Eastman(US:EMN)2026-02-13 16:58Financial Performance - In 2025, Eastman reported sales revenue of $8.8 billion, EBIT of $776 million, and net earnings of $474 million, with diluted earnings per share at $4.10[19] - Sales revenue decreased by 7% in 2025 to $8,752 million from $9,382 million in 2024, primarily due to lower sales volume and price effects[211] - Gross profit fell by 19% in 2025 to $1,844 million compared to $2,290 million in 2024, with gross profit excluding non-core items decreasing by 20%[212] - Net earnings attributable to Eastman were $474 million in 2025, down from $905 million in 2024, with diluted EPS decreasing from $7.67 to $4.10[208] - The company generated $970 million in cash from operating activities in 2025, a decrease from $1.3 billion in 2024[208] - EBIT excluding non-core items decreased to $930 million in 2025 from $1,298 million in 2024, reflecting lower sales volume and higher costs[206] - The company reported a total of $154 million in non-core items impacting EBIT for 2025, compared to $20 million in 2024[193] - Adjusted net earnings attributable to Eastman, excluding non-core and unusual items, were $627 million in 2025 compared to $931 million in 2024[208] Sustainability Initiatives - The company aims to reduce absolute scope 1 and scope 2 GHG emissions by 30% by 2035, with a target of net-zero operations by 2050[25] - Eastman has developed several innovative products, including Naia™ and Aventa™, which are biodegradable and compostable biopolymers[23] - Eastman’s sustainability initiatives include strategic collaborations to promote molecular recycling and mass balance accounting[25] - Eastman is leveraging molecular recycling technologies to convert waste plastics into specialty plastics, enhancing sustainability and product offerings in the AM segment[35] - The company is developing biodegradable cellulose-ester micropowders for personal care applications, addressing environmental challenges in the industry[41] - Eastman’s innovation initiatives are supported by world-class technology platforms and a focus on molecular recycling technologies[205] Market and Customer Insights - Approximately 55% of 2025 sales revenue was generated from outside the United States and Canada[19] - The Fibers segment's top 10 customers account for approximately 65% of its 2025 sales revenue, indicating a strong reliance on strategic long-term relationships[50] - The top 100 customers accounted for approximately 60% of the Company's 2025 sales revenue, with no single customer accounting for 10% or more of consolidated sales revenue[79] - The Company expects international markets to continue to represent a significant portion of its sales, with more than half of sales for 2025 coming from outside North America[96] Operational Efficiency and Innovation - Eastman operates the world's largest polyester molecular recycling facility, achieving approximately 2.5 times greater output than in 2024[33] - The company maintains a disciplined approach to capital allocation, prioritizing dividends, growth opportunities, and share repurchases[28] - Eastman’s innovation-driven growth model focuses on leveraging scalable technology platforms and engaging directly with customers to enhance product offerings[21] - The Company recognizes earnings from its acetate tow joint venture in China through equity investment, reported in "Other (income) charges, net"[54] - Eastman is investing in the conversion of existing assets to improve feedstock mix and balance ethylene and propylene production, enhancing operational efficiency[44] - The Company has implemented multifaceted sourcing, warehousing, and delivery strategies to mitigate supply chain disruptions and build resilient supply positions[94] Risk Management and Compliance - The Company is subject to significant governmental laws and regulations that require substantial expenditures for compliance, impacting its competitive position[80] - The Company faces risks related to global economic conditions, including fluctuating commodity prices and volatile exchange rates, which could adversely impact financial results[90] - The Company may incur significant costs to comply with health, safety, and environmental regulations, which could adversely affect its financial results[115] - The Company is subject to various legal proceedings that could materially impact its business and financial results[107] - The Company faces risks associated with cybersecurity incidents that could lead to financial and reputational damage[102] - The Company has established cybersecurity policies and incident response plans that are continually refined to adapt to regulatory changes and emerging risks[126] Employee and Corporate Governance - Eastman emphasizes employee well-being through various resources, including fitness classes and financial counseling, to attract and retain talent[74] - The Company employs a risk-based governance approach for artificial intelligence use, overseen by a Responsible AI Council[71] - Eastman’s compensation philosophy includes annual assessments of pay equity, considering factors such as gender, race, and performance[78] Financial Position and Investments - Eastman had $351 million in indefinite-lived intangible assets at December 31, 2025, with no impairments identified during the fourth quarter tests[166] - As of December 31, 2025, Eastman had $3.7 billion in goodwill, with fair values significantly exceeding carrying values for most reporting units tested, except for performance films[165] - The Company holds a 51% share in Eastman Specialties Wuhan Youji Chemical Co., Ltd. and Qilu Eastman Specialty Chemical, Ltd., and an 80% share in Eastman Fibers Korea Limited[148] - The Company accrued environmental costs expected to be paid out within approximately 30 years, reflecting liabilities related to contaminated sites[83] - The estimated future environmental expenditures for undiscounted remediation costs ranged from $285 million to $509 million, with a best estimate of $285 million as of December 31, 2025[169]