Cabot Announces Second Quarter 2009 Operating Results

Operations generate $193 million in cash during the quarter, despite difficult
business environment

BOSTON, April 29 /PRNewswire-FirstCall/ -- Cabot Corporation (NYSE: CBT) today
announced results for its second quarter of fiscal 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000323/CABOTLOGO )

Key Highlights
-- Carbon black volumes remain soft due to tire, automotive and
construction market weaknesses but have improved on a monthly basis
since December lows

-- Unit margins remain compressed affecting results by $38 million as
costs
reflect inventory lag

-- New Business progress continues with a $10 million year over year
improvement in cash performance

-- Cash flows strong with a $232 million decrease in working capital and
a
quarter-end cash balance of $220 million, after debt reduction of $85
million

-- Restructuring proceeding as planned and on track to deliver fixed cost
improvements of at least $80 million on a fiscal 2010 run rate basis

(In millions, except per share
amounts) 2009 2008
Second First Second First
Quarter 6 months Quarter 6 months

Net sales $470 $1,122 $786 $1,497
Diluted earnings per share $(0.90) $(0.83) $0.17 $0.73
Less: Certain items per share (0.63) (0.65) (0.13) (0.02)
Adjusted earnings per share $(0.27) $(0.18) $0.30 $0.75

Commenting on the results, Patrick Prevost, Cabot's President and CEO, stated,
"We have seen month to month improvements in our carbon black volumes since
our December lows, although our results continue to be affected by the global
weakness in the tire, automotive, and construction sectors. The significant
downturn in the electronics industry during the quarter affected volumes in
our Supermetals and Fumed Metal Oxides businesses. Margins in our carbon
black related businesses were under pressure from higher cost inventories
linked to slow volumes. On the cost side, our early efforts to respond to the
economic downturn are bearing fruit, as we experienced a significant
improvement in operating expenses. Separately, the restructuring we announced
earlier in the year is proceeding as planned and we are on track to meet our
objective of reducing fixed costs by at least $80 million on a fiscal 2010 run
rate basis. Our New Business activities once again showed improvement.
Revenue growth and more focused efforts allowed us to sustain the Segment's
cash positive performance during the quarter. We continue to focus on cash,
generating $193 million from operations during the quarter, and our balance
sheet remains strong."

Financial Detail
Summary of Results- For the second quarter of fiscal 2009, the Company
reported a net loss of $56 million (a loss of $0.90 per common share).
Adjusted EPS was a loss of $0.27 per common share, which excludes $0.63 per
common share of certain items principally related to restructuring charges.
This compares to second quarter fiscal 2008 net income of $11 million ($0.17
per diluted common share). In that quarter, adjusted EPS was $0.30 per
diluted common share, which excluded $0.13 per diluted common share of certain
items. Details of the Company's financial results and certain items are
provided in the accompanying tables.

Segment Results
Core Segment- Rubber Blacks second quarter fiscal 2009 profitability
decreased by $41 million when compared to the second quarter of fiscal 2008
driven principally by lower volumes from weak demand in the tire and
automotive markets and lower unit margins from older, higher cost inventories.
When compared to the second quarter of fiscal 2008, Rubber Blacks volumes
declined by 28% globally with decreases in all regions. On a sequential
quarter basis, volumes were flat with differing performance by region (North
America up 12%; China up 12%; South America up 4%; the Europe, Middle East,
Africa region up 1%; while Asia Pacific (excluding China) was down 22%).
During the second quarter of fiscal 2009, contract lag benefits and LIFO
benefits (as described below) were $9 million and $3 million, respectively,
compared to an unfavorable $17 million and a favorable $2 million,
respectively, in the same period of fiscal 2008.

Profitability in the Supermetals Business for the second quarter of fiscal
2009 decreased by $7 million compared to the same period of fiscal 2008,
driven principally by lower volumes from weak demand and customer de-stocking
in the electronics market. The volume decline was partially offset by higher
pricing implemented over the past three quarters. The Business generated $8
million in cash during the second quarter of fiscal 2009, principally from
working capital.

Performance Segment- Profitability decreased by $33 million when compared to
the second quarter of fiscal 2008. The decline was the result of lower
volumes from weakness in the automotive, construction and electronics markets
and lower unit margins from older, higher cost inventories. Lower carbon
black feedstock costs resulted in a LIFO benefit of $6 million during the
second quarter of fiscal 2009, compared to an unfavorable $5 million impact in
the same period of fiscal 2008. When compared to the second quarter of fiscal
2008, volumes in Performance Products and Fumed Metal Oxides declined by 36%
and 44%, respectively. Sequentially, Performance Products volumes increased
by 10%, although Fumed Metal Oxides volumes were 18% lower due to substantial
weakness in the electronics market.

Specialty Fluids Segment- Profitability declined by $1 million in the second
quarter of fiscal 2009 when compared to the second quarter of fiscal 2008.
Lower production costs and revenue in regions outside the North Sea did not
completely offset the slowdown in the North Sea during the period.

New Business Segment- Revenues improved when compared to the second quarter
of fiscal 2008. These increased revenues and lower costs improved the cash
performance of the Segment by $10 million, when compared to the second quarter
of fiscal 2008. The Segment was cash positive for the second consecutive
quarter. Sequential revenues declined by $2 million due to a reduction in
Inkjet volumes attributable to weakness in the electronics industry.

Cash Performance- During the second quarter of fiscal 2009, operations
generated $193 million of cash, including a $232 million decrease in working
capital. The Company ended the quarter with a cash balance of $220 million
after dividend payments of $12 million and an $85 million reduction in debt.
Capital expenditures were $23 million in the quarter.

Taxes- During the second quarter of fiscal 2009, the Company recorded a tax
benefit of $27 million, including $5 million of net tax benefit from audit
settlements and $15 million (net $11 million year to date, including a $4
million unfavorable impact in the first quarter of fiscal 2009) of benefit
primarily attributable to the timing of losses in certain locations. The $11
million timing benefit will reverse in the second half of the year.

Outlook
Commenting on the outlook for the business, Prevost said, "We are encouraged
by the monthly volume increases in many of our key businesses. While this may
be an early indication that customer de-stocking is coming to an end, we
remain cautious in the near term. Having said that, we are particularly
pleased with our volume improvement in China as we are well positioned there
with low cost operations, new capacity coming on line and an already strong
market position in that region. We are actively managing our global capacity
and working with customers to meet their needs in the new environment. The
restructuring of our operations is well underway and will allow us to fully
utilize a more efficient global asset base."

Prevost continued, "Due to the non-discretionary nature of many of our
customers' products, I am confident in the resilience and recovery of our
markets. Our leadership positions and continued investment in efficiency
improvement projects and high value technology products will allow us to
emerge an even stronger company post recovery. Our balance sheet and cash
positions are robust and will allow us the flexibility to capture potential
opportunities arising from the economic downturn."

Earnings Call
The Company will host a conference call with industry analysts at 2:00 p.m.
Eastern time on April 30, 2009. The call can be accessed through Cabot's
investor relations website at http://investor.cabot-corp.com.

Cabot Corporation, headquartered in Boston, Massachusetts, is a global
performance materials company. Cabot's major products are carbon black, fumed
silica, inkjet colorants, capacitor materials, and cesium formate drilling
fluids. The Company's website is: http://www.cabot-corp.com.

Other Information
Explanation of Terms Used- When explaining factors affecting our performance,
we use several terms. The term "fixed costs" means fixed manufacturing costs,
including utilities. The term "LIFO benefit" includes two factors: (i) the
impact of current inventory costs being recognized immediately in cost of
goods sold ("COGS") under a last-in first-out method, compared to the older
costs that would have been included in COGS under a first-in first-out method
("COGS impact"); and (ii) the impact of reductions in inventory quantities,
causing historical inventory costs to flow through COGS ("liquidation
impact"). The LIFO benefit in the second quarter of fiscal 2009 is comprised
of $6 million of COGS impact and $3 million of liquidation impact. The term
"contract lag" refers to the time lag of the price adjustments in certain of
our rubber blacks supply contracts to account for changes in feedstock costs
and, in some cases, changes in other relevant costs.

Forward-Looking Statements- This earnings release contains forward-looking
statements based on management's current expectations, estimates and
projections. All statements that address expectations or projections about
the future (including our expectations concerning the annualized fixed cost
savings we expect from our restructuring initiative, demand for our products
and our liquidity position), strategy for growth, market position, and
expected financial results are forward-looking statements. Some of the
forward-looking statements may be identified by words like "expects,"
"anticipates," "plans," "intends," "projects," "indicates," and similar
expressions. These statements are not guarantees of future performance and
involve a number of risks, uncertainties and assumptions. Many factors,
including those discussed more fully elsewhere in this release and in
documents filed with the Securities and Exchange Commission by Cabot,
particularly its latest annual report on Form 10-K, could cause results to
differ materially from those stated. These factors include, but are not
limited to changes in raw material costs; costs associated with the research
and development of new products, including regulatory approval and market
acceptance; competitive pressures; successful integration of structural
changes, including restructuring plans, and joint ventures; the laws,
regulations, policies and economic conditions, including inflation, interest
and foreign currency exchange rates, of countries in which the company does
business; and severe weather events that cause business interruptions,
including plant and power outages, or disruptions in supplier or customer
operations.

Use of Non-GAAP Financial Measures- The preceding discussion of our results
and the accompanying financial tables report adjusted EPS and also include
information on our reportable segment sales and segment (or business)
operating profit before taxes ("PBT"). Adjusted EPS and segment PBT are
non-GAAP financial measures and are not intended to replace EPS and income
(loss) from continuing operations before taxes, equity in net income of
affiliated companies and minority interest, respectively, the most directly
comparable GAAP financial measures. Both EPS and adjusted EPS are calculated
on a diluted share basis. In calculating adjusted EPS and segment PBT, we
exclude certain items, meaning items that are significant and unusual or
infrequent and not believed to reflect the true underlying business
performance, and, therefore, are not allocated to a segment's results or
included in adjusted EPS. Further, in calculating segment PBT we include
equity in net income of affiliated companies, royalties paid by equity
affiliates, minority interest and allocated corporate costs but exclude
interest expense, foreign currency translation gains and losses, interest
income, dividend income and unallocated corporate costs. Our chief operating
decision-maker uses adjusted EPS to evaluate the underlying earnings power of
the Company. Segment PBT is used to evaluate changes in the operating results
of each segment before non-operating factors and before certain items and to
allocate resources to the segments. We believe that these non-GAAP measures
also assist our investors in evaluating the changes in our results and the
Company's performance. A reconciliation of adjusted EPS to EPS is shown in
the table titled Certain Items and Reconciliation of Adjusted EPS, and a
reconciliation of total segment PBT to income (loss) from operations before
taxes, equity in net income of affiliated companies and minority interest is
shown in the table titled Summary Results by Segments. The certain items that
are excluded from our calculation of adjusted EPS and segment PBT are detailed
in the table titled Certain Items and Reconciliation of Adjusted EPS.

Second Quarter Earnings Announcement, Fiscal 2009

CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

------------------------------------------------------------------
Periods ended March 31
Dollars in millions, except per Three Months Six Months
share amounts (unaudited) 2009 2008 2009 2008
------------------------------------------------------------------

Net sales and other operating
revenues $470 $786 $1,122 $1,497

Cost of sales 470 668 1,030 1,263
--- --- ----- -----

Gross profit - 118 92 234

Selling and administrative expenses 54 66 110 123

Research and technical expenses 19 19 37 35
--- --- --- ---
(Loss) income from operations (73) 33 (55) 76

Other income and expense

Interest and dividend income 1 1 2 2

Interest expense (8) (9) (17) (18)

Other expense (4) (2) (13) (4)
--- --- --- ---
Total other income and expense (11) (10) (28) (20)
--- --- --- ---

(Loss) Income from operations before
income taxes (84) 23 (83) 56

Benefit (provision) for income taxes 27 (11) 26 (5)

Equity in net income of affiliated
companies, net of tax - 2 2 4

Minority interest in net income,
net of tax 1 (3) 3 (8)
--- --- --- ---

Net (loss) income (56) 11 (52) 47

Diluted earnings per share of
common stock
Diluted $(0.90) $0.17 $(0.83) $0.73
------ ----- ------ -----

Weighted average common shares
outstanding
Diluted 63 64 63 64

Second Quarter Earnings Announcement, Fiscal 2009

CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS

-------------------------------------------------------------------------
Periods ended March 31
Dollars in millions, except per share Three Months Six Months
amounts (unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------

SALES

Core Segment $295 $511 $739 $974
Rubber blacks 272 454 671 864
Supermetals 23 57 68 110

Performance Segment 132 236 289 447
Performance products 90 164 195 305
Fumed metal oxides 42 72 94 142

New Business Segment 16 14 34 24
Inkjet colorants 9 11 22 19
Aerogel(A) 5 2 9 3
Superior MicroPowders 2 1 3 2

Specialty Fluids Segment 11 16 26 32
-- -- -- --
Segment sales 454 777 1,088 1,477

Unallocated and other (A), (B) 16 9 34 20
-- -- -- --
Net sales and other operating revenues $470 $786 $1,122 $1,497
---- ---- ------ ------

SEGMENT PROFIT

Core Segment $(19) $29 $8 $48
Rubber blacks (13) 28 11 44
Supermetals (6) 1 (3) 4

Performance Segment (1) 32 2 63

New Business Segment (1) (9) (4) (21)

Specialty Fluids Segment 4 5 8 12
-- -- -- --
Total Segment (Loss) Profit (C) (17) 57 14 102

Interest expense (8) (9) (17) (18)
General unallocated expense (D) (59) (23) (78) (24)
Less: Equity in net income of affiliated
companies, net of tax - (2) (2) (4)
-- -- -- --

(Loss) income from continuing operations
before income taxes, equity in net
income of affiliated companies and
minority interest (84) 23 (83) 56
Benefit (provision) for income taxes 27 (11) 26 (5)
Equity in net income of affiliated
companies, net of tax - 2 2 4
Minority interest in net income, net of
tax 1 (3) 3 (8)
-- -- -- --
Net (loss) income $(56) $11 $(52) $47

Diluted earnings per share of common stock
Diluted $(0.90) $0.17 $(0.83) $0.73

Weighted average common shares outstanding
Diluted 63 64 63 64

Note: During the third quarter of fiscal 2008, management changed the way
it manages the Company's businesses. Accordingly, the segment
results for all periods presented have been revised to reflect
these changes.

(A) Royalty income received by the Aerogel business, which has been
included in Unallocated and other in prior periods, has been
reclassified to Segment sales for all periods presented above.

(B) Unallocated and other reflects an elimination for sales of one equity
affiliate, prior to the consolidation of its results beginning April
1, 2008, offset by royalties paid by equity affiliates and other
operating revenues and external shipping and handling fees.

(C) Segment profit is a measure used by Cabot's Chief Operating
Decision-Maker to measure consolidated operating results, assess
segment performance and allocate resources. Segment profit includes
equity in net income of affiliated companies, royalty income, minority
interest and allocated corporate costs.

(D) Beginning in fiscal 2009, certain administrative functions that have
historically been allocated to business segments have been
reclassified to "General unallocated expense." Fiscal 2008 has been
restated for comparative purposes. General unallocated expense also
includes foreign currency transaction gains (losses), interest income,
dividend income, and the certain items listed in the Certain Items and
Reconciliation of Adjusted EPS table.

Second Quarter Earnings Announcement, Fiscal 2009

CABOT CORPORATION CONSOLIDATED FINANCIAL POSITION

---------------------------------------------------------------------
March 31, September 30,
Dollars in millions, 2009 2008
except share and per share amounts (unaudited) (audited)
---------------------------------------------------------------------

Current assets:

Cash and cash equivalents $220 $129
Short-term marketable securities - 1
Accounts and notes receivable,
net of reserve for doubtful
accounts of $7 and $5 392 646
Inventories:
Raw materials 138 193
Work in process 53 58
Finished goods 138 246
Other 31 26
--- ---
Total inventories 360 523
Prepaid expenses and
other current assets 44 72
Deferred income taxes 37 30
Assets held for sale - 7
--- ---
Total current assets 1,053 1,408
----- -----

Investments:
Equity affiliates 57 53
Long-term marketable securities
and cost investments 1 1
--- ---
Total investments 58 54
--- ---

Property, plant and equipment 2,793 2,921
Accumulated depreciation and amortization (1,797) (1,839)
------ ------
Net property, plant and equipment 996 1,082
--- -----

Other assets:
Goodwill 33 34
Intangible assets, net of accumulated
amortization of $11 and $11 3 3
Assets held for rent 49 45
Deferred income taxes 209 173
Other assets 91 59
--- ---
Total other assets 385 314
--- ---

Total assets $2,492 $2,858
====== ======

Second Quarter Earnings Announcement, Fiscal 2009

CABOT CORPORATION CONSOLIDATED FINANCIAL POSITION

-------------------------------------------------------------------------
March 31, September 30,
Dollars in millions, except share 2009 2008
and per share amounts (unaudited) (audited)
-------------------------------------------------------------------------

Current liabilities:

Notes payable to banks $35 $91
Accounts payable and accrued liabilities 308 426
Income taxes payable 32 38
Deferred income taxes 5 7
Current portion of long-term debt 19 39
--- ---
Total current liabilities 399 601
--- ---

Long-term debt 567 586
Deferred income taxes 14 18
Other liabilities 267 294

Minority interest 101 110

Stockholders' equity:
Preferred stock:
Authorized: 2,000,000 shares of $1 par value
Issued: None and none - -
Outstanding: None and none - -
Common stock:
Authorized: 200,000,000 shares of $1 par value
Issued: 65,365,304 and 65,403,100 shares 65 65
Outstanding: 65,271,207 and 65,277,715 shares
Less cost of 94,097 and 125,385
shares of common treasury stock (3) (4)
Additional paid-in capital 32 21
Retained earnings 1,067 1,143
Deferred employee benefits (27) (30)
Notes receivable for restricted stock (20) (21)
Accumulated other comprehensive income 30 75
--- ---
Total stockholders' equity 1,144 1,249
----- -----

Total liabilities and stockholders' equity $2,492 $2,858
====== ======

CABOT CORPORATION
Fiscal 2008
--------------------------------------------------------------------
In millions,
except per share
amounts (unaudited) Dec. Q. Mar. Q. June Q. Sept. Q. FY
--------------------------------------------------------------------

Sales
Core Segment $463 $511 $537 $553 $2,064
Rubber blacks 410 454 499 505 1,868
Supermetals 53 57 38 48 196
Performance Segment 211 236 247 237 931
Performance products 141 164 175 165 645
Fumed metal oxides 70 72 72 72 286
New Business Segment 10 14 14 20 58
Inkjet colorants 8 11 11 13 43
Aerogel (A) 1 2 2 5 10
Superior MicroPowders 1 1 1 2 5
Specialty Fluids Segment 16 16 17 19 68
--------------------------------------------------------------------
Segment Sales 700 777 815 829 3,121
Unallocated and other (A),(B) 11 9 25 25 70
--------------------------------------------------------------------

Net sales and other
operating revenues $711 $786 $840 $854 $3,191
--------------------------------------------------------------------

Segment Profit
Core Segment $19 $29 $41 $18 $107
Rubber blacks 16 28 43 21 108
Supermetals 3 1 (2) (3) (1)
Performance Segment 31 32 32 24 119
New Business Segment (12) (9) (9) (5) (35)
Specialty Fluids Segment 8 5 5 6 24
--------------------------------------------------------------------
Total Segment Profit
(Loss) (C) 46 57 69 43 215

Interest expense (9) (9) (9) (10) (37)
General unallocated
income (expense) (D) (1) (23) (19) (15) (58)
Less: Equity in net
income of affiliated
companies, net of tax (2) (2) (2) (2) (8)
--------------------------------------------------------------------

Income (loss) before income
taxes, equity in net
income of affiliated
companies and minority
interest 34 23 39 16 112
Benefit (provision) for
income taxes 6 (11) (8) (1) (14)
Equity in net income of
affiliated companies,
net of tax 2 2 2 2 8
Minority interest in
net income, net of tax (6) (3) (6) (5) (20)
--------------------------------------------------------------------

Net income (loss) 36 11 27 12 86

Diluted earnings per
share of common stock
Net income $0.56 $0.17 $0.43 $0.18 $1.34
Weighted average common
shares outstanding
Diluted 64 64 63 64 64
--------------------------------------------------------------------

Fiscal 2009
--------------------------------------------------------------------
In millions,
except per share
amounts (unaudited) Dec. Q. Mar. Q. June Q. Sept. Q. FY
--------------------------------------------------------------------

Sales
Core Segment $444 $295 $739
Rubber blacks 399 272 671
Supermetals 45 23 68
Performance Segment 157 132 289
Performance products 105 90 195
Fumed metal oxides 52 42 94
New Business Segment 18 16 34
Inkjet colorants 13 9 22
Aerogel (A) 4 5 9
Superior MicroPowders 1 2 3
Specialty Fluids Segment 15 11 26
--------------------------------------------------------------------
Segment Sales 634 454 1,088
Unallocated and other (A),(B) 18 16 34
--------------------------------------------------------------------

Net sales and other
operating revenues $652 $470 $1,122
--------------------------------------------------------------------

Segment Profit
Core Segment $27 $(19) $8
Rubber blacks 24 (13) 11
Supermetals 3 (6) (3)
Performance Segment 3 (1) 2
New Business Segment (3) (1) (4)
Specialty Fluids Segment 4 4 8
--------------------------------------------------------------------
Total Segment Profit
(Loss) (C) 31 (17) 14

Interest expense (9) (8) (17)
General unallocated
income (expense) (D) (19) (59) (78)
Less: Equity in net
income of affiliated
companies, net of tax (2) - (2)
--------------------------------------------------------------------

Income (loss) before income
taxes, equity in net
income of affiliated
companies and minority
interest 1 (84) (83)
Benefit (provision) for
income taxes (1) 27 26
Equity in net income of
affiliated companies,
net of tax 2 - 2
Minority interest in
net income, net of tax 2 1 3
--------------------------------------------------------------------

Net income (loss) 4 (56) (52)

Diluted earnings per share
of common stock
Net income $0.07 $(0.90) $(0.83)
Weighted average common
shares outstanding
Diluted 64 63 63
--------------------------------------------------------------------

Note: During the third quarter of fiscal 2008, management changed the way
it manages the Company's businesses. Accordingly, the segment
results for all periods presented have been revised to reflect
these changes.

(A) Royalty income received by the Aerogel business, which has been
included in Unallocated and other in prior periods, has been
reclassified to Segment sales for all periods presented above.

(B) Unallocated and other reflects an elimination for sales of one
equity affiliate, prior to the consolidation of its results beginning
April 1, 2008, offset by royalties paid by equity affiliates and other
operating revenues and external shipping and handling fees.

(C) Segment profit is a measure used by Cabot's Chief Operating
Decision-Maker to measure consolidated operating results, assess
segment performance and allocate resources. Segment profit includes
equity in net income of affiliated companies, royalty income, minority
interest and allocated corporate costs.

(D) Beginning in fiscal 2009, certain administrative functions that have
historically been allocated to business segments have been
reclassified to "General unallocated expense". Fiscal 2008 has been
restated for comparative purposes. General unallocated expense also
includes foreign currency transaction gains (losses), interest income,
dividend income, and the certain items listed in the Certain Items and
Reconciliation of Adjusted EPS table.

Second Quarter Earnings Announcement, Fiscal 2009

CABOT CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS

--------------------------------------------------------------------------
Periods ended
March 31 Three Months Six Months
Dollars --------------------------- -----------------------------
in millions, 2009 2008 2009 2008
except per per per per per
share amounts 2009 share 2008 share 2009 share 2008 share
(unaudited) $ (A) $ (A) $ (A) $ (A)
------------------------------------------- -----------------------------

Certain items
before income
taxes
--------------
Environmental
reserves and
legal
settlements $- $- $- $- $- $- $(1) $(0.01)

CEO transition
costs - - (4) (0.04) - - (4) (0.04)

Write-down of
impaired
investments (1) (0.01) - - (1) (0.01) - -

Restructuring
initiatives:

- 2008
Global 1 0.01 - - (1) (0.01) - -

- 2009
Global (45) (0.62) - - (45) (0.62) - -

- Altona,
Australia - - - - - - 18 0.20

- North
America (1) (0.01) (7) (0.08) (2) (0.02) (13) (0.15)

- Europe(B) - - (1) (0.01) 1 0.01 (2) (0.02)
---------------------------- ----------------------------
Total
certain
items (46) (0.63) (12) (0.13) (48) (0.65) (2) (0.02)
---------------------------- ----------------------------

Tax impact
of certain
items 6 4 7 1
---------------------------- ----------------------------
Total certain
items $(40) $(0.63) $(8) $(0.13) $(41) $(0.65) $(1) $(0.02)
---------------------------- ----------------------------

---------------------------------------------
Periods ended
March 31 Three Months Six Months
-----------------------
Dollars in millions
(unaudited) 2009 2008 2009 2008
---------------------------------------------

Statement of
Operations Line Item
----------------------

Cost of sales (40) $(8) (41) $3

Selling and
administrative expenses (4) (4) (5) (5)

Research & Development (2) - (2) -

----------------------
Total certain items $(46) $(12) $(48) $(2)
----------------------

NON-GAAP MEASURE:
-----------------------------------------------------------------------
Periods ended
March 31 Three Months Six Months
------------------------------------------------
Dollars in
millions,
except per
share amounts 2009 2008 2009 2008
(unaudited) per share(A) per share(A) per share(A) per share(A)
--------------------------------------------------------------------------
Reconciliation of
Adjusted EPS to
GAAP EPS
-----------------
Diluted EPS $(0.90) $0.17 $(0.83) $0.73
Total certain
items (0.63) (0.13) (0.65) (0.02)
-------------------------------------------------
Adjusted EPS $(0.27) $0.30 $(0.18) $0.75
-------------------------------------------------

(A) Per share amounts are calculated after tax.
(B) Benefit relates to former carbon black facilities.

SOURCE Cabot Corporation

Susannah Robinson, Director, Investor Relations of Cabot Corporation,
+1-617-342-6129, susannah_robinson@cabot-corp.com