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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2026


☐	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

(Exact name of registrant as specified in its charter)

     Delaware

     04-2271897

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification No.)

     Two Seaport Lane, Suite 1400
Boston, Massachusetts

     02210-2019

     (Address of principal executive offices)

     (Zip Code)

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

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


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

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, smaller reporting company, or an emerging growth company. See the 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	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The Company had 51,621,417 shares of common stock, $1.00 par value per share, outstanding as of May 1, 2026.

INDEX


Part I.	Financial Information

	Item 1.	Financial Statements (unaudited)
		Consolidated Statements of Operations	3
		Consolidated Statements of Comprehensive Income (Loss)	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Cash Flows	7
		Consolidated Statements of Changes in Stockholders’ Equity	8
		Notes to the Consolidated Financial Statements	10

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4.	Controls and Procedures	29

Part II.	Other Information

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 5.	Other Information	30
	Item 6.	Exhibits	31

Part I. Financial Information

Item 1. Financial Statements

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED


	Three Months Ended March 31						Six Months Ended March 31
	2026			2025			2026			2025
	(In millions, except per share amounts)
Net sales and other operating revenues	$	904		$	936		$	1,753		$	1,891
Cost of sales		694			695			1,332			1,415
Gross profit		210			241			421			476
Selling and administrative expenses		67			64			136			130
Research and technical expenses		14			15			27			29
Income (loss) from operations		129			162			258			317
Interest and dividend income		7			7			14			13
Interest expense		(18	)		(19	)		(36	)		(37	)
Other income (expense)		2			1			2			2
Income (loss) from operations before income taxes and equity in earnings of affiliated companies		120			151			238			295
(Provision) benefit for income taxes		(44	)		(49	)		(81	)		(90	)
Equity in earnings of affiliated companies, net of tax		2			3			3			4
Net income (loss)		78			105			160			209
Net income (loss) attributable to noncontrolling interests, net of tax		10			11			19			22
Net income (loss) attributable to Cabot Corporation	$	68		$	94		$	141		$	187

Weighted-average common shares outstanding:
Basic		52.0			54.0			52.3			54.2
Diluted		52.2			54.4			52.6			54.7

Earnings (loss) per common share:
Basic	$	1.27		$	1.71		$	2.65		$	3.40
Diluted	$	1.27		$	1.69		$	2.64		$	3.36

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED


	Three Months Ended March 31						Six Months Ended March 31
	2026			2025			2026			2025
	(In millions)
Net income (loss)	$	78		$	105		$	160		$	209
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment, net of tax		(6	)		34			20			(70	)
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense, net of tax		(1	)		(1	)		(2	)		(2	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense, net of tax		1			—			1			1
Pension and other post-retirement benefit liability adjustments, net of tax		—			—			3			—
Other comprehensive income (loss), net of tax (provision) benefit of $(1), $3, $(2), $(1)		(6	)		33			22			(71	)
Comprehensive income (loss)		72			138			182			138
Net income (loss) attributable to noncontrolling interests, net of tax		10			11			19			22
Foreign currency translation adjustment attributable to noncontrolling interests, net of tax		—			3			3			(4	)
Comprehensive income (loss) attributable to noncontrolling interests		10			14			22			18
Comprehensive income (loss) attributable to Cabot Corporation	$	62		$	124		$	160		$	120

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

CABOT CORPORATION

CONSOLIDATED BALANCE SHEETS

ASSETS

UNAUDITED


	March 31, 2026			September 30, 2025
	(In millions)
Current assets:
Cash and cash equivalents	$	252		$	258
Accounts and notes receivable, net of reserve for doubtful accounts of $5 and $5		657			671
Inventories:
Raw materials		144			134
Finished goods		310			303
Other		68			67
Total inventories		522			504
Prepaid expenses and other current assets		116			106
Total current assets		1,547			1,539
Property, plant and equipment		4,514			4,405
Accumulated depreciation		(2,763	)		(2,694	)
Net property, plant and equipment		1,751			1,711
Goodwill		136			134
Equity affiliates		18			16
Intangible assets, net		53			55
Deferred income taxes		198			180
Other assets		194			180
Total assets	$	3,897		$	3,815

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

CABOT CORPORATION

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

UNAUDITED


	March 31, 2026			September 30, 2025
	(In millions, except share
	and per share amounts)
Current liabilities:
Short-term borrowings	$	175		$	14
Accounts payable and accrued liabilities		598			648
Income taxes payable		34			35
Current portion of long-term debt		261			260
Total current liabilities		1,068			957
Long-term debt		863			856
Deferred income taxes		40			39
Other liabilities		239			258
Contingencies (Note F)
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: 51,694,096 and 52,962,353 shares, Outstanding: 51,579,624 and 52,842,481 shares		52			53
Less cost of 115,063 and 119,872 shares of common treasury stock		(3	)		(3	)
Additional paid-in capital		—			—
Retained earnings		1,835			1,835
Accumulated other comprehensive income (loss)		(316	)		(335	)
Total Cabot Corporation stockholders' equity		1,568			1,550
Noncontrolling interests		119			155
Total stockholders' equity		1,687			1,705
Total liabilities and stockholders' equity	$	3,897		$	3,815

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED


	Six Months Ended March 31
	2026			2025
	(In millions)
Cash Flows from Operating Activities:
Net income (loss)	$	160		$	209
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		90			75
Deferred tax provision (benefit)		(14	)		8
Equity in earnings of affiliated companies		(3	)		(4	)
Share-based compensation		7			14
Other non-cash (income) expense		6			7
Cash dividends received from equity affiliates		1			12
Changes in assets and liabilities:
Accounts and notes receivable		37			(30	)
Inventories		—			(8	)
Prepaid expenses and other assets		(25	)		(17	)
Accounts payable and accrued liabilities		(51	)		(76	)
Income taxes payable		(2	)		—
Other liabilities		(3	)		7
Cash provided by (used in) operating activities		203			197
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(114	)		(149	)
Cash paid for asset acquisition		—			(27	)
Cash paid for acquisition of business, net of cash acquired $2		(66	)		—
Other		2			2
Cash provided by (used in) investing activities		(178	)		(174	)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings (original maturities greater than 90 days)		15			—
Repayments of short-term borrowings (original maturities greater than 90 days)		(8	)		—
Proceeds from (repayments of) short-term borrowings, net (original maturities 90 days or less)		12			—
Proceeds from issuance (repayments) of commercial paper, net		142			145
Proceeds from long-term debt		—			6
Repayments of long-term debt		(4	)		(4	)
Purchases of common stock		(101	)		(89	)
Proceeds from sales of common stock		—			2
Cash dividends paid to noncontrolling interests		(47	)		(20	)
Cash dividends paid to common stockholders		(48	)		(47	)
Cash provided by (used in) financing activities		(39	)		(7	)
Effects of exchange rate changes on cash and cash equivalents		8			(26	)
Increase (decrease) in cash and cash equivalents		(6	)		(10	)
Cash and cash equivalents at beginning of period		258			223
Cash and cash equivalents at end of period	$	252		$	213

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED

(In millions, except shares in thousands and per share amounts)


	Common Stock, Net of Treasury Stock						Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost			Capital			Earnings			Income (Loss)			Equity			Interests			Equity
Balance at September 30, 2025		52,842		$	50		$	—		$	1,835		$	(335	)	$	1,550		$	155		$	1,705
Net income (loss)											73						73			9			82
Total other comprehensive income (loss), net of tax														25			25			3			28
Cash dividends paid on Common stock, $0.45 per share											(24	)					(24	)					(24	)
Cash dividends declared to noncontrolling interests																	—			(13	)		(13	)
Issuance of stock under equity compensation plans		170			—			—									—						—
Share-based compensation								3									3						3
Purchase and retirement of common stock		(796	)		(1	)		(3	)		(48	)					(52	)					(52	)
Balance at December 31, 2025		52,216		$	49		$	—		$	1,836		$	(310	)	$	1,575		$	154		$	1,729
Net income (loss)											68						68			10			78
Total other comprehensive income (loss), net of tax														(6	)		(6	)		—			(6	)
Cash dividends paid on Common stock, $0.45 per share											(24	)					(24	)					(24	)
Cash dividends declared to noncontrolling interests																	—			(45	)		(45	)
Issuance of stock under equity compensation plans		15			—			—									—						—
Share-based compensation								4									4						4
Purchase and retirement of common stock		(651	)		—			(4	)		(45	)					(49	)					(49	)
Balance at March 31, 2026		51,580		$	49		$	—		$	1,835		$	(316	)	$	1,568		$	119		$	1,687

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

CABOT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED

(In millions, except shares in thousands and per share amounts)


	Common Stock, Net of Treasury Stock					Additional Paid-in			Retained			Accumulated Other Comprehensive			Total Cabot Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares			Cost		Capital			Earnings			Income (Loss)			Equity			Interests			Equity
Balance at September 30, 2024		54,297		$	51	$	—		$	1,734		$	(360	)	$	1,425		$	165		$	1,590
Net income (loss)										93						93			11			104
Total other comprehensive income (loss), net of tax													(97	)		(97	)		(7	)		(104	)
Cash dividends paid on Common stock, $0.43 per share										(24	)					(24	)					(24	)
Cash dividends declared to noncontrolling interests																—			(20	)		(20	)
Issuance of stock under equity compensation plans		308			—		2									2						2
Share-based compensation							8									8						8
Purchase and retirement of common stock		(390	)		—		(10	)		(31	)					(41	)					(41	)
Balance at December 31, 2024		54,215		$	51	$	—		$	1,772		$	(457	)	$	1,366		$	149		$	1,515
Net income (loss)										94						94			11			105
Total other comprehensive income (loss), net of tax													30			30			3			33
Cash dividends paid on Common stock, $0.43 per share										(23	)					(23	)					(23	)
Cash dividends declared to noncontrolling interests																—						—
Issuance of stock under equity compensation plans		16			—		—									—						—
Share-based compensation							6									6						6
Purchase and retirement of common stock		(530	)		—		(6	)		(40	)					(46	)					(46	)
Balance at March 31, 2025		53,701		$	51	$	—		$	1,803		$	(427	)	$	1,427		$	163		$	1,590

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

CABOT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

UNAUDITED

A. Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) (“GAAP”) and include the accounts of Cabot Corporation (“Cabot” or the “Company”) and its wholly-owned subsidiaries and majority-owned and controlled U.S. and non-U.S. subsidiaries. Additionally, Cabot considers consolidation of entities over which control is achieved through means other than voting rights. Intercompany transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required by Form 10-K. Additional information may be obtained by referring to Cabot’s Annual Report on Form 10-K for its fiscal year ended September 30, 2025 (the “2025 10-K”).

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

The financial information submitted herewith is unaudited and reflects all adjustments which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods ended March 31, 2026 and 2025. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results expected for the fiscal year.

B. Significant Accounting Policies

Full details on the Company’s significant accounting policies may be obtained by referring to Note A in the 2025 10-K.

Recently Adopted Accounting Standards:

In December 2023, the FASB issued a new standard, Improvements to Income Tax Disclosures. The new guidance requires, on an annual basis, additional disaggregation in the rate reconciliation, disclosure of income (loss) from continuing operations before income taxes, and disclosure of income tax expense and cash taxes paid by jurisdiction (federal, state, and foreign). The Company adopted the new standard on October 1, 2025 and will provide the disclosures required by the standard in the fiscal 2026 Form 10-K. The adoption of the standard is not expected to have a material impact on the Company’s Consolidated Financial Statements.

In November 2023, the FASB issued a new standard, Improvement to Reportable Segment Disclosures. The new guidance enhances the disclosure of significant reportable segment expenses. The Company adopted the standard for the fiscal year ended September 30, 2025 and for interim reporting periods beginning with the quarter ended December 31, 2025. See Note L for disclosures related to the Company's reportable segments. The adoption of the standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recent Tax Legislation

On July 4, 2025, the U.S. federal government enacted the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains significant changes to federal tax law, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The provisions in the legislation are generally effective for the Company beginning in fiscal year 2026. The impact of these changes was not material to the Company’s Consolidated Financial Statements for its interim period ending March 31, 2026.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB issued a new standard, Expense Disaggregation Disclosures. The new guidance requires quantitative and qualitative disclosure of certain cost and expense categories in the notes to the financial statements for interim and annual reporting periods. The new standard is effective for the Company's fiscal 2028 annual and interim reporting periods, with early adoption permitted. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements.

In December 2025, the FASB issued amendments to the interim reporting guidance: Interim Reporting — Narrow-Scope Improvements. The guidance improves the navigability of the required interim disclosures and clarifies when that guidance is applicable. The guidance is effective for the Company's interim reporting periods beginning on October 1, 2028. The amendments

can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of the adoption of this amendment on the Company’s Consolidated Financial Statements.

In September 2025, the FASB issued a new standard, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for the costs of internal use software given the evolution of software development to the incremental and iterative development method. The amendments remove all references to prescriptive and sequential development stages and require an entity to start capitalizing software costs when management has authorized and committed to funding the software project, it is probable that the project will be completed, and the software will be used to perform the function intended. The amendments are effective for annual and interim reporting periods beginning on October 1, 2028. Early adoption is permitted as of the beginning of an annual reporting period with the amendments to be applied using a prospective, modified retrospective, or retrospective transition approach. The Company is currently evaluating the timing of adoption and the impact of the adoption of this standard on the Company’s Consolidated Financial Statements.

In December 2025, the FASB issued a new standard, Accounting for Government Grants Received by Business Entities. The standard establishes authoritative guidance on the accounting for government grants received by business entities, including guidance for a grant related to an asset and a grant related to income. The new standard allows for a number of accounting policy elections to be made upon adoption and be applied to the subsequent grants received on a prospective basis. The new standard is effective for the Company’s annual and interim reporting period beginning on October 1, 2029. The new standard provides entities with a choice of modified prospective, modified retrospective, and retrospective adoption approach. The Company is currently evaluating the impact of the adoption of this standard on its Consolidated Financial Statements.

C. Acquisitions

Business acquisition

On January 31, 2026, the Company purchased 100% of the registered capital of Mexico Carbon Manufacturing, S.A. de C.V. (“MXCB”), a carbon black manufacturing facility in Tamaulipas, Mexico, for a purchase price of $68 million, which included $2 million of cash acquired. The Company incurred acquisition and integration costs of $1 million through March 31, 2026 associated with the transaction, which are included in Selling and administrative expenses in the Consolidated Statements of Operations.

The operating results of MXCB were included in the results of the Company’s Reinforcement Materials segment beginning in the second quarter of 2026, including approximately $12 million of revenue in the quarter.

The provisional estimates of the fair value of assets and liabilities acquired as of January 31, 2026 are set forth below based on the cash consideration.


	(In millions)
Fair value of asset acquired
Cash	$	2
Accounts and notes receivable		16
Inventories		20
Other assets		12
Property, plant and equipment		34
Intangible Assets		2
Total assets acquired		86

Fair value of liabilities assumed
Accounts payable and accrued liabilities		(12	)
Other liabilities		(6	)
Total liabilities assumed		(18	)

Total identifiable net assets	$	68

Cash consideration paid	$	68

Asset acquisition

In October 2024, the Company completed the purchase of certain assets and licensed related technology, which the Company uses to manufacture products for its battery materials product line. The Company paid $27 million, which was allocated to the identifiable assets on a relative fair value basis, with $19 million allocated to property, plant and equipment and $8 million to intangible assets.

D. Goodwill and Intangible Assets

The carrying amount of goodwill attributable to each reportable segment and the changes in those balances during the six months ended March 31, 2026 are as follows:


	Reinforcement Materials		Performance Chemicals		Total
	(In millions)
Balance at September 30, 2025	$	50	$	84	$	134
Foreign currency impact		—		2		2
Balance at March 31, 2026	$	50	$	86	$	136

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


	March 31, 2026							September 30, 2025
	Gross Carrying Value		Accumulated Amortization			Net Intangible Assets		Gross Carrying Value		Accumulated Amortization			Net Intangible Assets
	(In millions)
Intangible assets with finite lives
Developed technologies	$	42	$	(16	)	$	26	$	41	$	(14	)	$	27
Trademarks		2		(1	)		1		2		(1	)		1
Customer relationships		64		(38	)		26		63		(36	)		27
Total intangible assets(1)	$	108	$	(55	)	$	53	$	106	$	(51	)	$	55

(1)

Total intangible assets as of March 31, 2026 includes $2 million of intangible assets from the acquisition of MXCB.

Intangible assets are amortized over their estimated useful lives, which range between ten and twenty-five years, with a weighted average amortization period of approximately sixteen years. Amortization expense was $2 million for both the three months ended March 31, 2026 and 2025. Amortization expense was $3 million for both the six months ended March 31, 2026 and 2025. Amortization expense 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 $7 million each year for the next five fiscal years.

E. Accumulated Other Comprehensive Income (Loss) (“AOCI”)

Comprehensive income combines net income (loss) and other comprehensive income items, which are reported as components of stockholders’ equity in the accompanying Consolidated Balance Sheets.

Changes in each component of AOCI, net of tax, were as follows:


	Currency Translation Adjustment			Pension and Other Post-retirement Benefit Liability Adjustments			Total
	(In millions)
Balance at September 30, 2025, attributable to Cabot Corporation	$	(316	)	$	(19	)	$	(335	)
Other comprehensive income (loss) before reclassifications		26			3			29
Amounts reclassified from AOCI		(1	)		—			(1	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		3			—			3
Balance at December 31, 2025, attributable to Cabot Corporation	$	(294	)	$	(16	)	$	(310	)
Other comprehensive income (loss) before reclassifications		(6	)		—			(6	)
Amounts reclassified from AOCI		—			—			—
Less: Other comprehensive income (loss) attributable to noncontrolling interests		—			—			—
Balance at March 31, 2026, attributable to Cabot Corporation	$	(300	)	$	(16	)	$	(316	)


	Currency Translation Adjustment			Pension and Other Post-retirement Benefit Liability Adjustments			Total
	(In millions)
Balance at September 30, 2024, attributable to Cabot Corporation	$	(342	)	$	(18	)	$	(360	)
Other comprehensive income (loss) before reclassifications		(104	)		—			(104	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		(7	)		—			(7	)
Balance at December 31, 2024, attributable to Cabot Corporation	$	(439	)	$	(18	)	$	(457	)
Other comprehensive income (loss) before reclassifications		34			1			35
Amounts reclassified from AOCI		(1	)		(1	)		(2	)
Less: Other comprehensive income (loss) attributable to noncontrolling interests		3			—			3
Balance at March 31, 2025, attributable to Cabot Corporation	$	(409	)	$	(18	)	$	(427	)

The amounts reclassified out of AOCI and into the Consolidated Statements of Operations in each of the three and six months ended March 31, 2026 and 2025 are as follows:


	Affected Line Item in the Consolidated	Three Months Ended March 31						Six Months Ended March 31
	Statements of Operations	2026			2025			2026			2025
		(In millions)
Derivatives: net investment hedges
(Gains) losses reclassified to interest expense	Interest expense	$	(2	)	$	(2	)	$	(3	)	$	(3	)
(Gains) losses excluded from effectiveness testing and amortized to interest expense	Interest expense		1			—			1			1
Pension and other postretirement
Amortization of actuarial losses and prior service cost (credit)	Other income (expense)		—			(1	)		—			(1	)
Total before tax		$	(1	)	$	(3	)	$	(2	)	$	(3	)

F. Contingencies

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. As more fully described in the 2025 10-K, the respirator liabilities generally involve claims for personal injury, including asbestosis, silicosis and coal worker’s pneumoconiosis, 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. In addition to Cabot’s subsidiary, other parties are responsible for significant portions of the costs of these respirator liabilities (as defined in the 2025 10-K, the “Payor Group”), leaving Cabot’s subsidiary with a portion of the liability in only some of the pending cases.

As of March 31, 2026 and September 30, 2025, the Company had $32 million and $33 million, respectively, reserved for its estimated share of liability for pending and future respirator claims and for defense costs, 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.

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 the Company’s 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.

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.

G. Income Tax

Effective Tax Rate


	Three Months Ended March 31						Six Months Ended March 31
	2026			2025			2026			2025
	(Dollars in millions)
(Provision) benefit for income taxes	$	(44	)	$	(49	)	$	(81	)	$	(90	)
Effective tax rate		37	%		32	%		34	%		30	%

For the three and six months ended March 31, 2026, the provision for income taxes included a net discrete tax expense of $7 million and $11 million, respectively, primarily related to withholding taxes on dividend distribution. For the three and six months ended March 31, 2025, the provision for income taxes included a net discrete tax expense of $7 million and $9 million, respectively.

Income tax in Interim Periods

The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. The income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction.

Valuation allowances are provided against the future tax benefits that arise from the deferred tax assets in jurisdictions for which the Company expects that no benefit can be recognized. The estimated annual effective tax rate may be significantly impacted by non-deductible expenses and the Company’s projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.

Uncertainties

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 change in the unrecognized tax benefits may also 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 files U.S. federal and state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The 2022 through 2024 tax years generally remain subject to examination by the IRS and various tax years from 2019 through 2024 remain subject to examination by the respective state tax authorities. In foreign jurisdictions, various tax years from 2006 through 2025 remain subject to examination by their respective tax authorities.

H. Earnings Per Share

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


	Three Months Ended March 31				Six Months Ended March 31
	2026		2025		2026		2025
	(In millions, except per share amounts)
Basic EPS:
Net income (loss) attributable to Cabot Corporation	$	68	$	94	$	141	$	187
Less: Dividends and dividend equivalents to participating securities		—		1		—		1
Less: Undistributed earnings allocated to participating securities(1)		1		1		2		2
Earnings (loss) allocated to common stockholders (numerator)	$	67	$	92	$	139	$	184

Weighted average common shares and participating securities outstanding		52.8		54.8		53.1		55.0
Less: Participating securities(1)		0.8		0.8		0.8		0.8
Adjusted weighted average common shares (denominator)		52.0

CABOT CORP 10-Q