Eastman Chemical Company (EMN) is gaining from its innovation-driven growth model, operational execution and cost-management actions amid certain headwinds, including soft demand and consumer de-stocking.Eastman Chemical, which is among the prominent players in the chemical space along with Celanese Corporation (CE) , Air Products and Chemicals, Inc. (APD) and The Chemours Company (CC) , is expected to benefit from lower operating costs from its operational transformation program.EMN was able to offset $1.3 ...

Eastman Chemical Company (NYSE:EMN) Q3 2023 Earnings Call Transcript October 27, 2023 8:00 AM ET Company Participants Greg Riddle - IR Mark Costa - CEO William McLain - CFO Conference Call Participants David Begleiter - Deutsche Bank Frank Mitsch - Fermium Research Vincent Andrews - Morgan Stanley Patrick Cunningham - Citigroup Jeff Zekauskas - JPMorgan Salvator Tiano - Bank of America Michael Leithead - Barclays James Cannon - UBS Kevin McCarthy - Vertical Research Partners Aleksey Yefremov - KeyBanc Capit ...

Tailwinds • Normal seasonal declines in coatings and water treatment • Weakness in building and construction, particularly Asia • Significant destocking in the agriculture end market • Timing lag in pricing of cost-pass-through contracts to catch up to higher oil-based raw materials 7 Expect FY 2023 adjusted EBIT ~$425 million EASTMAN $M 3Q23 3Q22 2Q23 Revenue 323 250 323 Adjusted EBIT 109 21 106 Adjusted EBIT margin 33.7% 8.4% 32.8% | --- | --- | --- | --- | --- | |-------------------|-------|------------| ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its cha ...

• ~$50 million headwind from foreign currency exchange rates, net of hedging: USD/EURO $1.08; CNY/USD 7.00; JPY/USD 135 • Share repurchases to offset dilution 2Q 2023 financial results July 27, 2023 Prepared remarks Forward-looking statements Non-GAAP financial measures 2Q 2023 highlights • Named to Forbes' Net Zero Leaders List, highlighting our position as a sustainability leader 3 facility to serve strong adoption from brands for Renew products 2024 EBITDA growth from Kingsport methanolysis facility expe ...

Eastman Chemical Company (NYSE:EMN) Q2 2023 Earnings Conference Call July 28, 2023 8:00 AM ET Company Participants Greg Riddle - IR Mark Costa - CEO William McLain - CFO Conference Call Participants Josh Spector - UBS Vincent Andrews - Morgan Stanley Frank Mitsch - Fermium Research Aleksey Yefremov - KeyBanc Capital Markets Mike Sison - Wells Fargo David Begleiter - Deutsche Bank John Roberts - Credit Suisse Kevin McCarthy - Vertical Research Partners Matthew DeYoe - Bank of America Patrick Cunningham - Cit ...

Financial Performance - Sales for Q2 2023 were $2,324 million, a decrease of 16.5% compared to $2,784 million in Q2 2022[14] - Gross profit for Q2 2023 was $584 million, down 13% from $670 million in Q2 2022[14] - Net earnings attributable to Eastman for Q2 2023 were $272 million, an increase of 6.3% from $256 million in Q2 2022[14] - Basic earnings per share attributable to Eastman for Q2 2023 were $2.28, compared to $2.05 in Q2 2022, reflecting an increase of 11.2%[14] - Net earnings for the first six months of 2023 were $406 million, a decrease of 17.6% compared to $493 million in 2022[17] - Total sales for the first six months of 2023 were $4.736 billion, down from $5.498 billion in the same period of 2022, a decrease of 13.9%[97] - Adjusted net earnings for the first six months of 2023 were $433 million, with an EPS of $3.62, down from $627 million and an EPS of $4.88 in the same period of 2022, reflecting a 30.9% decrease[120] - The company reported a net loss of $34 million attributable to unusual items impacting net earnings in Q2 2023, compared to a gain of $102 million in Q2 2022[112] Assets and Liabilities - Total assets as of June 30, 2023, were $14,771 million, a slight increase from $14,667 million as of December 31, 2022[15] - Total liabilities decreased to $9,419 million as of June 30, 2023, compared to $9,431 million at the end of 2022[15] - Current liabilities decreased to $2,787 million as of June 30, 2023, from $3,251 million at the end of 2022[15] - Retained earnings at the end of Q2 2023 were $9,190 million, up from $8,973 million at the end of 2022[15] Cash Flow - Net cash provided by operating activities increased to $408 million in the first six months of 2023, up from $262 million in 2022[17] - The company reported a net cash used in investing activities of $498 million in the first six months of 2023, a significant decrease from $756 million in 2022[17] - Cash and cash equivalents at the end of Q2 2023 were $410 million, down from $493 million at the end of Q1 2023[17] Segment Performance - The Advanced Materials segment reported sales of $739 million in Q2 2023, down 12.7% from $846 million in Q2 2022[97] - The Fibers segment saw a significant increase in sales, reaching $323 million in Q2 2023, up 33.5% from $242 million in Q2 2022[97] - The Additives & Functional Products segment reported sales of $747 million in Q2 2023, down 19% from $924 million in Q2 2022, driven by lower sales volume and customer destocking[147] Expenses - Research and development expenses for Q2 2023 were $60 million, down from $67 million in Q2 2022[14] - Selling, general and administrative expenses remained stable at $185 million in Q2 2023, with a slight decrease of 1% in the first six months to $376 million compared to $381 million in 2022[125] - Net interest expense for the first six months of 2023 was reported at $106 million[64] Shareholder Returns - The company paid dividends totaling $188 million in the first six months of 2023, slightly down from $196 million in 2022[17] - Cash dividends declared in Q2 2023 were $95 million, with a dividend of $0.79 per share, up from $93 million and $0.76 per share in Q2 2022[81] - The company repurchased shares worth $50 million during Q2 2023, maintaining its strategy of returning capital to shareholders[81] Debt and Financing - Total borrowings as of June 30, 2023, amounted to $5.437 billion, an increase from $5.151 billion as of December 31, 2022[37] - The company has access to a $1.50 billion revolving credit agreement expiring December 2026, with no outstanding borrowings as of June 30, 2023[40] - The company issued $500 million of 5.75% notes due March 2033, with net proceeds allocated to sustainability projects totaling $496 million[38] Environmental and Legal Matters - Environmental contingencies total $290 million as of June 30, 2023, up from $274 million at December 31, 2022, reflecting an increase in long-term liabilities[74] - The company does not anticipate that ongoing legal matters will have a material adverse effect on its financial position or results of operations[79]

Eastman Chemical Company (NYSE:EMN) Q1 2023 Results Conference Call April 28, 2023 8:00 AM ET Company Participants Greg Riddle - IR Mark Costa - CEO William McLain - CFO Conference Call Participants David Begleiter - Deutsche Bank Vincent Andrews - Morgan Stanley Josh Spector - UBS Jeff Zekauskas - JPMorgan Aleksey Yefremov - KeyBanc Capital Markets Michael Leithead - Barclays Matthew DeYoe - Bank of America Kevin McCarthy - Vertical Research Partners, LLC Michael Sison - Wells Fargo Arun Viswanathan - RBC ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its charter ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Eastman is a global specialty materials company with four segments, driven by an innovation-focused strategy and sustainability initiatives - Eastman operates as a global specialty materials company across **four segments**: Advanced Materials, Additives & Functional Products, Chemical Intermediates, and Fibers[16](index=16&type=chunk) 2022 Key Financial Metrics | Metric | Value (in millions) | | :--- | :--- | | Sales Revenue | $10,600 | | Earnings Before Interest and Taxes (EBIT) | $1,200 | | Net Earnings Attributable to Eastman | $793 | | Net Cash Provided by Operating Activities | $975 | | Adjusted EBIT | $1,300 | - The company's strategy emphasizes an **innovation-driven growth model**, leveraging technology platforms and molecular recycling for sustainability[18](index=18&type=chunk)[20](index=20&type=chunk) [Corporate Overview](index=6&type=section&id=Corporate%20Overview) Eastman, founded in 1920, is a global specialty materials company with 35 manufacturing facilities, strategically evolving through divestitures and acquisitions - Eastman operates **35 manufacturing facilities** and two joint ventures across 12 countries, with its largest facility in Kingsport, Tennessee[16](index=16&type=chunk) - The company strategically transformed into a specialty materials company by **divesting commodity businesses** and **acquiring specialty product lines**[17](index=17&type=chunk) - Approximately **60% of 2022 sales revenue** originated from outside the United States and Canada[19](index=19&type=chunk) [Business Strategy](index=7&type=section&id=Business%20Strategy) Eastman's strategy focuses on innovation-driven growth, leveraging its chemical expertise, with sustainability and molecular recycling as central pillars for value creation - The company's strategy leverages an **innovation-driven growth model** to exceed end-market growth by expanding into new markets and sustaining leadership[21](index=21&type=chunk) - Sustainability and the circular economy are central to the strategy, utilizing **advanced molecular recycling technologies** to reduce greenhouse gas emissions[23](index=23&type=chunk) - Eastman committed to reducing absolute scope 1 and 2 emissions by **one-third by 2030**, aiming for carbon neutrality by 2050[24](index=24&type=chunk) - Key circular economy projects include a methanolysis plant in Kingsport, TN, a molecular recycling facility in France, and plans for a third U.S. facility[25](index=25&type=chunk) [Financial Strategy](index=9&type=section&id=Financial%20Strategy) Eastman's financial strategy prioritizes a strong financial position, liquidity, and investment-grade rating, with disciplined capital allocation for dividends, growth, and debt management - The company prioritizes maintaining a **strong financial position** and an **investment-grade credit rating** for long-term flexibility[26](index=26&type=chunk) - Cash use priorities include paying dividends, funding growth, repurchasing shares, and repaying debt[26](index=26&type=chunk) [Business Segments](index=9&type=section&id=Business%20Segments) Eastman manages operations across four segments: Advanced Materials, Additives & Functional Products, Chemical Intermediates, and Fibers, aligning with its specialty materials strategy - The company operates through **four segments**: Advanced Materials, Additives & Functional Products, Chemical Intermediates, and Fibers[27](index=27&type=chunk) [Advanced Materials Segment](index=9&type=section&id=Advanced%20Materials%20Segment) The Advanced Materials segment produces high-performance polymers, films, and plastics, focusing on innovation, higher-margin products, and molecular recycling technologies - The AM segment produces polymers, films, and plastics for diverse end-markets including transportation, durables, and medical[28](index=28&type=chunk) AM Segment Principal Products | Product Line | Principal Products | Key End-Use Applications | | :--- | :--- | :--- | | **Advanced Interlayers** | Saflex™ PVB sheet | Transportation (automotive safety/acoustic glass), Building and construction (architectural interlayers) | | **Performance Films** | LLumar™, SunTek™ window and protective films | Transportation (automotive aftermarket films), Building and construction (residential/commercial window films) | | **Specialty Plastics** | Tritan™, Eastar™ copolyesters, Treva™ cellulosic biopolymers | Consumables (packaging), Durable goods (housewares), Health and wellness (medical), Electronics (displays) | - The segment's strategy emphasizes innovation, expanding **higher-margin products** like Tritan™ Renew, and leveraging molecular recycling for sustainability[31](index=31&type=chunk)[32](index=32&type=chunk) - Key 2022 achievements included advancing molecular recycling plans, increasing 'Renew' product adoption, and expanding window and protective films[36](index=36&type=chunk) [Additives & Functional Products Segment](index=11&type=section&id=Additives%20%26%20Functional%20Products%20Segment) The Additives & Functional Products segment manufactures high-value materials for diverse end-markets, leveraging proprietary technologies and divesting its adhesives resins business in 2022 - The AFP segment manufactures high-value additives for diverse end-markets including transportation, personal care, and agriculture[33](index=33&type=chunk)[34](index=34&type=chunk) AFP Segment Principal Products | Product Line | Description | Key End-Use Applications | | :--- | :--- | :--- | | **Animal Nutrition** | Organic acid-based solutions | Gut health, preservation, hygiene | | **Care Additives** | Alkylamine derivatives, organic acids | Water treatment, personal care, pharmaceuticals, agriculture | | **Coatings Additives** | Specialty solvents, polymers, resins | Architectural coatings, automotive coatings, inks, packaging | | **Specialty Fluids & Energy** | Heat transfer and aviation fluids | Industrial processing, renewable energy, commercial aviation | - In 2022, the AFP segment expanded **Eastapure™ electronic solvents capacity** and launched **Fluid Genius™** for heat transfer fluid management[38](index=38&type=chunk) - The company divested its **adhesives resins business** in 2022[38](index=38&type=chunk) [Chemical Intermediates Segment](index=13&type=section&id=Chemical%20Intermediates%20Segment) The Chemical Intermediates segment leverages vertically integrated manufacturing and low-cost raw materials to support other segments and external markets, focusing on cost control and efficiency - The CI segment leverages **vertically integrated manufacturing** to support other Eastman segments and sell excess intermediates to external markets[39](index=39&type=chunk) - Competitive advantage is driven by **low-cost raw materials** (coal, propane, ethane), scale, and proprietary technology at key sites[40](index=40&type=chunk)[43](index=43&type=chunk) CI Segment Principal Products | Product Line | Description | Key End-Use Applications | | :--- | :--- | :--- | | **Functional Amines** | Methylamines, higher amines, solvents | Agrochemicals, energy, water treatment, animal nutrition | | **Intermediates** | Oxo alcohols, acetic acid/anhydride, ethylene | Industrial chemicals, building & construction, pharmaceuticals | | **Plasticizers** | Non-phthalate and phthalate plasticizers | Building & construction, consumables (food packaging), medical devices | [Fibers Segment](index=14&type=section&id=Fibers%20Segment) The Fibers segment produces acetate tow and cellulosic fibers, leveraging vertical integration and carbon renewal technology for sustainable products, and expanded Naia™ textile fiber adoptions in 2022 - The Fibers segment is the **world's largest producer of acetate yarn**, primarily manufacturing acetate tow for cigarette filters and Naia™ cellulosic fibers[44](index=44&type=chunk) - The **10 largest customers** accounted for approximately **60% of the segment's 2022 sales revenue**[46](index=46&type=chunk) - The segment's strategy leverages its integrated Kingsport facility and **carbon renewal technology** to produce sustainable 'Renew' products[50](index=50&type=chunk) - In 2022, the segment implemented **variable pricing for acetate tow** and secured major brand adoptions for **Naia™ textile fibers**[52](index=52&type=chunk) [Eastman Chemical Company General Information](index=16&type=section&id=Eastman%20Chemical%20Company%20General%20Information) This section covers Eastman's general corporate information, including seasonal earnings, global sales, R&D, manufacturing streams, cost management, intellectual property, human capital, customer concentration, and regulatory compliance - Earnings are typically **higher in Q2 and Q3**, with weaker results in Q4 due to seasonal market downturns[54](index=54&type=chunk) - Manufacturing is organized into **four streams**: polyester, cellulosic biopolymers and acetyl, alkylamines, and olefins, providing competitive advantages[61](index=61&type=chunk)[62](index=62&type=chunk) - Raw material and energy costs comprised approximately **55% of total cost of operations in 2022**[64](index=64&type=chunk) - The company has approximately **14,500 global employees**, with goals to achieve **gender parity** and industry leadership in racial/ethnic diversity by 2030[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - No single customer accounted for **10% or more of consolidated sales revenue in 2022**, with the top 100 customers representing about 55%[78](index=78&type=chunk) Environmental Protection Expenditures | Year | Cash Expenditures (in millions) | Capital Expenditures (in millions) | | :--- | :--- | :--- | | 2022 | $300 | $60 | | 2021 | $281 | $38 | | 2020 | $265 | $42 | [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the detailed discussion of material risk factors and uncertainties that could adversely affect the company, located in Part II, Item 7 - A detailed discussion of risk factors is provided in **Part II, Item 7**, under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors"[87](index=87&type=chunk) [Information about our Executive Officers](index=21&type=section&id=Information%20about%20our%20Executive%20Officers) This section provides biographical information for Eastman's executive officers, including their age, position, and career history within the company - **Mark J. Costa**, age 56, serves as Chair of the Board and Chief Executive Officer, appointed CEO in January 2014[89](index=89&type=chunk) - **William T. McLain, Jr.**, age 50, is the Senior Vice President and Chief Financial Officer, appointed in February 2020[90](index=90&type=chunk) - Other key executives include Stephen G. Crawford, Brad A. Lich, Kellye L. Walker, Christopher M. Killian, Julie A. McAlindon, Travis Smith, and Michelle R. Stewart[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) [Item 2. Properties](index=23&type=section&id=Item%202.%20Properties) As of December 31, 2022, Eastman owned or operated 35 manufacturing facilities and two joint ventures across 12 countries, with headquarters in Kingsport, Tennessee - At year-end 2022, Eastman operated **35 manufacturing facilities** and equity in **two joint ventures** across 12 countries[99](index=99&type=chunk) - The company's largest manufacturing sites are in **Kingsport, Tennessee**, and **Longview, Texas**[100](index=100&type=chunk) - Eastman also owns or leases approximately **200 stand-alone distribution facilities** in about 30 countries[101](index=101&type=chunk) [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) Eastman is involved in various legal proceedings, including environmental and commercial matters, none of which are expected to have a material adverse effect on its financial condition - The company is party to various legal proceedings, but their resolution is **not expected to have a material adverse effect** on financial condition or results[103](index=103&type=chunk) - A tentative settlement for environmental violations at the Jefferson Hills, PA facility (sold in 2022) is **not expected to be material**[104](index=104&type=chunk) - Eastman is indemnified by **Monsanto (Bayer AG)** for legacy tort claims related to the Solutia acquisition[105](index=105&type=chunk) Part II [Item 5. Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Stock%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Eastman's common stock trades on the NYSE, and the company actively repurchased **10.7 million shares for $1.1 billion** in 2022 under its ongoing $2.5 billion authorization - Eastman's common stock (EMN) is traded on the **New York Stock Exchange**[108](index=108&type=chunk) - In December 2021, the Board authorized a **$2.5 billion share repurchase program**, with **$1.865 billion remaining available** as of December 31, 2022[113](index=113&type=chunk)[117](index=117&type=chunk) 2022 Share Repurchases | Metric | Value | | :--- | :--- | | Shares Repurchased | 10,710,259 | | Total Cost (in millions) | $1,102 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Eastman's 2022 financial performance, noting relatively flat sales, decreased adjusted EBIT, strategic divestitures, and reduced cash from operations, along with critical accounting estimates and non-GAAP measures Financial Performance Comparison (2022 vs 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Sales Revenue (in billions) | $10.6 | $10.5 | | EBIT (in billions) | $1.2 | $1.3 | | Adjusted EBIT (in billions) | $1.3 | $1.6 | | Diluted EPS | $6.35 | $6.25 | | Adjusted Diluted EPS | $7.88 | $8.85 | - **2022 sales revenue** remained relatively unchanged from 2021, as higher prices were offset by lower volumes due to divestitures, outages, and Q4 destocking[167](index=167&type=chunk) - The company completed the sale of its **rubber additives business** in late 2021 and its **adhesives resins business** in April 2022[169](index=169&type=chunk)[170](index=170&type=chunk) - Cash from operating activities decreased from **$1.6 billion in 2021 to $975 million in 2022**, driven by lower net earnings and increased working capital[173](index=173&type=chunk)[223](index=223&type=chunk) [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including impairment of long-lived assets, environmental costs, pension benefits, and income taxes, all requiring significant judgment - Goodwill impairment testing in Q4 2022 showed fair values exceeded carrying values for all reporting units, with **$3.7 billion of goodwill** as of December 31, 2022[124](index=124&type=chunk)[125](index=125&type=chunk) - Estimated future environmental remediation costs ranged from a minimum of **$245 million to a maximum of $457 million** at year-end 2022[130](index=130&type=chunk) - Pension and postretirement benefit calculations are highly sensitive to discount rates and asset returns; a **25 basis point decrease in discount rate** would increase U.S. pension obligation by **$32 million**[134](index=134&type=chunk)[135](index=135&type=chunk) - As of December 31, 2022, **$258 million in valuation allowances** were provided against deferred tax assets due to realization uncertainty[141](index=141&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Management uses non-GAAP financial measures like adjusted EBIT, adjusted EPS, and net debt to evaluate performance, excluding non-core or unusual items for consistent period-over-period comparisons - Management uses non-GAAP measures such as **adjusted EBIT, adjusted EPS, and net debt** to evaluate performance, excluding non-core items[145](index=145&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) Reconciliation of Non-Core and Unusual Items Impacting EBIT (2022) | Item (in millions) | 2022 Impact | | :--- | :--- | | Mark-to-market pension/postretirement loss | $19 | | Asset impairments and restructuring charges, net | $52 | | Loss on divested businesses and transaction costs | $61 | | Steam line incident costs, net | $39 | | Other | $9 | | **Total non-core and unusual items impacting EBIT** | **$180** | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) In 2022, sales increased 1% to **$10.58 billion** driven by price, while gross profit decreased 15%, and adjusted EBIT fell 18% to **$1.34 billion**, impacting net earnings Sales Revenue Change (2022 vs 2021) | Component | Percentage Change | | :--- | :--- | | Volume / product mix | (3)% | | Price | 14% | | Exchange rate | (2)% | | Divested business | (8)% | | **Total Change** | **1%** | - Gross profit decreased **15% from $2.5 billion in 2021 to $2.1 billion in 2022**, with a 13% decrease excluding non-core items[176](index=176&type=chunk)[177](index=177&type=chunk) - SG&A expenses decreased **9% year-over-year**, primarily due to lower variable compensation costs[178](index=178&type=chunk)[179](index=179&type=chunk) Net Earnings and EPS (2022 vs 2021) | Metric (in millions, except EPS) | 2022 | 2021 | | :--- | :--- | :--- | | **Net Earnings Attributable to Eastman** | $793 | $857 | | **Diluted EPS** | $6.35 | $6.25 | | **Adjusted Net Earnings** | $984 | $1,213 | | **Adjusted Diluted EPS** | $7.88 | $8.85 | [Summary by Operating Segment](index=44&type=section&id=Summary%20by%20Operating%20Segment) This section details 2022 segment performance: Advanced Materials sales rose but adjusted EBIT fell, Additives & Functional Products sales and EBIT grew, Chemical Intermediates sales rose but adjusted EBIT declined, and Fibers sales increased with flat adjusted EBIT Advanced Materials Segment Performance (2022 vs 2021) | Metric (in millions) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Sales | $3,207 | $3,027 | 6% | | EBIT (Adjusted) | $395 | $532 | (26)% | Additives & Functional Products Segment Performance (2022 vs 2021) | Metric (in millions) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Sales | $3,165 | $2,708 | 17% | | EBIT (Adjusted) | $483 | $452 | 7% | Chemical Intermediates Segment Performance (2022 vs 2021) | Metric (in millions) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Sales | $3,026 | $2,849 | 6% | | EBIT (Adjusted) | $412 | $461 | (11)% | Fibers Segment Performance (2022 vs 2021) | Metric (in millions) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Sales | $1,022 | $900 | 14% | | EBIT (Adjusted) | $140 | $142 | (1)% | [Liquidity and Other Financial Information](index=46&type=section&id=Liquidity%20and%20Other%20Financial%20Information) Eastman ended 2022 with **$493 million in cash**, with cash from operations decreasing to **$975 million**, and net debt slightly decreasing to **$4.66 billion**, while capital expenditures are projected to increase in 2023 Cash Flow Summary (in millions) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $975 | $1,619 | | Net cash provided by (used in) investing activities | $392 | $(29) | | Net cash used in financing activities | $(1,321) | $(1,690) | | **Cash and cash equivalents at end of period** | **$493** | **$459** | - The company utilized an off-balance sheet accounts receivable factoring program, selling **$2.5 billion of receivables in 2022**[228](index=228&type=chunk) - Total borrowings were approximately **$5.2 billion** at year-end 2022, with net debt at **$4.66 billion**, a slight decrease from 2021[231](index=231&type=chunk)[242](index=242&type=chunk) - Capital expenditures are projected to be approximately **$700 million to $800 million in 2023**, primarily for growth initiatives like molecular recycling[245](index=245&type=chunk) [Risk Factors](index=50&type=section&id=Risk%20Factors) This section details key risks including global economic uncertainty, raw material and supply chain volatility, global operational risks, business-specific hazards, and increasing regulatory compliance costs - **Global Economy**: Uncertain economic conditions, inflation, and rising interest rates could negatively impact demand, costs, and capital access[253](index=253&type=chunk)[254](index=254&type=chunk) - **Raw Materials & Supply Chain**: Volatility in raw material and energy costs, along with supply and transportation disruptions, could adversely impact financial results[255](index=255&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - **Global Operations**: Over half of sales outside North America expose the company to foreign exchange, trade policy, and regulatory risks[260](index=260&type=chunk)[261](index=261&type=chunk) - **Operating & Strategic Risks**: The business faces manufacturing disruptions, cybersecurity threats, and risks that growth initiatives or M&A activities may not achieve goals[263](index=263&type=chunk)[264](index=264&type=chunk)[267](index=267&type=chunk) - **Regulatory Risks**: The company faces complex and costly health, safety, and environmental regulations, with potential for increased costs from climate change legislation[268](index=268&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Eastman manages market risks from foreign currency, commodity prices, and interest rates using derivatives, with sensitivity analyses indicating potential impacts from adverse movements - The company manages market risks from foreign currency, commodity prices, and interest rates through **hedging strategies**[270](index=270&type=chunk) - **Foreign Currency Risk**: A hypothetical **10% adverse U.S. dollar move** would result in a **$50 million loss** in fair value on derivative instruments[273](index=273&type=chunk) - **Commodity Risk**: A hypothetical **10% adverse price shift** in hedged commodities would result in a **$3 million loss** in fair value on derivative contracts[275](index=275&type=chunk) - **Interest Rate Risk**: The company had **$825 million in variable interest rate borrowings** as of December 31, 2022, managed with interest rate swaps[276](index=276&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Eastman's audited consolidated financial statements for 2022, including statements of earnings, financial position, and cash flows, along with detailed notes and the independent auditor's report - PricewaterhouseCoopers LLP issued an **unqualified opinion** on the consolidated financial statements and internal control over financial reporting[287](index=287&type=chunk) - The auditor identified the **goodwill impairment assessment** for an Additives & Functional Products reporting unit as a critical audit matter due to significant judgment[294](index=294&type=chunk)[295](index=295&type=chunk) Consolidated Financial Statement Summary (Year-End 2022) | Metric (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | **Total Assets** | $14,667 | $15,519 | | **Total Liabilities** | $9,431 | $9,731 | | **Total Stockholders' Equity** | $5,236 | $5,788 | | **Net Earnings** | $796 | $867 | | **Cash from Operations** | $975 | $1,619 | [Item 9A. Controls and Procedures](index=112&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that Eastman's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, a conclusion affirmed by the independent auditor - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2022[535](index=535&type=chunk) - Management assessed internal control over financial reporting using the **COSO framework** and found it **effective** as of December 31, 2022[539](index=539&type=chunk) - PricewaterhouseCoopers LLP's audit confirmed the **effectiveness of internal control over financial reporting** as of December 31, 2022[540](index=540&type=chunk) Part III Part III incorporates information by reference from the 2023 Proxy Statement, covering directors, executive officers, compensation, security ownership, related transactions, and principal accountant fees - Information regarding Directors, Executive Officers, and Corporate Governance is incorporated by reference from the **2023 Proxy Statement**[546](index=546&type=chunk) - Details on Executive Compensation are incorporated by reference from the **2023 Proxy Statement**[548](index=548&type=chunk) - Information on Security Ownership and Principal Accountant Fees is incorporated by reference from the **2023 Proxy Statement**[549](index=549&type=chunk)[556](index=556&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=114&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides information on equity compensation plans, including outstanding options and securities available for future issuance under stockholder-approved plans Equity Compensation Plan Information (as of Dec 31, 2022) | Category | Securities to be Issued Upon Exercise of Outstanding Options | Weighted-Average Exercise Price | Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | **Equity compensation plans approved by stockholders** | 3,479,200 | $88 | 8,355,640 | - All future share-based awards are made from the **2021 Omnibus Stock Compensation Plan**[550](index=550&type=chunk) Part IV Part IV lists all financial statements, schedules, and exhibits filed with the Form 10-K, including consolidated financial statements, auditor consent, and required certifications - This part contains the list of all financial statements, schedules, and exhibits filed with the annual report[559](index=559&type=chunk) - Key exhibits include the company's bylaws, debt agreements, executive compensation plans, and **Sarbanes-Oxley Act certifications**[563](index=563&type=chunk)[565](index=565&type=chunk)[567](index=567&type=chunk)