XBRL Cloud: Business Report

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Component: (Network and Table)
Network	100420 - Disclosure - Employee Benefit Plans (Tables) (http://www.cabot-corp.com/20160930/taxonomy/role/DisclosureEmployeeBenefitPlansTables)
Table	(Implied)

Slicers (applies to each fact value in each table cell)

Reporting Entity [Axis]

0000016040 (http://www.sec.gov/CIK)

Compensation And Retirement Disclosure [Abstract]

Period [Axis]

2015-10-01 - 2016-09-30

Compensation And Retirement Disclosure [Abstract]

Change in Benefit Obligations and Change in Plan Assets

The following provides information about benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans:

	Years Ended September 30
	2016						2015						2016						2015
	Pension Benefits												Postretirement Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
	(Dollars in millions)
Change in Benefit Obligations:
Benefit obligation at beginning of year	$	170		$	348		$	173		$	491		$	38		$	15		$	50		$	17
Service cost		1			8			1			9			—			—			—			—
Interest cost		4			8			7			11			1			1			2			1
Plan participants’ contribution		—			2			—			2			—			—			—			—
Foreign currency exchange rate changes		—			(9	)		—			(45	)		—			(1	)		—			(2	)
(Gain) Loss from changes in actuarial assumptions and plan experience		14			62			3			(23	)		1			5			1			(1	)
Benefits paid⁽¹⁾		(7	)		(14	)		(13	)		(13	)		(3	)		—			(4	)		—
Settlements or curtailments⁽²⁾		(6	)		(4	)		—			(85	)		—			—			—			—
Plan amendments		—			—			—			—			—			—			(11	)		—
Other		(1	)		(1	)		(1	)		1			—			—			—			—
Benefit obligation at end of year	$	175		$	400		$	170		$	348		$	37		$	20		$	38		$	15

	Years Ended September 30
	2016						2015						2016						2015
	Pension Benefits												Postretirement Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
	(Dollars in millions)
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	153		$	279		$	167		$	388		$	—		$	—		$	—		$	—
Actual return on plan assets		18			43			(1	)		11			—			—			—			—
Employer contribution		—			10			1			10			3			1			4			—
Plan participants’ contribution		—			2			—			2			—			—			—			—
Foreign currency exchange rate changes		—			(11	)		—			(34	)		—			—			—			—
Benefits paid⁽¹⁾		(7	)		(14	)		(13	)		(13	)		(3	)		(1	)		(4	)		—
Settlements		(6	)		(3	)		—			(85	)		—			—			—			—
Expenses paid from assets		(1	)		(1	)		(1	)		—			—			—			—			—
Fair value of plan assets at end of year	$	157		$	305		$	153		$	279		$	—		$	—		$	—		$	—
Funded status	$	(18	)	$	(95	)	$	(17	)	$	(69	)	$	(37	)	$	(20	)	$	(38	)	$	(15	)
Recognized liability	$	(18	)	$	(95	)	$	(17	)	$	(69	)	$	(37	)	$	(20	)	$	(38	)	$	(15	)

⁽¹⁾	Included in this amount are $5 million and $6 million that the Company paid directly to the participants in its defined benefit plans in fiscal 2016 and 2015, respectively.

⁽²⁾

The $10 million settlements and curtailments amount in 2016 was a result of global restructuring activities. The $85 million settlements amount in 2015 primarily reflects the transfer of certain plan assets and obligations to a third party, as discussed under Curtailments and Settlements of Employee Benefit Plans.

Assumptions Used to Determine Pension Benefit Obligations and Periodic Benefit Costs, Postretirement Benefit Obligations and Net Costs

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:

	Assumptions as of September 30
	2016						2015						2014
	Pension Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
Actuarial assumptions as of the year-end measurement date:
Discount rate		3.4	%		1.8	%		4.2	%		2.9	%		4.0	%		3.0	%
Rate of increase in compensation	N/A				2.8	%	N/A				2.8	%	N/A				2.8	%
Actuarial assumptions used to determine net periodic benefit cost during the year:
Discount rate - benefit obligation		4.2	%		2.9	%		4.0	%		3.0	%		4.5	%		3.8	%
Discount rate - service cost	N/A				2.8	%	N/A				3.0	%	N/A				3.8	%
Discount rate - interest cost		3.3	%		2.4	%		4.0	%		3.0	%		4.5	%		3.8	%
Expected long-term rate of return on plan assets		7.5	%		5.1	%		7.5	%		5.4	%		7.8	%		5.3	%
Rate of increase in compensation	N/A				2.8	%	N/A				2.8	%		3.0	%		3.1	%

Postretirement 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:

	Assumptions as of September 30
	2016						2015						2014
	Postretirement Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
Actuarial assumptions as of the year-end measurement date:
Discount rate		3.0	%		2.8	%		3.7	%		3.9	%		3.8	%		3.9	%
Initial health care cost trend rate		7.0	%		6.1	%		6.5	%		6.8	%		7.0	%		7.1	%
Actuarial assumptions used to determine net cost during the year:
Discount rate - benefit obligation		3.7	%		3.9	%		3.8	%		3.9	%		4.0	%		4.4	%
Discount rate - service cost		3.4	%		4.1	%		3.8	%		3.9	%		4.0	%		4.4	%
Discount rate - interest cost		2.8	%		3.7	%		3.8	%		3.9	%		4.0	%		4.4	%
Initial health care cost trend rate		6.5	%		6.8	%		7.0	%		7.1	%		7.5	%		7.5	%

Net Amounts Recognized in Consolidated Balance Sheets

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.

	Years Ended September 30
	2016						2015						2016						2015
	Pension Benefits												Postretirement Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign			U.S.			Foreign
	(Dollars in millions)
Net Amounts Recognized in the Consolidated Balance Sheets:
Noncurrent assets	$	—		$	8		$	—		$	5		$	—		$	—		$	—		$	—
Current liabilities		—			(1	)		(1	)		(1	)		(3	)		(1	)		(4	)		—
Noncurrent liabilities		(18	)		(102	)		(16	)		(73	)		(34	)		(19	)		(34	)		(15	)

Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

Amounts recognized in Accumulated other comprehensive income (loss) at September 30, 2016 and 2015 were as follows:

	Years Ended September 30
	2016					2015					2016					2015
	Pension Benefits										Postretirement Benefits
	U.S.		Foreign			U.S.		Foreign			U.S.			Foreign		U.S.			Foreign
	(Dollars in millions)
Net actuarial (gain) loss	$	12	$	92		$	5	$	65		$	(4	)	$	6	$	(6	)	$	1
Net prior service credit		—		(1	)		—		(1	)		(7	)		—		(11	)		—
Balance in accumulated other comprehensive income (loss), pretax	$	12	$	91		$	5	$	64		$	(11	)	$	6	$	(17	)	$	1

Estimated Future Benefit Payments

The Company expects that the following benefit payments will be made to plan participants in the years from 2017 to 2026:

	Pension Benefits				Postretirement Benefits
	U.S.		Foreign		U.S.		Foreign
	(Dollars in millions)
Years Ended:
2017		13		12		4		—
2018		11		13		3		1
2019		11		12		3		1
2020		11		12		3		1
2021		11		14		3		1
2022-2026		52		80		13		4

Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs

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

	Years Ended September 30
	2016						2015						2014						2016					2015					2014
	Pension Benefits																		Postretirement Benefits
	U.S.			Foreign			U.S.			Foreign			U.S.			Foreign			U.S.			Foreign		U.S.			Foreign		U.S.			Foreign
	(Dollars in millions)
Service cost	$	1		$	8		$	1		$	9		$	2		$	9		$	—		$	—	$	—		$	—	$	—		$	—
Interest cost		4			8			7			11			7			16			1			1		2			1		2			1
Expected return on plan assets		(10	)		(14	)		(11	)		(14	)		(10	)		(19	)		—			—		—			—		—			—
Amortization of prior service cost		—			—			—			3			—			—			(3	)		—		(4	)		—		(3	)		—
Net losses		—			3			—			4			—			3			—			—		—			—		—			—
Settlements or Curtailments cost		—			1			—			18			—			—			(1	)		—		—			—		—			—
Net periodic (benefit) cost	$	(5	)	$	6		$	(3	)	$	31		$	(1	)	$	9		$	(3	)	$	1	$	(2	)	$	1	$	(1	)	$	1

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income, Pre-Tax

Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows:

	Years Ended September 30
	2016					2015					2014						2016				2015					2014
	Pension Benefits																Postretirement Benefits
	U.S.		Foreign			U.S.		Foreign			U.S.			Foreign			U.S.		Foreign		U.S.			Foreign		U.S.			Foreign
	(Dollars in millions)
Net (gains) losses	$	7	$	31		$	14	$	(8	)	$	(4	)	$	50		$	2	$	5	$	1		$	—	$	(4	)	$	—
Prior service (credit) cost		—		—			—		(2	)		—			—			—		—		(11	)		—		3			—
Amortization of prior service credit		—		—			—		—			—			—			3		—		—			—		—			—
Amortization of prior unrecognized loss		—		(3	)		—		(4	)		—			(3	)		—		—		4			—		—			—
Other		—		(1	)		—		(27	)		—			(1	)		1		—		—			—		—			—
Total other comprehensive (income) loss ⁽¹⁾	$	7	$	27		$	14	$	(41	)	$	(4	)	$	46		$	6	$	5	$	(6	)	$	—	$	(1	)	$	—

Sensitivity Analysis

A one percentage point change in the 2016 assumed health care cost trend rate would have an immaterial impact to the aggregate of the service and interest cost components of the net periodic postretirement benefit and would have the following effect on the postretirement benefit obligation:

	1-Percentage-Point
	Increase				Decrease
	U.S.		Foreign		U.S.		Foreign
	(Dollars in millions)
Effect on postretirement benefit obligation	$	—	$	4	$	—	$	(3	)

Defined Benefit Pension Plans Weighted-Average Asset Allocations

The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2016 and 2015, by asset category, are as follows:

	Pension Assets
	September 30
	2016						2015
	U.S.			Foreign			U.S.			Foreign
Asset Category:
Equity securities		50	%		39	%		55	%		39	%
Debt securities		50	%		53	%		45	%		54	%
Cash and other securities		—			8	%		—			7	%
Total		100	%		100	%		100	%		100	%

Fair Value of Pension Plan Assets by Asset Category

The fair value of the Company’s pension plan assets at September 30, 2016 and 2015 by asset category is as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)				Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)
	2016				Total		2015				Total
Asset Category:
Cash	$	1	$	—	$	1	$	1	$	—	$	1
Direct investments:
U.S. equity securities		18		—		18		22		—		22
Total direct investments		18		—		18		22		—		22
Investment funds:
Equity funds⁽¹⁾		59		119		178		60		108		168
Fixed income funds⁽²⁾		79		162		241		70		150		220
Real estate funds⁽³⁾		1		8		9		—		9		9
Cash equivalent funds		—		1		1		—		1		1
Total investment funds		139		290		429		130		268		398
Alternative investments:
Insurance contracts⁽⁴⁾		—		14		14		—		11		11
Total alternative investments		—		—		—		—		11		11
Total pension plan assets	$	158	$	304	$	462	$	153	$	279	$	432

⁽¹⁾	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.

⁽²⁾

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.

⁽³⁾

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.

⁽⁴⁾	Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies.