株探米国株
日本語 英語
エドガーで原本を確認する
0000915389false00009153892023-04-272023-04-270000915389us-gaap:CommonStockMember2023-04-272023-04-270000915389emn:NotesDue2023Member2023-04-272023-04-270000915389emn:A1.875notesdueNovember2026Member2023-04-272023-04-27

Eastman_Black_300dpi.jpg

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported):
April 27, 2023

EASTMAN CHEMICAL COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware   1-12626   62-1539359
(State or Other Jurisdiction
of Incorporation)		   (Commission File Number)   (IRS Employer
Identification No.)
200 South Wilcox Drive  
Kingsport Tennessee 37662
(Address of Principal Executive Offices) (Zip Code)
(423) 229-2000
(Registrant’s Telephone Number, Including Area Code)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
  ☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
       
  ☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
       
  ☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
       
  ☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class   Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share   EMN New York Stock Exchange
1.50% Notes Due 2023 EMN23 New York Stock Exchange
1.875% Notes Due 2026 EMN26 New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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. ☐


EASTMAN CHEMICAL COMPANY - EMN     

Item 2.02 Results of Operations and Financial Condition
 
On April 27, 2023, the registrant publicly released its financial results for first quarter 2023. The full text of the release is furnished as Exhibit 99.01 to this Current Report on Form 8-K, and is incorporated herein by reference. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01    Regulation FD Disclosure

Unaudited Financial Information Recast for Changes in the Additives & Functional Products Segment and the Chemical Intermediates Segment

Starting in first-quarter 2023, Eastman integrated the functional amines product line into the Additives & Functional Products ("AFP") segment. In addition, organic acid products and some olefin-based products previously reported in the AFP segment are now being managed under the Chemical Intermediates segment. Because the operating results of the new segments for prior years will not be reported until the Form 10-Q is filed for each quarter of 2023, and the Form 10-K for 2023, management desires to provide more timely information to investors to enhance understanding of operating performance of the Company's adjusted segments. Therefore, Exhibit 99.02 to this Current Report on Form 8-K presents selected quarterly unaudited financial information recast for changes in segments for the years ended December 31, 2022, 2021, 2020, and 2019 to supplement financial disclosures included in the Company's previously filed reports and to recast previously disclosed segment financial information under the new reporting structure. The recast of the previous segment financial information is not a restatement of previous financial statements and does not affect the Company's consolidated reported net income, earnings per share, operating income, or total assets or liabilities for any of the previously reported periods. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits:
 
(d) Exhibits
 
The following exhibits are furnished pursuant to Item 9.01:
 
99.01    Public release by Eastman on April 27, 2023 of first quarter 2023 financial results

99.02    Unaudited Financial Information Recast for Changes in Segments

104    Cover Page Interactive Data File


EASTMAN CHEMICAL COMPANY - EMN     
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
   
Eastman Chemical Company 
 
  By: /s/ Michelle R. Stewart
Michelle R. Stewart
Vice President, Corporate Controller and Chief Accounting Officer
    Date: April 27, 2023


EX-99.01 2 ex99_0120230331cctables.htm EX-99.01 Q1 2023 EARNINGS RELEASE Document
eastman_blackx300dpi.jpg
Exhibit 99.01
Eastman Announces First-Quarter 2023 Financial Results

KINGSPORT, Tenn., April 27, 2023 – Eastman Chemical Company (NYSE:EMN) announced its first-quarter 2023 financial results.

•Strong sequential improvement in earnings driven by disciplined pricing, lower costs, and efficient operations.
•Demonstrated commercial excellence by holding prices stable to fourth quarter despite weak demand and continued customer inventory destocking.
•Continued progression on circular economy platform, building an exciting new vector of growth for the company.
•On track to reduce cost structure by more than $200 million, net of inflation.
•Functional amines, a stable growth and high-margin business, integrated into Additives & Functional Products. See “Functional Amines” section of this release and tables for more information.

(In millions, except per share amounts; unaudited) 1Q2023 1Q2022
Sales revenue $2,412 $2,714
Earnings before interest and taxes ("EBIT") 246 333
Adjusted EBIT* 283 366
Earnings per diluted share 1.12 1.80
Adjusted earnings per diluted share* 1.63 2.06
Net cash (used in) provided by operating activities (2) 17
*For non-core and unusual items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, and reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4A, 4B, and 6.

“Our first-quarter results showed solid improvement from fourth quarter, reflecting continued commercial excellence in pricing and the benefit of lower raw material and energy costs,” said Mark Costa, Board Chair and CEO. “We delivered this performance despite a global economic environment that remains challenging due to above normal customer inventory destocking, lackluster demand particularly in consumer durables and building and construction end markets, and an unfavorable impact from foreign currency exchange rates. In this environment, we are controlling what we can control, including price discipline, reducing costs, and remaining disciplined on capital allocation. We remain confident in the resiliency of our portfolio and the sustainability of our strong cash flow going forward. We are also excited about progress we are making on our circular economy initiatives, with significant milestones for the platform expected to be achieved throughout the year.”


eastman_blackx300dpi.jpg
Corporate Results 1Q 2023 versus 1Q 2022

Sales revenue decreased 11 percent due to 9 percent lower sales volume/mix, a 6 percent unfavorable impact from a divested business, and a 2 percent unfavorable impact from foreign currency, partially offset by 6 percent higher selling prices.

Sales volume/mix was lower across most product lines due to the continuation of weak primary demand and continued customer inventory destocking across several end markets, including consumer durables, building and construction, personal care, and water treatment. This weakness was partially offset by growth in automotive, particularly for advanced interlayers and performance films. Higher selling prices, primarily in Fibers and Advanced Materials, reflect the solid price gains made in 2022 to recover significantly higher raw material, energy, and distribution costs.

EBIT decreased due to lower sales volume/mix, increased pension expense, an unfavorable impact from foreign currency, and continued investment in growth. These factors were partially offset by increased selling prices more than offsetting higher variable costs and lower manufacturing costs.

Segment Results 1Q 2023 versus 1Q 2022

Advanced Materials – Sales revenue was relatively unchanged as 10 percent higher selling prices were mostly offset by 6 percent lower sales volume/mix and a 3 percent unfavorable impact from foreign currency.

Higher selling prices, particularly for advanced interlayers and specialty plastics, were a result of significant levels of inflation in 2022. Lower sales volume/mix in specialty plastics was due to continued weak demand and aggressive customer inventory destocking, particularly in the consumer durables and consumables end markets. The lower sales volume/mix in specialty plastics was partially offset by improved automotive demand and product mix in films driven by increased sales of premium products, including paint protection film and premium interlayers for electric vehicles.

EBIT increased due to lower manufacturing costs and higher selling prices more than offsetting higher variable costs. These factors are partially offset by an unfavorable impact from foreign currency and lower sales volume/mix.

Additives & Functional Products – Sales revenue decreased 13 percent due to 15 percent lower sales volume/mix, partially offset by 4 percent higher selling prices.

Sales volume/mix was lower across the segment due to weak demand and customer inventory destocking in the building and construction, water treatment, and personal care end markets. Higher selling prices were led by functional amines and care additives due to significant levels of inflation in 2022.

EBIT decreased due to lower sales volume/mix, with higher selling prices offsetting higher variable costs and modestly lower manufacturing costs.


eastman_blackx300dpi.jpg
Fibers – Sales revenue increased 42 percent primarily due to increased selling prices.

Substantially higher selling prices for acetate tow were due to an increase in industry capacity utilization and higher raw material, energy, and distribution prices throughout 2022.

EBIT increased due to recovery of margins as higher selling prices returned adjusted EBIT margins to acceptable performance levels.

Chemical Intermediates – Sales revenue decreased 18 percent primarily due to 12 percent lower sales volume/mix and 5 percent lower selling prices.

Sales volume/mix was lower in plasticizers and olefins due to continued weak end-market demand, including for building and construction, consumer durables, and industrial. Selling prices were lower due to lower raw material prices.

EBIT decreased due to lower sales volume/mix and lower spreads, which were above mid-cycle levels in the year-ago period.

Cash Flow

In first-quarter 2023, cash used in operating activities was $2 million, compared to cash provided by operating activities of $17 million in first-quarter 2022. In first-quarter 2023, the company returned $94 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2023 include organic growth investments, payment of the quarterly dividend, bolt-on acquisitions, and share repurchases to offset dilution.

2023 Outlook

Commenting on the outlook for full-year 2023, Costa said: “We delivered solid results in the first quarter despite a difficult global economic environment. We started the year by demonstrating strong commercial excellence with our pricing discipline, which we expect will continue through the year, allowing us to substantially recover our margins as we realize lower raw material, energy, and distribution costs. In addition, we are on track to reduce manufacturing, supply chain, and non-manufacturing costs by a total of $200 million for the year, net of inflation. We also delivered strong first-quarter results in Fibers and remain well positioned for significant full-year earnings improvement in this segment as margins recover to more sustainable levels. On volume/mix, we expect to continue to leverage our innovation-driven growth model to drive growth above our end markets, especially in the back half of the year. However, demand in many of our end markets is challenged, including consumer durables and building and construction, where we see inventory destocking continuing in second quarter. Taking all of this together, we continue to expect to grow adjusted 2023 EPS between 5 and 15 percent, excluding an approximately $0.75 pension headwind. We also remain focused on taking a range of actions to deliver $1.4 billion of operating cash flow in 2023.”

The full-year 2023 projected adjusted diluted EPS excludes any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items.

eastman_blackx300dpi.jpg
These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts.

Functional amines business now integrated into Additives & Functional Products

Starting in first-quarter 2023, Eastman integrated the functional amines business into Additives & Functional Products. In addition, organic acid products and some olefin-based products previously reported in AFP are now being managed under the CI segment. First-quarter 2023 financial reporting is on this new basis. A quarterly recast back to 2019 of the AFP and CI revenue and adjusted EBIT reflecting these product moves is provided as an appendix of this release. We expect the integration of functional amines into AFP to further enable long-term growth, result in asset and commercial synergies, and allow for increased portfolio transparency for investors.

Forward-Looking Statements

This news release includes forward-looking statements concerning current expectations and assumptions for future global economic conditions; logistics challenges, supply chain issues for customers and suppliers, and raw material and energy costs; competitive position and acceptance of specialty products in key markets; mix of products sold; cost reductions; and revenue, earnings, adjusted diluted EPS, cash flow, share repurchases, and cash and cash equivalents for full-year 2023. Such expectations and assumptions are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations and assumptions expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company’s filings with the Securities and Exchange Commission, including the Form 10-K filed for 2022, and the Form 10-Q to be filed for first-quarter 2023, both of which are or will be available, on the Eastman web site at www.eastman.com in the Investors, SEC filings section. These statements are based on our current beliefs and expectations and speak only as of the date of this release. We do not undertake any obligation to publicly update any forward-looking statements.

Conference Call and Webcast Information

Eastman will host a conference call with industry analysts on April 28, 2023, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go to investors.eastman.com, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at investors.eastman.com at approximately 5:00 p.m. ET on April 27, 2023. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 749251. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at investors.eastman.com, Events & Presentations.

eastman_blackx300dpi.jpg
A telephone replay will be available continuously from approximately 1:00 p.m. ET, April 28, 2023, to 11:59 p.m. ET, May 8, 2023, at +1 (866) 813-9403, passcode 986590.

Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2022 revenue of approximately $10.6 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.

# # #

Contacts:

Media: Tracy Kilgore Addington
423-224-0498 / tracy@eastman.com

Investors: Greg Riddle
212-835-1620 / griddle@eastman.com



eastman_blackx300dpi.jpg
FINANCIAL INFORMATION
April 27, 2023

For Eastman Chemical Company First Quarter 2023 Financial Results Release

Table of Contents
Item   Page
     



eastman_blackx300dpi.jpg
Table 1 – Statements of Earnings
First Quarter
(Dollars in millions, except per share amounts; unaudited) 2023 2022
Sales $ 2,412  $ 2,714 
Cost of sales (1)(2)
 1,883  2,164 
Gross profit 529  550 
Selling, general and administrative expenses 191  196 
Research and development expenses 62  65 
Asset impairments and restructuring charges, net 22  2 
Other components of post-employment (benefit) cost, net (3) (31)
Other (income) charges, net 11  (12)
Gain on divested business —  (3)
Earnings before interest and taxes 246  333 
Net interest expense 52  46 
Earnings before income taxes 194  287 
Provision for income taxes 60  51 
Net earnings 134  236 
Less: Net earnings attributable to noncontrolling interest —  1 
Net earnings attributable to Eastman $ 134  $ 235 
Basic earnings per share attributable to Eastman $ 1.13  $ 1.82 
Diluted earnings per share attributable to Eastman $ 1.12  $ 1.80 
Shares (in millions) outstanding at end of period 119.2  128.9 
Shares (in millions) used for earnings per share calculation    
Basic 118.9  129.0 
Diluted 119.7  130.7 
(1)First quarter 2023 includes $8 million insurance proceeds, net of costs, and first quarter 2022 includes $25 million costs, net of insurance proceeds, from the previously reported operational incident at the Kingsport site as a result of a steam line failure (the "steam line incident").
(2)First quarter 2023 includes $23 million accelerated depreciation related to the closure of an acetate yarn manufacturing facility in Europe.
1
eastman_blackx300dpi.jpg
Table 2A – Segment Sales Information
  First Quarter
(Dollars in millions, unaudited) 2023 2022
Sales by Segment    
Advanced Materials $ 742  $ 737 
Additives & Functional Products (1)
 777  889 
Chemical Intermediates (1)
 589  715 
Fibers 303  213 
Total Sales by Segment 2,411  2,554 
Other (2)
 1  160 
Total Eastman Chemical Company $ 2,412  $ 2,714 

  Fourth Quarter
(Dollars in millions, unaudited) 2022
Sales by Segment  
Advanced Materials $ 736 
Additives & Functional Products (1)
756 
Chemical Intermediates (1)
 564 
Fibers 317 
Total Eastman Chemical Company $ 2,373 
(1)First quarter 2022 sales revenue and earnings before interest and taxes ("EBIT") have been recast as a result of the Company's organizational and management changes during first quarter 2023. For additional information, see "Functional amines business now integrated into Additives & Functional Products" and Exhibit 99.02 to this Current Report on Form 8-K.
(2)"Other" in first quarter 2022 includes sales revenue and EBIT from a previously divested business.

Table 2B – Sales Revenue Change
   First Quarter 2023 Compared to First Quarter 2022
  Change in Sales Revenue Due To
(Unaudited) Revenue
% Change		 Volume / Product Mix Effect Price Effect Exchange
Rate
Effect
Divested Business Effect(1)
Advanced Materials 1  % (6)  % 10   % (3)  % —   %
Additives & Functional Products (13)  % (15)  % 4   % (2)  % —   %
Chemical Intermediates (18) % (12)  % (5)  % (1)  % —   %
Fibers 42   % 3   % 40   % (1)  % —   %
Other (99) % 1   % —   % —   % (100)  %
Total Eastman Chemical Company (11)  % (9)  % 6   % (2)  % (6)  %
(1)Sales revenue from divested business makes up 99 percent of Other. See Table 2A Note 2.

2
eastman_blackx300dpi.jpg
Table 2B – Sales Revenue Change (continued)
  First Quarter 2023 Compared to Fourth Quarter 2022
  Change in Sales Revenue Due To
(Unaudited) Revenue
% Change		 Volume / Product Mix Effect Price Effect Exchange
Rate
Effect
Advanced Materials 1  % (1)  % 1   % 1   %
Additives & Functional Products 3   % 4   % (3)  % 2   %
Chemical Intermediates 4  % 12   % (9)  % 1   %
Fibers (4)  % (18)  % 14   % —   %
Total Eastman Chemical Company 2   % 2   % (1)  % 1   %

Table 2C – Sales by Customer Location
  First Quarter
(Dollars in millions, unaudited) 2023 2022
Sales by Customer Location    
United States and Canada $ 1,065  $ 1,198 
Europe, Middle East, and Africa 709  745 
Asia Pacific 521  612 
Latin America 117  159 
Total Eastman Chemical Company $ 2,412  $ 2,714 
3
eastman_blackx300dpi.jpg
Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)
First Quarter
(Dollars in millions, unaudited) 2023 2022
Advanced Materials    
Earnings before interest and taxes $ 86  $ 61 
Asset impairments and restructuring charges, net —  1 
Excluding non-core item 86  62 
Additives & Functional Products
Earnings before interest and taxes 124  167 
Chemical Intermediates    
Earnings before interest and taxes 42  112 
Asset impairments and restructuring charges, net —  1 
Excluding non-core item 42  113 
Fibers    
Earnings before interest and taxes 65  24 
Asset impairments and restructuring charges, net (2)
 6  — 
Accelerated depreciation (2)
 23  — 
Excluding non-core items 94  24 
Other
Loss before interest and taxes (71) (31)
Asset impairments and restructuring charges, net (3)
 16  — 
Net steam line incident costs (insurance proceeds) (4)
 (8) 25 
Transaction costs, net of gain on divested business —  6 
Excluding non-core and unusual items (63) — 
Total Eastman Chemical Company  
Earnings before interest and taxes 246  333 
Asset impairments and restructuring charges, net 22  2 
Net steam line incident costs (insurance proceeds) (8) 25 
Transaction costs, net of gain on divested business —  6 
Accelerated depreciation 23  — 
Total earnings before interest and taxes excluding non-core and unusual items $ 283  $ 366 

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items
Earnings before interest and taxes $ 246  $ 333 
Costs of sales 15  25 
Selling, general and administrative expenses —  9 
Asset impairments and restructuring charges, net 22  2 
Gain on divested business —  (3)
Total earnings before interest and taxes excluding non-core and unusual items $ 283  $ 366 

(1)See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Quarterly Report on Form 10-Q for first quarter 2022 for description of first quarter 2022 non-core and unusual items.
(2)Site closure costs and accelerated depreciation related to the closure of an acetate yarn manufacturing facility in Europe.
(3)Severance charges as part of fourth quarter 2022 cost reduction initiatives.
(4)See Table 1 Note 1.

4
eastman_blackx300dpi.jpg
Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued) (1)
Fourth Quarter
(Dollars in millions, unaudited) 2022
Advanced Materials  
Earnings before interest and taxes $ 43 
Additives & Functional Products
Earnings before interest and taxes 76 
Chemical Intermediates  
Earnings before interest and taxes 24 
Fibers  
Earnings before interest and taxes 49 
Asset impairments and restructuring charges, net 9 
Excluding non-core item 58 
Other
Loss before interest and taxes (116)
Mark-to-market pension and other postretirement benefit plans loss, net 22 
Asset impairments and restructuring charges, net 20 
Net steam line incident costs (insurance proceeds) (3)
Loss on divested businesses and related transaction costs 53 
Adjustments to contingent considerations (6)
Excluding non-core and unusual items (30)
Total Eastman Chemical Company  
Earnings before interest and taxes 76 
Mark-to-market pension and other postretirement benefit plans loss, net 22 
Asset impairments and restructuring charges, net 29 
Net steam line incident costs (insurance proceeds) (3)
Loss on divested businesses and related transaction costs 53 
Adjustments to contingent considerations (6)
Total earnings before interest and taxes excluding non-core and unusual items $ 171 

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items
Earnings before interest and taxes $ 76 
Costs of sales (3)
Selling, general and administrative expenses 3 
Asset impairments and restructuring charges, net 29 
Other components of post-employment (benefit) cost, net 22 
Other (income) charges, net (6)
Net (gain) loss on divested businesses 50 
Total earnings before interest and taxes excluding non-core and unusual items $ 171 
 
(1)For the description of fourth quarter 2022 non-core and unusual items, see Table 3A in the Quarterly Report on Form 8-K furnished for the fourth quarter 2022.


5
eastman_blackx300dpi.jpg
Table 3B - Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins(1)(2)
  First Quarter
(Dollars in millions, unaudited) 2023 2022
Adjusted EBIT Adjusted EBIT Margin Adjusted EBIT Adjusted EBIT Margin
Advanced Materials $ 86  11.6  % $ 62  8.4  %
Additives & Functional Products (3)
 124  16.0  % 167  18.8  %
Chemical Intermediates (3)
 42  7.1  % 113  15.8  %
Fibers 94  31.0  % 24  11.3  %
Total segment EBIT excluding non-core and unusual items 346  14.4  % 366  14.3  %
Other
(63) — 
Total EBIT excluding non-core and unusual items $ 283  11.7  % $ 366  13.5  %
 


  Fourth Quarter
(Dollars in millions, unaudited) 2022
Adjusted EBIT Adjusted EBIT Margin
Advanced Materials $ 43  5.8  %
Additives & Functional Products (3)
 76  10.1  %
Chemical Intermediates (3)
 24  4.3  %
Fibers 58  18.3  %
Total segment EBIT excluding non-core and unusual items 201  8.5  %
Other (30)
Total EBIT excluding non-core and unusual items $ 171  7.2  %

(1)For identification of excluded non-core and unusual items and reconciliations to GAAP EBIT, see Table 3A.
(2)Adjusted EBIT margin is non-GAAP EBIT divided by GAAP sales. See Table 2A for sales.
(3)See Table 2A Note 1.


6
eastman_blackx300dpi.jpg
Table 4A – Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations
  First Quarter 2023
Earnings Before Interest and Taxes Earnings Before Income Taxes Provision for Income Taxes Effective Income Tax Rate Net Earnings
 Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited) After Tax Per Diluted Share
As reported (GAAP) $ 246  $ 194  $ 60  31  % $ 134  $ 1.12 
Non-Core and Unusual Items: (1)
Asset impairments and restructuring charges, net 22  22  4  18  0.14 
Accelerated depreciation 23  23  3  20  0.17 
Steam line incident insurance proceeds, net of costs (8) (8) (2) (6) (0.05)
Adjustment from tax law changes (2)
 —  —  (23) 23  0.19 
Interim adjustment to tax provision (3)
 —  —  (6) 6  0.06 
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) $ 283  $ 231  $ 36  16  % $ 195  $ 1.63 

  First Quarter 2022
  Earnings Before Interest and Taxes Earnings Before Income Taxes Provision for Income Taxes Effective Income Tax Rate Net Earnings
 Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited) After Tax Per Diluted Share
As reported (GAAP) $ 333  $ 287  $ 51  18  % $ 235  $ 1.80 
Non-Core and Unusual Items: (1)
Asset impairments and restructuring charges, net 2  2  1  1  — 
Transaction costs, net of gain on divested business 6  6  (2) 8  0.07 
Steam line incident costs, net of insurance proceeds 25  25  6  19  0.14 
Interim adjustment to tax provision (3)
 —  —  (6) 6  0.05 
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) $ 366  $ 320  $ 50  16  % $ 269  $ 2.06 

(1)See Table 3A for description of first quarter 2023 and 2022 non-core and unusual items excluded from non-GAAP EBIT. 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.
(2)Increase to the provision for state income taxes due to adjustment of the amount recognized in prior years resulting from recently issued state guidance related to the 2017 Tax Cuts and Jobs Act ("Tax Reform Act").
(3)The adjusted provision for income taxes for first quarter 2023 and 2022 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.





7
eastman_blackx300dpi.jpg
Table 4A – Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations (continued)
  Fourth Quarter 2022
Earnings Before Interest and Taxes Earnings Before Income Taxes Provision for Income Taxes Effective Income Tax Rate Net Earnings
 Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited) After Tax Per Diluted Share
As reported (GAAP) $ 76  $ 28  $ 26  95  % $ 1  $ 0.01 
Non-Core and Unusual Items: (1)
Asset impairments and restructuring charges, net 29  29  (1) 30  0.26 
Loss on divested businesses and related transaction costs 53  53  3  50  0.40 
Steam line incident insurance proceeds, net of costs (3) (3) —  (3) (0.01)
Mark-to-market pension and other postretirement benefit plans loss, net 22  22  5  17  0.14 
Adjustments to contingent considerations (6) (6) (2) (4) (0.04)
Interim adjustment to tax provision (2)
 —  —  (16) 16  0.13 
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) $ 171  $ 123  $ 15  13  % $ 107  $ 0.89 

(1)See Table 3A for description of fourth quarter 2022 non-core and unusual items excluded from non-GAAP EBIT. 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.
(2)Fourth quarter 2022 is a reconciliation of the adjustments made in interim quarters to reflect the previously forecasted full year effective tax rate.

Table 4B - Adjusted Effective Tax Rate Calculation
First Three Months (1)
2023 2022
Effective tax rate 31  % 18  %
Discrete tax items (2)
 —  % 1  %
Tax impact of current year non-core and unusual items (3)
 (8) % 1  %
Changes in tax contingencies and valuation allowances (1) % (1) %
Forecasted full year impact of expected tax events (6) % (3) %
Forecasted full year adjusted effective tax rate 16  % 16  %
(1)Effective tax rate percentages are rounded to the nearest whole percent. The forecasted full year effective tax rates are 15.5 percent for both first three months 2023 and 2022.
(2)"Discrete tax items" are items that are excluded from a company's estimated annual effective tax rate and recognized entirely in the quarter in which the item occurs. Discrete tax items for first three months 2022 are for share based compensation expense and adjustments to certain prior year tax returns.
(3)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.
8
eastman_blackx300dpi.jpg
Table 5 – Statements of Cash Flows
First Three Months
(Dollars in millions, unaudited) 2023 2022
Operating activities    
Net earnings $ 134  $ 236 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 141  121 
Gain on divested business —  (3)
Benefit from deferred income taxes (7) (24)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables (91) (127)
(Increase) decrease in inventories (44) (184)
Increase (decrease) in trade payables (132) 152 
Pension and other postretirement contributions (in excess of) less than expenses (19) (43)
Variable compensation payments (in excess of) less than expenses (16) (168)
Other items, net 32  57 
Net cash (used in) provided by operating activities (2) 17 
Investing activities    
Additions to properties and equipment (174) (112)
Proceeds from sale of businesses 16  — 
Acquisition, net of cash acquired (73) — 
Additions to capitalized software (2) (3)
Other items, net (19) (2)
Net cash used in investing activities (252) (117)
Financing activities    
Net increase (decrease) in commercial paper and other borrowings (326) 236 
Proceeds from borrowings 796  — 
Dividends paid to stockholders (94) (98)
Proceeds from stock option exercises and other items, net (19) (9)
Net cash provided by financing activities 357  129 
Effect of exchange rate changes on cash and cash equivalents 3  (1)
Net change in cash and cash equivalents 106  28 
Cash and cash equivalents at beginning of period 493  459 
Cash and cash equivalents at end of period $ 599  $ 487 

Table 6 – Total Borrowings to Net Debt Reconciliations
  March 31, December 31,
(Dollars in millions, unaudited) 2023 2022
Total borrowings $ 5,650  $ 5,151 
Less: Cash and cash equivalents 599  493 
Net debt (1)
 $ 5,051  $ 4,658 

(1)Includes non-cash increase of $28 million in 2023 and non-cash decrease of $85 million in 2022 resulting from foreign currency exchange rates.

9
EX-99.02 3 ex99_0220230331afpcisegmen.htm EX-99.02 2023.03.31 AFP & CI SEGMENT RECAST Document
eastman_blackx300dpia.jpg
Exhibit 99.02

Unaudited Financial Information Recast for Changes in the
Additives & Functional Products Segment and the Chemical Intermediates Segment


2022
(Dollars in millions) First Quarter Second Quarter Third Quarter Fourth Quarter Full
Year
Additives & Functional Products
Sales $ 889  $ 924  $ 906  $ 756  $ 3,475 
Earnings (loss) before interest and taxes ("EBIT") 167  160  143  76  546 
Depreciation and amortization 142 
Chemical Intermediates
Sales $ 715  $ 772  $ 665  $ 564  $ 2,716 
EBIT 112  142  68  24  346 
Asset impairments and restructuring charges, net 1 
1
 1 
1
 1 
1
 —  3 
1
EBIT excluding non-core item 113  143  69  24  349 
Depreciation and amortization 104 
1Site closure costs of $1 million included in each first quarter 2022, second quarter 2022, and third quarter 2022 resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site.


2021
(Dollars in millions) First Quarter Second Quarter Third Quarter Fourth Quarter Full
Year
Additives & Functional Products
Sales $ 672  $ 722  $ 775  $ 780  $ 2,949 
EBIT 124  115  130  112  481 
Asset impairments and restructuring charges, net — 
1
 2 
1
 1 
1
 1 
1
 4 
1
EBIT excluding non-core items 124  117  131  113  485 
Depreciation and amortization 141 
Chemical Intermediates
Sales $ 542  $ 669  $ 685  $ 712  $ 2,608 
EBIT 52  131  130  99  412 
Asset impairments and restructuring charges, net 4 
2
 7 
2
 2 
2
 3 
2
 16 
2
EBIT excluding non-core items 56  138  132  102  428 
Depreciation and amortization 102 
1Site closure costs of $1 million included in each first quarter 2021, second quarter 2021, and third quarter 2021, contract termination fees of $1 million in second quarter 2021, and asset impairments of $1 million in fourth quarter 2021 resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site. First quarter 2021 charges were offset by a $1 million gain on the sale of impaired assets from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization.
2Site closure costs of $4 million, $2 million, and $1 million included in first quarter 2021, third quarter 2021, and fourth quarter 2021, respectively, contract termination fees of $7 million in second quarter 2021, and asset impairments of $2 million in fourth quarter 2021 resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site.




eastman_blackx300dpia.jpg
Exhibit 99.02
2020
(Dollars in millions) First Quarter Second Quarter Third Quarter Fourth Quarter Full
Year
Additives & Functional Products
Sales $ 636  $ 567  $ 551  $ 588  $ 2,342 
EBIT 135  104  95  106  440 
Asset impairments and restructuring charges, net 2 
1
 —  1 
2
 —  3 
1,2
EBIT excluding non-core items 137  104  96  106  443 
Depreciation and amortization 132 
Chemical Intermediates
Sales $ 516  $ 392  $ 464  $ 471  $ 1,843 
EBIT 59  (2) 25  26  108 
Asset impairments and restructuring charges, net 1 
3
 2 
3
 1 
3
 1 
3
 5 
3
EBIT excluding non-core item 60  —  26  27  113 
Depreciation and amortization 101 
1First quarter 2020 included an intangible asset impairment of $2 million for customer relationships.
2Severance costs of $1 million included in third quarter 2020 resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site.
3Severance costs of $1 million, $2 million, $1 million, and $1 million in first quarter 2020, second quarter 2020, third quarter 2020, and fourth quarter 2020, respectively, resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site.


2019
(Dollars in millions) First Quarter Second Quarter Third Quarter Fourth Quarter Full
Year
Additives & Functional Products
Sales $ 650  $ 618  $ 619  $ 568  $ 2,455 
EBIT 119  122  118  42  401 
Asset impairments and restructuring charges, net 4 
1
 —  —  50 
2
 54 
1,2
EBIT excluding non-core items 123  122  118  92  455 
Depreciation and amortization 176 
Chemical Intermediates
Sales $ 592  $ 572  $ 533  $ 534  $ 2,231 
EBIT 66  50  25  (4) 137 
Asset impairments and restructuring charges, net —  —  —  22 
3
 22 
3
EBIT excluding non-core item 66  50  25  18  159 
Depreciation and amortization 102 
1First quarter 2019 included restructuring charges of $4 million related to a capital project that was discontinued in 2016.
2Fourth quarter 2019 included a goodwill impairment charge of $45 million related to the crop protection product line and an asset impairment of $5 million resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing operations.
3Fourth quarter 2019 included asset impairment charges of $22 million resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing operations.