Cabot Corporation Comments on the Mercury and Air Toxics Standards Regulation Court Ruling - 'we are pleased with the result'

Today the United States Court of Appeals for the District of Columbia Circuit ruled to keep the Mercury and Air Toxics Standards (MATS) regulation in place while the Environmental Protection Agency (EPA) works to address the cost analysis required by the U.S. Supreme Court's June 2015 decision. "We are pleased with the result of this ruling," said Fred von Gottberg, senior vice president and president, Purification Solutions Segment. "We are prepared to supply our customers with Cabot Norit activated carbon for mercury controls to comply with MATS. We expect significant growth for our activated carbon products starting in April 2016 as a result of this regulation." "Once all coal-fired utilities are in compliance with MATS, we expect the industry will use 300 to 350 million pounds of activated carbon per year to reduce mercury emissions," von Gottberg continued. "We anticipate that our share of sales to this sector will be in excess of 40 percent." The MATS regulation requires that coal-fired power plants in the U.S. remove approximately 90 percent of mercury from their emissions. Cabot's DARCO® Hg family of products for mercury control has currently been selected for use in over 90 units throughout the United States and Canada. The utilities chose Cabot products based on their proven ability to enable utilities to meet or exceed mercury removal levels compliant with MATS and their respective state regulations. Commenting on the outlook for the Company, Executive Vice President and Chief Financial Officer Eduardo Cordeiro said, "The implementation of the MATS regulation on its original schedule provides upside in the second half of the fiscal year to our previously communicated outlook of roughly breakeven EBIT for the Purification Solutions Segment for fiscal 2016." Cordeiro continued, "Although we remain committed to delivering an improvement of $0.75 of adjusted earnings per share in fiscal 2016 as compared to fiscal 2015, the current market conditions are weaker than originally anticipated, particularly in the first fiscal quarter of 2016. We continue to face ongoing headwinds related to competitive pricing pressures, muted global demand and negative feedstock impacts. The anticipated growth in activated carbon in addition to the restructuring actions previously announced will help offset these headwinds in the second half of the fiscal year."