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(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, 2017
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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
|
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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1.50% Notes Due 2023
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New York Stock Exchange
|
1.875% Notes Due 2026
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|
New York Stock Exchange
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|
Yes
|
No
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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[X]
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Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
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[X]
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Yes
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No
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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[X]
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Yes
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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[X]
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Yes
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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[X]
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|
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [X] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [ ]
(Do not check if a smaller reporting company) Emerging growth company [ ]
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ [ ]
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Yes
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No
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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[X]
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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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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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Page
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Chemical Intermediates Segment
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CORPORATE OVERVIEW
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•
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AFP segment:
|
•
|
Growth and innovation of Crystex
®
insoluble sulfur rubber additives through completion of an expansion of the manufacturing facility in Kuantan, Malaysia in 2017 that management expects will produce material qualified for commercial sales in 2018. This expansion is 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 facilitating the introduction of new products for the tire markets.
|
•
|
Growth and innovation of Tetrashield
®
performance polyester resins based on proprietary monomer technology. These polyester resins provide a combination of improved performance and sustainability, particularly for the automotive coatings, industrial, and food packaging markets.
|
•
|
Growth and innovation of Impera
®
high performance resins for tires. When used as additives in tire compound formulations, Impera
®
resins enable tire manufacturers to improve the safety and handling of tires, balance tire performance and fuel economy needs, and achieve superior levels of tack for tire construction.
|
•
|
Growth and innovation of Aerafin
®
polymer, developed from proprietary olefin technology. These olefin polymers enable improved processing time and other benefits including low odor, improved adhesion, exceptional peel performance, and thermal stability for adhesive applications within the hygiene market.
|
•
|
Growth in animal nutrition and solar specialty fluids through enhanced commercial execution.
|
•
|
AM segment:
|
•
|
Continued success of Tritan
®
copolyester in the durable goods and health and wellness markets, supported by construction of an additional 60,000 metric ton expansion of Tritan
®
copolyester capacity at the Kingsport, Tennessee manufacturing facility expected to be complete in early 2018 and fully operational in first half 2018.
|
•
|
Growth and innovation of Saflex
®
and head up displays ("HUD") acoustic interlayers used in the transportation and building and construction markets, supported by construction of a manufacturing facility for polyvinyl butyral ("PVB") resin at the Kuantan, Malaysia site which became fully operational in first quarter 2018.
|
•
|
Growth and innovation of Treva
™
, a cellulose-based engineering bioplastic that offers high performance, sustainability, and design flexibility in applications that require complex and intricate designs and high safety requirements such as eyeglass frames, wearable electronics, and lenses.
|
•
|
Growth in performance films in North America and China through strengthened sales channel, marketing, and commercial execution strategies and capabilities.
|
•
|
Fibers segment:
|
•
|
Leveraging the innovation-driven growth model to focus on growth and innovation in the textiles market through new product offerings including:
|
▪
|
Naia
®
, a yarn for the apparel market developed from Eastman's proprietary cellulose ester technology.
|
▪
|
Avra
™
, a family of fibers for the performance apparel market developed from a combination of Eastman proprietary spinning technology and polymer chemistry enabling unique fiber capabilities of size, shape, comfort, and performance.
|
▪
|
Vestera
™
, a new wood pulp-based alternative for the nonwoven industry used in personal hygiene applications.
|
•
|
Health and wellness: Tritan
®
copolyester, Tetrashield
®
performance polyester resins, and Vestera
™
cellulosic fiber.
|
•
|
Natural resource efficiency: Saflex
®
Q series advanced acoustic interlayers, Impera
®
high performance resins for tires, and Treva
™
proprietary engineering bioplastic.
|
•
|
Emerging middle class: Saflex
®
and HUD acoustic interlayers, Regalite
®
hydrocarbon resins, Naia
®
cellulosic yarn, and Avra
™
performance fibers.
|
•
|
Feeding a growing population: Eastman organic acids, Enhanz
™
feed additive, and Banguard
™
crop protection.
|
BUSINESS SEGMENTS
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use Applications
|
Coatings and Inks Additives
|
||||
Polymers
cellulosics
Tetrashield
®
polyesters
polyolefins
Additives and Solvents
Texanol
®
Optifilm
®
ketones
esters
glycol ethers
oxo alcohols
|
specialty coalescents, specialty solvents, and commodity solvents
paint additives and specialty polymers
|
BASF SE
DowDuPont Inc.
Oxea
Celanese Corporation
Alternative Technologies
|
wood pulp
propane
propylene
|
building and construction (architectural coatings)
transportation (OEM) and refinish coatings
durable goods (wood, industrial coatings and applications)
consumables (graphic arts, inks, and packaging)
|
Adhesives Resins
|
||||
Piccotac
®
Regalite
®
Eastotac
®
Eastoflex
®
Aerafin
®
|
hydrocarbon resins
and rosin resins
mainly for
hot-melt and
pressure sensitive
adhesives
|
Exxon Mobil Corporation
Kolon Industries, Inc.
Evonik Industries
|
C9 resin oil
piperylene
gum rosin
propylene
|
consumables (resins used in hygiene and packaging adhesives)
building and construction (resins for construction adhesives and interior flooring)
|
Tire Additives
|
||||
Crystex
®
|
insoluble sulfur
rubber additive
|
Oriental Carbon & Chemicals Limited
Shikoku Chemicals Corporation
|
sulfur
naphthenic process oil
|
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)
|
Impera
®
|
performance resins
|
Cray Valley Hydrocarbon Specialty Chemicals
Exxon Mobil Corporation
Kolon Industries
Incorporated
|
alpha methylstyrene
piperylene
styrene
|
transportation (tire manufacturing)
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use Applications
|
Care Chemicals
|
||||
Alkylamine derivatives
|
amine derivative-based building blocks for production of flocculants
intermediates for surfactants
|
BASF SE
DowDuPont Inc.
Huntsman Corporation
|
alkylamines
ammonia
alcohols
ethylene oxide
|
water treatment
personal and home care
|
Specialty Fluids
|
||||
Therminol
®
Turbo Oils
Skydrol
®
SkyKleen
®
|
heat transfer and
aviation fluids
|
DowDuPont Inc.
Exxon Mobil
Corporation
|
benzene
phosphorous
neo-polyol esters
|
industrial chemicals and processing (heat transfer fluids for chemical processes)
renewable energy
commercial aviation
|
Animal Nutrition
|
||||
Formic acid solutions
Enhanz
™
|
formic acid-based solutions
|
BASF SE
Perstorp
Luxi Chemical Group
Feicheng Acid
Chemicals
|
sulfuric acid
formic acid
|
animal nutrition
|
Crop Protection
|
||||
Alkylamine
derivatives
Banguard
™
|
metam-based soil fumigants
thiram and ziram-based fungicides
plant growth regulator
|
DowDuPont Inc.
Argo-Kanesho Co., Ltd.
Bayer
BASF SE
|
alkylamines
CS2
caustic soda
|
agriculture
crop protection
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Coatings and Inks Additives
|
23%
|
24%
|
24%
|
Adhesives Resins
|
18%
|
21%
|
21%
|
Tire Additives
|
17%
|
17%
|
17%
|
Care Chemicals
|
17%
|
15%
|
15%
|
Specialty Fluids
|
13%
|
11%
|
11%
|
Animal Nutrition and Crop Protection
|
12%
|
12%
|
12%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Sales by Customer Location
|
2017
|
2016
|
2015
|
United States and Canada
|
35%
|
37%
|
38%
|
Asia Pacific
|
23%
|
21%
|
21%
|
Europe, Middle East, and Africa
|
36%
|
35%
|
35%
|
Latin America
|
6%
|
7%
|
6%
|
Total
|
100%
|
100%
|
100%
|
•
|
advanced growth and innovation of Crystex
®
insoluble sulfur rubber additives through completion of an expansion of the manufacturing facility in Kuantan, Malaysia that management expects will produce material qualified for commercial sales in 2018. This expansion is 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 facilitating the introduction of new products into the tire markets;
|
•
|
advanced growth and innovation of Tetrashield
®
performance polyester resins based on proprietary monomer technology. These polyester resins provide a combination of improved performance and sustainability, particularly for the automotive coatings, industrial, and food packaging markets;
|
•
|
advanced growth and innovation of Impera
®
high performance resins for tires. When used as additives in tire compound formulations, Impera
®
resins enable tire manufacturers to improve the safety and handling of tires, balance tire performance and fuel economy needs, and achieve superior levels of tack for tire construction;
|
•
|
advanced growth and innovation of Aerafin
®
polymer, developed from proprietary olefin technology. These olefin polymers enable improved processing time and other benefits including low odor, improved adhesion, exceptional peel performance, and thermal stability for adhesive applications within the hygiene market; and
|
•
|
accelerated growth in animal nutrition and solar specialty fluids through enhanced commercial execution.
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use Applications
|
|
|
|
|
|
Specialty Plastics
|
||||
Tritan
®
copolyester
Eastar
®
copolyesters
Spectar
®
copolyester
Embrace
®
copolyester
Visualize
®
Eastman Aspira
™
family of resins
Flexvue
®
Treva
™
|
copolyesters
cellulose esters
|
Covestro
Trinseo
Evonik Industries AG
Saudi Basic Industries Corporation
Mitsubishi Chemical Corporation
S.K. Chemical Industries
Sichuan Push Acetati Company Limited
Daicel Chemical Industries Ltd
SABIC
|
paraxylene
ethylene glycol
cellulose
purified terephthalic acid
|
consumables (consumer packaging,
cosmetics packaging, in-store
fixtures and displays)
durable goods (consumer housewares
and appliances)
health and wellness (medical)
electronics (displays)
|
Advanced Interlayers
|
||||
Saflex
®
Saflex
®
Q Series
|
PVB sheet
specialty PVB
intermediates
|
Sekisui Chemical Co.,
Ltd.
Kuraray Co., Ltd
Kingboard (Fo Gang)
Specialty Resins
Limited,
Chang Chun
Petrochemical Co.,
Ltd
|
polyvinyl alcohol
vinyl acetate monomer
butyraldehyde
2-ethyl hexanol
ethanol
triethylene gylcol
|
transportation (automotive safety glass,
automotive acoustic glass, and
HUD)
building and construction (PVB for
architectural interlayers)
|
Performance Films
|
||||
LLumar
®
SunTek
®
V-KOOL
®
Gila
®
|
window film and protective film
products for
aftermarket
applied films
|
3M Company
Saint-Gobain S.A.
Beijing Kangde Xin
Composite Material
Company, LLC
"KDX"
|
polyethylene terephthalate film
|
transportation (automotive after-
market window film and paint
protection film)
building and construction (residential
and commercial window films)
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Specialty Plastics
|
51%
|
50%
|
51%
|
Advanced Interlayers
|
33%
|
34%
|
33%
|
Performance Films
|
16%
|
16%
|
16%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Sales by Customer Location
|
2017
|
2016
|
2015
|
United States and Canada
|
36%
|
37%
|
38%
|
Asia Pacific
|
33%
|
32%
|
31%
|
Europe, Middle East, and Africa
|
26%
|
26%
|
26%
|
Latin America
|
5%
|
5%
|
5%
|
Total
|
100%
|
100%
|
100%
|
•
|
advanced the continued success of Tritan
®
copolyester in the durable goods and health and wellness markets, supported by construction of an additional 60,000 metric ton expansion of Tritan
®
copolyester capacity at the Kingsport, Tennessee manufacturing facility expected to be complete in early 2018 and fully operational in first half 2018;
|
•
|
advanced growth and innovation of Saflex
®
and HUD acoustic interlayers used in the transportation and building and construction markets, supported by construction of a manufacturing facility for PVB resin at the Kuantan, Malaysia site which became fully operational in first quarter 2018;
|
•
|
advanced growth and innovation of Treva
™
, a cellulose-based engineering bioplastic that offers high performance, sustainability, and design flexibility in applications that require complex and intricate designs and high safety requirements such as eyeglass frames, wearable electronics, and lenses; and
|
•
|
strengthened growth in performance films in North America and China through improved sales channel, marketing, and commercial execution strategies and capabilities.
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use Applications
|
|
|
|
|
|
Intermediates
|
||||
Oxo alcohols
and derivatives
Acetic acid and
derivatives
Acetic anhydride
Ethylene
Glycol ethers
Esters
|
Olefin derivatives, acetyl derivatives, ethylene, commodity solvents
|
Lyondell Bassell,
BASF SE
DowDuPont Inc.
Oxea
BP plc
Celanese Corporation
Lonza
Flint Hills Resources
|
propane
ethane
propylene
coal
natural gas
paraxylene
metaxylene
|
industrial chemicals and processing
building and construction (paint and coating applications, construction chemicals, building materials)
pharmaceuticals and agriculture
health and wellness
packaging
|
Plasticizers
|
||||
Eastman 168
®
DOP
Benzoflex
®
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)
|
Functional Amines
|
||||
Alkylamines
|
methylamines
and salts
higher amines
and solvents
|
BASF SE
Chemours
U.S. Amines
Oxea
|
methanol
ammonia
acetone
ethanol
butanol
|
agrochemicals
energy
consumables
water treatment
animal nutrition
industrial intermediates
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Intermediates
|
64%
|
65%
|
65%
|
Plasticizers
|
19%
|
20%
|
20%
|
Functional Amines
|
17%
|
15%
|
15%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Sales by Customer Location
|
2017
|
2016
|
2015
|
United States and Canada
|
68%
|
69%
|
69%
|
Asia Pacific
|
14%
|
12%
|
12%
|
Europe, Middle East, and Africa
|
12%
|
13%
|
13%
|
Latin America
|
6%
|
6%
|
6%
|
Total
|
100%
|
100%
|
100%
|
Product
|
Description
|
Principal
Competitors
|
Key Raw
Materials
|
End-Use Applications
|
|
|
|
|
|
Acetate Tow
|
||||
Estron
®
|
cellulose acetate tow
|
Celanese Corporation
Rhodia Acetow
Daicel Corporation
Mitsubishi Rayon Co. Ltd.
|
wood pulp
methanol
high sulfur coal
|
filtration media (primarily cigarette filters)
|
Acetyl Chemical Products
|
||||
Estrobond
®
|
triacetin
cellulose acetate flake
acetic acid
acetic anhydride
|
Jiangsu Ruijia Chemistry Co., Ltd.
Polynt SPA
Daicel Corporation
Celanese Corporation
Rhodia Acetow
|
wood pulp
methanol
high sulfur coal
|
filtration media (primarily cigarette filters)
|
Acetate Yarn
|
||||
Estron
®
Chromspun
®
Naia
®
Avra
™
Vestera
™
|
natural (undyed) acetate yarn
solution dyed acetate yarn
natural (undyed) polyester yarn
|
UAB Dirbtinis Pluostas
Industrias del Acetato de Celulosa S.A.
Mitsubishi Rayon Co. Ltd.
Invista
Nan Ya Plastics Corporation
|
wood pulp
methanol
high sulfur coal
polyethylene
terephthalate
|
consumables (apparel, home furnishings, and industrial fabrics)
health and wellness (medical tape)
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Acetate Tow
|
77%
|
80%
|
78%
|
Acetyl Chemical Products
|
15%
|
13%
|
14%
|
Acetate Yarn
|
8%
|
7%
|
8%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Sales by Customer Location
|
2017
|
2016
|
2015
|
United States and Canada
|
22%
|
21%
|
21%
|
Asia Pacific
|
37%
|
44%
|
49%
|
Europe, Middle East, and Africa
|
37%
|
29%
|
26%
|
Latin America
|
4%
|
6%
|
4%
|
Total
|
100%
|
100%
|
100%
|
EASTMAN CHEMICAL COMPANY GENERAL INFORMATION
|
•
|
In the cellulose and acetyl stream, the Company begins with coal which is gasified with 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. The Company's ability to use coal is a long-term raw material cost advantage. Cellulose derivative manufacturing at the Company begins with natural polymers, sourced from managed forests, which, when combined with acetyl and olefin chemicals, provide differentiated product lines. Cellulose and acetyl stream products include, but are not limited to, cellulose fibers, plastics, and esters. The major end markets for products from the cellulose and acetyl stream include coatings, displays, thermoplastics, and filtration media.
|
•
|
In the olefins stream, the Company begins primarily with propane and ethane, which are "cracked" (the process whereby hydrocarbon molecules are broken down and rearranged) into the "olefin" chemicals ethylene and propylene in three cracking units at its facility in Longview, Texas. The Company purchases additional propylene for use at its Longview facility and other facilities outside the United States. Propylene derivative products are used in a variety of items such as paints and coatings, automotive safety glass, and non-phthalate plasticizers. Ethylene derivative products are converted for end uses in the food industry, health and beauty products, detergents, and automotive products. 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 more commodity-based producers due to its diverse derivatives products and focus on more specialty 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, and 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 alkylamines stream, the Company begins with ammonia and alcohols to produce methylamines and higher alkylamines, which can then be further reacted with other chemicals to produce alkylamine derivatives. The Company's alkylamines 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, 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 alcohols (ethyl, n butyl, n propyl, isopropyl and cyclohexyl amines). 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
|
Advanced Materials
|
Chemical Intermediates
|
Fibers
|
|
|
|
|
|
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)
|
|
x
|
|
|
Franklin, Virginia
(1)
|
x
|
|
|
|
Jefferson, Pennsylvania
|
x
|
|
|
|
Kingsport, Tennessee
|
x
|
x
|
x
|
x
|
Lemoyne, Alabama
(1)
|
x
|
|
|
|
Linden, New Jersey
|
x
|
|
|
|
Longview, Texas
|
x
|
x
|
x
|
|
Martinsville, Virginia
(3)
|
|
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
|
|
Trenton, Michigan
|
|
x
|
|
|
Watertown, New York
(4)
|
|
|
|
|
Europe
|
|
|
|
|
Antwerp, Belgium
(1)
|
x
|
x
|
|
|
Ghent, Belgium
(3)
|
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 that operates its manufacturing facilities at the site.
|
(2)
|
Eastman leases from a third party and operates the site.
|
(3)
|
Eastman has more than one manufacturing site at this location.
|
(4)
|
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 included in "Other".
|
|
Segment using manufacturing location
|
|||
Location
|
Additives & Functional Products
|
Advanced Materials
|
Chemical Intermediates
|
Fibers
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
Nanjing, China
|
x
|
|
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
(6)
|
|
|
|
x
|
Kuantan, Malaysia
(1)
|
x
|
x
|
|
|
Jurong Island, Singapore
(1)
|
x
|
|
x
|
|
Latin America
|
|
|
|
|
Itupeva, Brazil
(7)
|
x
|
|
|
|
Mauá, Brazil
|
|
|
x
|
|
Santo Toribio, Mexico
|
|
x
|
|
|
Uruapan, Mexico
|
x
|
|
|
|
(1)
|
Eastman leases from a third party and operates the site.
|
(2)
|
Eastman has more than one manufacturing site at this location.
|
(3)
|
Eastman holds a 60 percent share of Solutia Therminol Co., Ltd., Suzhou in the AFP segment.
|
(4)
|
Eastman holds a 51 percent share of Eastman Specialties Wuhan Youji Chemical Co., Ltd.
|
(5)
|
Eastman holds a 51 percent share of Qilu Eastman Specialty Chemical Ltd.
|
(6)
|
Eastman holds an 80 percent share of Eastman Fibers Korea Limited.
|
(7)
|
Eastman is a guest under an operating agreement with a third party that operates its manufacturing facilities at the site.
|
|
Segment using manufacturing location
|
|||
Location
|
Additives & Functional Products
|
Advanced Materials
|
Chemical Intermediates
|
Fibers
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
Hefei, China
|
|
|
|
x
|
Nanjing, China
|
x
|
|
|
|
Shenzhen, China
|
|
x
|
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
High
|
|
Low
|
|
Cash Dividends Declared
|
||||||
2017
|
First Quarter
|
$
|
82.10
|
|
|
$
|
74.78
|
|
|
$
|
0.51
|
|
|
Second Quarter
|
86.28
|
|
|
76.11
|
|
|
0.51
|
|
|||
|
Third Quarter
|
90.97
|
|
|
81.91
|
|
|
0.51
|
|
|||
|
Fourth Quarter
|
94.96
|
|
|
86.58
|
|
|
0.56
|
|
|||
2016
|
First Quarter
|
$
|
74.98
|
|
|
$
|
56.03
|
|
|
$
|
0.46
|
|
|
Second Quarter
|
78.79
|
|
|
65.19
|
|
|
0.46
|
|
|||
|
Third Quarter
|
72.50
|
|
|
63.10
|
|
|
0.46
|
|
|||
|
Fourth Quarter
|
77.98
|
|
|
62.70
|
|
|
0.51
|
|
Period
|
Total Number
of Shares
Purchased
|
Average Price Paid Per Share
(1)
|
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, 2017
|
280,114
|
|
$
|
89.25
|
|
280,114
|
|
$
|
202
|
|
November 1 - 30, 2017
|
—
|
|
$
|
—
|
|
—
|
|
$
|
202
|
|
December 1 - 31, 2017
|
543,740
|
|
$
|
91.96
|
|
543,740
|
|
$
|
152
|
|
Total
|
823,854
|
|
$
|
91.04
|
|
823,854
|
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Statements of Earnings Data
|
Year Ended December 31,
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Sales
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
|
$
|
9,527
|
|
|
$
|
9,350
|
|
Operating earnings
|
1,532
|
|
|
1,383
|
|
|
1,384
|
|
|
1,162
|
|
|
1,862
|
|
|||||
Earnings from continuing operations
|
1,388
|
|
|
859
|
|
|
854
|
|
|
755
|
|
|
1,172
|
|
|||||
Earnings from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Net earnings
|
1,388
|
|
|
859
|
|
|
854
|
|
|
757
|
|
|
1,172
|
|
|||||
Less: Net earnings attributable to noncontrolling interest
|
4
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|
7
|
|
|||||
Net earnings attributable to Eastman
|
$
|
1,384
|
|
|
$
|
854
|
|
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
Amounts attributable to Eastman:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations, net of tax
|
$
|
1,384
|
|
|
$
|
854
|
|
|
$
|
848
|
|
|
$
|
749
|
|
|
$
|
1,165
|
|
Earnings from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Net earnings attributable to Eastman
|
$
|
1,384
|
|
|
$
|
854
|
|
|
$
|
848
|
|
|
$
|
751
|
|
|
$
|
1,165
|
|
Basic earnings per share attributable to Eastman:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
9.56
|
|
|
$
|
5.80
|
|
|
$
|
5.71
|
|
|
$
|
5.01
|
|
|
$
|
7.57
|
|
Earnings from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|||||
Net earnings
|
$
|
9.56
|
|
|
$
|
5.80
|
|
|
$
|
5.71
|
|
|
$
|
5.03
|
|
|
$
|
7.57
|
|
Diluted earnings per share attributable to Eastman:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
$
|
9.47
|
|
|
$
|
5.75
|
|
|
$
|
5.66
|
|
|
$
|
4.95
|
|
|
$
|
7.44
|
|
Earnings from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|||||
Net earnings
|
$
|
9.47
|
|
|
$
|
5.75
|
|
|
$
|
5.66
|
|
|
$
|
4.97
|
|
|
$
|
7.44
|
|
Statements of Financial Position Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current assets
|
$
|
3,143
|
|
|
$
|
2,866
|
|
|
$
|
2,878
|
|
|
$
|
3,173
|
|
|
$
|
2,840
|
|
Net properties
|
5,607
|
|
|
5,276
|
|
|
5,130
|
|
|
5,087
|
|
|
4,290
|
|
|||||
Goodwill
|
4,527
|
|
|
4,461
|
|
|
4,518
|
|
|
4,486
|
|
|
2,637
|
|
|||||
Intangible assets, net of accumulated amortization
|
2,373
|
|
|
2,479
|
|
|
2,650
|
|
|
2,905
|
|
|
1,781
|
|
|||||
Total assets
|
15,999
|
|
|
15,457
|
|
|
15,580
|
|
|
16,072
|
|
|
11,845
|
|
|||||
Current liabilities
|
1,982
|
|
|
1,795
|
|
|
2,056
|
|
|
2,022
|
|
|
1,470
|
|
|||||
Long-term borrowings
|
6,147
|
|
|
6,311
|
|
|
6,577
|
|
|
7,248
|
|
|
4,254
|
|
|||||
Total liabilities
|
10,519
|
|
|
10,849
|
|
|
11,559
|
|
|
12,482
|
|
|
7,970
|
|
|||||
Total Eastman stockholders' equity
|
5,403
|
|
|
4,532
|
|
|
3,941
|
|
|
3,510
|
|
|
3,796
|
|
|||||
Dividends declared per share
|
2.09
|
|
|
1.89
|
|
|
1.66
|
|
|
1.45
|
|
|
1.25
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
Assumption
|
Impact on
2018 Pre-tax
Benefits Expense
(Excludes mark-to-market impact)
for Pension Plans
|
Impact on December 31, 2017 Projected Benefit Obligation for Pension Plans
|
Impact on 2018 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Other Postretirement Benefit Plans
|
Impact on December 31, 2017 Benefit Obligation for Other Postretirement Benefit Plans
|
|
U.S.
|
Non-U.S.
|
||||
25 basis point
decrease in discount
rate
|
-$3 Million
|
+$57 Million
|
+$43 Million
|
-$1 Million
|
+$18 Million
|
25 basis point
increase in discount
rate
|
+$3 Million
|
-$55 Million
|
-$39 Million
|
+$1 Million
|
-$17 Million
|
25 basis point
decrease in expected return on plan assets
|
+$7 Million
|
No Impact
|
No Impact
|
<+$0.5 Million
|
No Impact
|
25 basis point
increase in expected
return on plan assets
|
-$7 Million
|
No Impact
|
No Impact
|
<-$0.5 Million
|
No Impact
|
•
|
Non-core transactions, costs, and losses or gains relate to, among other things, cost reductions, growth and profitability improvement initiatives, and other events outside of core business operations, and have included asset impairments and restructuring charges and gains, costs of and related to acquisitions, gains and losses from and costs related to dispositions of businesses, financing transaction costs, and MTM losses or gains for pension and other postretirement benefit plans.
|
•
|
In 2017, two events resulted in unusual net costs and gains - net costs resulting from the fourth quarter coal gasification incident described below and a net income tax benefit resulting primarily from fourth quarter tax law changes and a tax loss from outside-U.S. entity reorganizations as part of the formation of an international treasury services center. Management considers the coal gasification incident unusual because of the Company's operational and safety history and the magnitude of the unplanned disruption, and considers the one-time net tax benefit unusual because of the infrequent nature of such changes in tax law and the significant one-time impact on fourth quarter and full year earnings.
|
•
|
MTM pension and other postretirement benefit plans gains and losses resulting from the changes in discount rates and other actuarial assumptions and the difference between actual and expected returns on plan assets during the period;
|
•
|
Asset impairments and restructuring charges, net, of which asset impairments are non-cash transactions impacting profitability;
|
•
|
Acquisition integration and transaction costs;
|
•
|
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 acquisition accounting, these inventories were marked to fair value);
|
•
|
Early debt extinguishment and other related costs resulting from repayment of borrowings;
|
•
|
Cost of disposition of claims against operations that were discontinued by Solutia, Inc. prior to the Company's acquisition of Solutia in 2012;
|
•
|
Gain from sale of the formulated electronics cleaning solutions business, which was part of the Additives & Functional Products segment;
|
•
|
Gain from sale of the Company's 50 percent interest in the Primester cellulose acetate flake joint venture; and
|
•
|
Tax benefit associated with a previously impaired site.
|
•
|
Net costs of the disruption, repairs, and reconstruction of the Kingsport site's coal gasification operations area resulting from the previously reported October 4, 2017 explosion ("the coal gasification incident"); and
|
•
|
Estimated net income tax benefit resulting from tax law changes (primarily the Tax Reform Act) and a tax loss from outside-U.S. entity reorganizations as part of the formation of an international treasury services center.
|
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Non-core items impacting operating earnings:
|
|
|
|
|
|
||||||
Mark-to-market pension and other postretirement benefits (gain) loss, net
|
$
|
(21
|
)
|
|
$
|
97
|
|
|
$
|
115
|
|
Asset impairments and restructuring charges, net
|
8
|
|
|
45
|
|
|
183
|
|
|||
Acquisition integration and transaction costs
|
—
|
|
|
9
|
|
|
28
|
|
|||
Additional costs of acquired inventories
|
—
|
|
|
—
|
|
|
7
|
|
|||
Unusual item impacting operating earnings:
|
|
|
|
|
|
||||||
Net costs resulting from coal gasification incident
|
112
|
|
|
—
|
|
|
—
|
|
|||
Total non-core and unusual items impacting operating earnings
|
99
|
|
|
151
|
|
|
333
|
|
|||
Non-core items impacting earnings before income taxes:
|
|
|
|
|
|
||||||
Early debt extinguishment and other related costs
|
—
|
|
|
85
|
|
|
—
|
|
|||
Cost of disposition of claims against discontinued Solutia operations
|
9
|
|
|
5
|
|
|
—
|
|
|||
Gains from sale of businesses
|
(3
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Total non-core items impacting earnings before income taxes
|
6
|
|
|
73
|
|
|
—
|
|
|||
Less: Items impacting (benefit from) provision for income taxes:
|
|
|
|
|
|
||||||
Tax effect for non-core and unusual items
|
30
|
|
|
75
|
|
|
90
|
|
|||
Tax benefit associated with previously impaired site
|
8
|
|
|
—
|
|
|
—
|
|
|||
Estimated net tax benefit from tax law changes and tax loss from outside-U.S. entity reorganizations
|
339
|
|
|
—
|
|
|
—
|
|
|||
Total items impacting (benefit from) provision for income taxes
|
377
|
|
|
75
|
|
|
90
|
|
|||
Total items impacting net earnings attributable to Eastman
|
$
|
(272
|
)
|
|
$
|
149
|
|
|
$
|
243
|
|
•
|
Gross profit,
|
•
|
Selling, general, and administrative ("SG&A") expenses,
|
•
|
Research and development ("R&D") expenses,
|
•
|
Operating earnings,
|
•
|
Other (income) charges, net,
|
•
|
(Benefit from) provision for income taxes,
|
•
|
Net earnings attributable to Eastman, and
|
•
|
Diluted earnings per share.
|
|
2017
|
|
2016
|
||||||||||||
(Dollars in millions, except diluted EPS)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||
Net earnings attributable to Eastman
|
$
|
1,384
|
|
|
$
|
9.47
|
|
|
$
|
854
|
|
|
$
|
5.75
|
|
Total non-core and unusual items, net of tax
(1)(2)
|
(272
|
)
|
|
(1.86
|
)
|
|
149
|
|
|
1.01
|
|
||||
Net earnings attributable to Eastman excluding non-core and unusual items
|
$
|
1,112
|
|
|
$
|
7.61
|
|
|
$
|
1,003
|
|
|
$
|
6.76
|
|
(1)
|
See "Results of Operations - Net Earnings and Diluted Earnings per Share" for the tax effected amount of non-core and unusual items.
|
(2)
|
The (benefit from) provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Sales
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
6
|
%
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
|
(7
|
)%
|
Volume / product mix effect
|
|
|
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
1
|
%
|
||||
Price effect
|
|
|
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
(7
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
|
—
|
%
|
|
|
|
|
|
|
|
(1
|
)%
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Gross Profit
|
$
|
2,454
|
|
|
$
|
2,350
|
|
|
4
|
%
|
|
$
|
2,350
|
|
|
$
|
2,580
|
|
|
(9
|
)%
|
Mark-to-market pension and other postretirement benefit (gain) loss, net
|
(11
|
)
|
|
78
|
|
|
|
|
78
|
|
|
84
|
|
|
|
||||||
Net costs resulting from coal gasification incident
|
112
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Additional costs of acquired inventories
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
7
|
|
|
|
||||||
Gross Profit excluding non-core and unusual items
|
$
|
2,555
|
|
|
$
|
2,428
|
|
|
5
|
%
|
|
$
|
2,428
|
|
|
$
|
2,671
|
|
|
(9
|
)%
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Selling, General & Administrative Expenses
|
$
|
699
|
|
|
$
|
703
|
|
|
(1
|
)%
|
|
$
|
703
|
|
|
$
|
771
|
|
|
(9
|
)%
|
Mark-to-market pension and other postretirement benefit gain (loss), net
|
8
|
|
|
(14
|
)
|
|
|
|
(14
|
)
|
|
(18
|
)
|
|
|
||||||
Acquisition integration and transaction costs
|
—
|
|
|
(9
|
)
|
|
|
|
|
(9
|
)
|
|
(28
|
)
|
|
|
|||||
Selling, General, and Administrative Expenses excluding non-core items
|
$
|
707
|
|
|
$
|
680
|
|
|
4
|
%
|
|
$
|
680
|
|
|
$
|
725
|
|
|
(6
|
)%
|
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Research & Development Expenses
|
$
|
215
|
|
|
$
|
219
|
|
|
(2
|
)%
|
|
$
|
219
|
|
|
$
|
242
|
|
|
(10
|
)%
|
Mark-to-market pension and other postretirement benefit gain (loss), net
|
2
|
|
|
(5
|
)
|
|
|
|
(5
|
)
|
|
(13
|
)
|
|
|
||||||
Research & Development Expenses excluding non-core item
|
$
|
217
|
|
|
$
|
214
|
|
|
1
|
%
|
|
$
|
214
|
|
|
$
|
229
|
|
|
(7
|
)%
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Asset impairments
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
85
|
|
Gain on sale of assets, net
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Intangible asset and goodwill impairments
|
—
|
|
|
—
|
|
|
22
|
|
|||
Severance charges
|
6
|
|
|
32
|
|
|
68
|
|
|||
Site closure and restructuring charges
|
1
|
|
|
3
|
|
|
9
|
|
|||
Total
|
$
|
8
|
|
|
$
|
45
|
|
|
$
|
183
|
|
|
2017 Compared to 2016
|
2016 Compared to 2015
|
|||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Operating earnings
|
$
|
1,532
|
|
|
$
|
1,383
|
|
|
11
|
%
|
|
$
|
1,383
|
|
|
$
|
1,384
|
|
|
—
|
%
|
Mark-to-market pension and other postretirement benefit (gain) loss, net
|
(21
|
)
|
|
97
|
|
|
|
|
|
97
|
|
|
115
|
|
|
|
|
||||
Net costs resulting from coal gasification incident
|
112
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Asset impairments and restructuring charges, net
|
8
|
|
|
45
|
|
|
|
|
|
45
|
|
|
183
|
|
|
|
|
||||
Acquisition integration and transaction costs
|
—
|
|
|
9
|
|
|
|
|
9
|
|
|
28
|
|
|
|
||||||
Additional costs of acquired inventories
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
7
|
|
|
|
||||||
Operating earnings excluding non-core and unusual items
|
$
|
1,631
|
|
|
$
|
1,534
|
|
|
6
|
%
|
|
$
|
1,534
|
|
|
$
|
1,717
|
|
|
(11
|
)%
|
|
2017 Compared to 2016
|
2016 Compared to 2015
|
|||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||
Gross interest expense
|
$
|
251
|
|
|
$
|
265
|
|
|
|
|
$
|
265
|
|
|
$
|
273
|
|
|
|
||
Less: Capitalized interest
|
7
|
|
|
7
|
|
|
|
|
7
|
|
|
7
|
|
|
|
||||||
Interest Expense
|
244
|
|
|
258
|
|
|
|
|
258
|
|
|
266
|
|
|
|
||||||
Less: Interest income
|
3
|
|
|
3
|
|
|
|
|
3
|
|
|
3
|
|
|
|
||||||
Net interest expense
|
$
|
241
|
|
|
$
|
255
|
|
|
(5
|
)%
|
|
$
|
255
|
|
|
$
|
263
|
|
|
(3
|
)%
|
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency transaction losses (gains), net
|
$
|
5
|
|
|
$
|
27
|
|
|
$
|
6
|
|
(Income) loss from equity investments and other investment (gains) losses, net
|
(14
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||
Cost of disposition of claims against discontinued Solutia operations
|
9
|
|
|
5
|
|
|
—
|
|
|||
Gains from sale of businesses
|
(3
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Other, net
|
5
|
|
|
(6
|
)
|
|
1
|
|
|||
Other (income) charges, net
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
Cost of disposition of claims against discontinued Solutia operations
|
(9
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Gains from sale of businesses
|
3
|
|
|
17
|
|
|
—
|
|
|||
Other (income) charges, net excluding non-core items
|
$
|
(4
|
)
|
|
$
|
6
|
|
|
$
|
(8
|
)
|
|
2017 Compared to 2016
|
2016 Compared to 2015
|
|||||||||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
(Benefit from) provision for income taxes and effective tax rate
|
$
|
(99
|
)
|
|
(8
|
)%
|
|
$
|
190
|
|
|
18
|
%
|
|
$
|
190
|
|
|
18
|
%
|
|
$
|
275
|
|
|
24
|
%
|
Tax provision for non-core and unusual items
|
30
|
|
|
|
|
75
|
|
|
|
|
75
|
|
|
|
|
|
90
|
|
|
|
|||||||
Tax benefit associated with previously impaired site
|
8
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||||
Estimated net tax benefit from tax law changes and tax loss from outside-U.S. entity reorganizations
|
339
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|||||||
Adjusted provision for income taxes and effective tax rate
|
$
|
278
|
|
|
20
|
%
|
|
$
|
265
|
|
|
21%
|
|
$
|
265
|
|
|
21
|
%
|
|
$
|
365
|
|
|
25
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
$
|
|
EPS
|
||||||||||||
Net earnings and diluted earnings per share attributable to Eastman
|
$
|
1,384
|
|
|
$
|
9.47
|
|
|
$
|
854
|
|
|
$
|
5.75
|
|
|
$
|
848
|
|
|
$
|
5.66
|
|
Non-core items, net of tax:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mark-to-market pension and other postretirement benefit (gain) loss, net
|
(14
|
)
|
|
(0.09
|
)
|
|
68
|
|
|
0.46
|
|
|
70
|
|
|
0.47
|
|
||||||
Asset impairments and restructuring charges, net
|
(3
|
)
|
|
(0.02
|
)
|
|
28
|
|
|
0.19
|
|
|
151
|
|
|
1.00
|
|
||||||
Acquisition transaction, integration, and financing costs
|
—
|
|
|
—
|
|
|
5
|
|
|
0.04
|
|
|
18
|
|
|
0.12
|
|
||||||
Additional costs of acquired inventories
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
0.03
|
|
||||||
Early debt extinguishment and other related costs
|
—
|
|
|
—
|
|
|
56
|
|
|
0.37
|
|
|
—
|
|
|
—
|
|
||||||
Cost of disposition of claims against discontinued Solutia operations
|
5
|
|
|
0.03
|
|
|
3
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
||||||
Gains from sale of businesses
|
(1
|
)
|
|
(0.01
|
)
|
|
(11
|
)
|
|
(0.07
|
)
|
|
—
|
|
|
—
|
|
||||||
Unusual items, net of tax:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net costs resulting from coal gasification incident
|
80
|
|
|
0.55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Estimated net tax benefit from tax law changes and tax loss from outside-U.S. entity reorganizations
|
(339
|
)
|
|
(2.32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted net earnings and diluted earnings per share attributable to Eastman
|
$
|
1,112
|
|
|
$
|
7.61
|
|
|
$
|
1,003
|
|
|
$
|
6.76
|
|
|
$
|
1,091
|
|
|
$
|
7.28
|
|
(1)
|
The (benefit from) provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
|
Additives & Functional Products Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
3,343
|
|
$
|
2,979
|
|
$
|
364
|
|
|
12
|
%
|
$
|
2,979
|
|
$
|
3,159
|
|
$
|
(180
|
)
|
|
(6
|
)%
|
Volume / product mix effect
|
|
|
|
|
|
313
|
|
|
10
|
%
|
|
|
|
|
|
46
|
|
|
1
|
%
|
||||
Price effect
|
|
|
|
|
|
45
|
|
|
2
|
%
|
|
|
|
|
|
(214
|
)
|
|
(7
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
6
|
|
|
—
|
%
|
|
|
|
|
|
(12
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
646
|
|
|
601
|
|
|
45
|
|
|
7
|
%
|
|
601
|
|
|
660
|
|
|
(59
|
)
|
|
(9
|
)%
|
Asset impairments and restructuring charges, net
|
|
3
|
|
|
10
|
|
|
(7
|
)
|
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
|
||
Net costs resulting from coal gasification incident
|
|
8
|
|
|
—
|
|
|
8
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Operating earnings excluding non-core and unusual items
|
|
657
|
|
|
611
|
|
|
46
|
|
|
8
|
%
|
|
611
|
|
|
660
|
|
|
(49
|
)
|
|
(7
|
)%
|
Advanced Materials Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,572
|
|
$
|
2,457
|
|
$
|
115
|
|
|
5
|
%
|
$
|
2,457
|
|
$
|
2,414
|
|
$
|
43
|
|
|
2
|
%
|
Volume / product mix effect
|
|
|
|
|
|
113
|
|
|
5
|
%
|
|
|
|
|
|
119
|
|
|
5
|
%
|
||||
Price effect
|
|
|
|
|
|
1
|
|
|
—
|
%
|
|
|
|
|
|
(67
|
)
|
|
(3
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
1
|
|
|
—
|
%
|
|
|
|
|
|
(9
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
482
|
|
|
471
|
|
|
11
|
|
|
2
|
%
|
|
471
|
|
|
384
|
|
|
87
|
|
|
23
|
%
|
Additional costs of acquired inventories
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
|
||
Asset impairments and restructuring charges, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
18
|
|
|
(18
|
)
|
|
|
||
Net costs resulting from coal gasification incident
|
|
11
|
|
|
—
|
|
|
11
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Operating earnings excluding non-core and unusual items
|
|
493
|
|
|
471
|
|
|
22
|
|
|
5
|
%
|
|
471
|
|
|
409
|
|
|
62
|
|
|
15
|
%
|
Chemical Intermediates Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
|||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,728
|
|
$
|
2,534
|
|
$
|
194
|
|
|
8
|
%
|
$
|
2,534
|
|
$
|
2,811
|
|
$
|
(277
|
)
|
|
(10
|
)%
|
Volume / product mix effect
|
|
|
|
|
|
(55
|
)
|
|
(2
|
)%
|
|
|
|
|
|
48
|
|
|
2
|
%
|
||||
Price effect
|
|
|
|
|
|
253
|
|
|
10
|
%
|
|
|
|
|
|
(317
|
)
|
|
(11
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(4
|
)
|
|
—
|
%
|
|
|
|
|
|
(8
|
)
|
|
(1
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
255
|
|
|
171
|
|
|
84
|
|
|
49
|
%
|
|
171
|
|
|
294
|
|
|
(123
|
)
|
|
(42
|
)%
|
Net costs resulting from coal gasification incident
|
|
44
|
|
|
—
|
|
|
44
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||
Operating earnings excluding unusual item
|
|
299
|
|
|
171
|
|
|
128
|
|
|
75
|
%
|
|
171
|
|
|
294
|
|
|
(123
|
)
|
|
(42
|
)%
|
Fibers Segment
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
|||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales
|
$
|
852
|
|
$
|
992
|
|
$
|
(140
|
)
|
|
(14
|
)%
|
$
|
992
|
|
$
|
1,219
|
|
$
|
(227
|
)
|
|
(19
|
)%
|
Volume / product mix effect
|
|
|
|
|
|
(53
|
)
|
|
(5
|
)%
|
|
|
|
|
|
(150
|
)
|
|
(13
|
)%
|
||||
Price effect
|
|
|
|
|
|
(86
|
)
|
|
(9
|
)%
|
|
|
|
|
|
(74
|
)
|
|
(6
|
)%
|
||||
Exchange rate effect
|
|
|
|
|
|
(1
|
)
|
|
—
|
%
|
|
|
|
|
|
(3
|
)
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating earnings
|
|
175
|
|
|
310
|
|
|
(135
|
)
|
|
(44
|
)%
|
|
310
|
|
|
292
|
|
|
18
|
|
|
6
|
%
|
Asset impairments and restructuring charges, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
98
|
|
|
(98
|
)
|
|
|
||
Net costs resulting from coal gasification incident
|
|
49
|
|
|
—
|
|
|
49
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Operating earnings excluding non-core and unusual items
|
|
224
|
|
|
310
|
|
|
(86
|
)
|
|
(28
|
)%
|
|
310
|
|
|
390
|
|
|
(80
|
)
|
|
(21
|
)%
|
(Dollars in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Sales
|
|
$
|
54
|
|
|
$
|
46
|
|
|
$
|
45
|
|
|
|
|
|
|
|
|
||||||
Operating loss
|
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to operating segments
|
|
$
|
(114
|
)
|
|
$
|
(82
|
)
|
|
$
|
(87
|
)
|
Pension and other postretirement benefit plans income (expense), net not allocated to operating segments
|
|
93
|
|
|
(44
|
)
|
|
(76
|
)
|
|||
Restructuring and acquisition integration and transaction costs
|
|
(5
|
)
|
|
(44
|
)
|
|
(83
|
)
|
|||
Operating loss before non-core items
|
|
(26
|
)
|
|
(170
|
)
|
|
(246
|
)
|
|||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net
|
|
(21
|
)
|
|
97
|
|
|
115
|
|
|||
Acquisition integration and transaction costs
|
|
—
|
|
|
9
|
|
|
28
|
|
|||
Asset impairments and restructuring charges, net
|
|
5
|
|
|
35
|
|
|
67
|
|
|||
Operating loss excluding non-core items
|
|
$
|
(42
|
)
|
|
$
|
(29
|
)
|
|
$
|
(36
|
)
|
|
Sales Revenue
|
||||||||||||||||||||||||||
|
|
|
|
|
Change
|
|
|
|
|
Change
|
|||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
$
|
%
|
|
2016
|
|
2015
|
|
$
|
%
|
||||||||||||||
United States and Canada
|
$
|
4,189
|
|
|
$
|
4,025
|
|
|
$
|
164
|
|
4
|
%
|
|
$
|
4,025
|
|
|
$
|
4,350
|
|
|
$
|
(325
|
)
|
(7
|
)%
|
Asia Pacific
|
2,306
|
|
|
2,163
|
|
|
143
|
|
7
|
%
|
|
2,163
|
|
|
2,333
|
|
|
(170
|
)
|
(7
|
)%
|
||||||
Europe, Middle East, and Africa
|
2,539
|
|
|
2,305
|
|
|
234
|
|
10
|
%
|
|
2,305
|
|
|
2,422
|
|
|
(117
|
)
|
(5
|
)%
|
||||||
Latin America
|
515
|
|
|
515
|
|
|
—
|
|
—
|
%
|
|
515
|
|
|
543
|
|
|
(28
|
)
|
(5
|
)%
|
||||||
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
$
|
541
|
|
6
|
%
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
|
$
|
(640
|
)
|
(7
|
)%
|
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,657
|
|
|
$
|
1,385
|
|
|
$
|
1,624
|
|
Investing activities
|
(643
|
)
|
|
(655
|
)
|
|
(693
|
)
|
|||
Financing activities
|
(1,006
|
)
|
|
(838
|
)
|
|
(844
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2
|
|
|
(4
|
)
|
|
(8
|
)
|
|||
Net change in cash and cash equivalents
|
10
|
|
|
(112
|
)
|
|
79
|
|
|||
Cash and cash equivalents at beginning of period
|
181
|
|
|
293
|
|
|
214
|
|
|||
Cash and cash equivalents at end of period
|
$
|
191
|
|
|
$
|
181
|
|
|
$
|
293
|
|
(Dollars in millions)
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash and cash equivalents
|
$
|
191
|
|
|
$
|
181
|
|
|
$
|
293
|
|
(Dollars in millions)
|
|
Payments Due for
|
||||||||||||||||||||||||||
Period
|
|
Debt Securities
|
|
Credit Facilities and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Other Liabilities
|
|
Total
|
||||||||||||||
2018
|
|
$
|
—
|
|
|
$
|
393
|
|
|
$
|
228
|
|
|
$
|
230
|
|
|
$
|
67
|
|
|
$
|
234
|
|
|
$
|
1,152
|
|
2019
|
|
250
|
|
|
1
|
|
|
229
|
|
|
222
|
|
|
55
|
|
|
85
|
|
|
842
|
|
|||||||
2020
|
|
797
|
|
|
—
|
|
|
207
|
|
|
184
|
|
|
44
|
|
|
90
|
|
|
1,322
|
|
|||||||
2021
|
|
185
|
|
|
200
|
|
|
190
|
|
|
92
|
|
|
34
|
|
|
91
|
|
|
792
|
|
|||||||
2022
|
|
738
|
|
|
—
|
|
|
178
|
|
|
160
|
|
|
23
|
|
|
92
|
|
|
1,191
|
|
|||||||
2023 and beyond
|
|
3,976
|
|
|
—
|
|
|
1,619
|
|
|
2,032
|
|
|
47
|
|
|
1,056
|
|
|
8,730
|
|
|||||||
Total
|
|
$
|
5,946
|
|
|
$
|
594
|
|
|
$
|
2,651
|
|
|
$
|
2,920
|
|
|
$
|
270
|
|
|
$
|
1,648
|
|
|
$
|
14,029
|
|
•
|
earnings to benefit from a robust portfolio of specialty businesses in attractive niche end-markets, strong growth in high margin, innovative products, and a modestly lower tax rate;
|
•
|
earnings to be negatively impacted by higher costs of strategic growth initiatives, higher scheduled maintenance costs, and volatile market prices for commodity products and raw materials and energy, particularly for olefins;
|
•
|
cash generated by operating activities of approximately $1.6 billion;
|
•
|
capital spending of approximately
$550 million
;
|
•
|
priorities for uses of available cash in 2018 to include payment of the quarterly dividend, repayment of debt, funding targeted organic and inorganic growth initiatives, and repurchasing shares; and
|
•
|
the full year effective tax rate on reported earnings before income tax to be 18 to 20 percent, excluding non-core, unusual, or non-recurring 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
|
March 1, 2018
|
|
March 1, 2018
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
Cost of sales
|
7,095
|
|
|
6,658
|
|
|
7,068
|
|
|||
Gross profit
|
2,454
|
|
|
2,350
|
|
|
2,580
|
|
|||
Selling, general and administrative expenses
|
699
|
|
|
703
|
|
|
771
|
|
|||
Research and development expenses
|
215
|
|
|
219
|
|
|
242
|
|
|||
Asset impairments and restructuring charges, net
|
8
|
|
|
45
|
|
|
183
|
|
|||
Operating earnings
|
1,532
|
|
|
1,383
|
|
|
1,384
|
|
|||
Net interest expense
|
241
|
|
|
255
|
|
|
263
|
|
|||
Early debt extinguishment and other related costs
|
—
|
|
|
85
|
|
|
—
|
|
|||
Other (income) charges, net
|
2
|
|
|
(6
|
)
|
|
(8
|
)
|
|||
Earnings before income taxes
|
1,289
|
|
|
1,049
|
|
|
1,129
|
|
|||
(Benefit from) provision for income taxes
|
(99
|
)
|
|
190
|
|
|
275
|
|
|||
Net earnings
|
1,388
|
|
|
859
|
|
|
854
|
|
|||
Less: Net earnings attributable to noncontrolling interest
|
4
|
|
|
5
|
|
|
6
|
|
|||
Net earnings attributable to Eastman
|
$
|
1,384
|
|
|
$
|
854
|
|
|
$
|
848
|
|
|
|
|
|
|
|
||||||
Basic earnings per share attributable to Eastman
|
$
|
9.56
|
|
|
$
|
5.80
|
|
|
$
|
5.71
|
|
Diluted earnings per share attributable to Eastman
|
$
|
9.47
|
|
|
$
|
5.75
|
|
|
$
|
5.66
|
|
Comprehensive Income
|
|
|
|
|
|
||||||
Net earnings including noncontrolling interest
|
$
|
1,388
|
|
|
$
|
859
|
|
|
$
|
854
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in cumulative translation adjustment
|
85
|
|
|
(97
|
)
|
|
(216
|
)
|
|||
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
||||||
Prior service credit arising during the period
|
—
|
|
|
64
|
|
|
87
|
|
|||
Amortization of unrecognized prior service credits included in net periodic costs
|
(27
|
)
|
|
(30
|
)
|
|
(19
|
)
|
|||
Derivatives and hedging:
|
|
|
|
|
|
||||||
Unrealized gain (loss) during period
|
7
|
|
|
93
|
|
|
(48
|
)
|
|||
Reclassification adjustment for losses included in net income, net
|
7
|
|
|
79
|
|
|
83
|
|
|||
Total other comprehensive income (loss), net of tax
|
72
|
|
|
109
|
|
|
(113
|
)
|
|||
Comprehensive income including noncontrolling interest
|
1,460
|
|
|
968
|
|
|
741
|
|
|||
Less: Comprehensive income attributable to noncontrolling interest
|
4
|
|
|
5
|
|
|
6
|
|
|||
Comprehensive income attributable to Eastman
|
$
|
1,456
|
|
|
$
|
963
|
|
|
$
|
735
|
|
Retained Earnings
|
|
|
|
|
|
||||||
Retained earnings at beginning of period
|
$
|
5,721
|
|
|
$
|
5,146
|
|
|
$
|
4,545
|
|
Net earnings attributable to Eastman
|
1,384
|
|
|
854
|
|
|
848
|
|
|||
Cash dividends declared
|
(303
|
)
|
|
(279
|
)
|
|
(247
|
)
|
|||
Retained earnings at end of period
|
$
|
6,802
|
|
|
$
|
5,721
|
|
|
$
|
5,146
|
|
|
December 31,
|
|
December 31,
|
||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
191
|
|
|
$
|
181
|
|
Trade receivables, net of allowance for doubtful accounts
|
1,026
|
|
|
812
|
|
||
Miscellaneous receivables
|
360
|
|
|
399
|
|
||
Inventories
|
1,509
|
|
|
1,404
|
|
||
Other current assets
|
57
|
|
|
70
|
|
||
Total current assets
|
3,143
|
|
|
2,866
|
|
||
Properties
|
|
|
|
||||
Properties and equipment at cost
|
12,370
|
|
|
11,699
|
|
||
Less: Accumulated depreciation
|
6,763
|
|
|
6,423
|
|
||
Net properties
|
5,607
|
|
|
5,276
|
|
||
Goodwill
|
4,527
|
|
|
4,461
|
|
||
Intangible assets, net of accumulated amortization
|
2,373
|
|
|
2,479
|
|
||
Other noncurrent assets
|
349
|
|
|
375
|
|
||
Total assets
|
$
|
15,999
|
|
|
$
|
15,457
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Payables and other current liabilities
|
$
|
1,589
|
|
|
$
|
1,512
|
|
Borrowings due within one year
|
393
|
|
|
283
|
|
||
Total current liabilities
|
1,982
|
|
|
1,795
|
|
||
Long-term borrowings
|
6,147
|
|
|
6,311
|
|
||
Deferred income tax liabilities
|
893
|
|
|
1,206
|
|
||
Post-employment obligations
|
963
|
|
|
1,018
|
|
||
Other long-term liabilities
|
534
|
|
|
519
|
|
||
Total liabilities
|
10,519
|
|
|
10,849
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock ($0.01 par value per share – 350,000,000 shares authorized; shares issued – 218,369,992 and 217,707,600 for 2017 and 2016, respectively)
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
1,983
|
|
|
1,915
|
|
||
Retained earnings
|
6,802
|
|
|
5,721
|
|
||
Accumulated other comprehensive loss
|
(209
|
)
|
|
(281
|
)
|
||
|
8,578
|
|
|
7,357
|
|
||
Less: Treasury stock at cost (75,454,111 shares for 2017 and 71,269,474 shares for 2016)
|
3,175
|
|
|
2,825
|
|
||
Total Eastman stockholders' equity
|
5,403
|
|
|
4,532
|
|
||
Noncontrolling interest
|
77
|
|
|
76
|
|
||
Total equity
|
5,480
|
|
|
4,608
|
|
||
Total liabilities and stockholders' equity
|
$
|
15,999
|
|
|
$
|
15,457
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
1,388
|
|
|
$
|
859
|
|
|
$
|
854
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
587
|
|
|
580
|
|
|
571
|
|
|||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net
|
(21
|
)
|
|
97
|
|
|
115
|
|
|||
Asset impairment charges
|
1
|
|
|
9
|
|
|
107
|
|
|||
Early debt extinguishment and other related costs
|
—
|
|
|
85
|
|
|
—
|
|
|||
Gains from sale of businesses
|
(3
|
)
|
|
(17
|
)
|
|
—
|
|
|||
(Benefit from) provision for deferred income taxes
|
(394
|
)
|
|
177
|
|
|
107
|
|
|||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|
|
|
|
|
||||||
(Increase) decrease in trade receivables
|
(53
|
)
|
|
(29
|
)
|
|
114
|
|
|||
(Increase) decrease in inventories
|
(71
|
)
|
|
54
|
|
|
(26
|
)
|
|||
Increase (decrease) in trade payables
|
123
|
|
|
7
|
|
|
(102
|
)
|
|||
Pension and other postretirement contributions in excess of expenses
|
(115
|
)
|
|
(329
|
)
|
|
(217
|
)
|
|||
Variable compensation less than expenses
|
71
|
|
|
17
|
|
|
71
|
|
|||
Other items, net
|
144
|
|
|
(125
|
)
|
|
30
|
|
|||
Net cash provided by operating activities
|
1,657
|
|
|
1,385
|
|
|
1,624
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Additions to properties and equipment
|
(649
|
)
|
|
(626
|
)
|
|
(652
|
)
|
|||
Proceeds from sale of businesses and assets
|
14
|
|
|
41
|
|
|
4
|
|
|||
Acquisitions, net of cash acquired
|
(4
|
)
|
|
(26
|
)
|
|
(45
|
)
|
|||
Other items, net
|
(4
|
)
|
|
(44
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(643
|
)
|
|
(655
|
)
|
|
(693
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net increase (decrease) in commercial paper and other borrowings
|
(19
|
)
|
|
(150
|
)
|
|
195
|
|
|||
Proceeds from borrowings
|
675
|
|
|
1,848
|
|
|
250
|
|
|||
Repayment of borrowings
|
(1,025
|
)
|
|
(2,126
|
)
|
|
(950
|
)
|
|||
Dividends paid to stockholders
|
(296
|
)
|
|
(272
|
)
|
|
(238
|
)
|
|||
Treasury stock purchases
|
(350
|
)
|
|
(145
|
)
|
|
(103
|
)
|
|||
Dividends paid to noncontrolling interests
|
(7
|
)
|
|
(8
|
)
|
|
(6
|
)
|
|||
Proceeds from stock option exercises and other items, net
|
16
|
|
|
15
|
|
|
8
|
|
|||
Net cash used in financing activities
|
(1,006
|
)
|
|
(838
|
)
|
|
(844
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2
|
|
|
(4
|
)
|
|
(8
|
)
|
|||
Net change in cash and cash equivalents
|
10
|
|
|
(112
|
)
|
|
79
|
|
|||
Cash and cash equivalents at beginning of period
|
181
|
|
|
293
|
|
|
214
|
|
|||
Cash and cash equivalents at end of period
|
$
|
191
|
|
|
$
|
181
|
|
|
$
|
293
|
|
1.
|
SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
INVENTORIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Finished goods
|
$
|
1,114
|
|
|
$
|
997
|
|
Work in process
|
213
|
|
|
198
|
|
||
Raw materials and supplies
|
470
|
|
|
473
|
|
||
Total inventories at FIFO or average cost
|
1,797
|
|
|
1,668
|
|
||
Less: LIFO reserve
|
288
|
|
|
264
|
|
||
Total inventories
|
$
|
1,509
|
|
|
$
|
1,404
|
|
3.
|
PROPERTIES AND ACCUMULATED DEPRECIATION
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Properties
|
|
|
|
||||
Land
|
$
|
161
|
|
|
$
|
157
|
|
Buildings
|
1,325
|
|
|
1,256
|
|
||
Machinery and equipment
|
10,122
|
|
|
9,646
|
|
||
Construction in progress
|
762
|
|
|
640
|
|
||
Properties and equipment at cost
|
$
|
12,370
|
|
|
$
|
11,699
|
|
Less: Accumulated depreciation
|
6,763
|
|
|
6,423
|
|
||
Net properties
|
$
|
5,607
|
|
|
$
|
5,276
|
|
4.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
(Dollars in millions)
|
Additives & Functional Products
|
|
Adhesives & Plasticizers
|
|
Advanced Materials
|
|
Chemical Intermediates
|
|
Other
|
|
Total
|
||||||||||||
Balance at December 31, 2015
|
$
|
1,865
|
|
|
$
|
111
|
|
|
$
|
1,293
|
|
|
$
|
1,239
|
|
|
$
|
10
|
|
|
$
|
4,518
|
|
Transfers of goodwill resulting from resegmentation
|
583
|
|
|
(111
|
)
|
|
—
|
|
|
(472
|
)
|
|
—
|
|
|
—
|
|
||||||
Currency translation adjustments
|
(32
|
)
|
|
—
|
|
|
(18
|
)
|
|
(7
|
)
|
|
—
|
|
|
(57
|
)
|
||||||
Balance at December 31, 2016
|
2,416
|
|
|
—
|
|
|
1,275
|
|
|
760
|
|
|
10
|
|
|
4,461
|
|
||||||
Acquisitions
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Goodwill written off as a result of sale of business
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Currency translation adjustments
|
27
|
|
|
—
|
|
|
14
|
|
|
9
|
|
|
—
|
|
|
50
|
|
||||||
Balance at December 31, 2017
|
$
|
2,459
|
|
|
$
|
—
|
|
|
$
|
1,289
|
|
|
$
|
769
|
|
|
$
|
10
|
|
|
$
|
4,527
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(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
|
8
|
-
|
25
|
$
|
1,583
|
|
|
$
|
345
|
|
|
$
|
1,238
|
|
|
$
|
1,542
|
|
|
$
|
267
|
|
|
$
|
1,275
|
|
Technology
|
7
|
-
|
20
|
690
|
|
|
247
|
|
|
443
|
|
|
675
|
|
|
196
|
|
|
479
|
|
||||||
Contracts
|
|
5
|
|
180
|
|
|
111
|
|
|
69
|
|
|
180
|
|
|
75
|
|
|
105
|
|
||||||
Other
|
5
|
-
|
37
|
102
|
|
|
19
|
|
|
83
|
|
|
99
|
|
|
14
|
|
|
85
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tradenames
|
|
|
|
530
|
|
|
—
|
|
|
530
|
|
|
525
|
|
|
—
|
|
|
525
|
|
||||||
Other
|
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||
Total identified intangible assets
|
|
|
|
$
|
3,095
|
|
|
$
|
722
|
|
|
$
|
2,373
|
|
|
$
|
3,031
|
|
|
$
|
552
|
|
|
$
|
2,479
|
|
5.
|
EQUITY INVESTMENTS
|
6.
|
PAYABLES AND OTHER CURRENT LIABILITIES
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Trade creditors
|
$
|
842
|
|
|
$
|
704
|
|
Accrued payrolls, vacation, and variable-incentive compensation
|
199
|
|
|
196
|
|
||
Accrued taxes
|
111
|
|
|
106
|
|
||
Post-employment obligations
|
89
|
|
|
110
|
|
||
Other
|
348
|
|
|
396
|
|
||
Total payables and other current liabilities
|
$
|
1,589
|
|
|
$
|
1,512
|
|
7.
|
INCOME TAXES
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Earnings before income taxes
|
|
|
|
|
|
||||||
United States
|
$
|
654
|
|
|
$
|
422
|
|
|
$
|
618
|
|
Outside the United States
|
635
|
|
|
627
|
|
|
511
|
|
|||
Total
|
$
|
1,289
|
|
|
$
|
1,049
|
|
|
$
|
1,129
|
|
(Benefit from) provision for income taxes
|
|
|
|
|
|
|
|
|
|||
United States Federal
|
|
|
|
|
|
|
|
|
|||
Current
(1)
|
$
|
220
|
|
|
$
|
(80
|
)
|
|
$
|
87
|
|
Deferred
(2)
|
(383
|
)
|
|
214
|
|
|
119
|
|
|||
Outside the United States
|
|
|
|
|
|
||||||
Current
|
62
|
|
|
91
|
|
|
59
|
|
|||
Deferred
|
2
|
|
|
(18
|
)
|
|
16
|
|
|||
State and other
|
|
|
|
|
|
||||||
Current
|
13
|
|
|
2
|
|
|
22
|
|
|||
Deferred
|
(13
|
)
|
|
(19
|
)
|
|
(28
|
)
|
|||
Total
|
$
|
(99
|
)
|
|
$
|
190
|
|
|
$
|
275
|
|
(1)
|
Includes a one-time transition tax of
$71 million
on deferred foreign income.
|
(2)
|
Includes one-time benefit of
$517 million
primarily due to the re-measurement of certain net deferred tax liabilities using the lower U.S. corporate income tax rate and a one-time
$72 million
valuation allowance on deferred tax assets for foreign tax credit carryforwards.
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Defined benefit pension and other postretirement benefit plans
|
$
|
(16
|
)
|
|
$
|
21
|
|
|
$
|
42
|
|
Derivatives and hedging
|
8
|
|
|
105
|
|
|
21
|
|
|||
Total
|
$
|
(8
|
)
|
|
$
|
126
|
|
|
$
|
63
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Earnings before income taxes
|
$
|
(99
|
)
|
|
$
|
190
|
|
|
$
|
275
|
|
Other comprehensive income
|
(8
|
)
|
|
126
|
|
|
63
|
|
|||
Total
|
$
|
(107
|
)
|
|
$
|
316
|
|
|
$
|
338
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Amount computed using the statutory rate
|
$
|
450
|
|
|
$
|
366
|
|
|
$
|
393
|
|
State income taxes, net
|
(4
|
)
|
|
(18
|
)
|
|
(3
|
)
|
|||
Foreign rate variance
|
(150
|
)
|
|
(121
|
)
|
|
(93
|
)
|
|||
Domestic manufacturing deduction
|
(18
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|||
Change in reserves for tax contingencies
|
20
|
|
|
—
|
|
|
(7
|
)
|
|||
General business credits
|
(65
|
)
|
|
(20
|
)
|
|
(15
|
)
|
|||
U.S. tax on foreign earnings
|
29
|
|
|
25
|
|
|
7
|
|
|||
Foreign tax credits
|
(26
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|||
Tax law changes and tax loss from outside-U.S. entity reorganizations
(1)
|
(339
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
4
|
|
|
(25
|
)
|
|
14
|
|
|||
(Benefit from) provision for income taxes
|
$
|
(99
|
)
|
|
$
|
190
|
|
|
$
|
275
|
|
|
|
|
|
|
|
||||||
Effective income tax rate
|
(8
|
)%
|
|
18
|
%
|
|
24
|
%
|
(1)
|
Includes one-time net benefit primarily due to the re-measurement of certain net deferred tax liabilities using the lower U.S. corporate income tax rate partially offset by the transition tax on deferred foreign income and changes in the valuation of deferred tax assets associated with tax law changes and the tax impact from intercompany reorganization activities.
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
|
|
||||
Post-employment obligations
|
$
|
242
|
|
|
$
|
378
|
|
Net operating loss carryforwards
|
690
|
|
|
337
|
|
||
Tax credit carryforwards
|
202
|
|
|
248
|
|
||
Environmental reserves
|
72
|
|
|
119
|
|
||
Unrealized derivative loss
|
17
|
|
|
50
|
|
||
Other
|
90
|
|
|
186
|
|
||
Total deferred tax assets
|
1,313
|
|
|
1,318
|
|
||
Less: Valuation allowance
|
410
|
|
|
278
|
|
||
Deferred tax assets less valuation allowance
|
$
|
903
|
|
|
$
|
1,040
|
|
Deferred tax liabilities
|
|
|
|
|
|
||
Property, plant, and equipment
|
$
|
(835
|
)
|
|
$
|
(1,237
|
)
|
Intangible assets
|
(535
|
)
|
|
(847
|
)
|
||
Investments
|
(274
|
)
|
|
—
|
|
||
Other
|
(131
|
)
|
|
(128
|
)
|
||
Total deferred tax liabilities
|
$
|
(1,775
|
)
|
|
$
|
(2,212
|
)
|
Net deferred tax liabilities
|
$
|
(872
|
)
|
|
$
|
(1,172
|
)
|
As recorded in the Consolidated Statements of Financial Position:
|
|
|
|
|
|
||
Other noncurrent assets
|
$
|
21
|
|
|
$
|
34
|
|
Deferred income tax liabilities
|
(893
|
)
|
|
(1,206
|
)
|
||
Net deferred tax liabilities
|
$
|
(872
|
)
|
|
$
|
(1,172
|
)
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Miscellaneous receivables
|
$
|
215
|
|
|
$
|
235
|
|
|
|
|
|
||||
Payables and other current liabilities
|
$
|
58
|
|
|
$
|
56
|
|
Other long-term liabilities
|
137
|
|
|
60
|
|
||
Total income taxes payable
|
$
|
195
|
|
|
$
|
116
|
|
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at January 1
|
$
|
114
|
|
|
$
|
125
|
|
|
$
|
117
|
|
Adjustments based on tax positions related to current year
|
29
|
|
|
(7
|
)
|
|
(12
|
)
|
|||
Additions based on acquisitions
|
—
|
|
|
—
|
|
|
27
|
|
|||
Lapse of statute of limitations
|
(1
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|||
Balance at December 31
|
$
|
142
|
|
|
$
|
114
|
|
|
$
|
125
|
|
8.
|
BORROWINGS
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Borrowings consisted of:
|
|
|
|
||||
5.5% notes due November 2019
|
$
|
250
|
|
|
$
|
249
|
|
2.7% notes due January 2020
|
797
|
|
|
796
|
|
||
4.5% notes due January 2021
|
185
|
|
|
184
|
|
||
3.6% notes due August 2022
|
738
|
|
|
741
|
|
||
1.50% notes due May 2023
(1)
|
895
|
|
|
786
|
|
||
7 1/4% debentures due January 2024
|
197
|
|
|
197
|
|
||
7 5/8% debentures due June 2024
|
43
|
|
|
43
|
|
||
3.8% notes due March 2025
|
690
|
|
|
689
|
|
||
1.875% notes due November 2026
(1)
|
592
|
|
|
519
|
|
||
7.60% debentures due February 2027
|
195
|
|
|
195
|
|
||
4.8% notes due September 2042
|
493
|
|
|
493
|
|
||
4.65% notes due October 2044
|
871
|
|
|
870
|
|
||
Commercial paper and short-term borrowings
|
389
|
|
|
280
|
|
||
Credit facilities borrowings
|
200
|
|
|
549
|
|
||
Capital leases and other
|
5
|
|
|
3
|
|
||
Total borrowings
|
6,540
|
|
|
6,594
|
|
||
Borrowings due within one year
|
393
|
|
|
283
|
|
||
Long-term borrowings
|
$
|
6,147
|
|
|
$
|
6,311
|
|
(1)
|
The carrying value of the euro-denominated 1.50% notes due May 2023 and 1.875% notes due November 2026 will fluctuate with changes in the euro exchange rate. The carrying value of these euro-denominated borrowings have been designated as non-derivative net investment hedges of a portion of the Company's net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations. During the
twelve months ended
December 31, 2017
, pre-tax losses of
$180 million
were recognized in "Other comprehensive income (loss)" for revaluation of these notes.
|
|
|
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount
December 31, 2017 |
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Liabilities (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
Total borrowings
|
|
$
|
6,540
|
|
|
$
|
6,980
|
|
|
$
|
6,386
|
|
|
$
|
594
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||||
(Dollars in millions)
|
|
Recorded Amount
December 31, 2016 |
|
Total Fair Value
|
|
Quoted Prices in Active Markets for Identical Liabilities (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||||
Total borrowings
|
|
$
|
6,594
|
|
|
$
|
6,868
|
|
|
$
|
6,036
|
|
|
$
|
832
|
|
|
$
|
—
|
|
9.
|
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS
|
Notional Outstanding
|
December 31, 2017
|
|
December 31, 2016
|
|||
|
|
|
|
|
||
Derivatives designated as cash flow hedges:
|
|
|
|
|||
Foreign Exchange Forward and Option Contracts (in millions)
|
|
|
|
|||
|
EUR/USD (in EUR)
|
€525
|
|
€378
|
||
|
EUR/USD (in approximate USD equivalent)
|
$630
|
|
$398
|
||
|
JPY/USD (in JPY)
|
¥0
|
|
¥1,800
|
||
|
JPY/USD (in approximate USD equivalent)
|
$0
|
|
$15
|
||
Commodity Forward and Collar Contracts
|
|
|
|
|||
|
Feedstock (in million barrels)
|
7
|
|
|
11
|
|
|
Energy (in million million british thermal units)
|
23
|
|
|
23
|
|
|
|
|
|
|||
Derivatives designated as fair value hedges:
|
|
|
|
|||
Fixed-for-floating interest rate swaps (in millions)
|
$75
|
|
$75
|
|||
|
|
|
|
|||
Non-derivatives designated as net investment hedges:
|
|
|
|
|||
Foreign Currency Net Investment Hedges (in millions)
|
|
|
|
|||
|
EUR/USD (in EUR)
|
€1,240
|
|
€1,238
|
The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis
|
||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
||||
Derivative Type
|
|
Statements of Financial
Position Location
|
|
December 31, 2017
Level 2
|
|
December 31, 2016
Level 2
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
9
|
|
|
$
|
5
|
|
Commodity contracts
|
|
Other noncurrent assets
|
|
4
|
|
|
2
|
|
||
Foreign exchange contracts
|
|
Other current assets
|
|
23
|
|
|
49
|
|
||
Foreign exchange contracts
|
|
Other noncurrent assets
|
|
2
|
|
|
47
|
|
||
|
|
|
|
|
|
|
||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
||||
Fixed-for-floating interest rate swap
|
|
Other current assets
|
|
1
|
|
|
1
|
|
||
Total Derivative Assets
|
|
|
|
$
|
39
|
|
|
$
|
104
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Payables and other current liabilities
|
|
$
|
28
|
|
|
$
|
62
|
|
Commodity contracts
|
|
Other long-term liabilities
|
|
10
|
|
|
69
|
|
||
Foreign exchange contracts
|
|
Payables and other current liabilities
|
|
6
|
|
|
—
|
|
||
Foreign exchange contracts
|
|
Other long-term liabilities
|
|
4
|
|
|
—
|
|
||
|
|
|
|
|
|
|
||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
||||
Fixed-for-floating interest rate swap
|
|
Long-term borrowings
|
|
4
|
|
|
4
|
|
||
Total Derivative Liabilities
|
|
|
|
$
|
52
|
|
|
$
|
135
|
|
Total Net Derivative Liabilities
|
|
|
|
$
|
13
|
|
|
$
|
31
|
|
(Dollars in millions)
|
|
Change in amount of after tax gain/(loss) recognized in OCI on Derivatives (effective portion)
|
|
Pre-tax amount of gain/(loss) reclassified from AOCI into income (effective portion)
|
|
Additional gain/(loss) recognized in earnings (effective portion)
|
|
|
||||||||||||||||||
|
|
December 31
|
|
December 31
|
|
December 31
|
|
|
||||||||||||||||||
Hedging Relationships
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Income Statement Classification
|
||||||||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity contracts
|
|
$
|
62
|
|
|
$
|
193
|
|
|
$
|
(43
|
)
|
|
$
|
(168
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cost of sales
|
Foreign exchange contracts
|
|
(50
|
)
|
|
(29
|
)
|
|
35
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
Sales
|
||||||
Forward starting interest rate and treasury lock swap contracts
|
|
3
|
|
|
(2
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
Net interest expense
|
||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-for-floating interest rate swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
11
|
|
|
Net interest expense
|
||||||
Non-derivatives in net investment hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net investment hedges (pre-tax)
|
|
(180
|
)
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
||||||
Derivatives not designated as hedges
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(34
|
)
|
|
Other (income) charges, net
|
(1)
|
The gains or losses on derivatives that are not designated as hedges are marked-to-market and represent foreign exchange derivatives denominated in multiple currencies and are transacted and settled in the same quarter.
|
10.
|
RETIREMENT PLANS
|
|
Pension
Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
(Dollars in millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
|
|
|
||||||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation, beginning of year
|
$
|
2,141
|
|
|
$
|
801
|
|
|
$
|
2,262
|
|
|
$
|
763
|
|
|
$
|
737
|
|
|
$
|
853
|
|
Service cost
|
37
|
|
|
13
|
|
|
39
|
|
|
12
|
|
|
3
|
|
|
5
|
|
||||||
Interest cost
|
66
|
|
|
20
|
|
|
74
|
|
|
23
|
|
|
23
|
|
|
27
|
|
||||||
Actuarial (gain) loss
|
94
|
|
|
(11
|
)
|
|
38
|
|
|
123
|
|
|
30
|
|
|
12
|
|
||||||
Settlement
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Plan amendments and other
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
||||||
Plan participants' contributions
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
12
|
|
|
14
|
|
||||||
Effect of currency exchange
|
—
|
|
|
90
|
|
|
—
|
|
|
(100
|
)
|
|
1
|
|
|
—
|
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Benefits paid
|
(184
|
)
|
|
(21
|
)
|
|
(220
|
)
|
|
(21
|
)
|
|
(69
|
)
|
|
(69
|
)
|
||||||
Benefit obligation, end of year
|
$
|
2,154
|
|
|
$
|
893
|
|
|
$
|
2,141
|
|
|
$
|
801
|
|
|
$
|
738
|
|
|
$
|
737
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, beginning of year
|
$
|
1,959
|
|
|
$
|
667
|
|
|
$
|
1,887
|
|
|
$
|
650
|
|
|
$
|
149
|
|
|
$
|
157
|
|
Actual return on plan assets
|
271
|
|
|
31
|
|
|
142
|
|
|
103
|
|
|
22
|
|
|
12
|
|
||||||
Effect of currency exchange
|
—
|
|
|
76
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
8
|
|
|
19
|
|
|
204
|
|
|
18
|
|
|
43
|
|
|
39
|
|
||||||
Reserve for third party contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(5
|
)
|
||||||
Plan participants' contributions
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
12
|
|
|
14
|
|
||||||
Benefits paid
|
(184
|
)
|
|
(21
|
)
|
|
(220
|
)
|
|
(21
|
)
|
|
(69
|
)
|
|
(69
|
)
|
||||||
Federal subsidy on benefits paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, end of year
|
$
|
2,054
|
|
|
$
|
773
|
|
|
$
|
1,959
|
|
|
$
|
667
|
|
|
$
|
148
|
|
|
$
|
149
|
|
Funded status at end of year
|
$
|
(100
|
)
|
|
$
|
(120
|
)
|
|
$
|
(182
|
)
|
|
$
|
(134
|
)
|
|
$
|
(590
|
)
|
|
$
|
(588
|
)
|
Amounts recognized in the Consolidated Statements of Financial Position consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other noncurrent assets
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
30
|
|
Current liabilities
|
(3
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
(44
|
)
|
|
(42
|
)
|
||||||
Post-employment obligations
|
(109
|
)
|
|
(127
|
)
|
|
(178
|
)
|
|
(133
|
)
|
|
(584
|
)
|
|
(576
|
)
|
||||||
Net amount recognized, end of year
|
$
|
(100
|
)
|
|
$
|
(120
|
)
|
|
$
|
(182
|
)
|
|
$
|
(134
|
)
|
|
$
|
(590
|
)
|
|
$
|
(588
|
)
|
Accumulated benefit obligation
|
$
|
2,031
|
|
|
$
|
845
|
|
|
$
|
2,030
|
|
|
$
|
753
|
|
|
|
|
|
||||
Amounts recognized in accumulated other comprehensive income consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service (credit) cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
|
$
|
(222
|
)
|
|
$
|
(262
|
)
|
(Dollars in millions)
|
2017
|
|
2016
|
||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
1,709
|
|
|
$
|
658
|
|
|
$
|
1,865
|
|
|
$
|
801
|
|
Fair value of plan assets
|
1,597
|
|
|
530
|
|
|
1,680
|
|
|
667
|
|
(Dollars in millions)
|
2017
|
|
2016
|
||||||||||||
|
U.S.
(1)
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Projected benefit obligation
|
$
|
170
|
|
|
$
|
618
|
|
|
$
|
1,865
|
|
|
$
|
557
|
|
Accumulated benefit obligation
|
159
|
|
|
596
|
|
|
1,754
|
|
|
535
|
|
||||
Fair value of plan assets
|
117
|
|
|
492
|
|
|
1,680
|
|
|
434
|
|
(1)
|
Return on assets during 2017, including returns on
$200 million
contributions made in 2016, resulted in the fair value of plan assets exceeding the accumulated benefit obligation for a significant U.S. pension plan.
|
|
Pension Plans
|
|
Postretirement Benefit Plans
|
||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
(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
|
$
|
37
|
|
|
$
|
13
|
|
|
$
|
39
|
|
|
$
|
12
|
|
|
$
|
39
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
8
|
|
Interest cost
|
66
|
|
|
20
|
|
|
74
|
|
|
23
|
|
|
87
|
|
|
26
|
|
|
23
|
|
|
27
|
|
|
39
|
|
|||||||||
Expected return on plan assets
|
(140
|
)
|
|
(35
|
)
|
|
(138
|
)
|
|
(32
|
)
|
|
(148
|
)
|
|
(37
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||||||||
Curtailment gain
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service (credit) cost
|
(4
|
)
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
|
(40
|
)
|
|
(44
|
)
|
|
(24
|
)
|
|||||||||
Mark-to-market pension and other postretirement benefits (gain) loss, net
|
(37
|
)
|
|
(7
|
)
|
|
34
|
|
|
52
|
|
|
140
|
|
|
(20
|
)
|
|
23
|
|
|
11
|
|
|
(5
|
)
|
|||||||||
Net periodic benefit (credit) cost
|
$
|
(78
|
)
|
|
$
|
(8
|
)
|
|
$
|
5
|
|
|
$
|
55
|
|
|
$
|
114
|
|
|
$
|
(22
|
)
|
|
$
|
4
|
|
|
$
|
(7
|
)
|
|
$
|
10
|
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Curtailment gain
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current year prior service credit (cost)
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
140
|
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service (credit) cost
|
(4
|
)
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
|
(40
|
)
|
|
(44
|
)
|
|
(24
|
)
|
|||||||||
Total
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(2
|
)
|
|
$
|
(40
|
)
|
|
$
|
62
|
|
|
$
|
116
|
|
(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:
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
3.57
|
%
|
2.25
|
%
|
|
3.89
|
%
|
2.33
|
%
|
|
4.13
|
%
|
3.26
|
%
|
|
3.54
|
%
|
|
3.91
|
%
|
|
4.17
|
%
|
Rate of compensation increase
|
3.25
|
%
|
2.95
|
%
|
|
3.25
|
%
|
2.94
|
%
|
|
3.50
|
%
|
3.00
|
%
|
|
3.25
|
%
|
|
3.25
|
%
|
|
3.50
|
%
|
Health care cost trend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Initial
|
|
|
|
|
|
|
|
|
|
6.75
|
%
|
|
7.00
|
%
|
|
7.50
|
%
|
||||||
Decreasing to ultimate trend of
|
|
|
|
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
||||||
in year
|
|
|
|
|
|
|
|
|
|
2025
|
|
|
2021
|
|
|
2021
|
|
||||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
U.S.
|
Non-U.S.
|
|
|
|
|
|
|
|||||||||
Discount rate
|
3.89
|
%
|
2.33
|
%
|
|
4.13
|
%
|
3.26
|
%
|
|
3.80
|
%
|
3.10
|
%
|
|
3.91
|
%
|
|
4.17
|
%
|
|
3.91
|
%
|
Discount rate for service cost
|
3.89
|
%
|
2.33
|
%
|
|
4.13
|
%
|
3.26
|
%
|
|
3.80
|
%
|
3.10
|
%
|
|
4.31
|
%
|
|
4.57
|
%
|
|
3.91
|
%
|
Discount rate for interest cost
|
3.24
|
%
|
2.33
|
%
|
|
3.33
|
%
|
3.26
|
%
|
|
3.80
|
%
|
3.10
|
%
|
|
3.28
|
%
|
|
3.42
|
%
|
|
3.91
|
%
|
Expected return on assets
|
7.49
|
%
|
5.02
|
%
|
|
7.60
|
%
|
5.11
|
%
|
|
7.78
|
%
|
5.50
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
Rate of compensation increase
|
3.25
|
%
|
2.94
|
%
|
|
3.50
|
%
|
3.00
|
%
|
|
3.50
|
%
|
3.24
|
%
|
|
3.25
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
Health care cost trend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Initial
|
|
|
|
|
|
|
|
|
|
7.00
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
||||||
Decreasing to ultimate trend of
|
|
|
|
|
|
|
|
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
||||||
in year
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2021
|
|
|
2020
|
|
(Dollars in millions)
|
|
|
|
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||||||||||||
Description
|
December 31, 2017
|
|
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)
|
$
|
20
|
|
|
$
|
57
|
|
|
$
|
20
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Public Equity - United States
(2)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other Investments
(3)
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||||||
Total Assets at Fair Value
|
$
|
24
|
|
|
$
|
108
|
|
|
$
|
24
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
Investments Measured at Net Asset Value
(4)
|
2,030
|
|
|
665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Assets
|
$
|
2,054
|
|
|
$
|
773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||||||||||||||
Description
|
December 31, 2016
|
|
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)
|
$
|
41
|
|
|
$
|
25
|
|
|
$
|
41
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Public Equity - United States
(2)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other Investments
(3)
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||||||
Total Assets at Fair Value
|
$
|
45
|
|
|
$
|
69
|
|
|
$
|
45
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Investments Measured at Net Asset Value
(4)
|
1,914
|
|
|
598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Assets
|
$
|
1,959
|
|
|
$
|
667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash & Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts.
|
(2)
|
Public Equity - United States: Common stock equity securities which are primarily valued using a market approach based on the quoted market prices.
|
(3)
|
Other Investments: Primarily consist of insurance contracts which are generally valued using a crediting rate that approximates market returns and investments in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.
|
(4)
|
Investments Measured at Net Asset Value: The underlying debt and public 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. The other alternative investments in this category are valued under the practical expedient method which is based on the most recently reported 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, 2017
|
||||||||||||
Description
|
December 31, 2017
|
|
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)
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
Total
|
$
|
115
|
|
|
$
|
2
|
|
|
$
|
113
|
|
|
$
|
—
|
|
(Dollars in millions)
|
|
|
Fair Value Measurements at
December 31, 2016 |
||||||||||||
Description
|
December 31, 2016
|
|
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)
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt
(2)
:
|
|
|
|
|
|
|
|
||||||||
Fixed Income (U.S.)
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
||||
Fixed Income (Non-U.S.)
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Total
|
$
|
115
|
|
|
$
|
3
|
|
|
$
|
112
|
|
|
$
|
—
|
|
(1)
|
Cash & Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts.
|
(2)
|
Debt: The fixed income securities are primarily valued upon a market approach, using matrix pricing and considering a security’s relationship to other securities for which quoted prices in an active market may be available, or an income approach, converting future cash flows to a single present value amount. Inputs used in developing fair value estimates include reported trades, broker quotes, benchmark yields, and base spreads.
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||
|
|
Other Investments
(1)
|
||
(Dollars in millions)
|
|
Non-U.S. Pension Plans
|
||
Balance at December 31, 2015
|
|
$
|
42
|
|
Unrealized gains
|
|
2
|
|
|
Balance at December 31, 2016
|
|
44
|
|
|
Unrealized gains
|
|
7
|
|
|
Balance at December 31, 2017
|
|
$
|
51
|
|
(1)
|
Primarily consists of insurance contracts.
|
|
U.S. Pension Plans
|
|
Non-U.S. Pension Plans
|
|
Postretirement Benefit Plan
|
||||||
|
2018 Target Allocation
|
Plan Assets at
December 31, 2017 |
Plan Assets at
December 31, 2016 |
|
2018 Target Allocation
|
Plan Assets at
December 31, 2017 |
Plan Assets at
December 31, 2016 |
|
2018 Target Allocation
|
Plan Assets at
December 31, 2017 |
Plan Assets at
December 31, 2016 |
Asset category
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
44%
|
48%
|
47%
|
|
26%
|
22%
|
30%
|
|
—%
|
—%
|
—%
|
Debt securities
|
40%
|
40%
|
41%
|
|
51%
|
55%
|
52%
|
|
100%
|
100%
|
100%
|
Real estate
|
3%
|
2%
|
2%
|
|
5%
|
7%
|
2%
|
|
—%
|
—%
|
—%
|
Other investments
(1)
|
13%
|
10%
|
10%
|
|
18%
|
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.
|
|
|
||||||
2018
|
$
|
197
|
|
|
$
|
23
|
|
|
$
|
58
|
|
2019
|
165
|
|
|
23
|
|
|
58
|
|
|||
2020
|
162
|
|
|
25
|
|
|
58
|
|
|||
2021
|
154
|
|
|
25
|
|
|
57
|
|
|||
2022
|
151
|
|
|
26
|
|
|
53
|
|
|||
2023-2027
|
722
|
|
|
164
|
|
|
220
|
|
11.
|
COMMITMENTS AND OFF BALANCE SHEET ARRANGEMENTS
|
(Dollars in millions)
|
|
Payments Due for
|
||||||||||||||||||||||||||
Period
|
|
Debt Securities
|
|
Credit Facilities and Other
|
|
Interest Payable
|
|
Purchase Obligations
|
|
Operating Leases
|
|
Other Liabilities
|
|
Total
|
||||||||||||||
2018
|
|
$
|
—
|
|
|
$
|
393
|
|
|
$
|
228
|
|
|
$
|
230
|
|
|
$
|
67
|
|
|
$
|
234
|
|
|
$
|
1,152
|
|
2019
|
|
250
|
|
|
1
|
|
|
229
|
|
|
222
|
|
|
55
|
|
|
85
|
|
|
842
|
|
|||||||
2020
|
|
797
|
|
|
—
|
|
|
207
|
|
|
184
|
|
|
44
|
|
|
90
|
|
|
1,322
|
|
|||||||
2021
|
|
185
|
|
|
200
|
|
|
190
|
|
|
92
|
|
|
34
|
|
|
91
|
|
|
792
|
|
|||||||
2022
|
|
738
|
|
|
—
|
|
|
178
|
|
|
160
|
|
|
23
|
|
|
92
|
|
|
1,191
|
|
|||||||
2023 and beyond
|
|
3,976
|
|
|
—
|
|
|
1,619
|
|
|
2,032
|
|
|
47
|
|
|
1,056
|
|
|
8,730
|
|
|||||||
Total
|
|
$
|
5,946
|
|
|
$
|
594
|
|
|
$
|
2,651
|
|
|
$
|
2,920
|
|
|
$
|
270
|
|
|
$
|
1,648
|
|
|
$
|
14,029
|
|
12.
|
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS
|
(Dollars in millions)
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Environmental contingent liabilities, current
|
$
|
25
|
|
|
$
|
30
|
|
Environmental contingent liabilities, long-term
|
279
|
|
|
291
|
|
||
Total
|
$
|
304
|
|
|
$
|
321
|
|
(Dollars in millions)
|
Environmental Remediation Liabilities
|
||
Balance at December 31, 2016
|
$
|
295
|
|
Cash reductions
|
(15
|
)
|
|
Balance at December 31, 2017
|
$
|
280
|
|
13.
|
LEGAL MATTERS
|
14.
|
STOCKHOLDERS' EQUITY
|
(Dollars in millions)
|
Common Stock at Par Value
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Treasury Stock at Cost
|
|
Total Eastman Stockholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||||
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
|
—
|
|
|
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
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
854
|
|
|
—
|
|
|
—
|
|
|
854
|
|
|
5
|
|
|
859
|
|
||||||||
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
—
|
|
|
(279
|
)
|
||||||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
||||||||
Share-Based Compensation Expense
(2)
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||||
Stock Option Exercises
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||||||
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
(145
|
)
|
|
—
|
|
|
(145
|
)
|
||||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||||
Balance at December 31, 2016
|
$
|
2
|
|
|
$
|
1,915
|
|
|
$
|
5,721
|
|
|
$
|
(281
|
)
|
|
$
|
(2,825
|
)
|
|
$
|
4,532
|
|
|
$
|
76
|
|
|
$
|
4,608
|
|
Net Earnings
|
—
|
|
|
—
|
|
|
1,384
|
|
|
—
|
|
|
—
|
|
|
1,384
|
|
|
4
|
|
|
1,388
|
|
||||||||
Cash Dividends
(1)
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
||||||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||||
Share-Based Compensation Expense
(2)
|
—
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||||||
Stock Option Exercises
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||||
Other
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
||||||||
Share Repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
(350
|
)
|
|
—
|
|
|
(350
|
)
|
||||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||
Balance at December 31, 2017
|
$
|
2
|
|
|
$
|
1,983
|
|
|
$
|
6,802
|
|
|
$
|
(209
|
)
|
|
$
|
(3,175
|
)
|
|
$
|
5,403
|
|
|
$
|
77
|
|
|
$
|
5,480
|
|
(1)
|
Cash dividends includes cash dividends paid and dividends declared, but unpaid.
|
(2)
|
Share-based compensation expense is the fair value of share-based awards.
|
|
For years ended December 31,
|
||||||||||
(In millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net earnings attributable to Eastman
|
$
|
1,384
|
|
|
$
|
854
|
|
|
$
|
848
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Weighted average shares used for basic EPS
|
144.8
|
|
|
147.3
|
|
|
148.6
|
|
|||
Dilutive effect of stock options and other award plans
|
1.3
|
|
|
1.1
|
|
|
1.2
|
|
|||
Weighted average shares used for diluted EPS
|
146.1
|
|
|
148.4
|
|
|
149.8
|
|
|||
|
|
|
|
|
|
||||||
EPS
(1)
|
|
|
|
|
|
||||||
Basic
|
$
|
9.56
|
|
|
$
|
5.80
|
|
|
$
|
5.71
|
|
Diluted
|
$
|
9.47
|
|
|
$
|
5.75
|
|
|
$
|
5.66
|
|
(1)
|
Earnings per share are calculated using whole dollars and shares.
|
|
For years ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
|
|
|
|
|
|||
Balance at beginning of year
|
217,707,600
|
|
|
216,899,964
|
|
|
216,256,971
|
|
Issued for employee compensation and benefit plans
|
662,392
|
|
|
807,636
|
|
|
642,993
|
|
Balance at end of year
|
218,369,992
|
|
|
217,707,600
|
|
|
216,899,964
|
|
(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, 2015
|
$
|
(284
|
)
|
|
$
|
129
|
|
|
$
|
(234
|
)
|
|
$
|
(1
|
)
|
|
$
|
(390
|
)
|
Period change
|
(97
|
)
|
|
34
|
|
|
172
|
|
|
—
|
|
|
109
|
|
|||||
Balance at December 31, 2016
|
(381
|
)
|
|
163
|
|
|
(62
|
)
|
|
(1
|
)
|
|
(281
|
)
|
|||||
Period change
|
85
|
|
|
(27
|
)
|
|
14
|
|
|
—
|
|
|
72
|
|
|||||
Balance at December 31, 2017
|
$
|
(296
|
)
|
|
$
|
136
|
|
|
$
|
(48
|
)
|
|
$
|
(1
|
)
|
|
$
|
(209
|
)
|
|
For years ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(Dollars in millions)
|
Before Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Net of Tax
|
|
Before Tax
|
|
Net of Tax
|
||||||||||||
Change in cumulative translation adjustment
|
$
|
85
|
|
|
$
|
85
|
|
|
$
|
(97
|
)
|
|
$
|
(97
|
)
|
|
$
|
(216
|
)
|
|
$
|
(216
|
)
|
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Prior service credit arising during the period
|
—
|
|
|
—
|
|
|
103
|
|
|
64
|
|
|
140
|
|
|
87
|
|
||||||
Amortization of unrecognized prior service credits included in net periodic costs
|
(43
|
)
|
|
(27
|
)
|
|
(48
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|
(19
|
)
|
||||||
Change in defined benefit pension and other postretirement benefit plans
|
(43
|
)
|
|
(27
|
)
|
|
55
|
|
|
34
|
|
|
110
|
|
|
68
|
|
||||||
Derivatives and hedging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized gain (loss) during period
|
11
|
|
|
7
|
|
|
150
|
|
|
93
|
|
|
(78
|
)
|
|
(48
|
)
|
||||||
Reclassification adjustment for losses included in net income, net
|
11
|
|
|
7
|
|
|
127
|
|
|
79
|
|
|
134
|
|
|
83
|
|
||||||
Change in derivatives and hedging
|
22
|
|
|
14
|
|
|
277
|
|
|
172
|
|
|
56
|
|
|
35
|
|
||||||
Total other comprehensive income (loss)
|
$
|
64
|
|
|
$
|
72
|
|
|
$
|
235
|
|
|
$
|
109
|
|
|
$
|
(50
|
)
|
|
$
|
(113
|
)
|
15.
|
ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Asset impairments
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
85
|
|
Gain on sale of assets, net
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Intangible asset and goodwill impairments
|
—
|
|
|
—
|
|
|
22
|
|
|||
Severance charges
|
6
|
|
|
32
|
|
|
68
|
|
|||
Site closure and restructuring charges
|
1
|
|
|
3
|
|
|
9
|
|
|||
Total
|
$
|
8
|
|
|
$
|
45
|
|
|
$
|
183
|
|
|
Balance at
January 1,
2017
|
|
Provision/ Adjustments
|
|
Non-cash Reductions/ Additions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2017
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
42
|
|
|
6
|
|
|
—
|
|
|
(29
|
)
|
|
19
|
|
|||||
Site closure & restructuring costs
|
13
|
|
|
1
|
|
|
1
|
|
|
(5
|
)
|
|
10
|
|
|||||
Total
|
$
|
55
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
$
|
29
|
|
|
Balance at
January 1,
2016
|
|
Provision/ Adjustments
|
|
Non-cash Reductions/ Additions
|
|
Cash
Reductions
|
|
Balance at
December 31,
2016
|
||||||||||
Noncash charges
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance costs
|
55
|
|
|
32
|
|
|
—
|
|
|
(45
|
)
|
|
42
|
|
|||||
Site closure & restructuring costs
|
11
|
|
|
1
|
|
|
4
|
|
|
(3
|
)
|
|
13
|
|
|||||
Total
|
$
|
66
|
|
|
$
|
45
|
|
|
$
|
(8
|
)
|
|
$
|
(48
|
)
|
|
$
|
55
|
|
|
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
|
|
16.
|
OTHER (INCOME) CHARGES, NET
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign exchange transaction losses (gains), net
|
$
|
5
|
|
|
$
|
27
|
|
|
$
|
6
|
|
(Income) loss from equity investments and other investment (gains) losses, net
|
(14
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||
Cost of disposition of claims against discontinued Solutia operations
|
9
|
|
|
5
|
|
|
—
|
|
|||
Gains from sale of businesses
|
(3
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Other, net
|
5
|
|
|
(6
|
)
|
|
1
|
|
|||
Other (income) charges, net
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
17.
|
SHARE-BASED COMPENSATION PLANS AND AWARDS
|
Assumptions
|
|
2017
|
|
2016
|
|
2015
|
Expected volatility rate
|
|
20.45%
|
|
23.71%
|
|
24.11%
|
Expected dividend yield
|
|
2.64%
|
|
2.31%
|
|
1.75%
|
Average risk-free interest rate
|
|
1.91%
|
|
1.23%
|
|
1.45%
|
Expected term years
|
|
5.0
|
|
5.0
|
|
4.8
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|||||||||
Outstanding at beginning of year
|
2,363,700
|
|
|
$
|
61
|
|
|
2,434,600
|
|
|
$
|
53
|
|
|
2,209,800
|
|
|
$
|
46
|
|
Granted
|
745,800
|
|
|
80
|
|
|
554,000
|
|
|
65
|
|
|
512,700
|
|
|
74
|
|
|||
Exercised
|
(489,300
|
)
|
|
44
|
|
|
(618,500
|
)
|
|
33
|
|
|
(271,200
|
)
|
|
30
|
|
|||
Cancelled, forfeited, or expired
|
(6,100
|
)
|
|
74
|
|
|
(6,400
|
)
|
|
77
|
|
|
(16,700
|
)
|
|
77
|
|
|||
Outstanding at end of year
|
2,614,100
|
|
|
$
|
70
|
|
|
2,363,700
|
|
|
$
|
61
|
|
|
2,434,600
|
|
|
$
|
53
|
|
Options exercisable at year-end
|
1,335,500
|
|
|
|
|
1,378,000
|
|
|
|
|
1,643,100
|
|
|
|
||||||
Available for grant at end of year
|
9,943,033
|
|
|
|
|
3,807,724
|
|
|
|
|
5,413,250
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||
Range of Exercise Prices
|
|
Number Outstanding at
December 31, 2017
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Weighted-Average Exercise Price
|
|
Number Exercisable at
December 31, 2017
|
|
Weighted-Average Exercise Price
|
||||
$18-$35
|
|
62,500
|
|
1.7
|
|
$
|
27
|
|
|
62,500
|
|
$
|
27
|
|
$36-$50
|
|
271,500
|
|
3.2
|
|
39
|
|
|
271,500
|
|
39
|
|
||
$51-$73
|
|
823,300
|
|
7.1
|
|
67
|
|
|
454,000
|
|
68
|
|
||
$74-$87
|
|
1,456,800
|
|
8.0
|
|
79
|
|
|
547,500
|
|
80
|
|
||
|
|
2,614,100
|
|
7.1
|
|
$
|
70
|
|
|
1,335,500
|
|
$
|
65
|
|
Nonvested Options
|
|
Number of Options
|
|
Weighted-Average Grant Date Fair Value
|
|
Nonvested at January 1, 2017
|
|
985,700
|
|
|
$12.56
|
Granted
|
|
745,800
|
|
|
$11.79
|
Vested
|
|
(446,800
|
)
|
|
$13.36
|
Forfeited or expired
|
|
(6,100
|
)
|
|
$13.89
|
Nonvested options at December 31, 2017
|
|
1,278,600
|
|
|
$11.82
|
18.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current assets
|
$
|
13
|
|
|
$
|
(35
|
)
|
|
$
|
5
|
|
Other assets
|
29
|
|
|
37
|
|
|
75
|
|
|||
Current liabilities
|
59
|
|
|
(98
|
)
|
|
22
|
|
|||
Long-term liabilities
|
43
|
|
|
(29
|
)
|
|
(72
|
)
|
|||
Total
|
$
|
144
|
|
|
$
|
(125
|
)
|
|
$
|
30
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
263
|
|
|
$
|
280
|
|
|
$
|
265
|
|
Income taxes
|
97
|
|
|
120
|
|
|
124
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Outstanding trade payables related to capital expenditures
|
27
|
|
|
34
|
|
|
10
|
|
|||
(Gain) loss from equity investments
|
(14
|
)
|
|
(15
|
)
|
|
(15
|
)
|
19.
|
SEGMENT INFORMATION
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Coatings and Inks Additives
|
23%
|
24%
|
24%
|
Adhesives Resins
|
18%
|
21%
|
21%
|
Tire Additives
|
17%
|
17%
|
17%
|
Care Chemicals
|
17%
|
15%
|
15%
|
Specialty Fluids
|
13%
|
11%
|
11%
|
Animal Nutrition and Crop Protection
|
12%
|
12%
|
12%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Specialty Plastics
|
51%
|
50%
|
51%
|
Advanced Interlayers
|
33%
|
34%
|
33%
|
Performance Films
|
16%
|
16%
|
16%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Intermediates
|
64%
|
65%
|
65%
|
Plasticizers
|
19%
|
20%
|
20%
|
Functional Amines
|
17%
|
15%
|
15%
|
Total
|
100%
|
100%
|
100%
|
|
Percentage of Total Segment Sales
|
||
Product Lines
|
2017
|
2016
|
2015
|
Acetate Tow
|
77%
|
80%
|
78%
|
Acetyl Chemical Products
|
15%
|
13%
|
14%
|
Acetate Yarn
|
8%
|
7%
|
8%
|
Total
|
100%
|
100%
|
100%
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
3,343
|
|
|
$
|
2,979
|
|
|
$
|
3,159
|
|
Advanced Materials
|
2,572
|
|
|
2,457
|
|
|
2,414
|
|
|||
Chemical Intermediates
|
2,728
|
|
|
2,534
|
|
|
2,811
|
|
|||
Fibers
|
852
|
|
|
992
|
|
|
1,219
|
|
|||
Total Sales by Operating Segment
|
$
|
9,495
|
|
|
$
|
8,962
|
|
|
$
|
9,603
|
|
Other
|
54
|
|
|
46
|
|
|
45
|
|
|||
Total Sales
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Earnings (Loss)
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
646
|
|
|
$
|
601
|
|
|
$
|
660
|
|
Advanced Materials
|
482
|
|
|
471
|
|
|
384
|
|
|||
Chemical Intermediates
|
255
|
|
|
171
|
|
|
294
|
|
|||
Fibers
|
175
|
|
|
310
|
|
|
292
|
|
|||
Total Operating Earnings by Operating Segment
|
1,558
|
|
|
1,553
|
|
|
1,630
|
|
|||
Other
|
|
|
|
|
|
||||||
Growth initiatives and businesses not allocated to operating segments
|
(114
|
)
|
|
(82
|
)
|
|
(87
|
)
|
|||
Pension and other postretirement benefit plans income (expense), net not allocated to operating segments
|
93
|
|
|
(44
|
)
|
|
(76
|
)
|
|||
Restructuring and acquisition integration and transaction costs
|
(5
|
)
|
|
(44
|
)
|
|
(83
|
)
|
|||
Total Operating Earnings
|
$
|
1,532
|
|
|
$
|
1,383
|
|
|
$
|
1,384
|
|
|
December 31,
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
||||
Assets by Segment
(1)
|
|
|
|
||||
Additives & Functional Products
|
$
|
6,648
|
|
|
$
|
6,255
|
|
Advanced Materials
|
4,379
|
|
|
4,247
|
|
||
Chemical Intermediates
|
3,000
|
|
|
2,927
|
|
||
Fibers
|
929
|
|
|
920
|
|
||
Total Assets by Operating Segment
|
14,956
|
|
|
14,349
|
|
||
Corporate Assets
|
1,043
|
|
|
1,108
|
|
||
Total Assets
|
$
|
15,999
|
|
|
$
|
15,457
|
|
(1)
|
The chief operating decision maker holds operating segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets. Segment asset balances for shared fixed assets within the CI and Fibers segments as of December 31, 2016 have been reclassified to conform to current period allocation methodology.
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation and Amortization Expense by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
213
|
|
|
$
|
208
|
|
|
$
|
203
|
|
Advanced Materials
|
164
|
|
|
160
|
|
|
161
|
|
|||
Chemical Intermediates
|
148
|
|
|
157
|
|
|
149
|
|
|||
Fibers
|
58
|
|
|
51
|
|
|
55
|
|
|||
Total Depreciation and Amortization Expense by Operating Segment
|
583
|
|
|
576
|
|
|
568
|
|
|||
Other
|
4
|
|
|
4
|
|
|
3
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
587
|
|
|
$
|
580
|
|
|
$
|
571
|
|
|
For years ended December 31,
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Capital Expenditures by Segment
|
|
|
|
|
|
||||||
Additives & Functional Products
|
$
|
229
|
|
|
$
|
212
|
|
|
$
|
227
|
|
Advanced Materials
|
248
|
|
|
244
|
|
|
225
|
|
|||
Chemical Intermediates
|
116
|
|
|
128
|
|
|
139
|
|
|||
Fibers
|
52
|
|
|
38
|
|
|
57
|
|
|||
Total Capital Expenditures by Operating Segment
|
645
|
|
|
622
|
|
|
648
|
|
|||
Other
|
4
|
|
|
4
|
|
|
4
|
|
|||
Total Capital Expenditures
|
$
|
649
|
|
|
$
|
626
|
|
|
$
|
652
|
|
(Dollars in millions)
|
For years ended December 31,
|
||||||||||
Geographic Information
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
|
|
|
|
|
||||||
United States
|
$
|
3,999
|
|
|
$
|
3,803
|
|
|
$
|
4,096
|
|
All foreign countries
|
5,550
|
|
|
5,205
|
|
|
5,552
|
|
|||
Total
|
$
|
9,549
|
|
|
$
|
9,008
|
|
|
$
|
9,648
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net properties
|
|
|
|
|
|
||||||
United States
|
$
|
4,203
|
|
|
$
|
4,066
|
|
|
$
|
3,939
|
|
All foreign countries
|
1,404
|
|
|
1,210
|
|
|
1,191
|
|
|||
Total
|
$
|
5,607
|
|
|
$
|
5,276
|
|
|
$
|
5,130
|
|
20.
|
QUARTERLY SALES AND EARNINGS DATA – UNAUDITED
|
(Dollars in millions, except per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,303
|
|
|
$
|
2,419
|
|
|
$
|
2,465
|
|
|
$
|
2,362
|
|
Gross profit
|
625
|
|
|
651
|
|
|
691
|
|
|
487
|
|
||||
Asset impairments and restructuring charges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Net earnings attributable to Eastman
|
278
|
|
|
292
|
|
|
323
|
|
|
491
|
|
||||
Net earnings per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.90
|
|
|
$
|
2.01
|
|
|
$
|
2.24
|
|
|
$
|
3.42
|
|
Diluted
|
1.89
|
|
|
2.00
|
|
|
2.22
|
|
|
3.39
|
|
(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
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
2,236
|
|
|
$
|
2,297
|
|
|
$
|
2,287
|
|
|
$
|
2,188
|
|
Gross profit
|
634
|
|
|
605
|
|
|
621
|
|
|
490
|
|
||||
Asset impairments and restructuring (gains) charges, net
|
(2
|
)
|
|
—
|
|
|
30
|
|
|
17
|
|
||||
Net earnings attributable to Eastman
|
251
|
|
|
255
|
|
|
232
|
|
|
116
|
|
||||
Net earnings per share attributable to Eastman
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.70
|
|
|
$
|
1.73
|
|
|
$
|
1.57
|
|
|
$
|
0.79
|
|
Diluted
|
1.69
|
|
|
1.71
|
|
|
1.56
|
|
|
0.79
|
|
(1)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
21.
|
RESERVE ROLLFORWARDS
|
(Dollars in millions)
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2017
|
|
Charges (Credits) to Cost and Expense
|
|
Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2017
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
12
|
|
LIFO inventory
|
264
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
288
|
|
|||||
Non-environmental asset retirement obligations
|
46
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
49
|
|
|||||
Environmental contingencies
|
321
|
|
|
8
|
|
|
4
|
|
|
29
|
|
|
304
|
|
|||||
Deferred tax valuation allowance
|
278
|
|
|
126
|
|
|
6
|
|
|
—
|
|
|
410
|
|
|||||
|
$
|
919
|
|
|
$
|
163
|
|
|
$
|
11
|
|
|
$
|
30
|
|
|
$
|
1,063
|
|
(Dollars in millions)
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at January 1,
2016
|
|
Charges (Credits) to Cost and Expense
|
|
Other Accounts
|
|
Deductions
|
|
Balance at December 31, 2016
|
||||||||||
Reserve for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Doubtful accounts and returns
|
$
|
13
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
10
|
|
LIFO inventory
|
296
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
264
|
|
|||||
Non-environmental asset retirement obligations
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Environmental contingencies
|
336
|
|
|
10
|
|
|
1
|
|
|
26
|
|
|
321
|
|
|||||
Deferred tax valuation allowance
|
254
|
|
|
20
|
|
|
4
|
|
|
—
|
|
|
278
|
|
|||||
|
$
|
945
|
|
|
$
|
(4
|
)
|
|
$
|
5
|
|
|
$
|
27
|
|
|
$
|
919
|
|
(Dollars in millions)
|
|
|
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
|
|
|
58
|
|
|
(18
|
)
|
|
50
|
|
|
254
|
|
|||||
|
$
|
1,125
|
|
|
$
|
(94
|
)
|
|
$
|
(5
|
)
|
|
$
|
81
|
|
|
$
|
945
|
|
22.
|
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
|
|
2,614,100
|
|
(1)
|
$
|
70
|
|
|
9,943,033
|
|
(2)
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
TOTAL
|
|
2,614,100
|
|
|
$
|
70
|
|
|
9,943,033
|
|
|
(1)
|
Represents shares of common stock issuable upon exercise of outstanding options granted under Eastman Chemical Company's 2007 Omnibus Long-Term Compensation Plan; the 2007 Director Long-Term Compensation Subplan, a component of the 2007 Omnibus Long-Term Compensation Plan; the 2012 Omnibus Stock Compensation Plan, the 2013 Director Long-Term Compensation Subplan, a component of the 2012 Omnibus Stock Compensation Plan, the 2017 Omnibus Stock Compensation Plan, and the 2017 Director Stock Compensation Subplan, a component of the 2017 Omnibus Stock Compensation Plan.
|
(2)
|
Shares of common stock available for future awards under the Company's 2017 Omnibus Stock Compensation Plan, including the 2017 Director Stock Compensation Subplan, a component of the 2017 Omnibus Stock Compensation Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
Page
|
(a)
|
1.
|
Consolidated Financial Statements:
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
2.
|
||
(b)
|
ITEM 16.
|
FORM 10-K SUMMARY
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Description
|
|
|
|
|
3.01
|
|
|
|
|
|
3.02
|
|
|
|
|
|
4.01
|
|
|
|
|
|
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
|
|
|
|
|
|
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
|
|
|
|
|
|
4.08
|
|
|
|
|
|
4.09
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
10.01
|
|
Amended and Restated $250,000,000 Accounts Receivable Securitization Agreement dated July 9, 2008 (amended August 31, 2016) 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
and
Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016
)
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Description
|
|
|
|
|
10.02
|
|
Second Amended and Restated Five-Year Credit Agreement, dated as of October 9, 2014 (amended October 9, 2015 and August 31, 2016), 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
,
Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015
, and
Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016
)
|
|
|
|
10.03
|
|
|
|
|
|
10.04
|
|
Amended and Restated Non-Recourse Account Receivable Purchase Agreement dated December 21, 2012 (amended March 28, 2013, July 30, 2013, March 22, 2016, and December 16, 2016) between BNP Paribas Fortis Factor N.V. and Taminco US LLC (incorporated herein by reference to
Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
and
Exhibit 10.36 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016
)
|
|
|
|
10.05
|
|
Amended and Restated Non-Recourse Accounts Receivable Purchase Agreement dated October 31, 2012 (amended March 28, 2013, May 23, 2013, July 30, 2013, December 10, 2013, January 7, 2014, March 22, 2016, and December 16, 2016) between BNP Paribas Fortis Factor N.V. and Taminco B.V.B.A. (
initial 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
and
Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
and
Exhibit 10.37 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016
)
|
|
|
|
10.06
|
|
Non-Recourse Accounts Receivable Purchase agreement dated April 25, 2014 (amended May 13, 2014, November 21, 2014, March 22, 2016, and December 16, 2016) between BNP Parisbas Fortis Factor N.V. and Taminco Finland Oy (
incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016
and
Exhibit 10.38 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016
)
|
|
|
|
10.07
|
|
|
|
|
|
10.08
|
|
|
|
|
|
10.09
|
|
|
|
|
|
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
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
Exhibit Number
|
|
EXHIBIT INDEX
|
|
Description
|
|
|
|
|
10.33*
|
|
|
|
|
|
10.34*
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36*
|
|
|
|
|
|
10.37*
|
|
|
|
|
|
12.01*
|
|
|
|
|
|
21.01*
|
|
|
|
|
|
23.01*
|
|
|
|
|
|
31.01*
|
|
|
|
|
|
31.02*
|
|
|
|
|
|
32.01*
|
|
|
|
|
|
32.02*
|
|
|
|
|
|
99.01*
|
|
|
|
|
|
99.02*
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation Linkbase
|
|
|
|
101.DEF*
|
|
XBRL Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase
|
|
|
|
101.PRE*
|
|
XBRL Presentation Linkbase Document
|
*
|
Denotes exhibit filed or furnished herewith.
|
**
|
Management contract or compensatory plan or arrangement filed pursuant to Item 601(b) (10) (iii) of Regulation S-K.
|
|
|
Eastman Chemical Company
|
|
|
|
By:
|
|
/s/ Mark J. Costa
|
|
|
Mark J. Costa
|
|
|
Chief Executive Officer
|
Date:
|
March 1, 2018
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
|
|
|
|
|
|
|
|
|
|
/s/ Mark J. Costa
|
|
Chief Executive Officer and
|
|
March 1, 2018
|
Mark J. Costa
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
PRINCIPAL FINANCIAL OFFICER:
|
|
|
|
|
|
|
|
|
|
/s/ Curtis E. Espeland
|
|
Executive Vice President and
|
|
March 1, 2018
|
Curtis E. Espeland
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
PRINCIPAL ACCOUNTING OFFICER:
|
|
|
|
|
|
|
|
|
|
/s/ Scott V. King
|
|
Vice President, Corporate Controller
|
|
March 1, 2018
|
Scott V. King
|
|
and Chief Accounting Officer
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
DIRECTORS (other than Mark J. Costa, who also signed as Principal Executive Officer):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Humberto P. Alfonso
|
|
Director
|
|
March 1, 2018
|
Humberto P. Alfonso
|
|
|
|
|
|
|
|
|
|
/s/ Gary E. Anderson
|
|
Director
|
|
March 1, 2018
|
Gary E. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ Brett D. Begemann
|
|
Director
|
|
March 1, 2018
|
Brett D. Begemann
|
|
|
|
|
|
|
|
|
|
/s/ Michael P. Connors
|
|
Director
|
|
March 1, 2018
|
Michael P. Connors
|
|
|
|
|
|
|
|
|
|
/s/ Stephen R. Demeritt
|
|
Director
|
|
March 1, 2018
|
Stephen R. Demeritt
|
|
|
|
|
|
|
|
|
|
/s/ Robert M. Hernandez
|
|
Director
|
|
March 1, 2018
|
Robert M. Hernandez
|
|
|
|
|
|
|
|
|
|
/s/ Julie F. Holder
|
|
Director
|
|
March 1, 2018
|
Julie F. Holder
|
|
|
|
|
|
|
|
|
|
/s/ Renée J. Hornbaker
|
|
Director
|
|
March 1, 2018
|
Renée J. Hornbaker
|
|
|
|
|
|
|
|
|
|
/s/ Lewis M. Kling
|
|
Director
|
|
March 1, 2018
|
Lewis M. Kling
|
|
|
|
|
|
|
|
|
|
/s/ James J. O'Brien
|
|
Director
|
|
March 1, 2018
|
James J. O'Brien
|
|
|
|
|
|
|
|
|
|
/s/ David W. Raisbeck
|
|
Director
|
|
March 1, 2018
|
David W. Raisbeck
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|