Table 1 - Statements of Earnings

First Quarter

(Dollars in millions, except per share amounts; unaudited)

2024

2023

Sales

$

2,310

$

2,412

Cost of sales (1)(2)

1,778

1,883

Gross profit

532

529

Selling, general and administrative expenses

191

191

Research and development expenses

59

62

Asset impairments and restructuring charges, net

11

22

Other components of post-employment (benefit) cost, net

(5)

(3)

Other (income) charges, net

13

11

Earnings before interest and taxes

263

246

Net interest expense

49

52

Earnings before income taxes

214

194

Provision for income taxes

49

60

Net earnings

165

134

Less: Net earnings attributable to noncontrolling interest

-

-

Net earnings attributable to Eastman

$

165

$

134

Basic earnings per share attributable to Eastman

$

1.40

$

1.13

Diluted earnings per share attributable to Eastman

$

1.39

$

1.12

Shares (in millions) outstanding at end of period

117.6

119.2

Shares (in millions) used for earnings per share calculation

Basic

117.4

118.9

Diluted

118.2

119.7

  1. First quarter 2023 includes $8 million insurance proceeds, net of costs, 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

Table 2A - Segment Sales Information

First Quarter

(Dollars in millions, unaudited)

2024

2023

Sales by Segment

Advanced Materials

$

748

$

742

Additives & Functional Products

704

777

Chemical Intermediates

523

589

Fibers

331

303

Total Sales by Segment

2,306

2,411

Other

4

1

Total Eastman Chemical Company

$

2,310

$

2,412

Fourth

Quarter

(Dollars in millions, unaudited)

2023

Sales by Segment

Advanced Materials

$

705

Additives & Functional Products

640

Chemical Intermediates

513

Fibers

346

Total Sales by Segment

2,204

Other

3

Total Eastman Chemical Company

$

2,207

2

Table 2B - Sales Revenue Change

First Quarter 2024 Compared to First Quarter 2023

Change in Sales Revenue Due To

(Unaudited)

Revenue

Volume /

Exchange

Product Mix

Price Effect

Rate

% Change

Effect

Effect

Advanced Materials

1 %

4

%

(3) %

- %

Additives & Functional Products

(9) %

(1) %

(8) %

-

%

Chemical Intermediates

(11) %

2

%

(13) %

-

%

Fibers

9 %

7

%

2 %

- %

Total Eastman Chemical Company

(4) %

3

%

(7) %

-

%

First Quarter 2024 Compared to Fourth Quarter 2023

Change in Sales Revenue Due To

Revenue

Volume /

Exchange

Product Mix

Price Effect

Rate

(Unaudited)

% Change

Effect

Effect

Advanced Materials

6

%

6

%

(1) %

1

%

Additives & Functional Products

10

%

8

%

1

%

1

%

Chemical Intermediates

2

%

1

%

1

%

-

%

Fibers

(4) %

(7) %

3 %

- %

Total Eastman Chemical Company

5 %

4

%

- %

1 %

Table 2C - Sales by Customer Location

First Quarter

(Dollars in millions, unaudited)

2024

2023

Sales by Customer Location

United States and Canada

$

969

$

1,065

Europe, Middle East, and Africa

659

709

Asia Pacific

564

521

Latin America

118

117

Total Eastman Chemical Company

$

2,310

$

2,412

3

Table 3A - Segment, Other, and Company

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)

First Quarter

(Dollars in millions, unaudited)

2024

2023

Advanced Materials

Earnings before interest and taxes

$

104

$

86

Additives & Functional Products

Earnings before interest and taxes

109

124

Chemical Intermediates

Earnings before interest and taxes

16

42

Fibers

Earnings before interest and taxes

117

65

Asset impairments and restructuring charges, net

-

6

Accelerated depreciation

-

23

Excluding non-core items

117

94

Other

Loss before interest and taxes

(83)

(71)

Asset impairments and restructuring charges, net (2)

11

16

Steam line incident (insurance proceeds) costs, net

-

(8)

Excluding non-core and unusual items

(72)

(63)

Total Eastman Chemical Company

Earnings before interest and taxes

263

246

Asset impairments and restructuring charges, net

11

22

Steam line incident (insurance proceeds) costs, net

-

(8)

Accelerated depreciation

-

23

Total earnings before interest and taxes excluding non-core and unusual items

$

274

$

283

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items

Earnings before interest and taxes

$

263

$

246

Cost of sales

-

15

Asset impairments and restructuring charges, net

11

22

Total earnings before interest and taxes excluding non-core and unusual items

$

274

$

283

  1. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of theQuarterly Report on Form10-Qfor first quarter 2023 for description of first quarter 2023 non-core and unusual items.
  2. Severance charges as part of fourth quarter 2023 cost reduction initiatives.

4

Table 3A - Segment, Other, and Company

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued) (1)

Fourth

Quarter

(Dollars in millions, unaudited)

2023

Advanced Materials

Earnings before interest and taxes

$

65

Additives & Functional Products

Earnings before interest and taxes

67

Chemical Intermediates

Earnings before interest and taxes

347

Gain on divested business

(323)

Excluding non-core item

24

Fibers

Earnings before interest and taxes

113

Other

Loss before interest and taxes

(115)

Mark-to-market pension and other postretirement benefit plans (gain), net

53

Asset impairments and restructuring charges, net

15

Excluding non-core and unusual items

(47)

Total Eastman Chemical Company

Earnings before interest and taxes

$

477

Mark-to-market pension and other postretirement benefit plans (gain), net

53

Asset impairments and restructuring charges, net

15

Gain on divested business

(323)

Total earnings before interest and taxes excluding non-core and unusual items

$

222

Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items

Earnings before interest and taxes

$

477

Asset impairments and restructuring charges, net

15

Other components of post-employment (benefit) cost, net

53

Net (gain) loss on divested businesses

(323)

Total earnings before interest and taxes excluding non-core and unusual items

$

222

  1. For the description of fourth quarter 2023 non-core and unusual items, see Table 3A in the Quarterly Report on Form8-Kfurnished for the fourth quarter 2023.

5

Table 3B - Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins(1)(2)

First Quarter

(Dollars in millions, unaudited)

2024

2023

Adjusted

Adjusted

Adjusted

Adjusted

EBIT

EBIT

EBIT

Margin

EBIT

Margin

Advanced Materials

$

104

13.9 %

$

86

11.6 %

Additives & Functional Products

109

15.5 %

124

16.0 %

Chemical Intermediates

16

3.1 %

42

7.1 %

Fibers

117

35.3 %

94

31.0 %

Total segment EBIT excluding non-core and unusual items

346

15.0 %

346

14.4 %

Other

(72)

(63)

Total EBIT excluding non-core and unusual items

$

274

11.9 %

$

283

11.7 %

Fourth Quarter

(Dollars in millions, unaudited)

2023

Adjusted

Adjusted

EBIT

EBIT

Margin

Advanced Materials

$

65

9.2 %

Additives & Functional Products

67

10.5 %

Chemical Intermediates

24

4.7 %

Fibers

113

32.7 %

Total segment EBIT excluding non-core and unusual items

269

12.2 %

Other

(47)

Total EBIT excluding non-core and unusual items

$

222

10.1 %

  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 2Afor sales.

6

Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,

and Earnings Per Share Reconciliations

First Quarter 2024

Earnings

Earnings

Provision

Net Earnings

Attributable to Eastman

Before

Before

for

Effective

(Dollars in millions, except per share amounts,

Interest

Income

Income

Income

After Tax

Per Diluted

unaudited)

and Taxes

Taxes

Taxes

Tax Rate

Share

As reported (GAAP)

$

263

$

214

$

49

23 %

$

165

$

1.39

Non-Core and Unusual Items: (1)

Asset impairments and restructuring

11

11

3

8

0.07

charges, net

Interim adjustment to tax provision (2)

-

-

(17)

17

0.15

Non-GAAP (Excluding non-core and

unusual items and with adjusted provision

for income taxes)

$

274

$

225

$

35

16 %

$

190

$

1.61

First Quarter 2023

Earnings

Earnings

Provision

Net Earnings

Attributable to Eastman

Before

Before

for

Effective

(Dollars in millions, except per share amounts,

Interest

Income

Income

Income

After Tax

Per Diluted

unaudited)

and Taxes

Taxes

Taxes

Tax Rate

Share

As reported (GAAP)

$

246

$

194

$

60

31 %

$

134

$

1.12

Non-Core and Unusual Items: (1)

Asset impairments and restructuring

22

22

4

18

0.14

charges, net

Accelerated depreciation

23

23

3

20

0.17

Steam line incident (insurance proceeds)

(8)

(8)

(2)

(6)

(0.05)

costs, net

Adjustments from tax law changes (3)

-

-

(23)

23

0.19

Interim adjustment to tax provision (2)

-

-

(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

  1. SeeTable 3Afor description of first quarter 2024 and 2023 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 state guidance issued in first quarter 2023 related to the 2017 Tax Cuts and Jobs Act.
  3. The adjusted provision for income taxes for first quarter 2024 and 2023 is calculated applying the forecasted full year effective tax rate as shown inTable 4B.

7

Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,

and Earnings Per Share Reconciliations (continued)

Fourth Quarter 2023

Earnings

Earnings

Provision

Net Earnings

Attributable to Eastman

Before

Before

for

Effective

(Dollars in millions, except per share amounts,

Interest

Income

Income

Income

After Tax

Per Diluted

unaudited)

and Taxes

Taxes

Taxes

Tax Rate

Share

As reported (GAAP)

$

477

$

425

$

114

27 %

$

310

$

2.61

Non-Core and Unusual Items: (1)

Asset impairments and restructuring

15

15

1

14

0.12

charges, net

Gain on divested business

(323)

(323)

(98)

(225)

(1.89)

Mark-to-market pension and other

53

53

14

39

0.33

postretirement benefit plans loss, net

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)

$

222

$

170

$

14

8 %

$

155

$

1.31

  1. SeeTable 3Afor description of fourth quarter 2023 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 2023 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)

2024

2023

Effective tax rate

23 %

31 %

Discrete tax items (2)

(1)%

- %

Tax impact of current year non-core and unusual items (3)

1 %

(8)%

Changes in tax contingencies and valuation allowances

(1)%

(1)%

Forecasted full year impact of expected tax events

(6)%

(6)%

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 in both first three months 2024 and 2023.
  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 items for 2024 are related to share based compensation expense.
  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

Table 5 - Statements of Cash Flows

First Three Months

(Dollars in millions, unaudited)

2024

2023

Operating activities

Net earnings

$

165

$

134

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

127

141

(Benefit from) provision for deferred income taxes

(17)

(7)

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:

(Increase) decrease in trade receivables

(105)

(91)

(Increase) decrease in inventories

(100)

(44)

Increase (decrease) in trade payables

49

(132)

Pension and other postretirement contributions (in excess of) less than expenses

(19)

(19)

Variable compensation payments (in excess of) less than expenses

(78)

(16)

Other items, net

(38)

32

Net cash used in operating activities

(16)

(2)

Investing activities

Additions to properties and equipment

(185)

(174)

Proceeds from sale of businesses

-

16

Acquisition, net of cash acquired

-

(73)

Additions to capitalized software

(1)

(2)

Other items, net

7

(19)

Net cash used in investing activities

(179)

(252)

Financing activities

Net decrease in commercial paper and other borrowings

-

(326)

Proceeds from borrowings

742

796

Repayment of borrowings

(498)

-

Dividends paid to stockholders

(95)

(94)

Other items, net

(1)

(19)

Net cash provided by financing activities

148

357

Effect of exchange rate changes on cash and cash equivalents

(2)

3

Net change in cash and cash equivalents

(49)

106

Cash and cash equivalents at beginning of period

548

493

Cash and cash equivalents at end of period

$

499

$

599

Table 6 - Total Borrowings to Net Debt Reconciliations

March 31,

December 31,

(Dollars in millions, unaudited)

2024

2023

Total borrowings

$

5,080

$

4,846

Less: Cash and cash equivalents

499

548

Net debt (1)

$

4,581

$

4,298

  1. Includes non-cash decrease of $12 million in 2024 and non-cash increase of $20 million in 2023 resulting from foreign currency exchange rates.

9

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Eastman Chemical Company published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 09:17:01 UTC.