2

(215)
(174)
(37)
167
14
1
257

(195)
—
—
—
2
7
(186)

—
—
58
200
(222)
(3)
6
(19)
(80)
(60)
8
19
151
170

168
2
170

41
93
41

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e
h
T

6
4

Notes to the Consolidated Financial Statements

Note A. Significant Accounting Policies

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States (“U.S. GAAP”). The significant accounting policies of Cabot Corporation (“Cabot” or “the Company”) are described
below.

Unless otherwise indicated, all disclosures and amounts in the Notes to the Consolidated Financial Statements relate to the

Company’s operations.

Prinrr cipl

ii es of Consolidll ation

The consolidated financial statements include the accounts of Cabot and its wholly-owned subsidiaries and majority-owned
and controlled subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means
other than voting rights, of which there were none in the periods presented. Intercompany transactions have been eliminated in
consolidation.

Cash and Cash Equivalents

Cash equivalents include all highly liquid investments with a maturity of three months or less at date of acquisition. Cabot

continually assesses the liquidity of cash equivalents and, as of September 30, 2023, has determined that they are readily
convertible to cash.

Inventoriesrr

Inventories are stated at the lower of cost or net realizable value. The cost of inventories is determined using the first-in, first-

out method.

Cabot periodically reviews inventory for both potential obsolescence and potential declines in anticipated selling prices. In this

review, the Company makes assumptions about the future demand for and market value of the inventory, and based on these
assumptions estimates the amount of any obsolete, unmarketable, slow moving, or overvalued inventory. Cabot writes down the
value of these inventories by an amount equal to the difference between the cost of the inventory and its estimated net realizable
value.

Investments

The Company has investments in equity affiliates and marketable securities. As circumstances warrant, all investments are
subject to periodic impairment reviews. Unless consolidation is required, investments in equity affiliates, where Cabot generally
owns between 20% and 50% of the affiliate, are accounted for using the equity method. Cabot records its share of the equity
affiliate’s results of operations based on its percentage of ownership of the affiliate. Dividends declared from equity affiliates are a
return on investment and are recorded as a reduction to the equity investment value. At both September 30, 2023 and 2022, Cabot
had equity affiliate investments of $20 million. Dividends declared and received from these investments were $2 million, $1 million
and $5 million in fiscal 2023, 2022 and 2021, respectively.

Intangible Assets and Goodwillii

Impairmii

ent

The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the
acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based
on their fair values at the date of acquisition. The Company uses assumptions and estimates in determining the fair value of assets
acquired and liabilities assumed in a business combination. The determination of the fair value of intangible assets requires the use
of significant judgment with regard to assumptions used in the valuation model. The Company estimates the fair value of identifiable
acquisition-related intangible assets principally based on projections of cash flows that will arise from these assets. The projected
cash flows are discounted to determine the fair value of the assets at the dates of acquisition.

Definite-lived intangible assets, which are comprised of trademarks, customer relationships and developed technologies, are

amortized over their estimated useful lives and are reviewed for impairment when indication of potential impairment exists, such as
a significant reduction in cash flows associated with the assets.

Goodwill is comprised of the purchase price of business acquisitions in excess of the fair value assigned to the net tangible and

identifiable intangible assets acquired. Goodwill is not amortized and is subject to impairment testing annually, or when events or
changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value.

A reporting unit, for the purpose of the impairment test, is at or below the operating segment level, and constitutes a business
for which discrete financial information is available and regularly reviewed by segment management. Reinforcement Materials, and
the fumed metal oxides, specialty compounds, specialty carbons and battery materials product lines within Performance Chemicals,
which are considered separate reporting units, carry the Company’s goodwill balances as of September 30, 2023.

47

For the purpose of the goodwill impairment test, the Company first assesses qualitative factors to determine whether it is

more likely than not that the fair value of a reporting unit is less than its carrying amount. If an initial qualitative assessment
identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional
quantitative evaluation is performed. If based on the quantitative evaluation the fair value of the reporting unit is less than its
carrying amount, a goodwill impairment loss would result. The goodwill impairment loss would be the amount by which the carrying
value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that
reporting unit. The fair value of a reporting unit is based on discounted estimated future cash flows. The assumptions used to
estimate fair value include management’s best estimates of future growth rates, operating cash flows, capital expenditures and
discount rates over an estimate of the remaining operating period at the reporting unit level. The fair value is also benchmarked
against the value calculated from a market approach using the guideline public company method. In fiscal 2023, the Company’s
qualitative assessment, performed as of August 31, 2023, indicated that the fair values of the Reinforcement Materials, fumed metal
oxides, specialty compounds, specialty carbons and battery materials reporting units were in excess of their carrying values.

Long-livll ed Assets Impairmerr

nt

Long-lived assets are grouped with other assets and liabilities at the lowest level for which independent identifiable cash flows

are determinable. The carrying values of long-lived assets are reviewed for impairment whenever events or changes in business
circumstances indicate that the carrying amount of an asset may not be recoverable. To test for impairment of assets, the Company
generally uses a probability-weighted estimate of the future undiscounted net cash flows of the assets over their remaining lives to
determine if the value of the asset is recoverable.

An asset impairment is recognized when the carrying value of the asset is not recoverable based on the analysis described
above, in which case the asset is written down to its fair value. If the asset does not have a readily determinable market value, a
discounted cash flow model may be used to determine the fair value of the asset.

Propr

erty,yy Plant and Equipmii

ent

Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is calculated using the

straight-line method over the estimated useful lives of the related assets. The depreciable lives for buildings, machinery and
equipment, and other fixed assets are generally between twenty and twenty-five years, ten and twenty-five years, and three and
twenty-five years, respectively. The cost and accumulated depreciation for property, plant and equipment sold, retired, or otherwise
disposed of are removed from the Consolidated Balance Sheets and resulting gains or losses are included in earnings in the
Consolidated Statements of Operations. Expenditures for repairs and maintenance are charged to expenses as incurred.
Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are
capitalized and depreciated.

Cabot capitalizes interest costs when they are part of the cost of acquiring and constructing certain assets that require a
period of time to prepare for their intended use. During fiscal 2023, 2022 and 2021, Cabot capitalized $6 million, $3 million and $1
million of interest costs, respectively. These amounts are amortized over the lives of the related assets when they are placed in
service.

Asset Retireii ment Obligat

i

ions

Cabot estimates incremental costs for special handling, removal and disposal of materials that may or will give rise to

conditional asset retirement obligations (“ARO”) and then discounts the expected costs back to the current year using a credit
adjusted risk-free rate. Cabot recognizes ARO liabilities and costs when they are probable and can be reasonably estimated. In
certain instances, Cabot has not recorded a reserve for AROs because the timing of disposal of the underlying asset is unknown. The
ARO reserves were $11 million and $10 million at September 30, 2023 and 2022, respectively. The ARO balances are included in
Accounts payable and accrued liabilities and Other liabilities on the Consolidated Balance Sheets.

Foreign Currency Translation

The functional currency of the majority of Cabot’s foreign subsidiaries is the local currency in which the subsidiary operates.

Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet dates.
Income and expense items are translated at average monthly exchange rates during the year. The functional currency of Cabot’s
foreign subsidiaries that operate in a highly inflationary economy is the U.S. dollar. Cabot’s operations in highly inflationary
economies are not material.

48

Unrealized currency translation adjustments (“CTA”) are included as a separate component of Accumulated other

comprehensive income (loss) (“AOCI”) within stockholders’ equity. Realized and unrealized foreign currency gains and losses arising
from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings with the
exception of (i) intercompany transactions considered to be of a long-term investment nature; (ii) income taxes upon future
repatriation of unremitted earnings from non-U.S. subsidiaries that are not indefinitely reinvested; and (iii) foreign currency
borrowings designated as net investment hedges. Gains or losses arising from these transactions are included within the CTA
component of Other comprehensive income (loss). In fiscal 2023, 2022 and 2021, net foreign currency transaction loss of $35
million, $13 million, and $6 million, respectively, is included in Other income (expense) in the Consolidated Statements of
Operations.

Share Repurchases

Periodically, Cabot repurchases shares of the Company’s common stock in the open market or in privately negotiated
transactions under the authorization approved by the Board of Directors. The Company retires the repurchased shares and records
the excess of the purchase price over par value to additional paid-in capital (“APIC”) until such amount is reduced to zero and then
charges the remainder against retained earnings.

ii
Financ

ial Instruments

Cabot’s financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, investments,
accounts payable and accrued liabilities, short-term and long-term debt, and derivative instruments. The carrying values of Cabot’s
financial instruments approximate fair value with the exception of fixed rate long-term debt, which is recorded at amortized cost.
The fair values of the Company’s financial instruments are based on quoted market prices, if such prices are available. In situations
where quoted market prices are not available, the Company relies on valuation models to derive fair value. Such valuations take into
account the ability of the financial counterparty to perform and the Company’s own credit risk.

Cabot uses derivative financial instruments primarily for purposes of hedging the exposures to fluctuations in foreign currency
exchange rates, which exist as part of its on-going business operations. Cabot does not enter into derivative contracts for speculative
purposes, nor does it hold or issue any derivative contracts for trading purposes. All derivatives are recognized on the Consolidated
Balance Sheets at fair value. Where Cabot has a legal right to offset derivative settlements under a master netting agreement with a
counterparty, derivatives with that counterparty are presented on a net basis. The changes in the fair value of derivatives are
recorded in either earnings or AOCI, depending on whether or not the instrument is designated as part of a hedge transaction and, if
designated as part of a hedge transaction, the type of hedge transaction. The gains or losses on derivative instruments reported in
AOCI are reclassified to earnings in the period in which earnings are affected by the underlying hedged item. The ineffective portion
of all hedges is recognized in earnings during the period in which the ineffectiveness occurs.

In accordance with Cabot’s risk management strategy, the Company may enter into certain derivative instruments that may

not be designated as hedges for hedge accounting purposes. Although these derivatives are not designated as hedges, the Company
believes that such instruments are closely correlated with the underlying exposure, thus managing the associated risk. The Company
records in earnings the gains or losses from changes in the fair value of derivative instruments that are not designated as hedges.
Cash movements associated with these instruments are presented in the Consolidated Statements of Cash Flows as Cash Flows from
Operating Activities because the derivatives are designed to mitigate risk to the Company’s cash flow from operations.

Revenue Recognition

Cabot recognizes revenue when its customers obtain control of promised goods or services. The revenue recognized is the

amount of consideration which the Company expects to receive in exchange for those goods or services. The Company’s contracts
with customers are generally for products only and do not include other performance obligations. Generally, Cabot considers
purchase orders, which in some cases are governed by master supply agreements, to be contracts with customers. The transaction
price as specified on the purchase order or sales contract is considered the standalone selling price for each distinct product. To
determine the transaction price at the time when revenue is recognized, the Company evaluates whether the price is subject to
adjustments, such as for returns, discounts or volume rebates, which are stated in the customer contract, to determine the net
consideration to which the Company expects to be entitled. Substantially all revenue from product sales is based on a point in time
model and is recognized when control of the product is transferred to the customer, which typically occurs upon shipment or
delivery of the product to the customer and title, risk and rewards of ownership have passed to the customer. For contracts where
we complete our performance obligation prior to our right to consideration or contracts where we receive consideration prior to
completing our performance obligation we record a contract asset or a contract liability, respectively, on the Consolidated Balance
Sheets.

49

Shipping and handling activities that occur after the transfer of control to the customer are billed to customers and are
recorded as sales revenue, as the Company considers these to be fulfillment costs. These shipping and handling costs are expensed
in the period incurred and included in Cost of sales within the Consolidated Statement of Operations. Taxes collected on sales to
customers are excluded from the transaction price.

The Company generally provides a warranty that its products will substantially conform to the identified specifications. The

Company’s liability typically is limited to either a credit equal to the purchase price or replacement of the non-conforming product.
Returns under warranty have historically been immaterial.

Payment terms typically range from zero to ninety days. When the period of time between the transfer of control of the goods

and the time the customer pays for the goods is one year or less, the Company does not consider there to be a significant financing
component associated with the contract.

Cost of Sales

Cost of sales consists of the cost of raw and packaging materials, direct manufacturing costs, depreciation, internal transfer
costs, inspection costs, inbound and outbound freight and shipping and handling costs, plant purchasing and receiving costs and
other overhead expenses necessary to manufacture the products.

Accountstt and Notes Receivable

Trade receivables are recorded at the invoiced amount and generally do not bear interest.

Cabot maintains allowances for doubtful accounts based on an assessment of the collectability of specific customer accounts,

the aging of accounts receivable and other economic information on both a historical and prospective basis. Customer account
balances are charged against the allowance when it is probable the receivable will not be recovered. There were no material
changes in the allowance for any of the years presented.

Stock-based Compensation

Cabot recognizes compensation expense for stock-based awards granted to employees using the fair value method. Under the
fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award,
and is recognized as expense over the service period, which generally represents the vesting period, and includes an estimate of
what level of performance the Company will achieve for Cabot’s performance-based stock awards. Cabot calculates the fair value of
its stock options using the Black-Scholes option pricing model. The fair value of restricted stock units is determined using the closing
price of Cabot stock on the day of the grant. The Company recognizes forfeitures as they occur.

Selling and Admidd ni

ii stii

rative Expexx nses

Selling and administrative expenses consist of salaries and fringe benefits of sales and office personnel, general office

expenses and other expenses not directly related to manufacturing operations.

Research and Technical Expexx nses

Research and technical expenses include salaries, equipment and material expenditures, and contractor fees and are expensed

as incurred.

Pensions and Other Postretireii ment Benefie ts

The Company recognizes the funded status of defined benefit pension and other postretirement benefit plans as an asset or

liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. Pension and post-
retirement benefit costs other than service cost are included in Other income (expense) in the Consolidated Statement of
Operations. Service cost is included with other employee compensation costs within Cost of sales, Selling and administrative
expenses, or Research and technical expenses. The Company recognizes actuarial gains and losses and prior service costs and credits
as a component of Other comprehensive income (loss), net of tax, which are subsequently amortized into earnings as a component
of net periodic benefit cost.

Accumulated Other Comprehensive Income (Loss)

AOCI, which is included as a component of stockholders’ equity, includes unrealized gains or losses on derivative instruments,

currency translation adjustments in foreign subsidiaries and pension and post-retirement related adjustments.

50

Income Taxesaa

Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement

carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization
of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely
than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and
additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Cabot has designated to be
indefinitely reinvested.

Cabot records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to
be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the
threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon
ultimate settlement. This analysis presumes the taxing authorities’ full knowledge of the positions taken and all relevant facts, but
does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and
includes such charges in its income tax provision in the Consolidated Statements of Operations.

Contingencies

Cabot accrues costs related to contingencies when it is probable that a liability has been incurred and the amount can be

reasonably estimated. Contingencies could arise from litigation, environmental remediation or contractual arrangements. When a
single liability amount cannot be reasonably estimated, but a range can be reasonably estimated, Cabot accrues the amount that
reflects the best estimate within that range or the low end of the range if no estimate within the range would be considered more
likely than any other estimate. The amount accrued is determined through the evaluation of various information, which could
include claims, settlement offers, demands by government agencies, estimates performed by independent third parties,
identification of other responsible parties and an assessment of their ability to contribute, and our prior experience. Cabot does not
reduce its estimated liability for possible recoveries from insurance carriers. Proceeds from insurance carriers are recorded when
realized by either the receipt of cash or a contractual agreement.

Use of Estimaii

tes

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain
estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from those estimates.

Note B. Recent Accounting Pronouncements

In November 2022, the FASB issued a new standard on the disclosure off supplier financing programs. The new standard

requires qualitative and quantitative disclosure as to the nature and potential magnitude off such programs in addition to program
activity and changes for the periods presented. The Company adopted this standard October 1, 2023. The Company has evaluated
the effect off adopting this accounting guidance and will include the new required disclosure in future filings.

Note C. Acquisitions

Tokai Carbon (TiaTT njinjj

) Co.

In February 2022, the Company purchased 100% off the registered capital off Tokai Carbon (Tianjin) Co., a carbon black

manufacturing facility, from Tokai Carbon Group for a net purchase price off $9 million, consisting off cash consideration fof
$14 million, including customary post-closing adjustments, and net off $5 million off cash acquired.

The excess off the fair value off the net assets over the purchase price was recorded as a gain off $24 million in fiscal 2022. The

Gain on bargain purchase off a business arose primarily due to necessary equipment upgrades that will be required after the
purchase to continue to utilize the existing assets.

Note D. Divestitures

Sale of Purifii cation Solutions Busineii

ss

In March 2022, the Company completed the sale off its Purification Solutions business, a reporting segment off the Company, to

an affiliate off funds advised by One Equity Partners for total cash proceeds off $85 million, net off $7 million cash transferred. The
Company recognized a pre-tax impairment charge of $197 million and a pre-tax loss on sale off the Purification Solutions business fof
$10 million during fiscal 2022. The purchase price off the Purification Solutions business was subject to customary post-closing
adjustments, which were finalized in fiscal 2023 and resulted in an additional pre-tax loss on sale off $3 million.

51

Note E. Inventories

Inventories, net of obsolete, unmarketable and slow-moving reserves, are as follows:

Raw materials
Finished goods
Other(1)
Total

September 30

2023

2022

(In millions)
148 $
374
63
585 $

182
427
55
664

$

$

(1) Other inventory is comprised of certain spare parts and supplies.

At September 30, 2023 and 2022, total inventory reserves were $14 million and $9 million, respectively.

Note F. Property, Plant and Equipment

Property, plant and equipment consists of the following:

Land and land improvements
Buildings
Machinery and equipment
Other
Construction in progress

Total property, plant and equipment

Less: Accumulated depreciation

Net property, plant and equipment

September 30

2023

2022

(In millions)
72 $

576
2,622
228
329
3,827
(2,415)
1,412 $

75
553
2,473
229
224
3,554
(2,284)
1,270

$

$

Depreciation expense for fiscal 2023, 2022 and 2021 was $138 million, $140 million and $152 million, respectively.

Note G. Goodwill and Intangible Assets

The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those

balances during the fiscal year ended September 30, 2023 are as follows:

Balance at September 30, 2022
Foreign currency impact
Balance at September 30, 2023

Reinforcement
Materials

Performance
Chemicals
(In millions)

Total

$

$

46
5
51

$

$

83
—
83

$

$

129
5
134

The following table provides information regarding the Company’s intangible assets with finite lives:

September 30, 2023

September 30, 2022

Gross
Carrying
Value

Accumulated
Amortization

Net
Intangible
Assets

Gross
Carrying
Value

Accumulated
Amortization

Net
Intangible
Assets

Developed technologies
Trademarks
Customer relationships

Total intangible assets

$

$

34
2
65
101

$

$

(10) $
(1)
(30)
(41) $

$

(In millions)
24
1
35
60

$

34
2
59
95

$

$

(8) $
(1)
(23)
(32) $

26
1
36
63

Intangible assets are amortized over their estimated useful lives, which range between ten and twenty-five years, with a
weighted average amortization period of seventeen years. Amortization expense for fiscal 2023, 2022 and 2021 was $6 million, $6
million and $8 million, respectively, and is included in Cost of sales, Selling and administrative expenses and Research and technical
expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $6 million
each year for the next five fiscal years.

52

Note H. Accounts Payable, Accrued Liabilities and Other Liabilities

Accounts payable and accrued liabilities included in current liabilities consist of the following:

Accounts payable
Accrued employee compensation
Other accrued liabilities

Total

Other long-term liabilities consist of the following:

Employee benefit plan liabilities
Operating lease liabilities
Other accrued liabilities

Total

Note I. Debt and Other Obligations

Short-term Borrowings

ii

September 30

2023

2022

(In millions)
438 $
55
107
600 $

September 30

2023

2022

(In millions)
48 $
84
99
231 $

533
66
108
707

51
83
100
234

$

$

$

$

Commercial Paper— The Company has a commercial paper program and the maximum aggregate balance of commercial
paper notes outstanding and the amounts borrowed under the revolving credit facility may not exceed the borrowing capacity of $1
billion under the revolving credit facility. The proceeds from the issuance of the commercial paper have been used for general
corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases,
and acquisitions. The revolving credit facility is available to repay the outstanding commercial paper, if necessary.

There was an outstanding balance of commercial paper of $172 million as of September 30, 2023 with a weighted average
interest rate of 5.44% and an outstanding balance of $322 million as of September 30, 2022 with a weighted average interest rate of
3.35%.

Long-termrr Obligations

The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized

below:

Variable Rate Debt:

Revolving Credit Facility, expires fiscal 2027
Revolving Credit Facility - Euro, expires fiscal 2027

Total variable rate debt

Fixed Rate Debt:

3.4% Notes due fiscal 2026
4.0% Notes due fiscal 2029
5.0% Notes due fiscal 2032
Medium-Term Notes due fiscal 2028, 6.57% — 7.28%
Chinese Renminbi Debt, due fiscal 2024, 4.3%

Total fixed rate debt
Finance lease obligations (Note R)
Unamortized debt issuance costs and debt discount

Total debt

Less current portion of long-term debt

Total long-term debt

September 30

2023

2022

(In millions)

$

— $

120
120

250
300
400
8
4
962
28
(8)
1,102
(8)
1,094 $

$

—
114
114

250
300
400
8
4
962
29
(9)
1,096
(7)
1,089

53

Revolving Credr

itdd Faciliii ty,yy expixx riii ngii

fiscii al 2027—In August 2021, the Company entered into a revolving credit agreement (the

“U.S. Credit Agreement”) with a loan commitment not to exceed $1 billion. The U.S. Credit Agreement supports the Company’s
issuance off commercial paper, and borrowings may be used for working capital, letters off credit and other general corporate
purposes. Outstanding commercial paper balances reduce the amount available for borrowing under the U.S. Credit Agreement,
which was $828 million as off September 30, 2023. The U.S. Credit Agreement, which matures in August 2027, contains affirmative
and negative covenants, the financial debt covenant described below, and annual sustainability performance targets related to the
Company’s reduction in its nitrogen oxide and sulfur dioxide emissions intensity, the achievement off which may adjust pricing under
the U.S. Credit Agreement. The borrowing rate is currently based on an adjusted daily risk-free borrowing rate, plus a Cabot-specific
spread based on the Company’s credit rating and achievement on the annual sustainability performance targets. As a result
fof
meeting the annual sustainability performance targets, the commitment fee and borrowing rate will be reduced by 0.01% and
0.05%, respectively, effective from August 2023 through August 2024.

Revolving Credr

itdd Faciliii ty-Euro, expixx riii ngii

fiscii al 2027—In May 2023, several subsidiaries entered into a revolving credit

agreement (the “Euro Credit Agreement”, and together with the U.S. Credit Agreement, the "Credit Agreements") with a loan
commitment not to exceed 300 million Euros. The amount available for borrowing under this revolving credit agreement was $197
million as of September 30, 2023, and the weighted average interest rate on the outstanding balance during the year was 4.82%.
The borrowing rate is based on an adjusted daily risk-free borrowing rate, plus a Cabot-specific spread based on the Company’s
credit rating. The revolving credit agreement, which matures in August 2027, may be used for repatriation of earnings of Cabot’s
foreign subsidiaries to the U.S., the repayment of indebtedness of the Company’s foreign subsidiaries owing to the Company or any
of its subsidiaries, and for working capital and general corporate purposes. The obligations of the subsidiaries under the revolving
credit agreement are guaranteed by the Company. The Company paid debt issuance costs of $1 million upon entering the
agreement, which are being amortized over the life of the revolver.

Debt Covenants—As of September 30, 2023, Cabot was in compliance with the financial debt covenants under the Credit
Agreements, which, with limited exceptions, require us to comply on a quarterly basis with a leverage test requiring the ratio of
consolidated net debt to consolidated EBITDA not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt
offset by the lessor of (i) unrestricted cash and cash equivalents and (ii) $150 million.

Chinese Renminbi Debt—The Company’s consolidated Chinese subsidiaries had $4 million off unsecured long-term debt

outstanding with a noncontrolling shareholder off a consolidated subsidiary as off both September 30, 2023 and 2022.

3.4% Notes due fiscal 2026—In September 2016, Cabot issued $250 million in registered notes with a coupon of 3.4% that

mature on September 15, 2026. These notes are unsecured and pay interest on March 15 and September 15. The net proceeds of
this offering were $248 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at
issuance and is being amortized over the life of the notes.

4.0% Notes due fiscal 2029—In June 2019, Cabot issued $300 million in registered, unsecured, notes with a coupon off 4.0%

that mature on July 1, 2029. Interest is payable under the notes semi-annually on January 1 and July 1. The net proceeds off this
offering were $296 million after deducting discounts and issuance costs off $1 million and $3 million, respectively, which were paid at
issuance and are being amortized over the life off the notes.

5.0% Notes due fiscal 2032—In June 2022, Cabot issued $400 million in unsecured notes with a coupon off 5% that mature on
June 30, 2032. Interest is payable semi-annually on June 30 and December 30. The net proceeds off this offering were $394 million
after deducting discounts and issuance costs, each off which were $3 million, which were paid at issuance and are being amortized
over the life off the notes.

Medium-TerTT mrr Notes—At both September 30, 2023 and 2022, there were $8 million of unsecured medium-term notes
outstanding issued to numerous lenders with various fixed interest rates and maturity dates. The weighted average maturity of the
total outstanding medium-term notes is 4 years with a weighted average interest rate of 7.24%.

ii
Financ

e Lease obligations—See Note R for a discussion of the Company’s leases.

54

Future Yearsrr Payment Schedule

The aggregate principal amounts of long-term debt, excluding finance lease liabilities presented separately in Note R, due in

each of the five years from fiscal 2024 through 2028 and thereafter are as follows:

Years Ending September 30

2024
2025
2026
2027
2028
Thereafter
Total

Principal Payments
on Long-Term
Debt
(In millions)

$

$

4
—
250
120
8
700
1,082

Standby lettersrr of credrr

itdd —At September 30, 2023, the Company had provided standby letters off credit that were outstanding

and not drawn totaling $7 million, which expire through fiscal 2024.

Note J. Financial Instruments and Fair Value Measurements

The FASB authoritative guidance on fair value measurements defines fair value, provides a framework for measuring fair value,

and requires certain disclosures about fair value measurements. The required disclosures focus on the inputs used to measure fair
value. The guidance establishes the following hierarchy for categorizing these inputs:

Level 1 — Quoted market prices in active markets for identical assets or liabilities

Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical

or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest
rate and yield curves, and market-corroborated inputs)

Level 3 — Significant unobservable inputs

There were no transfers of financial assets or liabilities measured at fair value between Level 1 and Level 2, and there were no

Level 3 investments during fiscal 2023 or 2022.

At both September 30, 2023 and 2022, the fair values of cash and cash equivalents, accounts and notes receivable, accounts

payable and accrued liabilities, and short term borrowings and variable rate debt approximated their carrying values due to the
short-term nature of these instruments. Cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

At both September 30, 2023 and 2022, Cabot had derivatives relating to foreign currency risks carried at fair value. The
Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows
and the ability of Cabot or the financial counterparty to perform. For interest rate and cross-currency swaps, the significant inputs to
these models are interest rate curves for discounting future cash flows and are adjusted for credit risk. For forward foreign currency
contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of the foreign
currency for translating future cash flows. These derivatives are classified as Level 2 instruments within the fair value hierarchy as
the fair value determination was based on observable inputs.

At both September 30, 2023 and 2022, the fair value of Guaranteed investment contracts, included in Other assets on the

Consolidated Balance Sheets was $8 million. Guaranteed investment contracts were classified as Level 2 instruments within the fair
value hierarchy as the fair value determination was based on other observable inputs.

The carrying value and fair value of the long-term fixed rate debt were $1.08 billion and $1.04 billion, respectively, as of
September 30, 2023 and $1.08 billion and $1.06 billion, respectively, as of September 30, 2022. The fair values of Cabot’s fixed rate
long-term debt are estimated based on comparable quoted market prices at the respective period ends. The carrying amounts of
Cabot’s floating rate long-term debt approximates the fair value. All such measurements are based on observable inputs and are
classified as Level 2 within the fair value hierarchy. The valuation technique used is the discounted cash flow model.

55

Note K. Derivatives

The Company has foreign currency exposure arising from its net investments in foreign operations. The Company uses cross-

currency swaps to partially mitigate the impact of the Euro currency rate changes on the Company’s Euro denominated net
investments. The Company’s cross-currency swaps are designated as net investment hedges.

The Company also has foreign currency exposure arising from the denomination of monetary assets and liabilities in foreign

currencies other than the functional currency of a given subsidiary as well as the risk that currency fluctuations could affect the
dollar value of future cash flows generated in foreign currencies. The Company uses short-term forward contracts to minimize the
exposure to foreign currency risk.

The Company had no significant concentration of credit risk at September 30, 2023 and 2022.

The following table provides details of the derivatives held as of September 30, 2023 and 2022 to manage foreign currency

risk.

Description

Borrowing

Cross Currency Swaps

3.4% Notes

Forward Foreign Currency Contracts(1)

N/A

Notional Amount

September 30, 2023
USD 250 million
swapped to EUR
223 million
USD 82 million

September 30, 2022
USD 250 million
swapped to EUR 223
million
USD 42 million

Hedge
Designation

Net investment

No designation

(1)

At September 30, 2023, the Company’s forward foreign exchange contracts were denominated in Indonesian rupiah, Czech
koruna, and Colombian peso. At September 30, 2022, the Company’s forward foreign exchange contracts were denominated
in Indonesian rupiah and Czech koruna.

Accounting for Derivative Instrumentstt and Hedging Activities

Net Investment Hedge

For net investment hedges, changes in the fair value of the effective portion of the derivatives’ gains or losses are reported as

CTA in AOCI while changes in the ineffective portion are reported in earnings. Effectiveness is assessed based on the hypothetical
derivative method. The gains or losses on derivative instruments reported in AOCI are reclassified to earnings in the period in which
earnings are affected by the underlying item, such as a disposal or substantial liquidations of the entities being hedged.

Cash settlements related to the net investment hedge occur semi-annually on March 15th and September 15th for fixed rate
interest payments and a cash exchange of the notional currency amount will occur at the end of the term in 2026. During fiscal 2023,
2022 and 2021 the Company received net cash interest of $4 million, $4 million and $3 million, respectively. As of September 30,
2023 and 2022, the fair value of these swaps was an asset of $12 million and $29 million, respectively, was included in Prepaid
expenses and other current assets and Other assets, and the cumulative unrealized gain of $15 million and $32 million, respectively,
was included in AOCI on the Consolidated Balance Sheets.

The following table summarizes the impact of the cross-currency swaps to AOCI and the Consolidated Statements of

Operations:

2023

2022

2021

2023

2022

2021

Years Ended September 30

Description

Gain/(Loss) Recognized in AOCI

(Gain)/Loss Reclassified from AOCI into
Interest Expense in the Consolidated
Statements of Operations

2023
2021
2022
(Gain)/Loss Recognized in Interest
Expense in the Consolidated
Statements of Operations (Amount
Excluded from Effectiveness Testing)

Cross-currency swaps

$

(13)

$

30

$

7

$

(6)

(In millions)
(6)
$

$

(5)

$

2

$

2

$

2

Forward Foreign Currency Contracts

At both September 30, 2023 and 2022, the Company had foreign currency forward contracts that were not designated as

hedges for accounting purposes. Although these derivatives do not qualify for hedge accounting, Cabot believes that such
instruments are closely correlated with the underlying exposure, thus managing the associated risk. The gains or losses from
changes in the fair value of derivative instruments that are not accounted for as hedges are recognized in current period earnings.

At both September 30, 2023 and 2022, the fair value of derivative instruments not designated as hedges was less than $1

million and was presented in Accounts payable and accrued liabilities on the Consolidated Balance Sheets.

56

Note L. Insurance Recoveries

Pepinster,r Belgium

In July 2021, the Company’s Specialty Compounds manufacturing and research and development facility in Pepinster,

Belgium experienced significant flooding. Full production, which was temporarily halted, resumed in the second quarter of fiscal
2022. The Company agreed to a final insurance settlement in fiscal 2023 for total proceeds of $33 million.

During fiscal 2023, 2022 and 2021, the Company recorded expenses of nil, $6 million and $17 million for clean-up costs,

inventory, and fixed asset impairments and simultaneously recognized a fully offsetting loss recovery from expected insurance
proceeds. During fiscal 2023, the Company recognized gains of $9 million related to lost margin and the replacement value of fixed
assets exceeding their net book value. The flood-related expenses, loss recoveries and gains are included within Cost of sales in the
Consolidated Statements of Operations in fiscal 2023, 2022 and 2021.

During fiscal 2023, 2022 and 2021, the Company received insurance proceeds of $14 million, $11 million and $8 million,

respectively. Of the proceeds received, $12 million, $1 million and $2 million, is included in Cash provided by investing activities and
$2 million, $10 million and $6 million, is included in Cash provided by operating activities for fiscal 2023, 2022 and 2021,
respectively, in the Consolidated Statements of Cash Flows.

Franklin, Louisiana

ii

In August 2021, the Company’s specialty carbons and reinforcing carbons manufacturing facility in Franklin, Louisiana

experienced an unplanned plant outage due to equipment failure. During fiscal 2022, the Company received insurance proceeds of
$8 million for business interruption. These proceeds were included within Cost of sales in the Consolidated Statements of
Operations and in Cash Provided by operating activities in the Consolidated Statements of Cash Flows for the fiscal year ended
September 30, 2022.

Note M. Employee Benefit Plans

The information below provides detail concerning the Company’s benefit obligations under the defined benefit and

postretirement benefit plans it sponsors.

Defined benefit plans provide pre-determined benefits to employees that are distributed upon retirement. Cabot is making all

sponsor required contributions to these plans. The accumulated benefit obligation was $2 million for the U.S. defined benefit plan
and $131 million for the foreign defined benefit plans as of September 30, 2023 and $2 million for the U.S. defined benefit plans and
$125 million for the foreign defined benefit plans as of September 30, 2022. The U.S. defined benefit plan is the frozen Supplemental
Cash Balance Plan.

The following provides information about projected benefit obligations, plan assets, the funded status and weighted-average

assumptions of the defined benefit pension and postretirement benefit plans:

Change in Benefit Obligations:
Benefit obligation at beginning of

year

Service cost
Interest cost
Plan participants’ contribution
Foreign currency exchange rate

changes

(Gain) loss from changes in actuarial
assumptions and plan experience

Benefits paid
Settlements or curtailments
Divestiture of a business
Benefit obligation at end of year

2023

U.S.

Pension Benefits
U.S.

Foreign

Years Ended September 30

2022

2023

2022

Foreign

U.S.

Foreign

U.S.

Foreign

Postretirement Benefits

(In millions)

3
—
—
—

—

(1)
—
—
—
2

$

$

221
4
4
1

(27)

(43)
(9)
(2)
(16)
133

$

$

16
—
1
—

—

(1)
(2)
—
—
14

$

$

13
—
1
—

1

(3)
(1)
—
—
11

$

$

25
—
—
—

—

(4)
(3)
(2)
—
16

$

$

19
—
1
—

(2)

(5)
—
—
—
13

$

$

2
—
—
—

—

—
—
—
—
2

$

$

133
3
7
1

6

(4)
(5)
(2)
—
139

$

$

57

2023

U.S.

Pension Benefits
U.S.

Foreign

Years Ended September 30

2022

2023

2022

Foreign

U.S.

Foreign

U.S.

Foreign

Postretirement Benefits

(In millions)

$

$
$
$

$

— $
—
—
—

135
4
4
1

— $
—
—
—

—
—
—
—
—

7
(5)
(2)
—
—

—
—
—
—
—

— $
(2) $
(2) $

144
5
5

$
$
$

— $
(2) $
(2) $

217
(35)
5
1

(24)
(9)
(2)
—
(18)

135
2
2

$

— $
—
2
—

— $
—
1
—

— $
—
5
—

—
(2)
—
—
—

—
(1)
—
—
—

—
(3)
(2)
—
—

—
—
—
—

—
—
—
—
—

$
$
$

— $
(14) $
(14) $

— $
(11) $
(11) $

— $
(16) $
(16) $

—
(13)
(13)

Change in Plan Assets:
Fair value of plan assets at beginning

of year

Actual return on plan assets
Employer contribution
Plan participants’ contribution
Foreign currency exchange rate

changes
Benefits paid
Settlements or curtailments
Expenses paid from assets
Divestiture of a business
Fair value of plan assets at end

of year

Funded status
Recognized asset (liability)

Pension Assumptions and Strategy

The following assumptions were used to determine the pension benefit obligations and periodic benefit costs as of and for the

years ended September 30:

Actuarial assumptions as of the year-end

measurement date:
scount rate

Rate of increase in compensation
Cash balance interest credit rate

Actuarial assumptions used to determine net

periodic benefit cost during the year:
scount rate - benefit obligation

Discount rate - service cost
Discount rate - interest cost
Expected long-term rate of return on

plan assets

Rate of increase in compensation
Cash balance interest credit rate

2023

2022
Pension Benefits

2021

U.S.

Foreign

U.S.

Foreign

U.S.

Foreign

6.0%
N/A
2.0%

5.6%
N/A
5.3%

N/A
N/A
2.0%

4.7%
3.0%
2.1%

4.5%
3.6%
4.5%

5.1%
3.0%
2.0%

5.5%
3.0%
2.0%

2.2%
N/A
1.6%

N/A
N/A
2.0%

4.5%
3.0%
2.0%

2.1%
2.0%
1.7%

3.5%
2.9%
1.7%

2.2%
N/A
2.0%

2.5%
N/A
1.4%

N/A
N/A
2.1%

2.1%
2.9%
1.7%

1.7%
1.7%
1.4%

4.6%
3.0%
1.7%

58

Postretireii ment Assumptions and Strategy

The following assumptions were used to determine the postretirement benefit obligations and net costs as of and for the

years ended September 30:

Actuarial assumptions as of the year-end

measurement date:
scount rate

Initial health care cost trend rate(1)

Actuarial assumptions used to determine

net cost during the year:

scount rate - benefit obligation

Discount rate - service cost
Discount rate - interest cost
Initial health care cost trend rate(1)

2023

U.S.

Foreign

2022
Postretirement Benefits
Foreign

U.S.

2021

U.S.

Foreign

6.0%
5.0%

5.6%
5.4%
5.3%
—%

5.7%
6.4%

5.1%
5.1%
5.1%
6.8%

5.6%
—%

2.4%
1.7%
1.6%
5.5%

5.1%
6.8%

2.8%
3.5%
2.5%
6.9%

2.4%
5.5%

2.1%
1.5%
1.4%
6.0%

2.8%
6.9%

2.4%
3.0%
2.1%
6.9%

(1)

The initial health care cost trend rate is set at 5% for the 2023 U.S. plan assumptions as the 2024 Medicare Part B premiums
are expected to increase. The trend rates for all future years beyond 2024 also reflect expected 5% increases. The initial
health care cost trend rate was set at zero for the 2022 U.S. plan assumptions in light of the expected downward adjustment
the U.S. government was expected to make to the 2023 Medicare Part B premiums, however, all trend rates beyond the
initial year were set to 5%.

Cabot uses discount rates as of September 30, the plans’ measurement date, to determine future benefit obligations under its
U.S. and foreign defined benefit plans. The discount rates for the defined benefit plans in Canada, the Eurozone, Japan, Switzerland,
the United Arab Emirates, the United Kingdom and the U.S. are derived from yield curves that reflect high quality corporate bond
yield or swap rate information in each region and reflect the characteristics of Cabot’s employee benefit plans. The discount rates
for the defined benefit plans in Mexico, the Czech Republic and Indonesia are based on government bond indices that best reflect
the durations of the plans, adjusted for credit spreads presented in selected AA corporate bond indices. The rates utilized are
selected because they represent long-term, high quality, fixed income benchmarks that approximate the long-term nature of Cabot’s
pension obligations and related payouts.

Amounts recognized in the Consolidated Balance Sheets at September 30, 2023 and 2022 related to the Company's defined

benefit pension and postretirement benefit plans were as follows:

2023

2022

2023

2022

U.S.

Pension Benefits
U.S.

Foreign

Foreign

U.S.

Foreign

U.S.

Foreign

Postretirement Benefits

September 30

Other assets
Accounts payable and accrued liabilities
Other liabilities

$
$
$

— $
— $
(2) $

30
$
(1) $
(24) $

— $
— $
(2) $

(In millions)
26
$
(1) $
(23) $

— $
(2) $
(12) $

— $
(1) $
(10) $

— $
(2) $
(14) $

—
(1)
(12)

Amounts recognized in AOCI at September 30, 2023 and 2022 related to the Company's defined benefit pension and

postretirement benefit plans were as follows:

Net actuarial (gain) loss
Net prior service credit
Balance in accumulated other

comprehensive (income) loss, pretax

$

$

2023

2022

2023

2022

U.S.

Pension Benefits
U.S.

Foreign

Foreign

U.S.

Foreign

U.S.

Foreign

Postretirement Benefits

September 30

— $
—

$

24
(1)

— $
—

(In millions)
23
(1)

$

(6) $
—

(7) $
—

(6) $
—

— $

23

$

— $

22

$

(6) $

(7) $

(6) $

(4)
—

(4)

59

Estimaii

ted Future Benefie t Payments

The Company expects that the following benefit payments will be made to plan participants in the years from 2024 to 2033:

Years Ending September 30

U.S.

Foreign

Pension Benefits

Postretirement Benefits
Foreign

U.S.

2024
2025
2026
2027
2028
2029 - 2033

$
$
$
$
$
$

— $
— $
— $
— $
— $
1 $

(In millions)
9 $
9 $
9 $
11 $
11 $
49 $

2 $
2 $
2 $
2 $
2 $
6 $

1
1
1
1
1
4

Postretirement medical benefits are unfunded and impact Cabot’s cash flows as benefits become due, which is expected to be

$3 million in fiscal 2024. The Company expects to contribute $4 million to its pension plans in fiscal 2024.

Net periodic defined benefit pension and other postretirement benefit costs include the following components:

2023

U.S.

Foreign

2022
Pension Benefits
Foreign
U.S.

$ — $
—

—
—

—
—
$ — $

3
7

(7)
(1)

—
—
2

$ — $
—

—
—

—
—
$ — $

4
4

(6)
1

—
—
3

Service cost
Interest cost
Expected return on plan

assets

Amortization of net losses
Settlements or

Curtailments cost

Other
Net periodic (benefit) cost

Years Ended September 30
2023
2021

2022
Postretirement Benefits

2021

U.S.

Foreign

U.S.

Foreign

U.S.

Foreign

U.S.

Foreign

(In millions)

$ — $
—

6
3

$ — $ — $ — $ — $ — $
—

—

1

1

1

—
—

4
—
4

$

(10)
3

—
(1)

1
2
5

—
—
$ — $

$

—
—

—
—
1

$

—
—

(1)
—
(1)

$

—
—

—
—
1

—
—

—
—
$ — $

—
1

—
—

—
—
1

Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) are as follows:

2023

U.S.

Foreign

2022
Pension Benefits
Foreign
U.S.

Years Ended September 30
2023
2021

2022
Postretirement Benefits

2021

U.S.

Foreign

U.S.

Foreign

U.S.

Foreign

U.S.

Foreign

$ — $
—

—
—
—

1
—

1
—
—

$ — $
—

—
—
—

$

(2)
—

(1)
(2)
—

(2)
—

—
—
(4)

$

(In millions)
(15)
(1)

$

(1)

$

(3)
—
(1)

1
—
—

$

(3)
—

—
—
—

(4)
—

—
—
1

$

(4)
—

$ — $
—

—
—
—

—
—
—

(2)
—

—
—
—

$ — $

2

$ — $

(5)

$

(6)

$

(20)

$ — $

(3)

$

(3)

$

(4)

$ — $

(2)

Net (gains) losses
Prior service (credit) cost
Amortization of prior
unrecognized loss
Loss on divestiture
(Loss) gain on settlements
Net changes recognized in

Total other comprehensive
(income) loss (1)

(1)

The tax impact on pension and other postretirement benefit liability adjustments arising during the period was a tax provision
of less than $1 million, a tax benefit of $3 million and a tax benefit of $8 million for fiscal 2023, 2022 and 2021, respectively.

60

U.K. Plans Termination

In fiscal 2023, the Company commenced the plan termination process for the Cabot Carbon Limited Pension Plan and Carbon

Plastics Pension Plan and expects to complete the transaction in fiscal 2024.

Plan Assets

The Company’s foreign defined benefit pension plans weighted-average asset allocations at September 30, 2023 and 2022 by

asset category, are as follows:

Equity securities
Debt securities
Real estate
Cash and other securities (1)

Total

September 30

2023

2022

19%
31%
10%
40%
100%

20%
68%
7%
5%
100%

(1)

The asset allocation is temporarily changed as a result of the insurance contracts Cabot Carbon Limited Pension Plan and
Carbon Plastics Pension Plan purchased with plan assets in anticipation of the settlement discussed above.

To develop the expected long-term rate of return on plan assets assumption, the Company used a capital asset pricing model.

The model considers the current level of expected returns on risk-free investments comprised of government bonds, the historical
level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future
returns for each asset class. The expected return for each asset class was then weighted based on the target asset allocation to
develop the expected long-term rate of return for each plan.

Cabot’s investment strategy for each of its foreign defined benefit plans is generally based on a set of investment objectives

and policies that cover time horizons and risk tolerance levels consistent with plan liabilities. Periodic studies are performed to
determine the asset mix that will meet pension obligations at a reasonable cost to the Company. The assets of the defined benefit
plans are comprised principally of investments in equity and high-quality fixed income securities, which are broadly diversified
across the capitalization and style spectrum and are managed using both active and passive strategies. The weighted average target
asset allocation for the foreign plans is 29% in equity, 46% in fixed income, 18% in real estate and 7% in cash and other securities.

For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is

either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on
which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without
consideration of transaction costs.

For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair

value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the
price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs
are obtained from third-party vendors of market data and subjected to tolerance/quality checks.

61

The fair value of the Company’s pension plan assets at September 30, 2023 and 2022 by asset category is as follows:

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

2023

Significant
Observable
Inputs
(Level 2)

September 30

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

2022

Significant
Observable
Inputs
(Level 2)

Total

Total

$

— $

— $

(In millions)
— $

1 $

— $

Cash
Direct investments:

S government bonds

U.S. corporate bonds
Non-U.S. equities
Non-U.S. government bonds
Non-U.S. corporate bonds
Mortgage-backed securities
Other fixed income

Total direct investments

Investment funds:

uity funds(1)

Fixed income funds(2)
Real estate funds(3)
Cash equivalent funds
Other investment funds

Total investment funds

Alternative investments:
surance contracts(4)

—
—
6
2
3
—
1
12

—
—
—
4
—
4

—
—
—
—
—
1
—
1

21
38
15
—
—
74

—
—
6
2
3
1
1
13

21
38
15
4
—
78

—
—
4
1
2
—
1
8

—
—
—
1
—
1

—
—
—
—
—
1
—
1

23
86
9
—
1
119

—
—
—
16 $

52
1
53
128 $

52
1
53
144 $

—
—
—
10 $

5
—
5
125 $

1

—
—
4
1
2
1
1
9

23
86
9
1
1
120

5
—
5
135

Other alternative investments

Total alternative investments

Total pension plan assets

$

(1)

(2)

(3)

(4)

The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies
incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-,
mid- or large-cap categories.
The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest
in low-risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed
securities. A significant portion of the fixed income funds include investment in long-term bond funds.
The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership,
acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial
and residential. These funds typically seek long-term growth of capital and current income that is above average relative to
public equity funds.
Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies.

Defie neii d Contribuii

tion Plans

In addition to benefits provided under the defined benefit and postretirement benefit plans, the Company provides benefits

under defined contribution plans. Cabot recognized expenses related to these plans of $19 million, $15 million and $18 million in
fiscal 2023, 2022 and 2021, respectively.

Note N. Stock-Based Compensation

The Cabot Corporation Amended and Restated 2017 Long-Term Incentive Plan (the “Amended Plan”) was established by the

Company to provide stock-based compensation to eligible employees. The Amended Plan was approved by Cabot’s stockholders on
March 11, 2021 and authorizes the issuance of up to 8,625,000 shares of common stock. It is the only equity incentive plan under
which the Company may grant equity awards to employees.

62

The terms of awards made under Cabot’s equity compensation plans are generally determined by the Compensation
Committee of Cabot’s Board of Directors. The awards made in fiscal 2023, 2022 and 2021 consist of grants of stock options, time-
based restricted stock units and performance-based restricted stock units. The options were issued with an exercise price equal to
100% of the market price of Cabot’s common stock on the date of grant, generally vest over a three-year period (30% on each of the
first and second anniversaries of the date of grant and 40% on the third anniversary of the date of grant) and have a ten-year term.
The restricted stock units generally vest three years from the date of the grant. The number of shares issuable, if any, when a
performance-based restricted stock unit award vests will depend on the degree of achievement of the corporate performance
metrics for each year within the three-year performance period of the award. Accordingly, future compensation costs associated
with outstanding awards of performance-based restricted stock units may increase or decrease based on the probability of the
Company achieving the performance metrics.

Stock-based employee compensation expense was $18 million, $22 million and $20 million, after tax, for fiscal 2023, 2022 and

2021, respectively.

The following table presents stock-based compensation expenses included in the Company’s Consolidated Statements of

Operations:

Cost of sales
Selling and administrative expenses
Research and technical expenses
Stock-based compensation expense
Income tax benefit

Net stock-based compensation expense

2023

Years Ended September 30
2022
(In millions)

2021

$

$

2 $

16
2
20
(2)
18 $

3 $

18
2
23
(1)
22 $

2
17
2
21
(1)
20

As of September 30, 2023, Cabot had $16 million and $3 million of total unrecognized compensation cost related to restricted

stock units and options, respectively, granted under the Company’s equity incentive plans. These costs are expected to be
recognized over a weighted-average period of approximately one year for restricted stock units and options.

Equity Incentive Plan Activity

The following table summarizes the total stock option and restricted stock unit activity in the equity incentive plans for fiscal

2023:

Stock Options

Restricted Stock Units

Total
Options (1)

Weighted
Average
Exercise
Price

Restricted
Stock
Units(4)

Weighted
Average
Grant Date
Fair Value

(Shares in thousands)

Outstanding at September 30, 2022
Granted
Performance-based adjustment(2)
Exercised / Vested
Cancelled / Forfeited
Outstanding at September 30, 2023(3)
Exercisable at September 30, 2023

1,574
157

$
$
— $
(75) $
(15) $
$
$

1,641
1,172

49.89
73.84

— $

47.77
49.88
52.27
50.02

$
1,012
$
225
20
$
(275) $
(44) $
$
938

48.95
73.68
51.88
50.43
50.20
54.45

(1)

(2)

(3)

(4)

Unvested stock options were approximately 469,000 na d 651,000 at September 30, 2023 and 2022 and their weighted
average grant date fair values were $57.92 and $49.3 ,0 respectively.
Represents the net incremental number of shares issuable upon vesting of performance-based restricted stock units based on
the Company’s actual financial performance metrics for fiscal 2023.
Stock options outstanding include options vested and expected to vest in the future and have a weighted average remaining
contractual life of 6.13 years.
The number granted represents the number of shares issuable upon vesting of time-based restricted stock units and
performance-based restricted stock units, assuming the Company performs at the target performance level in each year of the
three-year performance period.

63

Stock Options

As of September 30, 2023, the aggregate intrinsic value for all options outstanding and options exercisable was $29 million.

The intrinsic value of options exercised during fiscal 2023, 2022 and 2021 was $2 million, $4 million and $2 million, respectively, and
the Company received cash of $4 million, $6 million and $5 million, respectively, from these exercises. The Company recognized
immaterial tax benefits in fiscal 2023, 2022 and 2021 from the exercise of stock options which were included in (Provision) benefit
for income taxes within the Consolidated Statements of Operations.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of the options at the grant date. The
weighted average grant date fair values of options granted during fiscal 2023, 2022 and 2021 was $26.28, $15.95, and $9.69 per
option, respectively. The fair values on the grant date were calculated using the following weighted-average assumptions:

Expected stock price volatility
Risk free interest rate
Expected life of options (years)
Expected annual dividends per year

Years Ended September 30
2022

2023

2021

38%
4.0%
6
1.48

$

35%
1.4%
6
1.40

$

36%
0.6%
6
1.40

$

The expected stock price volatility assumption was determined using the historical volatility of the Company’s common stock

over the expected life of the option. The expected term reflects the anticipated time period between the measurement date and the
exercise date or post-vesting cancellation date.

Restricted Stock Units

The value of restricted stock unit awards is the closing stock price at the date of the grant. The weighted average grant date
fair values of restricted stock unit awards granted during fiscal 2023, 2022 and 2021 was $73.68, $58.72 and $41.92, respectively.
The intrinsic value of restricted stock units (meaning the fair value of the units on the date of vesting) that vested during fiscal 2023,
2022 and 2021 was $20 million, $13 million and $8 million, respectively.

Supplemental 401(k)(( Plan

Cabot’s Deferred Compensation and Supplemental Retirement Plan (“SERP 401(k)”) provides benefits to highly compensated

employees when the retirement plan limits established under the Internal Revenue Code prevent them from receiving all of the
Company matching and retirement contributions that would otherwise be provided under the qualified 401(k) plan. The SERP 401(k)
is non-qualified and unfunded. Contributions under the SERP 401(k) are treated as if invested in Cabot common stock. The majority
of the distributions made under the SERP 401(k) are required to be paid with shares of Cabot common stock. The remaining
distributions, which relate to certain grandfathered accounts, will be paid in cash based on the market price of Cabot common stock
at the time of distribution. The aggregate value of the accounts that will be paid out in stock, which is equivalent to approximately
113,000 and 103,000 shares of Cabot common stock as of September 30, 2023 and 2022, respectively, is reflected at historic cost in
stockholders’ equity, and the aggregate value of the accounts that will be paid in cash, which was immaterial as of September 30,
2023 and 2022, was included in Other liabilities and marked-to-market quarterly.

64

Note O. Accumulated Other Comprehensive Income (Loss)

Changes in each component of AOCI, net of tax, are as follows for fiscal 2023 and 2022:

Balance at September 30, 2021 attributable to

Cabot Corporation

Other comprehensive income (loss) before reclassifications
Amounts reclassified from AOCI
Less: Other comprehensive income (loss) attributable to

noncontrolling interests

Balance at September 30, 2022 attributable to

Cabot Corporation

Other comprehensive income (loss) before reclassifications
Amounts reclassified from AOCI
Less: Other comprehensive income (loss) attributable to

noncontrolling interests

Balance at September 30, 2023 attributable to

Cabot Corporation

Currency
Translation
Adjustment

Pension and Other
Postretirement
Benefit Liability
Adjustment
(In millions)

Total

$

(265) $
(208)
29

(24) $
12
2

(15)

(429)
80
(4)

—

—

(10)
3
(2)

—

(289)
(196)
31

(15)

(439)
83
(6)

—

$

(353) $

(9) $

(362)

The amounts reclassified out of AOCI and into the Consolidated Statements of Operations for fiscal 2023, 2022 and 2021 are as

follows:

Derivatives: net investment hedges
(Gains) losses reclassified to interest

expense

(Gains) losses excluded from effectiveness
testing and amortized to interest expense

Release of current translation adjustment

Pension and other postretirement benefit

liability adjustment
Release of actuarial losses and prior service cost

(credits)

Amortization of actuarial losses and prior service

cost (credit)

Settlement and curtailment loss (gain)
Total before tax

Affected Line Item in the Consolidated
Statements of Operations

2023

Years Ended September 30
2022
(In Millions)

2021

Interest expense

$

(6) $

(6) $

Interest expense
Loss on sale of business and
asset impairment charge

Loss on sale of business and
asset impairment charge

2

—

—

Other income (expense)
Other income (expense)

(2)
—
(6) $

$

2

33

2

1
(1)
31

$

(5)

2

—

—

3
5
5

65

Note P. Earnings Per Share

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

2023

Years Ended September 30
2022
(In millions, except per share amounts)

2021

Basic EPS:

Net income (loss) attributable to Cabot Corporation
Less: Dividends and dividend equivalents to participating

securities

Less: Undistributed earnings allocated to participating

securities(1)

Earnings (loss) allocated to common shareholders
(numerator)

$

445 $

209 $

250

1

7

1

2

1

2

$

437 $

206 $

247

Weighted average common shares and participating

securities outstanding

Less: Participating securities(1)
Adjusted weighted average common shares

(denominator)

Per share amounts—basic:
Net income (loss) attributable to Cabot Corporation

Diluted EPS:

Earnings (loss) allocated to common shareholders
Plus: Earnings allocated to participating securities
Less: Adjusted earnings allocated to participating

securities(2)

$

$

Earnings (loss) available to common shares (numerator)

$

Adjusted weighted average common shares outstanding
Effect of dilutive securities:
Common shares issuable(3)
Adjusted weighted average common shares

(denominator)

57.3
1.2

56.1

57.4
0.9

56.5

57.5
0.8

56.7

7.79 $

3.65 $

4.35

437 $
8

8
437 $

56.1

0.4

56.5

206 $
3

3
206 $

56.5

0.4

56.9

247
3

3
247

56.7

0.1

56.8

Per share amounts—diluted:
Net income (loss) attributable to Cabot Corporation

$

7.73 $

3.62 $

4.34

(1)

Participating securities consist of shares underlying unvested time-based restricted stock units (the "TSUs"), earned and
unvested performance-based restricted stock units (the "PSUs", and referred to in this note collectively with the TSUs as the
"RSUs"), stock units accounted for under the Supplemental 401(k) Plan portion of the Company’s Deferred Compensation and
Supplemental Retirement Plan, and stock units and phantom stock units accounted for under the Company’s Non-Employee
Directors’ Deferral Plan. The holders of RSUs are entitled to receive dividend equivalents, payable in cash, to the extent
dividends are paid on the outstanding shares of Common Stock, and equal in value to the dividends that would have been
paid in respect of the Common Stock underlying the RSU. The accounts of holders of stock units and phantom stock units are
credited with dividend equivalents, which are payable, in stock or cash, as the case may be, with the distribution of account
balances.

66

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:

Calculation of undistributed earnings:

Net income (loss) attributable to Cabot Corporation
Less: Dividends declared on common stock
Less: Dividends and dividend equivalents to participating

securities

Undistributed earnings (loss)

Allocation of undistributed earnings:

Undistributed earnings (loss) allocated to common

shareholders

Undistributed earnings allocated to participating

securities

Undistributed earnings (loss)

$

$

$

$

2023

Years Ended September 30
2022
(In millions)

2021

445 $
87

1
357 $

209 $
84

1
124 $

350 $

122 $

7
357 $

2
124 $

250
80

1
169

167

2
169

(2)

(3)

Undistributed earnings (loss) are adjusted for the assumed conversion of dilutive securities, which are described in (3) below,
to common shares and then reallocated to participating securities.
Represents incremental shares of common stock from the assumed exercise of stock options issued under Cabot’s equity
incentive plans. For fiscal 2023, 2022 and 2021, respectively, 138,966, 214,180 and 525,131 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.

Note Q. Income Taxes

Income from operations before income taxes and equity in net earnings of affiliated companies was as follows:

Domestic
Foreign
Income from operations before income taxes and

equity in earnings of affiliated companies

Tax provision (benefit) for income taxes consisted of the following:

U.S. federal and state:

Current
Deferred
Total

Foreign:

Current
Deferred
Total

Provision (benefit) for income taxes

2023

Years Ended September 30
2022
(In millions)

2021

65 $

386

(20) $
355

451 $

335 $

2023

Years Ended September 30
2022
(In millions)

2021

5 $

(156)
(151)

123
—
123
(28) $

7 $
2
9

135
(42)
93
102 $

(73)
479

406

11
(1)
10

103
10
113
123

$

$

$

$

67

The provision (benefit) for income taxes differed from the provision for income taxes as calculated using the U.S. statutory

rate as follows:

2023

Years Ended September 30
2022
(In millions)

2021

$

95 $

70 $

Computed tax expense at the federal statutory rate
Foreign impact of taxation at different rates, repatriation,

valuation allowance, and other

Global Intangible Low Taxed Income (GILTI)
Purification Solutions business divestiture
Impact of the Coronavirus Aid, Relief, and Economic

Security ("CARES") Act of 2020

Impact of increase (decrease) in valuation allowance on

U.S. deferred taxes

U.S. and state benefits from research and experimentation

activities

Provision (settlement) of unrecognized tax benefits
Permanent differences, net
State taxes, net of federal effect

Provision (benefit) for income taxes

$

Significant components of deferred income taxes were as follows:

Deferred tax assets:

Deferred expenses
Intangible assets
Inventory
Operating lease liability
Other
U.S. federal interest expense carryforward
Pension and other benefits
Net operating loss carryforwards
Capital loss carryforwards
Foreign tax credit carryforwards
R&D credit carryforwards
Other business credit carryforwards

Subtotal

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Property, plant and equipment
Right of use asset
Unremitted earnings of non-U.S. subsidiaries

Total deferred tax liabilities

85

8
18
—

10

(1)

(2)
1
7
(3)
123

30
15
—

—

(156)

(2)
2
(4)
(8)
(28) $

38
23
(179)

—

160

(2)
1
10
(19)
102 $

September 30

2023

2022

(In millions)

$

$

$

$

50 $
42
14
22
6
42
24
244
132
68
49
19
712
(498)
214 $

September 30

2023

2022

(In millions)

(47) $
(22)
(15)
(84) $

10
39
15
21
32
33
29
224
137
55
47
20
662
(580)
82

(59)
(21)
(22)
(102)

The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will
be generated to permit utilization of the existing deferred tax assets. When performing this assessment, the Company looks to the
potential future reversal of existing taxable temporary differences, taxable income in carryback years and the feasibility of tax
planning strategies and estimated future taxable income. Failure to achieve operating income targets resulting in a cumulative loss
may change the Company’s assessment regarding the realization of Cabot’s deferred tax assets, resulting in valuation allowance
being recorded against some or all of the Company’s deferred tax assets. The need for a valuation allowance can also be affected by

68

changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. A valuation allowance
represents management’s best estimate of the non-realizable portion of the deferred tax assets. Any adjustments in a valuation
allowance would result in an adjustment to income tax expense.

Since 2020, the Company has maintained a valuation allowance against its net U.S. deferred tax assets. On a quarterly basis,

the Company evaluates all positive and negative evidence to determine if a valuation allowance is required. In analyzing all available
evidence as of September 30, 2023, the Company determined that there is sufficient positive evidence outweighing the negative
evidence to conclude that it is more likely than not that a portion of the U.S. deferred tax assets are realizable. As a result, the
Company reversed a portion of the valuation allowance that was recorded against U.S. net deferred tax assets. This reversal resulted
in a non-cash income tax benefit of $152 million. The Company continues to maintain a valuation allowance in the U.S. against
capital losses, interest expense limitation carryforwards, certain foreign tax credits, certain R&D tax credits, and certain state
deferred tax assets that the Company does not expect to realize.

The valuation allowance decreased by $82 million from $580 million in fiscal 2022 compared to $498 million in fiscal 2023,

primarily due to the reversal of a portion of the valuation allowance on the ending U.S. net deferred tax assets, which was partially
offset by an increase in valuation allowance on current year activity of U.S. deferred tax assets and an increase in valuation
allowance on foreign deferred tax assets on some of the Company's net operating losses. The valuation allowance increased by $110
million from $470 million in fiscal 2021 compared to $580 million in fiscal 2022, primarily due to the tax loss related to the
divestiture of the Purification Solutions business.

After the valuation allowance, approximately $24 million of foreign NOLs and less than $1 million of other tax credit

carryforwards remained at September 30, 2023. The benefits of these carryforwards are dependent upon taxable income during the
carryforward period in the jurisdictions in which they arose.

The following table provides detail surrounding the expiration dates of NOLs, capital loss and other tax credit carryforwards

before valuation allowances:

Years Ending September 30

2024 - 2030
2031 and thereafter
Indefinite carryforwards

Total

NOLs/Capital
Losses

Credits

$

$

(In millions)

1,051 $
268
793
2,112 $

31
103
2
136

As of September 30, 2023, provisions have not been made for non-U.S. withholding taxes or other applicable taxes on $1,359

million of undistributed earnings of non-U.S. subsidiaries, as these earnings are considered indefinitely reinvested. It is not
practicable to calculate the unrecognized deferred tax liability on undistributed earnings. Cabot continually reviews the financial
position and forecasted cash flows of its U.S. consolidated group and foreign subsidiaries in order to reaffirm the Company’s intent
and ability to continue to indefinitely reinvest earnings of its foreign subsidiaries or whether such earnings will need to be
repatriated in the foreseeable future. Such review encompasses operational needs and future capital investments. From time to
time, however, the Company’s intentions relative to specific indefinitely reinvested amounts change because of certain unique
circumstances. These earnings could become subject to non-U.S. withholding taxes and other applicable taxes if they were remitted
to the U.S.

Cabot has filed its tax returns in accordance with the tax laws in each jurisdiction and recognizes tax benefits for uncertain tax

positions when the position would more likely than not be sustained based on its technical merits and recognizes measurement
adjustments when needed. As of September 30, 2023, the total amount of unrecognized tax benefits was $20 million, of which $6
million was recorded in Other liabilities in the Consolidated Balance Sheet and, $14 million was offset against deferred tax assets. In
2022, we reported an uncertain tax position of $137 million related to the initially anticipated filing position on the character of a
portion of the tax loss from Purification Solutions business divestiture. Upon completion of the U.S. Consolidated tax return in 2023,
the Company has reversed the $137 million unrecognized tax benefit which reflects the final position ultimately taken on the filed
tax return. In addition, accruals of $5 million have been recorded for penalties and interest, as of September 30, 2023. Total
penalties and interest recorded in the tax provision in the Consolidated Statements of Operations was $2 million in fiscal 2023, $2
million in fiscal 2022 and $1 million in fiscal 2021. If the unrecognized tax benefits were recognized as of September 30, 2023, there
would be $20 million favorable impact on the Company’s tax provision before consideration of the impact of the potential need for
valuation allowances.

69

A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal 2023, 2022 and 2021 is as follows:

2023

Years Ended September 30
2022
(In millions)

2021

$

159 $

21 $

Balance at beginning of the year

Additions based on tax positions related to the current

year

Additions for tax positions of prior years
Reductions of tax positions of prior years
Reductions related to settlements
Reductions from lapse of statute of limitations

Balance at end of the year

$

1
—
(137)
(2)
(1)
20 $

138
2
(1)
—
(1)
159 $

23

1
—
(2)
—
(1)
21

Cabot and certain subsidiaries are under audit in a number of jurisdictions. In addition, certain statutes of limitations are

scheduled to expire in the near future. It is reasonably possible that a further change in the unrecognized tax benefits may occur
within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of
limitations; however, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time.

Cabot is subject to taxation in the United States and various states and foreign jurisdictions. The 2020 through 2022 tax years
generally remain subject to examination by the IRS and various tax years from 2010 through 2022 remain subject to examination by
the respective state tax authorities. In foreign jurisdictions, various tax years from 2006 through 2022 remain subject to examination
by their respective tax authorities.

Note R. Leases

The Company determines if an arrangement is a lease at inception. The Company considers a contract to be or to contain a

lease if the contract conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period
of time in exchange for consideration.

A lease liability is recorded at commencement for the net present value of future lease payments over the lease term. The
discount rate used is generally the Company’s estimated incremental borrowing rate based on credit-adjusted and term-specific
discount rates, using a third-party yield curve. A right of use (“ROU”) asset is recorded and recognized at commencement at the
lease liability amount, adjusted for lease prepayments, initial direct costs incurred and lease incentives received. The Company’s
lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that
option.

In the normal course off its business, the Company enters into various leases as the lessee, primarily related to certain

transportation vehicles, warehouse facilities, office space, and machinery and equipment. These leases have remaining lease terms
between one and sixteen years, some off which may include options to extend the leases for up to fifteen years or options to
terminate the leases. The Company’s land leases have remaining lease terms up to seventy-nine years.

The Company has elected not to recognize short-term leases on the balance sheet for all underlying asset classes. Short-term

leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option
that the Company is reasonably certain to exercise. Short-term leases are expensed on a straight-line basis over the lease term.

The components of the Company’s lease costs were as follows:

Operating lease cost
Finance lease cost
Total lease cost

2023

Years Ended September 30

2022

(In millions)

2021

$

$

26
6
32

$

$

23
6
29

$

$

25
7
32

Included within operating lease costs are short-term lease costs, which were $7 million in fiscal 2023 and $5 million in both
fiscal 2022 and 2021. Some lease arrangements require variable payments that are dependent on usage, output, or index-based
adjustments. Variable lease costs were $2 million in fiscal 2023 and $1 million in both 2022 and 2021.

70

Supplemental cash flow information related to the Company’s leases was as follows:

2023

Years Ended September 30
2022
(In millions)

2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

Right-of-use assets obtained in exchange for new operating lease
liabilities
Right-of-use assets obtained in exchange for new finance lease liabilities

$

$
$

18
2
3

11
4

$

$
$

17
2
4

14
1

$

$
$

Supplemental balance sheet information related to the Company’s leases was as follows:

Description

Balance Sheet Classification

September 30, 2023

September 30, 2022

Lease ROU assets:

Operating
Finance

Total lease ROU assets

Lease liabilities:
Current:

Operating
Finance
Long-term:

Operating
Finance

Total lease liabilities

Other assets
Net property, plant and equipment

Accounts payable and accrued liabilities
Current portion of long-term debt

Other liabilities
Long-term debt

$

$

$

$

(In millions)

101
39
140

15
4

84
24
127

$

$

$

$

20
2
3

6
4

96
41
137

14
3

83
26
126

The following table presents the weighted-average remaining lease term and discount rates for the Company’s leases:

Description

September 30, 2023

September 30, 2022

Weighted-average remaining lease term (years):

Operating leases
Finance leases

Weighted-average discount rate:

Operating leases
Finance leases

15
9

3.28%
5.38%

Future minimum lease payments under non-cancelable operating and finance leases as of September 30, 2023 were as

follows:

2024
2025
2026
2027
2028
2029 and thereafter
Total lease payments
Less: imputed interest
Total

Years Ended September 30

Operating leases

Finance leases

$

(In millions)
18
16
13
12
10
51
120
21
99

$

$

$

71

15
10

2.97%
5.40%

5
4
4
3
3
15
34
6
28

Note S. Commitments and Contingencies

Other Long-TerTT mrr Commitments

Cabot has entered into long-term purchase agreements primarily for the purchase of raw materials. Under certain of these
agreements, the quantity of material being purchased is fixed, but the price paid changes as market prices change. Raw materials
purchased under these agreements were $370 million, $512 million and $405 million during fiscal 2023, 2022 and 2021, respectively.
Included in those raw materials purchased are purchases from noncontrolling shareholders of consolidated subsidiaries of $192
million, $235 million and $135 million during fiscal 2023, 2022 and 2021, respectively. Accounts payable and accrued liabilities owed
to noncontrolling shareholders as of September 30, 2023 and 2022, were $11 million and $31 million, respectively.

For these purchase commitments, the amounts included in the table below are based on market prices as of September 30,

2023 which may differ from actual market prices at the time of purchase.

Reinforcement Materials
Performance Chemicals
Total

2024

2025

$

$

208
41
249

$

$

185
38
223

$

$

2026

Payments Due by Fiscal Year
2027
(In millions)
161
$
36
197

181
36
217

$

$

$

2028

Thereafter

Total

101
21
122

$

$

1,266
211
1,477

$
$
$

2,102
383
2,485

The Company has also entered into long-term purchase agreements primarily for services related to information technology,
which are not included in the table above, that total $19 million as of September 30, 2023, the majority of which is expected to be
paid within the next 5 years.

Guarantee Agreements

Cabot has provided certain indemnities pursuant to which it may be required to make payments to an indemnified party in

connection with certain transactions and agreements. In connection with certain acquisitions and divestitures, Cabot has provided
routine indemnities with respect to such matters as environmental, tax, insurance, product and employee liabilities. In connection
with various other agreements, including service and supply agreements with customers, Cabot has provided indemnities for certain
contingencies and routine warranties. Cabot is unable to estimate the maximum potential liability for these types of indemnities as a
maximum obligation is not explicitly stated in most cases and the amounts, if any, are dependent upon the outcome of future
contingent events, the nature and likelihood of which cannot be reasonably estimated. The duration of the indemnities vary, and in
many cases are indefinite. Cabot has not recorded any liability for these indemnities in the consolidated financial statements, except
as otherwise disclosed.

Self-Iff nsurance and Retention for Certainii Contingencies

The Company is partially self-insured for certain third-party liabilities globally, as well as workers’ compensation and employee

medical benefits in the United States. The third-party and workers’ compensation liabilities are managed through a wholly-owned
insurance captive and the related liabilities are included in the consolidated financial statements. The employee medical obligations
are managed by a third-party provider and the related liabilities are included in the consolidated financial statements. To limit
Cabot’s potential liabilities for these risks, however, the Company purchases insurance from third parties that provides stop-loss
protection. The self-insured liability in fiscal 2023 for third-party liabilities was $500,000 per accident for auto, $2 million per
occurrence for all other, $1 million per accident for U.S. workers’ compensation, and the retention for medical costs in the United
States is at most $275,000 per person per annum.

Contingencies

Cabot is a defendant, or potentially responsible party, in various lawsuits and environmental proceedings wherein substantial

amounts are claimed or at issue.

Environmental Matters

As of September 30, 2023 and 2022, Cabot had $5 million and $4 million, respectively, reserved for environmental matters,

which is included in Accounts payable and accrued liabilities and Other liabilities in the Consolidated Balance sheets. These
environmental matters mainly relate to former operations. The Company’s reserves for environmental matters represent Cabot’s
best estimates of the probable costs to be incurred at those sites where costs are reasonably estimable based on the Company’s
analysis of the extent of clean up required, alternative clean-up methods available, abilities of other responsible parties to
contribute and its interpretation of laws and regulations applicable to each site. Cabot reviews the adequacy of the reserves as
circumstances change at individual sites and adjusts the reserves as appropriate. Almost all of Cabot’s environmental issues relate to
sites that are mature and have been investigated and studied and, in many cases, are subject to agreed upon remediation plans.
However, depending on the results of future testing, changes in risk assessment practices, remediation techniques and regulatory
requirements, newly discovered conditions, and other factors, it is reasonably possible that the Company could incur additional

72

costs in excess of environmental reserves currently recorded. Management estimates, based on the latest available information,
that any such future environmental remediation costs that are reasonably possible to be in excess of amounts already recorded
would be immaterial to the Company’s consolidated financial statements.

Charges for environmental expense were $1 million in both fiscal 2023 and fiscal 2022, and less than $1 million in fiscal 2021

and are included in Cost of sales in the Consolidated Statements of Operations. Cash payments related to these environmental
matters were $1 million in fiscal 2023 and $2 million in both fiscal 2022 and fiscal 2021. The Company anticipates that expenditures
related to these environmental matters will be made over a number of years.

The operation and maintenance component of the reserve for environmental matters was $3 million at both September 30,

2023 and 2022.

In November 2013, Cabot entered into a Consent Decree with the EPA and the Louisiana Department of Environmental Quality

(“LDEQ”) regarding Cabot’s three carbon black manufacturing facilities in the U.S. This settlement is related to EPA’s national
enforcement initiative focused on the U.S. carbon black manufacturing sector alleging non-compliance with certain regulatory and
permitting requirements under The Clean Air Act, including the New Source Review (“NSR”) construction permitting requirements.
Pursuant to this settlement, Cabot has installed technology controls for the reduction of sulfur dioxide and nitrogen oxide emissions
at two of its plants and is in the process of installing these controls at the third plant. Cabot is currently in discussions with the EPA
and LDEQ to extend its compliance date at the third plant to 2024 based upon force majeure events primarily related to the COVID-
19 pandemic.

Respirator Liabilities

Cabot has exposure in connection with a safety respiratory products business that a subsidiary acquired from American Optical

Corporation (“AO”) in an April 1990 asset purchase transaction. The subsidiary manufactured respirators under the AO brand and
disposed of that business in July 1995. In connection with its acquisition of the business, the subsidiary agreed, in certain
circumstances, to assume a portion of AO’s liabilities, including costs of legal fees together with amounts paid in settlements and
judgments, allocable to AO respiratory products used prior to the 1990 purchase by the Cabot subsidiary. In exchange for the
subsidiary’s assumption of certain of AO’s respirator liabilities, AO agreed to provide to the subsidiary the benefits of: (i) AO’s
insurance coverage for the period prior to the 1990 acquisition and (ii) a former owner’s indemnity of AO holding it harmless from
any liability allocable to AO respiratory products used prior to May 1982.

Generally, these respirator liabilities involve claims for personal injury, including asbestosis, silicosis and coal worker’s
pneumoconiosis (“CWP”), allegedly resulting from the use of respirators that are alleged to have been negligently designed and/or
labeled. At no time did this respiratory product line represent a significant portion of the respirator market.

The subsidiary transferred the business to Aearo Technologies (“Aearo”) in July 1995. Cabot agreed to have the subsidiary

retain certain liabilities associated with exposure to asbestos and silica while using respirators prior to the 1995 transaction so long
as Aearo paid, and continues to pay, Cabot an annual fee of $400,000. Aearo can discontinue payment of the fee at any time, in
which case it will assume the responsibility for and indemnify Cabot against those liabilities which Cabot’s subsidiary had agreed to
retain. The Company anticipates that it will continue to receive payment of the $400,000 fee from Aearo and thereby retain these
liabilities for the foreseeable future. Cabot has no liability in connection with any products manufactured by Aearo after 1995.
Because of the difficulty in determining when a particular respirator was manufactured, Aearo and Cabot have applied the retention
of liabilities under the 1995 agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or
silica products prior to January 1, 1997. On July 26, 2022, Aearo voluntarily filed for Chapter 11 bankruptcy protection with the
stated goal of establishing a trust, funded by Aearo and its parent 3M, to satisfy respirator and other unrelated claims related to
earplug products determined to be entitled to compensation. On June 9, 2023, the court dismissed Aearo’s bankruptcy case based
on motions filed by various creditors in the case. Aearo appealed the decision but did not seek to stay the dismissal, which made the
dismissal effective immediately and ended the automatic bankruptcy stay. In August 2023, Aearo entered into a settlement
agreement to resolve the unrelated earplug product claims. As a result of this settlement, Aearo’s appeals in the bankruptcy
proceedings have been stayed.

In addition to Cabot’s subsidiary and as described above, other parties are responsible for significant portions of the costs of

respirator liabilities, leaving Cabot’s subsidiary with a portion of the liability in only some of the pending cases. These parties include
Aearo, AO, AO’s insurers, another former owner and its insurers and a third-party manufacturer of respirators formerly sold under
the AO brand and its insurers (collectively, with the Company’s subsidiary, the “Payor Group”).

Cabot has contributed to the Payor Group’s defense and settlement costs with respect to a percentage of pending claims
depending on several factors, including the period of alleged product use. In order to quantify Cabot’s estimated share of liability for
pending and future respirator liability claims, Cabot has periodically engaged, through counsel, the assistance of Gnarus Advisors,
LLC (“Gnarus”), a consulting firm in the field of tort liability valuation.

73

The methodology used to estimate the liability addresses the complexities surrounding Cabot’s potential liability by making
assumptions about Cabot’s likely exposure based on various factors, including the Payor Group’s historical experience with these
claims, the number of future claims and the cost to resolve pending and future claims. Using those and other assumptions, the
Company estimates the costs that would be incurred in defending and resolving both currently pending and future claims.

As of September 30, 2023 and 2022, the Company had $38 million and $39 million, respectively, reserved for its estimated

share of liability for pending and future respirator claims, the majority of which the Company expects to incur over the next ten
years. The reserve is included in Other liabilities and Accounts payable and accrued liabilities on the Consolidated Balance Sheets. In
fiscal 2023, 2022 and 2021, the Company recorded a charge of $8 million, $6 million and $25 million, respectively, related to the
respirator liability which was included in Selling and administrative expense in the Consolidated Statements of Operations.

The Company made payments related to its respirator liability of $9 million in fiscal 2023, $11 million in fiscal 2022 and $37

million in fiscal 2021. The majority of the payments in fiscal 2021 related to a February 2020 settlement agreement in which Cabot,
with certain members of the Payor Group, resolved a large group of claims, including claims alleging serious injury, brought by coal
workers in Kentucky and West Virginia represented by common legal counsel.

The Company’s current estimate of the cost of its share of pending and future respirator liability claims is based on facts and
circumstances existing at this time, including the number and nature of the remaining claims. Developments that could affect the
Company’s estimate include, but are not limited to, (i) significant changes in the number of future claims, (ii) changes in the rate of
dismissals without payment of pending claims, (iii) significant changes in the average cost of resolving claims, including potential
settlements of groups of claims, (iv) significant changes in the legal costs of defending these claims, (v) changes in the nature of
claims received or changes in our assessment of the viability of these claims, (vi) trial and appellate outcomes, (vii) changes in the
law and procedure applicable to these claims, (viii) the financial viability of the parties that contribute to the payment of respirator
claims , (ix) exhaustion or changes in the recoverability of the insurance coverage maintained by certain members of the Payor
Group, or a change in the availability of the indemnity provided by a former owner of AO, (x) changes in the allocation of costs
among the various parties paying legal and settlement costs, and (xi) a determination that the assumptions that were used to
estimate Cabot’s share of liability are no longer reasonable. The Company cannot determine the impact of these potential
developments on its current estimate of its share of liability for existing and future claims. Because reserves are limited to amounts
that are probable and estimable as of a relevant measurement date, and there is inherent difficulty in projecting the impact of
potential developments on Cabot’s share of liability for these existing and future claims, it is reasonably possible that the liabilities
for existing and future claims could change in the near term and that change could be material.

Brazil Indirect Tax Settlements

The Company previously filed claims with the Brazilian tax authorities challenging the calculation of certain indirect taxes

related to local social contributions for the years 2012 through 2019. During the third quarter of fiscal 2021, the Brazilian Federal
Supreme Court rendered a final unappealable decision that clarified the methodology companies should use in the calculation. As a
result of this decision, the Company is entitled to recover credits and associated interest related to the historical periods for
overpayment of these indirect taxes to be used to offset future Brazilian tax liabilities. As such, the Company recorded a $12 million
benefit during fiscal 2021 of which $9 million, related to the credit recovery was included in Net sales and other operating revenues
and $3 million, related to interest income was included in Other income (expense) in the Consolidated Statement of Operations.

Other Matters

The Company has various other lawsuits, claims and contingent liabilities arising in the ordinary course of its business and with
respect to its divested businesses. The Company does not believe that any of these matters will have a material adverse effect on its
financial position; however, litigation is inherently unpredictable. Cabot could incur judgments, enter into settlements or revise its
expectations regarding the outcome of certain matters, and such developments could have a material impact on its results of
operations in the period in which the amounts are accrued or its cash flows in the period in which the amounts are paid.

74

Note T. Financial Information by Segment & Geographic Area

Segment Infon rmation

The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn
revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who
is Cabot’s President and Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its
performance; and iii) it has available discrete financial information. The Company has determined that all of its businesses are
operating segments. The CODM reviews financial information at the operating segment level to allocate resources and to assess the
operating results and financial performance for each operating segment. Operating segments are aggregated into a reportable
segment if the operating segments are determined to have similar economic characteristics and if the operating segments are
similar in the following areas: i) nature of products and services; ii) nature of production processes; iii) type or class of customer for
their products and services; iv) methods used to distribute the products or provide services; and v) if applicable, the nature of the
regulatory environment.

The Company has two reportable segments: Reinforcement Materials and Performance Chemicals. The Company’s former

Purification Solutions business was a separate reportable segment prior to divestiture in the second quarter of fiscal 2022.

Income (loss) from operations before income taxes (“Segment EBIT”) is presented for each reportable segment in the financial

information by the reportable segment table below on the line entitled Income (loss) from operations before taxes. Segment EBIT
excludes certain items, meaning items management does not consider representative of on-going operating segment results. In
addition, Segment EBIT includes Equity in earnings of affiliated companies, net of tax, royalties, Net income (loss) attributable to
noncontrolling interests, net of tax, and discounting charges for certain Notes receivable, but excludes Interest expense, foreign
currency transaction gains and losses, interest income, dividend income, unearned revenue, general unallocated expense and
unallocated corporate costs. Segment assets exclude cash, short-term investments, cost investments, income taxes receivable,
deferred taxes and headquarters’ assets, which are included in unallocated and other. Expenditures for additions to long-lived assets
include total equity and other investments (including available-for-sale securities) and property, plant and equipment.

Reinfon rcement Materials

Carbon black is a form of elemental carbon that is manufactured in a highly controlled process to produce particles and
aggregates of varied size, structure and surface chemistry, resulting in many different performance characteristics for a wide variety
of applications. Reinforcing carbons (a class of carbon blacks manufactured by Cabot) are used to enhance the physical properties of
the systems and applications in which they are incorporated.

The Company’s reinforcing carbons products are used in tires and industrial products. Reinforcing carbons have traditionally
been used in the tire industry as a rubber reinforcing agent to increase tread durability and are also used as a performance additive
to reduce rolling resistance and improve traction. In industrial products such as hoses, belts, extruded profiles and molded goods,
reinforcing carbons are used to improve the physical performance of the product, including the product’s physical strength, fluid
resistance, conductivity and resistivity.

In addition to its reinforcing carbons products, the Company manufactures engineered elastomer composites (“E2C®”)
solutions that are composites of reinforcing carbons and rubber made using the Company’s patented elastomer composites
manufacturing process. These composites improve abrasion/wear resistance, reduce fatigue of rubber parts and reduce rolling
resistance compared to reinforcing carbons/rubber compounds made entirely by conventional rubber mix methods enabling rubber
product manufacturers to reduce the need to make performance trade-offs.

Perforff mance Chemicals

The Performance Chemicals segment aggregates the specialty carbons, specialty compounds, fumed metal oxides, battery

materials, inkjet colorants and aerogel product lines. In Performance Chemicals, the Company designs, manufactures and sells
materials that deliver performance in a broad range of customer applications across the automotive, construction, infrastructure,
inkjet printing, electronics and consumer products sectors, and applications related to generation, transmission and storage of
energy. The Company’s focus areas for growth include conductive additives and other materials for battery applications, and inkjet
dispersions for post print corrugated packaging applications.

The Company’s specialty carbons are used to impart color, provide rheology control, enhance conductivity and static charge

control, provide UV protection, enhance mechanical properties and provide formulation flexibility through surface treatment. These
specialty carbon products are used in a wide variety of applications, such as inks, coatings, cables, plastics, adhesives, toners,
batteries and displays.

75

Cabot’s masterbatch and conductive compound products, which Cabot refers to as “specialty compounds”, are formulations

derived from specialty carbons mixed with polymers and other additives. These products are generally used by plastic resin
producers and converters in applications for the automotive, industrial, packaging, infrastructure, agricultural, consumer products,
and electronics industries. As an alternative to directly mixing specialty carbon blacks, these formulations offer greater ease of
handling and help customers achieve their desired levels of dispersion and color and manage the addition of small doses of
additives. In addition, Cabot’s electrically conductive compound products generally are used to help ensure uniform conductive
performance and reduce risks associated with electrostatic discharge in plastics applications.

The Company’s battery materials products include its conductive additives and fumed alumina, which are used principally in

advanced lead acid and lithium-ion batteries used in electric vehicles. The Company’s conductive additives consist of conductive
carbons, carbon nanotubes and carbon nano structures, and blends of these materials, each of which offers different levels of
conductivity and formulation flexibility for battery manufacturers to address performance (energy density, fast charging), cost and
safety. In lithium-ion batteries, the Company’s conductive additives are used in both cathode and anode applications to increase
energy density by providing a conductive network between active materials. Fumed alumina is used to reduce cathode material and
electrolyte decomposition and improve capacity retention leading to longer cycle life.

Fumed silica is an ultra-fine, high-purity particle used as a reinforcing, thickening, abrasive, thixotropic, suspending or anti-
caking agent in a wide variety of products for the automotive, construction, microelectronics, batteries, and consumer products
industries. These products include adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing
slurries and pharmaceuticals. In addition to its battery application, fumed alumina, also an ultra-fine, high-purity particle, is used as
an abrasive, absorbent or barrier agent in a variety of products, such as inkjet media, lighting, coatings, cosmetics and polishing
slurries.

Aerogel is a hydrophobic, silica-based particle with a high surface area that is used in a variety of thermal insulation and

specialty chemical applications. In the building and construction industry, the product is used in insulative sprayable plasters and
composite building products, as well as translucent skylight, window, wall and roof systems for insulating eco-daylighting
applications. In the specialty chemicals industry, the product is used to provide matte finishing, insulating and thickening properties
for use in a variety of applications, including thermal management for lithium-ion batteries.

The Company’s inkjet colorants are high-quality pigment-based black and color dispersions and inks. The Company’s

dispersions are based on patented pigment surface modification technology and polymer encapsulation technology. The dispersions
are used in aqueous inkjet inks to impart color, sharp print characteristics and durability, while maintaining high printhead reliability.
These products are used in various inkjet printing applications, including traditional work-from-home and corporate office settings,
and, increasingly, in commercial and corrugated packaging printing, that all require a high level of dispersibility and colloidal stability.
Our inkjet inks, which utilize our pigment-based colorant dispersions, are used in the commercial printing segment for graphic arts.

Purifii cation Solutions

Cabot divested its Purification Solutions business on March 1, 2022. Refer to Note D for the terms of this transaction.

76

Financial information by reportable segment is as follows:

Years Ended September 30

2023
Revenues from external customers(4)
Depreciation and amortization
Equity in earnings of affiliated companies
Income (loss) from operations

before income taxes(5)

Assets(6)
Total expenditures for additions to long-lived

assets(7)

2022
Revenues from external customers(3)(4)
Depreciation and amortization
Equity in earnings of affiliated companies
Income (loss) from operations

before income taxes(5)

Assets(6)
Total expenditures for additions to long-lived

assets(7)

2021
Revenues from external customers(3)(4)
Depreciation and amortization
Equity in earnings of affiliated companies
Income (loss) from operations

before income taxes(5)

Assets(6)
Total expenditures for additions to long-lived

assets(7)

Reinforcement
Materials

Performance
Chemicals

Purification
Solutions(1)

Segment
Total

(In millions)

Unallocated
and
Other(2)

Consolidated
Total

$
$
$

$
$

$

$
$
$

$
$

$

$
$
$

$
$

$

2,563 $
70 $
2 $

1,225 $
72 $
3 $

— $
— $
— $

3,788 $
142 $
5 $

143 $
2 $
— $

482 $
1,632 $

125 $
1,473 $

— $
— $

607 $
3,105 $

(156) $
499 $

3,931
144
5

451
3,604

149 $

108 $

— $

257 $

8 $

265

2,673 $
70 $
4 $

1,388 $
72 $
5 $

97 $
3 $
1 $

4,158 $
145 $
10 $

163 $
1 $
— $

408 $
1,691 $

234 $
1,458 $

— $
— $

642 $
3,149 $

(307) $
376 $

4,321
146
10

335
3,525

114 $

100 $

3 $

217 $

4 $

221

1,838 $
70 $
— $

1,156 $
73 $
2 $

257 $
16 $
2 $

3,251 $
159 $
4 $

158 $
1 $
(1) $

329 $
1,421 $

211 $
1,325 $

10 $
283 $

550 $
3,029 $

(144) $
277 $

3,409
160
3

406
3,306

104 $

80 $

9 $

193 $

5 $

198

(1)

(2)

(3)

(4)

Cabot divested its Purification Solutions business on March 1, 2022. Refer to Note D for the terms of this transaction.
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.
Beginning in fiscal 2023, the Company began allocating energy center revenue to the applicable segment’s revenue. The
Company recast prior period financial information to conform to the new presentation. The allocation of such revenue
resulted in an increase of $98 million and $57 million in the Reinforcement Materials segment and $16 million and $8 million
in the Performance Chemicals segment, with an offsetting decrease in Unallocated and Other revenue for fiscal 2022 and
fiscal 2021, respectively. There was no impact to Consolidated Total Revenue from external customers.

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 are
summarized as follows:

Shipping and handling fees
By-product sales
Other

Total

2023

Years Ended September 30
2022
(In millions)

2021

$

$

132 $
5
6
143 $

162 $
8
(7)
163 $

153
8
(3)
158

77

(5)

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

Interest expense
Certain items:(a)
Gain on sale of land
Legal and environmental matters and reserves (Note S)
Argentina controlled currency devaluation loss
Acquisition and integration-related charges
Global restructuring activities
Loss on sale of business and asset impairment charge
Other certain items
Gain on bargain purchase of a business (Note C)
Specialty Fluids divestiture related benefit
Employee benefit plan settlement and other charges
Purification Solutions divestiture related charges
Indirect tax settlement credits
Total certain items, pre-tax
Unallocated corporate costs(b)
General unallocated income (expense)(c)
Less: Equity in earnings of affiliated companies, net of tax(d)

2023

Years Ended September 30
2022
(In millions)

2021

$

(90) $

(56) $

1
(10)
(7)
(4)
(4)
(3)
(2)
—
—
—
—
—
(29)
(54)
22
5
(156) $

17
(9)
—
(6)
(3)
(207)
—
24
5
1
(5)
—
(183)
(59)
1
10
(307) $

(49)

—
(25)
—
(5)
(11)
—
(1)
—
—
(4)
—
12
(34)
(58)
—
3
(144)

Total

$

(a)

(b)

(c)

(d)

Certain items are items that management does not consider representative of operating segment results and they are,
therefore, excluded from Segment EBIT.

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

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, and unrealized holding gains (losses) for investments.

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

Unallocated and Other assets include cash, marketable securities, cost investments, income taxes receivable, deferred taxes,
headquarters’ assets and current and non-current assets held for sale.

Expenditures for additions to long-lived assets include total equity and other investments (including available-for-sale
securities) and property, plant and equipment.

(6)

(7)

Geographa ic Infon rmation

Revenues from external customers attributable to an individual country, other than the U.S. and China, were not material for

disclosure. Revenues from external customers by individual country are summarized as follows:

United States
China
Other countries
Total

2023

Years Ended September 30
2022
(In millions)

2021

$

$

738 $
972
2,221
3,931 $

842 $

1,129
2,350
4,321 $

668
858
1,883
3,409

78

Each of the Company’s segments operates globally. In addition to presenting Revenue from external customers by reportable

segment, the following tables further disaggregate Revenue from external customers by geographic region.

Americas
Asia Pacific
Europe, Middle East and Africa
Segment revenues from external customers
Unallocated and other
Net sales and other operating revenues

Americas
Asia Pacific
Europe, Middle East and Africa
Segment revenues from external customers
Unallocated and other
Net sales and other operating revenues

Reinforcement
Materials

Year Ended September 30, 2023
Purification
Performance
Solutions
Chemicals

Consolidated
Total

$

$

$

1,046
995
522
2,563

Reinforcement
Materials(1)

$

1,072
1,049
552
2,673

$

(In millions)
379
491
355
1,225

— $
—
—
—

Year Ended September 30, 2022
Purification
Performance
Chemicals(1)
Solutions

$

(In millions)
419
567
402
1,388

43
14
40
97

$

$

$

1,425
1,486
877
3,788
143
3,931

Consolidated
Total

1,534
1,630
994
4,158
163
4,321

(1)

Beginning in fiscal 2023, the Company began allocating energy center revenue to the applicable segment’s revenue. The
Company recast prior period financial information to conform to the new presentation.

Americas
Asia Pacific
Europe, Middle East and Africa
Segment revenues from external customers
Unallocated and other
Net sales and other operating revenues

Reinforcement
Materials(1)

Year Ended September 30, 2021
Purification
Performance
Chemicals(1)
Solutions

Consolidated
Total

$

$

708
777
353
1,838

$

(In millions)
311
489
356
1,156

110
34
113
257

$
$

$

1,129
1,300
822
3,251
158
3,409

(1)

Beginning in fiscal 2023, the Company began allocating energy center revenue to the applicable segment’s revenue. The
Company recast prior period financial information to conform to the new presentation.

Property, plant and equipment attributable to an individual country, other than the U.S. and China, were not material for

disclosure. Property, plant and equipment information by individual country is summarized as follows:

United States
China
Other countries
Total

Years Ended September 30

2023

2022

(In millions)
588 $
356
468
1,412 $

524
333
413
1,270

$

$

79

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Cabot Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cabot Corporation and subsidiaries (the "Company") as of
September 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, stockholders' equity, and
cash flows, for each of the three years in the period ended September 30, 2023, and the related notes (collectively referred to as the
"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the
period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company's internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control —
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated
November 22, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were
communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material
to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or
disclosures to which it relates.

Commitmentstt and Contingencies — CWPWW Respirator Liabilities — Refee r to Note S to the consolidll ated financ

ii

ial statements

Critical Audit Matter Descripti

ion

The Company has exposure in connection with a safety respiratory products business previously owned by one of its subsidiaries.
The respirator liabilities involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis (“CWP”).

We identified CWP respirator liabilities, which are part of the total respirator liabilities, as a critical audit matter because there is
significant uncertainty related to the number of future claims and the estimate of the cost to resolve pending and future claims.
Audit procedures around CWP respirator liabilities required a high degree of auditor judgment and an increased extent of effort and
specialized skill, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to respirator liabilities included the following, among others:

80

•

•

•

We tested the effectiveness of controls over management’s review of the calculation of the CWP respirator liabilities,
including the work performed by the Company’s tort liability consultants, and the assumptions and data utilized in the
calculation.

We evaluated the method and assumptions used by management to estimate the CWP respirator liabilities by utilizing
our actuarial specialists to assist with the calculation of an independent estimate of the CWP respirator liabilities, and
comparing our estimate to the Company’s estimate.

We assessed the appropriateness of the disclosures in the financial statements.

Income Taxeaa s – Domestic Defee rred Taxaa Assets – Refee r to Note Q to the consolidll ated finaii

ncial statements

Critical Audit Matter Descripti

ion

The Company determines deferred income taxes based on the estimated future tax effects of differences between financial statement
carrying amounts and the tax bases of existing assets and liabilities. A valuation allowance is established for deferred taxes when it is
more likely than not that all or a portion of the deferred tax assets will not be realized, which is dependent upon the generation of
future taxable income of applicable character.

During 2023 the Company reversed a portion of the valuation allowance that was recorded against its domestic net deferred tax
assets. This reversal resulted in a non-cash income tax benefit of $152 million.

We identified the evaluation of the realizability of domestic net deferred tax assets, which are part of total net deferred tax assets,
as a critical audit matter because performing audit procedures on the Company’s assessment of recoverability of domestic deferred
tax assets required increased extent of effort and specialized skill, including the need to involve our income tax specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the realizability of the Company's domestic deferred tax assets included the following, among
others:

•

•

•

We tested the effectiveness of controls over management's domestic deferred tax asset realizability assessment.

We evaluated the method and assumptions used by management to evaluate realizability of domestic net deferred tax
assets by utilizing our income tax specialists to assist with the calculation of an independent estimate of the amount of
domestic deferred tax assets that is recoverable, and comparing our estimate to the Company’s estimate.

We assessed the appropriateness of the disclosures in the financial statements.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
November 22, 2023

We have served as the Company's auditor since 2007.

81

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Cabot Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Cabot Corporation and subsidiaries (the “Company”) as of September
30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework
(2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated financial statements as of and for the year ended September 30, 2023, of the Company and our report dated
November 22,

2023 expressed an unqualified opinion on those financial statements.

,

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on
Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
November 22, 2023

82

Item 9. Changes in and Disaii greementstt with Accountantstt on Accountingii

ii
and Financ

ial Discii

losure

PART II

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Cabot carried out an evaluation, under the supervision and with the participation of its management, including its principal

executive officer and its principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures
pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2023.
Based on that evaluation, Cabot’s principal executive officer and its principal financial officer concluded that the Company’s
disclosure controls and procedures are effective with respect to the recording, processing, summarizing and reporting, within the
time periods specified in the Securities and Exchange Commission’s rules and forms, of information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act and such information is accumulated and communicated to
management to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Cabot’s management is responsible for establishing and maintaining adequate internal control over financial reporting for

Cabot. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process
designed by, or under the supervision of, a company’s principal executive and principal financial officers, and effected by the
company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:

•

•

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of
the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Cabot’s management assessed the effectiveness of Cabot’s internal control over financial reporting as of September 30, 2023

based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on this assessment, Cabot’s management concluded that Cabot’s internal
control over financial reporting was effective as of September 30, 2023.

Cabot’s internal control over financial reporting as of September 30, 2023 has been audited by Deloitte & Touche LLP, an

independent registered public accounting firm, as stated in their report above.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal

quarter ending September 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.

Item 9B. Other Infon rmation

(b). During our fiscal quarter ended September 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under

the Securities Exchange Act of 1934, as amended) entered into, modified (as to amount, price or timing of trades) or terminated (i)
contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified
in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material
nonpublic information or (ii) non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

Item 9C. Discii

losure Regardingii

Foreign Jurisdii

icdd tions that Prevent Inspections

None.

83

Item 10. Direii

ctors,rr Executive Offiff cers and Corporate Governance

PART III

Certain information regarding our executive officers is included at the end of Part I of this annual report under the heading

“Information about our Executive Officers.”

Cabot has adopted a Code of Business Ethics that applies to all of the Company’s employees and directors, including the Chief
Executive Officer, the Chief Financial Officer, the Controller and other senior financial officers. The Code of Business Ethics is posted
on our website, www.cabotcorp.com (under the “About Cabot” caption under “Company”). We intend to satisfy the disclosure
requirement regarding any amendment to, or waiver of, a provision of the Code of Business Ethics applicable to the Chief Executive
Officer, the Chief Financial Officer, the Controller or other senior financial officers by posting such information on our website.

The other information required by this item will be included in our Proxy Statement for the 2024 Annual Meeting of

Stockholders (“Proxy Statement”) and is herein incorporated by reference.

Item 11. Executive Compensation

The information required by this item will be included in our Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownershipii of Certainii Benefie cial Owners and Management and Related Stockholder Matters

The information required by this item will be included in our Proxy Statement and is incorporated herein by reference.

Item 13. Certainii Relationshipsii

and Related Transactions,s and Direii

ctor Independence

The information required by this item will be included in our Proxy Statement and is incorporated herein by reference.

Item 14. Prinrr cipaii

l Accounting Fees and Services

The information required by this item will be included in our Proxy Statement and is incorporated herein by reference.

84

Item 15. Exhixx bi

ii

ts,s Finaii

ncial Statement Schedules

PART IV

(a)

Financial Statements.

See “Index to Financial Statements” under Item 8 of this Form 10-K.

(b)

Schedules.

The Schedules have been omitted since the required information is not applicable or is not present in amounts sufficient to
require submission of the schedule, or because the information required is included in the consolidated financial statements and
notes thereto included in this Form 10-K.

(c)

Exhibits. (Certain exhibits not included in copies of the Form 10-K sent to stockholders.)

The exhibit numbers in the Exhibit Index correspond to the numbers assigned to such exhibits in the Exhibit Table of Item 601
of Regulation S-K. Cabot will furnish to any stockholder, upon written request, any exhibit listed in the Exhibit Index, upon payment
by such stockholder of the Company’s reasonable expenses in furnishing such exhibit.

Exhibit
Number

3(a)

3(b)

4(a)

Description

Restated Certificate of Incorporation of Cabot Corporation effective January 9, 2009 (incorporated herein by reference
to Exhibit 3.1 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2008, file reference
1-5667, filed with the SEC on February 9, 2009).

y

The By-laws of Cabot Corporation as amended May 11, 2023 (incorporated herein by reference to Exhibit 3.2 of Cabot’s
Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, file reference 1-5667, filed
)
with the SEC on August 8, 2023).

y p

,
q

p

p

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p

g

y

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,

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,

Indenture, dated as of December 1, 1987, between Cabot Corporation and The First National Bank of Boston, Trustee
(the “Indenture”)(incorporated herein by reference to Exhibit 4(a)(i) of Cabot’s Annual Report on Form 10-K for its fiscal
year ended September 30, 2017, file reference 1-5667, filed with the SEC on November 22, 2017).

4(a)(i)

Second Supplemental Indenture, dated as of January 31, 1997, between Cabot Corporation and State Street Bank and
Trust Company, Trustee (incorporated herein by reference to Exhibit 4 of Cabot’s Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1996, file reference 1-5667, filed with the SEC on February 14, 1997).

4(a)(ii)

Indenture, dated as of September 15, 2016, between Cabot Corporation and U.S. Bank National Association, as Trustee
(incorporated herein by reference to Exhibit 4.1 of Cabot Corporation’s Current Report on Form 8-K dated September
15, 2016, file reference 1-5667, filed with the SEC on September 15, 2016).

4(a)(iii)

First Supplemental Indenture, dated as of September 15, 2016, between Cabot Corporation and U.S. Bank National
Association, as Trustee, including the form of Global Note attached as Annex A thereto, supplementing the Indenture
dated as of September 15, 2016 (incorporated herein by reference to Exhibit 4.2 of Cabot Corporation’s Current Report
on Form 8-K dated September 15, 2016, file reference 1-5667, filed with the SEC on September 15, 2016).

4(a)(iv)

Second Supplemental Indenture, dated June 20, 2019, between Cabot Corporation and U.S. Bank National Association,
including the form of Global Note attached as Annex A thereto supplementing the Indenture dates as of September 15,
2016 (incorporated by reference to Exhibit 4.1 of Cabot Corporation’s Current Report on Form 8-K dated June 20, 2019,
file reference 1-5667, filed with the SEC on June 20, 2019).

4(a)(v)

Indenture, dated June 22, 2022, between Cabot Corporation and U.S. Bank Trust Company, National Association
(incorporated herein by reference to Exhibit 4.1 of Cabot Corporation’s Current Report on Form 8-K dated June 22, 2022,
file reference 1-5667, filed with SEC on June 22, 2022).

4(a)(vi)

First Supplemental Indenture, dated June 22, 2022, between Cabot Corporation and U.S. Bank Trust Company, National
Association. including the form of Global Note attached as Annex A thereto, supplementing the Indenture dated as of
June 22, 2022 (incorporated herein by reference to Exhibit 4.2 of Cabot Corporation’s Current Report on Form 8-K dated
June 22, 2022, file reference 1-5667, filed with SEC on June 22, 2022).

85

Exhibit
Number

Description

4(b)

Description of Cabot Securities (incorporated by reference to Exhibit 4(b) of Cabot Corporation’s Annual Report on Form
10-K for its fiscal year ended September 30, 2019, file reference 1-5667, filed with the SEC on November 22, 2019).

10(a)

10(a)(i)

10(a)(ii)

10(a)(iii)†

10(b)

,

g

,
,

p
Credit Agreement, dated August 6, 2021, among Cabot Corporation, JPMorgan Chase Bank, N.A., J.P. Morgan Securities
LLC, Citibank, N.A., Bank of America, N.A., Mizuho Bank, Ltd., TD Bank, N.A., and Wells Fargo Bank, National Association,
,
,
and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 of Cabot’s Quarterly Report on
y
)
Form 10-Q for the quarterly period ended June 30, 2021, file reference 1-5667, filed with the SEC on August 9, 2021).

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Amendment No. 1, dated as of April 21, 2023, to Credit Agreement dated as of August 6, 2021, by and among Cabot
g
Corporation, the designated borrowers, the lenders party thereto, and the Administrative Agent (incorporated herein
by reference to Exhibit 10.1 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, file
)
reference 1-5667, filed with the SEC on August 8, 2023).

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Amendment No. 2, dated as of July 27, 2023, to Credit Agreement dated as of August 6, 2021, by and among Cabot
g
Corporation, the designated borrowers, the lenders party thereto, and the Administrative Agent (incorporated herein
by reference to Exhibit 10.2 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, file
)
reference 1-5667, filed with the SEC on August 8, 2023).

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Amendment No. 3, dated as of October 4, 2023, to Credit Agreement dated as of August 6, 2021, by and among Cabot
g
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Corporation, the designated borrowers, the lenders party thereto, and the Administrative Agent.

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g

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Credit Agreement, dated as of May 18, 2023, among certain subsidiaries of Cabot Corporation, guaranteed by Cabot
Corporation, PNC Bank, National Association, ING Bank. N.V., Dublin branch, U.S. Bank National Association, and Mizuho
,
Bank, Ltd. (incorporated herein by reference to Exhibit 10.3 of Cabot’s Quarterly Report on Form 10-Q for the quarterly
y
)
period ended June 30, 2023, file reference 1-5667, filed with the SEC on August 8, 2023).
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10(c)*

2009 Long-Term Incentive Plan (incorporated herein by reference to Appendix B of Cabot’s Proxy Statement on Schedule
14A relating to the 2012 Annual Meeting of Stockholders, file reference 1-5667, filed with the SEC on January 30, 2012).

10(c)(i)*

2017 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 of Cabot’s Quarterly Report on Form
10-Q for the quarterly period ended March 31, 2017, file reference 1-5667, filed with the SEC on May 8, 2017).

10(c)(ii)*

Amended and Restated 2017 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 of Cabot’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, file reference 1-5667, filed with the SEC
on May 5, 2021).

10(c)(iii)*

2015 Directors’ Stock Compensation Plan (incorporated herein by reference to Appendix B of Cabot’s Proxy Statement
on Schedule 14A relating to the 2015 Annual Meeting of Stockholders, file reference 1-5667, filed with the SEC on January
28, 2015).

10(c)(vi)*

Cabot Corporation 2018 Short-Term Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 of
Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2018, file reference 1-5667, filed
with the SEC on February 8, 2019).

10(d)*

10(e)*

Cabot Corporation Amended and Restated Senior Management Severance Protection Plan, dated March 9, 2012
(incorporated herein by reference to Exhibit 10.5 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2012, file reference 1-5667, filed with the SEC on May 7, 2012).

Form of Performance-Based Restricted Stock Unit Award Certificate under the Cabot Corporation 2017 Long-Term
Incentive Plan (incorporated herein by reference to Exhibit 10(e) of Cabot’s Annual Report on Form 10-K for its fiscal
year ended September 30, 2018, file reference 1-5667, filed with the SEC on November 21, 2018).

86

Exhibit
Number

Description

10(f)*

Form of Time-Based Restricted Stock Unit Award Certificate under the Cabot Corporation 2017 Long-Term Incentive Plan
(incorporated herein by reference to Exhibit 10(f) of Cabot’s Annual Report on Form 10-K for its fiscal year ended
September 30, 2018, file reference 1-5667, filed with the SEC on November 21, 2018).

10(g)*

10(h)*†

10(i)*†

10(j)*†

10(k)*†

10(l)*

Form of Stock Option Award Certificate under the Cabot Corporation 2017 Long-Term Incentive Plan (incorporated
herein by reference to Exhibit 10(g) of Cabot’s Annual Report on Form 10-K for its fiscal year ended September 30, 2018,
file reference 1-5667, filed with the SEC on November 21, 2018).

Form of Amendment of outstanding Time-Based Restricted Stock Units, Performance-Based Restricted Stock Units and
Stock Options issued under the Cabot Corporation Amended and Restated 2017 Long-Term Incentive Plan.

p

p

g

g

,

Form of Time-Based Restricted Stock Unit Award Certificate under the Cabot Corporation Amended and Restated 2017
Long-Term Incentive Plan.

p

g

Form of Performance-Based Restricted Stock Unit Award Certificate under the Cabot Corporation Amended and Restated
2017 Long-Term Incentive Plan.

p

g

Form of Stock Option Award Certificate under the Cabot Corporation Amended and Restated 2017 Long-Term Incentive
p
Plan.

p

g

Cabot Corporation Deferred Compensation and Supplemental Retirement Plan, amended and restated January 1, 2014
(incorporated herein by reference to Exhibit 10.1 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period
ended December 31, 2013, file reference 1-5667, filed with the SEC on February 6, 2014).

10(m)*

Cabot Corporation Non-Employee Directors’ Deferral Plan, amended and restated January 1, 2014 (incorporated herein
by reference to Exhibit 10.2 of Cabot’s Quarterly Report on Form 10-Q for the quarterly period ended December 31,
2013, file reference 1-5667, filed with the SEC on February 6, 2014).

10(n)*

10(o)*

Offer Letter dated February 12, 2021, between Cabot Corporation and Jeff Zhu, as amended by letter agreement dated
February 4, 2021 (incorporated by reference to Exhibit 10.1 of Cabot’s Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 2020, file reference 1-5667, filed with the SEC on February 5, 2021).

y
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10(k) of Cabot’s Annual Report on Form
)
10-K for its fiscal year ended September 30, 2022, file reference 1-5667, filed with the SEC on November 23, 2022).

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21†

Subsidiaries of Cabot Corporation.

p

23†

Consent of Deloitte & Touche LLP.

31(i)†

31(ii)†

32††

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Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

( )

( )

q

p

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Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

( )

( )

p

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Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350.

p

p

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101.INS†

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags
are embedded within the Inline XBRL document.

101.SCH†

Inline XBRL Taxonomy Extension Schema Document.

101.CAL†

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

87

Exhibit
Number

Description

101.DEF†

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB†

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE†

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104†

Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Management contract or compensatory plan or arrangement.

† Filed herewith.

†† Furnished herewith.

Item 16. Form 10-K Summary

None.

88

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this

Report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

CABOT CORPORATION

BY:

/S/ SEAN D. KEOHANE
Sean D. Keohane
President and Chief Executive Officer

Date: November 22, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signatures

/s/ SEAN D. KEOHANE
Sean D. Keohane

/s/ ERICA MCLAUGHLIN
Erica McLaughlin

/s/

LISA M. DUMONT

Lisa M. Dumont

/s/ MICHAEL M. MORROW
Michael M. Morrow

/s/ CYNTHIA A. ARNOLD
Cynthia A. Arnold

/s/ DOUGLAS DEL GROSSO
Douglas Del Grosso

/s/ JUAN ENRIQUEZ
Juan Enriquez

/s/ WILLIAM C. KIRBY
William C. Kirby

/s/ RAFFIQ NATHOO
Raffiq Nathoo

/s/ SUE H. RATAJ
Sue H. Rataj

/s/ MICHELLE E. WILLIAMS
Michelle E. Williams

/s/ FRANK A. WILSON
Frank A. Wilson

/s/ MATTHIAS L. WOLFGRUBER
Matthias L. Wolfgruber

/s/ CHRISTINE Y. YAN
Christine Y. Yan

Title

Date

Director, President and
Chief Executive Officer

Executive Vice President and
Chief Financial Officer
(principal financial officer)

Vice President and Controller
(principal accounting officer)

Director, Non-Executive
Chair of the Board

Director

Director

Director

Director

Director

Director

Director

Director

Director

Director

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

November 22, 2023

89

Exhibit 31(i)

I, Sean D. Keohane, certify that:

1. I have reviewed this annual report on Form 10-K of Cabot Corporation;

Principal Executive Officer Certification

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to

state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over

financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control

over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2023

/S/ SEAN D. KEOHANE
Sean D. Keohane
President and
Chief Executive Officer

Exhibit 31(ii)

I, Erica McLaughlin, certify that:

1. I have reviewed this annual report on Form 10-K of Cabot Corporation;

Principal Financial Officer Certification

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to

state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over

financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control

over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2023

/s/ ERICA MCLAUGHLIN
Erica McLaughlin
Executive Vice President and
Chief Financial Officer

Certifications Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Exhibit 32

In connection with the filing of the Annual Report on Form 10-K for the year ended September 30, 2023 (the

“Report”) by Cabot Corporation (the “Company”), each of the undersigned hereby certifies pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1.

2.

The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of
1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

November 22, 2023

November 22, 2023

/s/ SEAN D. KEOHANE
Sean D. Keohane
President and
Chief Executive Officer

/s/ ERICA MCLAUGHLIN
Erica McLaughlin
Executive Vice President and
Chief Financial Officer

CORPORATE HEADQUARTERS

Cabot Corporation
Two Seaport Lane, Suite 1400
Boston, Massachusetts 02210-2019
617 345 0100

Investor Relations
Investor inquiries are welcome and individuals are invited to contact us through our investor website at
cabotcorp.com/investors or by telephone at 617 342 6255.

Stock Listing
Cabot Corporation common stock is listed on the New York Stock Exchange under the symbol CBT.

Annual Meeting
The Annual Meeting of Stockholders will be held on March 7, 2024 at 4:00 p.m. ET in a virtual meeting format
via live webcast at meetnow.global/MKQL6CH. All stockholders are invited to attend.

Stock Transfer Agent and Registrar
Registered shareholders may contact the transfer agent by Internet, phone or in writing for information or
assistance with receiving proxy materials electronically by internet, transfers of stock ownership, direct
deposit of dividend payments, dividend check replacements, account history, lost stock certificates, taxable
income or to report address changes. The transfer agent provides telephone assistance Monday through
Friday, 9:00 a.m. to 5:00 p.m. ET. Extended service is available 24 hours a day, seven days a week to callers
with touch-tone telephones through the transfer agent’s Interactive Voice Response (IVR) System.

When using the IVR system, mention Cabot Corporation as your stock holding and be prepared to provide
your name, Social Security number, if applicable, or your Computershare account number. Please include
your address and telephone number in all correspondence with the transfer agent.

Computershare Trust Company, N.A.
c/o Computershare
P.O. Box 43006
Providence, RI 02940-3006

Overnight correspondence should be sent to:
Computershare
150 Royall Street, Suite 101
Canton, MA 02021

Stockholder Inquiries: 781 575 2879 or 800 730 4001

For the hearing impaired: 800 952 9245 (TTY/TY DD)

As an alternative to calling Computershare, you can easily manage your account anytime, anywhere with no
waiting by visiting their Quick Access Hub at http://cshare.us/qahub to view statements, stock value, share
balance, replace checks, add or change account beneficiaries, update an address, and enroll in direct deposit
or to receive text message notifications.

Stockholder Website: computershare.com/investor
Click on “Contact Us” link at the top or bottom of the webpage for online stockholder inquiries.

For more information about Cabot Corporatrr

ion and our businesses, please visit our website at:tt cabotcorp.rr com

002CSNE559