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) |
☐ | 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)) |
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 | ||||||||||||
1.875% Notes Due 2026 | EMN26 | New York Stock Exchange |
EASTMAN CHEMICAL COMPANY - EMN |
EASTMAN CHEMICAL COMPANY - EMN |
Eastman Chemical Company
|
||||||||
By: | /s/ Michelle R. Stewart | |||||||
Michelle R. Stewart | ||||||||
Vice President, Chief Accounting Officer and Corporate Controller | ||||||||
Date: October 26, 2023 |
(In millions, except per share amounts; unaudited) | 3Q2023 | 3Q2022 | ||||||
Sales revenue | $2,267 | $2,709 | ||||||
Earnings before interest and taxes ("EBIT") | 256 | 324 | ||||||
Adjusted EBIT* | 256 | 333 | ||||||
Earnings per diluted share | 1.49 | 2.46 | ||||||
Adjusted earnings per diluted share* | 1.47 | 2.05 | ||||||
Net cash provided by operating activities | 514 | 256 | ||||||
Item | Page | |||||||
Third Quarter | First Nine Months | ||||||||||||||||||||||
(Dollars in millions, except per share amounts; unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Sales | $ | 2,267 | $ | 2,709 | $ | 7,003 | $ | 8,207 | |||||||||||||||
Cost of sales (1)(2) |
1,783 | 2,168 | 5,406 | 6,446 | |||||||||||||||||||
Gross profit | 484 | 541 | 1,597 | 1,761 | |||||||||||||||||||
Selling, general and administrative expenses | 160 | 173 | 536 | 554 | |||||||||||||||||||
Research and development expenses | 60 | 68 | 182 | 200 | |||||||||||||||||||
Asset impairments and restructuring charges, net | — | 2 | 22 | 23 | |||||||||||||||||||
Other components of post-employment (benefit) cost, net | (2) | (30) | (8) | (95) | |||||||||||||||||||
Other (income) charges, net | 10 | 1 | 40 | 3 | |||||||||||||||||||
Net (gain) loss on divested business (3) |
— | 3 | — | (7) | |||||||||||||||||||
Earnings before interest and taxes | 256 | 324 | 825 | 1,083 | |||||||||||||||||||
Net interest expense | 57 | 43 | 163 | 134 | |||||||||||||||||||
Earnings before income taxes | 199 | 281 | 662 | 949 | |||||||||||||||||||
Provision for (benefit from) income taxes | 20 | (20) | 77 | 155 | |||||||||||||||||||
Net earnings | 179 | 301 | 585 | 794 | |||||||||||||||||||
Less: Net earnings attributable to noncontrolling interest | 1 | — | 1 | 2 | |||||||||||||||||||
Net earnings attributable to Eastman | $ | 178 | $ | 301 | $ | 584 | $ | 792 | |||||||||||||||
Basic earnings per share attributable to Eastman | $ | 1.50 | $ | 2.48 | $ | 4.92 | $ | 6.34 | |||||||||||||||
Diluted earnings per share attributable to Eastman | $ | 1.49 | $ | 2.46 | $ | 4.89 | $ | 6.26 | |||||||||||||||
Shares (in millions) outstanding at end of period | 118.6 | 120.0 | 118.6 | 120.0 | |||||||||||||||||||
Shares (in millions) used for earnings per share calculation | |||||||||||||||||||||||
Basic | 118.5 | 121.0 | 118.7 | 124.9 | |||||||||||||||||||
Diluted | 119.0 | 122.3 | 119.5 | 126.4 |
Third Quarter | First Nine Months | ||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Sales by Segment | |||||||||||||||||||||||
Advanced Materials | $ | 746 | $ | 888 | $ | 2,227 | $ | 2,471 | |||||||||||||||
Additives & Functional Products (1) |
670 | 906 | 2,194 | 2,719 | |||||||||||||||||||
Chemical Intermediates (1) |
527 | 665 | 1,630 | 2,152 | |||||||||||||||||||
Fibers | 323 | 250 | 949 | 705 | |||||||||||||||||||
Total Sales by Segment | 2,266 | 2,709 | 7,000 | 8,047 | |||||||||||||||||||
Other (2) |
1 | — | 3 | 160 | |||||||||||||||||||
Total Eastman Chemical Company | $ | 2,267 | $ | 2,709 | $ | 7,003 | $ | 8,207 |
Second Quarter | ||||||||
(Dollars in millions, unaudited) | 2023 | |||||||
Sales by Segment | ||||||||
Advanced Materials | $ | 739 | ||||||
Additives & Functional Products | 747 | |||||||
Chemical Intermediates | 514 | |||||||
Fibers | 323 | |||||||
Total Sales by Segment | 2,323 | |||||||
Other | 1 | |||||||
Total Eastman Chemical Company | $ | 2,324 |
Third Quarter 2023 Compared to Third Quarter 2022 | ||||||||||||||
Change in Sales Revenue Due To | ||||||||||||||
(Unaudited) | Revenue % Change |
Volume / Product Mix Effect | Price Effect | Exchange Rate Effect |
||||||||||
Advanced Materials | (16) | % | (17) | % | 1 | % | — | % | ||||||
Additives & Functional Products | (26) | % | (18) | % | (9) | % | 1 | % | ||||||
Chemical Intermediates | (21) | % | (2) | % | (19) | % | — | % | ||||||
Fibers | 29 | % | 2 | % | 28 | % | (1) | % | ||||||
Total Eastman Chemical Company (1) |
(16) | % | (11) | % | (5) | % | — | % | ||||||
First Nine Months 2023 Compared to First Nine Months 2022 | |||||||||||||||||
Change in Sales Revenue Due To | |||||||||||||||||
(Unaudited) | Revenue % Change |
Volume / Product Mix Effect | Price Effect | Exchange Rate Effect |
Divested Business Effect | ||||||||||||
Advanced Materials | (10) | % | (13) | % | 4 | % | (1) | % | — | % | |||||||
Additives & Functional Products | (19) | % | (15) | % | (4) | % | — | % | — | % | |||||||
Chemical Intermediates | (24) | % | (13) | % | (11) | % | — | % | — | % | |||||||
Fibers | 35 | % | 2 | % | 33 | % | — | % | — | % | |||||||
Total Eastman Chemical Company (1) |
(15) | % | (12) | % | — | % | (1) | % | (2) | % |
Third Quarter 2023 Compared to Second Quarter 2023 | ||||||||||||||
Change in Sales Revenue Due To | ||||||||||||||
(Unaudited) | Revenue % Change |
Volume / Product Mix Effect | Price Effect | Exchange Rate Effect |
||||||||||
Advanced Materials | 1 | % | 2 | % | (1) | % | — | % | ||||||
Additives & Functional Products | (10) | % | (6) | % | (4) | % | — | % | ||||||
Chemical Intermediates | 3 | % | 10 | % | (7) | % | — | % | ||||||
Fibers | — | % | 1 | % | (1) | % | — | % | ||||||
Total Eastman Chemical Company | (2) | % | 1 | % | (3) | % | — | % |
Third Quarter | First Nine Months | ||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Sales by Customer Location | |||||||||||||||||||||||
United States and Canada | $ | 966 | $ | 1,202 | $ | 3,031 | $ | 3,704 | |||||||||||||||
Europe, Middle East, and Africa | 602 | 680 | 1,946 | 2,106 | |||||||||||||||||||
Asia Pacific | 576 | 662 | 1,654 | 1,912 | |||||||||||||||||||
Latin America | 123 | 165 | 372 | 485 | |||||||||||||||||||
Total Eastman Chemical Company | $ | 2,267 | $ | 2,709 | $ | 7,003 | $ | 8,207 | |||||||||||||||
Third Quarter | First Nine Months | |||||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Advanced Materials | ||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 93 | $ | 131 | $ | 278 | $ | 333 | ||||||||||||||||||
Asset impairments and restructuring charges, net | — | 1 | — | 19 | ||||||||||||||||||||||
Excluding non-core item | 93 | 132 | 278 | 352 | ||||||||||||||||||||||
Additives & Functional Products | ||||||||||||||||||||||||||
Earnings before interest and taxes | 105 | 143 | 369 | 470 | ||||||||||||||||||||||
Chemical Intermediates | ||||||||||||||||||||||||||
Earnings before interest and taxes | 6 | 68 | 87 | 322 | ||||||||||||||||||||||
Asset impairments and restructuring charges, net | — | 1 | — | 3 | ||||||||||||||||||||||
Excluding non-core item | 6 | 69 | 87 | 325 | ||||||||||||||||||||||
Fibers | ||||||||||||||||||||||||||
Earnings before interest and taxes | 109 | 21 | 280 | 82 | ||||||||||||||||||||||
Asset impairments and restructuring charges, net (3) |
— | — | 6 | — | ||||||||||||||||||||||
Accelerated depreciation (3) |
— | — | 23 | — | ||||||||||||||||||||||
Excluding non-core items | 109 | 21 | 309 | 82 | ||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Loss before interest and taxes | (57) | (39) | (189) | (124) | ||||||||||||||||||||||
Mark-to-market pension and other postretirement benefit plans (gain), net | — | — | — | (3) | ||||||||||||||||||||||
Asset impairments and restructuring charges, net (4) |
— | — | 16 | 1 | ||||||||||||||||||||||
Net steam line incident costs (insurance proceeds) (5) |
— | — | (8) | 42 | ||||||||||||||||||||||
Net (gain) loss on divested business and transaction costs | — | 7 | — | 8 | ||||||||||||||||||||||
Environmental and other costs (6) |
— | — | 13 | 15 | ||||||||||||||||||||||
Excluding non-core and unusual items | (57) | (32) | (168) | (61) | ||||||||||||||||||||||
Total Eastman Chemical Company | ||||||||||||||||||||||||||
Earnings before interest and taxes | 256 | 324 | 825 | 1,083 | ||||||||||||||||||||||
Mark-to-market pension and other postretirement benefit plans (gain), net | — | — | — | (3) | ||||||||||||||||||||||
Asset impairments and restructuring charges, net | — | 2 | 22 | 23 | ||||||||||||||||||||||
Net steam line incident costs (insurance proceeds) | — | — | (8) | 42 | ||||||||||||||||||||||
Net (gain) loss on divested business and transaction costs | — | 7 | — | 8 | ||||||||||||||||||||||
Accelerated depreciation | — | — | 23 | — | ||||||||||||||||||||||
Environmental and other costs | — | — | 13 | 15 | ||||||||||||||||||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 256 | $ | 333 | $ | 875 | $ | 1,168 |
Third Quarter | First Nine Months | |||||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | ||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 256 | $ | 324 | $ | 825 | $ | 1,083 | ||||||||||||||||||
Costs of sales | — | — | 15 | 42 | ||||||||||||||||||||||
Selling, general and administrative expenses | — | 4 | — | 15 | ||||||||||||||||||||||
Asset impairments and restructuring charges, net | — | 2 | 22 | 23 | ||||||||||||||||||||||
Other components of post-employment (benefit) cost, net | — | — | — | (3) | ||||||||||||||||||||||
Other (income) charges, net | — | — | 13 | 15 | ||||||||||||||||||||||
Net (gain) loss on divested business | — | 3 | — | (7) | ||||||||||||||||||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 256 | $ | 333 | $ | 875 | $ | 1,168 |
Second Quarter | ||||||||
(Dollars in millions, unaudited) | 2023 | |||||||
Advanced Materials | ||||||||
Earnings before interest and taxes | $ | 99 | ||||||
Additives & Functional Products | ||||||||
Earnings before interest and taxes | 140 | |||||||
Chemical Intermediates | ||||||||
Earnings before interest and taxes | 39 | |||||||
Fibers | ||||||||
Earnings before interest and taxes | 106 | |||||||
Other | ||||||||
Loss before interest and taxes | (61) | |||||||
Environmental and other costs | 13 | |||||||
Excluding non-core and unusual items | (48) | |||||||
Total Eastman Chemical Company | ||||||||
Earnings before interest and taxes | 323 | |||||||
Environmental and other costs | 13 | |||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 336 |
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | ||||||||
Earnings before interest and taxes | $ | 323 | ||||||
Other (income) charges, net | 13 | |||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 336 |
Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||
Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | ||||||||||||||||||||||||||||
Advanced Materials | $ | 93 | 12.5 | % | $ | 132 | 14.9 | % | $ | 278 | 12.5 | % | $ | 352 | 14.2 | % | |||||||||||||||||||
Additives & Functional Products (3) |
105 | 15.7 | % | 143 | 15.8 | % | 369 | 16.8 | % | 470 | 17.3 | % | |||||||||||||||||||||||
Chemical Intermediates (3) |
6 | 1.1 | % | 69 | 10.4 | % | 87 | 5.3 | % | 325 | 15.1 | % | |||||||||||||||||||||||
Fibers | 109 | 33.7 | % | 21 | 8.4 | % | 309 | 32.6 | % | 82 | 11.6 | % | |||||||||||||||||||||||
Total segment EBIT excluding non-core and unusual items | 313 | 13.8 | % | 365 | 13.5 | % | 1,043 | 14.9 | % | 1,229 | 15.3 | % | |||||||||||||||||||||||
Other |
(57) | (32) | (168) | (61) | |||||||||||||||||||||||||||||||
Total EBIT excluding non-core and unusual items | $ | 256 | 11.3 | % | $ | 333 | 12.3 | % | $ | 875 | 12.5 | % | $ | 1,168 | 14.2 | % |
Second Quarter | ||||||||
(Dollars in millions, unaudited) | 2023 | |||||||
Adjusted EBIT | Adjusted EBIT Margin | |||||||
Advanced Materials | $ | 99 | 13.4 | % | ||||
Additives & Functional Products |
140 | 18.7 | % | |||||
Chemical Intermediates |
39 | 7.6 | % | |||||
Fibers | 106 | 32.8 | % | |||||
Total segment EBIT excluding non-core and unusual items | 384 | 16.5 | % | |||||
Other |
(48) | |||||||
Total EBIT excluding non-core and unusual items | $ | 336 | 14.5 | % |
Third 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) | $ | 256 | $ | 199 | $ | 20 | 10 | % | $ | 178 | $ | 1.49 | ||||||||||||||||||||||||||
Non-Core and Unusual Items: (1) |
||||||||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (2) |
— | — | 3 | (3) | (0.02) | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 256 | $ | 199 | $ | 23 | 12 | % | $ | 175 | $ | 1.47 |
Third Quarter 2022 | ||||||||||||||||||||||||||||||||||||||
Earnings Before Interest and Taxes | Earnings Before Income Taxes | (Benefit from) 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) | $ | 324 | $ | 281 | $ | (20) | (7) | % | $ | 301 | $ | 2.46 | ||||||||||||||||||||||||||
Non-Core and Unusual Items: (1) |
||||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net | 2 | 2 | — | 2 | 0.01 | |||||||||||||||||||||||||||||||||
Net (gain) loss on divested business and transaction costs | 7 | 7 | 28 | (21) | (0.16) | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (2) |
— | — | 32 | (32) | (0.26) | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 333 | $ | 290 | $ | 40 | 14 | % | $ | 250 | $ | 2.05 |
First Nine Months 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) | $ | 825 | $ | 662 | $ | 77 | 12 | % | $ | 584 | $ | 4.89 | ||||||||||||||||||||||||||
Non-Core or 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 costs (insurance proceeds), net | (8) | (8) | (2) | (6) | (0.05) | |||||||||||||||||||||||||||||||||
Environmental and other costs | 13 | 13 | 4 | 9 | 0.08 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (2) |
— | — | 17 | (17) | (0.14) | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 875 | $ | 712 | $ | 103 | 15 | % | $ | 608 | $ | 5.09 |
First Nine Months 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) | $ | 1,083 | $ | 949 | $ | 155 | 16 | % | $ | 792 | $ | 6.26 | ||||||||||||||||||||||||||
Non-Core or Unusual Items: (1)
|
||||||||||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net | 23 | 23 | 5 | 18 | 0.14 | |||||||||||||||||||||||||||||||||
Net (gain) loss on divested business and transaction costs | 8 | 8 | (35) | 43 | 0.35 | |||||||||||||||||||||||||||||||||
Mark-to-market pension and other postretirement benefit plans (gain), net | (3) | (3) | — | (3) | (0.02) | |||||||||||||||||||||||||||||||||
Steam line incident costs (insurance proceeds), net | 42 | 42 | 10 | 32 | 0.25 | |||||||||||||||||||||||||||||||||
Environmental and other costs | 15 | 15 | 4 | 11 | 0.09 | |||||||||||||||||||||||||||||||||
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) | $ | 1,168 | $ | 1,034 | $ | 155 | 15 | % | $ | 877 | $ | 6.94 |
Second Quarter 2023 | ||||||||||||||||||||||||||||||||||||||
Earnings Before Interest and Taxes | Earnings Before Income Taxes | (Benefit from) 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) | $ | 323 | $ | 269 | $ | (3) | (1) | % | $ | 272 | $ | 2.27 | ||||||||||||||||||||||||||
Non-Core and Unusual Items: (1) |
||||||||||||||||||||||||||||||||||||||
Environmental and other costs | 13 | 13 | 4 | 9 | 0.08 | |||||||||||||||||||||||||||||||||
Adjustment from tax law changes (2) |
— | — | 23 | (23) | (0.19) | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) |
— | — | 20 | (20) | (0.17) | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 336 | $ | 282 | $ | 44 | 16 | % | $ | 238 | $ | 1.99 |
First Nine Months (1) |
|||||||||||
2023 | 2022 | ||||||||||
Effective tax rate | 12 | % | 16 | % | |||||||
Tax impact of current year non-core and unusual items (2) |
1 | % | (1) | % | |||||||
Changes in tax contingencies and valuation allowances | 1 | % | 1 | % | |||||||
Forecasted full year impact of expected tax events | 1 | % | (1) | % | |||||||
Forecasted full year adjusted effective tax rate | 15 | % | 15 | % |
Third Quarter | First Nine Months | ||||||||||||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Operating activities | |||||||||||||||||||||||
Net earnings | $ | 179 | $ | 301 | $ | 585 | $ | 794 | |||||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 120 | 117 | 380 | 360 | |||||||||||||||||||
Mark-to-market pension and other postretirement benefit plans (gain), net | — | — | — | (3) | |||||||||||||||||||
Loss on sale of assets | — | — | — | 15 | |||||||||||||||||||
Loss (gain) on divested business |
— | 3 | — | (7) | |||||||||||||||||||
(Benefit from) provision for deferred income taxes | (63) | 27 | (156) | (54) | |||||||||||||||||||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||||||||||||||||||
(Increase) decrease in trade receivables | 35 | 52 | 68 | (111) | |||||||||||||||||||
(Increase) decrease in inventories | 220 | (177) | 147 | (549) | |||||||||||||||||||
Increase (decrease) in trade payables | (73) | 8 | (363) | 187 | |||||||||||||||||||
Pension and other postretirement contributions (in excess of) less than expenses | (10) | (34) | (39) | (115) | |||||||||||||||||||
Variable compensation payments (in excess of) less than expenses | 24 | 15 | 73 | (117) | |||||||||||||||||||
Other items, net | 82 | (56) | 227 | 118 | |||||||||||||||||||
Net cash provided by operating activities | 514 | 256 | 922 | 518 | |||||||||||||||||||
Investing activities | |||||||||||||||||||||||
Additions to properties and equipment | (236) | (161) | (649) | (408) | |||||||||||||||||||
Proceeds from sale of businesses | 22 | — | 38 | 998 | |||||||||||||||||||
Acquisition, net of cash acquired | 2 | — | (74) | (1) | |||||||||||||||||||
Additions to capitalized software | — | (3) | (4) | (10) | |||||||||||||||||||
Other items, net | 30 | 6 | 9 | 19 | |||||||||||||||||||
Net cash (used in) provided by investing activities | (182) | (158) | (680) | 598 | |||||||||||||||||||
Financing activities | |||||||||||||||||||||||
Net increase (decrease) in commercial paper and other borrowings | (204) | 355 | 73 | 355 | |||||||||||||||||||
Proceeds from borrowings | — | — | 796 | 500 | |||||||||||||||||||
Repayment of borrowings | — | (200) | (808) | (750) | |||||||||||||||||||
Dividends paid to stockholders | (94) | (94) | (282) | (290) | |||||||||||||||||||
Treasury stock purchases | — | (150) | (50) | (902) | |||||||||||||||||||
Other items, net | (1) | 1 | (24) | (11) | |||||||||||||||||||
Net cash used in financing activities |
(299) | (88) | (295) | (1,098) | |||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (4) | (5) | (1) | (16) | |||||||||||||||||||
Net change in cash and cash equivalents | 29 | 5 | (54) | 2 | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 410 | 456 | 493 | 459 | |||||||||||||||||||
Cash and cash equivalents at end of period | $ | 439 | $ | 461 | $ | 439 | $ | 461 |
September 30, | December 31, | |||||||||||||
(Dollars in millions, unaudited) | 2023 | 2022 | ||||||||||||
Total borrowings | $ | 5,220 | $ | 5,151 | ||||||||||
Less: Cash and cash equivalents | 439 | 493 | ||||||||||||
Net debt (1) |
$ | 4,781 | $ | 4,658 |