(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, 2015
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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 1. BUSINESS
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CORPORATE OVERVIEW
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•
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Completing integration of the Taminco acquisition, which:
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•
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strengthens Eastman's presence in attractive niche markets benefiting from megatrends,
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•
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leverages a world-class technology platform underpinned by a business model similar to Eastman's,
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•
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resulted in expected revenue and cost synergies, and
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•
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accelerated revenue and earnings growth and growth expectations.
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•
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In the AFP segment:
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•
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Retrofitting an existing manufacturing facility in Germany and beginning construction of a 40,000 metric ton expansion of the Crystex
®
insoluble sulfur rubber additives manufacturing facility in Kuantan, Malaysia, expected to be operational in 2017. These actions are expected to allow the Company to capitalize on recent enhancements of technology for the manufacture of Crystex
®
insoluble sulfur by improving the Company's cost position and enhancing product characteristics.
|
•
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Commercializing performance polyester resins based on monomer technology. These polyester resins provide a combination of performance and sustainability, particularly for the automotive coatings market.
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•
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In the AM segment:
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•
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Construction of a manufacturing facility for PVB Resin at the Kuantan, Malaysia site expected to be operational in 2017 to support growth of transportation and building and construction markets particularly in the Asia Pacific region.
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•
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Integrating the acquired Commonwealth business to strengthen the window film product portfolio, add industry leading protective film technology, and increase scale cost efficiencies.
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•
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In the SFI segment completing a Therminol
®
heat transfer fluid capacity expansion in Newport, Wales in fourth quarter 2015 to meet expected long-term demand in the industrial chemicals and processing market.
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•
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Completing the integration of Knowlton wet-laid nonwovens acquisition, which accelerates the innovation cycle for the Eastman microfibers technology platform.
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•
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it is pursuing strategic options to divest or otherwise monetize its excess ethylene capacity position and certain commodity olefin intermediates product lines, while retaining its cost-advantaged integrated position to propylene which supports specialty derivatives throughout the Company, and
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•
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it has changed its organizational and management structure following completion of the integration of recently acquired businesses to better align similar strategies and business models, resulting in the Company's products and operations being managed and reported in four operating segments -- AFP, AM, Fibers, and Chemical Intermediates ("CI") -- beginning first quarter 2016 .
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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
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Description
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Principal
Competitors
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Key Raw
Materials
|
End-Use
Applications
|
Coatings and Other Formulated Products
|
||||
Polymers
•
cellulosics
•
polyesters
•
polyolefins
|
paint additives and specialty polymers
|
Sichuan Nitrocell Corporation
Companhia Nitro Química Brasileira
The Dow Chemical Company
Evonik Industries AG
|
wood pulp
propylene
propane
|
Coatings Industry
Transportation (OEM and refinish coatings)
Consumer durables (wood and industrial coatings applications)
Other Formulated Products
Consumables (graphic arts and inks)
Health and wellness (pharmaceutical and consumables)
|
Additives and Solvents
•
Texanol
®
•
ketones
•
esters
•
glycol ethers
• alcohol
solvents
• ethyl acetate
|
specialty coalescents, specialty solvents, and commodity solvents
|
BASF SE
The Dow Chemical Company
|
propane
propylene
ethane
|
Coatings Industry
Building and construction (architectural coatings)
Transportation (OEM) and refinish coatings
Consumer durables (industrial coatings applications)
Other Formulated Products
Distribution solvents (olefin derived solvents sold through distribution)
Consumables (graphic arts, cleaners, packaging)
Industrial chemicals (process solvents and intermediates)
|
Tires
|
||||
Crystex
®
|
insoluble sulfur
rubber additive
|
Oriental Carbon & Chemicals Limited
Shikoku Chemicals Corporation
|
naphthenic process oil
sulfur
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Transportation (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 (tire manufacturing)
Other rubber products (such as hoses,
belts, seals, and footwear)
|
Piccotac
®
Kristalex
®
|
hydrocarbon resins
|
Cray Valley Hydrocarbon Specialty Chemicals
Exxon Mobil Corporation
Kolon Industries
Incorporated
|
alpha methylstyrene
piperylene
styrene
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Transportation (tire manufacturing)
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2015
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2014
|
2013
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Coatings and Other Formulated Products
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46%
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66%
|
66%
|
Tires
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22%
|
31%
|
34%
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Specialty Amines and Crop Protection
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32%
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3%
|
-
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•
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Strategy
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•
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Overview
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•
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Principal Products
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Product
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Description
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Principal
Competitors
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Key Raw
Materials
|
End-Use
Applications
|
|
||||
Adhesives Resins
|
||||
Piccotac
®
Regalite
®
Eastotac
®
Eastoflex
®
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hydrocarbon resins
and rosin resins
mainly for hot-melt
and pressure
sensitive adhesives
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Exxon Mobil Corporation
Kolon Industries, Inc.
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C9 resin oil
piperylene
gum rosin
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Consumables (resins used in hygiene and packaging adhesives)
Building and construction (resins for construction adhesives and interior flooring)
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Plasticizers
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|
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Eastman 168
®
Eastman
®
DOP
Benzoflex
®
Eastman TXIB
®
Effusion
™
|
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 and construction (non-phthalate plasticizers used in interior surfaces)
Consumables (food packaging, packaging adhesives, and glove applications)
Health and wellness (medical devices)
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•
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Strategy
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•
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Overview
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•
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Principal Products
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Product
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Description
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Principal
Competitors
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Key Raw
Materials
|
End-Use
Applications
|
|
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Specialty Plastics
|
||||
Eastar
®
copolyesters
Eastman Tritan
®
copolyester
Eastman Visualize
®
Material
Eastman Embrace
®
copolyester
Eastman Spectar
®
copolyester
Eastman Aspira
™
family of resins
Flexvue
®
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specialty copolyesters and cellulose esters
|
Convestro
Trinseo
Evonik Industries AG
Saudi Basic Industries Corporation
Mitsubishi Chemical Corporation
S.K. Chemical Industries
Sichuan Push Acetati Company Limited
Daicel Chemical Industries Ltd
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paraxylene
ethylene glycol
cellulose
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Consumables (Specialty copolyesters used in consumer packaging, consumables and cosmetics packaging, in-store fixtures and displays)
Durable goods (consumer housewares and appliances)
Health and wellness (medical)
Electronics (displays)
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Interlayers
|
||||
Saflex
®
Saflex
®
Q Series
|
PVB sheet
specialty PVB intermediates
|
Sekisui Chemical Co., Ltd.
Kuraray Co., Ltd
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polyvinyl alcohol
vinyl acetate monomer
butyraldehyde
2-ethyl hexanol
ethanol
|
Transportation (automotive safety glass, automotive acoustic glass, and head up displays
Building and construction (PVB for
architectural interlayers)
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Performance Films
|
||||
LLumar
®
SunTek
®
V-KOOL
®
Gila
®
|
window film and protective film
products for
aftermarket
applied films
|
3M Company
Saint-Gobain S.A.
Garware Chemicals
Limited
|
polyethylene terephthalate film
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Transportation (automotive after-market window film and paint protection film)
Building and construction (residential
and commercial window films)
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•
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Strategy
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•
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Overview
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•
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Principal Products
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Product
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Description
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Principal
Competitors
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Key Raw
Materials
|
End-Use
Applications
|
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Acetate Tow
|
||||
Estron
®
|
cellulose acetate tow
|
Celanese Corporation
Solvay S.A.
Daicel Corporation
Mitsubishi Rayon Co. Ltd.
|
wood pulp
methanol
high sulfur coal
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Tobacco (manufacture of cigarette filters)
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Acetate Yarn
|
||||
Estron
®
Chromspun
®
Cosilva™
|
natural (undyed) acetate yarn
solution dyed acetate yarn
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UAB Dirbtinis Pluostas
Industrias del Acetato de Celulosa S.A.
Mitsubishi Rayon Co. Ltd.
|
wood pulp
methanol
high sulfur coal
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Consumables (apparel, home furnishings, and industrial fabrics)
Health and wellness (medical tape)
|
Acetyl Chemical Products
|
||||
Estrobond
®
|
triacetin
cellulose diacetate flake
acetic acid
acetic anhydride
|
Jiangsu Ruijia Chemistry Co., Ltd.
Polynt SPA
Daicel Corporation
Celanese Corporation
Solvay S.A.
|
wood pulp
methanol
high sulfur coal
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Tobacco (manufacture of cigarette filters)
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2015
|
2014
|
2013
|
Acetate Tow
|
78%
|
79%
|
83%
|
Acetate Yarn and Acetyl Chemical Products
|
22%
|
21%
|
17%
|
•
|
Strategy
|
•
|
Overview
|
•
|
Principal Products
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use
Applications
|
|
|
|
|
|
Chemical Intermediates
|
||||
oxo alcohols
and 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 and processing
Building and construction (paint/coating applications, construction chemicals, building materials)
Pharmaceuticals and agriculture
Health and wellness
|
Other Intermediates
|
||||
ethylene
oxo alcohols
polymer
intermediates
acetic acid
|
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 and construction (paint/coating applications, construction chemicals, building materials)
Industrial chemicals and processing
Packaging
|
Functional Amines
|
||||
alkylamines
|
methylamines
and salts
higher amines
and solvents
|
BASF SE
Chemours
U.S. Amines
Oxea
|
methanol
ammonia
acetone
ethanol
butanol
|
Agrochemicals and various industrial intermediates
Energy
Consumables
Water treatment
Animal nutrition
|
Specialty Fluids
|
||||
Therminol
®
Eastman Turbo Oils
Skydrol
®
Eastman SkyKleen
®
|
heat transfer and
aviation fluids
|
The Dow Chemical Company
Exxon Mobil
Corporation
|
benzene
phosphorous
neo-polyol esters
|
Industrial chemicals and processing (heat transfer fluids for chemical processes)
Renewable energy
Commercial aviation
|
•
|
Strategy
|
CORPORATE INITIATIVES
|
REGIONAL BUSINESS OVERVIEW
|
|
United States and Canada
|
Asia Pacific
|
Europe, Middle East, and Africa
|
Latin America
|
Additives & Functional Products
|
21%
|
22%
|
31%
|
31%
|
Adhesives & Plasticizers
|
16%
|
5%
|
15%
|
13%
|
Advanced Materials
|
21%
|
32%
|
26%
|
24%
|
Fibers
|
6%
|
25%
|
13%
|
9%
|
Specialty Fluids & Intermediates
|
36%
|
16%
|
15%
|
23%
|
TOTAL
|
100%
|
100%
|
100%
|
100%
|
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
Combined
|
United States and Canada
|
39%
|
56%
|
38%
|
21%
|
65%
|
45%
|
Asia Pacific
|
22%
|
9%
|
31%
|
49%
|
15%
|
24%
|
Europe, Middle East, and Africa
|
32%
|
29%
|
26%
|
26%
|
15%
|
25%
|
Latin America
|
7%
|
6%
|
5%
|
4%
|
5%
|
6%
|
TOTAL
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
EASTMAN CHEMICAL COMPANY GENERAL INFORMATION
|
•
|
In the acetyl stream, the Company begins with coal which is gasified in the presence of oxygen 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. In the long-term, the Company's ability to use coal is considered to be a raw material cost advantage. The major end markets 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. The Company continues to optimize the ethane content in its olefins cracking units feedstock mix based on relative market prices of olefins and olefins feedstocks. The Company also purchases additional propylene for use at its Longview facility and its facilities outside the United States. 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.
|
•
|
In the alkylamine stream, the Company begins with ammonia and alcohols (C1 - C6) to produce methyl amines and higher alkylamines, which can then be further reacted with other chemicals to produce alkylamine derivatives. The Company’s alkylamine products are primarily used in agriculture, water treatment, consumables, animal nutrition and oil and gas end markets. The Company is recognized as one of the leading global producers of alkylamines. Methylamines are manufactured by reacting methanol with ammonia in a catalytic reactor. Three different methylamines are produced: mono methylamine ("MMA"), di methylamine ("DMA") and tri methylamine ("TMA"). The reaction circumstances (pressure, temperature, catalysts, etc.) and reactant ratios determine the ratio of the three products which are purified by distillation and used as building blocks to produce downstream derivatives or sold externally to merchant customers. The term 'higher alkylamines' refers to amines produced with C2-C6 alcohols (ethyl, n butyl, n propyl, isopropyl and cyclohexyl amines). The manufacturing process for higher alkylamines is similar to that for methylamines, as ammonia is combined with various alcohols in catalytic reactors and subsequently distilled. The use of different alcohols results in the creation of different higher alkylamines which are used both internally to produce derivatives or sold externally to the merchant market.
|
ITEM 1A. RISK FACTORS
|
ITEM 1B. UNRESOLVED STAFF COMMENTS
|
EXECUTIVE OFFICERS OF THE COMPANY
|
ITEM 2.
|
PROPERTIES
|
|
Segment using manufacturing location
|
||||
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
|
|
|
|
Columbia, South Carolina
(1)(3)
|
|
|
x
|
|
|
Franklin, Virginia
(1)
|
|
x
|
|
|
|
Indianapolis, Indiana
(2)
|
x
|
|
|
|
|
Jefferson, Pennsylvania
|
x
|
x
|
|
|
|
Kingsport, Tennessee
|
x
|
x
|
x
|
x
|
x
|
Lemoyne, Alabama
(1)
|
x
|
|
|
|
|
Linden, New Jersey
|
|
|
|
|
x
|
Longview, Texas
|
x
|
x
|
x
|
|
x
|
Martinsville, Virginia
(4)
|
|
|
x
|
|
|
Monongahela, Pennsylvania
|
x
|
|
|
|
|
Pace, Florida
|
x
|
|
|
|
x
|
Sauget, Illinois
|
x
|
|
|
|
|
Springfield, Massachusetts
|
|
|
x
|
|
|
St. Gabriel, Louisiana
|
x
|
|
|
|
x
|
Sun Prairie, Wisconsin
|
|
|
x
|
|
|
Texas City, Texas
|
|
x
|
|
|
x
|
Trenton, Michigan
|
|
|
x
|
|
|
Watertown, New York
(5)
|
|
|
|
|
|
Europe
|
|
|
|
|
|
Antwerp, Belgium
(1)
|
x
|
|
x
|
|
|
Ghent, Belgium
(4)
|
x
|
|
x
|
|
x
|
Kohtla-Järve, Estonia
|
|
x
|
|
|
x
|
Oulu, Finland
(2)
|
x
|
|
|
|
|
Dresden, Germany
|
|
|
x
|
|
|
Leuna, Germany
|
x
|
|
|
|
x
|
Nienburg, Germany
|
x
|
|
|
|
|
Middelburg, the Netherlands
|
|
x
|
|
|
|
Newport, Wales
|
|
|
x
|
|
x
|
(1)
|
Eastman is a guest under an operating agreement with a third party, which operates its manufacturing facilities at the site.
|
(2)
|
Eastman leases from a third party and Eastman operates the site.
|
(3)
|
Although nearly the entire manufacturing site was included in the first quarter 2011 divestiture of the Company's polyethylene terephthalate ("PET") business and related assets, a portion was retained subsequent to the sale.
|
(4)
|
Eastman has more than one manufacturing site at this location.
|
(5)
|
This location supports developing businesses of the Eastman microfiber technology platform, the financial results of which are not identifiable to an operating segment and are shown as "other" operating earnings (loss).
|
|
Segment using manufacturing location
|
||||
Location
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
Fengxian, China
|
x
|
|
|
|
|
Suzhou, China
(1)(2)(3)
|
|
|
x
|
|
x
|
Wuhan, China
(4)
|
|
x
|
|
|
|
Yixing, China
|
x
|
|
|
|
|
Zibo, China
(5)
|
x
|
x
|
|
|
|
Kashima, Japan
|
x
|
|
|
|
|
Ulsan, Korea
|
|
|
|
x
|
|
Kuantan, Malaysia
(1)
|
x
|
|
x
|
|
|
Jurong Island, Singapore
(1)
|
x
|
x
|
|
|
x
|
Latin America
|
|
|
|
|
|
Itupeva, Brazil
(6)
|
x
|
|
|
|
|
Mauá, Brazil
|
|
x
|
|
|
|
Santo Toribio, Mexico
|
|
|
x
|
|
|
Uruapan, Mexico
|
|
x
|
|
|
|
(1)
|
Eastman leases from a third party and Eastman operates the site.
|
(2)
|
Eastman has more than one manufacturing site at this location.
|
(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 Eastman Specialties Wuhan Youji Chemical Co., Ltd.
|
(5)
|
Eastman holds a 51 percent share in the joint venture Qilu Eastman Specialty Chemical Ltd.
|
(6)
|
Eastman is a guest under an operating agreement with a third party, which operates its manufacturing facilities at the site.
|
|
Segment using manufacturing location
|
||||
Location
|
Additives & Functional Products
|
Adhesives & Plasticizers
|
Advanced Materials
|
Fibers
|
Specialty Fluids & Intermediates
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
Hefei, China
|
|
|
|
x
|
|
Nanjing, China
(1)
|
|
x
|
|
|
x
|
Shenzhen, China
|
|
|
x
|
|
|
(1)
|
Eastman has more than one manufacturing site at this location.
|
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
|
||||||
2015
|
First Quarter
|
$
|
76.67
|
|
|
$
|
67.13
|
|
|
$
|
0.40
|
|
|
Second Quarter
|
83.90
|
|
|
67.74
|
|
|
0.40
|
|
|||
|
Third Quarter
|
82.79
|
|
|
62.84
|
|
|
0.40
|
|
|||
|
Fourth Quarter
|
73.82
|
|
|
63.84
|
|
|
0.46
|
|
|||
2014
|
First Quarter
|
$
|
88.90
|
|
|
$
|
73.00
|
|
|
$
|
0.35
|
|
|
Second Quarter
|
90.55
|
|
|
82.49
|
|
|
0.35
|
|
|||
|
Third Quarter
|
89.02
|
|
|
78.21
|
|
|
0.35
|
|
|||
|
Fourth Quarter
|
88.93
|
|
|
70.38
|
|
|
0.40
|
|
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
|
|
Approximate Dollar
Value (in millions) that May Yet Be Purchased Under the Plans or Programs
|
||||||
October 1 - 31, 2015
|
78,107
|
|
|
$
|
64.01
|
|
|
78,107
|
|
|
$
|
697
|
|
November 1 - 30, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
697
|
|
December 1 - 31, 2015
|
742,975
|
|
|
$
|
67.30
|
|
|
742,975
|
|
|
$
|
647
|
|
Total
|
821,082
|
|
|
$
|
66.98
|
|
|
821,082
|
|
|
|
(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.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Operating Data
|
Year Ended December 31,
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Sales
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
|
$
|
8,102
|
|
|
$
|
7,178
|
|
Operating earnings
|
1,384
|
|
|
1,162
|
|
|
1,862
|
|
|
800
|
|
|
937
|
|
|||||
Earnings from continuing operations
|
854
|
|
|
755
|
|
|
1,172
|
|
|
443
|
|
|
607
|
|
|||||
Earnings from discontinued operations
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Gain from disposal of discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
31
|
|
|||||
Net earnings
|
854
|
|
|
757
|
|
|
1,172
|
|
|
444
|
|
|
647
|
|
|||||
Less: Net earnings attributable to noncontrolling interest
|
6
|
|
|
6
|
|
|
7
|
|
|
7
|
|
|
1
|
|
|||||
Net earnings attributable to Eastman
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
Amounts attributable to Eastman stockholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
749
|
|
|
$
|
1,165
|
|
|
$
|
436
|
|
|
$
|
606
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
40
|
|
|||||
Net earnings attributable to Eastman stockholders
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
|
$
|
437
|
|
|
$
|
646
|
|
Basic earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
5.71
|
|
|
$
|
5.01
|
|
|
$
|
7.57
|
|
|
$
|
2.99
|
|
|
$
|
4.34
|
|
Earnings from discontinued operations
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|
0.29
|
|
|||||
Net earnings
|
$
|
5.71
|
|
|
$
|
5.03
|
|
|
$
|
7.57
|
|
|
$
|
3.00
|
|
|
$
|
4.63
|
|
Diluted earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
5.66
|
|
|
$
|
4.95
|
|
|
$
|
7.44
|
|
|
$
|
2.92
|
|
|
$
|
4.24
|
|
Earnings from discontinued operations
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
|
0.28
|
|
|||||
Net earnings
|
$
|
5.66
|
|
|
$
|
4.97
|
|
|
$
|
7.44
|
|
|
$
|
2.93
|
|
|
$
|
4.52
|
|
Statement of Financial Position Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
2,878
|
|
|
$
|
3,173
|
|
|
$
|
2,840
|
|
|
$
|
2,699
|
|
|
$
|
2,302
|
|
Net properties
|
5,130
|
|
|
5,087
|
|
|
4,290
|
|
|
4,181
|
|
|
3,107
|
|
|||||
Goodwill
|
4,518
|
|
|
4,486
|
|
|
2,637
|
|
|
2,644
|
|
|
406
|
|
|||||
Other intangibles
|
2,650
|
|
|
2,905
|
|
|
1,781
|
|
|
1,870
|
|
|
101
|
|
|||||
Total assets
|
15,611
|
|
|
16,072
|
|
|
11,845
|
|
|
11,710
|
|
|
6,184
|
|
|||||
Current liabilities
|
2,056
|
|
|
2,022
|
|
|
1,470
|
|
|
1,364
|
|
|
1,114
|
|
|||||
Long-term borrowings
|
6,608
|
|
|
7,248
|
|
|
4,254
|
|
|
4,779
|
|
|
1,445
|
|
|||||
Total liabilities
|
11,590
|
|
|
12,482
|
|
|
7,970
|
|
|
8,682
|
|
|
4,283
|
|
|||||
Total Eastman stockholders' equity
|
3,941
|
|
|
3,510
|
|
|
3,796
|
|
|
2,943
|
|
|
1,870
|
|
|||||
Dividends declared per share
|
1.660
|
|
|
1.450
|
|
|
1.250
|
|
|
1.080
|
|
|
0.990
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Change in
Assumption
|
Impact on
2016 Pre-tax
Benefits Expense
(Excludes mark-to-market impact)
for Pension Plans
|
Impact on December 31, 2015 Projected Benefit Obligation for Pension Plans
|
Impact on 2016 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Other Postretirement Benefit Plans
|
Impact on December 31, 2015 Benefit Obligation for Other Postretirement Benefit Plans
|
|
|
|
U.S.
|
Non-U.S.
|
|
|
25 basis point
decrease in discount
rate
|
-$3 Million
|
+$56 Million
|
+$35 Million
|
-$1 Million
|
+$22 Million
|
|
|
|
|
|
|
25 basis point
increase in discount
rate
|
+$2 Million
|
-$54 Million
|
-$33 Million
|
+$1 Million
|
-$22 Million
|
|
|
|
|
|
|
25 basis point
decrease in expected return on assets
|
+$6 Million
|
No Impact
|
No Impact
|
<+$0.5 Million
|
No Impact
|
|
|
|
|
|
|
25 basis point
increase in expected
return on assets
|
-$6 Million
|
No Impact
|
No Impact
|
<-$0.5 Million
|
No Impact
|
•
|
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 and asset returns reflective of changes in global market conditions and interest rates on high-grade corporate bonds and did not arise from Eastman's core business or operations;
|
•
|
Asset impairments and restructuring charges, net, of which asset impairments are non-cash transactions impacting profitability;
|
•
|
Acquisition integration, transaction, and financing costs; and
|
•
|
Costs resulting from the sale of acquired inventories at fair value, net of the last-in, first-out ("LIFO") impact for certain of these inventories (as required by purchase accounting, these inventories were marked to fair value);
|
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Non-core items impacting operating earnings:
|
|
|
|
|
|
||||||
Mark-to-market pension and other postretirement benefits (gain) loss, net
|
$
|
115
|
|
|
$
|
304
|
|
|
$
|
(383
|
)
|
Asset impairments and restructuring charges, net
|
183
|
|
|
77
|
|
|
76
|
|
|||
Acquisition integration and transaction costs
|
28
|
|
|
46
|
|
|
36
|
|
|||
Additional costs of acquired inventories
|
7
|
|
|
24
|
|
|
—
|
|
|||
Non-core items impacting earnings before income taxes:
|
|
|
|
|
|
||||||
Taminco acquisition financing costs
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
•
|
Gross profit,
|
•
|
Selling, general, and administrative ("SG&A") expenses,
|
•
|
Research and development ("R&D") expenses,
|
•
|
Operating earnings,
|
•
|
Net interest expense,
|
•
|
Other (income) charges, net,
|
•
|
Earnings from continuing operations, and
|
•
|
Diluted earnings per share.
|
|
2015
|
|
2014
|
||||||||||||
(Dollars in millions, except diluted EPS)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
5.66
|
|
|
$
|
749
|
|
|
$
|
4.95
|
|
Total non-core items, net of tax
|
243
|
|
|
1.62
|
|
|
319
|
|
|
2.12
|
|
||||
Earnings from continuing operations excluding non-core items, net of tax
|
$
|
1,091
|
|
|
$
|
7.28
|
|
|
$
|
1,068
|
|
|
$
|
7.07
|
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
%
|
|
2014
|
|
2013
|
|
%
|
||||||||||
Sales
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
1
|
%
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
|
2
|
%
|
Acquired business effect
|
|
|
|
|
13
|
%
|
|
|
|
|
|
2
|
%
|
||||||||
Volume / product mix effect
|
|
|
|
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
(1
|
)%
|
||||
Price effect
|
|
|
|
|
|
|
(8
|
)%
|
|
|
|
|
|
|
|
1
|
%
|
||||
Exchange rate effect
|
|
|
|
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
—
|
%
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||
Gross Profit
|
$
|
2,580
|
|
|
$
|
2,221
|
|
|
16
|
%
|
|
$
|
2,221
|
|
|
$
|
2,776
|
|
|
(20
|
)%
|
Mark-to-market pension and other postretirement benefit (gain) loss, net
|
84
|
|
|
240
|
|
|
|
|
240
|
|
|
(297
|
)
|
|
|
||||||
Additional costs of acquired inventories
|
7
|
|
|
24
|
|
|
|
|
24
|
|
|
—
|
|
|
|
||||||
Gross Profit excluding non-core items
|
$
|
2,671
|
|
|
$
|
2,485
|
|
|
7
|
%
|
|
$
|
2,485
|
|
|
$
|
2,479
|
|
|
—
|
%
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||
Selling, General & Administrative Expenses
|
$
|
762
|
|
|
$
|
755
|
|
|
1
|
%
|
|
$
|
755
|
|
|
$
|
645
|
|
|
17
|
%
|
Mark-to-market pension and other postretirement benefit gain (loss), net
|
(18
|
)
|
|
(57
|
)
|
|
|
|
(57
|
)
|
|
76
|
|
|
|
||||||
Acquisition integration and transaction costs
|
(28
|
)
|
|
(46
|
)
|
|
|
|
|
(46
|
)
|
|
(36
|
)
|
|
|
|||||
Selling, General, and Administrative Expenses excluding non-core items
|
$
|
716
|
|
|
$
|
652
|
|
|
10
|
%
|
|
$
|
652
|
|
|
$
|
685
|
|
|
(5
|
)%
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||
Research & Development Expenses
|
$
|
251
|
|
|
$
|
227
|
|
|
11
|
%
|
|
$
|
227
|
|
|
$
|
193
|
|
|
18
|
%
|
Mark-to-market pension and other postretirement benefit gain (loss), net
|
(13
|
)
|
|
(7
|
)
|
|
|
|
(7
|
)
|
|
10
|
|
|
|
||||||
Research & Development Expenses excluding non-core items
|
$
|
238
|
|
|
$
|
220
|
|
|
8
|
%
|
|
$
|
220
|
|
|
$
|
203
|
|
|
8
|
%
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||
Operating earnings
|
$
|
1,384
|
|
|
$
|
1,162
|
|
|
19
|
%
|
|
$
|
1,162
|
|
|
$
|
1,862
|
|
|
(38
|
)%
|
Mark-to-market pension and other postretirement benefit (gain) loss, net
|
115
|
|
|
304
|
|
|
|
|
|
304
|
|
|
(383
|
)
|
|
|
|
||||
Asset impairments and restructuring charges, net
|
183
|
|
|
77
|
|
|
|
|
|
77
|
|
|
76
|
|
|
|
|
||||
Acquisition integration and transaction costs
|
28
|
|
|
46
|
|
|
|
|
46
|
|
|
36
|
|
|
|
||||||
Additional costs of acquired inventories
|
7
|
|
|
24
|
|
|
|
|
24
|
|
|
—
|
|
|
|
||||||
Operating earnings excluding non-core items
|
$
|
1,717
|
|
|
$
|
1,613
|
|
|
6
|
%
|
|
$
|
1,613
|
|
|
$
|
1,591
|
|
|
1
|
%
|
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
||||||||||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||||
Gross interest costs
|
$
|
286
|
|
|
$
|
210
|
|
|
|
|
$
|
210
|
|
|
$
|
190
|
|
|
|
||
Less: Capitalized interest
|
7
|
|
|
7
|
|
|
|
|
7
|
|
|
4
|
|
|
|
||||||
Interest expense
|
279
|
|
|
203
|
|
|
37
|
%
|
|
203
|
|
|
186
|
|
|
9
|
%
|
||||
Interest income
|
16
|
|
|
16
|
|
|
|
|
|
16
|
|
|
6
|
|
|
|
|
||||
Net interest expense
|
263
|
|
|
187
|
|
|
|
|
187
|
|
|
180
|
|
|
|
||||||
Taminco acquisition financing costs
|
—
|
|
|
(3
|
)
|
|
|
|
(3
|
)
|
|
—
|
|
|
|
||||||
Net interest expense excluding Taminco acquisition financing costs
|
$
|
263
|
|
|
$
|
184
|
|
|
43
|
%
|
|
$
|
184
|
|
|
$
|
180
|
|
|
2
|
%
|
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign exchange transaction (gains) losses, net
|
$
|
6
|
|
|
$
|
(7
|
)
|
|
$
|
7
|
|
Financing costs related to the acquisition of Taminco
|
—
|
|
|
10
|
|
|
—
|
|
|||
(Income) loss from equity investments and other investment (gains) losses, net
|
(15
|
)
|
|
(13
|
)
|
|
(5
|
)
|
|||
Other, net
|
1
|
|
|
(5
|
)
|
|
1
|
|
|||
Other (income) charges, net
|
(8
|
)
|
|
(15
|
)
|
|
3
|
|
|||
Financing costs related to the acquisition of Taminco
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||
Other (income) charges, net excluding financing costs related to the acquisition of Taminco
|
$
|
(8
|
)
|
|
$
|
(25
|
)
|
|
$
|
3
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
5.66
|
|
|
$
|
749
|
|
|
$
|
4.95
|
|
|
$
|
1,165
|
|
|
$
|
7.44
|
|
Mark-to-market pension and other postretirement benefit (gain) loss, net of tax
|
70
|
|
|
0.47
|
|
|
202
|
|
|
1.34
|
|
|
(233
|
)
|
|
(1.49
|
)
|
||||||
Asset impairments and restructuring charges, net of tax
|
151
|
|
|
1.00
|
|
|
63
|
|
|
0.42
|
|
|
53
|
|
|
0.34
|
|
||||||
Acquisition transaction, integration, and financing costs, net of tax
|
18
|
|
|
0.12
|
|
|
39
|
|
|
0.26
|
|
|
23
|
|
|
0.15
|
|
||||||
Additional costs of acquired inventories, net of tax
|
4
|
|
|
0.03
|
|
|
15
|
|
|
0.10
|
|
|
—
|
|
|
—
|
|
||||||
Earnings from continuing operations excluding non-core items, net of tax
|
$
|
1,091
|
|
|
$
|
7.28
|
|
|
$
|
1,068
|
|
|
$
|
7.07
|
|
|
$
|
1,008
|
|
|
$
|
6.44
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
5.66
|
|
|
$
|
749
|
|
|
$
|
4.95
|
|
|
$
|
1,165
|
|
|
$
|
7.44
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
2
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
||||||
Net earnings
|
$
|
848
|
|
|
$
|
5.66
|
|
|
$
|
751
|
|
|
$
|
4.97
|
|
|
$
|
1,165
|
|
|
$
|
7.44
|
|
Additives & Functional Products Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,368
|
|
$
|
1,821
|
|
$
|
547
|
|
|
30
|
%
|
$
|
1,821
|
|
$
|
1,719
|
|
$
|
102
|
|
|
6
|
%
|
Acquired business effect
|
|
|
|
|
|
706
|
|
|
39
|
%
|
|
|
|
|
|
56
|
|
|
3
|
%
|
||||
Volume / product mix effect
|
|
|
|
|
|
24
|
|
|
1
|
%
|
|
|
|
|
|
26
|
|
|
2
|
%
|
||||
Price effect
|
|
|
|
|
|
(136
|
)
|
|
(7
|
)%
|
|
|
|
|
|
20
|
|
|
1
|
%
|
||||
Exchange rate effect
|
|
|
|
|
|
(47
|
)
|
|
(3
|
)%
|
|
|
|
|
|
—
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
462
|
|
|
329
|
|
|
133
|
|
|
40
|
%
|
|
329
|
|
|
405
|
|
|
(76
|
)
|
|
(19
|
)%
|
Additional costs of acquired inventories
|
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
|
||
Asset impairments and restructuring charges, net
|
|
—
|
|
|
62
|
|
|
(62
|
)
|
|
|
|
62
|
|
|
1
|
|
|
61
|
|
|
|
||
Operating earnings excluding non-core items
|
|
462
|
|
|
398
|
|
|
64
|
|
|
16
|
%
|
|
398
|
|
|
406
|
|
|
(8
|
)
|
|
(2
|
)%
|
Adhesives & Plasticizers Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,214
|
|
$
|
1,363
|
|
$
|
(149
|
)
|
|
(11
|
)%
|
$
|
1,363
|
|
$
|
1,326
|
|
$
|
37
|
|
|
3
|
%
|
Volume / product mix effect
|
|
|
|
|
|
(14
|
)
|
|
(1
|
)%
|
|
|
|
|
|
61
|
|
|
5
|
%
|
||||
Price effect
|
|
|
|
|
|
(90
|
)
|
|
(7
|
)%
|
|
|
|
|
|
(28
|
)
|
|
(2
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(45
|
)
|
|
(3
|
)%
|
|
|
|
|
|
4
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
239
|
|
|
196
|
|
|
43
|
|
|
22
|
%
|
|
196
|
|
|
172
|
|
|
24
|
|
|
14
|
%
|
Asset impairments and restructuring charges, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
|
||
Operating earnings excluding non-core item
|
|
239
|
|
|
196
|
|
|
43
|
|
|
22
|
%
|
|
196
|
|
|
173
|
|
|
23
|
|
|
13
|
%
|
Advanced Materials Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,414
|
|
$
|
2,378
|
|
$
|
36
|
|
|
2
|
%
|
$
|
2,378
|
|
$
|
2,349
|
|
$
|
29
|
|
|
1
|
%
|
Acquired business effect
|
|
|
|
|
|
123
|
|
|
5
|
%
|
|
|
|
|
|
6
|
|
|
—
|
%
|
||||
Volume / product mix effect
|
|
|
|
|
|
88
|
|
|
4
|
%
|
|
|
|
|
|
50
|
|
|
2
|
%
|
||||
Price effect
|
|
|
|
|
|
(84
|
)
|
|
(3
|
)%
|
|
|
|
|
|
(23
|
)
|
|
(1
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(91
|
)
|
|
(4
|
)%
|
|
|
|
|
|
(4
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
384
|
|
|
276
|
|
|
108
|
|
|
39
|
%
|
|
276
|
|
|
257
|
|
|
19
|
|
|
7
|
%
|
Additional costs of acquired inventories
|
|
7
|
|
|
1
|
|
|
6
|
|
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
||
Asset impairments and restructuring charges, net
|
|
18
|
|
|
16
|
|
|
2
|
|
|
|
|
16
|
|
|
3
|
|
|
13
|
|
|
|
||
Operating earnings excluding non-core items
|
|
409
|
|
|
293
|
|
|
116
|
|
|
40
|
%
|
|
293
|
|
|
260
|
|
|
33
|
|
|
13
|
%
|
Fibers Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
|||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|||||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales
|
$
|
1,219
|
|
$
|
1,457
|
|
$
|
(238
|
)
|
|
(16
|
)%
|
$
|
1,457
|
|
$
|
1,441
|
|
$
|
16
|
|
|
1
|
%
|
Volume / product mix effect
|
|
|
|
|
|
(219
|
)
|
|
(15
|
)%
|
|
|
|
|
|
(38
|
)
|
|
(3
|
)%
|
||||
Price effect
|
|
|
|
|
|
(10
|
)
|
|
(1
|
)%
|
|
|
|
|
|
52
|
|
|
4
|
%
|
||||
Exchange rate effect
|
|
|
|
|
|
(9
|
)
|
|
—
|
%
|
|
|
|
|
|
2
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
292
|
|
|
474
|
|
|
(182
|
)
|
|
(38
|
)%
|
|
474
|
|
|
462
|
|
|
12
|
|
|
3
|
%
|
Asset impairments and restructuring charges, net
|
|
98
|
|
|
—
|
|
|
98
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Operating earnings excluding non-core item
|
|
390
|
|
|
474
|
|
|
(84
|
)
|
|
(18
|
)%
|
|
474
|
|
|
462
|
|
|
12
|
|
|
3
|
%
|
Specialty Fluids & Intermediates Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2015 Compared to 2014
|
|
2014 Compared to 2013
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,388
|
|
$
|
2,490
|
|
$
|
(102
|
)
|
|
(4
|
)%
|
$
|
2,490
|
|
$
|
2,497
|
|
$
|
(7
|
)
|
|
—
|
%
|
Acquired business effect
|
|
|
|
|
|
417
|
|
|
17
|
%
|
|
|
|
|
|
96
|
|
|
4
|
%
|
||||
Volume / product mix effect
|
|
|
|
|
|
(96
|
)
|
|
(4
|
)%
|
|
|
|
|
|
(133
|
)
|
|
(5
|
)%
|
||||
Price effect
|
|
|
|
|
|
(399
|
)
|
|
(16
|
)%
|
|
|
|
|
|
30
|
|
|
1
|
%
|
||||
Exchange rate effect
|
|
|
|
|
|
(24
|
)
|
|
(1
|
)%
|
|
|
|
|
|
—
|
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
253
|
|
|
289
|
|
|
(36
|
)
|
|
(12
|
)%
|
|
289
|
|
|
363
|
|
|
(74
|
)
|
|
(20
|
)%
|
Additional costs of acquired inventories
|
|
—
|
|
|
16
|
|
|
(16
|
)
|
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
|
||
Asset impairments and restructuring charges, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
|
||
Operating earnings excluding non-core items
|
|
253
|
|
|
305
|
|
|
(52
|
)
|
|
(17
|
)%
|
|
305
|
|
|
364
|
|
|
(59
|
)
|
|
(16
|
)%
|
(Dollars in millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
45
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
||||||
Operating loss
|
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to segments
|
|
$
|
(87
|
)
|
|
$
|
(58
|
)
|
|
$
|
(132
|
)
|
Pension and other postretirement benefit income (expense) and gain (loss) not allocated to operating segments
|
|
(76
|
)
|
|
(293
|
)
|
|
394
|
|
|||
Acquisition integration and transaction costs and asset impairments and restructuring charges, net
|
|
(83
|
)
|
|
(51
|
)
|
|
(59
|
)
|
|||
Operating loss before non-core items
|
|
(246
|
)
|
|
(402
|
)
|
|
203
|
|
|||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net
|
|
115
|
|
|
304
|
|
|
(383
|
)
|
|||
Acquisition integration and transaction costs
|
|
28
|
|
|
46
|
|
|
36
|
|
|||
Asset impairments and restructuring charges, net
|
|
67
|
|
|
(1
|
)
|
|
70
|
|
|||
Operating loss excluding non-core items
|
|
$
|
(36
|
)
|
|
$
|
(53
|
)
|
|
$
|
(74
|
)
|
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,612
|
|
|
$
|
1,408
|
|
|
$
|
1,297
|
|
Investing activities
|
(693
|
)
|
|
(4,091
|
)
|
|
(457
|
)
|
|||
Financing activities
|
(832
|
)
|
|
2,664
|
|
|
(859
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(4
|
)
|
|
7
|
|
|||
Net change in cash and cash equivalents
|
$
|
79
|
|
|
$
|
(23
|
)
|
|
$
|
(12
|
)
|
Cash and cash equivalents at beginning of period
|
214
|
|
|
237
|
|
|
249
|
|
|||
Cash and cash equivalents at end of period
|
$
|
293
|
|
|
$
|
214
|
|
|
$
|
237
|
|
(Dollars in millions)
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash and cash equivalents
|
$
|
293
|
|
|
$
|
214
|
|
|
$
|
237
|
|
(Dollars in millions)
|
|
Payments Due for
|
||||||||||||||||||||||||||
Period
|
|
Debt Securities
|
|
Credit Facilities and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Other Liabilities
(1)
|
|
Total
|
||||||||||||||
2016
|
|
$
|
—
|
|
|
$
|
431
|
|
|
$
|
265
|
|
|
$
|
145
|
|
|
$
|
63
|
|
|
$
|
376
|
|
|
$
|
1,280
|
|
2017
|
|
999
|
|
|
1
|
|
|
283
|
|
|
164
|
|
|
50
|
|
|
154
|
|
|
1,651
|
|
|||||||
2018
|
|
167
|
|
|
326
|
|
|
238
|
|
|
161
|
|
|
38
|
|
|
136
|
|
|
1,066
|
|
|||||||
2019
|
|
250
|
|
|
226
|
|
|
218
|
|
|
148
|
|
|
28
|
|
|
89
|
|
|
959
|
|
|||||||
2020
|
|
799
|
|
|
—
|
|
|
190
|
|
|
134
|
|
|
22
|
|
|
90
|
|
|
1,235
|
|
|||||||
2021 and beyond
|
|
3,840
|
|
|
—
|
|
|
1,926
|
|
|
673
|
|
|
72
|
|
|
1,302
|
|
|
7,813
|
|
|||||||
Total
|
|
$
|
6,055
|
|
|
$
|
984
|
|
|
$
|
3,120
|
|
|
$
|
1,425
|
|
|
$
|
273
|
|
|
$
|
2,147
|
|
|
$
|
14,004
|
|
(1)
|
Amounts represent the current estimated cash payments required to be made by the Company primarily for pension and other postretirement benefits, environmental loss contingency reserves, commodity and foreign exchange hedging, uncertain tax liabilities, and accrued compensation benefits 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 and Asset Retirement Obligations
" to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for expected cash payments related to environmental loss contingency reserves. See Note
10
, "
Derivatives
", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for additional information. 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 and these amounts are included in the "2021 and beyond" line item.
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Environmental contingent liabilities, current
|
$
|
35
|
|
|
$
|
35
|
|
Environmental contingent liabilities, long-term
|
301
|
|
|
310
|
|
||
Total
|
$
|
336
|
|
|
$
|
345
|
|
(Dollars in millions)
|
Environmental Remediation Liabilities
|
||
Balance at December 31, 2014
|
$
|
324
|
|
Changes in estimates recorded to earnings and other
|
12
|
|
|
Cash reductions
|
(28
|
)
|
|
Balance at December 31, 2015
|
$
|
308
|
|
•
|
operating results to continue to benefit from organic growth and improved product mix from continued market adoption of specialty products;
|
•
|
cost reductions to result in annual cost savings of approximately $100 million;
|
•
|
acquisition costs and tax synergies;
|
•
|
cash generated by operating activities of approximately $1.6 billion;
|
•
|
capital spending to be approximately
$650 million
;
|
•
|
priorities for uses of available cash to include payment of the quarterly cash dividend to stockholders, repayment of debt, funding targeted growth initiatives, and repurchasing shares; and
|
•
|
the full year effective tax rate on reported earnings before income tax to be approximately 25 percent, excluding non-core items.
|
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 25, 2016
|
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Sales
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
Cost of sales
|
7,068
|
|
|
7,306
|
|
|
6,574
|
|
|||
Gross profit
|
2,580
|
|
|
2,221
|
|
|
2,776
|
|
|||
Selling, general and administrative expenses
|
762
|
|
|
755
|
|
|
645
|
|
|||
Research and development expenses
|
251
|
|
|
227
|
|
|
193
|
|
|||
Asset impairments and restructuring charges, net
|
183
|
|
|
77
|
|
|
76
|
|
|||
Operating earnings
|
1,384
|
|
|
1,162
|
|
|
1,862
|
|
|||
Net interest expense
|
263
|
|
|
187
|
|
|
180
|
|
|||
Other (income) charges, net
|
(8
|
)
|
|
(15
|
)
|
|
3
|
|
|||
Earnings from continuing operations before income taxes
|
1,129
|
|
|
990
|
|
|
1,679
|
|
|||
Provision for income taxes from continuing operations
|
275
|
|
|
235
|
|
|
507
|
|
|||
Earnings from continuing operations
|
854
|
|
|
755
|
|
|
1,172
|
|
|||
Earnings from discontinued operations, net of tax
|
—
|
|
|
2
|
|
|
—
|
|
|||
Net earnings
|
854
|
|
|
757
|
|
|
1,172
|
|
|||
Less: Net earnings attributable to noncontrolling interest
|
6
|
|
|
6
|
|
|
7
|
|
|||
Net earnings attributable to Eastman
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
Amounts attributable to Eastman stockholders
|
|
|
|
|
|
||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
749
|
|
|
$
|
1,165
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
2
|
|
|
—
|
|
|||
Net earnings attributable to Eastman stockholders
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
Basic earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|||
Earnings from continuing operations
|
$
|
5.71
|
|
|
$
|
5.01
|
|
|
$
|
7.57
|
|
Earnings from discontinued operations
|
—
|
|
|
0.02
|
|
|
—
|
|
|||
Basic earnings per share attributable to Eastman
|
$
|
5.71
|
|
|
$
|
5.03
|
|
|
$
|
7.57
|
|
Diluted earnings per share attributable to Eastman
|
|
|
|
|
|
|
|
|
|||
Earnings from continuing operations
|
$
|
5.66
|
|
|
$
|
4.95
|
|
|
$
|
7.44
|
|
Earnings from discontinued operations
|
—
|
|
|
0.02
|
|
|
—
|
|
|||
Diluted earnings per share attributable to Eastman
|
$
|
5.66
|
|
|
$
|
4.97
|
|
|
$
|
7.44
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Comprehensive Income
|
|
|
|
|
|
||||||
Net earnings including noncontrolling interest
|
$
|
854
|
|
|
$
|
757
|
|
|
$
|
1,172
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Change in cumulative translation adjustment
|
(216
|
)
|
|
(201
|
)
|
|
28
|
|
|||
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
||||||
Prior service credit arising during the period
|
87
|
|
|
—
|
|
|
29
|
|
|||
Amortization of unrecognized prior service credits included in net periodic costs
|
(19
|
)
|
|
(17
|
)
|
|
(16
|
)
|
|||
Derivatives and hedging:
|
|
|
|
|
|
||||||
Unrealized gain (loss) during period
|
(48
|
)
|
|
(230
|
)
|
|
6
|
|
|||
Reclassification adjustment for (gains) losses included in net income, net
|
83
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income (loss), net of tax
|
(113
|
)
|
|
(448
|
)
|
|
48
|
|
|||
Comprehensive income including noncontrolling interest
|
741
|
|
|
309
|
|
|
1,220
|
|
|||
Comprehensive income attributable to noncontrolling interest
|
6
|
|
|
6
|
|
|
7
|
|
|||
Comprehensive income attributable to Eastman
|
$
|
735
|
|
|
$
|
303
|
|
|
$
|
1,213
|
|
Retained Earnings
|
|
|
|
|
|
||||||
Retained earnings at beginning of period
|
$
|
4,545
|
|
|
$
|
4,012
|
|
|
$
|
3,038
|
|
Net earnings attributable to Eastman
|
848
|
|
|
751
|
|
|
1,165
|
|
|||
Cash dividends declared
|
(247
|
)
|
|
(218
|
)
|
|
(191
|
)
|
|||
Retained earnings at end of period
|
$
|
5,146
|
|
|
$
|
4,545
|
|
|
$
|
4,012
|
|
|
December 31,
|
|
December 31,
|
||||
(Dollars in millions, except per share amounts)
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
293
|
|
|
$
|
214
|
|
Trade receivables, net
|
792
|
|
|
936
|
|
||
Miscellaneous receivables
|
246
|
|
|
264
|
|
||
Inventories
|
1,479
|
|
|
1,509
|
|
||
Other current assets
|
68
|
|
|
250
|
|
||
Total current assets
|
2,878
|
|
|
3,173
|
|
||
Properties
|
|
|
|
||||
Properties and equipment at cost
|
11,234
|
|
|
11,026
|
|
||
Less: Accumulated depreciation
|
6,104
|
|
|
5,939
|
|
||
Net properties
|
5,130
|
|
|
5,087
|
|
||
Goodwill
|
4,518
|
|
|
4,486
|
|
||
Intangible assets, net of accumulated amortization
|
2,650
|
|
|
2,905
|
|
||
Other noncurrent assets
|
435
|
|
|
421
|
|
||
Total assets
|
$
|
15,611
|
|
|
$
|
16,072
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Payables and other current liabilities
|
$
|
1,625
|
|
|
$
|
1,721
|
|
Borrowings due within one year
|
431
|
|
|
301
|
|
||
Total current liabilities
|
2,056
|
|
|
2,022
|
|
||
Long-term borrowings
|
6,608
|
|
|
7,248
|
|
||
Deferred income tax liabilities
|
928
|
|
|
946
|
|
||
Post-employment obligations
|
1,297
|
|
|
1,498
|
|
||
Other long-term liabilities
|
701
|
|
|
768
|
|
||
Total liabilities
|
11,590
|
|
|
12,482
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock ($0.01 par value per share – 350,000,000 shares authorized; shares issued – 216,899,964 and 216,256,971 for 2015 and 2014, respectively)
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
1,863
|
|
|
1,817
|
|
||
Retained earnings
|
5,146
|
|
|
4,545
|
|
||
Accumulated other comprehensive loss
|
(390
|
)
|
|
(277
|
)
|
||
|
6,621
|
|
|
6,087
|
|
||
Less: Treasury stock at cost (69,137,973 shares for 2015 and 67,660,313 shares for 2014)
|
2,680
|
|
|
2,577
|
|
||
Total Eastman stockholders' equity
|
3,941
|
|
|
3,510
|
|
||
Noncontrolling interest
|
80
|
|
|
80
|
|
||
Total equity
|
4,021
|
|
|
3,590
|
|
||
Total liabilities and stockholders' equity
|
$
|
15,611
|
|
|
$
|
16,072
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
854
|
|
|
$
|
757
|
|
|
$
|
1,172
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
571
|
|
|
450
|
|
|
433
|
|
|||
Asset impairment charges
|
107
|
|
|
52
|
|
|
28
|
|
|||
Gains on sale of assets
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Provision for deferred income taxes
|
107
|
|
|
99
|
|
|
331
|
|
|||
Mark-to-market (gain) loss on pension and other postretirement benefit plans
|
115
|
|
|
304
|
|
|
(383
|
)
|
|||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|
|
|
|
|
||||||
(Increase) decrease in trade receivables
|
114
|
|
|
19
|
|
|
(38
|
)
|
|||
(Increase) decrease in inventories
|
(26
|
)
|
|
(61
|
)
|
|
(6
|
)
|
|||
Increase (decrease) in trade payables
|
(102
|
)
|
|
(30
|
)
|
|
(2
|
)
|
|||
Pension and other postretirement contributions (in excess of) less than expenses
|
(259
|
)
|
|
(165
|
)
|
|
(149
|
)
|
|||
Variable compensation (in excess of) less than expenses
|
71
|
|
|
27
|
|
|
82
|
|
|||
Other items, net
|
60
|
|
|
(39
|
)
|
|
(171
|
)
|
|||
Net cash provided by operating activities
|
1,612
|
|
|
1,408
|
|
|
1,297
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to properties and equipment
|
(652
|
)
|
|
(593
|
)
|
|
(483
|
)
|
|||
Proceeds from sale of assets and investments
|
4
|
|
|
13
|
|
|
31
|
|
|||
Acquisitions and investments in joint ventures, net of cash acquired
|
(45
|
)
|
|
(3,509
|
)
|
|
—
|
|
|||
Other items, net
|
—
|
|
|
(2
|
)
|
|
(5
|
)
|
|||
Net cash used in investing activities
|
(693
|
)
|
|
(4,091
|
)
|
|
(457
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net increase (decrease) in commercial paper and other borrowings
|
195
|
|
|
(190
|
)
|
|
425
|
|
|||
Proceeds from borrowings
|
250
|
|
|
3,565
|
|
|
150
|
|
|||
Repayment of borrowings
|
(950
|
)
|
|
(125
|
)
|
|
(1,105
|
)
|
|||
Dividends paid to stockholders
|
(238
|
)
|
|
(210
|
)
|
|
(140
|
)
|
|||
Treasury stock purchases
|
(103
|
)
|
|
(410
|
)
|
|
(238
|
)
|
|||
Dividends paid to noncontrolling interests
|
(6
|
)
|
|
(9
|
)
|
|
(10
|
)
|
|||
Proceeds from stock option exercises and other items, net
|
20
|
|
|
43
|
|
|
59
|
|
|||
Net cash (used in) provided by financing activities
|
(832
|
)
|
|
2,664
|
|
|
(859
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(8
|
)
|
|
(4
|
)
|
|
7
|
|
|||
Net change in cash and cash equivalents
|
79
|
|
|
(23
|
)
|
|
(12
|
)
|
|||
Cash and cash equivalents at beginning of period
|
214
|
|
|
237
|
|
|
249
|
|
|||
Cash and cash equivalents at end of period
|
$
|
293
|
|
|
$
|
214
|
|
|
$
|
237
|
|
1.
|
SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
ACQUISITIONS
|
Assets acquired and liabilities assumed
|
|
|
|
|
|
||||||
(Dollars in millions)
|
As of December 5, 2014
|
|
2015 Net Adjustments to Fair Value
|
|
December 31, 2015
|
||||||
Current assets
|
$
|
266
|
|
|
$
|
1
|
|
|
$
|
267
|
|
Properties and equipment
|
658
|
|
|
3
|
|
|
661
|
|
|||
Intangible assets
|
1,002
|
|
|
(17
|
)
|
|
985
|
|
|||
Other noncurrent assets
|
37
|
|
|
5
|
|
|
42
|
|
|||
Goodwill
|
1,509
|
|
|
46
|
|
|
1,555
|
|
|||
Current liabilities
|
(161
|
)
|
|
4
|
|
|
(157
|
)
|
|||
Long-term liabilities
|
(546
|
)
|
|
(42
|
)
|
|
(588
|
)
|
|||
Total purchase price, net of cash acquired
|
$
|
2,765
|
|
|
$
|
—
|
|
|
$
|
2,765
|
|
Intangible Assets acquired
|
|
|
|
||
(Dollars in millions)
|
Fair Value
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets
|
|
|
|
||
Customer relationships
|
$
|
604
|
|
|
24
|
Developed technologies
|
201
|
|
|
17
|
|
Contracts
|
180
|
|
|
5
|
|
Total
|
$
|
985
|
|
|
|
Goodwill
|
Goodwill by Segment
|
||
(Dollars in millions)
|
|
||
Additives & Functional Products
|
$
|
916
|
|
Specialty Fluids & Intermediates
|
639
|
|
|
Total
|
$
|
1,555
|
|
|
For years ended December 31,
|
||||||
(Unaudited, dollars in millions)
|
2014
|
|
2013
|
||||
Pro forma sales
|
$
|
10,819
|
|
|
$
|
10,550
|
|
Pro forma earnings from continuing operations
|
834
|
|
|
1,101
|
|
Intangible Assets acquired
|
|
|
|
||
(Dollars in millions)
|
Fair Value
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets
|
|
|
|
||
Customer relationships
|
$
|
72
|
|
|
14
|
Developed technologies
|
41
|
|
|
18
|
|
Indefinite-lived intangible asset
|
|
|
|
||
Brand name
|
12
|
|
|
|
|
Total
|
$
|
125
|
|
|
|
Intangible Assets acquired
|
|
|
|
||
(Dollars in millions)
|
Fair Value
|
|
Weighted-Average Amortization Period (Years)
|
||
Amortizable intangible assets
|
|
|
|
||
Brands
|
$
|
74
|
|
|
30
|
Customer relationships
|
65
|
|
|
16
|
|
Total
|
$
|
139
|
|
|
|
3.
|
INVENTORIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Finished goods
|
$
|
1,063
|
|
|
$
|
1,130
|
|
Work in process
|
212
|
|
|
288
|
|
||
Raw materials and supplies
|
500
|
|
|
553
|
|
||
Total inventories at FIFO or average cost
|
1,775
|
|
|
1,971
|
|
||
Less: LIFO reserve
|
296
|
|
|
462
|
|
||
Total inventories
|
$
|
1,479
|
|
|
$
|
1,509
|
|
4.
|
PROPERTIES AND ACCUMULATED DEPRECIATION
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Properties
|
|
|
|
||||
Land
|
$
|
163
|
|
|
$
|
175
|
|
Buildings and building equipment
|
1,148
|
|
|
1,128
|
|
||
Machinery and equipment
|
9,333
|
|
|
9,252
|
|
||
Construction in progress
|
590
|
|
|
471
|
|
||
Properties and equipment at cost
|
$
|
11,234
|
|
|
$
|
11,026
|
|
Less: Accumulated depreciation
|
6,104
|
|
|
5,939
|
|
||
Net properties
|
$
|
5,130
|
|
|
$
|
5,087
|
|
5.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
(Dollars in millions)
|
Additives & Functional Products
|
|
Adhesives & Plasticizers
|
|
Advanced Materials
|
|
Specialty Fluids & Intermediates
|
|
Other Segments
|
|
Total
|
||||||||||||
As of December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
948
|
|
|
$
|
167
|
|
|
$
|
1,040
|
|
|
$
|
514
|
|
|
$
|
14
|
|
|
$
|
2,683
|
|
Accumulated impairment losses
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(46
|
)
|
||||||
Goodwill, net
|
$
|
948
|
|
|
$
|
132
|
|
|
$
|
1,040
|
|
|
$
|
514
|
|
|
$
|
3
|
|
|
$
|
2,637
|
|
Additions
|
908
|
|
|
—
|
|
|
274
|
|
|
693
|
|
|
7
|
|
|
1,882
|
|
||||||
Adjustments resulting from reorganizations
|
15
|
|
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Currency translation adjustments
|
(13
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|
—
|
|
|
(33
|
)
|
||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
1,858
|
|
|
$
|
153
|
|
|
$
|
1,297
|
|
|
$
|
1,200
|
|
|
$
|
24
|
|
|
$
|
4,532
|
|
Accumulated impairment losses
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(46
|
)
|
||||||
Goodwill, net
|
$
|
1,858
|
|
|
$
|
118
|
|
|
$
|
1,297
|
|
|
$
|
1,200
|
|
|
$
|
13
|
|
|
$
|
4,486
|
|
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Adjustments resulting from the finalization of fair values related to the Taminco acquisition
|
8
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
46
|
|
||||||
Currency translation adjustments and other
|
(1
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|
1
|
|
|
—
|
|
|
(11
|
)
|
||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
$
|
1,865
|
|
|
$
|
146
|
|
|
$
|
1,293
|
|
|
$
|
1,239
|
|
|
$
|
24
|
|
|
$
|
4,567
|
|
Accumulated impairment losses
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(49
|
)
|
||||||
Goodwill, net
|
$
|
1,865
|
|
|
$
|
111
|
|
|
$
|
1,293
|
|
|
$
|
1,239
|
|
|
$
|
10
|
|
|
$
|
4,518
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
(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
|
$
|
1,547
|
|
|
$
|
187
|
|
|
$
|
1,360
|
|
|
$
|
1,575
|
|
|
$
|
114
|
|
|
$
|
1,461
|
|
Technology
|
7
|
-
|
20
|
680
|
|
|
146
|
|
|
534
|
|
|
705
|
|
|
96
|
|
|
609
|
|
||||||
Contracts
|
|
5
|
|
180
|
|
|
39
|
|
|
141
|
|
|
179
|
|
|
3
|
|
|
176
|
|
||||||
Other
|
5
|
-
|
37
|
99
|
|
|
10
|
|
|
89
|
|
|
114
|
|
|
6
|
|
|
108
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tradenames
|
|
|
|
526
|
|
|
—
|
|
|
526
|
|
|
551
|
|
|
—
|
|
|
551
|
|
||||||
Total identified intangible assets
|
|
|
|
$
|
3,032
|
|
|
$
|
382
|
|
|
$
|
2,650
|
|
|
$
|
3,124
|
|
|
$
|
219
|
|
|
$
|
2,905
|
|
6.
|
EQUITY INVESTMENTS
|
7.
|
PAYABLES AND OTHER CURRENT LIABILITIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Trade creditors
|
$
|
699
|
|
|
$
|
827
|
|
Derivative hedging liability
|
218
|
|
|
227
|
|
||
Accrued payrolls, vacation, and variable-incentive compensation
|
211
|
|
|
191
|
|
||
Other
|
497
|
|
|
476
|
|
||
Total payables and other current liabilities
|
$
|
1,625
|
|
|
$
|
1,721
|
|
8.
|
PROVISION FOR INCOME TAXES
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Earnings from continuing operations before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
618
|
|
|
$
|
627
|
|
|
$
|
1,437
|
|
Outside the United States
|
511
|
|
|
363
|
|
|
242
|
|
|||
Total
|
$
|
1,129
|
|
|
$
|
990
|
|
|
$
|
1,679
|
|
Provision (benefit) for income taxes on earnings from continuing operations
|
|
|
|
|
|
|
|
|
|||
United States Federal
|
|
|
|
|
|
|
|
|
|||
Current
|
$
|
87
|
|
|
$
|
64
|
|
|
$
|
143
|
|
Deferred
|
119
|
|
|
135
|
|
|
300
|
|
|||
Outside the United States
|
|
|
|
|
|
|
|||||
Current
|
59
|
|
|
66
|
|
|
3
|
|
|||
Deferred
|
16
|
|
|
(35
|
)
|
|
15
|
|
|||
State and other
|
|
|
|
|
|
|
|||||
Current
|
22
|
|
|
6
|
|
|
30
|
|
|||
Deferred
|
(28
|
)
|
|
(1
|
)
|
|
16
|
|
|||
Total
|
$
|
275
|
|
|
$
|
235
|
|
|
$
|
507
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Unrecognized losses and prior service credits for benefit plans
|
$
|
42
|
|
|
$
|
(11
|
)
|
|
$
|
8
|
|
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Unrealized gains (losses) on cash flow hedges
|
21
|
|
|
(141
|
)
|
|
5
|
|
|||
Total
|
$
|
63
|
|
|
$
|
(152
|
)
|
|
$
|
12
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Continuing operations
|
$
|
275
|
|
|
$
|
235
|
|
|
$
|
507
|
|
Discontinued operations
|
—
|
|
|
2
|
|
|
—
|
|
|||
Other comprehensive income
|
63
|
|
|
(152
|
)
|
|
12
|
|
|||
Total
|
$
|
338
|
|
|
$
|
85
|
|
|
$
|
519
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Amount computed using the statutory rate
|
$
|
393
|
|
|
$
|
345
|
|
|
$
|
587
|
|
State income taxes, net
|
(3
|
)
|
|
4
|
|
|
30
|
|
|||
Foreign rate variance
|
(93
|
)
|
|
(105
|
)
|
|
(55
|
)
|
|||
Domestic manufacturing deduction
|
(12
|
)
|
|
(6
|
)
|
|
(17
|
)
|
|||
Change in reserves for tax contingencies
|
(7
|
)
|
|
(6
|
)
|
|
(16
|
)
|
|||
General business credits
|
(15
|
)
|
|
(8
|
)
|
|
(6
|
)
|
|||
Other
|
12
|
|
|
11
|
|
|
(16
|
)
|
|||
Provision for income taxes
|
$
|
275
|
|
|
$
|
235
|
|
|
$
|
507
|
|
|
|
|
|
|
|
||||||
Effective income tax rate
|
24
|
%
|
|
24
|
%
|
|
30
|
%
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Deferred tax assets
|
|
|
|
||||
Post-employment obligations
|
$
|
471
|
|
|
$
|
529
|
|
Net operating loss carryforwards
|
349
|
|
|
470
|
|
||
Tax credit carryforwards
|
276
|
|
|
239
|
|
||
Environmental reserves
|
122
|
|
|
123
|
|
||
Unrealized derivative loss
|
162
|
|
|
165
|
|
||
Other
|
193
|
|
|
294
|
|
||
Total deferred tax assets
|
1,573
|
|
|
1,820
|
|
||
Less valuation allowance
|
254
|
|
|
264
|
|
||
Deferred tax assets less valuation allowance
|
$
|
1,319
|
|
|
$
|
1,556
|
|
Deferred tax liabilities
|
|
|
|
|
|
||
Depreciation
|
$
|
(1,176
|
)
|
|
$
|
(1,144
|
)
|
Amortization
|
(902
|
)
|
|
(1,001
|
)
|
||
Other
|
(142
|
)
|
|
(158
|
)
|
||
Total deferred tax liabilities
|
$
|
(2,220
|
)
|
|
$
|
(2,303
|
)
|
Net deferred tax liabilities
|
$
|
(901
|
)
|
|
$
|
(747
|
)
|
As recorded in the Consolidated Statements of Financial Position:
|
|
|
|
|
|
||
Other current assets
|
$
|
—
|
|
|
$
|
177
|
|
Other noncurrent assets
|
27
|
|
|
28
|
|
||
Payables and other current liabilities
|
—
|
|
|
(6
|
)
|
||
Deferred income tax liabilities
|
(928
|
)
|
|
(946
|
)
|
||
Net deferred tax liabilities
|
$
|
(901
|
)
|
|
$
|
(747
|
)
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Miscellaneous receivables
|
$
|
92
|
|
|
$
|
97
|
|
|
|
|
|
||||
Payables and other current liabilities
|
$
|
33
|
|
|
$
|
23
|
|
Other long-term liabilities
|
32
|
|
|
24
|
|
||
Total income taxes payable
|
$
|
65
|
|
|
$
|
47
|
|
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at January 1
|
$
|
117
|
|
|
$
|
51
|
|
|
$
|
65
|
|
Additions based on tax positions related to current year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Additions based on acquisitions
|
27
|
|
|
72
|
|
|
—
|
|
|||
Lapse of statute of limitations
|
(7
|
)
|
|
(6
|
)
|
|
—
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||
Balance at December 31
|
$
|
137
|
|
|
$
|
117
|
|
|
$
|
51
|
|
9.
|
BORROWINGS
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Borrowings consisted of:
|
|
|
|
||||
3% notes due 2015
|
$
|
—
|
|
|
$
|
250
|
|
2.4% notes due 2017
|
999
|
|
|
998
|
|
||
6.30% notes due 2018
|
167
|
|
|
169
|
|
||
5.5% notes due 2019
|
250
|
|
|
250
|
|
||
2.7% notes due 2020
|
799
|
|
|
798
|
|
||
4.5% notes due 2021
|
250
|
|
|
250
|
|
||
3.6% notes due 2022
|
900
|
|
|
903
|
|
||
7 1/4% debentures due 2024
|
244
|
|
|
244
|
|
||
7 5/8% debentures due 2024
|
54
|
|
|
54
|
|
||
3.8% notes due 2025
|
796
|
|
|
796
|
|
||
7.60% debentures due 2027
|
222
|
|
|
222
|
|
||
4.8% notes due 2042
|
497
|
|
|
497
|
|
||
4.65% notes due 2044
|
877
|
|
|
877
|
|
||
Credit facility borrowings and commercial paper borrowings
|
980
|
|
|
1,235
|
|
||
Capital leases
|
4
|
|
|
6
|
|
||
Total borrowings
|
7,039
|
|
|
7,549
|
|
||
Borrowings due within one year
|
431
|
|
|
301
|
|
||
Long-term borrowings
|
$
|
6,608
|
|
|
$
|
7,248
|
|
|
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount
December 31, 2015 |
|
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
|
|
$
|
6,608
|
|
|
$
|
6,647
|
|
|
$
|
6,094
|
|
|
$
|
553
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements at December 31, 2014
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount
December 31, 2014 |
|
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
|
|
$
|
7,248
|
|
|
$
|
7,557
|
|
|
$
|
6,366
|
|
|
$
|
1,191
|
|
|
$
|
—
|
|
10.
|
DERIVATIVES
|
(Dollars in millions)
|
|
|
|
Fair Value Measurement
|
||||||
Derivative Assets
|
|
Statement of Financial Position Location
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
Other noncurrent assets
|
|
$
|
—
|
|
|
$
|
5
|
|
|
|
Twelve Months Ended
|
||||||||
(Dollars in millions)
|
|
Consolidated Statement of Earnings Location of Gain/(Loss) Recognized in Income on Derivatives
|
|
Amount of Gain/ (Loss) Recognized in Income on Derivatives
|
||||||
Derivatives in Fair Value Hedging Relationships
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|||||
Interest rate swaps
|
|
Net interest expense
|
|
$
|
13
|
|
|
$
|
6
|
|
Total notional amounts:
|
December 31, 2015
|
|
December 31, 2014
|
|||
|
|
|
|
|
||
Foreign Exchange Forward and Option Contracts (in millions)
|
|
|
|
|||
|
EUR/USD (in EUR)
|
€618
|
|
€810
|
||
|
EUR/USD (in approximate USD equivalent)
|
$689
|
|
$1,000
|
||
|
JPY/USD (in JPY)
|
¥2,400
|
|
¥4,800
|
||
|
JPY/USD (in approximate USD equivalent)
|
$20
|
|
$40
|
||
Commodity Forward and Collar Contracts
|
|
|
|
|||
|
Contract ethylene sales (in thousand metric tons)
|
—
|
|
|
14
|
|
|
Feedstock (in million barrels)
|
22
|
|
|
33
|
|
|
Feedstock (in thousand metric tons)
|
—
|
|
|
30
|
|
|
Energy (in million million british thermal units)
|
32
|
|
|
25
|
|
Interest rate swaps for the future issuance of debt (in millions)
|
$500
|
|
$500
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements
|
||||||
Derivative Assets
|
|
Statement of Financial Position Location
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
—
|
|
|
$
|
2
|
|
Foreign exchange contracts
|
|
Other current assets
|
|
65
|
|
|
61
|
|
||
Foreign exchange contracts
|
|
Other noncurrent assets
|
|
79
|
|
|
71
|
|
||
|
|
|
|
$
|
144
|
|
|
$
|
134
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements
|
||||||
Derivative Liabilities
|
|
Statement of Financial Position Location
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Payables and other current liabilities
|
|
$
|
194
|
|
|
$
|
193
|
|
Commodity contracts
|
|
Other long-term liabilities
|
|
242
|
|
|
289
|
|
||
Foreign exchange contracts
|
|
Payables and other current liabilities
|
|
—
|
|
|
10
|
|
||
Forward starting interest rate swap contracts
|
|
Other long-term liabilities
|
|
30
|
|
|
16
|
|
||
|
|
|
|
$
|
466
|
|
|
$
|
508
|
|
(Dollars in millions)
|
|
Change in amount of after tax 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, 2015
|
|
December 31, 2014
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|||||||||
Commodity contracts
|
|
$
|
26
|
|
|
$
|
(312
|
)
|
|
Sales
|
|
$
|
4
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
(217
|
)
|
|
(7
|
)
|
||||
Foreign exchange contracts
|
|
13
|
|
|
85
|
|
|
Sales
|
|
86
|
|
|
14
|
|
||||
Forward starting interest rate swap contracts
|
|
(4
|
)
|
|
(3
|
)
|
|
Interest Expense
|
|
(7
|
)
|
|
(8
|
)
|
||||
|
|
$
|
35
|
|
|
$
|
(230
|
)
|
|
|
|
$
|
(134
|
)
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||
Description
|
|
December 31, 2015
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Derivative Assets
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
—
|
|
Derivative Liabilities
|
|
(466
|
)
|
|
—
|
|
|
(466
|
)
|
|
—
|
|
||||
|
|
$
|
(322
|
)
|
|
$
|
—
|
|
|
$
|
(322
|
)
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
|
Fair Value Measurements at December 31, 2014
|
||||||||||||
Description
|
|
December 31, 2014
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Derivative Assets
|
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
137
|
|
|
$
|
2
|
|
Derivative Liabilities
|
|
(508
|
)
|
|
—
|
|
|
(508
|
)
|
|
—
|
|
||||
|
|
$
|
(369
|
)
|
|
$
|
—
|
|
|
$
|
(371
|
)
|
|
$
|
2
|
|
Fair Value Measurements Using Level 3 Inputs
|
|
|
||||||
Commodity Contracts
|
|
December 31,
|
||||||
(Dollars in millions)
|
|
2015
|
|
2014
|
||||
Beginning balance at January 1
|
|
$
|
2
|
|
|
$
|
—
|
|
Realized gain (loss) in sales revenue
|
|
4
|
|
|
1
|
|
||
Change in unrealized gain (loss) in Other Comprehensive Income
|
|
(2
|
)
|
|
2
|
|
||
Purchases, sales and settlements
|
|
(4
|
)
|
|
(1
|
)
|
||
Transfers (out) in of Level 3
|
|
—
|
|
|
—
|
|
||
Ending balance at December 31
|
|
$
|
—
|
|
|
$
|
2
|
|
11.
|
RETIREMENT PLANS
|
|
Pension
Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
|
|
|
||||||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation, beginning of year
|
$
|
2,356
|
|
|
$
|
867
|
|
|
$
|
2,236
|
|
|
$
|
736
|
|
|
$
|
1,014
|
|
|
$
|
962
|
|
Service cost
|
39
|
|
|
15
|
|
|
40
|
|
|
14
|
|
|
8
|
|
|
8
|
|
||||||
Interest cost
|
87
|
|
|
26
|
|
|
100
|
|
|
31
|
|
|
39
|
|
|
45
|
|
||||||
Actuarial (gain) loss
|
(31
|
)
|
|
(50
|
)
|
|
174
|
|
|
149
|
|
|
(13
|
)
|
|
49
|
|
||||||
Curtailment gain
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||||
Acquisitions
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
48
|
|
|
—
|
|
|
4
|
|
||||||
Plan amendments and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
1
|
|
||||||
Plan participants' contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
15
|
|
|
18
|
|
||||||
Effect of currency exchange
|
—
|
|
|
(61
|
)
|
|
—
|
|
|
(73
|
)
|
|
(2
|
)
|
|
—
|
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Benefits paid
|
(189
|
)
|
|
(22
|
)
|
|
(194
|
)
|
|
(22
|
)
|
|
(67
|
)
|
|
(74
|
)
|
||||||
Benefit obligation, end of year
|
$
|
2,262
|
|
|
$
|
763
|
|
|
$
|
2,356
|
|
|
$
|
867
|
|
|
$
|
853
|
|
|
$
|
1,014
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, beginning of year
|
$
|
1,968
|
|
|
$
|
699
|
|
|
$
|
1,887
|
|
|
$
|
658
|
|
|
$
|
176
|
|
|
$
|
179
|
|
Actual return on plan assets
|
(23
|
)
|
|
7
|
|
|
151
|
|
|
92
|
|
|
(1
|
)
|
|
16
|
|
||||||
Effect of currency exchange
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
131
|
|
|
21
|
|
|
124
|
|
|
22
|
|
|
34
|
|
|
38
|
|
||||||
Reserve for third party contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
||||||
Plan participants' contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
15
|
|
|
18
|
|
||||||
Benefits paid
|
(189
|
)
|
|
(22
|
)
|
|
(194
|
)
|
|
(22
|
)
|
|
(67
|
)
|
|
(74
|
)
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Acquisitions
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, end of year
|
$
|
1,887
|
|
|
$
|
650
|
|
|
$
|
1,968
|
|
|
$
|
699
|
|
|
$
|
157
|
|
|
$
|
176
|
|
Funded status at end of year
|
$
|
(375
|
)
|
|
$
|
(113
|
)
|
|
$
|
(388
|
)
|
|
$
|
(168
|
)
|
|
$
|
(696
|
)
|
|
$
|
(838
|
)
|
Amounts recognized in the Consolidated Statements of Financial Position consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other noncurrent assets
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
19
|
|
|
$
|
13
|
|
Current liabilities
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(43
|
)
|
|
(41
|
)
|
||||||
Post-employment obligations
|
(372
|
)
|
|
(120
|
)
|
|
(390
|
)
|
|
(171
|
)
|
|
(672
|
)
|
|
(810
|
)
|
||||||
Net amount recognized, end of year
|
$
|
(375
|
)
|
|
$
|
(113
|
)
|
|
$
|
(388
|
)
|
|
$
|
(168
|
)
|
|
$
|
(696
|
)
|
|
$
|
(838
|
)
|
Accumulated benefit obligation
|
$
|
2,146
|
|
|
$
|
721
|
|
|
$
|
2,254
|
|
|
$
|
781
|
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service (credit) cost
|
$
|
(10
|
)
|
|
$
|
2
|
|
|
$
|
(14
|
)
|
|
$
|
(1
|
)
|
|
$
|
(200
|
)
|
|
$
|
(84
|
)
|
(Dollars in millions)
|
2015
|
|
2014
|
||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
2,262
|
|
|
$
|
622
|
|
|
$
|
1,973
|
|
|
$
|
745
|
|
Fair value of plan assets
|
1,887
|
|
|
501
|
|
|
1,581
|
|
|
573
|
|
(Dollars in millions)
|
2015
|
|
2014
|
||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
2,262
|
|
|
$
|
622
|
|
|
$
|
1,973
|
|
|
$
|
711
|
|
Accumulated benefit obligation
|
2,146
|
|
|
584
|
|
|
1,870
|
|
|
640
|
|
||||
Fair value of plan assets
|
1,887
|
|
|
501
|
|
|
1,581
|
|
|
541
|
|
|
Pension Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
|
|
|
|
|
||||||||||||||||||
Components of net periodic benefit (credit) cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost
|
$
|
39
|
|
|
$
|
15
|
|
|
$
|
40
|
|
|
$
|
14
|
|
|
$
|
43
|
|
|
$
|
14
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
11
|
|
Interest cost
|
87
|
|
|
26
|
|
|
100
|
|
|
31
|
|
|
89
|
|
|
27
|
|
|
39
|
|
|
45
|
|
|
44
|
|
|||||||||
Expected return on assets
|
(148
|
)
|
|
(37
|
)
|
|
(143
|
)
|
|
(38
|
)
|
|
(129
|
)
|
|
(35
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||||||||
Curtailment gain
(1)
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost (credit)
|
(4
|
)
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|
(22
|
)
|
|||||||||
Mark-to-market pension and other postretirement benefits (gain) loss
|
140
|
|
|
(20
|
)
|
|
166
|
|
|
95
|
|
|
(294
|
)
|
|
18
|
|
|
(5
|
)
|
|
43
|
|
|
(107
|
)
|
|||||||||
Net periodic benefit (credit) cost
|
$
|
114
|
|
|
$
|
(22
|
)
|
|
$
|
159
|
|
|
$
|
102
|
|
|
$
|
(295
|
)
|
|
$
|
23
|
|
|
$
|
10
|
|
|
$
|
65
|
|
|
$
|
(81
|
)
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Curtailment gain
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current year prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
47
|
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service cost (credit)
|
(4
|
)
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|
(22
|
)
|
|||||||||
Total
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
116
|
|
|
$
|
(24
|
)
|
|
$
|
25
|
|
(1)
|
Gain of $7 million
in 2015 in the Fibers segment related to the remeasurement of the Workington, UK pension plan, triggered by the closure of the Workington, UK acetate tow manufacturing facility
.
|
|
Pension Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations for years ended December 31:
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
4.13
|
%
|
3.26
|
%
|
|
3.80
|
%
|
3.10
|
%
|
|
4.59
|
%
|
4.18
|
%
|
|
4.17
|
%
|
|
3.91
|
%
|
|
4.75
|
%
|
Rate of compensation increase
|
3.50
|
%
|
3.00
|
%
|
|
3.50
|
%
|
3.24
|
%
|
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
Health care cost trend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Initial
|
|
|
|
|
|
|
|
|
|
7.50
|
%
|
|
7.50
|
%
|
|
8.00
|
%
|
||||||
Decreasing to ultimate trend of
|
|
|
|
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
||||||
in year
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2020
|
|
||||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
3.80
|
%
|
3.10
|
%
|
|
4.59
|
%
|
4.18
|
%
|
|
3.72
|
%
|
4.16
|
%
|
|
3.91
|
%
|
|
4.75
|
%
|
|
3.91
|
%
|
Expected return on assets
|
7.78
|
%
|
5.50
|
%
|
|
7.83
|
%
|
5.78
|
%
|
|
7.98
|
%
|
5.90
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
Rate of compensation increase
|
3.50
|
%
|
3.24
|
%
|
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
3.49
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
Health care cost trend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Initial
|
|
|
|
|
|
|
|
|
|
7.50
|
%
|
|
8.00
|
%
|
|
8.00
|
%
|
||||||
Decreasing to ultimate trend of
|
|
|
|
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
||||||
in year
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
(Dollars in millions)
|
|
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||||||||||||||||
Description
|
December 31, 2015
|
|
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)
|
$
|
66
|
|
|
$
|
9
|
|
|
$
|
66
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Income (U.S.)
|
665
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
665
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed Income (Non-U.S.)
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed Income (Global)
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. Treasury Securities
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Public Equity Funds
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States
|
476
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
476
|
|
|
36
|
|
|
—
|
|
|
—
|
|
||||||||
Non-U.S.
|
358
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
49
|
|
|
—
|
|
|
—
|
|
||||||||
Global
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
||||||||
Other
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
286
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
286
|
|
|
42
|
|
||||||||
Multi-Asset Common Collective Trusts
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
1,887
|
|
|
$
|
650
|
|
|
$
|
66
|
|
|
$
|
9
|
|
|
$
|
1,535
|
|
|
$
|
599
|
|
|
$
|
286
|
|
|
$
|
42
|
|
(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 Funds: 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, 2014
|
||||||||||||||||||||||||||
Description
|
December 31, 2014
|
|
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)
|
$
|
77
|
|
|
$
|
19
|
|
|
$
|
77
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Income (U.S.)
|
662
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
662
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed Income (Non-U.S.)
|
—
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed Income (Global)
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. Treasury Securities
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Public Equity Funds
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
United States
|
509
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
509
|
|
|
31
|
|
|
—
|
|
|
—
|
|
||||||||
Non-U.S.
|
348
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
348
|
|
|
48
|
|
|
—
|
|
|
—
|
|
||||||||
Global
|
—
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
—
|
|
||||||||
Other
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
335
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
335
|
|
|
55
|
|
||||||||
Multi-Asset Common Collective Trusts
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
1,968
|
|
|
$
|
699
|
|
|
$
|
77
|
|
|
$
|
19
|
|
|
$
|
1,556
|
|
|
$
|
625
|
|
|
$
|
335
|
|
|
$
|
55
|
|
(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 Funds: 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, 2015
|
||||||||||||
Description
|
December 31, 2015
|
|
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)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
86
|
|
|
—
|
|
|
86
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
||||
U.S. Treasury Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
Fair Value Measurements at
December 31, 2014
|
||||||||||||
Description
|
December 31, 2014
|
|
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)
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
124
|
|
|
—
|
|
|
124
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
U.S. Treasury Securities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total
|
$
|
133
|
|
|
$
|
6
|
|
|
$
|
127
|
|
|
$
|
—
|
|
(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, 2013
|
$
|
177
|
|
|
$
|
101
|
|
|
$
|
84
|
|
|
$
|
362
|
|
|
$
|
2
|
|
|
$
|
25
|
|
|
$
|
27
|
|
|
Distributions
|
(40
|
)
|
|
(29
|
)
|
|
(17
|
)
|
|
(86
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Unrealized gains
|
18
|
|
|
9
|
|
|
4
|
|
|
31
|
|
|
—
|
|
—
|
|
4
|
|
|
4
|
|
|||||||
Purchases, contributions, and other
|
21
|
|
|
2
|
|
|
5
|
|
|
28
|
|
|
(2
|
)
|
|
26
|
|
|
24
|
|
||||||||
Balance at December 31, 2014
|
176
|
|
|
83
|
|
|
76
|
|
|
335
|
|
|
—
|
|
|
55
|
|
|
55
|
|
||||||||
Distributions
|
(56
|
)
|
|
(28
|
)
|
|
(15
|
)
|
|
(99
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Unrealized gains
|
23
|
|
|
10
|
|
|
(16
|
)
|
|
17
|
|
|
—
|
|
—
|
|
(5
|
)
|
|
(5
|
)
|
|||||||
Purchases, contributions, and other
|
24
|
|
|
1
|
|
|
8
|
|
|
33
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Balance at December 31, 2015
|
$
|
167
|
|
|
$
|
66
|
|
|
$
|
53
|
|
|
$
|
286
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
42
|
|
(1)
|
U.S. primarily consists of natural resource and energy related limited partnership investments. Non-U.S. primarily consists of annuity contracts.
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
Postretirement Benefit Plan
|
||||||
|
Target Allocation
|
Plan Assets at
December 31, 2015
|
Plan Assets at
December 31, 2014
|
|
Target Allocation
|
Plan Assets at
December 31, 2015
|
Plan Assets at
December 31, 2014
|
|
Target Allocation
|
Plan Assets at
December 31, 2015
|
Plan Assets at
December 31, 2014
|
Asset category
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
48%
|
44%
|
44%
|
|
31%
|
36%
|
34%
|
|
—%
|
—%
|
—%
|
Debt securities
|
33%
|
41%
|
39%
|
|
50%
|
46%
|
48%
|
|
100%
|
100%
|
100%
|
Real estate
|
5%
|
4%
|
4%
|
|
2%
|
2%
|
2%
|
|
—%
|
—%
|
—%
|
Other investments
(1)
|
14%
|
11%
|
13%
|
|
17%
|
16%
|
16%
|
|
—%
|
—%
|
—%
|
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 annuity contracts and alternative investments.
|
|
Pension Plans
|
|
Postretirement
Benefit Plans
|
||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
|
||||||
2016
|
$
|
227
|
|
|
$
|
22
|
|
|
$
|
60
|
|
2017
|
200
|
|
|
22
|
|
|
60
|
|
|||
2018
|
199
|
|
|
23
|
|
|
59
|
|
|||
2019
|
197
|
|
|
25
|
|
|
60
|
|
|||
2020
|
195
|
|
|
26
|
|
|
60
|
|
|||
2021-2025
|
879
|
|
|
147
|
|
|
296
|
|
12.
|
COMMITMENTS
|
(Dollars in millions)
|
|
Payments Due For
|
||||||||||||||||||||||
Period
|
|
Debt Securities
|
|
Credit Facilities and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Total
|
||||||||||||
2016
|
|
$
|
—
|
|
|
$
|
431
|
|
|
$
|
265
|
|
|
$
|
145
|
|
|
$
|
63
|
|
|
$
|
904
|
|
2017
|
|
999
|
|
|
1
|
|
|
283
|
|
|
164
|
|
|
50
|
|
|
1,497
|
|
||||||
2018
|
|
167
|
|
|
326
|
|
|
238
|
|
|
161
|
|
|
38
|
|
|
930
|
|
||||||
2019
|
|
250
|
|
|
226
|
|
|
218
|
|
|
148
|
|
|
28
|
|
|
870
|
|
||||||
2020
|
|
799
|
|
|
—
|
|
|
190
|
|
|
134
|
|
|
22
|
|
|
1,145
|
|
||||||
2021 and beyond
|
|
3,840
|
|
|
—
|
|
|
1,926
|
|
|
673
|
|
|
72
|
|
|
6,511
|
|
||||||
Total
|
|
$
|
6,055
|
|
|
$
|
984
|
|
|
$
|
3,120
|
|
|
$
|
1,425
|
|
|
$
|
273
|
|
|
$
|
11,857
|
|
13.
|
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Environmental contingent liabilities, current
|
$
|
35
|
|
|
$
|
35
|
|
Environmental contingent liabilities, long-term
|
301
|
|
|
310
|
|
||
Total
|
$
|
336
|
|
|
$
|
345
|
|
(Dollars in millions)
|
Environmental Remediation Liabilities
|
||
Balance at December 31, 2014
|
$
|
324
|
|
Changes in estimates recorded to earnings and other
|
12
|
|
|
Cash reductions
|
(28
|
)
|
|
Balance at December 31, 2015
|
$
|
308
|
|
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, 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
|
)
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
Balance at December 31, 2013
|
2
|
|
|
1,778
|
|
|
4,012
|
|
|
171
|
|
|
(2,167
|
)
|
|
3,796
|
|
|
79
|
|
|
3,875
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
751
|
|
|
—
|
|
|
—
|
|
|
751
|
|
|
6
|
|
|
757
|
|
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(218
|
)
|
|
—
|
|
|
—
|
|
|
(218
|
)
|
|
—
|
|
|
(218
|
)
|
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(448
|
)
|
|
—
|
|
|
(448
|
)
|
|
—
|
|
|
(448
|
)
|
Share-Based Compensation Expense
(2)
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
Stock Option Exercises
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
Other
(3)
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(410
|
)
|
|
(410
|
)
|
|
—
|
|
|
(410
|
)
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
Balance at December 31, 2014
|
2
|
|
|
1,817
|
|
|
4,545
|
|
|
(277
|
)
|
|
(2,577
|
)
|
|
3,510
|
|
|
80
|
|
|
3,590
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
848
|
|
|
—
|
|
|
—
|
|
|
848
|
|
|
6
|
|
|
854
|
|
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(247
|
)
|
|
—
|
|
|
—
|
|
|
(247
|
)
|
|
—
|
|
|
(247
|
)
|
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
(113
|
)
|
Share-Based Compensation Expense
(2)
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
Stock Option Exercises
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Other
(3)
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
(103
|
)
|
|
—
|
|
|
(103
|
)
|
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
Balance at December 31, 2015
|
2
|
|
|
1,863
|
|
|
5,146
|
|
|
(390
|
)
|
|
(2,680
|
)
|
|
3,941
|
|
|
80
|
|
|
4,021
|
|
(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)
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator
|
|
|
|
|
|
||||||
Earnings attributable to Eastman stockholders:
|
|
|
|
|
|
||||||
Earnings from continuing operations, net of tax
|
$
|
848
|
|
|
$
|
749
|
|
|
$
|
1,165
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average shares used for basic EPS
|
148.6
|
|
|
149.5
|
|
|
154.0
|
|
|||
Dilutive effect of stock options and other award plans
|
1.2
|
|
|
1.6
|
|
|
2.5
|
|
|||
Weighted average shares used for diluted EPS
|
149.8
|
|
|
151.1
|
|
|
156.5
|
|
|||
|
|
|
|
|
|
||||||
EPS from continuing operations
(1)
|
|
|
|
|
|
||||||
Basic
|
$
|
5.71
|
|
|
$
|
5.01
|
|
|
$
|
7.57
|
|
Diluted
|
$
|
5.66
|
|
|
$
|
4.95
|
|
|
$
|
7.44
|
|
(1)
|
Earnings per share are calculated using whole dollars and shares.
|
|
For years ended December 31,
|
|||||||
Shares of common stock issued
(1)
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|||
Balance at beginning of year
|
216,256,971
|
|
|
215,131,237
|
|
|
213,406,523
|
|
Issued for employee compensation and benefit plans
|
642,993
|
|
|
1,125,734
|
|
|
1,455,030
|
|
Issued for Solutia acquisition and related warrants
|
—
|
|
|
—
|
|
|
269,684
|
|
Balance at end of year
|
216,899,964
|
|
|
216,256,971
|
|
|
215,131,237
|
|
(1)
|
Includes shares held in treasury.
|
(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, 2013
|
133
|
|
|
78
|
|
|
(39
|
)
|
|
(1
|
)
|
|
171
|
|
Period change
|
(201
|
)
|
|
(17
|
)
|
|
(230
|
)
|
|
—
|
|
|
(448
|
)
|
Balance at December 31, 2014
|
(68
|
)
|
|
61
|
|
|
(269
|
)
|
|
(1
|
)
|
|
(277
|
)
|
Period change
|
(216
|
)
|
|
68
|
|
|
35
|
|
|
—
|
|
|
(113
|
)
|
Balance at December 31, 2015
|
(284
|
)
|
|
129
|
|
|
(234
|
)
|
|
(1
|
)
|
|
(390
|
)
|
|
For years ended December 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
(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
|
$
|
(216
|
)
|
|
$
|
(216
|
)
|
|
$
|
(201
|
)
|
|
$
|
(201
|
)
|
|
$
|
27
|
|
|
$
|
28
|
|
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Prior service credit arising during the period
|
140
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
29
|
|
||||||
Amortization of unrecognized prior service credits included in net periodic costs
|
(30
|
)
|
|
(19
|
)
|
|
(28
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(16
|
)
|
||||||
Change in defined benefit pension and other postretirement benefit plans
|
110
|
|
|
68
|
|
|
(28
|
)
|
|
(17
|
)
|
|
21
|
|
|
13
|
|
||||||
Derivatives and hedging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized (loss) gain
|
(78
|
)
|
|
(48
|
)
|
|
(371
|
)
|
|
(230
|
)
|
|
10
|
|
|
6
|
|
||||||
Reclassification adjustment for loss (gain) included in net income
|
134
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||||
Change in derivatives and hedging
|
56
|
|
|
35
|
|
|
(371
|
)
|
|
(230
|
)
|
|
12
|
|
|
7
|
|
||||||
Total other comprehensive income (loss)
|
$
|
(50
|
)
|
|
$
|
(113
|
)
|
|
$
|
(600
|
)
|
|
$
|
(448
|
)
|
|
$
|
60
|
|
|
$
|
48
|
|
16.
|
ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed asset impairments
|
$
|
85
|
|
|
$
|
28
|
|
|
$
|
28
|
|
Gain on sale
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
|||
Intangible asset and goodwill impairments
|
22
|
|
|
24
|
|
|
—
|
|
|||
Severance charges
|
68
|
|
|
13
|
|
|
27
|
|
|||
Site closure and restructuring charges
|
9
|
|
|
19
|
|
|
21
|
|
|||
Total
|
$
|
183
|
|
|
$
|
77
|
|
|
$
|
76
|
|
|
Balance at
January 1,
2015
|
|
Provision/ Adjustments
|
|
Non-cash Reductions/ Additions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2015
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
(107
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
13
|
|
|
67
|
|
|
1
|
|
|
(26
|
)
|
|
55
|
|
|||||
Site closure & restructuring costs
|
15
|
|
|
9
|
|
|
3
|
|
|
(16
|
)
|
|
11
|
|
|||||
Total
|
$
|
28
|
|
|
$
|
183
|
|
|
$
|
(103
|
)
|
|
$
|
(42
|
)
|
|
$
|
66
|
|
|
Balance at
January 1,
2014
|
|
Provision/ Adjustments
|
|
Non-cash Reductions/ Additions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2014
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
(52
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
22
|
|
|
13
|
|
|
—
|
|
|
(22
|
)
|
|
13
|
|
|||||
Site closure & restructuring costs
|
14
|
|
|
12
|
|
|
(4
|
)
|
|
(7
|
)
|
|
15
|
|
|||||
Total
|
$
|
36
|
|
|
$
|
77
|
|
|
$
|
(56
|
)
|
|
$
|
(29
|
)
|
|
$
|
28
|
|
|
Balance at
January 1,
2013
|
|
Provision/ Adjustments
|
|
Non-cash Reductions/ Additions
|
|
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 (INCOME) CHARGES, NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign exchange transaction (gains) losses, net
|
$
|
6
|
|
|
$
|
(7
|
)
|
|
$
|
7
|
|
Financing costs related to the acquisition of Taminco
|
—
|
|
|
10
|
|
|
—
|
|
|||
(Income) loss from equity investments and other investment (gains) losses, net
|
(15
|
)
|
|
(13
|
)
|
|
(5
|
)
|
|||
Other, net
|
1
|
|
|
(5
|
)
|
|
1
|
|
|||
Other (income) charges, net
|
$
|
(8
|
)
|
|
$
|
(15
|
)
|
|
$
|
3
|
|
18.
|
SHARE-BASED COMPENSATION PLANS AND AWARDS
|
Assumptions
|
|
2015
|
|
2014
|
|
2013
|
Expected volatility rate
|
|
24.11%
|
|
25.82%
|
|
34.90%
|
Expected dividend yield
|
|
1.75%
|
|
1.70%
|
|
1.97%
|
Average risk-free interest rate
|
|
1.45%
|
|
1.44%
|
|
0.77%
|
Expected forfeiture rate
|
|
0.75%
|
|
0.75%
|
|
0.75%
|
Expected term years
|
|
4.8
|
|
4.7
|
|
5.0
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|||||||||
Outstanding at beginning of year
|
2,209,800
|
|
|
$
|
46
|
|
|
2,359,100
|
|
|
$
|
39
|
|
|
2,480,100
|
|
|
$
|
33
|
|
Granted
|
512,700
|
|
|
74
|
|
|
272,100
|
|
|
86
|
|
|
317,900
|
|
|
70
|
|
|||
Exercised
|
(271,200
|
)
|
|
30
|
|
|
(419,300
|
)
|
|
31
|
|
|
(436,500
|
)
|
|
28
|
|
|||
Cancelled, forfeited, or expired
|
(16,700
|
)
|
|
77
|
|
|
(2,100
|
)
|
|
55
|
|
|
(2,400
|
)
|
|
15
|
|
|||
Outstanding at end of year
|
2,434,600
|
|
|
$
|
53
|
|
|
2,209,800
|
|
|
$
|
46
|
|
|
2,359,100
|
|
|
$
|
39
|
|
Options exercisable at year-end
|
1,643,100
|
|
|
|
|
1,726,800
|
|
|
|
|
1,862,000
|
|
|
|
||||||
Available for grant at end of year
|
5,413,250
|
|
|
|
|
7,271,093
|
|
|
|
|
8,454,854
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||
Range of Exercise Prices
|
|
Number Outstanding at
December 31, 2015
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Weighted-Average Exercise Price
|
|
Number Exercisable at
December 31, 2015
|
|
Weighted-Average Exercise Price
|
||||
$18-$29
|
|
272,100
|
|
3.7
|
|
$
|
27
|
|
|
272,100
|
|
$
|
27
|
|
$30-$34
|
|
211,700
|
|
1.2
|
|
32
|
|
|
211,700
|
|
32
|
|
||
$35-$40
|
|
868,000
|
|
5.3
|
|
39
|
|
|
868,000
|
|
39
|
|
||
$41-$87
|
|
1,082,800
|
|
8.4
|
|
76
|
|
|
291,300
|
|
74
|
|
||
|
|
2,434,600
|
|
6.1
|
|
$
|
53
|
|
|
1,643,100
|
|
$
|
42
|
|
Nonvested Options
|
|
Number of Options
|
|
Weighted-Average Grant Date Fair Value
|
Nonvested at January 1, 2015
|
|
483,000
|
|
$17.47
|
Granted
|
|
512,700
|
|
13.89
|
Vested
|
|
(187,400)
|
|
17.66
|
Forfeited
|
|
(16,800)
|
|
14.55
|
Nonvested options at December 31, 2015
|
|
791,500
|
|
$15.17
|
19.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Current assets
|
$
|
5
|
|
|
$
|
(12
|
)
|
|
$
|
(56
|
)
|
Other assets
|
44
|
|
|
45
|
|
|
102
|
|
|||
Current liabilities
|
22
|
|
|
(88
|
)
|
|
(26
|
)
|
|||
Long-term liabilities
|
(11
|
)
|
|
16
|
|
|
(191
|
)
|
|||
Total
|
$
|
60
|
|
|
$
|
(39
|
)
|
|
$
|
(171
|
)
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash paid for interest and income taxes is as follows:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
265
|
|
|
$
|
184
|
|
|
$
|
186
|
|
Income taxes
|
124
|
|
|
152
|
|
|
224
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Outstanding trade payables related to capital expenditures
|
10
|
|
|
19
|
|
|
28
|
|
|||
(Gain) loss from equity investments
|
(15
|
)
|
|
(13
|
)
|
|
(4
|
)
|
20.
|
SEGMENT INFORMATION
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Sales by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
2,368
|
|
|
$
|
1,821
|
|
|
$
|
1,719
|
|
Adhesives & Plasticizers
|
1,214
|
|
|
1,363
|
|
|
1,326
|
|
|||
Advanced Materials
|
2,414
|
|
|
2,378
|
|
|
2,349
|
|
|||
Fibers
|
1,219
|
|
|
1,457
|
|
|
1,441
|
|
|||
Specialty Fluids & Intermediates
|
2,388
|
|
|
2,490
|
|
|
2,497
|
|
|||
Total Sales by Segment
|
$
|
9,603
|
|
|
$
|
9,509
|
|
|
$
|
9,332
|
|
Other
|
45
|
|
|
18
|
|
|
18
|
|
|||
Total Sales
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Operating Earnings (Loss)
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
462
|
|
|
$
|
329
|
|
|
$
|
405
|
|
Adhesives & Plasticizers
|
239
|
|
|
196
|
|
|
172
|
|
|||
Advanced Materials
|
384
|
|
|
276
|
|
|
257
|
|
|||
Fibers
|
292
|
|
|
474
|
|
|
462
|
|
|||
Specialty Fluids & Intermediates
|
253
|
|
|
289
|
|
|
363
|
|
|||
Total Operating Earnings by Segment
|
1,630
|
|
|
1,564
|
|
|
1,659
|
|
|||
Other
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to segments
|
(87
|
)
|
|
(58
|
)
|
|
(132
|
)
|
|||
Pension and other postretirement benefit income (expense), net not allocated to operating segments
|
(76
|
)
|
|
(293
|
)
|
|
394
|
|
|||
Acquisition integration, transaction, and restructuring costs
|
(83
|
)
|
|
(51
|
)
|
|
(59
|
)
|
|||
Total Operating Earnings
|
$
|
1,384
|
|
|
$
|
1,162
|
|
|
$
|
1,862
|
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
2014
|
||||
Assets by Segment
(1)
|
|
|
|
||||
Additives & Functional Products
|
$
|
4,812
|
|
|
$
|
4,900
|
|
Adhesives & Plasticizers
|
902
|
|
|
1,011
|
|
||
Advanced Materials
|
4,227
|
|
|
4,235
|
|
||
Fibers
|
969
|
|
|
986
|
|
||
Specialty Fluids & Intermediates
|
3,586
|
|
|
3,710
|
|
||
Total Assets by Segment
|
14,496
|
|
|
14,842
|
|
||
Corporate Assets
|
1,115
|
|
|
1,230
|
|
||
Total Assets
|
$
|
15,611
|
|
|
$
|
16,072
|
|
(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)
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation and Amortization Expense by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
163
|
|
|
$
|
104
|
|
|
$
|
95
|
|
Adhesives & Plasticizers
|
43
|
|
|
43
|
|
|
45
|
|
|||
Advanced Materials
|
161
|
|
|
143
|
|
|
144
|
|
|||
Fibers
|
55
|
|
|
66
|
|
|
65
|
|
|||
Specialty Fluids & Intermediates
|
146
|
|
|
92
|
|
|
80
|
|
|||
Total Depreciation and Amortization Expense by Segment
|
568
|
|
|
448
|
|
|
429
|
|
|||
Other
|
3
|
|
|
2
|
|
|
4
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
571
|
|
|
$
|
450
|
|
|
$
|
433
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Capital Expenditures by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
171
|
|
|
$
|
111
|
|
|
$
|
74
|
|
Adhesives & Plasticizers
|
43
|
|
|
57
|
|
|
56
|
|
|||
Advanced Materials
|
225
|
|
|
176
|
|
|
170
|
|
|||
Fibers
|
57
|
|
|
53
|
|
|
65
|
|
|||
Specialty Fluids & Intermediates
|
152
|
|
|
188
|
|
|
113
|
|
|||
Total Capital Expenditures by Segment
|
648
|
|
|
585
|
|
|
478
|
|
|||
Other
|
4
|
|
|
8
|
|
|
5
|
|
|||
Total Capital Expenditures
|
$
|
652
|
|
|
$
|
593
|
|
|
$
|
483
|
|
(Dollars in millions)
|
For years ended December 31,
|
||||||||||
Geographic Information
|
2015
|
|
2014
|
|
2013
|
||||||
Sales
|
|
|
|
|
|
||||||
United States
|
$
|
4,096
|
|
|
$
|
4,162
|
|
|
$
|
4,140
|
|
All foreign countries
|
5,552
|
|
|
5,365
|
|
|
5,210
|
|
|||
Total
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
|
|
|
|
|
|
||||||
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net properties
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
3,939
|
|
|
$
|
3,753
|
|
|
$
|
3,247
|
|
All foreign countries
|
1,191
|
|
|
1,334
|
|
|
1,043
|
|
|||
Total
|
$
|
5,130
|
|
|
$
|
5,087
|
|
|
$
|
4,290
|
|
21.
|
QUARTERLY SALES AND EARNINGS DATA – UNAUDITED
|
(Dollars in millions, except per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,443
|
|
|
$
|
2,533
|
|
|
$
|
2,447
|
|
|
$
|
2,225
|
|
Gross profit
|
656
|
|
|
720
|
|
|
695
|
|
|
509
|
|
||||
Asset impairments and restructuring charges, net
|
109
|
|
|
—
|
|
|
21
|
|
|
53
|
|
||||
Net earnings attributable to Eastman
|
171
|
|
|
297
|
|
|
256
|
|
|
124
|
|
||||
Net earnings per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.15
|
|
|
$
|
2.00
|
|
|
$
|
1.73
|
|
|
$
|
0.83
|
|
Diluted
|
1.14
|
|
|
1.98
|
|
|
1.71
|
|
|
0.83
|
|
(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
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,305
|
|
|
$
|
2,460
|
|
|
$
|
2,413
|
|
|
$
|
2,349
|
|
Gross profit
|
595
|
|
|
657
|
|
|
636
|
|
|
333
|
|
||||
Asset impairments and restructuring charges (gains), net
|
13
|
|
|
(7
|
)
|
|
71
|
|
|
—
|
|
||||
Net earnings attributable to Eastman
|
233
|
|
|
292
|
|
|
210
|
|
|
16
|
|
||||
Net earnings per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.54
|
|
|
$
|
1.96
|
|
|
$
|
1.41
|
|
|
$
|
0.11
|
|
Diluted
|
1.52
|
|
|
1.93
|
|
|
1.39
|
|
|
0.11
|
|
(1)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
22.
|
RESERVE ROLLFORWARDS
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2015
|
|
Charges (Credits) to Cost and Expense
|
|
Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2015
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
13
|
|
LIFO inventory
|
462
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
296
|
|
|||||
Non-environmental asset retirement obligations
|
44
|
|
|
4
|
|
|
—
|
|
|
2
|
|
|
46
|
|
|||||
Environmental contingencies
|
345
|
|
|
9
|
|
|
11
|
|
|
29
|
|
|
336
|
|
|||||
Deferred tax valuation allowance
|
264
|
|
|
2
|
|
|
38
|
|
|
50
|
|
|
254
|
|
|||||
|
$
|
1,125
|
|
|
$
|
(150
|
)
|
|
$
|
51
|
|
|
$
|
81
|
|
|
$
|
945
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2014
|
|
Charges (Credits) to Cost and Expense
|
|
Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2014
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
10
|
|
LIFO inventory
|
506
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
462
|
|
|||||
Non-environmental asset retirement obligations
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
|||||
Environmental contingencies
|
368
|
|
|
2
|
|
|
2
|
|
|
27
|
|
|
345
|
|
|||||
Deferred tax valuation allowance
|
204
|
|
|
(6
|
)
|
|
66
|
|
|
—
|
|
|
264
|
|
|||||
|
$
|
1,090
|
|
|
$
|
(47
|
)
|
|
$
|
112
|
|
|
$
|
30
|
|
|
$
|
1,125
|
|
(Dollars in millions)
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2013
|
|
Charges (Credits) to Cost and Expense
|
|
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
|
|
23.
|
RECENTLY ISSUED ACCOUNTING STANDARDS
|
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 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
|
|
2,434,600
|
|
(1)
|
$
|
53
|
|
|
5,413,250
|
|
(2)
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
TOTAL
|
|
2,434,600
|
|
|
$
|
53
|
|
|
5,413,250
|
|
|
(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; the 2007 Director Long-Term Compensation Subplan, a component of the 2007 Omnibus Long-Term Compensation Plan, and the 2012 Omnibus Stock Compensation Plan.
|
(2)
|
Shares of common stock available for future awards under the Company's 2012 Omnibus Stock Compensation Plan, including the 2015 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
|
|
|
Eastman Chemical Company
|
|
|
|
By:
|
|
/s/ Mark J. Costa
|
|
|
Mark J. Costa
|
|
|
Chief Executive Officer
|
Date:
|
February 25, 2016
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
DIRECTORS (other than Mark J. Costa, who also signed as Principal Executive Officer):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Humberto P. Alfonso
|
|
Director
|
|
February 25, 2016
|
Humberto P. Alfonso
|
|
|
|
|
|
|
|
|
|
/s/ Gary E. Anderson
|
|
Director
|
|
February 25, 2016
|
Gary E. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ Brett D. Begemann
|
|
Director
|
|
February 25, 2016
|
Brett D. Begemann
|
|
|
|
|
|
|
|
|
|
/s/ Michael P. Connors
|
|
Director
|
|
February 25, 2016
|
Michael P. Connors
|
|
|
|
|
|
|
|
|
|
/s/ Stephen R. Demeritt
|
|
Director
|
|
February 25, 2016
|
Stephen R. Demeritt
|
|
|
|
|
|
|
|
|
|
/s/ Robert M. Hernandez
|
|
Director
|
|
February 25, 2016
|
Robert M. Hernandez
|
|
|
|
|
|
|
|
|
|
/s/ Julie F. Holder
|
|
Director
|
|
February 25, 2016
|
Julie F. Holder
|
|
|
|
|
|
|
|
|
|
/s/ Renée J. Hornbaker
|
|
Director
|
|
February 25, 2016
|
Renée J. Hornbaker
|
|
|
|
|
|
|
|
|
|
/s/ Lewis M. Kling
|
|
Director
|
|
February 25, 2016
|
Lewis M. Kling
|
|
|
|
|
|
|
|
|
|
/s/ David W. Raisbeck
|
|
Director
|
|
February 25, 2016
|
David W. Raisbeck
|
|
|
|
|
|
|
|
|
|
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
|
|
143
|
|
|
|
|
|
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 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)
|
|
|
|
|
|
|
|
4.12
|
|
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)
|
|
|
|
|
|
|
|
4.13
|
|
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)
|
|
|
|
|
|
|
|
4.14
|
|
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)
|
|
|
|
|
|
|
|
4.15
|
|
Form of 4.65% Note due 2044 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated May 15, 2014)
|
|
|
|
|
|
|
|
4.16
|
|
Form of 2.70% Note due 2020 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated November 20, 2014)
|
|
|
|
|
|
|
|
4.17
|
|
Form of 3.80% Note due 2025 (incorporated herein by reference to Exhibit 4.18 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
|
|
|
|
|
|
|
|
10.01
|
|
Amended and Restated $250,000,000 Accounts Receivable Securitization Agreement dated July 9, 2008 between the Company and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as agent (incorporated herein by reference Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015)
|
|
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.02
|
|
Second Amended and Restated Five-Year Credit Agreement, dated as of October 9, 2014 (amended October 9, 2015), 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 (incorporated herein by reference to Exhibit 10.03 to the Company's Current Report on Form 8-K dated October 9, 2014 and Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015)
|
|
|
|
|
|
|
|
10.03
|
|
Five-Year Senior Term Loan Credit Agreement (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 9, 2014)
|
|
|
|
|
|
|
|
10.04
|
|
Amended and Restated Non-Recourse Accounts Receivable Purchase Agreement(incorporated herein by reference to Exhibit 10.8 to Taminco Corporation Amendment No. 1 to Registration Statement on Form S-1, File No. 333-185244, filed with the SEC January 18, 2013)
|
|
|
|
|
|
|
|
10.05**
|
|
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)
|
|
|
|
|
|
|
|
10.06**
|
|
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)
|
|
|
|
|
|
|
|
10.07**
|
|
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)
|
|
|
|
|
|
|
|
10.08**
|
|
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)
|
|
|
|
|
|
|
|
10.09**
|
|
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)
|
|
|
|
|
|
|
|
10.10**
|
|
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)
|
|
|
|
|
|
|
|
10.11**
|
|
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)
|
|
|
|
|
|
|
|
10.12**
|
|
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)
|
|
|
|
|
|
|
|
10.13**
|
|
Amended and Restated Eastman Executive Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
|
|
|
|
|
|
|
|
10.14**
|
|
Amended and Restated Eastman Directors' Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
|
|
|
|
|
|
|
|
10.15**
|
|
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)
|
|
|
|
|
|
|
|
10.16**
|
|
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)
|
|
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.17**
|
|
Forms of Award Notice for Stock Options Granted to Executive Officers under the 2002 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006)
|
|
|
|
|
|
|
|
10.18**
|
|
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)
|
|
|
|
|
|
|
|
10.19**
|
|
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)
|
|
|
|
|
|
|
|
10.20**
|
|
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)
|
|
|
|
|
|
|
|
10.21**
|
|
Forms of Performance Share Awards to Executive Officers (2014 – 2016 Performance Period) (incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013)
|
|
|
|
|
|
|
|
10.22**
|
|
Forms of Performance Share Awards to Executive Officers (2015 – 2017 Performance Period) (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015)
|
|
|
|
|
|
|
|
10.23**
|
|
Forms of Performance Share Awards to Executive Officers (2016 – 2018 Performance Period)
|
|
158
|
|
|
|
|
|
10.24**
|
|
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)
|
|
|
|
|
|
|
|
10.25**
|
|
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 2015 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 3, 2014)
|
|
|
|
|
|
|
|
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 2016 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 2, 2015)
|
|
|
|
|
|
|
|
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 (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 and Exhibit 10.29 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013)
|
|
|
|
|
|
|
|
10.30**
|
|
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)
|
|
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Sequential Page Number
|
|
Description
|
|
||
10.31**
|
|
Eastman Chemical Company Executive Incentive Pay Clawback Policy (incorporated herein by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K dated February 3, 2015)
|
|
|
|
|
|
|
|
10.32**
|
|
Form of Restricted Stock Unit Award to Curtis E. Espeland on January 1, 2015 (incorporated herein by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
|
|
|
|
|
|
|
|
10.33**
|
|
Form of Restricted Stock Unit Award to David A. Golden and one other Executive Officer on February 18, 2015 (incorporated herein by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
|
|
|
|
|
|
|
|
10.34**
|
|
2015 Director Stock Compensation Subplan of the 2012 Omnibus Stock Compensation Plan and Form of Restricted Stock Award Notice (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015)
|
|
|
|
|
|
|
|
12.01
|
|
Statement re: Computation of Ratios of Earnings (Loss) to Fixed Charges
|
|
185
|
|
|
|
|
|
21.01
|
|
Subsidiaries of the Company
|
|
186
|
|
|
|
|
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm
|
|
191
|
|
|
|
|
|
31.01
|
|
Rule 13a – 14(a) Certification by Mark J. Costa, Chief Executive Officer, for the year ended December 31, 2015
|
|
192
|
|
|
|
|
|
31.02
|
|
Rule 13a – 14(a) Certification by Curtis E. Espeland, Executive Vice President and Chief Financial Officer, for the year ended December 31, 2015
|
|
193
|
|
|
|
|
|
32.01
|
|
Section 1350 Certification by Mark J. Costa, Chief Executive Officer, for the year ended December 31, 2015
|
|
194
|
|
|
|
|
|
32.02
|
|
Section 1350 Certification by Curtis E. Espeland, Executive Vice President and Chief Financial Officer, for the year ended December 31, 2015
|
|
195
|
|
|
|
|
|
99.01
|
|
Product and Raw Material Information
|
|
196
|
|
|
|
|
|
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.
|
Return on Invested Capital Performance
|
||||||
Eastman TSR Relative to Comparison Companies
|
≥7.00 to 8.50
|
8.51 to 10.00
|
10.01 to 11.50
|
11.51 to 13.00
|
13.01 to 14.50
|
>14.50
|
5
th
quintile
|
0.0
|
0.0
|
0.0
|
0.2
|
0.3
|
0.4
|
4
th
quintile
|
0.0
|
0.2
|
0.4
|
0.6
|
0.8
|
0.9
|
3
rd
quintile <50%
|
0.4
|
0.6
|
0.8
|
1.0
|
1.2
|
1.4
|
3
rd
quintile ≥50%
|
0.6
|
0.8
|
1.0
|
1.3
|
1.5
|
1.7
|
2
nd
quintile
|
1.0
|
1.2
|
1.4
|
1.7
|
1.9
|
2.1
|
1
st
quintile
|
1.0
|
1.8
|
2.0
|
2.3
|
2.4
|
2.5
|
•
|
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.
|
China
|
a.
|
If such termination occurs before the mid-point of the Performance Period, you (or your legal representative, as applicable) shall become vested in a number of Performance Shares equal to the Target Award; or
|
b.
|
If such termination occurs on or after the mid-point of the Performance Period, you (or your legal representative, as applicable) shall become vested in a number of Performance Shares equal to the Target Award multiplied by the multiplier as set forth in Exhibit A of this Award Notice corresponding to the Company's achievement of the most recent Performance Conditions available on the date of termination, as determined by the Committee in its sole discretion.
|
Finland
|
France
|
Malaysia
|
You understand that Data will be transferred to the current stock plan service providers or a stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that if you reside outside the United States, you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, the stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting of the Performance Shares may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data, limit the processing of Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consent herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Company will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company may not be able to grant you Performance Shares or other equity awards or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.
|
Anda memahami bahawa Data ini akan dipindahkan kepada pembekal perkhidmatan pelan saham semasa atau pembekal perkhidmatan pelan saham yang mungkin dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Anda memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara anda. Anda memahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh meminta satu senarai yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan anda. Anda memberi kuasa kepada Syarikat, pembekal perkhidmatan pelan saham dan mana-mana penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, bagi tujuan melaksanakan, mentadbir dan menguruskan penyertaan anda di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow atau pihak ketiga dengan siapa Saham diterima semasa peletakhakan Performance Shares mungkin didepositkan. Anda memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan anda dalam Pelan. Anda memahami bahawa sekiranya anda menetap di luar Amerika Syarikat, anda boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data, mengehadkan pemprosesan Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, anda memahami bahawa anda memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya anda tidak bersetuju, atau sekiranya anda kemudian membatalkan persetujuan anda, status pekerjaan atau perkhidmatan dan kerjaya anda dengan Syarikat tidak akan terjejas; satu-satunya akibat buruk sekiranya anda tidak bersetuju atau menarik balik persetujuan andaadalah bahawa Syarikat tidak akan dapat memberikan Perforamance Shares kepada anda atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah-anugerah tersebut. Oleh itu, anda memahami bahawa keengganan atau penarikan balik persetujuan anda boleh menjejaskan keupayaan anda untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai akibat-akibat keengganan anda untuk memberikan keizinan atau penarikan balik keizinan, anda memahami bahawa anda boleh menghubungi wakil sumber manusia tempatan.
|
Mexico
|
Netherlands
|
Singapore
|
South Korea
|
1)
|
COLLECTION AND USE OF YOUR PERSONAL DATA.
|
2)
|
PROVISION OF YOUR PERSONAL DATA TO A THIRD PART AND TRANSFER OF YOUR PERSONAL DATA OVERSEAS.
|
3)
|
PROCESSING OF YOUR UNIQUE IDENTIFYING INFORMATION (RESIDENT REGISTRATION NUMBER).
|
United Kingdom
|
Return on Invested Capital Performance
|
||||||
Eastman TSR Relative to Comparison Companies
|
≥7.00 to 8.50
|
8.51 to 10.00
|
10.01 to 11.50
|
11.51 to 13.00
|
13.01 to 14.50
|
>14.50
|
5
th
quintile
|
0.0
|
0.0
|
0.0
|
0.2
|
0.3
|
0.4
|
4
th
quintile
|
0.0
|
0.2
|
0.4
|
0.6
|
0.8
|
0.9
|
3
rd
quintile <50%
|
0.4
|
0.6
|
0.8
|
1.0
|
1.2
|
1.4
|
3
rd
quintile ≥50%
|
0.6
|
0.8
|
1.0
|
1.3
|
1.5
|
1.7
|
2
nd
quintile
|
1.0
|
1.2
|
1.4
|
1.7
|
1.9
|
2.1
|
1
st
quintile
|
1.0
|
1.8
|
2.0
|
2.3
|
2.4
|
2.5
|
(Dollars in millions)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||
Earnings from continuing operations before income taxes
(1)
|
$
|
1,123
|
|
$
|
984
|
|
$
|
1,672
|
|
$
|
642
|
|
$
|
880
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
|
279
|
|
|
203
|
|
|
186
|
|
|
148
|
|
|
83
|
|
Appropriate portion of rental expense
(2)
|
|
30
|
|
|
27
|
|
|
24
|
|
|
26
|
|
|
17
|
|
Amortization of capitalized interest
|
|
6
|
|
|
6
|
|
|
6
|
|
|
7
|
|
|
7
|
|
Earnings as adjusted
|
$
|
1,438
|
|
$
|
1,220
|
|
$
|
1,888
|
|
$
|
823
|
|
$
|
987
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
$
|
279
|
|
$
|
203
|
|
$
|
186
|
|
$
|
148
|
|
$
|
83
|
|
Appropriate portion of rental expense
(2)
|
|
30
|
|
|
27
|
|
|
24
|
|
|
26
|
|
|
17
|
|
Capitalized interest
|
|
7
|
|
|
7
|
|
|
4
|
|
|
4
|
|
|
9
|
|
Total fixed charges
|
$
|
316
|
|
$
|
237
|
|
$
|
214
|
|
$
|
178
|
|
$
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ratio of earnings to fixed charges
|
|
4.6x
|
|
|
5.1x
|
|
|
8.8x
|
|
|
4.6x
|
|
|
9.1x
|
|
(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.
|
(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
|
2010 Acquisition Corporation
|
Delaware
|
Commonwealth Laminating & Coating (Hong Kong) Limited
|
Hong Kong
|
Commonwealth Laminating & Coating (Shanghai) Co., Ltd.
|
China
|
Commonwealth Laminating & Coating, Inc.
|
Virginia
|
CP Films Vertriebs GmbH
|
Germany
|
CPFilms Inc.
|
Delaware
|
Crown Operations International, LLC
|
Delaware
|
Dynaloy, LLC
|
Delaware
|
Eastman Administración, S.A. de C.V.
|
Mexico
|
Eastman Chemical (China) Co., Ltd.
|
China
|
Eastman Chemical (China) Co., Ltd. - Guangzhou Branch
|
Guangzhou
|
Eastman Chemical (China) Co., Ltd. - JingAn Branch
|
Shanghai
|
Eastman Chemical (Gibraltar) Limited
|
Gibraltar
|
Eastman Chemical (Malaysia) Sdn. Bhd.
|
Malaysia
|
Eastman Chemical (PPU) Pte. Ltd.
|
Singapore
|
Eastman Chemical (Tongxiang) Limited
|
China
|
Eastman Chemical Adhesives (Hong Kong) Limited
|
Hong Kong
|
Eastman Chemical Advanced Materials B.V.
|
Netherlands
|
Eastman Chemical AP Holdings B.V.
|
Netherlands
|
Eastman Chemical Argentina S.R.L.
|
Argentina
|
Eastman Chemical Australia Pty LTD - New Zealand Branch
|
New Zealand
|
Eastman Chemical Australia Pty. Ltd.
|
Australia
|
Eastman Chemical B.V.
|
Netherlands
|
Eastman Chemical B.V. - Czech Republic Representative Office
|
Czech Republic
|
Eastman Chemical B.V. - Denmark Branch
|
Denmark
|
Eastman Chemical B.V. - Filiale Italiana
|
Italy
|
Eastman Chemical B.V. - France Branch
|
France
|
Eastman Chemical B.V. - Hungarian Commercial Representative Office
|
Hungary
|
Eastman Chemical B.V. - Poland Representative Office
|
Poland
|
Eastman Chemical B.V. - South Africa Representative Office
|
South Africa
|
Eastman Chemical B.V. - Taiwan Branch
|
Taiwan
|
Eastman Chemical B.V. - Turkey Representative Office
|
Turkey
|
Eastman Chemical B.V., The Hague, Zug Branch
|
Switzerland
|
Eastman Chemical Canada, Inc.
|
Ontario
|
Eastman Chemical Company
|
Delaware
|
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 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 COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
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 Hong Kong B.V.
|
Netherlands
|
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 Ltd.
|
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 Branch
|
Australia
|
Eastman Chemical Ltd. - Singapore Branch
|
Singapore
|
Eastman Chemical Ltd. - Taiwan Branch
|
Taiwan
|
Eastman Chemical Ltd. - Thailand Representative Office
|
Thailand
|
Eastman Chemical Luxembourg Finance S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 1 LLC
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 1 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings 2 S.a.r.l.
|
Luxembourg
|
Eastman Chemical Luxembourg Holdings LLC
|
Delaware
|
Eastman Chemical Luxembourg Holdings S.a.r.l.
|
Luxembourg
|
Eastman Chemical Malaysia B.V.
|
Netherlands
|
Eastman Chemical Middelburg B.V.
|
Netherlands
|
Eastman Chemical Netherlands Ltd.
|
United Kingdom
|
Eastman Chemical Products - Dubai Regional Liaison Office
|
Dubai
|
Eastman Chemical Products Singapore Pte. Ltd.
|
Singapore
|
Eastman Chemical Regional UK
|
England
|
Eastman Chemical Resins, Inc.
|
Delaware
|
Eastman Chemical S.C.S.
|
Luxembourg
|
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
|
England
|
Eastman Chemical, Asia Pacific Pte Ltd-Indonesia Rep Office
|
Indonesia
|
Eastman Chemical, Asia Pacific Pte. Ltd.
|
Singapore
|
Eastman Chemical, Europe, Middle East and Africa LLC
|
Delaware
|
Eastman Cogen Management L.L.C.
|
Texas
|
Eastman Cogeneration L.P.
|
Texas
|
Eastman Company UK Limited
|
England
|
Eastman Espana, S.L.
|
Spain
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
Eastman Fibers Korea Limited (80%)
|
Korea
|
Eastman Fibers Singapore Pte. Ltd.
|
Singapore
|
Eastman Global Holdings, Inc.
|
Delaware
|
Eastman International Holdings, Inc.
|
Delaware
|
Eastman International Holdings, Inc., Taiwan Branch
|
Taiwan
|
Eastman International Management Company
|
Tennessee
|
Eastman Kimya Sanayi ve Ticaret Limited Sirketi
|
Turkey
|
Eastman Mazzucchelli Hong Kong Limited
|
Hong Kong
|
Eastman Mazzucchelli Plastics (Shenzhen) Company Limited
|
China
|
Eastman Servicios Corporativos, S.A. de C.V.
|
Mexico
|
Eastman Shuangwei Fibers Company Limited (45%)
|
China
|
Eastman Spain L.L.C.
|
Delaware
|
Eastman Specialties Corporation
|
Delaware
|
Eastman Specialties Holdings Corporation
|
Delaware
|
Eastman Specialties OU
|
Estonia
|
Eastman Specialties S.a.r.l.
|
Luxembourg
|
Eastman Specialties Wuhan Youji Chemical Company Ltd (51%)
|
China
|
Ecuataminco S.A.
|
Ecuador
|
Flexsys America Co.
|
Delaware
|
Flexsys America L.P.
|
Delaware
|
Flexsys Asia Pacific Sdn. Bhd.
|
Malaysia
|
Flexsys Chemicals (M) Sdn Bhd
|
Malaysia
|
Flexsys Holding B.V.
|
Netherlands
|
Flexsys K.K.
|
Japan
|
Flexsys Rubber Chemicals Ltd.
|
United Kingdom
|
Flexsys Verkauf GmbH
|
Germany
|
Flexsys Verkauf GmbH - France Branch
|
France
|
Flexsys Verwaltungs- und Beteiligungsgesellschaft mbH
|
Germany
|
HDK Industries, Inc.
|
Tennessee
|
Holston Defense Corporation
|
Virginia
|
Huper Optik (GP), L.L.C.
|
Texas
|
Huper Optik International Pte. Ltd.
|
Singapore
|
Huper Optik U.S.A., L.P.
|
Texas
|
Industriepark Nienburg GmbH
|
Germany
|
Jaeger Chimie France S.a.r.l.
|
France
|
Kingsport Hotel, L.L.C.
|
Tennessee
|
Knowlton Technologies, LLC
|
Delaware
|
Monchem International LLC
|
Delaware
|
Mustang Pipeline Company
|
Texas
|
Nanjing Yangzi Eastman Chemical Ltd (50%)
|
China
|
Novomatrix International Trading (Shanghai) Co. Ltd.
|
Shanghai
|
Novomatrix International Trading (Shanghai) Co., Ltd. No. 1 Branch
|
China
|
Novomatrix, Inc.
|
Delaware
|
Primester (50%)
|
Monroe County, NY
|
Qilu Eastman Specialty Chemicals, Ltd. (51%)
|
China
|
S E Investment LLC
|
Delaware
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
Scandiflex do Brasil Ltda.
|
Brazil
|
Solchem Netherlands C.V.
|
Netherlands
|
Solutia (Thailand) Ltd.
|
Thailand
|
Solutia Argentina S.R.L.
|
Argentina
|
Solutia Brasil Ltda.
|
Brazil
|
Solutia Canada Inc.
|
Canada
|
Solutia Chemicals France S.a.r.l.
|
France
|
Solutia Chemicals Iberica, S.L.
|
Spain
|
Solutia Chemicals India Private Limited
|
India
|
Solutia Deutschland GmbH
|
Germany
|
Solutia Europe BVBA - Portugal Representative Office
|
Portugal
|
Solutia Europe BVBA - Russia Representative Office
|
Russia
|
Solutia Europe SPRL/BVBA
|
Belgium
|
Solutia Greater China, LLC
|
Delaware
|
Solutia Hong Kong Limited
|
Hong Kong
|
Solutia Inc.
|
Delaware
|
Solutia International Trading (Shanghai) Co., Ltd.
|
Shanghai, China
|
Solutia International Trading (Shanghai) Co., Ltd. No. 1 Branch
|
China
|
Solutia Italia S.r.l.
|
Italy
|
Solutia Japan Limited
|
Japan
|
Solutia Performance Products (Suzhou) Co., Ltd.
|
China
|
Solutia Performance Products Solutions Ltd.
|
Mauritius
|
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 Insulating Glass, LLC
|
Delaware
|
Southwall Technologies Inc.
|
Delaware
|
St. Gabriel CC Company, LLC
|
Delaware
|
SunTek Australia Pty. Ltd.
|
Australia
|
SunTek Europe GmbH
|
Germany
|
SunTek Films Canada, Inc.
|
Canada
|
Suntek Holding Company
|
Delaware
|
SunTek UK Limited
|
United Kingdom
|
Tam Limitada (Costa Rica)
|
Costa Rica
|
Taminco Argentina SA
|
Argentina
|
Taminco BVBA
|
Belgium
|
Taminco BVBA - Australia Branch Office
|
Australia
|
Taminco BVBA - France Rep Office
|
France
|
Taminco BVBA - Hungarian Commercial Representative Office
|
Hungary
|
Taminco BVBA - India Rep Office
|
India
|
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCOROPRATION OR
ORGANIZATION
|
Taminco BVBA - Japan
|
Japan
|
Taminco BVBA - Malaysia Branch
|
Malaysia
|
Taminco BVBA - Oficina de Representacion en Espana
|
Spain
|
Taminco BVBA - Shanghai, China Rep office
|
Shanghai
|
Taminco BVBA - Singapore Representative Office
|
Singapore
|
Taminco BVBA - The Philippines
|
Philippines
|
Taminco Chile S.p.A
|
Chile
|
Taminco Choline Chloride (Shanghai) Co., Ltd.
|
Shanghai, China
|
Taminco Corporation
|
Delaware
|
Taminco de Guatemala, S.A.
|
Guatemala
|
Taminco de Honduras, S.A. de C.V.
|
Honduras
|
Taminco do Brasil Comercio e Industria de Aminas Ltda.
|
Brazil
|
Taminco do Brasil Produtos Quimicos Ltda.
|
Brazil
|
Taminco Finland Oy
|
Finland
|
Taminco Germany GmbH
|
Germany
|
Taminco Global Chemical LLC
|
Delaware
|
Taminco Group BVBA
|
Belgium
|
Taminco Group Holdings S.a.r.l.
|
Luxembourg
|
Taminco Holding Finland Oy
|
Finland
|
Taminco Holding Netherlands B.V.
|
Netherlands
|
Taminco Intermediate LLC
|
Delaware
|
Taminco Italia S.r.l.
|
Italy
|
Taminco Mexico S. de R.L. de C.V.
|
Mexico
|
Taminco UK Limited
|
United Kingdom
|
Taminco Uruguay S.A.
|
Uruguay
|
Taminco US LLC
|
Delaware
|
Te An Ling Tian (Nanjing) Fine Chemical Co., Ltd.
|
China
|
TX Energy, LLC
|
Delaware
|
V-Kool International Pte. Ltd.
|
Singapore
|
Yixing Taminco Feed Additives Co., Ltd.
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China
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1.
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I have reviewed this annual report on Form 10-K of Eastman Chemical Company;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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I have reviewed this annual report on Form 10-K of Eastman Chemical Company;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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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.
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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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.
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