(Mark
One)
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2013
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______________ to ______________
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Delaware
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62-1539359
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(State or other jurisdiction of
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(I.R.S. employer
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incorporation or organization)
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identification no.)
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200 South Wilcox Drive
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Kingsport, Tennessee
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37662
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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ITEM
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PAGE
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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10.
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11.
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12.
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13.
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14.
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Item
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Page
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ITEM 1. BUSINESS
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CORPORATE OVERVIEW
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•
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substantially completing the integration of Solutia, which was acquired on July 2, 2012 and which:
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◦
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broadened Eastman's global presence;
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◦
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established a combined platform with extensive organic growth opportunities through complementary technologies and business capabilities, and an overlap of key end markets; and
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◦
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expanded Eastman's portfolio of sustainable products and products with leading market positions;
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•
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in the Additives & Functional Products segment, completing an expansion of ethylene oxide derivative capacity in Longview, Texas in second quarter 2013 to meet demand in the coatings markets;
|
•
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in the Advanced Materials segment, beginning the expansion of Eastman Tritan
TM
copolyester capacity at the Kingsport, Tennessee manufacturing facility which is expected to be operational in the second half of 2014 to meet demand for Eastman Tritan
TM
copolyester;
|
•
|
in the Fibers segment, completing a new 30,000 metric ton acetate tow manufacturing facility in Hefei, China during third quarter 2013 in a joint venture with China National Tobacco Corporation to meet customer growth; and
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•
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in the Specialty Fluids & Intermediates segment:
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◦
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debottlenecking its largest olefins cracking unit in Longview, Texas, in first quarter 2013, primarily to produce additional ethylene to improve Eastman's olefin cost position; and
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◦
|
beginning a Therminol
®
heat transfer fluid capacity expansion in Newport, Wales, which is expected to be operational in the second half of 2014 to support expected demand in the industrial chemicals and processing market.
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BUSINESS SEGMENTS
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•
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Overview
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•
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Principal Products
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Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
Coatings Industry and Other
|
||||
Solvents
•
Texanol™
•
ketones
•
esters
•
glycol ethers
• alcohol solvents
|
specialty coalescents, specialty solvents, and commodity solvents
|
BASF SE
The Dow Chemical Company
|
propane
propylene
ethane
|
Coatings Industry
Building & Construction (architectural coatings)
Transportation (OEM) and refinish coatings)
Durable Goods (industrial coatings applications)
Other
Consumables (graphic arts, cleaners, packaging)
Industrial chemicals (process solvents and intermediates)
|
Polymers
•
cellulosics
•
polyesters
•
polyolefins
|
paint additives and specialty polymers
|
alternative technologies
|
wood pulp
propylene
propane
|
Coatings Industry
Transportation (OEM and refinish coatings)
Durable Goods (industrial coatings applications and wood coatings)
Other
Consumables (graphic arts and printing inks)
Durable Goods (packaging inks)
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
Tires Industry
|
||||
Crystex
®
|
insoluble sulfur rubber additive
|
Oriental Carbon & Chemicals Limited
Shikoku Chemicals Corporation
|
naphthenic process oil
sulfur
|
Transportation (rubber tire manufacturing)
Other rubber products (such as hoses, belts, seals, and footwear)
|
Santoflex
®
|
antidegradant rubber additive
|
Jiangsu Sinorgchem Technology Co, Ltd.
Korea Kumho Petrochemical Co. Ltd.
Lanxess AG
|
nitrobenzene
aniline
methyl isobutyl ketone
|
Transportation (rubber tire manufacturing)
Other rubber products (such as hoses, belts, seals, and footwear)
|
Piccotac
®
Kristalex
®
|
hydrocarbon resins
|
Arizona Chemical
Cray Valley Hydrocarbon Specialty Chemicals
Exxon Mobil Corporation
Kolon Industries Incorporated
|
alpha methylstyrene
piperylene
styrene
|
Transportation (rubber tire manufacturing)
|
|
Percentage of Total Segment Sales
|
|||
Product Lines
|
2013
|
2012 Pro Forma
Combined
|
2012
|
2011
|
Coatings Industry
|
48%
|
49%
|
59%
|
73%
|
Tires Industry
|
34%
|
34%
|
20%
|
—%
|
Other Industries
|
18%
|
17%
|
21%
|
27%
|
•
|
Growth
|
•
|
Overview
|
•
|
Principal Products
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
|
||||
Adhesives Resins
|
||||
Piccotac
TM
Regalite
TM
Eastotac
TM
Eastoflex
TM
|
hydrocarbon resins and rosin resins mainly for hot-melt and pressure sensitive adhesives
|
Exxon Mobil Corporation
Kolon Industries, Inc.
|
C9 resin oil
piperylene
gum rosin
|
Consumables (resins used in hygiene and packaging adhesives)
Building & Construction (resins for construction adhesives and interior flooring)
|
Plasticizers
|
|
|
|
|
Eastman 168
TM
Eastman
TM
DOP
Benzoflex
TM
Eastman TXIB
TM
|
primary non-phthalate and phthalate plasticizers and a range of niche non-phthalate plasticizers
|
BASF SE
Exxon Mobil Corporation
LG Chem, Ltd.
Emerald Performance Materials
|
propane
propylene
paraxylene
|
Building & Construction (non-phthalate plasticizers used in interior surfaces)
Consumables (food packaging, packaging adhesives, and glove applications)
Health & Wellness (medical devices)
|
•
|
Growth
|
•
|
Overview
|
•
|
Principal Products
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
|
|
|
|
|
Specialty Plastics
|
||||
Eastar™ copolyesters
Eastman Tritan™ copolyester
Eastman Embrace™ copolyester
Eastman Spectar™ copolyester
Eastman Aspira™ family of resins
Eastman Visualize
TM
Material
|
specialty copolyesters and cellulose esters
|
Bayer AG
Styron LLC
Evonik Industries AG
Saudi Basic Industries Corporation
Mitsubishi Chemical Corporation
S.K. Chemical Industries
Sichuan Push Acetati Company Limited
Daicel Chemical Industries Ltd
|
paraxylene
ethylene glycol
cellulose
|
Consumables (Specialty copolyesters used in consumer packaging, personal care and cosmetics packaging, in-store fixtures and displays)
Durable Goods (consumer housewares and appliances)
Health & Wellness (medical)
Electronic films (displays)
|
Interlayers
|
||||
Saflex
®
|
laminated safety glass and specialty intermediate polyvinyl butyral ("PVB") resin
|
Sekisui Chemical Co., Ltd.
E.I. du Pont de Nemours and Company
Kuraray Co., Ltd
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polyvinyl alcohol
vinyl acetate monomer
butyraldehyde
2-ethyl hexanol
ethanol
|
Transportation (automotive safety glass)
Building & Construction (PVB for architectural interlayers)
|
Performance Films
|
||||
Llumar
®
V-kool
®
Gila
®
Flexvue
®
|
window film products for aftermarket applied films
|
3M Company
Saint-Gobain S.A.
Commonwealth Laminating & Coating, Inc.
Garware Chemicals Limited
|
polyethylene terephthalate film
|
Transportation (automotive after-market window film)
Building & Construction (residential and commercial window films)
|
|
Percentage of Total Segment Sales
|
|||
Product Lines
|
2013
|
2012 Pro Forma
Combined
|
2012
|
2011
|
Specialty Plastics
|
53%
|
52%
|
69%
|
100%
|
Interlayers
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34%
|
34%
|
23%
|
—%
|
Performance Films
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13%
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14%
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8%
|
—%
|
•
|
Growth
|
•
|
Overview
|
•
|
Principal Products
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
|
|
|
|
|
Acetate Tow
|
||||
Estron™
|
cellulose acetate tow
|
Celanese Corporation
Solvay S.A.
Daicel Corporation
Mitsubishi Rayon Co. Ltd.
|
wood pulp
methanol
high sulfur coal
|
Tobacco (manufacture of cigarette filters)
|
Acetate Yarn
|
||||
Estron™
Chromspun™
Cosilva™
|
natural (undyed) acetate yarn
solution dyed acetate yarn
|
Industrias del Acetato de Celulosa S.A.
UAB Korelita
Mitsubishi Rayon Co. Ltd.
|
wood pulp
methanol
high sulfur coal
|
Consumables (apparel, home furnishings, and industrial fabrics)
Health & Wellness (medical tape)
|
Acetyl Chemical Products
|
||||
Estrobond™
|
cellulose diacetate flake
acetic acid
acetic anhydride
triacetin
|
Jiangsu Ruijia Chemistry Co., Ltd.
Polynt SPA
Daicel Corporation
Celanese Corporation
Solvay S.A.
|
wood pulp
methanol
high sulfur coal
|
Tobacco (manufacture of cigarette filters)
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2013
|
2012
|
2011
|
Acetate Tow
|
83%
|
86%
|
82%
|
Acetate Yarn and Acetyl Chemical Products
|
17%
|
14%
|
18%
|
•
|
Growth
|
•
|
Overview
|
•
|
Principal Products
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
||
|
|
|
|
|
||
Specialty Fluids
|
||||||
Therminol
®
Skydrol
®
|
heat transfer and aviation fluids
|
The Dow Chemical Company
Exxon Mobil Corporation
|
benzene
phosphorous
|
Industrial Chemicals & Processing (heat transfer fluids for chemical processes)
Commercial aviation
|
||
Chemical Intermediates
|
||||||
oxo alcohols & derivatives
acetic acid and derivatives
acetic anhydride
|
chemical intermediates
|
BASF SE
The Dow Chemical Company
Oxea
BP plc
Celanese Corporation
Lonza
|
propane
ethane
propylene
coal
acetic acid
natural gas
|
Industrial Chemicals & Processing
Building & Construction (paint/coating applications, construction chemicals, building materials)
Pharmaceuticals and agriculture
Health & Wellness
|
||
Other Intermediates
|
||||||
ethylene
acetic acid
oxo alcohols
polymer Intermediates
|
olefin, chemical intermediates, and polymer intermediates
|
LyondellBasell Industries
Celanese Corporation
BP plc
BASF SE
Flint Hill Resources
|
propane
ethane
propylene
coal
natural gas
paraxylene
metaxylene
|
Building & Construction (paint/coating applications, construction chemicals, building materials)
Industrial Chemicals & Processing
Packaging
|
|
Percentage of Total Segment Sales
|
|||
Product Lines
|
2013
|
2012 Pro Forma
Combined
|
2012
|
2011
|
Specialty Fluids
|
13%
|
13%
|
7%
|
—%
|
Chemical Intermediates
|
48%
|
48%
|
51%
|
54%
|
Other Intermediates
|
39%
|
39%
|
42%
|
46%
|
•
|
Growth
|
CORPORATE INITIATIVES
|
REGIONAL BUSINESS OVERVIEW
|
|
United States and Canada
|
Asia Pacific
|
Europe, Middle East, and Africa
|
Latin America
|
Additives & Functional Products
|
17%
|
19%
|
18%
|
30%
|
Adhesives & Plasticizers
|
17%
|
5%
|
19%
|
18%
|
Advanced Materials
|
20%
|
26%
|
35%
|
25%
|
Fibers
|
7%
|
31%
|
16%
|
9%
|
Specialty Fluids & Intermediates
|
39%
|
19%
|
12%
|
18%
|
|
|
|
|
|
TOTAL
|
100%
|
100%
|
100%
|
100%
|
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
Combined
|
United States and Canada
|
42%
|
56%
|
37%
|
20%
|
67%
|
46%
|
Asia Pacific
|
29%
|
9%
|
29%
|
56%
|
19%
|
28%
|
Europe, Middle East, and Africa
|
20%
|
28%
|
29%
|
21%
|
10%
|
21%
|
Latin America
|
9%
|
7%
|
5%
|
3%
|
4%
|
5%
|
|
|
|
|
|
|
|
TOTAL
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
EASTMAN CHEMICAL COMPANY GENERAL INFORMATION
|
•
|
In the acetyl stream, the Company begins with coal and oxygen which are 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, but not limited to, cellulose fibers, plastics, and esters. The Company's ability to use coal is considered to be a raw material cost advantage. The major end uses for products from the acetyl stream include coatings, displays, and tobacco.
|
•
|
In the olefins stream, the Company begins primarily with propane and ethane, which are cracked into the "olefin" chemicals ethylene and propylene at its facility in Longview, Texas. "Cracking" is a chemical process in which liquefied petroleum gases are converted into the more reactive olefin molecules which can then be used in the manufacture of other chemicals. Eastman operates three cracking units in Longview, Texas, and debottlenecked its largest unit in first half 2013, primarily to produce additional ethylene to improve Eastman's olefin cost position. The Company also purchases additional propylene for use at its Longview facility and its facilities outside the United States and recently entered into an agreement with Enterprise Products Partners L.P. to purchase propylene from a planned propane dehydrogenation plant expected to be operational in 2015, which is expected to further improve the Company's competitive cost position compared to purchasing propylene in the North American market. Prior to completion of the plant, the Company will continue to benefit from a propylene market contract which improves its cost position for purchased propylene. Propylene is used in chemical intermediates, which are used to produce a variety of items such as paints and coatings, automotive safety glass, and non-phthalate plasticizers. The ethylene is used to produce chemicals that Eastman's customers ultimately convert for end uses in the food industry, health and beauty products, detergents, and automotive products. Petrochemical business cycles are influenced by periods of over- and under-capacity. Capacity additions to steam cracking 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 positioned to be less impacted by 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") and dimethyl terephthalate ("DMT") for polyesters and copolyesters. PTA or DMT is then reacted with various glycols, which the Company either makes or purchases, along with other raw materials (some of which the Company makes and are proprietary) to produce copolyesters. The Company believes that this backward integration of polyester manufacturing is a competitive advantage, giving Eastman a low cost position, as well as a more reliable 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 effectively compete with materials such as polycarbonate and acrylic.
|
ITEM 1A. RISK FACTORS
|
ITEM 1B. UNRESOLVED STAFF COMMENTS
|
EXECUTIVE OFFICERS OF THE COMPANY
|
ITEM 2.
|
PROPERTIES
|
|
Segment using manufacturing facility
|
||||
Location
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
|
|
|
|
|
|
USA
|
|
|
|
|
|
Alvin, Texas
(1)
|
|
|
|
|
x
|
Anniston, Alabama
|
|
|
|
|
x
|
Axton, Virginia
|
|
|
x
|
|
|
Canoga Park, California
(2)
|
|
|
x
|
|
|
Cartersville, Georgia
(1)
|
x
|
|
|
|
|
Chestertown, Maryland
|
|
x
|
|
|
|
Chicago, Illinois
(2)
|
|
|
x
|
|
|
Columbia, South Carolina
(1)(3)
|
|
|
x
|
|
|
Franklin, Virginia
(1)
|
|
x
|
|
|
|
Indianapolis, Indiana
|
x
|
|
|
|
|
Jefferson, Pennsylvania
|
x
|
x
|
|
|
|
Kingsport, Tennessee
|
x
|
x
|
x
|
x
|
x
|
Lemoyne, Alabama
(1)
|
x
|
|
|
|
|
Longview, Texas
|
x
|
x
|
x
|
|
x
|
Martinsville, Virginia
|
|
|
x
|
|
|
Monongahela, Pennsylvania
|
x
|
|
|
|
|
Sauget, Illinois
|
x
|
|
|
|
|
Springfield, Massachusetts
|
|
|
x
|
|
|
Sun Prairie, Wisconsin
|
|
|
x
|
|
|
Texas City, Texas
|
|
x
|
|
|
x
|
Trenton, Michigan
|
|
|
x
|
|
|
Europe
|
|
|
|
|
|
Antwerp, Belgium
(1)
|
x
|
|
x
|
|
|
Ghent, Belgium
|
|
|
x
|
|
|
Workington, England
|
|
|
|
x
|
|
Kohtla-Järve, Estonia
|
|
x
|
|
|
x
|
Sete, France
|
x
|
|
|
|
|
Dresden, Germany
|
|
|
x
|
|
|
Nienburg, Germany
|
x
|
|
|
|
|
Middelburg, the Netherlands
|
|
x
|
|
|
|
Newport, Wales
|
|
|
x
|
|
x
|
(1)
|
Indicates a location where Eastman is a guest under an operating agreement with a third party, which operates its manufacturing facilities at the site.
|
(2)
|
Indicates a location that Eastman leases from a third party and Eastman operates the site.
|
(3)
|
Although nearly all of the manufacturing facility was included in the first quarter 2011 divestiture of the Company's polyethylene terephthalate ("PET") business and related assets, a portion has been retained subsequent to the sale.
|
|
Segment using manufacturing facility
|
||||
Location
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
Suzhou, China
(1)(2)(3)
|
|
|
x
|
|
x
|
Wuhan, China
(4)
|
|
x
|
|
|
|
Zibo, China
(5)
|
x
|
x
|
|
|
|
Kashima, Japan
|
x
|
|
|
|
|
Ulsan, Korea
|
|
|
|
x
|
|
Kuantan, Malaysia
(1)
|
x
|
|
x
|
|
|
Jurong Island, Singapore
(1)
|
x
|
x
|
|
|
x
|
Hsinchu, Taiwan
(1)
|
|
|
x
|
|
|
Latin America
|
|
|
|
|
|
Itupeva, Brazil
(6)
|
x
|
|
|
|
|
Mauá, Brazil
|
|
x
|
|
|
|
Santo Toribio, Mexico
|
|
|
x
|
|
|
Uruapan, Mexico
|
|
x
|
|
|
|
(1)
|
Indicates a location that Eastman leases from a third party and Eastman operates the site.
|
(2)
|
Indicates a location where Eastman has more than one manufacturing facility.
|
(3)
|
Eastman holds a 60 percent share in the joint venture Solutia Therminol Co., Ltd., Suzhou in the Specialty Fluids & Intermediates segment.
|
(4)
|
Eastman holds a 51 percent share in the joint venture Genovique Specialties Wuhan Youji Chemical Co., Ltd.
|
(5)
|
Eastman holds a 51 percent share in the joint venture Qilu Eastman Specialty Chemical Ltd.
|
(6)
|
Indicates a location where Eastman is a guest under an operating agreement with a third party, which operates its manufacturing facilities at the site.
|
|
Segment using manufacturing facility
|
||||
Location
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
Hefei, China
|
|
|
|
x
|
|
Nanjing, China
|
|
x
|
|
|
|
Shenzhen, China
|
|
|
x
|
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
High
|
|
Low
|
|
Cash Dividends Declared
|
||||||
2013
|
First Quarter
|
$
|
75.18
|
|
|
$
|
67.27
|
|
|
$
|
0.30
|
|
|
Second Quarter
|
74.62
|
|
|
63.48
|
|
|
0.30
|
|
|||
|
Third Quarter
|
82.91
|
|
|
69.75
|
|
|
0.30
|
|
|||
|
Fourth Quarter
|
82.96
|
|
|
72.62
|
|
|
0.35
|
|
|||
2012
|
First Quarter
|
$
|
55.14
|
|
|
$
|
39.16
|
|
|
$
|
0.26
|
|
|
Second Quarter
|
55.53
|
|
|
41.54
|
|
|
0.26
|
|
|||
|
Third Quarter
|
59.56
|
|
|
46.18
|
|
|
0.26
|
|
|||
|
Fourth Quarter
|
68.22
|
|
|
52.93
|
|
|
0.30
|
|
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, 2013
|
385,888
|
|
|
$
|
77.74
|
|
|
385,888
|
|
|
$
|
255
|
|
November 1 - 30, 2013
|
573,642
|
|
|
$
|
78.19
|
|
|
573,642
|
|
|
$
|
210
|
|
December 1 - 31, 2013
|
674,238
|
|
|
$
|
74.55
|
|
|
674,238
|
|
|
$
|
160
|
|
Total
|
1,633,768
|
|
|
$
|
76.58
|
|
|
1,633,768
|
|
|
|
(1)
|
All shares were repurchased under a Company announced repurchase plan.
|
(2)
|
Average price paid per share reflects the weighted average purchase price paid for shares.
|
(3)
|
In February 2011, the Board of Directors authorized repurchase of up to $300 million of the Company's outstanding common stock. The Company completed the $300 million of repurchases in August 2013, acquiring a total of 6,141,999 shares. In May 2013, 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 May 2013 authorization was in addition to the remaining amount available under the February 2011 repurchase authorization. As of
December 31, 2013
, a total of 1,828,526 shares have been repurchased under this authorization for a total amount of $140 million. During
2013
, the Company repurchased 3,212,886 shares of common stock for a cost of approximately $238 million. In February 2014, the Board of Directors authorized repurchase of up to an additional $1 billion of the Company's outstanding common stock. For additional information, see Note
15
, "Stockholders' Equity", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Operating Data
|
Year Ended December 31,
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Sales
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
|
$
|
5,842
|
|
|
$
|
4,396
|
|
Operating earnings
|
1,862
|
|
|
800
|
|
|
937
|
|
|
844
|
|
|
276
|
|
|||||
Earnings from continuing operations
|
1,172
|
|
|
443
|
|
|
607
|
|
|
418
|
|
|
116
|
|
|||||
Earnings (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
(22
|
)
|
|||||
Gain from disposal of discontinued operations
|
—
|
|
|
1
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings
|
1,172
|
|
|
444
|
|
|
647
|
|
|
427
|
|
|
94
|
|
|||||
Less: Net earnings attributable to noncontrolling interest
|
7
|
|
|
7
|
|
|
1
|
|
|
2
|
|
|
5
|
|
|||||
Net earnings attributable to Eastman
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
|
$
|
425
|
|
|
$
|
89
|
|
Amounts attributable to Eastman stockholders
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations, net of tax
|
$
|
1,165
|
|
|
$
|
436
|
|
|
$
|
606
|
|
|
$
|
416
|
|
|
$
|
111
|
|
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
|
1
|
|
|
40
|
|
|
9
|
|
|
(22
|
)
|
|||||
Net earnings attributable to Eastman stockholders
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
|
$
|
425
|
|
|
$
|
89
|
|
Basic earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
7.57
|
|
|
$
|
2.99
|
|
|
$
|
4.34
|
|
|
$
|
2.88
|
|
|
$
|
0.77
|
|
Earnings (loss) from discontinued operations
|
—
|
|
|
0.01
|
|
|
0.29
|
|
|
0.07
|
|
|
(0.16
|
)
|
|||||
Net earnings
|
$
|
7.57
|
|
|
$
|
3.00
|
|
|
$
|
4.63
|
|
|
$
|
2.95
|
|
|
$
|
0.61
|
|
Diluted earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
7.44
|
|
|
$
|
2.92
|
|
|
$
|
4.24
|
|
|
$
|
2.81
|
|
|
$
|
0.76
|
|
Earnings (loss) from discontinued operations
|
—
|
|
|
0.01
|
|
|
0.28
|
|
|
0.07
|
|
|
(0.15
|
)
|
|||||
Net earnings
|
$
|
7.44
|
|
|
$
|
2.93
|
|
|
$
|
4.52
|
|
|
$
|
2.88
|
|
|
$
|
0.61
|
|
Statement of Financial Position Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
2,840
|
|
|
$
|
2,699
|
|
|
$
|
2,302
|
|
|
$
|
2,047
|
|
|
$
|
1,735
|
|
Net properties
|
4,290
|
|
|
4,181
|
|
|
3,107
|
|
|
3,219
|
|
|
3,110
|
|
|||||
Goodwill
|
2,637
|
|
|
2,644
|
|
|
406
|
|
|
375
|
|
|
315
|
|
|||||
Other intangibles
|
1,761
|
|
|
1,849
|
|
|
101
|
|
|
92
|
|
|
43
|
|
|||||
Total assets
|
11,845
|
|
|
11,710
|
|
|
6,184
|
|
|
5,986
|
|
|
5,515
|
|
|||||
Current liabilities
|
1,470
|
|
|
1,364
|
|
|
1,114
|
|
|
1,070
|
|
|
800
|
|
|||||
Long-term borrowings
|
4,254
|
|
|
4,779
|
|
|
1,445
|
|
|
1,598
|
|
|
1,604
|
|
|||||
Total liabilities
|
7,970
|
|
|
8,682
|
|
|
4,283
|
|
|
4,327
|
|
|
3,975
|
|
|||||
Total Eastman stockholders' equity
|
3,796
|
|
|
2,943
|
|
|
1,870
|
|
|
1,627
|
|
|
1,513
|
|
|||||
Dividends declared per share
|
1.250
|
|
|
1.080
|
|
|
0.990
|
|
|
0.895
|
|
|
0.880
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Change in
Assumption
|
Impact on
2014 Pre-tax
Benefits Expense
(Excludes mark-to-market impact)
for Pension Plans
|
Impact on December 31, 2013 Projected Benefit Obligation for Pension Plans
|
Impact on 2014 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Other Postretirement Benefit Plans
|
Impact on December 31, 2013 Benefit Obligation for Other Postretirement Benefit Plans
|
|
|
|
U.S.
|
Non-U.S.
|
|
|
25 basis point
decrease in discount
rate
|
-$2 Million
|
+$57 Million
|
+$32 Million
|
-$1 Million
|
+$26 Million
|
|
|
|
|
|
|
25 basis point
increase in discount
rate
|
+$2 Million
|
-$55 Million
|
-$31 Million
|
+$1 Million
|
-$24 Million
|
|
|
|
|
|
|
25 basis point
decrease in expected return on assets
|
+$7 Million
|
No Impact
|
No Impact
|
+$1 Million
|
No Impact
|
|
|
|
|
|
|
25 basis point
increase in expected
return on assets
|
-$7 Million
|
No Impact
|
No Impact
|
-$1 Million
|
No Impact
|
•
|
Costs resulting from the sale of acquired Solutia inventories at fair value, net of the last-in, first-out ("LIFO") impact of these inventories (as required by purchase accounting, these inventories were marked to fair value, and were sold in 2012);
|
•
|
Solutia acquisition, financing, transaction, and integration costs, including the costs and fees for borrowings used to complete the Solutia acquisition and pre-acquisition interest expense for acquisition-related borrowings, which resulted from non-core transactions not expected to impact Eastman's results consistently;
|
•
|
MTM pension and other postretirement benefit plans gains and losses, net, which are actuarial gains and losses measured as the changes in discount rates and other actuarial assumptions and the difference between actual and expected returns on plan assets during the period. These actuarial gains and losses were primarily due to changes in discount rates reflective of changes in global financial market conditions and interest rates on high-grade corporate bonds and changes in other postretirement benefit plan obligations resulting from a plan amendment, and did not directly arise from Eastman's core business and operations; and
|
•
|
Asset impairments and restructuring charges and gains, net, which, other than certain severance costs, are not cash transactions impacting profitability,
|
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Non-core or non-recurring items impacting operating earnings:
|
|
|
|
|
|
||||||
Additional costs of acquired Solutia inventories
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
—
|
|
Transaction costs related to the acquisition of Solutia
|
—
|
|
|
28
|
|
|
—
|
|
|||
Integration costs related to the acquisition of Solutia
|
36
|
|
|
16
|
|
|
—
|
|
|||
Mark-to-market pension and other postretirement benefit (gains) losses, net
|
(383
|
)
|
|
276
|
|
|
144
|
|
|||
Asset impairments and restructuring charges (gains), net
|
76
|
|
|
120
|
|
|
(8
|
)
|
|||
Non-core or non-recurring items impacting earnings before income taxes:
|
|
|
|
|
|
||||||
Financing costs related to the acquisition of Solutia
|
—
|
|
|
32
|
|
|
—
|
|
•
|
Gross profit,
|
•
|
Selling, general, and administrative ("SG&A") expenses,
|
•
|
Research and development ("R&D") expenses,
|
•
|
Operating earnings,
|
•
|
Net interest expense,
|
•
|
Other charges (income), net,
|
•
|
Provision for income taxes,
|
•
|
Earnings from continuing operations, and
|
•
|
Diluted earnings per share.
|
•
|
substantially completing the integration of Solutia, which:
|
◦
|
broadened Eastman's global presence;
|
◦
|
established a combined platform with extensive organic growth opportunities through complementary technologies and business capabilities, and an overlap of key end markets; and
|
◦
|
expanded Eastman's portfolio of sustainable products and products with leading market positions;
|
•
|
in the AFP segment, completing an expansion of ethylene oxide derivative capacity in Longview, Texas in second quarter 2013 to meet demand in the coatings markets;
|
•
|
in the AM segment, beginning the expansion of Eastman Tritan
TM
copolyester capacity at the Kingsport, Tennessee manufacturing facility which is expected to be operational in the second half of 2014 to meet demand for Eastman Tritan
TM
copolyester;
|
•
|
in the Fibers segment, completing a new 30,000 metric ton acetate tow manufacturing facility in Hefei, China during third quarter 2013 in a joint venture with China National Tobacco Corporation to meet customer growth; and
|
•
|
in the SFI segment:
|
◦
|
debottlenecking its largest olefins cracking unit in Longview, Texas in first quarter 2013, primarily to produce additional ethylene to improve Eastman's olefin cost position; and
|
◦
|
beginning a Therminol
®
heat transfer fluid capacity expansion in Newport, Wales, which is expected to be operational in the second half of 2014 to support expected demand in the industrial chemicals and processing market.
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
%
|
|
2012
|
|
2011
|
|
%
|
||||||||||
Sales
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
15
|
%
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
|
13
|
%
|
Volume effect
|
|
|
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
14
|
%
|
||||
Price effect
|
|
|
|
|
|
|
—
|
%
|
|
|
|
|
|
|
|
(1
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pro Forma Combined Sales
|
$
|
9,350
|
|
|
$
|
9,120
|
|
|
3
|
%
|
|
$
|
9,120
|
|
|
$
|
9,275
|
|
|
(2
|
)%
|
Volume effect
|
|
|
|
|
3
|
%
|
|
|
|
|
|
—
|
%
|
||||||||
Price effect
|
|
|
|
|
—
|
%
|
|
|
|
|
|
(1
|
)%
|
||||||||
Exchange rate effect
|
|
|
|
|
—
|
%
|
|
|
|
|
|
(1
|
)%
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Gross Profit
|
$
|
2,776
|
|
|
$
|
1,762
|
|
|
58
|
%
|
|
$
|
1,762
|
|
|
$
|
1,569
|
|
|
12
|
%
|
Additional costs of acquired Solutia inventories
|
—
|
|
|
79
|
|
|
|
|
79
|
|
|
—
|
|
|
|
||||||
Mark-to-market pension and other postretirement benefit (gains) loss, net
|
(297
|
)
|
|
208
|
|
|
|
|
208
|
|
|
119
|
|
|
|
||||||
Gross Profit excluding non-core or non-recurring items
|
$
|
2,479
|
|
|
$
|
2,049
|
|
|
21
|
%
|
|
$
|
2,049
|
|
|
$
|
1,688
|
|
|
21
|
%
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Selling, General & Administrative Expenses
|
$
|
645
|
|
|
$
|
644
|
|
|
—
|
%
|
|
$
|
644
|
|
|
$
|
481
|
|
|
34
|
%
|
Transaction costs related to the acquisition of Solutia
|
—
|
|
|
(28
|
)
|
|
|
|
|
(28
|
)
|
|
—
|
|
|
|
|
||||
Integration costs related to the acquisition of Solutia
|
(36
|
)
|
|
(16
|
)
|
|
|
|
|
(16
|
)
|
|
—
|
|
|
|
|
||||
Mark-to-market pension and other postretirement benefit gains (loss), net
|
76
|
|
|
(58
|
)
|
|
|
|
(58
|
)
|
|
(21
|
)
|
|
|
||||||
Selling, General, and Administrative Expenses excluding non-core or non-recurring items
|
$
|
685
|
|
|
$
|
542
|
|
|
26
|
%
|
|
$
|
542
|
|
|
$
|
460
|
|
|
18
|
%
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Research & Development Expenses
|
$
|
193
|
|
|
$
|
198
|
|
|
(3
|
)%
|
|
$
|
198
|
|
|
$
|
159
|
|
|
25
|
%
|
Mark-to-market pension and other postretirement benefit gains (loss), net
|
10
|
|
|
(10
|
)
|
|
|
|
(10
|
)
|
|
(4
|
)
|
|
|
||||||
Research & Development Expenses excluding non-core or non-recurring items
|
$
|
203
|
|
|
$
|
188
|
|
|
8
|
%
|
|
$
|
188
|
|
|
$
|
155
|
|
|
21
|
%
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Operating earnings
|
$
|
1,862
|
|
|
$
|
800
|
|
|
133
|
%
|
|
$
|
800
|
|
|
$
|
937
|
|
|
(15
|
)%
|
Additional costs of acquired Solutia inventories
|
—
|
|
|
79
|
|
|
|
|
79
|
|
|
—
|
|
|
|
||||||
Transaction and integration costs related to the acquisition of Solutia
|
36
|
|
|
44
|
|
|
|
|
|
44
|
|
|
—
|
|
|
|
|
||||
Mark-to-market pension and other postretirement benefit (gains) loss, net
|
(383
|
)
|
|
276
|
|
|
|
|
|
276
|
|
|
144
|
|
|
|
|
||||
Asset impairments and restructuring charges (gains), net
|
76
|
|
|
120
|
|
|
|
|
|
120
|
|
|
(8
|
)
|
|
|
|
||||
Operating earnings excluding non-core or non-recurring items
|
$
|
1,591
|
|
|
$
|
1,319
|
|
|
21
|
%
|
|
$
|
1,319
|
|
|
$
|
1,073
|
|
|
23
|
%
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Operating earnings
|
$
|
1,862
|
|
|
$
|
940
|
|
|
98
|
%
|
|
$
|
940
|
|
|
$
|
1,254
|
|
|
(25
|
)%
|
Additional costs of acquired Solutia inventories
(1)
|
—
|
|
|
79
|
|
|
|
|
79
|
|
|
—
|
|
|
|
||||||
Transaction and integration costs related to the acquisition of Solutia
|
36
|
|
|
69
|
|
|
|
|
|
69
|
|
|
—
|
|
|
|
|
||||
Mark-to-market pension and other postretirement benefit (gains) loss, net
|
(383
|
)
|
|
276
|
|
|
|
|
|
276
|
|
|
209
|
|
|
|
|
||||
Asset impairments and restructuring charges (gains), net
(1)(2)(3)
|
76
|
|
|
125
|
|
|
|
|
|
125
|
|
|
11
|
|
|
|
|
||||
Other operating expense (income)
(4)(5)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(46
|
)
|
|
|
||||||
Operating earnings excluding non-core or non-recurring items
|
$
|
1,591
|
|
|
$
|
1,489
|
|
|
7
|
%
|
|
$
|
1,489
|
|
|
$
|
1,428
|
|
|
4
|
%
|
(1)
|
2012 included acquisition related expenses of $5 million for the Solutia Southwall acquisition.
|
(2)
|
2011 included severance, pension settlement, and other charges of $14 million related to the relocation of Solutia's European regional headquarters.
|
(3)
|
2011 included Solutia's severance of $3 million and share-based compensation costs for executive officer separation of $2 million.
|
(4)
|
2011 included a gain of $29 million for the sale of Solutia's remaining ownership interest in Ascend Performance Materials Holdings Inc.
|
(5)
|
2011 included a gain of $17 million for Solutia's certain other rubber chemicals divestitures.
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Gross interest costs
|
$
|
190
|
|
|
$
|
152
|
|
|
|
|
$
|
152
|
|
|
$
|
92
|
|
|
|
||
Less: Capitalized interest
|
4
|
|
|
4
|
|
|
|
|
4
|
|
|
9
|
|
|
|
||||||
Interest expense
|
186
|
|
|
148
|
|
|
26
|
%
|
|
148
|
|
|
83
|
|
|
78
|
%
|
||||
Interest income
|
6
|
|
|
5
|
|
|
|
|
|
5
|
|
|
7
|
|
|
|
|
||||
Net interest expense
|
180
|
|
|
143
|
|
|
|
|
143
|
|
|
76
|
|
|
|
||||||
Financing costs related to the acquisition of Solutia
|
—
|
|
|
(9
|
)
|
|
|
|
(9
|
)
|
|
—
|
|
|
|
||||||
Net interest expense excluding financing costs related to the acquisition of Solutia
|
$
|
180
|
|
|
$
|
134
|
|
|
34
|
%
|
|
$
|
134
|
|
|
$
|
76
|
|
|
76
|
%
|
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Foreign exchange transaction (gains) losses, net
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
Financing costs related to the acquisition of Solutia
|
—
|
|
|
23
|
|
|
—
|
|
|||
Investment (gains) losses, net
|
(5
|
)
|
|
(9
|
)
|
|
(16
|
)
|
|||
Other, net
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Other charges (income), net
|
3
|
|
|
8
|
|
|
(20
|
)
|
|||
Financing costs related to the acquisition of Solutia
|
—
|
|
|
(23
|
)
|
|
—
|
|
|||
Other charges (income), net excluding financing costs related to the acquisition of Solutia
|
$
|
3
|
|
|
$
|
(15
|
)
|
|
$
|
(20
|
)
|
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
Provision for income taxes from continuing operations
|
$
|
507
|
|
|
$
|
206
|
|
|
146
|
%
|
|
$
|
206
|
|
|
$
|
274
|
|
|
(25
|
)%
|
Effective tax rate
|
30
|
%
|
|
32
|
%
|
|
|
|
|
32
|
%
|
|
31
|
%
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||||||
Earnings from continuing operations
|
$
|
1,165
|
|
|
$
|
7.44
|
|
|
$
|
436
|
|
|
$
|
2.92
|
|
|
$
|
606
|
|
|
$
|
4.24
|
|
Additional costs of acquired Solutia inventories, net of tax
|
—
|
|
|
—
|
|
|
56
|
|
|
0.37
|
|
|
—
|
|
|
—
|
|
||||||
Solutia transaction and integration costs, net of tax
|
23
|
|
|
0.15
|
|
|
52
|
|
|
0.35
|
|
|
—
|
|
|
—
|
|
||||||
Asset impairments and restructuring charges (gains), net of tax
|
53
|
|
|
0.34
|
|
|
80
|
|
|
0.54
|
|
|
(5
|
)
|
|
(0.03
|
)
|
||||||
Mark-to-market pension and other postretirement benefit (gains) losses, net of tax
|
(233
|
)
|
|
(1.49
|
)
|
|
178
|
|
|
1.20
|
|
|
88
|
|
|
0.60
|
|
||||||
Earnings from continuing operations excluding non-core or non-recurring items
|
$
|
1,008
|
|
|
$
|
6.44
|
|
|
$
|
802
|
|
|
$
|
5.38
|
|
|
$
|
689
|
|
|
$
|
4.81
|
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||||||
Earnings from continuing operations
|
$
|
1,165
|
|
|
$
|
7.44
|
|
|
$
|
436
|
|
|
$
|
2.92
|
|
|
$
|
606
|
|
|
$
|
4.24
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
0.07
|
|
||||||
Gain from disposal of discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
0.01
|
|
|
31
|
|
|
0.21
|
|
||||||
Net earnings
|
$
|
1,165
|
|
|
$
|
7.44
|
|
|
$
|
437
|
|
|
$
|
2.93
|
|
|
$
|
646
|
|
|
$
|
4.52
|
|
Additives & Functional Products Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,719
|
|
$
|
1,332
|
|
$
|
387
|
|
|
29
|
%
|
$
|
1,332
|
|
$
|
1,067
|
|
$
|
265
|
|
|
25
|
%
|
Volume effect
|
|
|
|
|
|
393
|
|
|
29
|
%
|
|
|
|
|
|
312
|
|
|
29
|
%
|
||||
Price effect
|
|
|
|
|
|
(5
|
)
|
|
—
|
%
|
|
|
|
|
|
(43
|
)
|
|
(4
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(1
|
)
|
|
—
|
%
|
|
|
|
|
|
(4
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
405
|
|
|
285
|
|
|
120
|
|
|
42
|
%
|
|
285
|
|
|
215
|
|
|
70
|
|
|
33
|
%
|
Additional costs of acquired Solutia inventories
|
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
|
||
Asset impairments and restructuring charges (gains), net
|
|
1
|
|
|
17
|
|
|
(16
|
)
|
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
|
||
Operating earnings excluding non-core or non-recurring items
|
|
406
|
|
|
323
|
|
|
83
|
|
|
26
|
%
|
|
323
|
|
|
215
|
|
|
108
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma combined sales
|
$
|
1,719
|
|
$
|
1,613
|
|
$
|
106
|
|
|
7
|
%
|
$
|
1,613
|
|
$
|
1,677
|
|
$
|
(64
|
)
|
|
(4
|
)%
|
Volume effect
|
|
|
|
|
|
122
|
|
|
8
|
%
|
|
|
|
|
|
3
|
|
|
—
|
%
|
||||
Price effect
|
|
|
|
|
|
(13
|
)
|
|
(1
|
)%
|
|
|
|
|
|
(52
|
)
|
|
(3
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(3
|
)
|
|
—
|
%
|
|
|
|
|
|
(15
|
)
|
|
(1
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma combined operating earnings
|
|
405
|
|
|
357
|
|
|
48
|
|
|
13
|
%
|
|
357
|
|
|
382
|
|
|
(25
|
)
|
|
(7
|
)%
|
Additional costs of acquired Solutia inventories
|
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
|
||
Pro forma combined asset impairments and restructuring charges (gains), net
|
|
1
|
|
|
17
|
|
|
(16
|
)
|
|
|
|
17
|
|
|
(17
|
)
|
|
34
|
|
|
|
||
Pro forma combined operating earnings excluding non-core or non-recurring items
|
|
406
|
|
|
395
|
|
|
11
|
|
|
3
|
%
|
|
395
|
|
|
365
|
|
|
30
|
|
|
8
|
%
|
Fibers Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
|||||||||||||||||||||
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales
|
$
|
1,441
|
|
$
|
1,315
|
|
$
|
126
|
|
|
10
|
%
|
$
|
1,315
|
|
$
|
1,279
|
|
$
|
36
|
|
|
3
|
%
|
Volume effect
|
|
|
|
|
|
49
|
|
|
4
|
%
|
|
|
|
|
|
(21
|
)
|
|
(2
|
)%
|
||||
Price effect
|
|
|
|
|
|
78
|
|
|
6
|
%
|
|
|
|
|
|
61
|
|
|
5
|
%
|
||||
Exchange rate effect
|
|
|
|
|
|
(1
|
)
|
|
—
|
%
|
|
|
|
|
|
(4
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating earnings
|
462
|
|
|
385
|
|
|
77
|
|
|
20
|
%
|
|
385
|
|
|
365
|
|
|
20
|
|
|
5
|
%
|
|
Asset impairments and restructuring charges (gains), net
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
|
|||
Operating earnings excluding non-core or non-recurring items
|
462
|
|
|
388
|
|
|
74
|
|
|
19
|
%
|
|
388
|
|
|
365
|
|
|
23
|
|
|
6
|
%
|
Specialty Fluids & Intermediates Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2013 Compared to 2012
|
|
2012 Compared to 2011
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2012
|
|
2011
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,497
|
|
$
|
2,318
|
|
$
|
179
|
|
|
8
|
%
|
$
|
2,318
|
|
$
|
2,256
|
|
$
|
62
|
|
|
3
|
%
|
Volume effect
|
|
|
|
|
|
197
|
|
|
9
|
%
|
|
|
|
|
|
166
|
|
|
7
|
%
|
||||
Price effect
|
|
|
|
|
|
(16
|
)
|
|
(1
|
)%
|
|
|
|
|
|
(96
|
)
|
|
(4
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(2
|
)
|
|
—
|
%
|
|
|
|
|
|
(8
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
363
|
|
|
288
|
|
|
75
|
|
|
26
|
%
|
|
288
|
|
|
204
|
|
|
84
|
|
|
41
|
%
|
Additional costs of acquired Solutia inventories
|
|
—
|
|
|
17
|
|
|
(17
|
)
|
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
|
||
Asset impairments and restructuring charges (gains), net
|
|
1
|
|
|
9
|
|
|
(8
|
)
|
|
|
|
9
|
|
|
7
|
|
|
2
|
|
|
|
||
Operating earnings excluding non-core or non-recurring items
|
|
364
|
|
|
314
|
|
|
50
|
|
|
16
|
%
|
|
314
|
|
|
211
|
|
|
103
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma combined sales
|
$
|
2,497
|
|
$
|
2,473
|
|
$
|
24
|
|
|
1
|
%
|
$
|
2,473
|
|
$
|
2,548
|
|
$
|
(75
|
)
|
|
(3
|
)%
|
Volume effect
|
|
|
|
|
|
39
|
|
|
2
|
%
|
|
|
|
|
|
9
|
|
|
—
|
%
|
||||
Price effect
|
|
|
|
|
|
(14
|
)
|
|
(1
|
)%
|
|
|
|
|
|
(72
|
)
|
|
(3
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(1
|
)
|
|
—
|
%
|
|
|
|
|
|
(12
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma combined operating earnings
|
|
363
|
|
|
333
|
|
|
30
|
|
|
9
|
%
|
|
333
|
|
|
271
|
|
|
62
|
|
|
23
|
%
|
Additional costs of acquired Solutia inventories
|
|
—
|
|
|
17
|
|
|
(17
|
)
|
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
|
||
Pro forma combined asset impairments and restructuring charges (gains), net
|
|
1
|
|
|
9
|
|
|
(8
|
)
|
|
|
|
9
|
|
|
7
|
|
|
2
|
|
|
|
||
Pro forma combined operating earnings excluding non-core or non-recurring items
|
|
364
|
|
|
359
|
|
|
5
|
|
|
1
|
%
|
|
359
|
|
|
278
|
|
|
81
|
|
|
29
|
%
|
(Dollars in millions)
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
18
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Operating loss
|
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to segments
|
|
$
|
(132
|
)
|
|
$
|
(132
|
)
|
|
$
|
(49
|
)
|
Pension and other postretirement benefit income (expense) and gain (loss) not allocated to operating segments
|
|
394
|
|
|
(294
|
)
|
|
(173
|
)
|
|||
Transaction, integration, and restructuring costs related to the acquisition of Solutia
|
|
(59
|
)
|
|
(76
|
)
|
|
—
|
|
|||
Operating loss before exclusions
|
|
203
|
|
|
(502
|
)
|
|
(222
|
)
|
|||
Transaction and integration costs related to the acquisition of Solutia
|
|
36
|
|
|
44
|
|
|
—
|
|
|||
Mark-to-market pension and other postretirement benefit plans (gain) loss
|
|
(383
|
)
|
|
276
|
|
|
144
|
|
|||
Asset impairments and restructuring charges, net
|
|
70
|
|
|
59
|
|
|
(15
|
)
|
|||
Operating loss excluding non-core or non-recurring items
|
|
$
|
(74
|
)
|
|
$
|
(123
|
)
|
|
$
|
(93
|
)
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Pro forma combined sales
|
|
|
|
$
|
33
|
|
|
$
|
77
|
|
||
|
|
|
|
|
|
|
||||||
Pro forma combined operating loss
|
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to segments
|
|
|
|
$
|
(135
|
)
|
|
$
|
(29
|
)
|
||
Pension and other postretirement benefit plans income (expense) and gain (loss) not allocated to operating segments
|
|
|
|
(294
|
)
|
|
(236
|
)
|
||||
Transaction, integration, and restructuring costs related to the acquisition of Solutia
|
|
|
|
(101
|
)
|
|
—
|
|
||||
Pro forma combined operating loss before exclusions
|
|
|
|
(530
|
)
|
|
(265
|
)
|
||||
Transaction and integration costs related to the acquisition of Solutia
|
|
|
|
69
|
|
|
—
|
|
||||
Mark-to-market pension and other postretirement benefits (gain) loss
|
|
|
|
276
|
|
|
209
|
|
||||
Pro forma combined asset impairments and restructuring charges, net
|
|
|
|
59
|
|
|
4
|
|
||||
Other operating (income)
|
|
|
|
—
|
|
|
(29
|
)
|
||||
Pro forma combined operating loss excluding non-core or non-recurring items
|
|
|
|
$
|
(126
|
)
|
|
$
|
(81
|
)
|
|
Sales Revenue
|
|
Pro Forma Combined Sales Revenue
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||
United States and Canada
|
$
|
4,290
|
|
|
$
|
3,995
|
|
|
7
|
%
|
|
$
|
4,290
|
|
|
$
|
4,264
|
|
|
1
|
%
|
Asia Pacific
|
2,584
|
|
|
2,088
|
|
|
24
|
%
|
|
2,584
|
|
|
2,396
|
|
|
8
|
%
|
||||
Europe, Middle East, and Africa
|
1,975
|
|
|
1,605
|
|
|
23
|
%
|
|
1,975
|
|
|
1,968
|
|
|
—
|
%
|
||||
Latin America
|
501
|
|
|
414
|
|
|
21
|
%
|
|
501
|
|
|
492
|
|
|
2
|
%
|
||||
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
15
|
%
|
|
$
|
9,350
|
|
|
$
|
9,120
|
|
|
3
|
%
|
|
Sales Revenue
|
|
Pro Forma Combined Sales Revenue
|
||||||||||||||||||
(Dollars in millions)
|
2012
|
|
2011
|
|
Change
|
|
2012
|
|
2011
|
|
Change
|
||||||||||
United States and Canada
|
$
|
3,995
|
|
|
$
|
3,824
|
|
|
4
|
%
|
|
$
|
4,264
|
|
|
$
|
4,364
|
|
|
(2
|
)%
|
Asia Pacific
|
2,088
|
|
|
1,681
|
|
|
24
|
%
|
|
2,396
|
|
|
2,315
|
|
|
3
|
%
|
||||
Europe, Middle East, and Africa
|
1,605
|
|
|
1,352
|
|
|
19
|
%
|
|
1,968
|
|
|
2,119
|
|
|
(7
|
)%
|
||||
Latin America
|
414
|
|
|
321
|
|
|
29
|
%
|
|
492
|
|
|
477
|
|
|
3
|
%
|
||||
|
$
|
8,102
|
|
|
$
|
7,178
|
|
|
13
|
%
|
|
$
|
9,120
|
|
|
$
|
9,275
|
|
|
(2
|
)%
|
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,297
|
|
|
$
|
1,128
|
|
|
$
|
625
|
|
Investing activities
|
(457
|
)
|
|
(2,962
|
)
|
|
(142
|
)
|
|||
Financing activities
|
(859
|
)
|
|
1,504
|
|
|
(423
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
7
|
|
|
2
|
|
|
1
|
|
|||
Net change in cash and cash equivalents
|
$
|
(12
|
)
|
|
$
|
(328
|
)
|
|
$
|
61
|
|
Cash and cash equivalents at beginning of period
|
249
|
|
|
577
|
|
|
516
|
|
|||
Cash and cash equivalents at end of period
|
$
|
237
|
|
|
$
|
249
|
|
|
$
|
577
|
|
(Dollars in millions)
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash and cash equivalents
|
$
|
237
|
|
|
$
|
249
|
|
|
$
|
577
|
|
Short-term time deposits
|
—
|
|
|
—
|
|
|
200
|
|
|||
Total cash and cash equivalents and short-term time deposits
|
$
|
237
|
|
|
$
|
249
|
|
|
$
|
777
|
|
(Dollars in millions)
|
|
Payments Due for
|
||||||||||||||||||||||||||
Period
|
|
Notes and Debentures
|
|
Facility Borrowings and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Other Liabilities (a)
|
|
Total
|
||||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
410
|
|
|
$
|
44
|
|
|
$
|
344
|
|
|
$
|
960
|
|
2015
|
|
250
|
|
|
—
|
|
|
162
|
|
|
404
|
|
|
38
|
|
|
81
|
|
|
935
|
|
|||||||
2016
|
|
—
|
|
|
—
|
|
|
154
|
|
|
269
|
|
|
35
|
|
|
96
|
|
|
554
|
|
|||||||
2017
|
|
998
|
|
|
—
|
|
|
142
|
|
|
218
|
|
|
24
|
|
|
85
|
|
|
1,467
|
|
|||||||
2018
|
|
171
|
|
|
425
|
|
|
130
|
|
|
211
|
|
|
15
|
|
|
85
|
|
|
1,037
|
|
|||||||
2019 and beyond
|
|
2,410
|
|
|
—
|
|
|
1,012
|
|
|
971
|
|
|
54
|
|
|
1,229
|
|
|
5,676
|
|
|||||||
Total
|
|
$
|
3,829
|
|
|
$
|
425
|
|
|
$
|
1,762
|
|
|
$
|
2,483
|
|
|
$
|
210
|
|
|
$
|
1,920
|
|
|
$
|
10,629
|
|
(a)
|
Amounts represent the current estimated cash payments required to be made by the Company primarily for pension and other postretirement benefits, environmental obligations and uncertain tax liabilities in the periods indicated. The amount and timing of such pension and other postretirement benefit 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. See Note
13
, "Environmental Matters" to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for expected cash payments related to environmental obligations. Due to uncertainties in the timing of the effective settlement of tax positions with respect to taxing authorities, management is unable to determine the timing of payments related to uncertain tax liabilities, these amounts are included in the "2019 and beyond" line item.
|
(Dollars in millions)
|
Environmental Remediation Liabilities
|
||
Balance at December 31, 2012
|
$
|
365
|
|
Changes in estimates recorded to earnings and other
|
7
|
|
|
Cash reductions
|
(31
|
)
|
|
Balance at December 31, 2013
|
$
|
341
|
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Environmental contingent liabilities, current
|
$
|
40
|
|
|
$
|
35
|
|
Environmental contingent liabilities, long-term
|
328
|
|
|
359
|
|
||
Total
|
$
|
368
|
|
|
$
|
394
|
|
•
|
cash generated by operating activities of approximately $1.4 billion;
|
•
|
capital spending to be approximately $600 million; and
|
•
|
its full year tax rate on reported earnings from continuing operations before income tax to be approximately 29 percent.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mark J. Costa
|
|
/s/ Curtis E. Espeland
|
Mark J. Costa
|
|
Curtis E. Espeland
|
Chief Executive Officer
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
February 28, 2014
|
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2013
|
|
2012
|
|
2011
|
||||||
Sales
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
Cost of sales
|
6,574
|
|
|
6,340
|
|
|
5,609
|
|
|||
Gross profit
|
2,776
|
|
|
1,762
|
|
|
1,569
|
|
|||
Selling, general and administrative expenses
|
645
|
|
|
644
|
|
|
481
|
|
|||
Research and development expenses
|
193
|
|
|
198
|
|
|
159
|
|
|||
Asset impairments and restructuring charges (gains), net
|
76
|
|
|
120
|
|
|
(8
|
)
|
|||
Operating earnings
|
1,862
|
|
|
800
|
|
|
937
|
|
|||
Net interest expense
|
180
|
|
|
143
|
|
|
76
|
|
|||
Other charges (income), net
|
3
|
|
|
8
|
|
|
(20
|
)
|
|||
Earnings from continuing operations before income taxes
|
1,679
|
|
|
649
|
|
|
881
|
|
|||
Provision for income taxes from continuing operations
|
507
|
|
|
206
|
|
|
274
|
|
|||
Earnings from continuing operations
|
1,172
|
|
|
443
|
|
|
607
|
|
|||
Earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
9
|
|
|||
Gain from disposal of discontinued operations, net of tax
|
—
|
|
|
1
|
|
|
31
|
|
|||
Net earnings
|
1,172
|
|
|
444
|
|
|
647
|
|
|||
Less: Net earnings attributable to noncontrolling interest
|
7
|
|
|
7
|
|
|
1
|
|
|||
Net earnings attributable to Eastman
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
Amounts attributable to Eastman stockholders
|
|
|
|
|
|
||||||
Earnings from continuing operations, net of tax
|
$
|
1,165
|
|
|
$
|
436
|
|
|
$
|
606
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
1
|
|
|
40
|
|
|||
Net earnings attributable to Eastman stockholders
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
Basic earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|||
Earnings from continuing operations
|
$
|
7.57
|
|
|
$
|
2.99
|
|
|
$
|
4.34
|
|
Earnings from discontinued operations
|
—
|
|
|
0.01
|
|
|
0.29
|
|
|||
Basic earnings per share attributable to Eastman
|
$
|
7.57
|
|
|
$
|
3.00
|
|
|
$
|
4.63
|
|
Diluted earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|||
Earnings from continuing operations
|
$
|
7.44
|
|
|
$
|
2.92
|
|
|
$
|
4.24
|
|
Earnings from discontinued operations
|
—
|
|
|
0.01
|
|
|
0.28
|
|
|||
Diluted earnings per share attributable to Eastman
|
$
|
7.44
|
|
|
$
|
2.93
|
|
|
$
|
4.52
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2013
|
|
2012
|
|
2011
|
||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
|||
Net earnings including noncontrolling interest
|
$
|
1,172
|
|
|
$
|
444
|
|
|
$
|
647
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|||
Change in cumulative translation adjustment
|
28
|
|
|
41
|
|
|
(15
|
)
|
|||
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Prior service credit arising during the period
|
29
|
|
|
2
|
|
|
1
|
|
|||
Amortization of unrecognized prior service credits included in net periodic costs
|
(16
|
)
|
|
(15
|
)
|
|
(22
|
)
|
|||
Derivatives and hedging:
|
|
|
|
|
|
|
|
|
|||
Unrealized (loss) gain during period
|
6
|
|
|
(36
|
)
|
|
(20
|
)
|
|||
Reclassification adjustment for gains (losses) included in net income
|
1
|
|
|
(7
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss), net of tax
|
48
|
|
|
(15
|
)
|
|
(56
|
)
|
|||
Comprehensive income including noncontrolling interest
|
$
|
1,220
|
|
|
$
|
429
|
|
|
$
|
591
|
|
Comprehensive income attributable to noncontrolling interest
|
7
|
|
|
7
|
|
|
1
|
|
|||
Comprehensive income attributable to Eastman
|
$
|
1,213
|
|
|
$
|
422
|
|
|
$
|
590
|
|
Retained Earnings
|
|
|
|
|
|
|
|
|
|||
Retained earnings at beginning of period
|
$
|
3,038
|
|
|
$
|
2,760
|
|
|
$
|
2,253
|
|
Net earnings attributable to Eastman
|
1,165
|
|
|
437
|
|
|
646
|
|
|||
Cash dividends declared
|
(191
|
)
|
|
(159
|
)
|
|
(139
|
)
|
|||
Retained earnings at end of period
|
$
|
4,012
|
|
|
$
|
3,038
|
|
|
$
|
2,760
|
|
|
December 31,
|
|
December 31,
|
||||
(Dollars in millions, except per share amounts)
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
237
|
|
|
$
|
249
|
|
Trade receivables, net
|
880
|
|
|
846
|
|
||
Miscellaneous receivables
|
208
|
|
|
151
|
|
||
Inventories
|
1,264
|
|
|
1,260
|
|
||
Other current assets
|
251
|
|
|
193
|
|
||
Total current assets
|
2,840
|
|
|
2,699
|
|
||
Properties
|
|
|
|
|
|
||
Properties and equipment at cost
|
9,958
|
|
|
9,681
|
|
||
Less: Accumulated depreciation
|
5,668
|
|
|
5,500
|
|
||
Net properties
|
4,290
|
|
|
4,181
|
|
||
Goodwill
|
2,637
|
|
|
2,644
|
|
||
Intangible assets, net of accumulated amortization
|
1,761
|
|
|
1,849
|
|
||
Other noncurrent assets
|
317
|
|
|
337
|
|
||
Total assets
|
$
|
11,845
|
|
|
$
|
11,710
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Payables and other current liabilities
|
$
|
1,470
|
|
|
$
|
1,360
|
|
Borrowings due within one year
|
—
|
|
|
4
|
|
||
Total current liabilities
|
1,470
|
|
|
1,364
|
|
||
Long-term borrowings
|
4,254
|
|
|
4,779
|
|
||
Deferred income tax liabilities
|
496
|
|
|
182
|
|
||
Post-employment obligations
|
1,297
|
|
|
1,856
|
|
||
Other long-term liabilities
|
453
|
|
|
501
|
|
||
Total liabilities
|
7,970
|
|
|
8,682
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
|
|
||
Common stock ($0.01 par value per share – 350,000,000 shares authorized; shares issued – 215,131,237 and 213,406,523 for 2013 and 2012, respectively)
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
1,778
|
|
|
1,709
|
|
||
Retained earnings
|
4,012
|
|
|
3,038
|
|
||
Accumulated other comprehensive income
|
171
|
|
|
123
|
|
||
|
5,963
|
|
|
4,872
|
|
||
Less: Treasury stock at cost (62,714,861 shares for 2013 and 59,511,662 shares for 2012 )
|
2,167
|
|
|
1,929
|
|
||
Total Eastman stockholders' equity
|
3,796
|
|
|
2,943
|
|
||
Noncontrolling interest
|
79
|
|
|
85
|
|
||
Total equity
|
$
|
3,875
|
|
|
$
|
3,028
|
|
Total liabilities and stockholders' equity
|
$
|
11,845
|
|
|
$
|
11,710
|
|
|
|
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net earnings including noncontrolling interest
|
$
|
1,172
|
|
|
$
|
444
|
|
|
$
|
647
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
433
|
|
|
360
|
|
|
273
|
|
|||
Asset impairment charges
|
28
|
|
|
46
|
|
|
—
|
|
|||
Gains on sale of assets
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||
Provision (benefit) for deferred income taxes
|
331
|
|
|
48
|
|
|
(22
|
)
|
|||
Mark-to-market (gain) loss on pension and other postretirement benefit plans
|
(383
|
)
|
|
247
|
|
|
147
|
|
|||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|
|
|
|
|
|
|||||
(Increase) decrease in trade receivables
|
(38
|
)
|
|
48
|
|
|
(73
|
)
|
|||
(Increase) decrease in inventories
|
(6
|
)
|
|
38
|
|
|
(156
|
)
|
|||
Increase (decrease) in trade payables
|
(2
|
)
|
|
10
|
|
|
(51
|
)
|
|||
Pension and other postretirement contributions (in excess of) less than expenses
|
(149
|
)
|
|
(97
|
)
|
|
(103
|
)
|
|||
Variable compensation (in excess of) less than expenses
|
82
|
|
|
26
|
|
|
15
|
|
|||
Other items, net
|
(171
|
)
|
|
(42
|
)
|
|
18
|
|
|||
Net cash provided by operating activities
|
1,297
|
|
|
1,128
|
|
|
625
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Additions to properties and equipment
|
(483
|
)
|
|
(465
|
)
|
|
(457
|
)
|
|||
Proceeds from redemption of short-term time deposits
|
—
|
|
|
200
|
|
|
—
|
|
|||
Proceeds from sale of assets and investments
|
31
|
|
|
7
|
|
|
651
|
|
|||
Acquisitions and investments in joint ventures, net of cash acquired
|
—
|
|
|
(2,669
|
)
|
|
(156
|
)
|
|||
Additions to short-term time deposits
|
—
|
|
|
—
|
|
|
(200
|
)
|
|||
Additions to capitalized software
|
(5
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|||
Other items, net
|
—
|
|
|
(30
|
)
|
|
29
|
|
|||
Net cash used in investing activities
|
(457
|
)
|
|
(2,962
|
)
|
|
(142
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase (decrease) in commercial paper, credit facility, and other borrowings
|
425
|
|
|
(1
|
)
|
|
1
|
|
|||
Proceeds from borrowings
|
150
|
|
|
3,511
|
|
|
(36
|
)
|
|||
Repayment of borrowings
|
(1,105
|
)
|
|
(1,866
|
)
|
|
(2
|
)
|
|||
Dividends paid to stockholders
|
(140
|
)
|
|
(192
|
)
|
|
(136
|
)
|
|||
Treasury stock purchases
|
(238
|
)
|
|
—
|
|
|
(316
|
)
|
|||
Dividends paid to noncontrolling interests
|
(10
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|||
Proceeds from stock option exercises and other items, net
|
59
|
|
|
56
|
|
|
69
|
|
|||
Net cash provided by (used in) financing activities
|
(859
|
)
|
|
1,504
|
|
|
(423
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
7
|
|
|
2
|
|
|
1
|
|
|||
Net change in cash and cash equivalents
|
(12
|
)
|
|
(328
|
)
|
|
61
|
|
|||
Cash and cash equivalents at beginning of period
|
249
|
|
|
577
|
|
|
516
|
|
|||
Cash and cash equivalents at end of period
|
$
|
237
|
|
|
$
|
249
|
|
|
$
|
577
|
|
1.
|
SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES
|
Goodwill from July 2, 2012 Acquisition
|
Goodwill by Segment
|
||
(Dollars in millions)
|
|
||
Additives & Functional Products
|
$
|
745
|
|
Advanced Materials
|
1,004
|
|
|
Specialty Fluids & Intermediates
|
459
|
|
|
Total
|
$
|
2,208
|
|
Intangible Assets acquired on July 2, 2012
|
|
|
|
||
(Dollars in millions)
|
Fair Value
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets
|
|
|
|
||
Customer relationships
|
$
|
809
|
|
|
22
|
Developed technologies
|
440
|
|
|
13
|
|
Indefinite-lived intangible assets
|
|
|
|
||
Trade names
|
542
|
|
|
|
|
Total
|
$
|
1,791
|
|
|
|
|
|
|
||||
(Unaudited, dollars in millions)
|
2012
|
2011
|
||||
Pro forma sales
|
$
|
9,120
|
|
$
|
9,275
|
|
Pro forma earnings from continuing operations including noncontrolling interest
|
649
|
|
590
|
|
3.
|
INVENTORIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
At FIFO or average cost (approximates current cost)
|
|
|
|
||||
Finished goods
|
$
|
976
|
|
|
$
|
941
|
|
Work in process
|
300
|
|
|
288
|
|
||
Raw materials and supplies
|
494
|
|
|
536
|
|
||
Total inventories
|
1,770
|
|
|
1,765
|
|
||
LIFO Reserve
|
(506
|
)
|
|
(505
|
)
|
||
Total inventories
|
$
|
1,264
|
|
|
$
|
1,260
|
|
4.
|
PROPERTIES AND ACCUMULATED DEPRECIATION
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
(1)
|
||||
Properties
|
|
|
|
||||
Land
|
$
|
147
|
|
|
$
|
173
|
|
Buildings and building equipment
|
1,057
|
|
|
991
|
|||
Machinery and equipment
|
8,389
|
|
|
8,193
|
|
||
Construction in progress
|
365
|
|
|
324
|
|
||
Properties and equipment at cost
|
$
|
9,958
|
|
|
$
|
9,681
|
|
Less: Accumulated depreciation
|
5,668
|
|
|
5,500
|
|
||
Net properties
|
$
|
4,290
|
|
|
$
|
4,181
|
|
5.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
(Dollars in millions)
|
Additives & Functional Products
|
|
Adhesives & Plasticizers
|
|
Advanced Materials
|
|
Specialty Fluids & Intermediates
|
|
Other Segments
|
|
Total
|
||||||||||||
Reported balance at December 31, 2011
|
$
|
211
|
|
|
$
|
134
|
|
|
$
|
1
|
|
|
$
|
56
|
|
|
$
|
4
|
|
|
$
|
406
|
|
Additions
|
740
|
|
|
—
|
|
|
1,027
|
|
|
463
|
|
|
—
|
|
|
2,230
|
|
||||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Currency translation adjustments
|
(6
|
)
|
|
(1
|
)
|
|
16
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Reported balance at December 31, 2012
|
945
|
|
|
133
|
|
|
1,044
|
|
|
519
|
|
|
3
|
|
|
2,644
|
|
||||||
Adjustments resulting from subsequent recognition of deferred tax assets
|
5
|
|
|
—
|
|
|
(23
|
)
|
|
(4
|
)
|
|
—
|
|
|
(22
|
)
|
||||||
Currency translation adjustments
|
(2
|
)
|
|
(1
|
)
|
|
19
|
|
|
(1
|
)
|
|
—
|
|
|
15
|
|
||||||
Reported balance at December 31, 2013
|
$
|
948
|
|
|
$
|
132
|
|
|
$
|
1,040
|
|
|
$
|
514
|
|
|
$
|
3
|
|
|
$
|
2,637
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
(Dollars in millions)
|
Estimated Useful Life in Years
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
15-25
|
$
|
863
|
|
|
$
|
71
|
|
|
$
|
792
|
|
|
$
|
869
|
|
|
$
|
29
|
|
|
$
|
840
|
|
Technology
|
7-17
|
455
|
|
|
58
|
|
|
397
|
|
|
454
|
|
|
21
|
|
|
433
|
|
||||||
Other
|
5-20
|
4
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
568
|
|
|
—
|
|
|
568
|
|
|
572
|
|
|
—
|
|
|
572
|
|
||||||
Total identified intangible assets
|
|
$
|
1,890
|
|
|
$
|
129
|
|
|
$
|
1,761
|
|
|
$
|
1,899
|
|
|
$
|
50
|
|
|
$
|
1,849
|
|
6.
|
EQUITY INVESTMENTS
|
7.
|
PAYABLES AND OTHER CURRENT LIABILITIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Trade creditors
|
$
|
762
|
|
|
$
|
723
|
|
Accrued payrolls, vacation, and variable-incentive compensation
|
205
|
|
|
171
|
|
||
Accrued taxes
|
80
|
|
|
76
|
|
||
Post-employment obligations
|
59
|
|
|
62
|
|
||
Interest payable
|
46
|
|
|
59
|
|
||
Environmental contingent liabilities, current portion
|
40
|
|
|
35
|
|
||
Other
|
278
|
|
|
234
|
|
||
Total payables and other current liabilities
|
$
|
1,470
|
|
|
$
|
1,360
|
|
8.
|
PROVISION FOR INCOME TAXES
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Earnings from continuing operations before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
1,437
|
|
|
$
|
651
|
|
|
$
|
717
|
|
Outside the United States
|
242
|
|
|
(2
|
)
|
|
164
|
|
|||
Total
|
$
|
1,679
|
|
|
$
|
649
|
|
|
$
|
881
|
|
Provision (benefit) for income taxes on earnings from continuing operations
|
|
|
|
|
|
|
|
|
|||
United States
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
143
|
|
|
$
|
123
|
|
|
$
|
165
|
|
Deferred
|
300
|
|
|
95
|
|
|
66
|
|
|||
Outside the United States
|
|
|
|
|
|
|
|
|
|||
Current
|
3
|
|
|
27
|
|
|
20
|
|
|||
Deferred
|
15
|
|
|
(51
|
)
|
|
16
|
|
|||
State and other
|
|
|
|
|
|
|
|
|
|||
Current
|
30
|
|
|
14
|
|
|
16
|
|
|||
Deferred
|
16
|
|
|
(2
|
)
|
|
(9
|
)
|
|||
Total
|
$
|
507
|
|
|
$
|
206
|
|
|
$
|
274
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Unrecognized losses and prior service credits for benefit plans
|
$
|
(8
|
)
|
|
$
|
(7
|
)
|
|
$
|
(16
|
)
|
Cumulative translation adjustment
|
1
|
|
|
1
|
|
|
—
|
|
|||
Unrealized gains (losses) on cash flow hedges
|
(5
|
)
|
|
(27
|
)
|
|
(11
|
)
|
|||
Total
|
$
|
(12
|
)
|
|
$
|
(33
|
)
|
|
$
|
(27
|
)
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Continuing operations
|
$
|
507
|
|
|
$
|
206
|
|
|
$
|
274
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
27
|
|
|||
Other comprehensive income
|
(12
|
)
|
|
(33
|
)
|
|
(27
|
)
|
|||
Total
|
$
|
495
|
|
|
$
|
173
|
|
|
$
|
274
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Amount computed using the statutory rate
|
$
|
587
|
|
|
$
|
226
|
|
|
$
|
308
|
|
State income taxes, net
|
30
|
|
|
8
|
|
|
2
|
|
|||
Foreign rate variance
|
(55
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|||
Domestic manufacturing deduction
|
(17
|
)
|
|
(12
|
)
|
|
(17
|
)
|
|||
Change in reserves for tax contingencies
|
(16
|
)
|
|
(12
|
)
|
|
—
|
|
|||
General business credits
|
(6
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Other
|
(16
|
)
|
|
8
|
|
|
7
|
|
|||
Provision for income taxes
|
$
|
507
|
|
|
$
|
206
|
|
|
$
|
274
|
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
(2)
|
||||
Deferred tax assets
|
|
|
|
||||
Post-employment obligations
|
$
|
502
|
|
|
$
|
715
|
|
Net operating loss carryforwards
|
573
|
|
|
630
|
|
||
Tax credit carryforwards
|
224
|
|
|
230
|
|
||
Environmental reserves
|
133
|
|
|
145
|
|
||
Other
|
210
|
|
|
182
|
|
||
Total deferred tax assets
|
1,642
|
|
|
1,902
|
|
||
Less valuation allowance
|
(204
|
)
|
|
(215
|
)
|
||
Deferred tax assets less valuation allowance
|
$
|
1,438
|
|
|
$
|
1,687
|
|
Deferred tax liabilities
|
|
|
|
|
|
||
Depreciation
|
$
|
(992
|
)
|
|
$
|
(951
|
)
|
Amortization
(1)
|
(631
|
)
|
|
(666
|
)
|
||
Other
|
(110
|
)
|
|
(100
|
)
|
||
Total deferred tax liabilities
|
$
|
(1,733
|
)
|
|
$
|
(1,717
|
)
|
Net deferred tax liabilities
|
$
|
(295
|
)
|
|
$
|
(30
|
)
|
As recorded in the Consolidated Statements of Financial Position:
|
|
|
|
|
|
||
Other current assets
|
$
|
196
|
|
|
$
|
139
|
|
Other noncurrent assets
|
7
|
|
|
16
|
|
||
Payables and other current liabilities
|
(2
|
)
|
|
(3
|
)
|
||
Deferred income tax liabilities
|
(496
|
)
|
|
(182
|
)
|
||
Net deferred tax liabilities
|
$
|
(295
|
)
|
|
$
|
(30
|
)
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Miscellaneous receivables
|
$
|
46
|
|
|
$
|
38
|
|
|
|
|
|
||||
Payables and other current liabilities
|
$
|
35
|
|
|
$
|
44
|
|
Other long-term liabilities
|
53
|
|
|
68
|
|
||
Total income taxes payable
|
$
|
88
|
|
|
$
|
112
|
|
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at January 1
|
$
|
65
|
|
|
$
|
10
|
|
|
$
|
9
|
|
Additions based on tax positions related to current year
|
—
|
|
|
—
|
|
|
1
|
|
|||
Additions based on Solutia acquisition
|
—
|
|
|
67
|
|
|
—
|
|
|||
Lapse of statute of limitations
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Settlements
|
(14
|
)
|
|
(7
|
)
|
|
—
|
|
|||
Balance at December 31
|
$
|
51
|
|
|
$
|
65
|
|
|
$
|
10
|
|
9.
|
BORROWINGS
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Borrowings consisted of:
|
|
|
|
||||
3% notes due 2015
|
$
|
250
|
|
|
$
|
250
|
|
2.4% notes due 2017
|
998
|
|
|
997
|
|
||
6.30% notes due 2018
|
171
|
|
|
174
|
|
||
5.5% notes due 2019
|
250
|
|
|
250
|
|
||
4.5% notes due 2021
|
250
|
|
|
250
|
|
||
3.6% notes due 2022
|
894
|
|
|
893
|
|
||
7 1/4% debentures due 2024
|
243
|
|
|
243
|
|
||
7 5/8% debentures due 2024
|
54
|
|
|
54
|
|
||
7.60% debentures due 2027
|
222
|
|
|
222
|
|
||
4.8% notes due 2042
|
497
|
|
|
496
|
|
||
Credit facility borrowings
|
425
|
|
|
950
|
|
||
Other
|
—
|
|
|
4
|
|
||
Total borrowings
|
4,254
|
|
|
4,783
|
|
||
Borrowings due within one year
|
—
|
|
|
4
|
|
||
Long-term borrowings
|
$
|
4,254
|
|
|
$
|
4,779
|
|
|
|
|
|
Fair Value Measurements at December 31, 2013
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount December 31, 2013
|
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
Long-term borrowings
|
|
$
|
4,254
|
|
|
$
|
4,366
|
|
|
$
|
3,941
|
|
|
$
|
425
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements at December 31, 2012
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount December 31, 2012
|
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
Long-term borrowings
|
|
$
|
4,779
|
|
|
$
|
5,165
|
|
|
$
|
4,215
|
|
|
$
|
950
|
|
|
$
|
—
|
|
10.
|
DERIVATIVES
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2013
|
||||||||||||
Description
|
|
December 31, 2013
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Derivative Assets
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
58
|
|
|
$
|
—
|
|
Derivative Liabilities
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
||||
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2012
|
||||||||||||
Description
|
|
December 31, 2012
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Derivative Assets
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
Derivative Liabilities
|
|
(24
|
)
|
|
—
|
|
|
(19
|
)
|
|
(5
|
)
|
||||
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
(5
|
)
|
Fair Value Measurements Using Level 3 Inputs
|
|
|
||||||
Commodity Contracts
|
|
December 31,
|
||||||
(Dollars in millions)
|
|
2013
|
|
2012
|
||||
Beginning balance at January 1
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
Realized gain (loss) in sales revenue
|
|
(14
|
)
|
|
(4
|
)
|
||
Change in unrealized gain (loss) in Other Comprehensive Income
|
|
5
|
|
|
(5
|
)
|
||
Purchases, sales and settlements
|
|
14
|
|
|
4
|
|
||
Transfers (out) in of Level 3
|
|
—
|
|
|
—
|
|
||
Ending balance at December 31
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements Significant Other Observable Inputs
|
||||||
Derivative Assets
|
|
Statement of Financial Position Location
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Cash Flow Hedges
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
20
|
|
|
$
|
7
|
|
Commodity contracts
|
|
Other noncurrent assets
|
|
7
|
|
|
—
|
|
||
Foreign exchange contracts
|
|
Other current assets
|
|
17
|
|
|
8
|
|
||
Foreign exchange contracts
|
|
Other noncurrent assets
|
|
14
|
|
|
13
|
|
||
|
|
|
|
$
|
58
|
|
|
$
|
28
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements Significant Other Observable Inputs
|
||||||
Derivative Liabilities
|
|
Statement of Financial Position Location
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Cash Flow Hedges
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Payables and other current liabilities
|
|
$
|
—
|
|
|
$
|
13
|
|
Foreign exchange contracts
|
|
Payables and other current liabilities
|
|
21
|
|
|
8
|
|
||
Foreign exchange contracts
|
|
Other long-term liabilities
|
|
25
|
|
|
3
|
|
||
|
|
|
|
$
|
46
|
|
|
$
|
24
|
|
(Dollars in millions)
|
|
Amount of 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 Income (effective portion)
|
|
Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into Income (effective portion)
|
||||||||||||
Derivatives' Cash Flow Hedging Relationships
|
|
December 31, 2013
|
|
December 31, 2012
|
|
|
December 31, 2013
|
|
December 31, 2012
|
|||||||||
Commodity contracts
|
|
$
|
20
|
|
|
$
|
—
|
|
|
Sales
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
14
|
|
|
(22
|
)
|
||||
Foreign exchange contracts
|
|
(18
|
)
|
|
(15
|
)
|
|
Sales
|
|
6
|
|
|
38
|
|
||||
Forward starting interest rate swap contracts
|
|
5
|
|
|
(28
|
)
|
|
Interest Expense
|
|
(8
|
)
|
|
(5
|
)
|
||||
|
|
$
|
7
|
|
|
$
|
(43
|
)
|
|
|
|
$
|
(2
|
)
|
|
$
|
11
|
|
11.
|
RETIREMENT PLANS
|
|
Pension
Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
|
|
|
||||||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation, beginning of year
|
$
|
2,466
|
|
|
$
|
672
|
|
|
$
|
1,531
|
|
|
$
|
257
|
|
|
$
|
1,140
|
|
|
$
|
881
|
|
Service cost
|
43
|
|
|
14
|
|
|
40
|
|
|
8
|
|
|
11
|
|
|
10
|
|
||||||
Interest cost
|
89
|
|
|
27
|
|
|
86
|
|
|
19
|
|
|
44
|
|
|
45
|
|
||||||
Actuarial (gain) loss
|
(184
|
)
|
|
22
|
|
|
196
|
|
|
88
|
|
|
(123
|
)
|
|
93
|
|
||||||
Curtailment gain
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
727
|
|
|
291
|
|
|
—
|
|
|
167
|
|
||||||
Plan amendments and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(3
|
)
|
||||||
Plan participants' contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
20
|
|
|
16
|
|
||||||
Effect of currency exchange
|
—
|
|
|
20
|
|
|
—
|
|
|
21
|
|
|
(1
|
)
|
|
—
|
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||||
Benefits paid
|
(178
|
)
|
|
(20
|
)
|
|
(114
|
)
|
|
(13
|
)
|
|
(83
|
)
|
|
(71
|
)
|
||||||
Benefit obligation, end of year
|
$
|
2,236
|
|
|
$
|
736
|
|
|
$
|
2,466
|
|
|
$
|
672
|
|
|
$
|
962
|
|
|
$
|
1,140
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, beginning of year
|
$
|
1,702
|
|
|
$
|
596
|
|
|
$
|
1,003
|
|
|
$
|
276
|
|
|
$
|
210
|
|
|
$
|
55
|
|
Actual return on plan assets
|
239
|
|
|
39
|
|
|
171
|
|
|
54
|
|
|
7
|
|
|
13
|
|
||||||
Effect of currency exchange
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
124
|
|
|
24
|
|
|
128
|
|
|
21
|
|
|
40
|
|
|
38
|
|
||||||
Reserve for third party contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(5
|
)
|
||||||
Plan participants' contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
20
|
|
|
16
|
|
||||||
Benefits paid
|
(178
|
)
|
|
(20
|
)
|
|
(114
|
)
|
|
(13
|
)
|
|
(83
|
)
|
|
(71
|
)
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
514
|
|
|
240
|
|
|
—
|
|
|
162
|
|
||||||
Fair value of plan assets, end of year
|
$
|
1,887
|
|
|
$
|
658
|
|
|
$
|
1,702
|
|
|
$
|
596
|
|
|
$
|
179
|
|
|
$
|
210
|
|
Funded status at end of year
|
$
|
(349
|
)
|
|
$
|
(78
|
)
|
|
$
|
(764
|
)
|
|
$
|
(76
|
)
|
|
$
|
(783
|
)
|
|
$
|
(930
|
)
|
Amounts recognized in the Consolidated Statements of Financial Position consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other noncurrent assets
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
7
|
|
Current liabilities
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(41
|
)
|
|
(42
|
)
|
||||||
Post-employment obligations
|
(346
|
)
|
|
(84
|
)
|
|
(761
|
)
|
|
(86
|
)
|
|
(745
|
)
|
|
(895
|
)
|
||||||
Net amount recognized, end of year
|
$
|
(349
|
)
|
|
$
|
(78
|
)
|
|
$
|
(764
|
)
|
|
$
|
(76
|
)
|
|
$
|
(783
|
)
|
|
$
|
(930
|
)
|
Accumulated benefit obligation
|
$
|
2,123
|
|
|
$
|
678
|
|
|
$
|
2,387
|
|
|
$
|
603
|
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service credit
|
$
|
(18
|
)
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
(108
|
)
|
|
$
|
(83
|
)
|
(Dollars in millions)
|
2013
|
|
2012
|
||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
2,236
|
|
|
$
|
618
|
|
|
$
|
2,466
|
|
|
$
|
547
|
|
Fair value of plan assets
|
1,887
|
|
|
533
|
|
|
1,702
|
|
|
460
|
|
(Dollars in millions)
|
2013
|
|
2012
|
||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
2,236
|
|
|
$
|
398
|
|
|
$
|
2,466
|
|
|
$
|
345
|
|
Accumulated benefit obligation
|
2,123
|
|
|
373
|
|
|
2,387
|
|
|
317
|
|
||||
Fair value of plan assets
|
1,887
|
|
|
324
|
|
|
1,702
|
|
|
276
|
|
|
Pension Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
|
|
|
|
|
||||||||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost
|
$
|
43
|
|
|
$
|
14
|
|
|
$
|
40
|
|
|
$
|
8
|
|
|
$
|
39
|
|
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
9
|
|
Interest cost
|
89
|
|
|
27
|
|
|
86
|
|
|
19
|
|
|
71
|
|
|
16
|
|
|
44
|
|
|
45
|
|
|
44
|
|
|||||||||
Expected return on assets
|
(129
|
)
|
|
(35
|
)
|
|
(103
|
)
|
|
(24
|
)
|
|
(82
|
)
|
|
(18
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|||||||||
Curtailment gain
(1)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost (credit)
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(14
|
)
|
|
1
|
|
|
(22
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|||||||||
Mark-to-market pension and other postretirement benefits (gains) loss
|
(294
|
)
|
|
18
|
|
|
128
|
|
|
58
|
|
|
128
|
|
|
(14
|
)
|
|
(107
|
)
|
|
90
|
|
|
33
|
|
|||||||||
Net periodic benefit cost
|
$
|
(295
|
)
|
|
$
|
23
|
|
|
$
|
147
|
|
|
$
|
61
|
|
|
$
|
142
|
|
|
$
|
(9
|
)
|
|
$
|
(81
|
)
|
|
$
|
121
|
|
|
$
|
56
|
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Curtailment gain
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Current year prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
47
|
|
|
3
|
|
|
—
|
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost (credit)
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(14
|
)
|
|
1
|
|
|
(22
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|||||||||
Total
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
3
|
|
|
$
|
25
|
|
|
$
|
(16
|
)
|
|
$
|
(26
|
)
|
(1)
|
Gain of
$1 million
in 2013 from the shut-down of the Photovoltaics product line in Germany. Gain of
$7 million
in 2011 for the Performance Polymers segment that was sold January 31, 2011 and included in discontinued operations. For more information, see Note
20
, "Discontinued Operations".
|
(2)
|
For the Performance Polymers segment that was sold January 31, 2011 and included in discontinued operations. For more information, see Note
20
, "Discontinued Operations".
|
|
Pension Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations for years ended December 31:
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
4.59
|
%
|
4.18
|
%
|
|
3.72
|
%
|
4.16
|
%
|
|
4.88
|
%
|
5.48
|
%
|
|
4.75
|
%
|
|
3.91
|
%
|
|
4.96
|
%
|
Rate of compensation increase
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
3.82
|
%
|
|
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
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
||||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
3.72
|
%
|
4.16
|
%
|
|
4.50
|
%
|
5.06
|
%
|
|
5.21
|
%
|
5.71
|
%
|
|
3.91
|
%
|
|
4.73
|
%
|
|
5.33
|
%
|
Expected return on assets
|
7.98
|
%
|
5.90
|
%
|
|
8.12
|
%
|
6.17
|
%
|
|
8.45
|
%
|
6.40
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
|
—
|
%
|
Rate of compensation increase
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
3.65
|
%
|
|
3.50
|
%
|
4.15
|
%
|
|
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
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2013
|
|||||||||||||||||||||||
Description
|
December 31, 2013
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||||||||||
Pension Assets:
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
||||||||||||||||
Cash & Cash Equivalents
(1)
|
$
|
36
|
|
$
|
9
|
|
|
$
|
36
|
|
$
|
9
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Income (U.S.)
|
485
|
|
4
|
|
|
47
|
|
—
|
|
|
438
|
|
4
|
|
|
—
|
|
—
|
|
||||||||
Fixed Income (Non-U.S.)
|
—
|
|
299
|
|
|
—
|
|
—
|
|
|
—
|
|
299
|
|
|
—
|
|
—
|
|
||||||||
Fixed Income (Global)
|
—
|
|
13
|
|
|
—
|
|
—
|
|
|
—
|
|
13
|
|
|
—
|
|
—
|
|
||||||||
U.S. Treasury Securities
|
36
|
|
—
|
|
|
—
|
|
—
|
|
|
36
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Public Equity Funds
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States
|
702
|
|
48
|
|
|
54
|
|
—
|
|
|
648
|
|
48
|
|
|
—
|
|
—
|
|
||||||||
Non-U.S.
|
266
|
|
93
|
|
|
19
|
|
—
|
|
|
247
|
|
93
|
|
|
—
|
|
—
|
|
||||||||
Non-U.S. Commodities Funds
|
—
|
|
2
|
|
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|
—
|
|
—
|
|
||||||||
Global
|
—
|
|
91
|
|
|
—
|
|
—
|
|
|
—
|
|
91
|
|
|
—
|
|
—
|
|
||||||||
Other
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
362
|
|
51
|
|
|
—
|
|
—
|
|
|
—
|
|
24
|
|
|
362
|
|
27
|
|
||||||||
Multi-Asset Common Collective Trusts
|
—
|
|
48
|
|
|
—
|
|
—
|
|
|
—
|
|
48
|
|
|
—
|
|
—
|
|
||||||||
Total
|
$
|
1,887
|
|
$
|
658
|
|
|
$
|
156
|
|
$
|
9
|
|
|
$
|
1,369
|
|
$
|
622
|
|
|
$
|
362
|
|
$
|
27
|
|
(1)
|
Cash & Cash Equivalents: The carrying amounts of cash and cash equivalents are valued at
$1
per unit, which approximates fair value. Amounts are generally invested in actively managed common trust funds or interest bearing accounts.
|
(2)
|
Debt: The underlying fixed income investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date.
|
(3)
|
Public Equity: The underlying equity investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date.
|
(4)
|
Other: The underlying investments in this category are held in private investment funds. These investments are valued based on the net asset value provided by the management of each private investment fund, adjusted as appropriate, for any lag between the date of the financial reports and the measurement date.
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2012
|
|||||||||||||||||||||||
Description
|
December 31, 2012
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||||||||||
Pension Assets:
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
||||||||||||||||
Cash & Cash Equivalents
(1)
|
$
|
45
|
|
$
|
12
|
|
|
$
|
45
|
|
$
|
12
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Income (U.S.)
|
355
|
|
1
|
|
|
56
|
|
—
|
|
|
299
|
|
1
|
|
|
—
|
|
—
|
|
||||||||
Fixed Income (Non-U.S.)
|
—
|
|
281
|
|
|
—
|
|
—
|
|
|
—
|
|
281
|
|
|
—
|
|
—
|
|
||||||||
Fixed Income (Global)
|
—
|
|
13
|
|
|
—
|
|
—
|
|
|
—
|
|
13
|
|
|
—
|
|
—
|
|
||||||||
U.S. Treasury Securities
|
39
|
|
—
|
|
|
—
|
|
—
|
|
|
39
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Public Equity Funds
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States
|
640
|
|
31
|
|
|
39
|
|
—
|
|
|
601
|
|
31
|
|
|
—
|
|
—
|
|
||||||||
Non-U.S.
|
244
|
|
80
|
|
|
16
|
|
—
|
|
|
228
|
|
80
|
|
|
—
|
|
—
|
|
||||||||
Non-U.S. Commodities Funds
|
—
|
|
9
|
|
|
—
|
|
7
|
|
|
—
|
|
2
|
|
|
—
|
|
—
|
|
||||||||
Global
|
—
|
|
88
|
|
|
—
|
|
—
|
|
|
—
|
|
88
|
|
|
—
|
|
—
|
|
||||||||
Other
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
379
|
|
52
|
|
|
—
|
|
—
|
|
|
—
|
|
25
|
|
|
379
|
|
27
|
|
||||||||
Multi-Asset Common Collective Trusts
|
—
|
|
29
|
|
|
—
|
|
—
|
|
|
—
|
|
29
|
|
|
—
|
|
—
|
|
||||||||
Total
|
$
|
1,702
|
|
$
|
596
|
|
|
$
|
156
|
|
$
|
19
|
|
|
$
|
1,167
|
|
$
|
550
|
|
|
$
|
379
|
|
$
|
27
|
|
(1)
|
Cash & Cash Equivalents: The carrying amounts of cash and cash equivalents are valued at
$1
per unit, which approximates fair value. Amounts are generally invested in actively managed common trust funds or interest bearing accounts.
|
(2)
|
Debt: The underlying fixed income investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date.
|
(3)
|
Public Equity: The underlying equity investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date.
|
(4)
|
Other: The underlying investments in this category are held in private investment funds. These investments are valued based on the net asset value provided by the management of each private investment fund, adjusted as appropriate, for any lag between the date of the financial reports and the measurement date.
|
(Dollars in millions)
|
|
|
Fair Value Measurements at
December 31, 2013
|
||||||||||||
Description
|
December 31, 2013
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Postretirement Benefit Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Cash & Cash Equivalents
(1)
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
120
|
|
|
—
|
|
|
120
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
U.S. Treasury Securities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
134
|
|
|
$
|
12
|
|
|
$
|
122
|
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
Fair Value Measurements at
December 31, 2012
|
||||||||||||
Description
|
December 31, 2012
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Postretirement Benefit Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Cash & Cash Equivalents
(1)
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
143
|
|
|
—
|
|
|
143
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
U.S. Treasury Securities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
157
|
|
|
$
|
10
|
|
|
$
|
147
|
|
|
$
|
—
|
|
(1)
|
Cash & Cash Equivalents: The carrying amounts of cash and cash equivalents are valued at $1 per unit, which approximates fair value. Amounts are generally invested in actively managed common trust funds or interest bearing accounts.
|
(2)
|
Debt: The underlying fixed income investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date.
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|||||||||||||||||||||||||||
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|||||||||||||||||||||||||
(Dollars in millions)
|
Private Equity
|
|
Real Estate
|
|
Other Alternative Investments
(1)
|
|
Total
|
|
Real Estate
|
|
Other Alternative Investments
(1)
|
|
Total
|
|||||||||||||||
Balance at December 31, 2011
|
$
|
150
|
|
|
$
|
113
|
|
|
$
|
93
|
|
|
$
|
356
|
|
|
$
|
5
|
|
|
$
|
15
|
|
|
$
|
20
|
|
|
Distributions
|
(32
|
)
|
|
(12
|
)
|
|
(24
|
)
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Unrealized gains (losses)
|
20
|
|
|
8
|
|
|
11
|
|
|
39
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||
Purchases, contributions, and other
|
32
|
|
|
10
|
|
|
10
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Balance at December 31, 2012
|
170
|
|
|
119
|
|
|
90
|
|
|
379
|
|
|
5
|
|
|
22
|
|
|
27
|
|
||||||||
Distributions
|
(31
|
)
|
|
(27
|
)
|
|
(21
|
)
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Unrealized gains (losses)
|
20
|
|
|
5
|
|
|
6
|
|
|
31
|
|
|
—
|
|
—
|
|
2
|
|
|
2
|
|
|||||||
Purchases, contributions, and other
|
18
|
|
|
4
|
|
|
9
|
|
|
31
|
|
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
||||||||
Balance at December 31, 2013
|
$
|
177
|
|
|
$
|
101
|
|
|
$
|
84
|
|
|
$
|
362
|
|
|
$
|
2
|
|
|
$
|
25
|
|
|
$
|
27
|
|
(1)
|
U.S. primarily consists of natural resource and energy related limited partnership investments. Non-U.S. primarily consists of an annuity contract.
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
Postretirement Benefit Plan
|
||||||
|
Target Allocation
|
Plan Assets at
December 31, 2013
|
Plan Assets at
December 31, 2012
|
|
Target Allocation
|
Plan Assets at
December 31, 2013
|
Plan Assets at December 31, 2012
|
|
Target Allocation
|
Plan Assets at
December 31, 2013
|
Plan Assets at December 31, 2012
|
Asset category
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
50%
|
51%
|
52%
|
|
33%
|
36%
|
35%
|
|
—%
|
—%
|
—%
|
Debt securities
|
32%
|
30%
|
26%
|
|
51%
|
49%
|
51%
|
|
100%
|
100%
|
100%
|
Real estate
|
4%
|
5%
|
7%
|
|
2%
|
2%
|
3%
|
|
—%
|
—%
|
—%
|
Other investments
(1)
|
14%
|
14%
|
15%
|
|
14%
|
13%
|
11%
|
|
—%
|
—%
|
—%
|
Total
|
100%
|
100%
|
100%
|
|
100%
|
100%
|
100%
|
|
100%
|
100%
|
100%
|
(1)
|
U.S. primarily consists of private equity and natural resource and energy related limited partnership investments. Non-U.S. primarily consists of an annuity contract and alternative investments.
|
|
Pension Plans
|
|
Postretirement
Benefit Plans
|
||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
|
||||||
2014
|
$
|
213
|
|
|
$
|
21
|
|
|
$
|
63
|
|
2015
|
215
|
|
|
21
|
|
|
64
|
|
|||
2016
|
209
|
|
|
21
|
|
|
64
|
|
|||
2017
|
211
|
|
|
22
|
|
|
63
|
|
|||
2018
|
202
|
|
|
23
|
|
|
64
|
|
|||
2019-2023
|
889
|
|
|
133
|
|
|
324
|
|
12.
|
COMMITMENTS
|
(Dollars in millions)
|
|
Payments Due For
|
||||||||||||||||||||||
Period
|
|
Notes and Debentures
|
|
Facility Borrowings and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Total
|
||||||||||||
2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
410
|
|
|
$
|
44
|
|
|
$
|
616
|
|
2015
|
|
250
|
|
|
—
|
|
|
162
|
|
|
404
|
|
|
38
|
|
|
854
|
|
||||||
2016
|
|
—
|
|
|
—
|
|
|
154
|
|
|
269
|
|
|
35
|
|
|
458
|
|
||||||
2017
|
|
998
|
|
|
—
|
|
|
142
|
|
|
218
|
|
|
24
|
|
|
1,382
|
|
||||||
2018
|
|
171
|
|
|
425
|
|
|
130
|
|
|
211
|
|
|
15
|
|
|
952
|
|
||||||
2019 and beyond
|
|
2,410
|
|
|
—
|
|
|
1,012
|
|
|
971
|
|
|
54
|
|
|
4,447
|
|
||||||
Total
|
|
$
|
3,829
|
|
|
$
|
425
|
|
|
$
|
1,762
|
|
|
$
|
2,483
|
|
|
$
|
210
|
|
|
$
|
8,709
|
|
13.
|
ENVIRONMENTAL MATTERS
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Environmental contingent liabilities, current
|
$
|
40
|
|
|
$
|
35
|
|
Environmental contingent liabilities, long-term
|
328
|
|
|
359
|
|
||
Total
|
$
|
368
|
|
|
$
|
394
|
|
14.
|
LEGAL MATTERS
|
15.
|
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 Attributed to Eastman
$
|
|
Noncontrolling Interest $
|
|
Total Stockholders' Equity $
|
||||||||
Balance at December 31, 2010
|
2
|
|
|
793
|
|
|
2,253
|
|
|
194
|
|
|
(1,615
|
)
|
|
1,627
|
|
|
32
|
|
|
1,659
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
646
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|
1
|
|
|
647
|
|
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
Share-Based Compensation Expense
(2)
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
Stock Option Exercises
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
Other
(3)
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
10
|
|
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(316
|
)
|
|
(316
|
)
|
|
—
|
|
|
(316
|
)
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
Balance at December 31, 2011
|
2
|
|
|
900
|
|
|
2,760
|
|
|
138
|
|
|
(1,930
|
)
|
|
1,870
|
|
|
31
|
|
|
1,901
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
437
|
|
|
—
|
|
|
—
|
|
|
437
|
|
|
7
|
|
|
444
|
|
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
(159
|
)
|
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
Share-Based Compensation Expense
(2)
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
Stock Option Exercises
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
Shares Issued for Business Combination
|
—
|
|
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
730
|
|
|
—
|
|
|
730
|
|
Other
(3)
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
15
|
|
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
50
|
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
Balance at December 31, 2012
|
2
|
|
|
1,709
|
|
|
3,038
|
|
|
123
|
|
|
(1,929
|
)
|
|
2,943
|
|
|
85
|
|
|
3,028
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
1,165
|
|
|
—
|
|
|
—
|
|
|
1,165
|
|
|
7
|
|
|
1,172
|
|
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
(191
|
)
|
|
—
|
|
|
(191
|
)
|
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
Share-Based Compensation Expense
(2)
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
Stock Option Exercises
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Shares Issued for Business Combination
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
Other
(3)
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
|
|
|
2
|
|
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(238
|
)
|
|
(238
|
)
|
|
—
|
|
|
(238
|
)
|
Noncontrolling interests associated with acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
Balance at December 31, 2013
|
2
|
|
|
1,778
|
|
|
4,012
|
|
|
171
|
|
|
(2,167
|
)
|
|
3,796
|
|
|
79
|
|
|
3,875
|
|
(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)
|
Paid in capital 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. Equity attributable to noncontrolling interest includes adjustments for currency revaluation.
|
|
For years ended December 31,
|
||||||||||
(In millions, except per share amounts)
|
2013
|
|
2012
|
|
2011
|
||||||
Numerator
|
|
|
|
|
|
||||||
Earnings attributable to Eastman stockholders:
|
|
|
|
|
|
||||||
Earnings from continuing operations, net of tax
|
$
|
1,165
|
|
|
$
|
436
|
|
|
$
|
606
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average shares used for basic EPS
|
154.0
|
|
|
145.5
|
|
|
139.7
|
|
|||
Dilutive effect of stock options and other award plans
|
2.5
|
|
|
3.6
|
|
|
3.4
|
|
|||
Weighted average shares used for diluted EPS
|
156.5
|
|
|
149.1
|
|
|
143.1
|
|
|||
|
|
|
|
|
|
||||||
EPS from continuing operations
(1)
|
|
|
|
|
|
||||||
Basic
|
$
|
7.57
|
|
|
$
|
2.99
|
|
|
$
|
4.34
|
|
Diluted
|
$
|
7.44
|
|
|
$
|
2.92
|
|
|
$
|
4.24
|
|
|
For years ended December 31,
|
||||
Shares of common stock issued
(1)
|
2013
|
|
2012
|
|
2011
|
|
|
|
|
|
|
Balance at beginning of year
|
213,406,523
|
|
196,455,131
|
|
193,688,890
|
Issued for employee compensation and benefit plans
|
1,455,030
|
|
2,263,783
|
|
2,766,241
|
Issued for Solutia acquisition and related warrants
|
269,684
|
|
14,687,609
|
|
0
|
Balance at end of year
|
215,131,237
|
|
213,406,523
|
|
196,455,131
|
(Dollars in millions)
|
Cumulative Translation Adjustment
$
|
|
Benefit Plans Unrecognized Prior Service Credits
$
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
$
|
|
Unrealized Losses on Investments
$
|
|
Accumulated Other Comprehensive Income (Loss)
$
|
|||||
Balance at December 31, 2011
|
64
|
|
|
78
|
|
|
(3
|
)
|
|
(1
|
)
|
|
138
|
|
Period change
|
41
|
|
|
(13
|
)
|
|
(43
|
)
|
|
—
|
|
|
(15
|
)
|
Balance at December 31, 2012
|
105
|
|
|
65
|
|
|
(46
|
)
|
|
(1
|
)
|
|
123
|
|
Period change
|
28
|
|
|
13
|
|
|
7
|
|
|
—
|
|
|
48
|
|
Balance at December 31, 2013
|
133
|
|
|
78
|
|
|
(39
|
)
|
|
(1
|
)
|
|
171
|
|
|
For years ended December 31,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
(Dollars in millions)
|
Before Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Net of Tax
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in cumulative translation adjustment
|
$
|
29
|
|
|
$
|
28
|
|
|
$
|
42
|
|
|
$
|
41
|
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Prior service credit arising during the period
|
47
|
|
|
29
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|
1
|
|
||||||
Amortization of unrecognized prior service credits included in net periodic costs
|
(26
|
)
|
|
(16
|
)
|
|
(23
|
)
|
|
(15
|
)
|
|
(39
|
)
|
|
(22
|
)
|
||||||
Change in defined benefit pension and other postretirement benefit plans
|
21
|
|
|
13
|
|
|
(20
|
)
|
|
(13
|
)
|
|
(37
|
)
|
|
(21
|
)
|
||||||
Derivatives and hedging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized (loss) gain
|
10
|
|
|
6
|
|
|
(59
|
)
|
|
(36
|
)
|
|
(31
|
)
|
|
(20
|
)
|
||||||
Reclassification adjustment for gains included in net income
|
2
|
|
|
1
|
|
|
(11
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||||
Change in derivatives and hedging
|
12
|
|
|
7
|
|
|
(70
|
)
|
|
(43
|
)
|
|
(31
|
)
|
|
(20
|
)
|
||||||
Total other comprehensive income (loss)
|
$
|
62
|
|
|
$
|
48
|
|
|
$
|
(48
|
)
|
|
$
|
(15
|
)
|
|
$
|
(83
|
)
|
|
$
|
(56
|
)
|
16.
|
ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES (GAINS), NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Fixed asset impairments
|
$
|
28
|
|
|
$
|
41
|
|
|
$
|
—
|
|
Gain on sale
|
—
|
|
|
—
|
|
|
(15
|
)
|
|||
Intangible asset and goodwill impairments
|
—
|
|
|
5
|
|
|
—
|
|
|||
Severance charges
|
27
|
|
|
33
|
|
|
7
|
|
|||
Site closure and restructuring charges
|
21
|
|
|
41
|
|
|
—
|
|
|||
Total
|
$
|
76
|
|
|
$
|
120
|
|
|
$
|
(8
|
)
|
|
Balance at
January 1,
2011
|
|
Provision/ Adjustments
|
|
Non-cash Reductions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2011
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
15
|
|
|
7
|
|
|
—
|
|
|
(20
|
)
|
|
2
|
|
|||||
Total
|
$
|
15
|
|
|
$
|
(8
|
)
|
|
$
|
15
|
|
|
$
|
(20
|
)
|
|
$
|
2
|
|
|
Balance at
January 1,
2012
|
|
Provision/ Adjustments
|
|
Non-cash Reductions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2012
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
(43
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
2
|
|
|
34
|
|
|
—
|
|
|
(32
|
)
|
|
4
|
|
|||||
Site closure & restructuring costs
|
—
|
|
|
43
|
|
|
(20
|
)
|
|
(2
|
)
|
|
21
|
|
|||||
Total
|
$
|
2
|
|
|
$
|
120
|
|
|
$
|
(63
|
)
|
|
$
|
(34
|
)
|
|
$
|
25
|
|
|
Balance at
January 1,
2013
|
|
Provision/ Adjustments
|
|
Non-cash Reductions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2013
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
4
|
|
|
27
|
|
|
2
|
|
|
(11
|
)
|
|
22
|
|
|||||
Site closure & restructuring costs
|
21
|
|
|
21
|
|
|
(16
|
)
|
|
(12
|
)
|
|
14
|
|
|||||
Total
|
$
|
25
|
|
|
$
|
76
|
|
|
$
|
(42
|
)
|
|
$
|
(23
|
)
|
|
$
|
36
|
|
17.
|
OTHER CHARGES (INCOME), NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Foreign exchange transactions (gains) losses, net
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
Solutia financing costs
|
—
|
|
|
23
|
|
|
—
|
|
|||
Investments (gains) losses, net
|
(5
|
)
|
|
(9
|
)
|
|
(16
|
)
|
|||
Other, net
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Other charges (income), net
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
(20
|
)
|
18.
|
SHARE-BASED COMPENSATION PLANS AND AWARDS
|
Assumptions
|
|
2013
|
|
2011
|
Expected volatility rate
|
|
34.90%
|
|
33.00%
|
Expected dividend yield
|
|
1.97%
|
|
2.23%
|
Average risk-free interest rate
|
|
0.77%
|
|
0.95%
|
Expected forfeiture rate
|
|
0.75%
|
|
0.75%
|
Expected term years
|
|
5.00
|
|
5.20
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|||||||||
Outstanding at beginning of year
|
2,480,100
|
|
|
$
|
33
|
|
|
3,974,400
|
|
|
$
|
30
|
|
|
5,505,800
|
|
|
$
|
29
|
|
Granted
|
317,900
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
537,500
|
|
|
38
|
|
|||
Exercised
|
(436,500
|
)
|
|
28
|
|
|
(1,486,300
|
)
|
|
27
|
|
|
(2,059,900
|
)
|
|
29
|
|
|||
Cancelled, forfeited, or expired
|
(2,400
|
)
|
|
15
|
|
|
(8,000
|
)
|
|
19
|
|
|
(9,000
|
)
|
|
25
|
|
|||
Outstanding at end of year
|
2,359,100
|
|
|
$
|
39
|
|
|
2,480,100
|
|
|
$
|
33
|
|
|
3,974,400
|
|
|
$
|
30
|
|
Options exercisable at year-end
|
1,862,000
|
|
|
|
|
1,912,400
|
|
|
|
|
2,796,400
|
|
|
|
||||||
Available for grant at end of year
|
8,454,854
|
|
|
|
|
9,808,610
|
|
|
|
|
1,475,922
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||
Range of Exercise Prices
|
|
Number Outstanding at
December 31, 2013
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Weighted-Average Exercise Price
|
|
Number Exercisable at
December 31, 2013
|
|
Weighted-Average Exercise Price
|
|
$15-$24
|
|
51,200
|
|
2.1
|
|
$21
|
|
51,200
|
|
|
$21
|
$25-$29
|
|
576,300
|
|
4.6
|
|
28
|
|
576,300
|
|
|
28
|
$30-$32
|
|
263,000
|
|
3.0
|
|
31
|
|
263,000
|
|
|
31
|
$33-$34
|
|
189,700
|
|
3.8
|
|
33
|
|
189,700
|
|
|
33
|
$35-$40
|
|
961,000
|
|
7.2
|
|
39
|
|
781,800
|
|
|
39
|
$41-$70
|
|
317,900
|
|
9.2
|
|
70
|
|
—
|
|
|
—
|
|
|
2,359,100
|
|
6.0
|
|
$39
|
|
1,862,000
|
|
|
$33
|
Nonvested Options
|
|
Number of Options
|
|
Weighted-Average Grant Date Fair Value
|
Nonvested at January 1, 2013
|
|
567,700
|
|
$9.02
|
Granted
|
|
317,900
|
|
17.92
|
Vested
|
|
(388,500)
|
|
8.91
|
Forfeited
|
|
—
|
|
—
|
Nonvested Options at December 31, 2013
|
|
497,100
|
|
$14.80
|
19.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Current assets
|
$
|
(56
|
)
|
|
$
|
(23
|
)
|
|
$
|
15
|
|
Other assets
|
102
|
|
|
53
|
|
|
16
|
|
|||
Current liabilities
|
(26
|
)
|
|
(1
|
)
|
|
37
|
|
|||
Long-term liabilities and equity
|
(191
|
)
|
|
(71
|
)
|
|
(50
|
)
|
|||
Total
|
$
|
(171
|
)
|
|
$
|
(42
|
)
|
|
$
|
18
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Cash paid for interest and income taxes is as follows:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
186
|
|
|
$
|
125
|
|
|
$
|
78
|
|
Income taxes
|
224
|
|
|
137
|
|
|
261
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Increase (decrease) in trade payables related to capital expenditures
|
28
|
|
|
—
|
|
|
(11
|
)
|
|||
(Gain) loss from equity investments
|
(4
|
)
|
|
(8
|
)
|
|
9
|
|
20.
|
DISCONTINUED OPERATIONS
|
|
For years ended December 31,
|
||||||
(Dollars in millions)
|
2012
|
|
2011
|
||||
Sales
|
$
|
—
|
|
|
$
|
105
|
|
Earnings
before income taxes
|
—
|
|
|
17
|
|
||
Earnings from discontinued operations, net of tax
|
—
|
|
|
9
|
|
||
Gain from disposal of discontinued operations, net of tax
|
1
|
|
|
31
|
|
21.
|
SEGMENT INFORMATION
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Sales by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
1,719
|
|
|
$
|
1,332
|
|
|
$
|
1,067
|
|
Adhesives & Plasticizers
|
1,326
|
|
|
1,432
|
|
|
1,381
|
|
|||
Advanced Materials
|
2,349
|
|
|
1,694
|
|
|
1,195
|
|
|||
Fibers
|
1,441
|
|
|
1,315
|
|
|
1,279
|
|
|||
Specialty Fluids & Intermediates
|
2,497
|
|
|
2,318
|
|
|
2,256
|
|
|||
Total Sales by Segment
|
$
|
9,332
|
|
|
$
|
8,091
|
|
|
$
|
7,178
|
|
Other
|
18
|
|
|
11
|
|
|
—
|
|
|||
Total Sales
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Earnings (Loss)
|
|
|
|
|
|
||||||
Additives & Functional Products
(1)(2)(3)(4)(5)(6)
|
$
|
405
|
|
|
$
|
285
|
|
|
$
|
215
|
|
Adhesives & Plasticizers
(2)(4)
|
172
|
|
|
260
|
|
|
250
|
|
|||
Advanced Materials
(1)(2)(3)(4)(5)(7)
|
257
|
|
|
84
|
|
|
125
|
|
|||
Fibers
(4)
|
462
|
|
|
385
|
|
|
365
|
|
|||
Specialty Fluids & Intermediates
(1)(2)(4)(5)(8)
|
363
|
|
|
288
|
|
|
204
|
|
|||
Total Operating Earnings by Segment
|
1,659
|
|
|
1,302
|
|
|
1,159
|
|
|||
Other
(9)
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to segments
(2)(10)(11)(12)(13)(14)
|
(132
|
)
|
|
(132
|
)
|
|
(49
|
)
|
|||
Pension and other postretirement benefit costs not allocated to operating segments
(15)
|
394
|
|
|
(294
|
)
|
|
(173
|
)
|
|||
Transaction, integration, and restructuring costs related to the acquisition of Solutia
(16)
|
(59
|
)
|
|
(76
|
)
|
|
—
|
|
|||
Total Operating Earnings
|
$
|
1,862
|
|
|
$
|
800
|
|
|
$
|
937
|
|
(1)
|
Included in 2012 earnings are additional costs of $21 million, $41 million, and $17 million in the AFP, AM, and SFI segments, respectively, of acquired Solutia inventories. See Note
2
, "Acquisitions and Investments in Joint Ventures".
|
(2)
|
Included in 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the AFP, A&P, AM, and SFI segments, respectively, and $3 million in "Other", in each case primarily for severance.
|
(3)
|
Included in 2013 earnings is a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the AFP and AM segments, respectively.
|
(4)
|
Included in 2012 were asset impairments and restructuring charges of $3 million, $3 million, $5 million, $3 million, and $6 million in the AFP, A&P, AM, Fibers and SFI segments, respectively, primarily related to discontinuance of a project to modify existing utility assets in order to meet requirements of recently enacted environmental regulations controlling air emissions from boilers.
|
(5)
|
Included in 2012 were asset impairments and restructuring charges of $8 million, $24 million, and $3 million in the AFP, AM, and SFI segments, respectively, for the fourth quarter termination of an operating agreement at the acquired Solutia manufacturing facility in Sao Jose Dos Campos, Brazil and related manufacturing facility closure costs.
|
(6)
|
Included in 2012 earnings are asset impairments and restructuring charges of $6 million in the AFP segment related to the closure of a production facility in China.
|
(7)
|
Included in 2013 are asset impairments of $4 million in the AM segment for the fourth quarter decision to terminate efforts to develop a continuous resin process in Kuantan, Malaysia and Antwerp, Belgium.
|
(8)
|
Included in 2011 earnings are restructuring charges of $7 million in the SFI segment related to severance.
|
(9)
|
Research and development, pension and other postretirement benefits, and other expenses not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown as "other" operating earnings (loss).
|
(10)
|
Businesses not allocated to segments include the Perennial Wood
TM
growth initiative and Photovoltaics product line. See Note 11 below.
|
(11)
|
Included in 2013 are asset impairment and restructuring charges of $30 million for management's decision not to continue its Perennial Wood™ growth initiative. Operating earnings in 2012 included restructuring charges of $17 million for inventory costs in excess of recoverable value of certain Perennial Wood
TM
product lines and to accrue for losses on take-or-pay contracts with third parties.
|
(12)
|
Included in 2013 earnings are asset impairments and restructuring charges of $14 million for the shut-down of the Photovoltaics product line primarily in Germany.
|
(13)
|
Included in 2012 were asset impairments and restructuring charges of $4 million for termination of the research and development activities of a site acquired in 2011 and a charge of $6 million for the impairment of land retained from the terminated Beaumont, Texas industrial gasification project.
|
(14)
|
Included in 2011 earnings is a $15 million gain from the sale of the previously impaired methanol and ammonia assets related to the discontinued industrial gasification project.
|
(15)
|
Included in 2013 earnings are MTM pension and other postretirement benefit plans gains of $297 million and an MTM other postretirement benefit plan gain of $86 million for a change in benefits. Included in 2012 and 2011 earnings are MTM pension and other postretirement benefit plans losses of $276 million and $144 million, respectively. See Note
11
, "Retirement Plans."
|
(16)
|
Included in 2013 earnings are restructuring charges of $23 million primarily for severance associated with the continued integration of Solutia. Operating earnings in 2012 included restructuring charges $32 million primarily for severance related to the acquisition and integration of Solutia.
|
|
December 31,
|
||||||
(Dollars in millions)
|
2013
|
|
2012
|
||||
Assets by Segment
(1)
|
|
|
|
||||
Additives & Functional Products
|
$
|
2,940
|
|
|
$
|
2,892
|
|
Adhesives & Plasticizers
|
996
|
|
|
1,088
|
|
||
Advanced Materials
|
3,807
|
|
|
3,744
|
|
||
Fibers
|
974
|
|
|
937
|
|
||
Specialty Fluids & Intermediates
|
2,054
|
|
|
1,987
|
|
||
Total Assets by Segment
|
10,771
|
|
|
10,648
|
|
||
Corporate Assets
|
1,075
|
|
|
1,062
|
|
||
Total Assets
|
$
|
11,845
|
|
|
$
|
11,710
|
|
(1)
|
The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Depreciation and Amortization Expense by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
95
|
|
|
$
|
63
|
|
|
$
|
33
|
|
Adhesives & Plasticizers
|
45
|
|
|
46
|
|
|
44
|
|
|||
Advanced Materials
|
144
|
|
|
109
|
|
|
64
|
|
|||
Fibers
|
65
|
|
|
66
|
|
|
68
|
|
|||
Specialty Fluids & Intermediates
|
80
|
|
|
72
|
|
|
60
|
|
|||
Total Depreciation and Amortization Expense by Segment
|
429
|
|
|
356
|
|
|
269
|
|
|||
Other
|
4
|
|
|
4
|
|
|
4
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
433
|
|
|
$
|
360
|
|
|
$
|
273
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Capital Expenditures by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
74
|
|
|
$
|
70
|
|
|
$
|
44
|
|
Adhesives & Plasticizers
|
56
|
|
|
51
|
|
|
58
|
|
|||
Advanced Materials
|
170
|
|
|
153
|
|
|
193
|
|
|||
Fibers
|
65
|
|
|
52
|
|
|
51
|
|
|||
Specialty Fluids & Intermediates
|
113
|
|
|
128
|
|
|
79
|
|
|||
Total Capital Expenditures by Segment
|
478
|
|
|
454
|
|
|
425
|
|
|||
Other
|
5
|
|
|
11
|
|
|
32
|
|
|||
Total Capital Expenditures
|
$
|
483
|
|
|
$
|
465
|
|
|
$
|
457
|
|
(Dollars in millions)
|
For years ended December 31,
|
||||||||||
Geographic Information
|
2013
|
|
2012
|
|
2011
|
||||||
Sales
|
|
|
|
|
|
||||||
United States
|
$
|
4,140
|
|
|
$
|
3,831
|
|
|
$
|
3,662
|
|
All foreign countries
|
5,210
|
|
|
4,271
|
|
|
3,516
|
|
|||
Total
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
|
|
|
|
|
|
||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Long-Lived Assets, Net
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
3,247
|
|
|
$
|
3,172
|
|
|
$
|
2,687
|
|
All foreign countries
|
1,043
|
|
|
1,009
|
|
|
420
|
|
|||
Total
|
$
|
4,290
|
|
|
$
|
4,181
|
|
|
$
|
3,107
|
|
22.
|
QUARTERLY SALES AND EARNINGS DATA – UNAUDITED
|
(Dollars in millions, except per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2013
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,307
|
|
|
$
|
2,440
|
|
|
$
|
2,338
|
|
|
$
|
2,265
|
|
Gross profit
|
616
|
|
|
677
|
|
|
689
|
|
|
794
|
|
||||
Asset impairments and restructuring charges, net
|
3
|
|
|
18
|
|
|
3
|
|
|
52
|
|
||||
Net earnings (loss) attributable to Eastman
|
247
|
|
|
264
|
|
|
308
|
|
|
346
|
|
||||
Net earnings (loss) per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.60
|
|
|
$
|
1.71
|
|
|
$
|
2.00
|
|
|
$
|
2.26
|
|
Diluted
|
1.57
|
|
|
1.69
|
|
|
1.97
|
|
|
2.22
|
|
||||
|
|
|
|
|
|
|
|
(1)
|
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
|
||||||||
2012
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,821
|
|
|
$
|
1,853
|
|
|
$
|
2,259
|
|
|
$
|
2,169
|
|
Gross profit
|
431
|
|
|
481
|
|
|
525
|
|
|
325
|
|
||||
Asset impairments and restructuring charges (gains), net
|
—
|
|
|
—
|
|
|
37
|
|
|
83
|
|
||||
Earnings from continuing operations attributable to Eastman
|
159
|
|
|
177
|
|
|
154
|
|
|
(54
|
)
|
||||
Gain from disposal of discontinued operations, net of tax
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Net earnings attributable to Eastman
|
158
|
|
|
179
|
|
|
154
|
|
|
(54
|
)
|
||||
Earnings from continuing operations per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.15
|
|
|
$
|
1.28
|
|
|
$
|
1.01
|
|
|
$
|
(0.35
|
)
|
Diluted
|
1.13
|
|
|
1.26
|
|
|
0.99
|
|
|
(0.35
|
)
|
||||
Earnings from discontinued operations per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
—
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||
Net earnings per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.15
|
|
|
$
|
1.30
|
|
|
$
|
1.01
|
|
|
$
|
(0.35
|
)
|
Diluted
|
1.12
|
|
|
1.27
|
|
|
0.99
|
|
|
(0.35
|
)
|
(1)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
23.
|
RESERVE ROLLFORWARDS
|
(Dollars in millions)
|
|
|
Additions (Deductions)
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2011
|
|
Charged to Cost and Expense
|
|
Charged to Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2011
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
||||||||||
Doubtful accounts and returns
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
8
|
|
LIFO inventory
|
490
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
590
|
|
|||||
Environmental contingencies
|
40
|
|
|
2
|
|
|
3
|
|
|
6
|
|
|
39
|
|
|||||
Deferred tax valuation allowance
|
48
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
42
|
|
|||||
|
$
|
583
|
|
|
$
|
106
|
|
|
$
|
3
|
|
|
$
|
13
|
|
|
$
|
679
|
|
|
|
|
Additions (Deductions)
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2012
|
|
Charged to Cost and Expense
|
|
Charged to Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2012
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
8
|
|
LIFO inventory
|
590
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
505
|
|
|||||
Environmental contingencies
|
39
|
|
|
2
|
|
|
370
|
|
|
17
|
|
|
394
|
|
|||||
Deferred tax valuation allowance
|
42
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
215
|
|
|||||
|
$
|
679
|
|
|
$
|
(81
|
)
|
|
$
|
543
|
|
|
$
|
19
|
|
|
$
|
1,122
|
|
|
|
|
Additions (Deductions)
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2013
|
|
Charged to Cost and Expense
|
|
Charged to Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2013
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
12
|
|
LIFO inventory
|
505
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Environmental contingencies
|
394
|
|
|
4
|
|
|
1
|
|
|
31
|
|
|
368
|
|
|||||
Deferred tax valuation allowance
|
215
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
204
|
|
|||||
|
$
|
1,122
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
43
|
|
|
$
|
1,090
|
|
24.
|
RECENTLY ISSUED ACCOUNTING STANDARDS
|
25.
|
SUBSEQUENT EVENT
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
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.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
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
|
|
2,359,100
|
|
(1)
|
$
|
39
|
|
|
8,454,854
|
|
(2)
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
TOTAL
|
|
2,359,100
|
|
|
$
|
39
|
|
|
8,454,854
|
|
|
(1)
|
Represents shares of common stock issuable upon exercise of outstanding options granted under Eastman Chemical Company's 2002 and 2007 Omnibus Long-Term Compensation Plans; the 2002 Director Long-Term Compensation Plan; and both the 2007 and 2008 Director Long-Term Compensation Subplans, components of the 2007 Omnibus Long-Term Compensation Plan.
|
(2)
|
Shares of common stock available for future awards under the Company's 2012 Omnibus Stock Compensation Plan, including the 2013 Director Stock Compensation Subplan, a component of the 2012 Omnibus Stock Compensation Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
Page
|
(a)
|
1.
|
Consolidated Financial Statements:
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
2.
|
||
(b)
|
|
|
|
Eastman Chemical Company
|
|
|
|
By:
|
|
/s/ Mark J. Costa
|
|
|
Mark J. Costa
|
|
|
Chief Executive Officer and Director
|
Date:
|
February 28, 2014
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
DIRECTORS (other than Mark J. Costa, who also signed as Principal Executive Officer):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Humberto P. Alfonso
|
|
Director
|
|
February 28, 2014
|
Humberto P. Alfonso
|
|
|
|
|
|
|
|
|
|
/s/ Gary E. Anderson
|
|
Director
|
|
February 28, 2014
|
Gary E. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ Brett D. Begemann
|
|
Director
|
|
February 28, 2014
|
Brett D. Begemann
|
|
|
|
|
|
|
|
|
|
/s/ Michael P. Connors
|
|
Director
|
|
February 28, 2014
|
Michael P. Connors
|
|
|
|
|
|
|
|
|
|
/s/ Stephen R. Demeritt
|
|
Director
|
|
February 28, 2014
|
Stephen R. Demeritt
|
|
|
|
|
|
|
|
|
|
/s/ Robert M. Hernandez
|
|
Director
|
|
February 28, 2014
|
Robert M. Hernandez
|
|
|
|
|
|
|
|
|
|
/s/ Julie F. Holder
|
|
Director
|
|
February 28, 2014
|
Julie F. Holder
|
|
|
|
|
|
|
|
|
|
/s/ Renée J. Hornbaker
|
|
Director
|
|
February 28, 2014
|
Renée J. Hornbaker
|
|
|
|
|
|
|
|
|
|
/s/ Lewis M. Kling
|
|
Director
|
|
February 28, 2014
|
Lewis M. Kling
|
|
|
|
|
|
|
|
|
|
/s/ Howard L. Lance
|
|
Director
|
|
February 28, 2014
|
Howard L. Lance
|
|
|
|
|
|
|
|
|
|
/s/ David W. Raisbeck
|
|
Director
|
|
February 28, 2014
|
David W. Raisbeck
|
|
|
|
|
|
|
|
|
|
/s/ James P. Rogers
|
|
Executive Chairman of the Board
|
|
February 28, 2014
|
James P. Rogers
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
|
|
|
|
|
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 March 31, 2012)
|
|
|
|
|
|
|
|
3.02
|
|
Amended and Restated Bylaws of Eastman Chemical Company
|
|
144 - 153
|
|
|
|
|
|
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
|
|
Indenture, dated as of June 5, 2012, between Eastman Chemical Company and Wells Fargo Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated June 5, 2012)
|
|
|
|
|
|
|
|
4.04
|
|
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)
|
|
|
|
|
|
|
|
4.05
|
|
Officers' Certificate pursuant to Sections 201 and 301 of the Indenture related to 7 5/8% Debentures due 2024 (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated June 8, 1994)
|
|
|
|
|
|
|
|
4.06
|
|
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)
|
|
|
|
|
|
|
|
4.07
|
|
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)
|
|
|
|
|
|
|
|
4.08
|
|
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, 2006)
|
|
|
|
|
|
|
|
4.09
|
|
Form of 5.500% Note 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
|
|
Form of 6.30% Note 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)
|
|
|
|
|
|
|
|
4.11
|
|
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)
|
|
|
|
|
|
|
|
4.12
|
|
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)
|
|
|
|
|
|
|
|
4.13
|
|
Form of 2.4% Note due 2017 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated June 5, 2012)
|
|
|
|
|
|
|
|
4.14
|
|
Form of 3.6% Note due 2022 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K dated June 5, 2012)
|
|
|
|
|
|
|
|
4.15
|
|
Form of 4.8% Note due 2042 (incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K dated June 5, 2012)
|
|
|
|
|
|
|
|
10.01
|
|
Accounts Receivable Securitization Agreement dated July 9, 2008 (amended February 18, 2009, July 9, 2009, July 7, 2010, January 31, 2011, July 6, 2011, April 30, 2012, and August 1, 2013), between the Company and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as agent (incorporated herein by reference to Exhibit 4.09 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, Exhibit 4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010, Exhibit 4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, and Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2013)
|
|
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.02**
|
|
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)
|
|
|
|
|
|
|
|
10.03**
|
|
Form of Executive Change in Control Severance Agreements (incorporated herein by reference to Exhibit 10.02 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010)
|
|
|
|
|
|
|
|
10.04**
|
|
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)
|
|
|
|
|
|
|
|
10.05**
|
|
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)
|
|
|
|
|
|
|
|
10.06**
|
|
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)
|
|
|
|
|
|
|
|
10.07**
|
|
Eastman Chemical Company Benefit Security Trust dated December 24, 1997, as amended May 1, 1998 and February 1, 2001 and Amendment Number Three to the Eastman Chemical Company Benefit Security Trust dated January 2, 2002 (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and Exhibit 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|
|
|
|
|
|
|
10.08**
|
|
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)
|
|
|
|
|
|
|
|
10.09**
|
|
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)
|
|
|
|
|
|
|
|
10.10**
|
|
Amended and Restated Eastman Executive Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
|
|
|
|
10.11**
|
|
Amended and Restated Eastman Directors' Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
|
|
|
|
10.12**
|
|
Eastman Unit Performance Plan as amended and restated effective December 5, 2012 (incorporated herein by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
|
|
|
|
10.13**
|
|
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)
|
|
|
|
|
|
|
|
10.14**
|
|
Cancellation of Employment Agreement between Eastman Chemical Company and Mark J. Costa dated May 4, 2006 (Employment Agreement incorporated by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009)
|
|
154 - 155
|
|
|
|
|
|
10.15**
|
|
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)
|
|
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.16**
|
|
Forms of Award Notices 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)
|
|
|
|
|
|
|
|
10.17**
|
|
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)
|
|
|
|
|
|
|
|
10.18**
|
|
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)
|
|
|
|
|
|
|
|
10.19**
|
|
Forms of Performance Share Awards to Executive Officers (2011 – 2013 Performance Period) (incorporated herein by reference to Exhibits 10.03 and 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|
|
|
|
|
|
|
10.20**
|
|
Forms of Performance Share Awards to Executive Officers (2012 – 2014 Performance Period) (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)
|
|
|
|
|
|
|
|
10.21**
|
|
Forms of Performance Share Awards to Executive Officers (2013 – 2015 Performance Period) (incorporated herein by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
|
|
|
|
10.22**
|
|
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)
|
|
|
|
|
|
|
|
10.23**
|
|
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)
|
|
|
|
|
|
|
|
10.24**
|
|
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 2013 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 5, 2012)
|
|
|
|
|
|
|
|
10.25**
|
|
Form of Award Notice for Stock Options Granted to James P. Rogers, Chief Executive Officer, on November 2, 2011 (incorporated herein by reference to Exhibit 10.05 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)
|
|
|
|
|
|
|
|
10.26**
|
|
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 2014 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 4, 2013)
|
|
|
|
|
|
|
|
10.27**
|
|
2012 Omnibus Stock Compensation Plan (incorporated herein by reference to Appendix A to the Company's 2012 Annual Meeting Proxy Statement)
|
|
|
|
|
|
|
|
10.28**
|
|
2012 Director Stock Compensation Subplan of the 2012 Omnibus Stock Compensation Plan and Form of Restricted Stock Award Notice (incorporated herein by reference to Exhibit 10.06 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012)
|
|
|
|
|
|
|
|
10.29**
|
|
Forms of Award Notices for Stock Options and Stock Appreciation Rights Granted to Executive Officers under the 2012 Omnibus Stock Compensation Plan (previous forms of awards incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013)
|
|
156 -166
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.30
|
|
Amendment to Amended and Restated Five-Year Credit Agreement, dated as of October 31, 2013, amended December 20, 2013, among Eastman Chemical Company, the initial lenders named therein, and Citibank N.A., as administrative agent, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as joint lead arrangers (Agreement incorporated herein by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K dated October 31, 2013)
|
|
167
|
|
|
|
|
|
10.31**
|
|
2013 Director Stock Compensation Subplan of the 2012 Omnibus Stock Compensation Plan and Form of Restricted Stock Award Notice (incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
|
|
|
|
10.32**
|
|
Forms of Performance Share Awards to Executive Officers (2014 - 2016 Performance Period)
|
|
168 - 186
|
|
|
|
|
|
12.01
|
|
Statement re: Computation of Ratios of Earnings (Loss) to Fixed Charges
|
|
187
|
|
|
|
|
|
21.01
|
|
Subsidiaries of the Company
|
|
188 - 192
|
|
|
|
|
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm
|
|
193
|
|
|
|
|
|
31.01
|
|
Rule 13a – 14(a) Certification by Mark J. Costa, Chief Executive Officer, for the year ended December 31, 2013
|
|
194
|
|
|
|
|
|
31.02
|
|
Rule 13a – 14(a) Certification by Curtis E. Espeland, Executive Vice President and Chief Financial Officer, for the year ended December 31, 2013
|
|
195
|
|
|
|
|
|
32.01
|
|
Section 1350 Certification by Mark J. Costa, Chief Executive Officer, for the year ended December 31, 2013
|
|
196
|
|
|
|
|
|
32.02
|
|
Section 1350 Certification by Curtis E. Espeland, Executive Vice President and Chief Financial Officer, for the year ended December 31, 2013
|
|
197
|
|
|
|
|
|
99.01
|
|
2013 Databook
|
|
198
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Definition Linkbase Document
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
|
|
*
|
Schedules and exhibits have been omitted from this exhibit pursuant to Item 601(b)(2) of Regulation S-K and are not filed herewith. The Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.
|
**
|
Management contract or compensatory plan or arrangement filed pursuant to Item 601(b) (10) (iii) of Regulation S-K.
|
Australia
|
Belgium
|
France
|
Mexico
|
Netherlands
|
Singapore
|
United Kingdom
|
Differential from Target Return on Capital (ROC-(COC+3))
|
|||||||||
Eastman TSR Relative to Comparison Companies
|
≤ -5%
|
-4.99 to -3%
|
-2.99 to -1%
|
-0.99 to 0%
|
+.01 to +1%
|
+1.01 to +3%
|
+3.01 to +5%
|
+5.01 to +7%
|
>7%
|
5
th
quintile
|
0.00
|
0.00
|
0.00
|
0.00
|
0.20
|
0.30
|
0.40
|
0.50
|
0.60
|
4
th
quintile
|
0.00
|
0.00
|
0.40
|
0.50
|
0.60
|
0.70
|
0.80
|
0.90
|
1.00
|
3
rd
quintile <50%
|
0.00
|
0.00
|
0.50
|
0.60
|
0.80
|
1.00
|
1.20
|
1.40
|
1.60
|
3
rd
quintile 50%
|
0.00
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2
nd
quintile
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2.25
|
1
st
quintile
|
0.60
|
0.80
|
1.00
|
1.20
|
1.50
|
1.75
|
2.00
|
2.25
|
2.50
|
•
|
your combined age and years of service with your Employer, the Company and its Subsidiaries equals or exceeds 75;
|
•
|
you have attained age 55 and 10 years of service with your Employer, the Company and its Subsidiaries;
|
•
|
you had attained age 50 or greater as of your hire date and you have attained 5 years of service with your Employer, the Company and its Subsidiaries; or
|
•
|
you have attained age 65.
|
Australia
|
France
|
Mexico
|
Netherlands
|
Singapore
|
United Kingdom
|
Differential from Target Return on Capital (ROC-(COC+3))
|
|||||||||
Eastman TSR Relative to Comparison Companies
|
≤ -5%
|
-4.99 to -3%
|
-2.99 to -1%
|
-0.99 to 0%
|
+.01 to +1%
|
+1.01 to +3%
|
+3.01 to +5%
|
+5.01 to +7%
|
>7%
|
5
th
quintile
|
0.00
|
0.00
|
0.00
|
0.00
|
0.20
|
0.30
|
0.40
|
0.50
|
0.60
|
4
th
quintile
|
0.00
|
0.00
|
0.40
|
0.50
|
0.60
|
0.70
|
0.80
|
0.90
|
1.00
|
3
rd
quintile <50%
|
0.00
|
0.00
|
0.50
|
0.60
|
0.80
|
1.00
|
1.20
|
1.40
|
1.60
|
3
rd
quintile ≥50%
|
0.00
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2
nd
quintile
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2.25
|
1
st
quintile
|
0.60
|
0.80
|
1.00
|
1.20
|
1.50
|
1.75
|
2.00
|
2.25
|
2.50
|
(Dollars in millions)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
$
|
1,672
|
|
$
|
642
|
$
|
880
|
$
|
618
|
Add:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
186
|
|
|
148
|
|
83
|
|
105
|
Appropriate portion of rental expense
(2)
|
|
24
|
|
|
26
|
|
17
|
|
14
|
Amortization of capitalized interest
|
|
6
|
|
|
7
|
|
7
|
|
7
|
Earnings as adjusted
|
$
|
1,888
|
|
$
|
823
|
$
|
987
|
$
|
744
|
|
|
|
|
|
|
|
|
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
$
|
186
|
|
$
|
148
|
$
|
83
|
$
|
105
|
Appropriate portion of rental expense
(2)
|
|
24
|
|
|
26
|
|
17
|
|
14
|
Capitalized interest
|
|
4
|
|
|
4
|
|
9
|
|
3
|
Total fixed charges
|
$
|
214
|
|
$
|
178
|
$
|
109
|
$
|
122
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to fixed charges
|
|
8.8x
|
|
|
4.6x
|
|
9.1x
|
|
6.1x
|
(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 20, "Discontinued Operations" to the Company's consolidated financial statements in Part II, Item 8 of this 2013 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
INCOROPRATION OR
ORGANIZATION
|
CP Films Vertriebs GmbH
|
Germany
|
CPFilms Inc.
|
Delaware
|
Crown Operations International, LLC
|
Delaware
|
Dynaloy, LLC
|
Delaware
|
Eastman (Shanghai) Chemical Commercial Co., Ltd
|
China
|
Eastman Administración, S.A. de C.V.
|
Mexico
|
Eastman Benelux B.V.B.A.
|
Belgium
|
Eastman Cayman Financial Services Limited
|
Cayman Islands
|
Eastman Chemical (Gibraltar) Limited
|
Gibraltar
|
Eastman Chemical (Malaysia) Sdn. Bhd.
|
Malaysia
|
Eastman Chemical (Tongxiang) Limited
|
China
|
Eastman Chemical Advanced Materials B.V.
|
Netherlands
|
Eastman Chemical Adhesives (Hong Kong) Limited
|
China
|
Eastman Chemical AP Holdings B.V.
|
Netherlands
|
Eastman Chemical Argentina S.R.L.
|
Argentina
|
Eastman Chemical B.V.
|
Netherlands
|
Eastman Chemical Belgium B.V.
|
Netherlands
|
Eastman Chemical Canada, Inc.
|
Canada
|
Eastman Chemical Company Foundation, Inc.
|
Tennessee
|
Eastman Chemical Company Investments, Inc.
|
Delaware
|
Eastman Chemical do Brasil Ltda.
|
Brazil
|
Eastman Chemical EMEA B.V.
|
Netherlands
|
Eastman Chemical Financial Corporation
|
Delaware
|
Eastman Chemical Financial Services B.V.
|
Netherlands
|
Eastman Chemical Germany B.V.
|
Netherlands
|
Eastman Chemical Germany GmbH
|
Germany
|
Eastman Chemical Germany Holdings GmbH & Co. KG
|
Germany
|
Eastman Chemical Germany Management GmbH & Co. KG
|
Germany
|
Eastman Chemical Germany Verwaltungs-GmbH
|
Germany
|
Eastman Chemical Global Holdings LLC
|
Texas
|
Eastman Chemical Global Holdings S.a.r.l
|
Luxembourg
|
Eastman Chemical GmbH
|
Germany
|
Eastman Chemical HK Limited
|
Hong Kong
|
Eastman Chemical Holdings do Brasil Ltda.
|
Brazil
|
Eastman Chemical Holdings Spain S.L.
|
Spain
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR ORGANIZATION |
Eastman Chemical Holdings, S.A. de C.V.
|
Mexico
|
Eastman Chemical Hong Kong B.V.
|
Hong Kong
|
Eastman Chemical India Private Limited
|
India
|
Eastman Chemical Intermediates (Hong Kong) Limited
|
Hong Kong
|
Eastman Chemical International GmbH
|
Switzerland
|
Eastman Chemical International Holdings B.V.
|
Netherlands
|
Eastman Chemical International LP, LLC
|
Delaware
|
Eastman Chemical Japan Limited
|
Japan
|
Eastman Chemical Korea B.V.
|
Netherlands
|
Eastman Chemical Korea, Ltd.
|
Korea
|
Eastman Chemical Latin America, Inc.
|
Delaware
|
Eastman Chemical Ltd.
|
New York
|
Eastman Chemical Ltd.
|
Australia
|
Eastman Chemical Ltd.
|
Singapore
|
Eastman Chemical Ltd.
|
Taiwan
|
Eastman Chemical Ltd.
|
Thailand
|
Eastman Chemical Luxembourg Holdings 1 LLC
|
Texas
|
Eastman Chemical Luxembourg Holdings 1 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 2 LLC
|
Texas
|
Eastman Chemical Luxembourg Holdings 2 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 3 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 4 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 6 S.C.S
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 7 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings LLC
|
Delaware
|
Eastman Chemical Luxembourg S.a.r.l.
|
Luxembourg
|
Eastman Chemical Malaysia B.V.
|
Netherlands
|
Eastman Chemical Middelburg B.V.
|
Netherlands
|
Eastman Chemical Netherlands C.V.
|
Netherlands
|
Eastman Chemical Netherlands Ltd.
|
United Kingdom
|
Eastman Chemical Pioneer, LLC
|
Delaware
|
Eastman Chemical Regional UK
|
United Kingdom
|
Eastman Chemical Resins, Inc.
|
Delaware
|
Eastman Chemical Singapore Pte. Ltd.
|
Singapore
|
Eastman Chemical Texas City, Inc.
|
Delaware
|
Eastman Chemical Uruapan, S.A. de C.V.
|
Mexico
|
Eastman Chemical Workington Limited
|
United Kingdom
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
Eastman Chemical, Asia Pacific Pte. Ltd.
|
Indonesia
|
Eastman Chemical, Asia Pacific Pte. Ltd.
|
Singapore
|
Eastman Chemical, Europe, Middle East and Africa, Ltd.
|
Delaware
|
Eastman Cogen Management L.L.C.
|
Texas
|
Eastman Cogeneration L.P.
|
Texas
|
Eastman Company UK Limited
|
United Kingdom
|
Eastman España, S.L.
|
Spain
|
Eastman Fibers Korea Limited
|
Korea
|
Eastman Gasification Services Company
|
Delaware
|
Eastman Global Holdings, Inc.
|
Delaware
|
Eastman International Holdings, Inc.
|
Delaware
|
Eastman International Holdings, Inc.
|
Taiwan
|
Eastman International Management Company
|
Tennessee
|
Eastman Kimyasal Ürünleri Kayit Hizmetleri Limited Sirketi
|
Turkey
|
Eastman Malta Limited
|
Malta
|
Eastman Mazzucchelli Hong Kong Limited
|
Hong Kong
|
Eastman Mazzucchelli Plastics (Shenzhen) Company Limited
|
China
|
Eastman Renewable Materials, LLC
|
Delaware
|
Eastman Servicios Corporativos, S.A. de C.V.
|
Mexico
|
Eastman Shuangwei Fibers Company Limited
|
China
|
Eastman Spain L.L.C.
|
Delaware
|
Eastman Specialties Corporation
|
Delaware
|
Eastman Specialties Holdings Corporation
|
Delaware
|
Eastman Specialties OÜ
|
Estonia
|
Eastman Specialties Wuhan Youji Chemical Co. Ltd
|
China
|
EGSC Beaumont, Inc.
|
Delaware
|
Enterprise Genetics, Inc.
|
Nevada
|
Flexsys America Co.
|
Delaware
|
Flexsys America L.P.
|
Delaware
|
Flexsys Asia Pacific Sdn. Bhd.
|
Malaysia
|
Flexsys Chemicals (M) Sdn Bhd
|
Malaysia
|
Flexsys Distribution GmbH
|
Germany
|
Flexsys Holding B.V.
|
Netherlands
|
Flexsys K.K.
|
Japan
|
Flexsys Rubber Chemicals Ltd.
|
United Kingdom
|
Flexsys SA/NV
|
Belgium
|
Flexsys Verkauf GmbH
|
Germany
|
Flexsys Verwaltungs- und Beteiligungsgesellschaft mbH
|
Germany
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
GMX Trading Pte. Ltd.
|
Singapore
|
HDK Industries, Inc.
|
Tennessee
|
Holston Defense Corporation
|
Virginia
|
Huper Optic Intl (GP) LLC
|
Texas
|
Huper Optik International Pte. Ltd.
|
Singapore
|
Huper Optik Intl USA LP
|
Texas
|
Industriepark Nienburg GmbH
|
Germany
|
Jaeger Chimie France S.a.r.l
|
France
|
Kingsport Hotel, L.L.C.
|
Tennessee
|
Monchem International, Inc.
|
Delaware
|
Mustang Pipeline Company
|
Texas
|
Nanjing Yangzi Eastman Chemical Ltd.
|
China
|
Novomatrix International Trading (Shanghai) Co. Ltd.
|
China
|
Novomatrix Investments, Inc.
|
Delaware
|
Novomatrix Pte. Ltd.
|
Singapore
|
Novomatrix Pte. Ltd.
|
Dubai
|
Novomatrix, Inc.
|
Delaware
|
Primester
|
New York
|
Qilu Eastman Specialty Chemicals, Ltd.
|
China
|
S E Investment LLC
|
Delaware
|
Scandiflex do Brasil S.A. Industrias Quimicas
|
Brazil
|
SFC LLC
|
Delaware
|
Solchem Netherlands C.V.
|
Netherlands
|
Solutia (Thailand) Ltd.
|
Thailand
|
Solutia Argentina S.R.L.
|
Argentina
|
Solutia Australia Pty. Ltd.
|
Australia
|
Solutia Brasil Ltda.
|
Brazil
|
Solutia Canada Inc.
|
Canada
|
Solutia Chemicals France S.a.r.l.
|
France
|
Solutia Chemicals Ibérica, S.L.
|
Spain
|
Solutia Chemicals India Private Limited
|
India
|
Solutia Deutschland GmbH
|
Germany
|
Solutia Europe
|
Portugal
|
Solutia Europe
|
Russia
|
Solutia Europe SPRL/BVBA
|
Belgium
|
Solutia Greater China, LLC
|
Delaware
|
Solutia Hong Kong Limited
|
Hong Kong
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
Solutia Inc.
|
Delaware
|
Solutia International Trading (Shanghai) Co.
|
China
|
Solutia Italia S.r.l.
|
Italy
|
Solutia Japan Limited
|
Japan
|
Solutia Overseas, Inc.
|
Delaware
|
Solutia Performance Products (Suzhou) Co., Ltd.
|
China
|
Solutia Performance Products Solutions Ltd.
|
Mauritius
|
Solutia Services International SCA/Comm. VA
|
Belgium
|
Solutia Singapore Pte. Ltd.
|
Singapore
|
Solutia Solar GmbH
|
Germany
|
Solutia Therminol Co., Ltd. Suzhou
|
China
|
Solutia Tlaxcala, S.A. de C.V.
|
Mexico
|
Solutia UK Holdings Ltd.
|
United Kingdom
|
Solutia UK Investments Ltd.
|
United Kingdom
|
Solutia UK Ltd.
|
United Kingdom
|
Solutia Venezuela, S.R.L.
|
Venezuela
|
Southwall Europe GmbH
|
Germany
|
Southwall IG Holdings, Inc.
|
Delaware
|
Southwall Insulating Glass, LLC
|
Delaware
|
Southwall Technologies Inc.
|
Delaware
|
Southwall Technologies, Inc.
|
Belgium
|
Sterling Chemicals JV Holdings, Inc.
|
Delaware
|
Sterling Methanol Company
|
Delaware
|
Sterling Oxo Alcohols Company
|
Delaware
|
Sun-X (South East Asia) Pte. Ltd.
|
Singapore
|
Sun-X Film Pte. Ltd.
|
Singapore
|
Texas City Gasification, LLC
|
Delaware
|
TX Energy, LLC
|
Delaware
|
V-Kool International Pte. Ltd.
|
Singapore
|
/s/ PricewaterhouseCoopers LLP
|
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.
|
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.
|
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.
|
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.
|
Additives & Functional Products
|
|
|
Key Competitors
:
Specialty Materials
: Bayer AG, Styron LLC, Evonik Industries AG, Saudi Basic Industries Corporation, Mitsubishi Chemical Corporation, S.K. Chemical Industries, Sichuan Push Acetati Company Limited, Daicel Chemical Industries Ltd.
Interlayers
: Sekisui Chemical Co., DuPont, Kuraray Co., Ltd.
Performance Films
: 3M Company, Saint- Gobain S.A., Commonwealth Laminating & Coating, Inc., Garware Chemicals Limited
|
|||
2013 Sales Revenue:
|
$1,719 million
|
|
||||
2013 Operating Earnings:
|
406
|
million
|
|
|||
2013 Depreciation & Amortization Expense
|
95
|
million
|
|
|||
Key Products
:
Solvents
: Texanol
TM
, Ketones, Esters, Glycol Ethers, Alcohol Solvents
Polymers
: Cellulosic, Polyester, and Polyolefin-based Polymers
Insoluble Sulfur
: Marketed under the Crystex® brand
Antidegradants
: Marketed under the Santoflex® brand
Key Markets & Applications
:
Transportation
: Insoluble sulfur and antidegradants used in rubber tire manufacturing, polymers and solvents used in OEM and refinish coatings
Building & Construction
: Solvents used in architectural coatings
Durable Goods
: Polymers and solvents used in industrial coatings applications
Key Raw Materials
: Propane, Propylene, Napthenic Process Oil, Nitrobenzene, Methyl Isobutyl Ketone, Aniline, Sulfur, Ethane
Key Competitors
: BASF SE, Dow, Oriental Carbon & Chemicals, Ltd., Shikoku Chemicals Corporation, Jiangsu Sinorgchem Technology Co. Ltd., Korea Kumho Petrochemical Co., Ltd., Lanxess AG
|
|
|||||
|
||||||
|
Fibers
|
|
||||
|
2013 Sales Revenue:
|
$1,441 million
|
||||
|
2013 Operating Earnings:
|
462
|
million
|
|||
|
2013 Depreciation & Amortization Expense
|
65
|
million
|
|||
|
Key Products
:
Acetate Tow
Acetate Yarn
Acetyl Chemical Products
: Includes cellulose diacetate flake, acetylation-grade acetic acid, acetic anhydride, triacetin plasticizers
Key Markets & Applications
:
Tobacco
: Cigarette filters
Consumables
: Apparel
Health & Wellness
: Medical Tape
Key Raw Materials
: Wood Pulp, Methanol, High Sulfur Coal
Key Competitors
:
Acetate Tow
: Celanese, Solvay S.A., Daicel, Mitsubishi Rayon
Acetate Yarn
: Industrias del Acetato de Celulosa S.A., UAB Korelita, Mitsubishi Rayon
Acetyl Chemical Products
: Jiangsu Ruijia Chemistry Co., Ltd., Polynt SPA, Daicel, Celanese, Solvay S.A.
|
|||||
|
||||||
|
||||||
|
||||||
|
||||||
Adhesives & Plasticizers
|
|
|
||||
2013 Sales Revenue:
|
$1,326 million
|
|
||||
2013 Operating Earnings:
|
173
|
million
|
|
|||
2013 Depreciation & Amortization Expense
|
45
|
million
|
|
|||
Key Products:
Resins
:
Hydrocarbon Resins (Piccotac
TM
, Regalite™, Eastotac™), Rosins
Plasticizers
:
Primary Non-Phthalate and Phthalate Plasticizers (Eastman 168™, Eastman DOP
TM
), Niche Non-Phthalate Plasticizers (Benzoflex™, Eastman TXIB™)
Key Markets & Applications
:
Consumable
s
: Resins used in hygiene and packaging adhesives
Building & Construction
: Non-phthalate plasticizers used in interior surfaces, resins for construction adhesives and interior flooring
Key Raw Material
s: Propane, C9 Resin Oil, Piperylene, Propylene, Gum Rosin, Paraxylene
Key Competitors
: BASF SE, Exxon Mobil Corp., LG Chem, Ltd.,
|
|
Specialty Fluids & Intermediates
|
|
|||
|
2013 Sales Revenue:
|
$2,497 million
|
||||
|
2013 Operating Earnings:
|
364
|
million
|
|||
|
2013 Depreciation & Amortization Expense
|
80
|
million
|
|||
|
Key Products
:
Specialty Fluids
: Heat transfer fluids marketed under the Therminol® brand, aviation hydraulic fluids marketed under the Skydrol® brand
Chemical Intermediates
: Oxo alcohols and derivatives, acetic derivatives, acetic anhydride
Other Intermediates
: Lower-margin intermediates produced to achieve high capacity utilization (includes ethylene, low-margin grades of acetic acid, oxo alcohols, and polymer intermediates)
Key Markets & Applications
:
Industrial Chemicals & Processing
: Heat transfer fluids for chemical processes, olefin & acetyl-based intermediates serving a wide range of industrial processing needs
Building & Construction
: Intermediates for paint/coating applications, construction chemicals, building materials
Key Raw Materials
: Propane, Ethane, Propylene, Coal, Metaxylene, Benzene, Natural Gas, Paraxylene
Key Competitors
: BASF SE, Celanese, Dow, Exxon Mobil Corp.
|
|||||
|
||||||
|
||||||
|
||||||
Advanced Materials
|
|
|
||||
2013 Sales Revenue:
|
$2,349 million
|
|
||||
2013 Operating Earnings:
|
260
|
million
|
|
|||
2013 Depreciation & Amortization Expense
|
144
|
million
|
|
|||
Key Products
:
Specialty Plastics
: Specialty Copolyesters (including Eastman Tritan™), Cellulose Esters
Interlayers
: PVB resin used as an adhesive interlayers in the production of laminated safetly glass and primarily marketed under the SAFLEX® brand name
Performance Films
: Aftermarket window film products including the LLumar® and V-Kool® brands
Key Markets & Application
s:
Transportation
: Interlayers for automotive safety glass, automotive after-market window film
Consumables
: Specialty copolyesters used in consumer packaging, personal care and cosmetics packaging, in-store fixtures and displays
Building & Construction
: PVB for architectural interlayers, residential and commercial window films
Durable Goods
: Specialty copolyesters and cellulose esters used in consumer housewares and appliances
Key Raw Materials
: Paraxylene, Polyvinyl Alcohol, Ethylene Glycol, Cellulose, Polyethylene Terephthalate Film, Vinyl Acetate Monomer, Butyraldehyde, 2-EH, Ethanol
|
|
|||||
|
||||||
|
Eastman Chemical Company
|
|||||
|
2013 Sales Revenue by end-market
|
|||||
|
Transportation
Consumables
Building & Construction
Tobacco
Industrial Chemicals & Processing
Durable Goods
Health & Wellness
Energy, Fuels & Water
Electronics
Agriculture
Other
|
17 %
16 %
16 %
15 %
14 %
7 %
6 %
3 %
2 %
2 %
2 %
|
|
|||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
Sales revenue by region
|
||||||||||||
(Dollars in millons)
|
||||||||||||
|
|
|
|
|
||||||||
Year
|
2013
|
2012
|
2011
|
2010
|
||||||||
United States and Canada
|
$
|
4,290
|
|
$
|
4,264
|
|
$
|
4,364
|
|
$
|
3,468
|
|
Asia Pacific
|
2,584
|
|
2,396
|
|
2,315
|
|
2,023
|
|
||||
Europe, Middle East, and Africa
|
1,975
|
|
1,968
|
|
2,119
|
|
1,855
|
|
||||
Latin America
|
501
|
|
492
|
|
477
|
|
446
|
|
||||
|
|
|
|
|
||||||||
Eastman Chemical Company
|
$
|
9,350
|
|
$
|
9,120
|
|
$
|
9,275
|
|
$
|
7,792
|
|
(Dollars in millions, except per share amounts)
Selected operating items
|
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||
Sales
|
$
|
9,350
|
|
$
|
9,120
|
|
$
|
9,275
|
|
$
|
7,792
|
|
$
|
6,014
|
|
Operating earnings
|
1,921
|
|
1,120
|
|
1,254
|
|
1,199
|
|
302
|
|
|||||
Additional costs of acquired Solutia inventories
|
—
|
|
—
|
|
—
|
|
—
|
|
79
|
|
|||||
Transaction and integration related to the acquisition of Solutia
|
—
|
|
—
|
|
—
|
|
—
|
|
69
|
|
|||||
Mark-to-market pension and other postretirement benefits (gains) losses, net
|
(383
|
)
|
276
|
|
209
|
|
4
|
|
89
|
|
|||||
Asset impairments and restructuring charges, net
|
53
|
|
93
|
|
11
|
|
45
|
|
281
|
|
|||||
Other operating (income) expense
|
—
|
|
—
|
|
(46
|
)
|
—
|
|
2
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
1,591
|
|
1,489
|
|
1,428
|
|
1,248
|
|
822
|
|
|||||
Depreciation and amortization expense
|
433
|
|
438
|
|
429
|
|
395
|
|
384
|
|
|||||
|
|
|
|
|
|
||||||||||
Diluted earnings from continuing operations per share*
|
7.44
|
|
2.92
|
|
4.24
|
|
2.81
|
|
0.76
|
|
|||||
Additional costs of acquired Solutia inventories, net of tax
|
—
|
|
0.37
|
|
—
|
|
—
|
|
—
|
|
|||||
Solutia transaction and integration costs, net of tax
|
0.15
|
|
0.35
|
|
—
|
|
—
|
|
—
|
|
|||||
Asset impairments and restructuring charges, net of tax
|
0.34
|
|
0.54
|
|
(0.03
|
)
|
0.12
|
|
0.86
|
|
|||||
Mark-to-market pension and other postretirement benefits (gains) losses, net of tax
|
(1.49
|
)
|
1.20
|
|
0.60
|
|
0.22
|
|
0.39
|
|
|||||
Early debt extinguishment costs, net of tax
|
—
|
|
—
|
|
—
|
|
0.48
|
|
—
|
|
|||||
Diluted earnings from continuing operations per share excluding non-core or non-recurring items
|
6.44
|
|
5.38
|
|
4.81
|
|
3.63
|
|
2.01
|
|
(Dollars in millions)
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Year
|
||||||||||
Additives & Functional Products
Sales
|
$
|
419
|
|
$
|
430
|
|
$
|
445
|
|
$
|
425
|
|
$
|
1,719
|
|
Operating earnings
|
98
|
|
104
|
|
111
|
|
92
|
|
405
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
98
|
|
105
|
|
111
|
|
92
|
|
406
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
95
|
|
|||||||||
Adhesives & Plasticizers
Sales
|
$
|
345
|
|
$
|
339
|
|
$
|
321
|
|
$
|
321
|
|
$
|
1,326
|
|
Operating earnings
|
49
|
|
49
|
|
41
|
|
33
|
|
172
|
|
|||||
Asset impairments and restructuring charges, net
(1)
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
49
|
|
50
|
|
41
|
|
33
|
|
173
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
45
|
|
|||||||||
Advanced Materials
Sales
|
$
|
584
|
|
$
|
625
|
|
$
|
583
|
|
$
|
557
|
|
$
|
2,349
|
|
Operating earnings
|
65
|
|
82
|
|
69
|
|
41
|
|
257
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(3)
|
—
|
|
(1
|
)
|
—
|
|
4
|
|
3
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
65
|
|
81
|
|
69
|
|
45
|
|
260
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
144
|
|
|||||||||
Fibers
Sales
|
$
|
346
|
|
$
|
363
|
|
$
|
363
|
|
$
|
369
|
|
$
|
1,441
|
|
Operating earnings
|
114
|
|
116
|
|
113
|
|
119
|
|
462
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
65
|
|
|||||||||
Specialty Fluids & Intermediates
Sales
|
$
|
607
|
|
$
|
677
|
|
$
|
620
|
|
$
|
593
|
|
$
|
2,497
|
|
Operating earnings
|
95
|
|
117
|
|
90
|
|
61
|
|
363
|
|
|||||
Asset impairments and restructuring charges, net
(1)
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
95
|
|
118
|
|
90
|
|
61
|
|
364
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
80
|
|
|||||||||
Other
(4)
Sales
(5)
|
$
|
6
|
|
$
|
6
|
|
$
|
6
|
|
$
|
—
|
|
$
|
18
|
|
Operating (loss) earnings
|
|
|
|
|
|
||||||||||
Growth initiatives and businesses not allocated to segments
|
(21
|
)
|
(32
|
)
|
(20
|
)
|
(59
|
)
|
(132
|
)
|
|||||
Pension and other postretirement benefits gain (loss) not allocated to operating segments
|
3
|
|
3
|
|
87
|
|
301
|
|
394
|
|
|||||
Operating (loss) earnings before non-core or non-recurring items
|
(18
|
)
|
(29
|
)
|
67
|
|
242
|
|
262
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(6)
|
—
|
|
—
|
|
(86
|
)
|
(297
|
)
|
(383
|
)
|
|||||
Asset impairments and restructuring charges, net
(7)(8)
|
—
|
|
13
|
|
—
|
|
34
|
|
47
|
|
|||||
Operating loss excluding non-core or non-recurring items
|
(18
|
)
|
(16
|
)
|
(19
|
)
|
(21
|
)
|
(74
|
)
|
|||||
Depreciation and amortization expense
|
|
|
|
|
4
|
|
|||||||||
Eastman Chemical Company
Sales
|
$
|
2,307
|
|
$
|
2,440
|
|
$
|
2,338
|
|
$
|
2,265
|
|
$
|
9,350
|
|
Operating earnings
|
403
|
|
439
|
|
491
|
|
588
|
|
1,921
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(6)
|
—
|
|
—
|
|
(86
|
)
|
(297
|
)
|
(383
|
)
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(3)(7)(8)
|
—
|
|
15
|
|
—
|
|
38
|
|
53
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
403
|
|
454
|
|
405
|
|
329
|
|
1,591
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
433
|
|
(Dollars in millions)
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Year
|
||||||||||
Additives & Functional Products
Sales
|
$
|
400
|
|
$
|
423
|
|
$
|
406
|
|
$
|
384
|
|
$
|
1,613
|
|
Operating earnings
|
94
|
|
107
|
|
105
|
|
72
|
|
378
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(3)
|
—
|
|
—
|
|
—
|
|
17
|
|
17
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
94
|
|
107
|
|
105
|
|
89
|
|
395
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
93
|
|
|||||||||
Adhesives & Plasticizers
Sales
|
$
|
374
|
|
$
|
372
|
|
$
|
348
|
|
$
|
338
|
|
$
|
1,432
|
|
Operating earnings
|
66
|
|
72
|
|
73
|
|
49
|
|
260
|
|
|||||
Asset impairments and restructuring charges, net
(1)
|
—
|
|
—
|
|
—
|
|
3
|
|
3
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
66
|
|
72
|
|
73
|
|
52
|
|
263
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
46
|
|
|||||||||
Advanced Materials
Sales
|
$
|
567
|
|
$
|
600
|
|
$
|
559
|
|
$
|
528
|
|
$
|
2,254
|
|
Operating earnings
|
57
|
|
62
|
|
57
|
|
—
|
|
176
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(4)
|
4
|
|
1
|
|
—
|
|
29
|
|
34
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
61
|
|
63
|
|
57
|
|
29
|
|
210
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
144
|
|
|||||||||
Fibers
Sales
|
$
|
323
|
|
$
|
318
|
|
$
|
349
|
|
$
|
325
|
|
$
|
1,315
|
|
Operating earnings
|
101
|
|
96
|
|
98
|
|
90
|
|
385
|
|
|||||
Asset impairments and restructuring charges, net
(1)
|
—
|
|
—
|
|
—
|
|
3
|
|
3
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
101
|
|
96
|
|
98
|
|
93
|
|
388
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
66
|
|
|||||||||
Specialty Fluids & Intermediates
Sales
|
$
|
642
|
|
$
|
649
|
|
$
|
592
|
|
$
|
590
|
|
$
|
2,473
|
|
Operating earnings
|
73
|
|
97
|
|
96
|
|
84
|
|
350
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)
|
—
|
|
—
|
|
—
|
|
9
|
|
9
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
73
|
|
97
|
|
96
|
|
93
|
|
359
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
82
|
|
|||||||||
Other
(5)
Sales
|
$
|
13
|
|
$
|
11
|
|
$
|
5
|
|
$
|
4
|
|
$
|
33
|
|
Operating loss
|
|
|
|
|
|
||||||||||
Growth initiatives and businesses not allocated to segments
|
(25
|
)
|
(26
|
)
|
(36
|
)
|
(48
|
)
|
(135
|
)
|
|||||
Pension and other postretirement benefit gain (loss) not allocated to operating segments
|
(7
|
)
|
(6
|
)
|
(5
|
)
|
(276
|
)
|
(294
|
)
|
|||||
Operating loss before non-core or non-recurring items
|
(32
|
)
|
(32
|
)
|
(41
|
)
|
(324
|
)
|
(429
|
)
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(6)
|
—
|
|
—
|
|
—
|
|
276
|
|
276
|
|
|||||
Asset impairments and restructuring charges, net
(1)(7)
|
—
|
|
—
|
|
9
|
|
18
|
|
27
|
|
|||||
Operating loss excluding non-core or non-recurring items
|
(32
|
)
|
(32
|
)
|
(32
|
)
|
(30
|
)
|
(126
|
)
|
|||||
Depreciation and amortization expense
|
|
|
|
|
7
|
|
|||||||||
Eastman Chemical Company
Sales
|
$
|
2,319
|
|
$
|
2,373
|
|
$
|
2,259
|
|
$
|
2,169
|
|
$
|
9,120
|
|
Operating earnings (loss)
|
359
|
|
402
|
|
388
|
|
(29
|
)
|
1,120
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(6)
|
—
|
|
—
|
|
—
|
|
276
|
|
276
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(3)(4)(7)
|
4
|
|
1
|
|
9
|
|
79
|
|
93
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
363
|
|
403
|
|
397
|
|
326
|
|
1,489
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
438
|
|
(Dollars in millions)
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Year
|
||||||||||
Additives & Functional Products
Sales
|
$
|
429
|
|
$
|
437
|
|
$
|
412
|
|
$
|
399
|
|
$
|
1,677
|
|
Operating earnings
|
125
|
|
105
|
|
84
|
|
68
|
|
382
|
|
|||||
Other operating income
(1)
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
(17
|
)
|
|||||
Operating earnings excluding non-core or non-recurring item
|
108
|
|
105
|
|
84
|
|
68
|
|
365
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
95
|
|
|||||||||
Adhesives & Plasticizers
Sales
|
$
|
340
|
|
$
|
371
|
|
$
|
349
|
|
$
|
321
|
|
$
|
1,381
|
|
Operating earnings
|
70
|
|
70
|
|
61
|
|
49
|
|
250
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
44
|
|
|||||||||
Advanced Materials
Sales
|
$
|
574
|
|
$
|
632
|
|
$
|
558
|
|
$
|
549
|
|
$
|
2,313
|
|
Operating earnings
|
69
|
|
82
|
|
63
|
|
37
|
|
251
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
135
|
|
|||||||||
Fibers
Sales
|
$
|
290
|
|
$
|
331
|
|
$
|
334
|
|
$
|
324
|
|
$
|
1,279
|
|
Operating earnings
|
86
|
|
97
|
|
98
|
|
84
|
|
365
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
68
|
|
|||||||||
Specialty Fluids & Intermediates
Sales
|
$
|
612
|
|
$
|
638
|
|
$
|
657
|
|
$
|
641
|
|
$
|
2,548
|
|
Operating earnings
|
76
|
|
79
|
|
69
|
|
47
|
|
271
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
—
|
|
—
|
|
7
|
|
—
|
|
7
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
76
|
|
79
|
|
76
|
|
47
|
|
278
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
80
|
|
|||||||||
Other
(3)
Sales
|
$
|
21
|
|
$
|
20
|
|
$
|
20
|
|
$
|
16
|
|
$
|
77
|
|
Operating (loss) earnings
|
|
|
|
|
|
||||||||||
Growth initiatives and businesses not allocated to segments
|
(20
|
)
|
5
|
|
10
|
|
(24
|
)
|
(29
|
)
|
|||||
Pension and other postretirement benefit gain (loss) not allocated to operating segments
|
9
|
|
(5
|
)
|
(10
|
)
|
(230
|
)
|
(236
|
)
|
|||||
Operating loss before non-core or non-recurring items
|
(11
|
)
|
—
|
|
—
|
|
(254
|
)
|
(265
|
)
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(4)
|
(15
|
)
|
—
|
|
—
|
|
224
|
|
209
|
|
|||||
Asset impairments and restructuring charges, net
(5)(6)(7)
|
12
|
|
(14
|
)
|
6
|
|
—
|
|
4
|
|
|||||
Other operating expense (income)
(8)
|
—
|
|
—
|
|
(29
|
)
|
—
|
|
(29
|
)
|
|||||
Operating loss excluding non-core or non-recurring items
|
(14
|
)
|
(14
|
)
|
(23
|
)
|
(30
|
)
|
(81
|
)
|
|||||
Depreciation and amortization expense
|
|
|
|
|
7
|
|
|||||||||
Eastman Chemical Company
Sales
|
$
|
2,266
|
|
$
|
2,429
|
|
$
|
2,330
|
|
$
|
2,250
|
|
$
|
9,275
|
|
Operating earnings
|
415
|
|
433
|
|
375
|
|
31
|
|
1,254
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(4)
|
(15
|
)
|
—
|
|
—
|
|
224
|
|
209
|
|
|||||
Asset impairments and restructuring charges, net
(2)(5)(6)(7)
|
12
|
|
(14
|
)
|
13
|
|
—
|
|
11
|
|
|||||
Other operating expense (income)
(1)(8)
|
(17
|
)
|
—
|
|
(29
|
)
|
—
|
|
(46
|
)
|
|||||
Operating earnings excluding non-core or non-recurring items
|
395
|
|
419
|
|
359
|
|
225
|
|
1,428
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
429
|
|
(Dollars in millions)
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Year
|
||||||||||
Additives & Functional Products
Sales
|
$
|
377
|
|
$
|
405
|
|
$
|
401
|
|
$
|
377
|
|
$
|
1,560
|
|
Operating earnings
|
81
|
|
106
|
|
104
|
|
70
|
|
361
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)
|
5
|
|
4
|
|
1
|
|
5
|
|
15
|
|
|||||
Other operating income
(3)
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
|||||
Operating earnings excluding non-core or non-recurring items
|
86
|
|
110
|
|
105
|
|
70
|
|
371
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
90
|
|
|||||||||
Adhesives & Plasticizers
Sales
|
$
|
217
|
|
$
|
283
|
|
$
|
276
|
|
$
|
274
|
|
$
|
1,050
|
|
Operating earnings
|
34
|
|
50
|
|
55
|
|
43
|
|
182
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
—
|
|
3
|
|
—
|
|
2
|
|
5
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
34
|
|
53
|
|
55
|
|
45
|
|
187
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
37
|
|
|||||||||
Advanced Materials
Sales
|
$
|
486
|
|
$
|
545
|
|
$
|
526
|
|
$
|
513
|
|
$
|
2,070
|
|
Operating earnings
|
52
|
|
56
|
|
57
|
|
38
|
|
203
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
1
|
|
—
|
|
—
|
|
5
|
|
6
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
53
|
|
56
|
|
57
|
|
43
|
|
209
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
129
|
|
|||||||||
Fibers
Sales
|
$
|
267
|
|
$
|
274
|
|
$
|
301
|
|
$
|
300
|
|
$
|
1,142
|
|
Operating earnings
|
82
|
|
85
|
|
93
|
|
79
|
|
339
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
—
|
|
—
|
|
—
|
|
3
|
|
3
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
82
|
|
85
|
|
93
|
|
82
|
|
342
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
61
|
|
|||||||||
Specialty Fluids & Intermediates
Sales
|
$
|
468
|
|
$
|
485
|
|
$
|
487
|
|
$
|
467
|
|
$
|
1,907
|
|
Operating earnings
|
42
|
|
65
|
|
67
|
|
40
|
|
214
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
42
|
|
65
|
|
67
|
|
44
|
|
218
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
72
|
|
|||||||||
Other
Sales
|
$
|
4
|
|
$
|
12
|
|
$
|
26
|
|
$
|
21
|
|
$
|
63
|
|
Operating loss
|
|
|
|
|
|
||||||||||
Growth initiatives and businesses not allocated to segments
|
(14
|
)
|
(14
|
)
|
(10
|
)
|
(20
|
)
|
(58
|
)
|
|||||
Pension and other postretirement benefit gain (loss) not allocated to operating segments
|
(8
|
)
|
(10
|
)
|
(9
|
)
|
(15
|
)
|
(42
|
)
|
|||||
Operating loss before non-core or non-recurring items
|
(22
|
)
|
(24
|
)
|
(19
|
)
|
(35
|
)
|
(100
|
)
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(5)
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
|
|||||
Asset impairments and restructuring charges, net
(2)(6)
|
1
|
|
1
|
|
—
|
|
10
|
|
12
|
|
|||||
Other operating income
(7)
|
—
|
|
—
|
|
5
|
|
—
|
|
5
|
|
|||||
Operating loss excluding non-core or non-recurring item
|
(21
|
)
|
(23
|
)
|
(14
|
)
|
(21
|
)
|
(79
|
)
|
|||||
Depreciation and amortization expense
|
|
|
|
|
6
|
|
|||||||||
Eastman Chemical Company
Sales
|
$
|
1,819
|
|
$
|
2,004
|
|
$
|
2,017
|
|
$
|
1,952
|
|
$
|
7,792
|
|
Operating earnings
|
269
|
|
338
|
|
357
|
|
235
|
|
1,199
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(5)
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(6)
|
7
|
|
8
|
|
1
|
|
29
|
|
45
|
|
|||||
Other operating income
(3)(7)
|
—
|
|
—
|
|
5
|
|
(5
|
)
|
—
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
276
|
|
346
|
|
363
|
|
263
|
|
1,248
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
395
|
|
(Dollars in millions)
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Year
|
||||||||||
Additives & Functional Products
Sales
|
$
|
261
|
|
$
|
305
|
|
$
|
350
|
|
$
|
345
|
|
$
|
1,261
|
|
Operating earnings
|
17
|
|
64
|
|
100
|
|
101
|
|
282
|
|
|||||
Additional costs of acquired Solutia inventories
(1)
|
21
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|||||
Asset impairments and restructuring charges, net
(2)(3)(4)(5)
|
6
|
|
(5
|
)
|
—
|
|
1
|
|
2
|
|
|||||
Other operating income
(6)
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
(4
|
)
|
|||||
Operating earnings excluding non-core or non-recurring items
|
44
|
|
59
|
|
100
|
|
98
|
|
301
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
87
|
|
|||||||||
Adhesives & Plasticizers
Sales
|
$
|
149
|
|
$
|
167
|
|
$
|
182
|
|
$
|
181
|
|
$
|
679
|
|
Operating earnings
|
2
|
|
18
|
|
34
|
|
30
|
|
84
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
4
|
|
(1
|
)
|
—
|
|
—
|
|
3
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
6
|
|
17
|
|
34
|
|
30
|
|
87
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
37
|
|
|||||||||
Advanced Materials
Sales
|
$
|
324
|
|
$
|
401
|
|
$
|
435
|
|
$
|
464
|
|
$
|
1,624
|
|
Operating (loss) earnings
|
(62
|
)
|
34
|
|
48
|
|
37
|
|
57
|
|
|||||
Additional costs of acquired Solutia inventories
(1)
|
41
|
|
—
|
|
—
|
|
—
|
|
41
|
|
|||||
Asset impairments and restructuring charges, net
(2)(7)(8)
|
18
|
|
5
|
|
2
|
|
7
|
|
32
|
|
|||||
Operating (loss) earnings excluding non-core or non-recurring items
|
(3
|
)
|
39
|
|
50
|
|
44
|
|
130
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
123
|
|
|||||||||
Fibers
Sales
|
$
|
259
|
|
$
|
263
|
|
$
|
257
|
|
$
|
253
|
|
$
|
1,032
|
|
Operating earnings
|
72
|
|
77
|
|
82
|
|
77
|
|
308
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||
Operating earnings excluding non-core or non-recurring item
|
76
|
|
77
|
|
82
|
|
77
|
|
312
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
62
|
|
|||||||||
Specialty Fluids & Intermediates
Sales
|
$
|
302
|
|
$
|
323
|
|
$
|
378
|
|
$
|
396
|
|
$
|
1,399
|
|
Operating earnings (loss)
|
(18
|
)
|
16
|
|
36
|
|
28
|
|
62
|
|
|||||
Additional costs of acquired Solutia inventories
(1)
|
17
|
|
—
|
|
—
|
|
—
|
|
17
|
|
|||||
Asset impairments and restructuring charges, net
(2)
|
5
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
4
|
|
16
|
|
36
|
|
28
|
|
84
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
71
|
|
|||||||||
Other
Sales
|
$
|
6
|
|
$
|
6
|
|
$
|
4
|
|
$
|
3
|
|
$
|
19
|
|
Operating loss
|
|
|
|
|
|
||||||||||
Growth initiatives and businesses not allocated to segments
|
(16
|
)
|
(11
|
)
|
(20
|
)
|
(199
|
)
|
(246
|
)
|
|||||
Pension and other postretirement benefit gain (loss) not allocated to operating segments
|
(17
|
)
|
(17
|
)
|
(17
|
)
|
(93
|
)
|
(144
|
)
|
|||||
Transaction and integration related to the acquisition of Solutia
|
(160
|
)
|
—
|
|
—
|
|
—
|
|
(160
|
)
|
|||||
Operating loss before non-core or non-recurring items
|
(193
|
)
|
(28
|
)
|
(37
|
)
|
(292
|
)
|
(550
|
)
|
|||||
Transaction, integration, and restructuring costs related to the acquisition of Solutia
|
105
|
|
—
|
|
—
|
|
—
|
|
105
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(10)
|
—
|
|
—
|
|
8
|
|
81
|
|
89
|
|
|||||
Asset impairments and restructuring charges, net
(2)(11)(12)
|
62
|
|
—
|
|
8
|
|
188
|
|
258
|
|
|||||
Other operating loss
(13)
|
—
|
|
—
|
|
6
|
|
—
|
|
6
|
|
|||||
Operating loss excluding non-core or non-recurring items
|
(26
|
)
|
(28
|
)
|
(15
|
)
|
(23
|
)
|
(92
|
)
|
|||||
Depreciation and amortization expense
|
|
|
|
|
4
|
|
|||||||||
Eastman Chemical Company
Sales
|
$
|
1,301
|
|
$
|
1,465
|
|
$
|
1,606
|
|
$
|
1,642
|
|
$
|
6,014
|
|
Operating earnings (loss)
|
(182
|
)
|
181
|
|
263
|
|
(19
|
)
|
243
|
|
|||||
Additional costs of acquired Solutia inventories
(1)
|
79
|
|
—
|
|
—
|
|
—
|
|
79
|
|
|||||
Transaction, integration, and restructuring costs related to the acquisition of Solutia
|
105
|
|
—
|
|
—
|
|
—
|
|
105
|
|
|||||
Mark-to-market pension and other postretirement benefits losses (gains), net
(10)
|
—
|
|
—
|
|
8
|
|
81
|
|
89
|
|
|||||
Asset impairments and restructuring charges, net
(1)(2)(3)(4)(5)(7)(8)(11)(12)
|
99
|
|
(1
|
)
|
10
|
|
196
|
|
304
|
|
|||||
Other operating loss (income)
(6)(13)
|
—
|
|
—
|
|
6
|
|
(4
|
)
|
2
|
|
|||||
Operating earnings excluding non-core or non-recurring items
|
101
|
|
180
|
|
287
|
|
254
|
|
822
|
|
|||||
Depreciation and amortization expense
|
|
|
|
|
384
|
|
Year
|
|
Footnote
|
|
|
|
2013
|
1
|
Second quarter and twelve months 2013 earnings include restructuring charges of $2 million, $1 million, $2 million, and $1 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, in each case primarily for severance.
|
|
2
|
Second quarter and full year 2013 earnings include a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the Additives & Functional Products and Advanced Materials segments, respectively.
|
|
3
|
Fourth quarter and twelve months 2013 include asset impairments of $4 million in the Advanced Materials segment for the fourth quarter decision to terminate efforts to develop a continuous resin process in Kuantan, Malaysia and Antwerp, Belgium.
|
|
4
|
Research and development, pension and other postretirement benefits, and other expenses not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown as "other" operating earnings (loss).
|
|
5
|
Businesses not allocated to segments include the Perennial Wood
TM
growth initiative and Photovoltaics product line. See footnotes 7 and 8 to this table for more information.
|
|
6
|
Fourth quarter and twelve months 2013 MTM gains for pension and other postretirement benefit plans actuarial adjustments. MTM gains, net, in twelve months 2013 included an $86 million gain for the third quarter 2013 interim remeasurement of the Eastman other postretirement benefit plan obligation, triggered by a plan change in life insurance benefits.
|
|
7
|
Second quarter and twelve months 2013 earnings include asset impairments and restructuring charges of $14 million primarily for the shut-down of the Photovoltaics product line primarily in Germany.
|
|
8
|
Fourth quarter and twelve months 2013 include asset impairment and restructuring charges of approximately $30 million for management's decision not to pursue its Perennial Wood
TM
growth initiative.
|
|
|
|
2012
|
1
|
Fourth quarter includes asset impairments and restructuring charges of $3 million, $3 million, $5 million, $3 million, and $6 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, Fibers, and Specialty Fluids & Intermediates segments, respectively, primarily due to a change in approach to address recently finalized boiler air emissions regulations.
|
|
2
|
Amounts include business exit costs and asset impairments of $8 million, $24 million, and $3 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, for production businesses exited in Sao Jose dos Campos, Brazil in fourth quarter.
|
|
3
|
Amount includes asset impairments and restructuring charges of $6 million related to the closure of a production facility in China.
|
|
4
|
Amounts include acquisition related expenses on the Southwall Technologies Inc. acquisition.
|
|
5
|
Research and development, pension and other postretirement benefit, and other expenses not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as “other” operating earnings (loss).
|
|
6
|
Amounts are MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments.
|
|
7
|
Fourth quarter includes restructuring charges of $17 million for inventory costs in excess of recoverable value of certain discontinued Perennial Wood
TM
product lines and to accrue for losses on take-or-pay contracts with third parties. Third and fourth quarters include asset impairments and restructuring charges of $3 million and $1 million, respectively, for termination of the research and development activities for renewable chemicals. Third quarter also includes a charge of $6 million for the impairment of land retained from the terminated Beaumont, Texas industrial gasification project.
|
Year
|
|
Footnote
|
|
|
|
2011
|
1
|
Amount includes gains on certain other rubber chemicals divestitures.
|
|
2
|
Amount includes restructuring charges primarily for severance associated with the acquisition and integration of Sterling Chemicals, Inc.
|
|
3
|
Research and development, pension and other postretirement benefit, and other expenses not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as “other” operating earnings (loss).
|
|
4
|
MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments. First quarter 2011 included MTM gain of $15 million in due to the interim remeasurement of the other postretirement benefit plan obligation, triggered by the exit of employees associated with the sale of the PET business.
|
|
5
|
First quarter, second quarter, third quarter, and full year include $12 million, $1 million, $1 million, and $14 million, respectively, for severance, pension settlement and other charges related to the relocation of European regional headquarters.
|
|
6
|
Second quarter and full year include $15 million gain from the sale of the previously impaired methanol and ammonia assets related to the terminated Beaumont, Texas industrial gasification project.
|
|
7
|
Third quarter and full year include $3 million for severance and $2 million for share-based compensation costs on executive officer separation agreement.
|
|
8
|
Third quarter and full year include $29 million gain related to the sale of remaining 2% ownership interest in Ascend Performance Materials Holdings Inc.
|
|
|
|
2010
|
1
|
First, second, third, and fourth quarters reflect restructuring costs of $4 million, $4 million, $1 million, and $1 million, respectively, related to the closure of the Ruabon and Cologne facilities.
|
|
2
|
Includes charges for severance programs of: $1 million and $4 million in first and fourth quarters, respectively, in the Additives and Functional Products segment; $3 million and $2 million in second and fourth quarters, respectively, in the Adhesives and Plasticizers segment; $1 million and $5 million in first and fourth quarters, respectively, in the Advanced Materials segment; $3 million in fourth quarter in the Fibers segment; $4 million in fourth quarter in the Specialty Fluids and Intermediates segment; and $1 million, $1 million, and $2 million in first, second, and fourth quarters, respectively, in Other.
|
|
3
|
Includes gain on the sale of select assets of Perkalink.
|
|
4
|
Research and development, pension and other postretirement benefit, and other expenses not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as “other” operating earnings (loss).
|
|
5
|
Amounts include MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments.
|
|
6
|
Fourth quarter includes $8 million for intangible asset impairment charges resulting from an environmental regulatory change during the fourth quarter impacting the fair value of air emission credits remaining from the previously discontinued Beaumont, Texas, gasification project.
|
|
7
|
Includes loss on the sale of European Plastic Products business.
|
Year
|
|
Footnote
|
|
|
|
2009
|
1
|
As required by purchase accounting, the acquired Solutia inventories were marked to fair value. These inventories were sold in 2012 resulting in an increase in cost of sales, net of the LIFO impact for these inventories in third and fourth quarters 2012. For purposes of this pro forma combined financial information, the acquisition is presented as if the acquisition of Solutia had been consummated on January 1, 2009
|
|
2
|
Includes charges and adjustments for corporate severance program of: charges of $5 million and $1 million in first and fourth quarters, respectively, and an adjustment of $1 million in second quarter in the Additives and Functional Products segment; a charge of $4 million in first quarter and an adjustment of $1 million in second quarter in the Adhesives and Plasticizers segment; charges of $14 million, $4 million, $2 million, and $4 million in first, second, third, and fourth quarters in the Advanced Materials segment; charges of $4 million in first quarter in the Fibers segment; a charge of $5 million in first quarter in the Specialty Fluids and Intermediates segment; and charges of $7 million, $2 million, and $9 million in first, second, and fourth quarters, respectively, in Other.
|
|
3
|
First quarter, second quarter, and fourth quarter include charges of $1 million, gains of $4 million, and charges of $1 million, respectively, related to the announced closure of the Ruabon facility.
|
|
4
|
Fourth quarter includes $2 million gain from the reversal of a reserve for previously divested businesses and product lines within the former Coatings, Adhesives, and Specialty Polymers and Inks segment.
|
|
5
|
Fourth quarter includes $1 million impairment of intangible assets related to the sale of the Thiurams business.
|
|
6
|
Reflects gain on the sale of the Thiurams business.
|
|
7
|
First quarter and second quarter include $4 million and $1 million, respectively, related to the announced closure of the SAFLEX
®
plastic interlayer production line at the Trenton facility.
|
|
8
|
Fourth quarter includes net charges of $3 million related to consolidation of certain European manufacturing and distribution sites.
|
|
9
|
Research and development, pension and other postretirement benefits, and other expenses not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as "other" operating earnings (loss).
|
|
10
|
Amounts include MTM losses (gains), net, for pension and other postretirement benefits plans actuarial adjustments.
|
|
11
|
Amounts include restructuring charges of $55 million primarily for severance related to the acquisition and integration of Solutia.
|
|
12
|
Fourth quarter includes $179 million for asset impairments related to the Company's previously announced discontinuance of its Beaumont, Texas industrial gasification project.
|
|
13
|
Third quarter includes loss on the sale of North America Plastic Products and related impairment of intangible assets.
|