(Mark
One)
|
|
[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended
December 31, 2010
|
|
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 1-12626
|
EASTMAN CHEMICAL COMPANY
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
62-1539359
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification no.)
|
|
200 South Wilcox Drive
|
||
Kingsport, Tennessee
|
37662
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant's telephone number, including area code:
(423) 229-2000
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, par value $0.01 per share
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the Act:
None
|
ITEM
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PAGE
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1.
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5
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1A.
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23
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1B.
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23
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24
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2.
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26
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3.
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28
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5.
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29
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6.
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31
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7.
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33
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7A.
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69
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8.
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70
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9.
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118
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9A.
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118
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9B.
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119
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10.
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120
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11.
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120
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12.
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120
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13.
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121
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14.
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121
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123
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Item
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Page
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6
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6
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6
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7
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9
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9
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9
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9
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12
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14
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16
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19
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19
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20
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20
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ITEM
1. BUSINESS
|
C
OR
PORATE OVERVIEW
|
·
|
In the Specialty Plastics segment, the monomer manufacturing facility and the first Eastman Tritan
TM
copolyester polymer manufacturing facility in Kingsport, Tennessee commenced production in first quarter 2010. The
Company
is adding another 30,000 metric tons of resin capacity for Tritan
TM
, which is expected to be operational in early 2012.
|
·
|
In the Specialty Plastics segment, the Company is expanding its capacity for cyclohexane dimethanol ("CHDM"), a monomer used in the manufacture of copolyester, and expects the capacity to be operational in two phases in mid-2011 and in 2012.
|
·
|
In the Specialty Plastics segment, the Company is expanding its cellulose triacetate
capacity, with the new capacity expected to be operational in first quarter 2012.
|
·
|
In the CASPI segment, the Company is expanding capacity for its specialty hydrocarbon resins through an additional expansion of the Company's hydrogenated hydrocarbon resins manufacturing capacity in Middelburg, the Netherlands which is expected to be completed in the second half of 2011, an additional debottleneck of the hydrogenated hydrocarbon facility in Longview, Texas, which is expected to be operational in the first half of 2011, and an expansion of the pure monomer and hydrogenated resins production capacity in Jefferson, Pennsylvania, which is expected to be operational in 2012.
|
·
|
In the PCI segment, the Company plans to increase capacity of 2-ethyl hexanol in 2012 to support expected growth in the plasticizers, coatings, and fuel additive markets.
|
·
|
The Company continues to explore and invest in R&D initiatives at a corporate level that are aligned with macro trends in sustainability, consumerism, and energy efficiency through high performance materials, advanced cellulosics, and environmentally-friendly chemistry, including an initiative in the building and construction market.
|
·
|
In
the
acetyl stream, the Company begins with high sulfur coal which is then gasified in its coal gasification facility. The resulting synthesis gas is converted into a number of chemicals including methanol, methyl acetate, acetic acid, and acetic anhydride. These chemicals are used in manufacturing products throughout the Company including acetate tow, acetate yarn, and cellulose esters. The Company's ability to use coal is a competitive advantage in both raw materials and energy. The Company continues to evaluate opportunities to further leverage its gasification expertise to produce additional cost advantaged chemicals from petroleum coke or coal instead of natural gas or petroleum.
|
·
|
In the olefins stream, the Company begins primarily with propane and ethane, which are then cracked at its facility in Longview, Texas into propylene, as well as ethylene. "Cracking" is a chemical process in which gases are converted into more reactive molecules for use in the manufacturing process. The Company also purchases propylene for use at its Longview facility and its facilities outside the U.S. The propylene is used in oxo derivative products. The ethylene is used in oxo derivative products, acetaldehyde and ethylene glycol production and is also sold commercially. There are four cracking units located at the Company's Longview, Texas facility. Eastman had previously shut down the first of the three units identified for a staged phase-out and idled the second cracking unit. In 2010, a decision was made to restart the idled cracking unit due to improved competitive position based on low cost feedstocks and olefin market conditions. Petrochemical business cycles are influenced by periods of over- and under-capacity. Capacity additions to steam cracker units around the world, combined with demand for light olefins, determine the operating rate and thus profitability of producing olefins. Historically, periodic additions of large blocks of capacity have caused profit margins of light olefins to expand and contract, resulting in "ethylene" or "olefins" cycles. The Company believes it is less impacted by the these cycles than it has been historically due to actions it has taken to leverage its diverse derivatives products to take advantage of regulatory trends and focus on more durable markets.
|
·
|
In the polyester stream, the Company begins with purchased paraxylene and produces purified terephthalic acid ("PTA") for polyesters and dimethyl terephthalate ("DMT") for copolyesters. PTA or DMT is then reacted with ethylene glycol, which the Company both makes and purchases, along with other raw materials (some of which the Company makes and are proprietary) to produce polyesters. The Company believes that this backward integration of polyester manufacturing is a competitive advantage, giving Eastman a low cost position, as well as surety of intermediate supply. In addition, Eastman can add specialty monomers to copolyesters to provide clear, tough, chemically resistant product characteristics. As a result, the Company's copolyesters can effectively compete with materials such as polycarbonate and acrylic.
|
SITE
|
ACETYL
STREAM
|
POLYESTER
STREAM
|
OLEFINS
STREAM
|
Kingsport, Tennessee
|
X
|
X
|
X
|
Longview, Texas
|
X
|
X
|
|
Columbia, South Carolina
(1)
|
X
|
||
Kuantan, Malaysia
|
X
|
||
Singapore
|
X
|
||
Workington, United Kingdom
|
X
|
||
Ulsan, South Korea
|
X
|
(1)
|
Retained
a portion of the manufacturing facility related to the Specialty Plastics segment subsequent to the sale of the Company's PET business and related assets.
|
SEGMENT
|
ACETYL STREAM
|
POLYESTER STREAM
|
OLEFINS STREAM
|
KEY PRODUCTS, MARKETS, AND
END USES
|
CASPI
|
X
|
X
|
Paints and coatings for architectural, transportation, industrial, and original equipment manufacturing ("OEM"), adhesives ingredients for tapes, labels, personal care products and building and construction uses and inks for packaging
|
|
Fibers
|
X
|
Acetate fibers for filter products and textiles
|
||
PCI
|
X
|
X
|
X
|
Intermediate chemicals for agriculture, transportation, beverages, nutrition, pharmaceuticals, coatings, medical devices, toys, adhesives, household products, polymers, textiles, consumer and industrial products, and health and wellness uses
|
Specialty Plastics
|
X
|
X
|
X
|
Copolyesters and cellulosics for appliances, store fixtures and displays, building and construction, electronic packaging, medical devices and packaging, graphic arts, general purpose packaging, personal care and cosmetics, food and beverage packaging, performance films, tape and labels, fibers/nonwovens, photographic and optical films, and liquid crystal displays ("LCD")
|
BUSINESS
SEGMENTS
|
·
|
Overview
|
·
|
Products |
Ø Polymers | |
The polymers product line consists of cellulose-based specialty polymers and olefin-based performance products. Eastman's cellulose-based specialty polymers enhance the aesthetic appeal and improve the performance of industrial and transportation coatings and inks. Olefin-based products are used as base polymers in hot-melt adhesives, paper laminating, sealants, and pressure sensitive adhesives. They are also used as elastomer extenders in sealants and waterproofing compounds for wire and cable flooding applications. The polymers product line also includes chlorinated polyolefins which promote the adherence of paints and coatings to plastic substrates. Polymers accounted for approximately 20 percent of the CASPI segment's total sales for 2010. |
Ø Resins | |
The resins product line consists of hydrocarbon resins, rosin resins, and resin dispersions. These products are sold primarily to adhesive formulators and consumer product companies for use as raw materials essential in hot-melt and pressure sensitive adhesives and as binders in nonwoven products such as disposable diapers, feminine products, and pre-saturated wipes. Eastman offers a broad product portfolio of essential ingredients for the adhesives industry, and ranks as the second largest global tackifier supplier. In addition, Eastman is one of the largest manufacturers of hydrogenated gum rosins used in chewing gum applications. Eastman resins are also used in a wide range of applications including plastics and rubber modification and inks. Resins accounted for approximately 35 percent of the CASPI segment's total sales for 2010. |
Ø Solvents | |
The solvents product line includes both specialty coalescents and ketones and commodity esters, glycol ethers, and alcohol solvents. Coalescents include products such as Texanol TM ester alcohol and Eastman Optifilm TM Enhancer 300 and 400, which improve film formation and durability in architectural latex paints. Ketones are used in high solids low volatile organic compound ("VOC") coatings applications. Commodity solvents, which consist of esters, glycol ethers, and alcohol solvents, are used in both paints and inks to maintain the formulation in liquid form for ease of application. Solvents accounted for approximately 45 percent of the CASPI segment's total sales for 2010. |
·
|
Strategy and Innovation
|
·
|
Customers and Markets
|
·
|
Competition
|
· | Overview |
·
|
Products
|
Ø Acetate Tow | |
Eastman manufactures acetate tow under the Estron TM trademark according to a wide variety of customer specifications, primarily for use in the manufacture of cigarette filters. Acetate tow is the largest sales product of the Fibers segment. Worldwide demand for acetate tow is expected to increase by one to two percent per year over the next several years. Demand growth within Asia, mostly China, one of the largest and fastest growing markets, primarily influences this expected global increase. |
Ø Acetate Yarn | |
The Company manufactures acetate filament yarn under the Estron TM and Chromspun TM trademarks in a wide variety of specifications. Estron TM acetate yarn is available in bright and dull luster and is suitable for subsequent dyeing in the fabric form. Chromspun TM acetate yarn is solution-dyed in the manufacturing process and is available in more than 100 colors. |
Ø Acetyl Chemical Products | |
T he Fibers segment's acetyl chemical products are sold primarily to other acetate fiber market producers and include cellulose diacetate flake, acetic acid, and acetic anhydride. Each is used as a raw material for the production of cellulose acetate fibers. The Fibers segment also markets acetyl-based triacetin plasticizers under the Estrobond TM trademark, generally for use by cigarette manufacturers as a bonding agent in cigarette filters. |
·
|
Strategy and Innovation
|
Ø
|
Growth
|
Ø
|
Continue to Capitalize on Fibers Technology Expertise
|
Ø
|
Maintain Cost-Effective Operations and Consistent Cash Flows and Earnings
|
Ø
|
Research and Development
|
·
|
Overview
|
·
|
Customers and Markets
|
·
|
Competition
|
·
|
Overview
|
Ø
|
Specialty Copolyesters
|
Ø
|
Cellulosic Plastics
|
Eastman cellulosic plastics, sold under the Tenite™ brand, are known for their excellent balance of properties, including toughness, hardness, strength, surface gloss, clarity, chemical resistance, and warmth to the touch. During 2010, Eastman entered into a joint venture with Mazzucchelli 1949 SPA in Shenzhen, China, which is expected to expand Eastman's portfolio of cellulosic plastics. The joint venture will produce compounded cellulose acetate pellets, mostly used in the production of high design injection molded articles such as ophthalmic frames or tool handles. The Mazzucchelli joint venture facility is expected to be operational by second quarter 2011. |
·
|
Strategy and Innovation
|
·
|
Customers and Markets
|
·
|
Competition
|
REGIONAL
BUSINESS OVERVIEW
|
CASPI
|
Fibers
|
PCI
|
Specialty Plastics
|
Total
|
|
United States and Canada
|
25 %
|
10 %
|
50 %
|
15 %
|
100 %
|
Asia Pacific
|
20 %
|
35 %
|
25 %
|
20 %
|
100 %
|
Europe, Middle East, and Africa
|
35 %
|
25 %
|
20 %
|
20 %
|
100 %
|
Latin America
|
35 %
|
20 %
|
35 %
|
10 %
|
100 %
|
CO
RPOR
ATE INITIATIVES
|
D
ISCON
TINUED OPERATIONS
|
EAS
TM
AN CHEMICAL COMPANY GENERAL INFORMATION
|
ITEM 1A.
RISK
FACTORS
|
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
|
EXECUTIVE
OFFICERS OF THE COMPANY
|
(1)
|
Nearly all of the manufacturing facility is included in assets held for sale at December 31, 2010 as a result of the first quarter 2011 divestiture of the Company's PET business and related assets. A portion has been retained subsequent to the sale.
|
(2)
|
Indicates a location that Eastman leases from a third party.
|
(3)
|
Eastman holds a 51 percent share in the joint venture Genovique Specialties Wuhan Youji Chemical Co., Ltd.
|
(4)
|
Eastman holds a 51 percent share in the joint venture Qilu Eastman Specialty Chemical Ltd.
|
High
|
Low
|
Cash Dividends Declared
|
|||||
2010
|
First Quarter
|
$
|
64.67
|
$
|
55.87
|
$
|
0.44
|
Second Quarter
|
71.95
|
53.25
|
0.44
|
||||
Third Quarter
|
74.85
|
51.10
|
0.44
|
||||
Fourth Quarter
|
84.57
|
73.63
|
0.47
|
||||
2009
|
First Quarter
|
$
|
34.15
|
$
|
17.76
|
$
|
0.44
|
Second Quarter
|
45.85
|
26.14
|
0.44
|
||||
Third Quarter
|
55.88
|
34.57
|
0.44
|
||||
Fourth Quarter
|
61.95
|
49.85
|
0.44
|
Period
|
Total Number
of Shares
Purchased
(1)
|
Average Price Paid
Per Share
(2)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
or Programs
(3)
|
Approximate Dollar
Value (in Millions) that May Yet Be Purchased Under the Plans or Programs
(3)
|
|||
October 1- 31, 2010
|
--
|
$
|
--
|
--
|
$
|
327
|
|
November 1-30, 2010
|
1,240,000
|
$
|
78.63
|
1,240,000
|
$
|
230
|
|
December 1-31, 2010
|
1,407,814
|
$
|
81.04
|
1,407,814
|
$
|
116
|
|
Total
|
2,647,814
|
$
|
79.91
|
2,647,814
|
$
|
116
|
(1)
|
Shares repurchased under a previously announced Company repurchase plan.
|
(2)
|
Average price paid per share reflects the weighted average purchase price paid for share repurchases.
|
(3)
|
In October 2007, the Board of Directors authorized $700 million for repurchase of the Company's outstanding common stock. The Company completed the $700 million repurchase authorization in November 2010, acquiring a total of 11.2 million shares.
In August 2010, the Company's Board of Directors authorized an additional repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company. As of December 31, 2010, a total of 2.3 million shares have been repurchased under this authorization for a total amount of approximately $184 million. During 2010, the Company repurchased 3.8 million shares of common stock for a cost of approximately $280 million under the two repurchase authorizations. For additional information, see
Note 17, "Stockholders' Equity
", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
In February 2011, the Board of Directors authorized an additional repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company. The February 2011 authorization is in addition to the remaining amount available under the August 2010 repurchase authorization.
|
Operating Data
|
Year Ended December 31,
|
|||||||||
(Dollars in millions, except per share amounts)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||
Sales
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
$
|
5,513
|
$
|
4,899
|
Operating earnings
|
862
|
345
|
551
|
683
|
552
|
|||||
Earnings from continuing operations
|
425
|
154
|
345
|
434
|
362
|
|||||
Earnings (loss) from discontinued operations
|
13
|
(18)
|
(17)
|
(123)
|
47
|
|||||
Gain (loss) from disposal of discontinued operations
|
--
|
--
|
18
|
(11)
|
--
|
|||||
Net earnings
|
$
|
438
|
$
|
136
|
$
|
346
|
$
|
300
|
$
|
409
|
Basic earnings per share
|
||||||||||
Earnings from continuing operations
|
$
|
5.90
|
$
|
2.12
|
$
|
4.58
|
$
|
5.24
|
$
|
4.41
|
Earnings (loss) from discontinued operations
|
0.17
|
(0.24)
|
0.01
|
(1.61)
|
0.57
|
|||||
Net earnings
|
$
|
6.07
|
$
|
1.88
|
$
|
4.59
|
$
|
3.63
|
$
|
4.98
|
Diluted earnings per share
|
||||||||||
Earnings from continuing operations
|
$
|
5.75
|
$
|
2.09
|
$
|
4.54
|
$
|
5.18
|
$
|
4.35
|
Earnings (loss) from discontinued operations
|
0.17
|
(0.24)
|
0.01
|
(1.60)
|
0.56
|
|||||
Net earnings
|
$
|
5.92
|
$
|
1.85
|
$
|
4.55
|
$
|
3.58
|
$
|
4.91
|
Statement of Financial Position Data
|
||||||||||
Current assets
|
$
|
2,047
|
$
|
1,735
|
$
|
1,423
|
$
|
2,293
|
$
|
2,422
|
Net properties
|
3,219
|
3,110
|
3,198
|
2,846
|
3,069
|
|||||
Total assets
|
5,986
|
5,515
|
5,281
|
6,009
|
6,132
|
|||||
Current liabilities
|
1,070
|
800
|
832
|
1,122
|
1,059
|
|||||
Long-term borrowings
|
1,598
|
1,604
|
1,442
|
1,535
|
1,589
|
|||||
Total liabilities
|
4,359
|
4,002
|
3,728
|
3,927
|
4,103
|
|||||
Total stockholders' equity
|
1,627
|
1,513
|
1,553
|
2,082
|
2,029
|
|||||
Dividends declared per share
|
1.79
|
1.76
|
1.76
|
1.76
|
1.76
|
Page
|
|
34
|
|
38
|
|
39
|
|
41
|
|
44
|
|
49
|
|
50
|
|
53
|
|
58
|
|
59
|
|
64
|
|
65
|
|
65
|
|
66
|
|
Change in
Assumption
|
Impact on
2011 Pre-tax U.S.
Benefits Expense
|
Impact on
December 31, 2010 Projected Benefit Obligation
for U.S. Pension Plans
|
Impact on
December 31, 2010 Benefit Obligation
for Other U.S. Postretirement Plans
|
25 basis point
decrease in discount
rate
|
+$6 Million
|
+$42 Million
|
+$25 Million
|
25 basis point
increase in discount
rate
|
-$5 Million
|
-$40 Million
|
-$24 Million
|
25 basis point
decrease in expected return on assets
|
+$3 Million
|
No Impact
|
N/A
|
25 basis point
increase in expected
return on assets
|
-$3 Million
|
No Impact
|
N/A
|
·
|
Company and segment sales excluding the contract ethylene sales under a transition agreement related to the divestiture of the polyethylene ("PE") product lines and contract polymer intermediates sales under a transition supply agreement related to the divestiture of the PET manufacturing facilities and related businesses in Mexico and Argentina described below;
|
·
|
Company and segment gross profit and operating earnings excluding the accelerated depreciation costs, asset impairments and restructuring charges, net, and other operating income described below;
|
·
|
Company earnings from continuing operations and diluted earnings per share excluding the accelerated depreciation costs, asset impairments and restructuring charges, net, other operating income, early debt extinguishment costs, and net deferred tax benefits related to the previous divestiture of businesses described below; and
|
·
|
Cash flows from operating activities excluding the impact of adoption of amended accounting guidance for transfers of financial assets described below.
|
·
|
In the Specialty Plastics segment, the monomer manufacturing facility and the first Eastman Tritan
TM
copolyester polymer manufacturing facility in Kingsport, Tennessee commenced production in first quarter 2010. The Company is adding another 30,000 metric tons of resin capacity for Tritan
TM
, which is expected to be operational in early 2012.
|
·
|
In the Specialty Plastics segment, the Company is expanding its capacity for cyclohexane dimethanol ("CHDM"), a monomer used in the manufacture of copolyester, and expects the capacity to be operational in two phases in mid-2011 and in 2012.
|
·
|
In the Specialty Plastics segment, the Company is expanding its cellulose triacetate
capacity, with the new capacity expected to be operational in first quarter 2012.
|
·
|
In the CASPI segment, the Company is expanding capacity for its specialty hydrocarbon resins through an additional expansion of the Company's hydrogenated hydrocarbon resins manufacturing capacity in Middelburg, the Netherlands which is expected to be completed in the second half of 2011, an additional debottleneck of the hydrogenated hydrocarbon facility in Longview, Texas, which is expected to be operational in the first half of 2011, and an expansion of the pure monomer and hydrogenated resins production capacity in Jefferson, Pennsylvania, which is expected to be operational in 2012.
|
·
|
In the PCI segment, the Company plans to increase capacity of 2-ethyl hexanol in 2012 to support expected growth in the plasticizers, coatings, and fuel additive markets.
|
·
|
The Company continues to explore and invest in research and development ("R&D") initiatives at a corporate level that are aligned with macro trends in sustainability, consumerism, and energy efficiency through high performance materials, advanced cellulosics, and environmentally-friendly chemistry, including an initiative in the building and construction market.
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||||||
(Dollars in millions)
|
2010
|
2009
|
Change
|
|||||||||||
Sales
|
$
|
5,842
|
$
|
4,396
|
33 %
|
19 %
|
10 %
|
4 %
|
-- %
|
(Dollars in millions)
|
2010
|
2009
|
Change
|
|||
Gross Profit
|
$
|
1,474
|
$
|
1,032
|
43 %
|
|
As a percentage of sales
|
25 %
|
23 %
|
(Dollars in millions)
|
2010
|
2009
|
Change
|
|||
Selling, General and Administrative Expenses ("SG&A")
|
$
|
431
|
$
|
367
|
17 %
|
|
Research and Development Expenses
|
152
|
124
|
23 %
|
|||
$
|
583
|
$
|
491
|
19 %
|
||
As a percentage of sales
|
10 %
|
11 %
|
Operating Earnings | ||||||
2010
|
2009
|
Change
|
||||
(Dollars in millions)
|
||||||
Operating earnings
|
$
|
862
|
$
|
345
|
>100 %
|
|
Asset impairments and restructuring charges, net
|
29
|
196
|
||||
Operating earnings excluding asset impairment and restructuring charges, net
|
$
|
891
|
$
|
541
|
65 %
|
(Dollars in millions)
|
2010
|
2009
|
Change
|
|||
Gross interest costs
|
$
|
108
|
$
|
99
|
||
Less: capitalized interest
|
3
|
14
|
||||
Interest expense
|
105
|
85
|
24 %
|
|||
Interest income
|
6
|
7
|
||||
Net interest expense
|
$
|
99
|
$
|
78
|
27 %
|
(Dollars in millions)
|
2010
|
2009
|
||
Foreign exchange transactions losses, net
|
$
|
8
|
$
|
5
|
Investments (gains) losses, net
|
(1)
|
5
|
||
Other, net
|
5
|
3
|
||
Other charges (income), net
|
$
|
12
|
$
|
13
|
(Dollars in millions)
|
2010
|
2009
|
Change
|
|||
Provision for income taxes from continuing operations
|
$
|
211
|
$
|
100
|
>100 %
|
|
Effective tax rate
|
33 %
|
39 %
|
Earnings from Continuing Operations and Diluted Earnings per Share
|
||||||||
2010
|
2009
|
|||||||
(Dollars in millions, except diluted EPS)
|
$
|
EPS
|
$
|
EPS
|
||||
Earnings from continuing operations
|
$
|
425
|
$
|
5.75
|
$
|
154
|
$
|
2.09
|
Asset impairments and restructuring charges, net of tax
|
18
|
0.24
|
127
|
1.74
|
||||
Early debt extinguishment costs, net of tax
|
71
|
0.97
|
--
|
--
|
||||
Earnings from continuing operations excluding asset impairments and restructuring charges, net of tax and early debt extinguishment costs, net of tax
|
$
|
514
|
$
|
6.96
|
$
|
281
|
$
|
3.83
|
(Dollars in millions, except diluted EPS)
|
2010
|
2009
|
||||||
$
|
EPS
|
$
|
EPS
|
|||||
Earnings from continuing operations
|
$
|
425
|
$
|
5.75
|
$
|
154
|
$
|
2.09
|
Earnings (loss) from discontinued operations, net of tax
|
13
|
0.17
|
(18)
|
(0.24)
|
||||
Net earnings
|
$
|
438
|
$
|
5.92
|
$
|
136
|
$
|
1.85
|
CASPI Segment
|
|||||||||||||
Change
|
|||||||||||||
(Dollars in millions)
|
2010
|
2009
|
$
|
%
|
|||||||||
Sales
|
$
|
1,574
|
$
|
1,217
|
$
|
357
|
29 %
|
||||||
Volume effect
|
198
|
16 %
|
|||||||||||
Price effect
|
122
|
10 %
|
|||||||||||
Product mix effect
|
43
|
4 %
|
|||||||||||
Exchange rate effect
|
(6)
|
(1) %
|
|||||||||||
Operating earnings
|
293
|
221
|
72
|
33 %
|
|||||||||
Asset impairments and restructuring charges, net
|
6
|
3
|
3
|
||||||||||
Operating earnings excluding asset impairments and restructuring charges, net
|
299
|
224
|
75
|
34 %
|
Change
|
||||||||||
(Dollars in millions) |
2010
|
2009
|
$
|
%
|
||||||
Sales |
$
|
1,142
|
$
|
1,032
|
$
|
110
|
11 %
|
|||
Volume effect |
61
|
6 %
|
||||||||
Price Effect |
4
|
-- %
|
||||||||
Product mix effect |
46
|
5 %
|
||||||||
Exchange rate effect |
(1)
|
-- %
|
||||||||
Operating earnings |
323
|
292
|
31
|
11 %
|
||||||
Asset impairments and restructuring charges, net |
3
|
4
|
(1)
|
|||||||
Operating earnings excluding asset impairments and restructuring charges, net |
326
|
296
|
30
|
10 %
|
PCI Segment
|
||||||||||
Change
|
||||||||||
(Dollars in millions)
|
2010
|
2009
|
$
|
%
|
||||||
Sales
|
$
|
2,083
|
$ |
1,398
|
$
|
685
|
49 %
|
|||
Volume effect
|
333
|
24 %
|
||||||||
Price effect
|
295
|
21 %
|
||||||||
Product mix effect
|
58
|
4 %
|
||||||||
Exchange rate effect
|
(1)
|
-- %
|
||||||||
Operating earnings
|
224
|
41
|
183
|
>100 %
|
||||||
Asset impairments and restructuring charges, net
|
7
|
6
|
1
|
|||||||
Operating earnings excluding asset impairments and restructuring charges, net
|
231
|
47
|
184
|
>100 %
|
Specialty Plastics Segment
|
|||||||||
Change
|
|||||||||
(Dollars in millions)
|
2010
|
2009
|
$
|
%
|
|||||
Sales
|
$
|
1,043
|
$ |
749
|
$
|
294
|
39 %
|
||
Volume effect
|
240
|
32 %
|
|||||||
Price effect
|
14
|
2 %
|
|||||||
Product mix effect
|
37
|
5 %
|
|||||||
Exchange rate effect
|
3
|
-- %
|
|||||||
Operating earnings
|
88
|
9
|
79
|
>100 %
|
|||||
Asset impairments and restructuring charges, net
|
5
|
4
|
1
|
||||||
Operating earnings excluding asset impairments and restructuring charges, net
|
93
|
13
|
80
|
>100 %
|
(Dollars in millions) |
2010
|
2009
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||
United States and Canada
|
$
|
2,957
|
$
|
2,252
|
31 %
|
19 %
|
12 %
|
-- %
|
-- %
|
|||||
Asia Pacific
|
1,446
|
1,062
|
36 %
|
18 %
|
10 %
|
7 %
|
1 %
|
|||||||
Europe, Middle East, and Africa
|
1,150
|
835
|
38 %
|
23 %
|
5 %
|
12 %
|
(2) %
|
|||||||
Latin America
|
289
|
247
|
17 %
|
9 %
|
7 %
|
1 %
|
-- %
|
|||||||
$
|
5,842
|
$
|
4,396
|
33 %
|
19 %
|
10 %
|
4 %
|
-- %
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||||||
(
Dollars in millions)
|
2009
|
2008
|
Change
|
|||||||||||
Sales
|
$
|
4,396
|
$
|
5,936
|
(26) %
|
(16) %
|
(10) %
|
-- %
|
-- %
|
|||||
Sales – contract ethylene sales
(1)
|
28
|
314
|
||||||||||||
Sales - contract polymer intermediates
(2
)
|
--
|
138
|
||||||||||||
Sales – excluding listed items
|
$
|
4,368
|
$
|
5,484
|
(20) %
|
(9) %
|
(10) %
|
(1) %
|
-- %
|
|||||
(1)
|
Sales revenue for 2009 and 2008
included
contract ethylene sales under the transition supply agreement related to the divestiture of the PE businesses in fourth quarter 2006.
|
(2)
|
Sales revenue for 2008 included contract polymer intermediates sales under the transition supply agreement related to the divestiture of the PET manufacturing facilities and related businesses in Mexico and Argentina in fourth quarter 2007.
|
(Dollars in millions)
|
2009
|
2008
|
Change
|
|||
Gross Profit
|
$
|
1,032
|
$
|
1,084
|
(5) %
|
|
As a percentage of sales
|
23 %
|
18 %
|
||||
Accelerated depreciation costs included in cost of sales
|
--
|
5
|
||||
Gross profit excluding accelerated depreciation costs
|
1,032
|
1,089
|
(5) %
|
|||
As a percentage of sales
|
23 %
|
18 %
|
(Dollars in millions)
|
2009
|
2008
|
Change
|
|||
Selling, General and Administrative Expenses ("SG&A")
|
$
|
367
|
$
|
384
|
(4) %
|
|
Research and Development Expenses
|
124
|
143
|
(13) %
|
|||
$
|
491
|
$
|
527
|
(7) %
|
||
As a percentage of sales
|
11 %
|
9 %
|
Operating Earnings | ||||||
2009
|
2008
|
Change
|
||||
(Dollars in millions)
|
||||||
Operating earnings
|
$
|
345
|
$
|
551
|
(37) %
|
|
Accelerated depreciation costs included in cost of sales
|
--
|
5
|
||||
Asset impairments and restructuring charges, net
|
196
|
22
|
||||
Other operating income
|
--
|
(16)
|
||||
Operating earnings excluding accelerated depreciation costs, asset impairment and restructuring charges, net, and other operating income
|
$
|
541
|
$
|
562
|
(4) %
|
(Dollars in millions)
|
2009
|
2008
|
Change
|
|||
Gross interest costs
|
$
|
99
|
$
|
104
|
||
Less: capitalized interest
|
14
|
10
|
||||
Interest expense
|
85
|
94
|
(10) %
|
|||
Interest income
|
7
|
24
|
||||
Net interest expense
|
$
|
78
|
$
|
70
|
11 %
|
(Dollars in millions)
|
2009
|
2008
|
||
Foreign exchange transactions losses, net
|
$
|
5
|
$
|
17
|
Investments losses, net
|
5
|
6
|
||
Other, net
|
3
|
(3)
|
||
Other charges (income), net
|
$
|
13
|
$
|
20
|
(Dollars in millions)
|
2009
|
2008
|
Change
|
|||
Provision for income taxes from continuing operations
|
$
|
100
|
$
|
116
|
(14) %
|
|
Effective tax rate
|
39 %
|
25 %
|
2009
|
2008
|
|||||||
(Dollars in millions, except diluted EPS)
|
$
|
EPS
|
$
|
EPS
|
||||
Earnings from continuing operations
|
$
|
154
|
$
|
2.09
|
$
|
345
|
$
|
4.54
|
Accelerated depreciation costs included in cost of sales, net of tax
|
--
|
--
|
3
|
0.05
|
||||
Asset impairments and restructuring charges, net of tax
|
127
|
1.74
|
18
|
0.22
|
||||
Other operating income, net of tax
|
--
|
--
|
(10)
|
(0.13)
|
||||
Net deferred tax benefits related to the previous divestiture of businesses
|
--
|
--
|
(14)
|
(0.18)
|
||||
Earnings from continuing operations excluding accelerated depreciation costs, net of tax, asset impairments and restructuring charges, net of tax, other operating income, net of tax, and net deferred tax benefits related to the previous divesture of businesses
|
$
|
281
|
$
|
3.83
|
$
|
342
|
$
|
4.50
|
(Dollars in millions, except
diluted
EPS)
|
2009
|
2008
|
||||||
$
|
EPS
|
$
|
EPS
|
|||||
Earnings from continuing operations
|
$
|
154
|
$
|
2.09
|
$
|
345
|
$
|
4.54
|
Loss from discontinued operations, net of tax
|
(18)
|
(0.24)
|
(17)
|
(0.23)
|
||||
Gain from disposal of discontinued operations, net of tax
|
--
|
--
|
18
|
0.24
|
||||
Net earnings
|
$
|
136
|
$
|
1.85
|
$
|
346
|
$
|
4.55
|
CASPI Segment
|
|||||||||||||
Change
|
|||||||||||||
(Dollars in millions)
|
2009
|
2008
|
$
|
%
|
|||||||||
Sales
|
$
|
1,217
|
$
|
1,524
|
$
|
(307)
|
(20) %
|
||||||
Volume effect |
(184)
|
(12) %
|
|||||||||||
Price effect |
(96)
|
(6) %
|
|||||||||||
Product mix effect |
(30)
|
(2) %
|
|||||||||||
Exchange rate effect |
3
|
-- %
|
|||||||||||
Operating earnings
|
221
|
196
|
25
|
(13) %
|
|||||||||
Asset impairments and restructuring charges, net
|
3
|
--
|
3
|
||||||||||
Other operating income
|
--
|
(5)
|
5
|
||||||||||
Operating earnings excluding asset impairments and restructuring charges, net and other operating income
|
224
|
191
|
33
|
(17) %
|
Fibers Segment
|
||||||||||
Change
|
||||||||||
(Dollars in millions)
|
2009
|
2008
|
$
|
%
|
||||||
Sales
|
$
|
1,032
|
$
|
1,046
|
$
|
(14)
|
(1) %
|
|||
Volume effect |
(89)
|
(8) %
|
||||||||
Price effect |
83
|
8 %
|
||||||||
Product mix effect |
(11)
|
(1) %
|
||||||||
Exchange rate effect |
3
|
-- %
|
||||||||
Operating earnings
|
292
|
234
|
58
|
25 %
|
||||||
Asset impairments and restructuring charges, net
|
4
|
--
|
4
|
|||||||
Operating earnings excluding asset impairments and restructuring charges, net
|
296
|
234
|
62
|
26 %
|
PCI Segment
|
||||||||||
Change
|
||||||||||
(Dollars in millions)
|
2009
|
2008
|
$
|
%
|
||||||
Sales
|
$
|
1,398
|
$
|
2,443
|
$
|
(1,045)
|
(43) %
|
|||
Volume effect
|
(580)
|
(24) %
|
||||||||
Price effect
|
(507)
|
(21) %
|
||||||||
Product mix effect
|
39
|
2 %
|
||||||||
Exchange rate effect
|
3
|
-- %
|
||||||||
Sales – contract ethylene sales
(1)
|
28
|
314
|
(286)
|
|||||||
– contract polymer intermediates sales
(2)
|
--
|
138
|
(138)
|
|||||||
Sales – excluding listed items
|
1,370
|
1,991
|
(621)
|
(31) %
|
||||||
Volume effect
|
(113)
|
(6) %
|
||||||||
Price effect
|
(499)
|
(25) %
|
||||||||
Product mix effect
|
(12)
|
-- %
|
||||||||
Exchange rate effect
|
3
|
-- %
|
||||||||
Operating earnings
|
41
|
143
|
(102)
|
(71) %
|
||||||
Accelerated depreciation costs included in cost of sales
|
--
|
5
|
(5)
|
|||||||
Asset impairments and restructuring charges, net
|
6
|
22
|
(16)
|
|||||||
Other operating income
|
--
|
(9)
|
9
|
|||||||
Operating earnings excluding accelerated depreciation costs, asset impairments and restructuring charges, net, and other operating income
|
47
|
161
|
(114)
|
(71) %
|
(1 ) |
Sales revenue for 2009 and 2008 included contract ethylene sales under the transition supply agreement related to the divestiture of the PE businesses in fourth quarter 2006.
|
(2)
|
Sales revenue for 2008 includes contract polymer intermediates sales under the transition supply agreement related to the divestiture of the PET manufacturing facilities and related businesses in Mexico and Argentina in fourth quarter 2007.
|
Specialty Plastics Segment
|
|||||||||
Change
|
|||||||||
(Dollars in millions)
|
2009
|
2008
|
$
|
%
|
|||||
Sales
|
$
|
749
|
$
|
923
|
$
|
(174)
|
(19) %
|
||
Volume effect
|
(91)
|
(10) %
|
|||||||
Price effect
|
(66)
|
(7) %
|
|||||||
Product mix effect
|
(23)
|
(3) %
|
|||||||
Exchange rate effect
|
6
|
1 %
|
|||||||
Operating earnings
|
9
|
30
|
(21)
|
(70) %
|
|||||
Asset impairments and restructuring charges, net
|
4
|
--
|
4
|
||||||
Other operating income
|
--
|
(2)
|
2
|
||||||
Operating earnings excluding asset impairments and restructuring charges, net and other operating income
|
13
|
28
|
(15)
|
(54) %
|
(Dollars in millions)
|
2009
|
2008
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||
United States and Canada
|
$
|
2,252
|
$
|
3,308
|
(32) %
|
(19) %
|
(14) %
|
1 %
|
-- %
|
|||||
Asia Pacific
|
1,062
|
1,186
|
(10) %
|
(1) %
|
(5) %
|
(4) %
|
-- %
|
|||||||
Europe, Middle East, and Africa
|
835
|
1,045
|
(20) %
|
(16) %
|
(1) %
|
(4) %
|
1 %
|
|||||||
Latin America
|
247
|
397
|
(38) %
|
(31) %
|
(12) %
|
5 %
|
-- %
|
|||||||
$
|
4,396
|
$
|
5,936
|
(26) %
|
(16) %
|
(10) %
|
-- %
|
-- %
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Net cash provided by (used in):
|
||||||
Operating activities
|
$
|
575
|
$
|
758
|
$
|
653
|
Investing activities
|
(442)
|
(369)
|
(376)
|
|||
Financing activities
|
(411)
|
18
|
(779)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
(1)
|
1
|
|||
Net change in cash and cash equivalents
|
$
|
(277)
|
$
|
406
|
$
|
(501)
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
516
|
$
|
793
|
$
|
387
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Net cash provided by operating activities
|
$
|
575
|
$
|
758
|
$
|
653
|
Impact of adoption of amended accounting guidance
(1)
|
200
|
--
|
--
|
|||
Net cash provided by operating activities excluding item
|
775
|
758
|
653
|
|||
Additions to properties and equipment
|
(243)
|
(310)
|
(634)
|
|||
Dividends paid to stockholders
|
(127)
|
(128)
|
(135)
|
|||
Free Cash Flow
|
$
|
405
|
$
|
320
|
$
|
(116)
|
(1)
|
The net cash from operating activities in 2010 reflected the adoption of amended accounting guidance for transfers of financial assets which resulted in $200 million of receivables, which were previously accounted for as sold and removed from the balance sheet when transferred under the accounts receivable securitization program, being included on the first quarter balance sheet as trade receivables, net. This increase in receivables reduced cash from operations by $200 million in first quarter 2010.
|
(Dollars in millions)
|
Payments Due for
|
|||||||||||||
Period
|
Notes and Debentures
|
Credit Facility Borrowings and Other
|
Interest Payable
|
Purchase Obligations
|
Operating Leases
|
Other Liabilities (a)
|
Total
|
|||||||
2011
|
$
|
6
|
$
|
--
|
$
|
87
|
$
|
266
|
$
|
24
|
$
|
296
|
$
|
679
|
2012
|
151
|
--
|
87
|
265
|
24
|
51
|
578
|
|||||||
2013
|
--
|
--
|
81
|
239
|
13
|
53
|
386
|
|||||||
2014
|
--
|
--
|
81
|
37
|
6
|
54
|
178
|
|||||||
2015
|
250
|
--
|
82
|
36
|
4
|
55
|
427
|
|||||||
2016 and beyond
|
1,197
|
--
|
528
|
118
|
15
|
969
|
2,827
|
|||||||
Total
|
$
|
1,604
|
$
|
--
|
$
|
946
|
$
|
961
|
$
|
86
|
$
|
1,478
|
$
|
5,075
|
(a) |
Amounts represent the current estimated cash payments to be made by the Company primarily for pension and other post-employment benefits and taxes payable in the periods indicated. The amount and timing of such payments is dependent upon interest rates, health care cost trends, actual returns on plan assets, retirement and attrition rates of employees, continuation or modification of the benefit plans, and other factors. Such factors can significantly impact the amount and timing of any future contributions by the Company.
|
ITEM
|
Page
|
71
|
|
72
|
|
73
|
|
74
|
|
75
|
|
Notes to the Audited Consolidated Financial Statements
|
|
76
|
|
80
|
|
82
|
|
83
|
|
83
|
|
84
|
|
84
|
|
85
|
|
85
|
|
89
|
|
90
|
|
90
|
|
93
|
|
100
|
|
102
|
|
102
|
|
103
|
|
105
|
|
106
|
|
107
|
|
107
|
|
110
|
|
111
|
|
114
|
|
116
|
|
117
|
|
/s/ James P. Rogers | /s/ Curtis E. Espeland | |
James P. Rogers
|
Curtis E. Espeland
|
|
Chairman of the Board and
|
Senior Vice President and
|
|
Chief Executive Officer
|
Chief Financial Officer
|
|
February
23,
2011
|
For years ended December 31,
|
||||||
(Dollars in millions, except per share amounts)
|
2010
|
2009
|
2008
|
|||
Sales
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
Cost of sales
|
4,368
|
3,364
|
4,852
|
|||
Gross profit
|
1,474
|
1,032
|
1,084
|
|||
Selling, general and administrative expenses
|
431
|
367
|
384
|
|||
Research and development expenses
|
152
|
124
|
143
|
|||
Asset impairments and restructuring charges, net
|
29
|
196
|
22
|
|||
Other operating income
|
--
|
--
|
(16)
|
|||
Operating earnings
|
862
|
345
|
551
|
|||
Net interest expense
|
99
|
78
|
70
|
|||
Early debt extinguishment costs
|
115
|
--
|
--
|
|||
Other charges (income), net
|
12
|
13
|
20
|
|||
Earnings from continuing operations before income taxes
|
636
|
254
|
461
|
|||
Provision for income taxes from continuing operations
|
211
|
100
|
116
|
|||
Earnings from continuing operations
|
425
|
154
|
345
|
|||
Earnings (loss) from discontinued operations, net of tax |
13
|
(18)
|
(17)
|
|||
Gain from disposal of discontinued operations, net of tax |
--
|
--
|
18
|
|||
Net earnings
|
$
|
438
|
$
|
136
|
$
|
346
|
Basic earnings per share
|
||||||
Earnings from continuing operations
|
$
|
5.90
|
$
|
2.12
|
$
|
4.58
|
Earnings (loss) from discontinued operations
|
0.17
|
(0.24)
|
0.01
|
|||
Basic earnings per share
|
$
|
6.07
|
$
|
1.88
|
$
|
4.59
|
Diluted earnings per share
|
||||||
Earnings from continuing operations
|
$
|
5.75
|
$
|
2.09
|
$
|
4.54
|
Earnings (loss) from discontinued operations
|
0.17
|
(0.24)
|
0.01
|
|||
Diluted earnings per share
|
$
|
5.92
|
$
|
1.85
|
$
|
4.55
|
Comprehensive Income
|
||||||
Net earnings
|
$
|
438
|
$
|
136
|
$
|
346
|
Other comprehensive income (loss), net of tax
|
||||||
Change in cumulative translation adjustment
|
2
|
17
|
(97)
|
|||
Change in unrecognized losses and prior service credits for benefit plans
|
(39)
|
(74)
|
(232)
|
|||
Change in unrealized gains (losses) on derivative instruments
|
(10)
|
7
|
23
|
|||
Change in unrealized losses on investments
|
--
|
--
|
(1)
|
|||
Total other comprehensive income (loss), net of tax
|
(47)
|
(50)
|
(307)
|
|||
Comprehensive income
|
$
|
391
|
$
|
86
|
$
|
39
|
Retained Earnings
|
||||||
Retained earnings at beginning of period
|
$
|
2,571
|
$
|
2,563
|
$
|
2,349
|
Net earnings
|
438
|
136
|
346
|
|||
Cash dividends declared
|
(129)
|
(128)
|
(132)
|
|||
Retained earnings at end of period
|
$
|
2,880
|
$
|
2,571
|
$
|
2,563
|
December 31,
|
December 31,
|
|||
(Dollars in millions, except per share amounts)
|
2010
|
2009
|
||
Assets
|
||||
Current assets
|
||||
Cash and cash equivalents
|
$
|
516
|
$
|
793
|
Trade receivables, net
|
545
|
277
|
||
Miscellaneous receivables
|
131
|
102
|
||
Inventories
|
619
|
531
|
||
Other current assets
|
19
|
32
|
||
Current assets held for sale
|
217
|
--
|
||
Total current assets
|
2,047
|
1,735
|
||
Properties
|
||||
Properties and equipment at cost
|
7,908
|
8,525
|
||
Less: Accumulated depreciation
|
5,063
|
5,415
|
||
Properties and equipment held for sale, net
|
374
|
--
|
||
Net properties
|
3,219
|
3,110
|
||
Goodwill
|
375
|
315
|
||
Other noncurrent assets
|
322
|
355
|
||
Noncurrent assets held for sale
|
23
|
--
|
||
Total assets
|
$
|
5,986
|
$
|
5,515
|
Liabilities and Stockholders' Equity
|
||||
Current liabilities
|
||||
Payables and other current liabilities
|
$
|
1,012
|
$
|
800
|
Borrowings due within one year
|
6
|
--
|
||
Current liabilities related to assets held for sale
|
52
|
--
|
||
Total current liabilities
|
1,070
|
800
|
||
Long-term borrowings
|
1,598
|
1,604
|
||
Deferred income tax liabilities
|
284
|
258
|
||
Post-employment obligations
|
1,274
|
1,221
|
||
Other long-term liabilities
|
130
|
119
|
||
Noncurrent liabilities related to assets held for sale
|
3
|
--
|
||
Total liabilities
|
4,359
|
4,002
|
||
Commitments and contingencies (
Note 14
)
|
||||
Stockholders' equity
|
||||
Common stock ($0.01 par value per share – 350,000,000 shares authorized; shares issued – 96,844,445 and 94,775,064 for 2010 and 2009, respectively)
|
1
|
1
|
||
Additional paid-in capital
|
793
|
661
|
||
Retained earnings
|
2,880
|
2,571
|
||
Accumulated other comprehensive loss
|
(432)
|
(385)
|
||
3,242
|
2,848
|
|||
Less: Treasury stock at cost (26,172,654 shares for 2010 and 22,389,696 shares for 2009 )
|
1,615
|
1,335
|
||
Total stockholders' equity
|
1,627
|
1,513
|
||
Total liabilities and stockholders' equity
|
$
|
5,986
|
$
|
5,515
|
For years ended December 31,
|
||||||
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Cash flows from operating activities
|
||||||
Net earnings
|
$
|
438
|
$
|
136
|
$
|
346
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||
Depreciation and amortization
|
280
|
274
|
267
|
|||
Asset impairments charges
|
8
|
179
|
1
|
|||
Gains on sale of assets
|
--
|
--
|
(14)
|
|||
Early debt extinguishment costs
|
115
|
--
|
--
|
|||
Provision (benefit) for deferred income taxes
|
59
|
185
|
(71)
|
|||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
||||||
(Increase) decrease in trade receivables
|
(358)
|
2
|
261
|
|||
(Increase) decrease in inventories
|
(160)
|
100
|
(95)
|
|||
Increase (decrease) in trade payables
|
152
|
16
|
(211)
|
|||
Increase (decrease) in liabilities for employee benefits and incentive pay
|
20
|
(141)
|
7
|
|||
Other items, net
|
21
|
7
|
162
|
|||
Net cash provided by operating activities
|
575
|
758
|
653
|
|||
Cash flows from investing activities
|
||||||
Additions to properties and equipment
|
(243)
|
(310)
|
(634)
|
|||
Proceeds from sale of assets and investments
|
13
|
30
|
337
|
|||
Acquisitions and investments in joint ventures
|
(190)
|
(68)
|
(38)
|
|||
Additions to capitalized software
|
(7)
|
(8)
|
(10)
|
|||
Other items, net
|
(15)
|
(13)
|
(31)
|
|||
Net cash used in investing activities
|
(442)
|
(369)
|
(376)
|
|||
Cash flows from financing activities
|
||||||
Net increase (decrease) in commercial paper, credit facility, and other borrowings
|
2
|
3
|
(7)
|
|||
Proceeds from borrowings
|
496
|
248
|
--
|
|||
Repayment of borrowings
|
(620)
|
(101)
|
(175)
|
|||
Dividends paid to stockholders
|
(127)
|
(128)
|
(135)
|
|||
Treasury stock purchases
|
(280)
|
(21)
|
(501)
|
|||
Proceeds from stock option exercises and other items
|
118
|
17
|
39
|
|||
Net cash provided by (used in) financing activities
|
(411)
|
18
|
(779)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
(1)
|
1
|
|||
Net change in cash and cash equivalents
|
(277)
|
406
|
(501)
|
|||
Cash and cash equivalents at beginning of period
|
793
|
387
|
888
|
|||
Cash and cash equivalents at end of period
|
$
|
516
|
$
|
793
|
$
|
387
|
1.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
2.
|
DISCONTINUED
OPERATIONS AND ASSETS HELD FOR SALE
|
For years ended December 31,
|
||||||
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Sales
|
$
|
849
|
$
|
651
|
$
|
1,029
|
Earnings (loss) before income taxes
|
26
|
(28)
|
(26)
|
|||
Earnings (loss) from discontinued operations, net of tax
|
13
|
(18)
|
(17)
|
|||
Gain from disposal of discontinued operations, net of tax
|
--
|
--
|
18
|
December 31,
|
||
(Dollars in millions)
|
2010
|
|
Current assets
|
||
Trade receivables, net
|
$
|
116
|
Inventories
|
90
|
|
Other current assets
|
11
|
|
Total current assets held for sale
|
217
|
|
Non-current assets
|
||
Properties and equipment, net
|
374
|
|
Goodwill
|
1
|
|
Other noncurrent assets
|
22
|
|
Total noncurrent assets held for sale
|
397
|
|
Total assets
|
$
|
614
|
Current liabilities
|
||
Payables and other current liabilities
|
$
|
52
|
Total current liabilities held for sale
|
52
|
|
Noncurrent liabilities
|
||
Other noncurrent liabilities
|
3
|
|
Total noncurrent liabilities
|
3
|
|
Total liabilities
|
$
|
55
|
3.
|
Dollars in millions
|
||
Current assets
|
$
|
48
|
Properties and equipment
|
33
|
|
Intangible assets
|
59
|
|
Other noncurrent assets
|
2
|
|
Goodwill
|
63
|
|
Current liabilities
|
(17)
|
|
Long-term liabilities
|
(28)
|
|
Total purchase price
|
$
|
160
|
4.
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
At FIFO or average cost (approximates current cost)
|
||||
Finished goods
|
$
|
611
|
$
|
547
|
Work in process
|
206
|
168
|
||
Raw materials and supplies
|
292
|
262
|
||
Total inventories
|
1,109
|
977
|
||
LIFO Reserve
|
(490)
|
(446)
|
||
Total inventories
|
$
|
619
|
$
|
531
|
5.
|
PROPERTIES
AND ACCUMULATED DEPRECIATION
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
Properties
|
||||
Land
|
$
|
77
|
$
|
78
|
Buildings and building equipment
|
743
|
849
|
||
Machinery and equipment
|
6,851
|
7,456
|
||
Construction in progress
|
237
|
142
|
||
Properties and equipment at cost
|
$
|
7,908
|
$
|
8,525
|
Less: Accumulated depreciation
|
5,063
|
5,415
|
||
Net properties
|
$
|
2,845
|
$
|
3,110
|
6.
|
GOODWILL
AND OTHER INTANGIBLE ASSETS
|
(Dollars in millions)
|
CASPI Segment
|
PCI Segment
|
Other Segments
|
Total
|
||||
Reported balance at December 31, 2008
|
$
|
309
|
$
|
1
|
$
|
15
|
$
|
325
|
Impairment
|
--
|
--
|
(10)
|
(10)
|
||||
Currency translation adjustments
|
--
|
--
|
--
|
--
|
||||
Reported balance at December 31, 2009
|
$
|
309
|
$
|
1
|
$
|
5
|
$
|
315
|
Additions
|
--
|
63
|
--
|
63
|
||||
Adjustment for asset held for sale
|
--
|
--
|
(1)
|
(1)
|
||||
Currency translation adjustments
|
(2)
|
--
|
--
|
(2)
|
||||
Reported balance at December 31, 2010
|
$
|
307
|
$
|
64
|
$
|
4
|
$
|
375
|
7.
|
EQUITY
INVESTMENTS
|
8.
|
PAYABLES
AND OTHER CURRENT LIABILITIES
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
Trade creditors
|
$
|
569
|
$
|
433
|
Accrued payrolls, vacation, and variable-incentive compensation
|
166
|
125
|
||
Accrued taxes
|
44
|
33
|
||
Post-employment obligations
|
62
|
61
|
||
Interest payable
|
21
|
32
|
||
Other
|
150
|
116
|
||
Total payables and other current liabilities
|
$
|
1,012
|
$
|
800
|
9.
|
PROVISION
FOR INCOME TAXES
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Earnings from continuing operations before income taxes
|
||||||
United States
|
$
|
507
|
$
|
193
|
$
|
387
|
Outside the United States
|
129
|
61
|
74
|
|||
Total
|
$
|
636
|
$
|
254
|
$
|
461
|
Provision (benefit) for income taxes on earnings from continuing operations
|
||||||
United States
|
||||||
Current
|
$
|
115
|
$
|
(82)
|
$
|
108
|
Deferred
|
44
|
156
|
(2)
|
|||
Outside the United States
|
||||||
Current
|
29
|
17
|
16
|
|||
Deferred
|
9
|
1
|
(1)
|
|||
State and other
|
||||||
Current
|
18
|
(11)
|
7
|
|||
Deferred
|
(4)
|
19
|
(12)
|
|||
Total
|
$
|
211
|
$
|
100
|
$
|
116
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Unrecognized losses and prior service credits for benefit plans
|
$
|
(28)
|
$
|
(47)
|
$
|
(142)
|
Cumulative translation adjustment
|
3
|
2
|
16
|
|||
Unrealized gains (losses) on cash flow hedges
|
(6)
|
4
|
14
|
|||
Total
|
$
|
(31)
|
$
|
(41)
|
$
|
(112)
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Continuing operations
|
$
|
211
|
$
|
100
|
$
|
116
|
Discontinued operations
|
13
|
(10)
|
(27)
|
|||
Other comprehensive income
|
(31)
|
(41)
|
(112)
|
|||
Total
|
$
|
193
|
$
|
49
|
$
|
(23)
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Amount computed using the statutory rate
|
$
|
224
|
$
|
89
|
$
|
161
|
State income taxes, net
|
9
|
5
|
(1)
|
|||
Foreign rate variance
|
(11)
|
(2)
|
(4)
|
|||
Domestic manufacturing deduction
|
(14)
|
5
|
(7)
|
|||
Capital loss benefits
|
--
|
--
|
(12)
|
|||
Change in reserves for tax contingencies
|
--
|
(5)
|
(8)
|
|||
General business credits
|
(4)
|
7
|
(16)
|
|||
Other
|
7
|
1
|
3
|
|||
Provision for income taxes
|
$
|
211
|
$
|
100
|
$
|
116
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
Deferred tax assets
|
||||
Post-employment obligations
|
$
|
512
|
$
|
496
|
Net operating loss carry forwards
|
61
|
97
|
||
Other
|
22
|
70
|
||
Total deferred tax assets
|
595
|
663
|
||
Less valuation allowance
|
(48)
|
(88)
|
||
Deferred tax assets less valuation allowance
|
$
|
547
|
$
|
575
|
Deferred tax liabilities
|
||||
Depreciation
|
$
|
(781)
|
$
|
(771)
|
Inventory reserves
|
(37)
|
(26)
|
||
Total deferred tax liabilities
|
$
|
(818)
|
$
|
(797)
|
Net deferred tax liabilities
|
$
|
(271)
|
$
|
(222)
|
As recorded in the Consolidated Statements of Financial Position:
|
||||
Other current assets
|
$
|
2
|
$
|
11
|
Other noncurrent assets
|
24
|
30
|
||
Payables and other current liabilities
|
(13)
|
(5)
|
||
Deferred income tax liabilities
|
(284)
|
(258)
|
||
Net deferred tax liabilities
|
$
|
(271)
|
$
|
(222)
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
Miscellaneous receivables
|
$
|
45
|
$
|
23
|
Payables and other current liabilities
|
7
|
2
|
||
Other long-term liabilities
|
9
|
6
|
||
Total income taxes payable
|
$
|
16
|
$
|
8
|
December 31,
|
||||||
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
|
||||||
Balance at January 1
|
$
|
6
|
$
|
11
|
$
|
24
|
Additions based on tax positions related to current year
|
5
|
--
|
--
|
|||
Reductions for tax positions of prior years
|
--
|
--
|
(4)
|
|||
Settlements
|
--
|
--
|
(7)
|
|||
Lapse of statute of limitations
|
(2)
|
(5)
|
(2)
|
|||
Balance at December 31
|
$
|
9
|
$
|
6
|
$
|
11
|
10.
|
December 31,
|
||||
(Dollars in millions)
|
2010
|
2009
|
||
Borrowings consisted of:
|
||||
7% notes due 2012
|
$
|
151
|
$
|
152
|
3% debentures due 2015
|
250
|
--
|
||
6.30% notes due 2018
|
178
|
205
|
||
5.5% notes due 2019
|
250
|
250
|
||
4.5% debentures due 2021
|
250
|
--
|
||
7 1/4% debentures due 2024
|
243
|
497
|
||
7 5/8% debentures due 2024
|
54
|
200
|
||
7.60% debentures due 2027
|
222
|
298
|
||
Credit facility borrowings
|
--
|
--
|
||
Other
|
6
|
2
|
||
Total borrowings
|
1,604
|
1,604
|
||
Borrowings due within one year
|
(6)
|
--
|
||
Long-term borrowings
|
$
|
1,598
|
$
|
1,604
|
December 31, 2010
|
December 31, 2009
|
|||||||
(Dollars in millions)
|
Recorded Amount
|
Fair Value
|
Recorded Amount
|
Fair Value
|
||||
Long-term borrowings
|
$
|
1,598
|
$
|
1,688
|
$
|
1,604
|
$
|
1,656
|
11.
|
EARLY
DEBT EXTINGUISHMENT COSTS
|
(Dollars in millions)
|
Book Value
|
|
6.30% notes due 2018
|
$
|
24
|
7 1/4% debentures due 2024
|
255
|
|
7 5/8% debentures due 2024
|
146
|
|
7.60% debentures due 2027
|
76
|
|
Total
|
$
|
501
|
12.
|
(Dollars in millions)
|
Fair Value Measurements at December 31, 2010
|
|||||||
Description
|
December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Derivative Assets
|
$
|
45
|
$
|
--
|
$
|
45
|
$
|
--
|
Derivative Liabilities
|
(17)
|
--
|
(17)
|
--
|
||||
$
|
28
|
$
|
--
|
$
|
28
|
$
|
--
|
(Dollars in millions)
|
Fair Value Measurements at December 31, 2009
|
|||||||
Description
|
December 31, 2009
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Derivative Assets
|
$
|
34
|
$
|
--
|
$
|
34
|
$
|
--
|
Derivative Liabilities
|
(3)
|
--
|
(3)
|
--
|
||||
$
|
31
|
$
|
--
|
$
|
31
|
$
|
--
|
|
(Dollars in
millions
)
|
Fair Value
|
|||||
Derivative Assets
|
Statement of Financial Position Location
|
December 31, 2010
|
December 31, 2009
|
|||
Fair Value Hedges
|
||||||
Interest rate swaps
|
Other noncurrent assets
|
$
|
2
|
$
|
--
|
|
Cash Flow Hedges
|
||||||
Commodity contracts
|
Other current assets
|
4
|
7
|
|||
Foreign exchange contracts
|
Other current assets
|
23
|
14
|
|||
Foreign exchange contracts
|
Other noncurrent assets
|
12
|
11
|
|||
Forward starting interest rate swap contracts
|
Other current assets
|
4
|
--
|
|||
$
|
45
|
$
|
32
|
(Dollars in millions)
|
Fair Value
|
|||||
Derivative Liabilities
|
Statement of Financial Position Location
|
December 31, 2010
|
December 31, 2009
|
|||
Cash Flow Hedges
|
||||||
Commodity contracts
|
Payables and other current liabilities
|
$
|
2
|
$
|
1
|
|
Foreign exchange contracts
|
Payables and other current liabilities
|
6
|
--
|
|||
Foreign exchange contracts
|
Other noncurrent liabilities
|
9
|
--
|
|||
$
|
17
|
$
|
1
|
(Dollars in millions) |
Amount of gain/ (loss) recognized income on Derivatives
|
|||||
Derivatives in Fair Value Hedging Relationships
|
Location of gain/(loss) recognized in Income on Derivatives |
December 31,
2010
|
December 31,
2009
|
|||
Interest rate contracts
|
Net interest expense
|
$
|
1
|
$
|
--
|
|
$
|
1
|
$
|
--
|
(Dollars in millions) |
Amount after tax of gain/ (loss) recognized in Other Comprehensive Income on derivatives (effective portion)
|
Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into |
Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
|
|||||||
Derivatives' Cash Flow Hedging Relationships |
December 31, 2010
|
December 31, 2009
|
income (effective portion) |
December 31, 2010
|
December 31, 2009
|
|||||
Commodity contracts
|
$
|
(3)
|
$
|
9
|
Cost of sales
|
$
|
1
|
$
|
(6)
|
|
Foreign exchange contracts
|
(9)
|
(2)
|
Sales
|
44
|
23
|
|||||
Forward starting interest rate swap contracts
|
2
|
--
|
-- | -- | ||||||
$
|
(10)
|
$
|
7
|
$
|
45
|
$
|
17
|
13.
|
RETIREMENT
PLANS
|
Summary Balance Sheet | ||||||||
Pension Plans | Postretirement Welfare Plans | |||||||
(Dollars in millions)
|
2010
|
2009
|
2010
|
2009
|
||||
Change in projected benefit obligation:
|
||||||||
Benefit obligation, beginning of year
|
$
|
1,508
|
$
|
1,423
|
$
|
777
|
$
|
746
|
Service cost
|
44
|
42
|
9
|
8
|
||||
Interest cost
|
85
|
87
|
44
|
45
|
||||
Actuarial loss
|
75
|
72
|
40
|
24
|
||||
Curtailment
|
6
|
--
|
--
|
--
|
||||
Plan amendments and other
|
--
|
--
|
--
|
--
|
||||
Plan participants' contributions
|
--
|
--
|
12
|
12
|
||||
Effect of currency exchange
|
(16)
|
17
|
--
|
--
|
||||
Benefits paid
|
(81)
|
(133)
|
(55)
|
(58)
|
||||
Benefit obligation, end of year
|
$
|
1,621
|
$
|
1,508
|
$
|
827
|
$
|
777
|
Change in plan assets:
|
||||||||
Fair value of plan assets, beginning of year
|
$
|
1,087
|
$
|
930
|
$
|
51
|
$
|
55
|
Actual return on plan assets
|
133
|
76
|
9
|
13
|
||||
Effect of currency exchange
|
(14)
|
14
|
--
|
--
|
||||
Company contributions
|
53
|
200
|
39
|
40
|
||||
Reserve for third party contributions
|
--
|
--
|
(4)
|
(11)
|
||||
Plan participants' contributions
|
--
|
--
|
12
|
12
|
||||
Benefits paid
|
(81)
|
(133)
|
(55)
|
(58)
|
||||
Fair value of plan assets, end of year
|
$
|
1,178
|
$
|
1,087
|
$
|
52
|
$
|
51
|
Funded status at end of year
|
$
|
(443)
|
$
|
(421)
|
$
|
(775)
|
$
|
(726)
|
Amounts recognized in the Consolidated Statements of Financial Position consist of:
|
||||||||
Other noncurrent asset
|
$
|
9
|
$
|
--
|
$
|
--
|
$
|
--
|
Current liability
|
(8)
|
(4)
|
(40)
|
(40)
|
||||
Noncurrent liability
|
(444)
|
(417)
|
(735)
|
(686)
|
||||
Net amount recognized, end of year
|
$
|
(443)
|
$
|
(421)
|
$
|
(775)
|
$
|
(726)
|
Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income
|
||||||||||||
Pension Plans
|
Postretirement Welfare Plans
|
|||||||||||
(Dollars in millions)
|
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
||||||
Components of net periodic benefit cost:
|
||||||||||||
Service cost
|
$
|
44
|
$
|
42
|
$
|
46
|
$
|
9
|
$
|
8
|
$
|
6
|
Interest cost
|
85
|
87
|
88
|
44
|
45
|
43
|
||||||
Expected return on assets
|
(104)
|
(100)
|
(105)
|
(3)
|
(3)
|
(4)
|
||||||
Curtailment charge
(1)
|
4
|
--
|
9
|
--
|
--
|
--
|
||||||
Amortization of:
|
||||||||||||
Prior service credit
|
(16)
|
(16)
|
(16)
|
(23)
|
(23)
|
(23)
|
||||||
Actuarial loss
|
43
|
32
|
27
|
13
|
13
|
10
|
||||||
Net periodic benefit cost
|
$
|
56
|
$
|
45
|
$
|
49
|
$
|
40
|
$
|
40
|
$
|
32
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
||||||||||||
Curtailment charge
(1)
|
$
|
4
|
$
|
--
|
$
|
15
|
||||||
Current year actuarial loss
|
(52)
|
(96)
|
(395)
|
|||||||||
Current year prior service credit
|
--
|
--
|
16
|
|||||||||
Amortization of:
|
||||||||||||
Prior service credit
|
(16)
|
(16)
|
(16)
|
|||||||||
Actuarial loss
|
43
|
32
|
27
|
|||||||||
Effect of currency exchange
|
2
|
(3)
|
13
|
|||||||||
Total
|
$
|
(19)
|
$
|
(83)
|
$
|
(340)
|
||||||
(1)
|
Includes $2 million for the Performance Polymers segment that was sold January 31, 2011 and is included in discontinued operations. For more information, see
Note 2, "Discontinued Operations and Assets Held for Sale
."
|
Pension Plans
|
Postretirement Welfare Plans
|
||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
||||||
Weighted-average assumptions used to determine benefit obligations for years ended December 31:
|
|||||||||||
Discount rate
|
5.33 %
|
5.73 %
|
6.05 %
|
5.33 %
|
5.76 %
|
6.08 %
|
|||||
Rate of compensation increase |
3.60 %
|
3.53 %
|
3.57 %
|
3.50 %
|
3.50 %
|
3.50 %
|
|||||
Health care cost trend
|
|||||||||||
Initial
|
8.00 %
|
8.00 %
|
8.00 %
|
||||||||
Decreasing to ultimate trend of
|
5.00 %
|
5.00 %
|
5.00 %
|
||||||||
in year
|
2017
|
2016
|
2015
|
||||||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
|||||
Discount rate
|
5.73 %
|
6.05 %
|
6.03 %
|
5.76 %
|
6.08 %
|
6.19 %
|
|||||
Expected return on assets
|
8.25 %
|
8.47 %
|
8.54 %
|
--
|
--
|
--
|
|||||
Rate of compensation increase
|
3.53 %
|
3.57 %
|
3.83 %
|
3.50 %
|
3.50 %
|
3.75 %
|
|||||
Health care cost trend
|
|||||||||||
Initial
|
8.00 %
|
8.00 %
|
9.00 %
|
||||||||
Decreasing to ultimate trend of
|
5.00 %
|
5.00 %
|
5.00 %
|
||||||||
in year
|
2016
|
2015
|
2012
|
||||||||
(Dollars in millions)
|
Fair Value Measurements at December 31, 2010
|
|||||||
Description
|
December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Cash
|
$
|
16
|
$
|
16
|
$
|
--
|
$
|
--
|
Debt:
|
||||||||
Fixed Income (US)
|
28
|
--
|
28
|
--
|
||||
Fixed Income (International)
|
125
|
--
|
125
|
--
|
||||
US Treasury Securities
|
32
|
--
|
32
|
--
|
||||
Public Equity Funds:
|
||||||||
Domestic
|
408
|
--
|
408
|
--
|
||||
International
|
216
|
--
|
216
|
--
|
||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
353
|
--
|
9
|
344
|
||||
Total
|
$
|
1,178
|
$
|
16
|
$
|
818
|
$
|
344
|
(Dollars in millions)
|
Fair Value Measurements at December 31, 2009
|
|||||||
Description
|
December 31, 2009
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Cash
|
$
|
18
|
$
|
18
|
$
|
--
|
$
|
--
|
Debt:
|
||||||||
Fixed Income (US)
|
26
|
--
|
26
|
--
|
||||
Fixed Income (International)
|
123
|
--
|
123
|
--
|
||||
US Treasury Securities
|
37
|
--
|
37
|
--
|
||||
Public Equity Funds:
|
||||||||
Domestic
|
359
|
--
|
359
|
--
|
||||
International
|
210
|
--
|
210
|
--
|
||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
314
|
--
|
10
|
304
|
||||
Total
|
$
|
1,087
|
$
|
18
|
$
|
765
|
$
|
304
|
(Dollars in millions)
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|||||||
Private Equity
|
Real Estate
|
Other Alternative Investments
(1)
|
Total
|
|||||
Beginning balance at December 31, 2009
|
$
|
107
|
$
|
92
|
$
|
105
|
$
|
304
|
Distributions
|
(20)
|
(2)
|
(19)
|
(41)
|
||||
Unrealized gains/(losses)
|
19
|
(9)
|
14
|
24
|
||||
Purchases, contributions, and other
|
23
|
25
|
9
|
57
|
||||
Ending balance at December 31, 2010
|
$
|
129
|
$
|
106
|
$
|
109
|
$
|
344
|
Target Allocation
|
Plan Assets at December 31, 2010
|
Plan Assets at December 31, 2009
|
|
Asset category
|
|||
Equity securities
|
59 %
|
57 %
|
58 %
|
Debt securities
|
12 %
|
8 %
|
7 %
|
Real estate
|
9 %
|
11 %
|
11 %
|
Other investments
(1)
|
20 %
|
24 %
|
24 %
|
Total
|
100 %
|
100 %
|
100 %
|
Target Allocation
|
Plan Assets at December 31, 2010
|
Plan Assets at December 31, 2009
|
|
Asset category
|
|||
Equity securities
|
33 %
|
38 %
|
33 %
|
Debt securities
|
50 %
|
49 %
|
53 %
|
Other investments
(1)
|
17 %
|
13 %
|
14 %
|
Total
|
100 %
|
100 %
|
100 %
|
(Dollars in millions)
|
Pension Plans |
Postretirement
Welfare Plans
|
||||
U.S.
|
Non U.S.
|
|||||
2011
|
$
|
206
|
$
|
7
|
$ |
45
|
2012
|
124
|
7
|
46
|
|||
2013
|
130
|
7
|
47
|
|||
2014
|
133
|
8
|
49
|
|||
2015
|
133
|
8
|
51
|
|||
2016-2020
|
623
|
50
|
279
|
14.
|
(Dollars in millions)
|
Payments Due For
|
|||||||||||
Period
|
Notes and Debentures
|
Credit Facility Borrowings and Other
|
Interest Payable
|
Purchase Obligations
|
Operating Leases
|
Total
|
||||||
2011
|
$
|
6
|
$
|
--
|
$
|
87
|
$
|
266
|
$
|
24
|
$
|
383
|
2012
|
151
|
--
|
87
|
265
|
24
|
527
|
||||||
2013
|
--
|
--
|
81
|
239
|
13
|
333
|
||||||
2014
|
--
|
--
|
81
|
37
|
6
|
124
|
||||||
2015
|
250
|
--
|
82
|
36
|
4
|
372
|
||||||
2016 and beyond
|
1,197
|
--
|
528
|
118
|
15
|
1,858
|
||||||
Total
|
$
|
1,604
|
$
|
--
|
$
|
946
|
$
|
961
|
$
|
86
|
$
|
3,597
|
15.
|
ENVIRONMENTAL
MATTERS
|
16.
|
LEGAL
MATTERS
|
17.
|
STOCKHOLDERS'
EQUITY
|
(Dollars in millions)
|
Common Stock at Par Value
$
|
Paid-in Capital
$
|
Retained Earnings
$
|
Accumulated Other Comprehensive Income (Loss)
$
|
Treasury Stock at Cost
$
|
Total Stockholders' Equity
$
|
Balance at December 31, 2007
|
1
|
573
|
2,349
|
(28)
|
(813)
|
2,082
|
Net Earnings
|
--
|
--
|
346
|
--
|
--
|
346
|
Cash Dividends Declared
(1)
|
--
|
--
|
(132)
|
--
|
--
|
(132)
|
Other Comprehensive Loss
|
--
|
--
|
--
|
(307)
|
--
|
(307)
|
Share-based Compensation Costs
(2)
|
--
|
25
|
--
|
--
|
--
|
25
|
Stock Option Exercises
|
--
|
35
|
--
|
--
|
--
|
35
|
Other
(3)
|
--
|
5
|
--
|
--
|
--
|
5
|
Stock Repurchases
|
--
|
--
|
--
|
--
|
(501)
|
(501)
|
Balance at December 31, 2008
|
1
|
638
|
2,563
|
(335)
|
(1,314)
|
1,553
|
Net Earnings
|
--
|
--
|
136
|
--
|
--
|
136
|
Cash Dividends Declared
(1)
|
--
|
--
|
(128)
|
--
|
--
|
(128)
|
Other Comprehensive Loss
|
--
|
--
|
--
|
(50)
|
--
|
(50)
|
Share-based Compensation Costs
(2)
|
--
|
19
|
--
|
--
|
--
|
19
|
Stock Option Exercises
|
--
|
7
|
--
|
--
|
--
|
7
|
Other
(3)
|
--
|
(3)
|
--
|
--
|
--
|
(3)
|
Stock Repurchases
|
--
|
--
|
--
|
--
|
(21)
|
(21)
|
Balance at December 31, 2009
|
1
|
661
|
2,571
|
(385)
|
(1,335)
|
1,513
|
Net Earnings
|
--
|
--
|
438
|
--
|
--
|
438
|
Cash Dividends Declared
(1)
|
--
|
--
|
(129)
|
--
|
--
|
(129)
|
Other Comprehensive Loss
|
--
|
--
|
--
|
(47)
|
--
|
(47)
|
Share-based Compensation Costs
(2)
|
--
|
24
|
--
|
--
|
--
|
24
|
Stock Option Exercises
|
--
|
102
|
--
|
--
|
--
|
102
|
Other
(3)
|
--
|
6
|
--
|
--
|
--
|
6
|
Stock Repurchases
|
--
|
--
|
--
|
--
|
(280)
|
(280)
|
Balance at December 31, 2010
|
1
|
793
|
2,880
|
(432)
|
(1,615)
|
1,627
|
(1)
|
Includes cash dividends paid and dividends declared, but unpaid.
|
(2)
|
Includes the fair value of equity share-based awards recognized for share-based compensation.
|
(3)
|
Includes tax benefits/charges relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes have been adjusted to paid-in capital and other items.
|
Shares of common stock issued
(1)
|
2010
|
2009
|
2008
|
||
Balance at beginning of year
|
94,775,064
|
94,495,860
|
93,630,292
|
||
Issued for employee compensation and benefit plans
|
2,069,381
|
279,204
|
865,568
|
||
Balance at end of year
|
96,844,445
|
94,775,064
|
94,495,860
|
||
(1)
Includes shares held in treasury.
|
(Dollars in
millions
)
|
Cumulative Translation Adjustment
$
|
Benefit Plans Unrecognized Losses and Prior Service Credits
$
|
Unrealized Gains (Losses) on Cash Flow Hedges
$
|
Unrealized Losses on Investments
$
|
Accumulated Other Comprehensive Income (Loss)
$
|
Balance at December 31, 2008
|
60
|
(414)
|
20
|
(1)
|
(335)
|
Period change
|
17
|
(74)
|
7
|
--
|
(50)
|
Balance at December 31, 2009
|
77
|
(488)
|
27
|
(1)
|
(385)
|
Period change
|
2
|
(39)
|
(10)
|
--
|
(47)
|
Balance at December 31, 2010
|
79
|
(527)
|
17
|
(1)
|
(432)
|
18.
|
ASSET
IMPAIRMENTS AND RESTRUCTURING CHARGES, NET
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Fixed asset impairments
|
$ |
--
|
$ |
133
|
$ |
--
|
Intangible asset and goodwill impairments
|
8
|
46
|
--
|
|||
Severance charges
|
18
|
19
|
8
|
|||
Site closure and restructuring charges
|
3
|
(2)
|
14
|
|||
Total Eastman Chemical Company
|
$ |
29
|
$ |
196
|
$ |
22
|
(Dollars in millions)
|
Balance at
January 1, 2008
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash Reductions
|
Balance at
December 31, 2008
|
|||||
Noncash charges
|
$
|
--
|
$
|
2
|
$
|
(2)
|
$
|
--
|
$
|
--
|
Severance costs
|
2
|
9
|
--
|
(7)
|
4
|
|||||
Site closure and restructuring costs
|
11
|
11
|
(8)
|
(8)
|
6
|
|||||
Total
|
$
|
13
|
$
|
22
|
$
|
(10)
|
$
|
(15)
|
$
|
10
|
Balance at
January 1, 2009
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash Reductions
|
Balance at
December 31, 2009
|
||||||
Noncash charges
|
$
|
--
|
$
|
179
|
$
|
(179)
|
$
|
--
|
$
|
--
|
Severance costs
|
4
|
19
|
--
|
(20)
|
3
|
|||||
Site closure and restructuring costs
|
6
|
(2)
|
2
|
--
|
6
|
|||||
Total
|
$
|
10
|
$
|
196
|
$
|
(177)
|
$
|
(20)
|
$
|
9
|
Balance at
January 1, 2010
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash Reductions
|
Balance at
December 31, 2010
|
||||||
Noncash charges
|
$
|
--
|
$
|
8
|
$
|
(8)
|
$
|
--
|
$
|
--
|
Severance costs
|
3
|
18
|
--
|
(6)
|
15
|
|||||
Site closure and restructuring costs
|
6
|
3
|
(3)
|
--
|
6
|
|||||
Total
|
$
|
9
|
$
|
29
|
$
|
(11)
|
$
|
(6)
|
$
|
21
|
19.
|
OTHER
OPERATING INCOME
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Other operating income
|
$
|
--
|
$
|
--
|
$
|
(16)
|
20.
|
OTHER
CHARGES (INCOME), NET
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Foreign exchange transactions losses, net
|
$
|
8
|
$
|
5
|
$
|
17
|
Investments (gains) losses, net
|
(1)
|
5
|
6
|
|||
Other, net
|
5
|
3
|
(3)
|
|||
Other charges (income), net
|
$
|
12
|
$
|
13
|
$
|
20
|
21.
|
SHARE
-BASED COMPENSATION PLANS AND AWARDS
|
2010
|
2009
|
2008
|
|||||||||
Options
|
Weighted-Average Exercise Price
|
Options
|
Weighted-Average Exercise Price
|
Options
|
Weighted-Average Exercise Price
|
||||||
Outstanding at beginning of year
|
4,341,400
|
$
|
55
|
4,217,700
|
$
|
54
|
4,481,300
|
$
|
55
|
||
Granted
|
299,000
|
79
|
355,300
|
56
|
445,700
|
38
|
|||||
Exercised
|
(1,879,100)
|
54
|
(167,600)
|
41
|
(691,500)
|
51
|
|||||
Cancelled, forfeited, or expired
|
(8,400)
|
44
|
(64,000)
|
46
|
(17,800)
|
55
|
|||||
Outstanding at end of year
|
2,752,900
|
$
|
58
|
4,341,400
|
$
|
55
|
4,217,700
|
$
|
54
|
||
Options exercisable at year-end
|
2,075,200
|
3,493,800
|
2,980,100
|
||||||||
Available for grant at end of year
|
1,300,580
|
1,899,323
|
2,545,400
|
||||||||
Options Outstanding
|
Options Exercisable
|
|||||||||
Range of Exercise Prices
|
Number Outstanding at 12/31/10
|
Weighted-Average Remaining Contractual Life (Years)
|
Weighted-Average Exercise Price
|
Number Exercisable at 12/31/10
|
Weighted-Average Exercise Price
|
|||||
$30-$49
|
572,400
|
5.5
|
$
|
39
|
430,600
|
$
|
40
|
|||
$50-$59
|
701,900
|
6.8
|
55
|
465,000
|
55
|
|||||
$60-$64
|
677,700
|
5.6
|
61
|
670,200
|
61
|
|||||
$65-$69
|
489,400
|
5.5
|
66
|
489,400
|
66
|
|||||
$70-$80
|
311,500
|
9.7
|
79
|
20,000
|
73
|
|||||
2,752,900
|
6.3
|
$
|
58
|
2,075,200
|
$
|
57
|
Nonvested Options
|
Number of Options
|
Weighted-Average Grant Date Fair Value
|
||
Nonvested at January 1, 2010
|
847,700
|
$
|
9.31
|
|
Granted
|
299,000
|
17.38
|
||
Vested
|
(468,900)
|
9.64
|
||
Forfeited
|
--
|
--
|
||
Nonvested Options at December 31, 2010
|
677,800
|
$
|
12.65
|
22.
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Current assets
|
$
|
(38)
|
$
|
(2)
|
$
|
113
|
Other assets
|
7
|
27
|
18
|
|||
Current liabilities
|
46
|
(23)
|
10
|
|||
Long-term liabilities and equity
|
6
|
5
|
21
|
|||
Total
|
$
|
21
|
$
|
7
|
$
|
162
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Cash paid for interest and income taxes is as follows:
|
||||||
Interest, net of amounts capitalized
|
$
|
116
|
$
|
82
|
$
|
96
|
Income taxes paid (refunded)
|
165
|
(71)
|
150
|
23.
|
SEGMENT
INFORMATION
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Sales by Segment
|
||||||
CASPI
|
$
|
1,574
|
$
|
1,217
|
$
|
1,524
|
Fibers
|
1,142
|
1,032
|
1,046
|
|||
PCI
|
2,083
|
1,398
|
2,443
|
|||
Specialty Plastics
|
1,043
|
749
|
923
|
|||
Total Sales
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Operating Earnings (Loss)
|
||||||
CASPI
(1)
|
$
|
293
|
$
|
221
|
$
|
196
|
Fibers
(2)
|
323
|
292
|
234
|
|||
PCI
(3)
|
224
|
41
|
143
|
|||
Specialty Plastics
(4)
|
88
|
9
|
30
|
|||
Total Operating Earnings by Segment
|
928
|
563
|
603
|
|||
Other
(5)
|
(66)
|
(218)
|
(52)
|
|||
Total Operating Earnings
|
$
|
862
|
$
|
345
|
$
|
551
|
(1)
|
CASPI includes $6 million and $3 million in 2010 and 2009, respectively, in asset impairments and restructuring charges, net related to severance charges and $5 million in 2008 in other operating income related to the sale of certain mineral rights at an operating manufacturing site.
|
(2)
|
Fibers includes $3 million and $4 million in 2010 and 2009, respectively, in asset impairments and restructuring charges, net related to severance charges.
|
(3)
|
PCI includes $7 million, $6 million, and $22 million in 2010, 2009, and 2008, respectively, in asset impairments and restructuring charges, net, related to severance charges and the divestiture of manufacturing facilities outside the U.S., $5 million in 2008 in accelerated depreciation related to the scheduled shutdown of cracking units at the Longview, Texas facility, and other operating income of $9 million in 2008 related to the sale of certain mineral rights at an operating manufacturing site.
|
(4)
|
Specialty Plastics includes $5 million and $4 million in 2010 and 2009, respectively, in asset impairments and restructuring charges, net related to severance charges and $2 million in 2008 in other operating income related to the sale of certain mineral rights at an operating manufacturing site.
|
(5)
|
Other includes $8 million and $179 million in 2010 and 2009, respectively, in asset impairments and restructuring charges related to the discontinued industrial gasification project in Beaumont, Texas.
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Assets by Segment
(1)
|
||||||
CASPI
|
$
|
1,28
0
|
$
|
1,113
|
$
|
1,150
|
Fibers
|
874
|
726
|
750
|
|||
Performance Polymers
(2)
|
--
|
575
|
647
|
|||
PCI
|
1,235
|
844
|
915
|
|||
Specialty Plastics
|
1,017
|
910
|
818
|
|||
Total Assets by Segment
|
4,406
|
4,168
|
4,280
|
|||
Corporate Assets
(3)
|
986
|
1,347
|
1,001
|
|||
Assets Held for Sale
(2)
|
594
|
--
|
--
|
|||
Total Assets
|
$
|
5,986
|
$
|
5,515
|
$
|
5,281
|
(1)
|
The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.
|
(2)
|
The Performance Polymers assets have been classified as assets held for sale as of December 31, 2010, as a result of the definitive agreement with DAK Americas, LLC, to sell the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment in fourth quarter 2010. For more information regarding assets held for sale, see
Note 2, "Discontinued Operations and Assets Held for Sale
" and
Note 26 "Subsequent Events
. "
|
(3)
|
For more information regarding the impairment of Beaumont, Texas industrial gasification project, see
Note 18 "Asset Impairments and Restructuring Charges, Net
".
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Depreciation Expense by Segment
|
||||||
CASPI
|
$
|
56
|
$
|
56
|
$
|
50
|
Fibers
|
59
|
59
|
50
|
|||
PCI
(1)
|
60
|
57
|
53
|
|||
Specialty Plastics
|
61
|
53
|
53
|
|||
Total Depreciation Expense by Segment
|
236
|
225
|
206
|
|||
Other
|
2
|
2
|
1
|
|||
Total Depreciation Expense
|
$
|
238
|
$
|
227
|
$
|
207
|
(1)
|
In the fourth quarter 2006, the Company made a strategic decision relating to the scheduled shutdown of cracking units at the Longview, Texas facility. In 2008, accelerated depreciation costs resulting from this decision were $5 million in the PCI segment.
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Capital Expenditures by Segment
|
||||||
CASPI
|
$
|
39
|
$
|
42
|
$
|
69
|
Fibers
|
39
|
29
|
87
|
|||
PCI
|
61
|
49
|
126
|
|||
Specialty Plastics
|
73
|
125
|
152
|
|||
Total Capital Expenditures by Segment
|
212
|
245
|
434
|
|||
Other
(1)
|
31
|
65
|
200
|
|||
Total Capital Expenditures
|
$
|
243
|
$
|
310
|
$
|
634
|
(1)
|
Other includes $24 million, $27 million, and $126 million, for 2010, 2009, and 2008, respectively, of capital expenditures in the Performance Polymers segment which is now classified in assets held for sale. For more information regarding assets held for sale, see
Note 2, "Discontinued Operations and Assets Held for Sale
."
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
|||
Geographic Information
|
||||||
Sales
|
||||||
United States
|
$
|
2,826
|
$
|
2,189
|
$
|
3,218
|
All foreign countries
|
3,016
|
2,207
|
2,718
|
|||
Total
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
Long
-
Lived Assets, Net
|
||||||
United States
(1)
|
$
|
2,790
|
$
|
2,789
|
$
|
2,794
|
All foreign countries
|
429
|
321
|
404
|
|||
Total
|
$
|
3,219
|
$
|
3,110
|
$
|
3,198
|
(1)
|
The Performance Polymers assets have been classified as assets held for sale as of December 31, 2010, as a result of the definitive agreement with DAK Americas, LLC, to sell the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment in fourth quarter 2010. For more information regarding assets held for sale, see
Note 2, "Discontinued Operations and Assets Held for Sale
" and
Note 26 "Subsequent Events
."
|
24.
|
QUARTERLY
SALES AND EARNINGS DATA – UNAUDITED
|
(Dollars in millions, except per share amounts)
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||
2010
|
||||||||
Sales
|
$
|
1,370
|
$
|
1,502
|
$
|
1,507
|
$
|
1,463
|
Gross profit
|
317
|
384
|
422
|
351
|
||||
Asset impairment and restructuring charges, net
|
--
|
3
|
--
|
26
|
||||
Earnings from continuing operations
|
105
|
141
|
162
|
17
|
||||
Earnings (loss) from discontinued operations, net of tax
(1)
|
(4)
|
7
|
8
|
2
|
||||
Net earnings
|
101
|
148
|
170
|
19
|
||||
Earnings from continuing operations per share
(2)
|
||||||||
Basic
|
$
|
1.45
|
$
|
1.96
|
$
|
2.26
|
$
|
0.23
|
Diluted
|
$
|
1.43
|
$
|
1.92
|
$
|
2.22
|
$
|
0.23
|
Earnings (loss) from discontinued operations per share
(1)(2)
|
||||||||
Basic
|
$
|
(0.06)
|
$
|
0.09
|
$
|
0.11
|
$
|
0.02
|
Diluted
|
$
|
(0.06)
|
$
|
0.10
|
$
|
0.11
|
$
|
0.02
|
Net earnings per share
(2)
|
||||||||
Basic
|
$
|
1.39
|
$
|
2.05
|
$
|
2.37
|
$
|
0.25
|
Diluted
|
$
|
1.37
|
$
|
2.02
|
$
|
2.33
|
$
|
0.25
|
(1)
|
The Company completed the sale of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment on January 31, 2011.
The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented and are therefore not included in results from continuing operations under GAAP.
|
(2)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
(Dollars in millions, except per share amounts) |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||
2009
|
||||||||
Sales
|
$
|
970
|
$
|
1,069
|
$
|
1,171
|
$
|
1,186
|
Gross profit
|
177
|
237
|
318
|
300
|
||||
Asset impairment and restructuring charges, net
|
22
|
(3)
|
--
|
177
|
||||
Earnings (loss) from continuing operations
|
10
|
57
|
102
|
(15)
|
||||
Earnings (loss) from discontinued operations, net of tax
(1)
|
(8)
|
8
|
(1)
|
(17)
|
||||
Net earnings (loss)
|
2
|
65
|
101
|
(32)
|
||||
Earnings (loss) from continuing operations per share
(2)
|
||||||||
Basic
|
$
|
0.14
|
$
|
0.78
|
$
|
1.41
|
$
|
(0.21)
|
Diluted
|
$
|
0.14
|
$
|
0.78
|
$
|
1.39
|
$
|
(0.21)
|
Earnings (loss) from discontinued operations per share
(1)(2)
|
||||||||
Basic
|
$
|
(0.11)
|
$
|
0.11
|
$
|
(0.01)
|
$
|
(0.23)
|
Diluted
|
$
|
(0.11)
|
$
|
0.11
|
$
|
(0.01)
|
$
|
(0.23)
|
Net earnings (loss) per share
(2)
|
||||||||
Basic
|
$
|
0.03
|
$
|
0.89
|
$
|
1.40
|
$
|
(0.44)
|
Diluted
|
$
|
0.03
|
$
|
0.89
|
$
|
1.38
|
$
|
(0.44)
|
(1)
|
The Company completed the sale of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment on January 31, 2011.
The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented and are therefore not included in results from continuing operations under GAAP.
|
(2)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
25.
|
RESERVE
ROLLFORWARDS
|
(Dollars in millions) |
Additions
|
|||||||||
Balance at
January 1, 2008
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at
December 31, 2008
|
||||||
Reserve for:
|
||||||||||
Doubtful accounts and returns
|
$
|
6
|
$
|
6
|
$
|
--
|
$
|
4
|
$
|
8
|
LIFO Inventory
|
510
|
15
|
--
|
--
|
525
|
|||||
Environmental contingencies
|
42
|
5
|
--
|
6
|
41
|
|||||
Deferred tax valuation allowance
|
146
|
(10)
|
--
|
5
|
131
|
|||||
$
|
704
|
$
|
16
|
$
|
--
|
$
|
15
|
$
|
705
|
|
Balance at
January 1, 2009
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at
December 31, 2009
|
||||||
Reserve for:
|
||||||||||
Doubtful accounts and returns
|
$
|
8
|
$
|
3
|
$
|
--
|
$
|
1
|
$
|
10
|
LIFO Inventory
|
525
|
(79)
|
--
|
--
|
446
|
|||||
Environmental contingencies
|
41
|
3
|
--
|
2
|
42
|
|||||
Deferred tax valuation allowance
|
131
|
--
|
--
|
43
|
88
|
|||||
$
|
705
|
$
|
(73)
|
$
|
--
|
$
|
46
|
$
|
586
|
|
Balance at
January 1, 2010
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at
December 31, 2010
|
||||||
Reserve for:
|
||||||||||
Doubtful accounts and returns
|
$
|
10
|
$
|
(5)
|
$
|
--
|
$
|
(1)
|
$
|
6
|
LIFO Inventory
|
446
|
44
|
--
|
--
|
490
|
|||||
Environmental contingencies
|
42
|
4
|
(4)
|
2
|
40
|
|||||
Deferred tax valuation allowance
|
88
|
--
|
--
|
40
|
48
|
|||||
$
|
586
|
$
|
43
|
$
|
(4)
|
$
|
41
|
$
|
584
|
26.
|
SUBSEQUENT
EVENTS
|
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and acquisitions and dispositions of assets of the Company;
|
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the 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 Company's financial statements.
|
None.
|
PART III
|
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options
(a)
|
Weighted-Average Exercise Price of Outstanding Options
(b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities reflected in Column (a))
(c)
|
||||
Equity compensation plans approved by stockholders
|
2,752,900
|
(1)
|
$58
|
1,300,580
|
(2)
|
||
Equity compensation plans not approved by stockholders
|
--
|
--
|
--
|
||||
TOTAL
|
2,752,900
|
$58
|
1,300,580
|
|
(1)
Represents shares of common stock issuable upon exercise of outstanding options granted under Eastman Chemical Company's 1997, 2002, and 2007 Omnibus Long-Term Compensation Plans; the 1999 and 2002 Director Long-Term Compensation Plans; and the 2007 Director Long Term Compensation Subplan and the 2008 Director Long-Term Compensation Subplan, components of the 2007 Omnibus Long-Term Compensation Plan.
|
|
(2)
Shares of common stock available for future awards under the Company's 2007 Omnibus Long-Term Compensation Plan, including the 2008 Director Long-Term Compensation Subplan, a component of the 2007 Omnibus Long-Term Compensation Plan.
|
Eastman Chemical Company
|
||
By:
|
/s/ James P. Rogers | |
James P. Rogers
|
||
Chairman of the Board and Chief Executive Officer
|
||
Date:
|
February
23,
2011
|
SIGNATURE
|
TITLE
|
DATE
|
||
PRINCIPAL EXECUTIVE OFFICER:
|
||||
/s/ James P. Rogers |
Chairman of the Board and
|
February
23,
2011
|
||
James P. Rogers
|
Chief Executive Officer
|
|||
PRINCIPAL FINANCIAL OFFICER:
|
||||
/s/ Curtis E. Espeland |
Senior Vice President and
|
February
23,
2011
|
||
Curtis E. Espeland
|
Chief Financial Officer
|
|||
PRINCIPAL ACCOUNTING OFFICER:
|
||||
/s/ Scott V. King |
Vice President, Controller and
|
February
23,
2011
|
||
Scott V. King
|
Chief Accounting Officer
|
|||
SIGNATURE
|
TITLE
|
DATE
|
||
DIRECTORS (other than Chairman, James P. Rogers, who signed as Principal Executive Officer):
|
||||
/s/ Humberto P. Alfonso |
Director
|
February
23,
2011
|
||
Humberto P. Alfonso
|
||||
/s/ Gary E. Anderson |
Director
|
February
23,
2011
|
||
Gary E. Anderson
|
||||
/s/ Michael P. Connors |
Director
|
February
23,
2011
|
||
Michael P. Connors
|
||||
/s/ Stephen R. Demeritt |
Director
|
February
23,
2011
|
||
Stephen R. Demeritt
|
||||
/s/ Robert M. Hernandez |
Director
|
February
23,
2011
|
||
Robert M. Hernandez
|
||||
/s/ Renée J. Hornbaker |
Director
|
February
23,
2011
|
||
Renée J. Hornbaker
|
||||
/s/ Lewis M. Kling |
Director
|
February
23,
2011
|
||
Lewis M. Kling
|
||||
/s/ Howard L. Lance |
Director
|
February
23,
2011
|
||
Howard L. Lance
|
||||
/s/ Thomas H. McLain |
Director
|
February
23,
2011
|
||
Thomas H. McLain
|
||||
/s/ David W. Raisbeck |
Director
|
February
23,
2011
|
||
David W. Raisbeck
|
EXHIBIT
INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
3.01
|
Amended and Restated Certificate of Incorporation of Eastman Chemical Company (incorporated herein by reference to Exhibit 3.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010)
|
|||
3.02
|
Amended and Restated Bylaws of Eastman Chemical Company (incorporated herein by referenced to Exhibit 3.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|||
4.01
|
Form of Eastman Chemical Company common stock certificate as amended February 1, 2001 (incorporated herein by reference to Exhibit 4.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
|
|||
4.02
|
Indenture, dated as of January 10, 1994, between Eastman Chemical Company and The Bank of New York, as Trustee (the "Indenture") (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated January 10, 1994)
|
|||
4.03
|
Form of 7 1/4% Debentures due January 15, 2024 (incorporated herein by reference to Exhibit 4(d) to the Company's Current Report on Form 8-K dated January 10, 1994)
|
|||
4.04
|
Officers' Certificate pursuant to Sections 201 and 301 of the Indenture (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated June 8, 1994)
|
|||
4.05
|
Form of 7 5/8% Debentures due June 15, 2024 (incorporated herein by reference to Exhibit 4(b) to the Company's Current Report on Form 8-K dated June 8, 1994)
|
|||
4.06
|
Form of 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)
|
|||
4.07
|
Form of 7% Notes due April 15, 2012 (incorporated herein by reference to Exhibit 4.09 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002)
|
|||
4.08
|
Officer's Certificate pursuant to Sections 201 and 301 of the Indenture related to 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)
|
|||
4.09
|
Form of 5.500% Notes due 2019 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 2, 2009)
|
|||
4.10
|
130
|
|||
4.11
|
Amended and Restated Credit Agreement, dated as of April 3, 2006 (the "Credit Agreement") among Eastman Chemical Company, the Lenders named therein, and Citigroup Global Markets , Inc. and J. P. Morgan Securities Inc., as joint lead arrangers, as amended on November 16, 2007 and March 10, 2008 (incorporated herein by reference to Exhibit 4.11 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and Exhibit 4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008)
|
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
4.12
|
Form of 6.30% Notes due 2018 (incorporated herein by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003)
|
|||
4.13
|
Form of 3% Note due 2015 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 10, 2010)
|
|||
4.14
|
Form of 4.5% Note due 2021 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 10, 2010)
|
|||
10.01*
|
Eastman Excess Retirement Income Plan (incorporated herein by reference to Exhibit 10.02 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.02*
|
136
|
|||
10.03*
|
Eastman Unfunded Retirement Income Plan (incorporated herein by reference to Exhibit 10.04 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.04*
|
2002 Omnibus Long-Term Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.05*
|
2002 Director Long-Term Compensation Plan, as amended (incorporated herein by reference to Appendix B to Eastman Chemical Company's 2002 Annual Meeting Proxy Statement)
|
|||
10.06*
|
Amended and Restated Eastman Chemical Company Benefit Security Trust dated January 2, 2002 (incorporated herein by reference to Exhibit 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
10.07*
|
Amended and Restated Warrant to Purchase Shares of Common Stock of Eastman Chemical Company, dated January 2, 2002 (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
10.08*
|
Amended and Restated Registration Rights Agreement, dated January 2, 2002 (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
10.09*
|
Amended and Restated Eastman Executive Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.10*
|
Amended Directors' Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.11*
|
148 | |||
10.12*
|
Form of Indemnification Agreements with Directors and Executive Officers (incorporated herein by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003)
|
|||
10.13*
|
Employment Agreement between Eastman Chemical Company and Mark J. Costa dated May 4, 2006 (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006) and amendment dated December 31, 2009 (incorporated herein by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009)
|
|||
10.14*
|
Forms of Award Notice for Stock Options Granted to Executive Officers under the 2002 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006)
|
|||
10.15*
|
Forms of Award Notice for Stock Options Granted to Executive Officers under the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.08 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|||
10.16*
|
1997 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.17*
|
2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.18*
|
Forms of Performance Share Awards to Executive Officers (2008 – 2010 Performance Period) (incorporated herein by reference to Exhibit 10.09 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.19*
|
Forms of Performance Share Awards to Executive Officers (2009 – 2011 Performance Period) (incorporated herein by reference to Exhibit 10.03 and 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.20*
|
Forms of Performance Share Awards to Executive Officers (2010 – 2012 Performance Period) (incorporated herein by reference to Exhibit 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009)
|
|||
10.21*
|
2007 Director Long-Term Compensation Subplan of the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.22*
|
2008 Director Long-Term Compensation Subplan of the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.05 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008)
|
|||
10.23*
|
Unit Performance Plan ("UPP") performance measures and goals, specific target objectives with respect to such performance goals, the method for computing the amount of the UPP award allocated to the award pool if the performance goals are attained, and the eligibility criteria for employee participation in the UPP, for the 2010 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 2, 2009)
|
|||
10.24*
|
Forms of Restricted Stock Unit Awards to James P. Rogers, Mark J. Costa, and Ronald C. Lindsay (incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.25*
|
Form of Restricted Stock Unit Award to Curtis E. Espeland (incorporated herein by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.26* | F orms of Performance Share Awards to Executive Officers (2011 – 2013 Performance Period) (incorporated herein by reference to Exhibit 10.03 and 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010) | |||
10.27* |
Unit Performance Plan ("UPP") performance measures and goals, specific target objectives with respect to such performance goals, the method for computing the amount of the UPP award allocated to the award pool if the performance goals are attained, and the eligibility criteria for employee participation in the UPP, for the 2011 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 1, 2010)
|
|||
10.28* | 156 | |||
12.01
|
158
|
|||
21.01
|
159
|
|||
23.01
|
161
|
|||
31.01
|
162
|
|||
31.02
|
163
|
|||
32.01
|
164
|
|||
32.02
|
165
|
|||
99.01 | Presentation of Revised Financial Information | 166 | ||
101.INS
|
XBRL Instance Document (furnished, not filed)
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema (furnished, not filed)
|
|||
101.CAL
|
XBRL Taxonomy Calculation Linkbase (furnished, not filed)
|
|||
101.LAB
|
XBRL Taxonomy Label Linkbase (furnished, not filed)
|
|||
101.PRE
|
XBRL Definition Linkbase Document (furnished, not filed)
|
|||
101.DEF
|
XBRL Definition Linkbase Document (furnished, not filed)
|
|||
*
Management contract or compensatory plan or arrangement filed pursuant to Item 601(b) (10) (iii) of Regulation S-K.
|
If to Executive
:
|
the address set forth below under Executive’s signature
|
|
If to the Company
:
|
Eastman Chemical Company
200 South Wilcox Drive
Kingsport, Tennessee 37660-5280
Attention: Corporate Secretary
|
1)
|
Each participant’s annual base pay rate on December 31 of the year in which Company and Unit performance is measured (the “Performance Year”), times
|
2)
|
The participant’s “UPP Target Award Percentage”, which is a target award percentage, expressed as a percentage of annual base rate, and determined by the participant’s salary grade, times
|
3)
|
A “Unit Performance Factor”, expressed as a percentage and determined by pre-set corporate and/or specified organizational unit (“Business Group Units”) performance goals. Generally, the Performance Factor can range from 0%, if performance goals are not met, up to the maximum performance factor of 200% for each UPP measure.
|
|
I.
|
The Performance Year will be divided into monthly intervals.
|
|
II.
|
Anyone promoted into UPP or who changes UPP participation level at any time during the performance year will have a portion of his/her Target UPP Variable Pay allocated to a Unit Award Pool based on the number of participating months during the performance year (participation as of the end of the month will be credited as an entire month).
|
|
III.
|
Anyone who moves to another variable pay program at any time during the performance year will have a portion of his/her Target UPP Variable Pay allocated to a Unit Award Pool based on the number of participating months during the performance year (participation as of the end of the month will be credited as an entire month).
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||
Earnings from continuing operations before income taxes
|
$
|
636
|
$
|
254
|
$
|
461
|
$
|
649
|
$
|
492
|
Add:
|
||||||||||
Interest expense
|
105
|
85
|
95
|
107
|
105
|
|||||
Appropriate portion of rental expense
(2)
|
14
|
12
|
14
|
17
|
20
|
|||||
Amortization of capitalized interest
|
7
|
8
|
7
|
8
|
10
|
|||||
Earnings as adjusted
|
$
|
762
|
$
|
359
|
$
|
577
|
$
|
781
|
$
|
627
|
Fixed charges:
|
||||||||||
Interest expense
|
$
|
105
|
$
|
85
|
$
|
95
|
$
|
107
|
$
|
105
|
Appropriate portion of rental expense
(2)
|
14
|
12
|
14
|
17
|
20
|
|||||
Capitalized interest
|
3
|
14
|
9
|
8
|
4
|
|||||
Total fixed charges
|
$
|
122
|
$
|
111
|
$
|
118
|
$
|
132
|
$
|
129
|
Ratio of earnings to fixed charges
|
6.2x
|
3.2x
|
4.9x
|
5.9x
|
4.9x
|
|||||
(1)
|
The Company completed the sale of the polyethylene terephthalate ("PET") business, related assets at the Columbia, South Carolina, site, and technology of its Performance Polymers segment on January 31, 2011. The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented. For additional information, see Note 2, "Discontinued Operations and Assets Held for Sale" and Note 26, "Subsequent Events" to the Company's consolidated financial statements in Part II, Item 8 of this 2010 Annual Report on Form 10-K.
|
(2)
|
For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense.
|
Exhibit 21.01
|
||
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
||
NAME OF SUBSIDIARY
|
JURISDICTION OF INCORPORATION OR ORGANIZATION
|
|
Eastman Administración, S.A. de C.V.
|
Mexico
|
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Eastman Belgium B.V.B.A.
|
Belgium
|
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Eastman Benelux B.V.B.A.
|
Belgium
|
|
Eastman Cayman Financial Services Limited
|
Cayman Islands
|
|
Eastman Chemical Argentina S.R.L.
|
Argentina
|
|
Eastman Chemical, Asia Pacific Pte. Ltd.
|
Singapore
|
|
Eastman Chemical (Malaysia) Sdn. Bhd.
|
Malaysia
|
|
Eastman Chemical B.V.
|
Netherlands
|
|
Eastman Chemical Canada, Inc.
|
Canada
|
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Eastman Chemical Company Foundation, Inc.
|
Delaware
|
|
Eastman Chemical Company Investments, Inc.
|
Delaware
|
|
Eastman Chemical do Brasil Ltda
|
Brazil - partnership
|
|
Eastman Chemical, Europe, Middle East, and Africa, Ltd
|
Delaware
|
|
Eastman Chemical Financial Corporation
|
Delaware
|
|
Eastman Chemical GmbH
|
Germany
|
|
Eastman Chemical HK Limited
|
Hong Kong
|
|
Eastman Chemical Holdings, S.A. de C.V.
|
Mexico
|
|
Eastman Chemical Holdings Spain, S.L.
|
Spain
|
|
Eastman Chemical International AG
|
Switzerland
|
|
Eastman Chemical Italia S.r.l.
|
Italy
|
|
Eastman Chemical Japan Limited
|
Japan
|
|
Eastman Chemical Korea Ltd.
|
Korea
|
|
Eastman Chemical Latin America, Inc.
|
Delaware
|
|
Eastman Chemical Ltd.
|
New York
|
|
Eastman Chemical Luxembourg S.a.r.l.
|
Luxembourg
|
|
Eastman Chemical Middelburg, B.V.
|
Netherlands
|
|
Eastman Chemical Pioneer, LLC
|
Delaware
|
|
Eastman Chemical Regional UK
|
United Kingdom
|
|
Eastman Chemical Resins, Inc.
|
Delaware
|
|
Eastman Chemical Singapore Pte. Ltd.
|
Singapore
|
|
Eastman Chemical Uruapan, S.A. de C.V.
|
Mexico
|
|
Eastman Chemical Workington Limited
|
United Kingdom
|
|
||
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
||
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCORPORATION
OR ORGANIZATION
|
|
Eastman Cogen Management L.L.C.
|
Texas
|
|
Eastman Cogeneration L.P.
|
Texas
|
|
Eastman Company UK Limited
|
United Kingdom
|
|
Eastman Espana S. L.
|
Spain
|
|
Eastman Fibers Korea, Ltd.
|
Korea
|
|
Eastman Gasification Services Company
|
Delaware
|
|
Eastman International Management Company
|
Tennessee
|
|
Eastman Malta Limited
|
Malta
|
|
Eastman Chemical EMEA B.V.
|
Netherlands
|
|
Eastman Servicios Corporativos, S.A. de C.V.
|
Mexico
|
|
Eastman (Shanghai) Chemical Commercial Co., Ltd.
|
China
|
|
Eastman Spain L.L.C.
|
Delaware
|
|
Eastman Specialties AS
|
Estonia
|
|
Eastman Specialties Corporation
|
Delaware
|
|
Eastman Specialties Holdings Corporation
|
Delaware
|
|
EGSC Beaumont, Inc.
|
Delaware
|
|
Enterprise Genetics, Inc.
|
Nevada
|
|
GLC Associates
|
Nevada
|
|
Genovique Specialties Singapore Pte. Ltd.
|
Singapore
|
|
Genovique Specialties Wuhan Youji Chemical Co., Ltd.
|
China
|
|
Tongxiang Xinglong Fine Chemical Company Limited
|
China
|
|
Holston Defense Corporation
|
Virginia
|
|
Jaeger Chimie France S.A.R.L.
|
France
|
|
Kingsport Hotel, L.L.C.
|
Tennessee
|
|
Mustang Pipeline Company
|
Texas
|
|
Nanjing Yangzi Eastman Chemical Ltd.
|
China
|
|
Pinto Pipeline Company of Texas
|
Texas
|
|
Primester
|
New York
|
|
Qilu Eastman Specialty Chemicals, Ltd
|
China
|
|
TX Energy, LLC
|
Delaware
|
1. I have reviewed this annual report on Form 10-K of Eastman Chemical Company; |
|
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 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 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.
|
/s/ James P. Rogers |
1. I have reviewed this annual report on Form 10-K of Eastman Chemical Company; |
|
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 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 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.
|
/s/ Curtis E. Espeland |
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
/s/ James P. Rogers |
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
/s/ Curtis E. Espeland |
(Dollars in millions)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||
Sales by Segment
|
||||||||||
CASPI
|
$
|
1,574
|
$
|
1,217
|
$
|
1,524
|
$
|
1,451
|
$
|
1,421
|
Fibers
|
1,142
|
1,032
|
1,046
|
999
|
911
|
|||||
PCI
|
2,083
|
1,398
|
2,443
|
2,191
|
1,749
|
|||||
Specialty Plastics
|
1,043
|
749
|
923
|
872
|
818
|
|||||
Total Operating Earnings
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
$
|
5,513
|
$
|
4,899
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||
Operating Earnings (Loss)
|
||||||||||
CASPI
|
$
|
293
|
$
|
221
|
$
|
196
|
$
|
225
|
$
|
217
|
Fibers
|
323
|
292
|
234
|
230
|
218
|
|||||
PCI
|
224
|
41
|
143
|
218
|
125
|
|||||
Specialty Plastics
|
88
|
9
|
30
|
58
|
39
|
|||||
Total Operating Earnings by Segment
|
928
|
563
|
603
|
731
|
599
|
|||||
Other
|
(66)
|
(218)
|
(52)
|
(48)
|
(47)
|
|||||
Total Operating Earnings
|
$
|
862
|
$
|
345
|
$
|
551
|
$
|
683
|
$
|
552
|
(Dollars in millions)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||
Sales by Customer Location
|
||||||||||
United States and Canada
|
$
|
2,957
|
$
|
2,252
|
$
|
3,308
|
$
|
3,263
|
$
|
2,981
|
Asia Pacific
|
1,446
|
1,062
|
1,186
|
1,084
|
890
|
|||||
Europe, Middle East, and Africa
|
1,150
|
835
|
1,045
|
935
|
812
|
|||||
Latin America
|
289
|
247
|
397
|
231
|
216
|
|||||
Total Sales
|
$
|
5,842
|
$
|
4,396
|
$
|
5,936
|
$
|
5,513
|
$
|
4,899
|