Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2020shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2020 |
Document Transition Report | false |
Entity File Number | 1-12626 |
Entity Registrant Name | EASTMAN CHEMICAL CO |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 62-1539359 |
Entity Address, Address Line One | 200 South Wilcox Drive |
Entity Address, City or Town | Kingsport |
Entity Address, State or Province | TN |
Entity Address, Postal Zip Code | 37662 |
City Area Code | 423 |
Local Phone Number | 229-2000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 135,467,894 |
Entity Central Index Key | 0000915389 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Common Stock [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | EMN |
Security Exchange Name | NYSE |
1.5% notes due May 2023 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.50% Notes Due 2023 |
Trading Symbol | EMN23 |
Security Exchange Name | NYSE |
1.875% notes due November 2026 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.875% Notes Due 2026 |
Trading Symbol | EMN26 |
Security Exchange Name | NYSE |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED EARNINGS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 2,122 | $ 2,325 | $ 6,287 | $ 7,068 |
Cost of sales | 1,621 | 1,751 | 4,838 | 5,331 |
Gross profit | 501 | 574 | 1,449 | 1,737 |
Selling, general and administrative expenses | 165 | 163 | 480 | 515 |
Research and development expenses | 56 | 59 | 169 | 174 |
Asset impairments and restructuring charges, net | 60 | 2 | 215 | 52 |
Other components of post-employment (benefit) cost, net | (30) | (20) | (90) | (62) |
Other (income) charges, net | 7 | 3 | 10 | 0 |
Earnings before interest and taxes | 243 | 367 | 665 | 1,058 |
Net interest expense | 52 | 54 | 159 | 165 |
Early debt extinguishment costs | 1 | 0 | 1 | 0 |
Earnings before income taxes | 190 | 313 | 505 | 893 |
Provision for income taxes | 25 | 46 | 50 | 158 |
Net earnings | 165 | 267 | 455 | 735 |
Less: Net earnings attributable to noncontrolling interest | 4 | 1 | 9 | 2 |
Net earnings attributable to Eastman | $ 161 | $ 266 | $ 446 | $ 733 |
Earnings Per Share, Basic [Abstract] | ||||
Basic earnings per share attributable to Eastman | $ 1.19 | $ 1.95 | $ 3.29 | $ 5.31 |
Diluted earnings per share attributable to Eastman | ||||
Diluted earnings per share attributable to Eastman | $ 1.18 | $ 1.93 | $ 3.27 | $ 5.27 |
Comprehensive Income | ||||
Net earnings including noncontrolling interest | $ 165 | $ 267 | $ 455 | $ 735 |
Other comprehensive income (loss), net of tax: | ||||
Change in cumulative translation adjustment | (20) | 23 | (15) | 40 |
Defined benefit pension and other postretirement benefit plans: | ||||
Amortization of unrecognized prior service credits | (7) | (7) | (21) | (22) |
Derivatives and hedging: | ||||
Unrealized gain (loss) during period | (13) | 10 | (9) | (2) |
Reclassification adjustment for (gains) losses included in net income, net | 6 | 6 | 16 | 6 |
Total other comprehensive income (loss), net of tax | (34) | 32 | (29) | 22 |
Comprehensive income including noncontrolling interest | 131 | 299 | 426 | 757 |
Less: Net earnings attributable to noncontrolling interest | 4 | 1 | 9 | 2 |
Comprehensive income attributable to Eastman | 127 | 298 | 417 | 755 |
Retained Earnings | ||||
Retained earnings at beginning of period | 8,071 | 7,848 | 7,965 | 7,573 |
Net earnings attributable to Eastman | 161 | 266 | 446 | 733 |
Cash dividends declared | (90) | (85) | (269) | (257) |
Retained earnings at end of period | 8,142 | 8,029 | 8,142 | 8,029 |
Retained earnings | $ 8,142 | $ 8,029 | $ 7,965 | 8,029 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Retained Earnings | ||||
Retained earnings at beginning of period | (20) | |||
Retained earnings | $ (20) |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 650 | $ 204 | |
Trade receivables, net of allowance for doubtful accounts | 1,077 | 980 | |
Miscellaneous receivables | 377 | 395 | |
Inventories | 1,338 | 1,662 | |
Other current assets | 92 | 80 | |
Total current assets | 3,534 | 3,321 | |
Properties | |||
Properties and equipment at cost | 13,332 | 12,904 | |
Less: Accumulated depreciation | 7,843 | 7,333 | |
Net properties | 5,489 | 5,571 | |
Goodwill | 4,443 | 4,431 | |
Intangible assets, net of accumulated amortization | 1,802 | 2,011 | |
Other noncurrent assets | 741 | 674 | |
Total assets | [1] | 16,009 | 16,008 |
Current liabilities | |||
Payables and other current liabilities | 1,419 | 1,618 | |
Borrowings due within one year | 370 | 171 | |
Total current liabilities | 1,789 | 1,789 | |
Long-term borrowings | 5,495 | 5,611 | |
Deferred income tax liabilities | 928 | 915 | |
Post-employment obligations | 939 | 1,016 | |
Other long-term liabilities | 702 | 645 | |
Total liabilities | 9,853 | 9,976 | |
Stockholders' equity | |||
Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 220,247,546 and 219,638,646 for 2020 and 2019, respectively) | 2 | 2 | |
Additional paid-in capital | 2,134 | 2,105 | |
Retained earnings | 8,142 | 7,965 | |
Accumulated other comprehensive income (loss) | (243) | (214) | |
Stockholder's Equity before Treasury Stock | 10,035 | 9,858 | |
Less: Treasury stock at cost (84,830,450 shares for 2020 and 83,696,398 shares for 2019) | 3,960 | 3,900 | |
Total Eastman stockholders' equity | 6,075 | 5,958 | |
Noncontrolling interest | 81 | 74 | |
Total equity | 6,156 | 6,032 | |
Total liabilities and stockholders' equity | $ 16,009 | $ 16,008 | |
[1] | Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. |
UNAUDITED CONSOLIDATED STATEM_3
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 220,247,546 | 219,638,646 |
Treasury stock at cost (in shares) | 84,830,450 | 83,696,398 |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net earnings | $ 455 | $ 735 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 429 | 462 |
Asset impairment charges | 145 | 0 |
Early debt extinguishment costs | 1 | 0 |
(Benefit from) provision for deferred income taxes | (14) | 13 |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | ||
(Increase) decrease in trade receivables | (90) | (50) |
(Increase) decrease in inventories | 316 | (122) |
Increase (decrease) in trade payables | (213) | (183) |
Pension and other postretirement contributions (in excess of) less than expenses | (108) | (97) |
Variable compensation (in excess of) less than expenses | 25 | (15) |
Other items, net | 103 | 90 |
Net cash provided by operating activities | 1,049 | 833 |
Investing activities | ||
Additions to properties and equipment | (278) | (308) |
Acquisitions, net of cash acquired | 0 | (48) |
Other items, net | (4) | (4) |
Net cash used in investing activities | (282) | (360) |
Financing activities | ||
Net increase (decrease) in commercial paper and other borrowings | 14 | 149 |
Proceeds from borrowings | 249 | 335 |
Repayment of borrowings | (250) | (385) |
Dividends paid to stockholders | (269) | (258) |
Treasury stock purchases | (60) | (325) |
Other items, net | (6) | (3) |
Net cash used in financing activities | (322) | (487) |
Effect of exchange rate changes on cash and cash equivalents | 1 | (5) |
Net change in cash and cash equivalents | 446 | (19) |
Cash and cash equivalents at beginning of period | 204 | 226 |
Cash and cash equivalents at end of period | $ 650 | $ 207 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by Eastman Chemical Company ("Eastman" or the "Company") in accordance and consistent with the accounting policies stated in the Company's 2019 Annual Report on Form 10-K , and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of that report, with the exception of the items noted below. The December 31, 2019 financial position data included herein was derived from the consolidated financial statements included in the 2019 Annual Report on Form 10-K but does not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). In the opinion of management, the unaudited consolidated financial statements include all normal recurring adjustments necessary for fair statement of the interim financial information in conformity with GAAP. These statements contain some amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. The unaudited consolidated financial statements include assets, liabilities, sales revenue, and expenses of all majority-owned subsidiaries and joint ventures in which a controlling interest is maintained. Eastman accounts for other joint ventures and investments where it exercises significant influence on the equity basis. Intercompany transactions and balances are eliminated in consolidation. Certain prior period data has been reclassified in the unaudited consolidated financial statements and accompanying footnotes to conform to current period presentation. Recently Adopted Accounting Standards Accounting Standards Update ("ASU") 2016-13 Financial Instruments - Credit Losses: On January 1, 2020, Eastman adopted this standard, and related releases, under the various required transition methods. The amendments require a financial asset (including trade receivables) to be presented at the net amount expected to be collected through the use of allowances for credit losses valuation account. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The adoption of this standard did not result in a material impact on the Company's financial statements and related disclosures. ASU 2018-13 Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement: On January 1, 2020, Eastman adopted this standard that is a part of the Financial Accounting Standards Board's ("FASB") disclosure framework project to improve the effectiveness of disclosures in the notes to financial statements. The primary changes applicable to Eastman in this update are the disclosures of fair value levels, assessment thereof, and transfers between those levels. The adoption under the various required transition methods did not impact the Company's related disclosures. ASU 2018-18 Collaborative Arrangements - Clarifying the Interaction between Topic 808 (Collaborative Arrangements) and Topic 606 (Revenue from Contracts with Customers): On January 1, 2020, Eastman adopted this standard, retrospectively to the date of the initial application of Topic 606 on January 1, 2017, that provides clarification in regards to which contracts are accounted for under Topic 808 and Topic 606 as well as alignment of guidance between the two pronouncements. The adoption of this standard did not impact the Company's financial statements and related disclosures. ASU 2019-01 Leases - Codification Improvements: On January 1, 2020, Eastman adopted this standard which was applied as of the adoption date and under the same transition methodology of ASU 2016-02 Lease previously adopted on January 1, 2019. The FASB issued this update in response to stakeholder inquiries regarding the new leasing standard. The adoption of this standard did not impact the Company's financial statements and related disclosures. ASU 2020-04 Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting : Eastman adopted this standard when issued and effective on March 12, 2020. The FASB issued this update to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform (the global financial markets transition in contracts, hedging relationships, and other transactions away from referencing the London Interbank Offered Rate (LIBOR) and other interbank offered rates and toward new reference rates) on financial reporting. As reference reform has not impacted Eastman as of the issuance and effective date, the adoption of this standard did not impact the Company's financial statements and related disclosures. Accounting Standards Issued But Not Adopted as of September 30, 2020 ASU 2018-14 Retirement Benefits - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans: In August 2018, the FASB issued this update as a part of its disclosure framework project to improve the effectiveness of disclosures in the notes to financial statements. The primary change impacting Eastman is the addition of disclosures related to significant gains and losses related to changes in the benefit obligation for the period and weighted-average interest crediting rates for cash balance plans. This standard is effective for fiscal years ending after December 15, 2020. Upon adoption, this update is to be applied on a retrospective basis to all periods presented. Management does not expect that changes required by the new standard will materially impact the Company's related disclosures. ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes : In December 2019, the FASB issued this update as part of its initiative to reduce complexity in accounting standards which removes certain exceptions and provides simplification to specific tax items. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Adoption methods vary based on the specific items impacted. Management is currently evaluating the impact on the Company's financial statements and related disclosures. ASU 2020-01 Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815: In January 2020, the FASB issued a clarification that an entity should consider observable transactions that require the application or discontinuance of the equity method of accounting for the purposes of applying the measurement alternative and clarification that certain forward contracts and purchased options to purchase securities that, upon settlement, would be accounted for under the equity method of accounting. This standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The update is to be applied prospectively. Management does not expect that changes required by the new standard will materially impact the Company's financial statements and related disclosures. Working Capital Management and Off Balance Sheet Arrangements Since 2019, the Company has been expanding its off balance sheet, uncommitted accounts receivable factoring program under which entire invoices may be sold, without recourse, to third-party financial institutions. Under these agreements, the Company sells the invoices at face value, less a transaction fee, which substantially equals the carrying value and fair value with no gain or loss recognized and no credit loss exposure is retained. Available capacity under these agreements, which the Company uses as a source of working capital funding, is dependent on the level of accounts receivable eligible to be sold and the financial institutions' willingness to purchase such receivables. In addition, certain agreements also require that the Company continue to service, administer, and collect the sold accounts receivable at market rates. The total amounts sold in third quarter 2020 and 2019 were $336 million and $190 million, respectively, and $1.20 billion and $460 million in first nine months 2020 and 2019, respectively. The Company works with suppliers to optimize payment terms and conditions on accounts payable to enhance timing of working capital and cash flows. As part of these efforts, in 2019 the Company introduced a voluntary supply chain finance program to provide suppliers with the opportunity to sell receivables due from Eastman to a participating financial institution. Eastman's responsibility is limited to making payments on the terms originally negotiated with suppliers, regardless of whether the suppliers sell their receivables to the financial institution. The range of payment terms Eastman negotiates with suppliers are consistent, regardless of whether a supplier participates in the program. All of Eastman's accounts payable and associated payments are reported consistently in the Company's Unaudited Consolidated Statements of Financial Position and Unaudited Consolidated Statements of Cash Flows regardless of whether they are associated with a vendor who participates in the program. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES September 30, December 31, (Dollars in millions) 2020 2019 Finished goods $ 873 $ 1,114 Work in process 191 220 Raw materials and supplies 510 576 Total inventories at FIFO or average cost 1,574 1,910 Less: LIFO reserve 236 248 Total inventories $ 1,338 $ 1,662 Inventories valued on the last-in, first-out ("LIFO") method were approximately 50 percent of total inventories at both September 30, 2020 and December 31, 2019. In third quarter 2020, a $10 million LIFO decrement was recognized due to inventory reduction actions, resulting in an increase to "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings and a decrease to "Inventories" in the Unaudited Consolidated Statements of Financial Position. |
PAYABLES AND OTHER CURRENT LIAB
PAYABLES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
PAYABLES AND OTHER CURRENT LIABILITIES | PAYABLES AND OTHER CURRENT LIABILITIES September 30, December 31, (Dollars in millions) 2020 2019 Trade creditors $ 663 $ 890 Accrued payroll and variable compensation 188 176 Accrued taxes 90 89 Post-employment obligations 139 93 Dividends payable to shareholders 89 90 Other 250 280 Total payables and other current liabilities $ 1,419 $ 1,618 "Other" consists primarily of accruals for interest payable, the current portion of operating lease liabilities, the current portion of environmental liabilities, the current portion of derivative hedging liabilities, and miscellaneous accruals. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES | INCOME TAXES Third Quarter First Nine Months (Dollars in millions) 2020 2019 2020 2019 $ % $ % $ % $ % Provision for income taxes and tax rate $ 25 13 % $ 46 15 % $ 50 10 % $ 158 18 % First nine months 2020 effective tax rate included a $19 million decrease to the provision for income taxes as a result of a decrease in unrecognized tax positions and a $7 million decrease to the provision for income taxes related to adjustments to certain prior year tax returns. Third quarter and first nine months 2019 effective tax rates included adjustments to the tax provision to reflect amendments to and finalization of prior year's income tax returns. At September 30, 2020 and December 31, 2019, Eastman had $194 million and $202 million, respectively, in unrecognized tax benefits. At September 30, 2020, it is reasonably possible that, as a result of the resolution of federal, state, and foreign examinations and appeals, and the expiration of various statutes of limitation, the total amounts of unrecognized tax benefits could decrease by $10 million to $55 million within the next 12 months. |
BORROWINGS
BORROWINGS | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS September 30, December 31, (Dollars in millions) 2020 2019 Borrowings consisted of: 4.5% notes due January 2021 (1) $ 185 $ 185 3.5% notes due December 2021 298 298 3.6% notes due August 2022 743 741 1.50% notes due May 2023 (2) 876 840 7 1/4% debentures due January 2024 198 198 7 5/8% debentures due June 2024 43 43 3.8% notes due March 2025 701 695 1.875% notes due November 2026 (2) 581 556 7.60% debentures due February 2027 195 195 4.5% notes due December 2028 493 493 4.8% notes due September 2042 493 493 4.65% notes due October 2044 874 874 Commercial paper and short-term borrowings 185 171 Total borrowings 5,865 5,782 Borrowings due within one year 370 171 Long-term borrowings $ 5,495 $ 5,611 (1) In October 2020, the Company repaid the 4.5% notes due January 2021 ($185 million principal) using available cash. (2) The carrying value of the euro-denominated 1.50% notes due May 2023 and 1.875% notes due November 2026 will fluctuate with changes in the euro exchange rate. The carrying value of these euro-denominated borrowings have been designated as non-derivative net investment hedges of a portion of the Company's net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations. Loan Agreement, Credit Facility, and Commercial Paper Borrowings In second quarter 2020, the Company borrowed $250 million under a new 364-Day Term Loan Credit Agreement (the "Term Loan") as a precautionary measure due to increased financial market volatility, particularly in the availability and terms of commercial paper, resulting from the COVID-19 coronavirus global pandemic ("COVID-19"). In third quarter 2020, the Term Loan was repaid using available cash. The early repayment resulted in a charge of $1 million for early debt extinguishment costs which was primarily attributable to related unamortized issuance costs. The Company has access to a $1.50 billion revolving credit agreement (the "Credit Facility") expiring October 2023. Borrowings under the Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. The Credit Facility provides available liquidity for general corporate purposes and supports commercial paper borrowings. Commercial paper borrowings are classified as short-term. In first quarter 2020, the Company borrowed a total of $400 million under the Credit Facility. In second quarter 2020, the Company repaid a total of $400 million using available cash. At September 30, 2020 and December 31, 2019, the Company had no outstanding borrowings under the Credit Facility. At September 30, 2020, the Company's commercial paper borrowings were $185 million with a weighted average interest rate of 0.35 percent. At December 31, 2019, the Company's commercial paper borrowings were $170 million with a weighted average interest rate of 2.03 percent. The Credit Facility contains customary covenants, including requirements to maintain certain financial ratios, that determine the events of default, amounts available, and terms of borrowings. In second quarter 2020, the Company amended the Credit Facility and the Term Loan maximum debt covenants to reflect the higher cash balance to enhance liquidity due to, and the expected negative impact on operating results of, COVID-19 and added a new restrictive covenant prohibiting stock repurchases until June 30, 2021 in the event certain financial ratios are exceeded. The Company was in compliance with all applicable covenants at both September 30, 2020 and December 31, 2019. The Company did not renew the $250 million accounts receivable securitization agreement (the "A/R Facility") which expired April 2020. Eastman Chemical Financial Corporation ("ECFC"), a subsidiary of the Company, had an agreement to sell interests in trade receivables under the A/R Facility to a third party purchaser. Third party creditors of ECFC had first priority claims on the assets of ECFC before those assets would be available to satisfy the Company's general obligations. Borrowings under the A/R Facility were subject to interest rates based on a spread over the lender's borrowing costs and ECFC paid a fee to maintain availability of the A/R Facility. In first quarter 2020, the Company borrowed a total of $350 million, in two tranches, under the A/R Facility and repaid a total of $350 million using available cash. At December 31, 2019, the Company had no borrowings outstanding under the A/R Facility. Fair Value of Borrowings Eastman has classified its total borrowings at September 30, 2020 and December 31, 2019 under the fair value hierarchy as defined in the accounting policies in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . The fair value for fixed-rate debt securities is based on quoted market prices for the same or similar debt instruments and is classified as Level 2. The fair value for the Company's other borrowings, primarily under the Credit Facility and commercial paper, equals the carrying value and is classified as Level 2. At September 30, 2020 and December 31, 2019, the fair value of total borrowings was $6.529 billion and $6.275 billion, respectively. The Company had no borrowings classified as Level 3 as of September 30, 2020 and December 31, 2019. |
DERIVATIVE AND NON-DERIVATIVE F
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Overview of Hedging Programs Eastman is exposed to market risks, such as changes in foreign currency exchange rates, commodity prices, and interest rates. To mitigate these market risks and their effects on the cash flows of the underlying transactions and investments in foreign subsidiaries, the Company uses various derivative and non-derivative financial instruments, when appropriate, in accordance with the Company's hedging strategy and policies. Designation is performed on a specific exposure basis to support hedge accounting. The Company does not enter into derivative transactions for speculative purposes. For further information on hedging programs, see Note 9, "Derivative and Non-Derivative Financial Instruments", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . Cash Flow Hedges Cash flow hedges are derivative instruments designated as and used to hedge the exposure to variability in expected future cash flows that are attributable to a particular risk. The derivative instruments that are designated and qualify as a cash flow hedge are reported on the balance sheet at fair value and the changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the anticipated cash flows of the underlying exposures being hedged. The change in the hedge instrument is reported as a component of Accumulated other comprehensive income (loss) ("AOCI") located in the Unaudited Consolidated Statements of Financial Position and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Cash flows from cash flow hedges are classified as operating activities in the Unaudited Consolidated Statements of Cash Flows. In first, second, and third quarters 2020, Eastman entered into forward-starting interest rate swaps with a notional amount of $25 million in each period to mitigate the risk of variability in interest rates for an expected long-term debt issuance by August 2022. These swaps were designated as cash flow hedges and will be settled upon debt issuance. The total outstanding forward starting swaps as of September 30, 2020 was $75 million. Fair Value Hedges Fair value hedges are defined as derivative or non-derivative instruments designated as and used to hedge the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk. The derivative instruments that are designated and qualify as fair value hedges are recognized on the balance sheet at fair value and the changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the anticipated fair value of the underlying exposures being hedged. The net of the change in the hedge instrument and item being hedged for qualifying fair value hedges is recognized in earnings in the same period or periods during which the hedged transaction affects earnings. Cash flows from fair value hedges are classified as operating activities in the Unaudited Consolidated Statements of Cash Flows. Net Investment Hedges Net investment hedges are defined as derivative or non-derivative instruments designated as and used to hedge the foreign currency exposure of the net investments in certain foreign operations. The net of the change in the hedge instrument and item being hedged for qualifying net investment hedges is reported as a component of the "Cumulative Translation Adjustment" ("CTA") within AOCI in the Unaudited Consolidated Statements of Financial Position. Cash flows from the CTA component are classified as operating activities in the Unaudited Consolidated Statements of Cash Flows. Recognition in earnings of amounts previously recognized in CTA is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. In the event of a complete or substantially complete liquidation of the net investment, cash flows from net investment hedges are classified as investing activities in the Unaudited Consolidated Statements of Cash Flows. For derivative cross-currency interest rate swap net investment hedges, gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in CTA within AOCI and recognized in earnings through the periodic swap interest accruals. The cross-currency interest rate swaps designated as net investment hedges are included as part of "Other long-term liabilities", "Other noncurrent assets", "Payables and other current liabilities", or "Other current assets" within the Unaudited Consolidated Statements of Financial Position. Cash flows from excluded components are classified as operating activities in the Unaudited Consolidated Statements of Cash Flows. In September 2020, the Company terminated fixed-to-fixed cross-currency swaps designated to hedge a portion of its net investment in a euro functional currency denominated subsidiary against foreign currency fluctuations. The notional amount terminated was €150 million ($180 million) which was scheduled to mature in January 2021. The termination resulted in a $3 million gain recognized in CTA. The related cash flows were classified as investing activities in the Unaudited Consolidated Statements of Cash Flows. In September 2020, the Company entered into fixed-to-fixed cross-currency swaps and designated these swaps to hedge a portion of its net investment in a euro functional currency denominated subsidiary against foreign currency fluctuations. These contracts involve the exchange of fixed U.S. dollars with fixed euro interest payments periodically over the life of the contracts and an exchange of the notional amounts at maturity. The fixed-to-fixed cross-currency swaps include €152 million ($180 million) maturing December 2028. Summary of Financial Position and Financial Performance of Hedging Instruments The following table presents the notional amounts outstanding at September 30, 2020 and December 31, 2019 associated with Eastman's hedging programs. Notional Outstanding September 30, 2020 December 31, 2019 Derivatives designated as cash flow hedges: Foreign Exchange Forward and Option Contracts (in millions) EUR/USD (in EUR) €549 €630 Commodity Forward and Collar Contracts Feedstock (in million barrels) — 1 Energy (in million british thermal units) 22 27 Interest rate swaps for the future issuance of debt (in millions) $75 — Derivatives designated as fair value hedges: Fixed-for-floating interest rate swaps (in millions) $75 $75 Derivatives designated as net investment hedges: Cross-currency interest rate swaps (in millions) EUR/USD (in EUR) €853 €851 Non-derivatives designated as net investment hedges: Foreign Currency Net Investment Hedges (in millions) EUR/USD (in EUR) €1,244 €1,243 Fair Value Measurements All the Company's derivative assets and liabilities are currently classified as Level 2. Level 2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs that are derived from or corroborated by observable market data such as interest rate yield curves and currency spot and forward rates. The fair value of commodity contracts is derived using forward curves supplied by an industry recognized and unrelated third party. In addition, on an ongoing basis, the Company tests a subset of its valuations against valuations received from transaction counterparties to validate the accuracy of its standard pricing models. The Company had no derivatives classified as Level 3 as of September 30, 2020 and December 31, 2019. Counterparties to these derivative contracts are highly rated financial institutions which the Company believes carry minimal risk of nonperformance, and the Company diversifies its positions among such counterparties to reduce its exposure to counterparty risk and credit losses. The Company monitors the creditworthiness of its counterparties on an ongoing basis. The Company did not recognize a credit loss during third quarter and first nine months 2020 or 2019. All the Company's derivative contracts are subject to master netting arrangements, or similar agreements, which provide for the option to settle contracts on a net basis when they settle on the same day and in the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event. The Company does not have any cash collateral due under such agreements. The Company has elected to present derivative contracts on a gross basis within the Unaudited Consolidated Statements of Financial Position. The following table presents the financial assets and liabilities valued on a recurring and gross basis and includes where the financial assets and liabilities are within the Unaudited Consolidated Statements of Financial Position as of September 30, 2020 and December 31, 2019. The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis (Dollars in millions) Derivative Type Statements of Financial September 30, 2020 December 31, 2019 Derivatives designated as cash flow hedges: Commodity contracts Other current assets $ 5 $ — Commodity contracts Other noncurrent assets 1 — Foreign exchange contracts Other current assets 1 13 Foreign exchange contracts Other noncurrent assets 1 2 Derivatives designated as fair value hedges: Fixed-for-floating interest rate swap Other current assets — 1 Fixed-for-floating interest rate swap Other noncurrent assets 4 — Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other noncurrent assets 61 68 Total Derivative Assets $ 73 $ 84 Derivatives designated as cash flow hedges: Commodity contracts Payables and other current liabilities $ 4 $ 26 Commodity contracts Other long-term liabilities — 2 Foreign exchange contracts Payables and other current liabilities 8 1 Foreign exchange contracts Other long-term liabilities 7 2 Forward starting interest rate swap contracts Other long-term liabilities — — Derivatives designated as fair value hedges: Fixed-for-floating interest rate swap Long-term borrowings — 1 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other long-term liabilities 13 — Total Derivative Liabilities $ 32 $ 32 Total Net Derivative Assets (Liabilities) $ 41 $ 52 In addition to the fair value associated with derivative instruments designated as cash flow hedges, fair value hedges, and net investment hedges noted in the table above, the Company had non-derivative instruments designated as foreign currency net investment hedges with a carrying value of $1.5 billion and $1.4 billion at September 30, 2020 and December 31, 2019, respectively. The designated foreign currency-denominated borrowings are included as part of "Long-term borrowings" within the Unaudited Consolidated Statements of Financial Position. For additional fair value measurement information, see Note 1, "Significant Accounting Policies", and Note 9, "Derivative and Non-Derivative Financial Instruments", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . As of September 30, 2020 and December 31, 2019, the following amounts were included in the Unaudited Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges. (Dollars in millions) Carrying amount of the hedged liabilities Cumulative amount of fair value hedging loss adjustment included in the carrying amount of the hedged liability Line item in the Unaudited Consolidated Statements of Financial Position in which the hedged item is included September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Long-term borrowings (1) $ 772 $ 763 $ (1) $ (7) (1) At September 30, 2020 and December 31, 2019, the cumulative amount of fair value hedging loss adjustment remaining for hedged liabilities for which hedge accounting has been discontinued was $5 million and $7 million, respectively. The following table presents the effect of the Company's hedging instruments on "Other comprehensive income (loss), net of tax" ("OCI") and financial performance for third quarter and first nine months 2020 and 2019. Change in amount of after tax gain (loss) recognized in OCI on derivatives Pre-tax amount of gain (loss) reclassified from OCI into earnings (Dollars in millions) Third Quarter First Nine Months Third Quarter First Nine Months Hedging Relationships 2020 2019 2020 2019 2020 2019 2020 2019 Derivatives in cash flow hedging relationships: Commodity contracts $ 10 $ (1) $ 20 $ (7) $ (5) $ (14) $ (26) $ (25) Foreign exchange contracts (20) 16 (19) 10 — 7 12 20 Forward starting interest rate and treasury lock swap contracts 2 1 5 3 (2) (2) (7) (4) Non-derivatives in net investment hedging relationships (pre-tax): Net investment hedges (62) 60 (59) 68 — — — — Derivatives in net investment hedging relationships (pre-tax): Cross-currency interest rate swaps (44) 40 (45) 46 — — — — Cross-currency interest rate swaps excluded component (13) 9 25 22 — — — — The following table presents the effect of fair value and cash flow hedge accounting on the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for third quarter 2020 and 2019. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships Third Quarter 2020 2019 (Dollars in millions) Sales Cost of Sales Net Interest Expense Sales Cost of Sales Net Interest Expense Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized $ 2,122 $ 1,621 $ 52 $ 2,325 $ 1,751 $ 54 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships: Interest contracts (fixed-for-floating interest rate swaps): Hedged items — 1 Derivatives designated as hedging instruments — (1) Gain or (loss) on cash flow hedging relationships: Interest contracts (forward starting interest rate and treasury lock swap contracts): Amount reclassified from AOCI into earnings (2) (2) Commodity Contracts: Amount reclassified from AOCI into earnings (5) (14) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings — 7 The following table presents the effect of fair value and cash flow hedge accounting on the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for first nine months 2020 and 2019. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships First Nine Months 2020 2019 (Dollars in millions) Sales Cost of Sales Net Interest Expense Sales Cost of Sales Net Interest Expense Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized $ 6,287 $ 4,838 $ 159 $ 7,068 $ 5,331 $ 165 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships: Interest contracts (fixed-for-floating interest rate swaps): Hedged items 1 1 Derivatives designated as hedging instruments (1) (1) Gain or (loss) on cash flow hedging relationships: Interest contracts (forward starting interest rate and treasury lock swap contracts): Amount reclassified from AOCI into earnings (7) (4) Commodity Contracts: Amount reclassified from AOCI into earnings (26) (25) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings 12 20 The Company enters into foreign exchange derivatives denominated in multiple currencies which are transacted and settled in the same quarter. These derivatives are not designated as hedges due to the short-term nature and the gains or losses on these derivatives are marked-to-market in line item "Other (income) charges, net" of the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings. As a result of these derivatives, the Company recognized a net loss of $4 million and a net gain of $5 million during third quarter 2020 and 2019, respectively, and recognized a net gain of $4 million and $1 million during first nine months 2020 and 2019, respectively. Pre-tax monetized positions and mark-to-market gains and losses from raw materials and energy, currency, and certain interest rate hedges that were included in AOCI included net losses of $117 million and $50 million at September 30, 2020 and December 31, 2019, respectively. Losses recognized between September 30, 2020 and December 31, 2019 primarily resulted from an increase in foreign currency exchange rates associated with the euro, partially offset by commodity price increases. If recognized, approximately $18 million in pre-tax losses, as of September 30, 2020, would be reclassified into earnings during the next 12 months. |
RETIREMENT PLANS
RETIREMENT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS Defined Benefit Pension Plans and Other Postretirement Benefit Plans Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits. In addition, Eastman provides life insurance for eligible retirees hired prior to January 1, 2007. The Company provides a subsidy for pre-Medicare health care and dental benefits to eligible retirees hired prior to January 1, 2007 that will end on December 31, 2021. Company funding is also provided for eligible Medicare retirees hired prior to January 1, 2007 with a health reimbursement arrangement. Costs recognized for these benefits are estimated amounts, which may change as actual costs for the year are determined. For additional information regarding retirement plans, see Note 10, "Retirement Plans", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . Components of net periodic benefit (credit) cost were as follows: Third Quarter Pension Plans Other Postretirement Benefit Plans 2020 2019 2020 2019 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 6 $ 5 $ 6 $ 4 $ — $ — Interest cost 15 4 19 5 5 6 Expected return on assets (34) (9) (31) (8) (2) (2) Amortization of: Prior service credit, net — — — — (9) (9) Net periodic benefit (credit) cost $ (13) $ — $ (6) $ 1 $ (6) $ (5) First Nine Months Pension Plans Other Postretirement Benefit Plans 2020 2019 2020 2019 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 19 $ 13 $ 20 $ 11 $ — $ — Interest cost 43 11 57 15 14 19 Expected return on assets (101) (25) (96) (24) (4) (4) Amortization of: Prior service credit, net — — — — (28) (29) Net periodic benefit (credit) cost $ (39) $ (1) $ (19) $ 2 $ (18) $ (14) |
LEASES AND OTHER COMMITMENTS
LEASES AND OTHER COMMITMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Disclosure [Text Block] | LEASES AND OTHER COMMITMENTS Leases There are two types of leases: finance and operating. Both types of leases have associated right-to-use assets and lease liabilities that are valued at the present value of the lease payments and recognized on the Unaudited Consolidated Statements of Financial Position. The discount rate used in the measurement of a right-to-use asset and lease liability is the rate implicit in the lease whenever that rate is readily determinable. If the rate implicit in the lease is not readily determinable, the collateralized incremental borrowing rate is used. The Company elected the accounting policy not to apply the recognition and measurement requirements to short-term leases with a term of 12 months or less and do not include a bargain purchase option. The Company has operating leases, as a lessee, with customary terms that do not include: significant variable lease payments; significant reasonably certain extensions or options required to be included in the lease term; restrictions; or other covenants for real property, rolling stock, and machinery and equipment. Real property leases primarily consist of office space and rolling stock leases primarily for railcars and fleet vehicles. At September 30, 2020 and December 31, 2019, operating right-to-use assets of $174 million and $197 million, respectively, are included as a part of "Other noncurrent assets" in the Unaudited Consolidated Statements of Financial Position and includes $8 million at both periods of assets previously classified as lease intangibles. Operating lease liabilities are included as a part of "Payables and other current liabilities" and "Other long-term liabilities" in the Unaudited Consolidated Statements of Financial Position. As of September 30, 2020, reconciliation of lease payments and operating lease liabilities is provided below: (Dollars in millions) Operating lease liabilities Remainder of 2020 $ 17 2021 56 2022 42 2023 29 2024 16 2025 and beyond 35 Total lease payments 195 Less: amounts of lease payments representing interest 18 Present value of future lease payments 177 Less: current obligations under leases 54 Long-term lease obligations $ 123 The Company has operating leases, primarily leases for railcars, with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease that will expire beginning in first quarter 2021. Residual guarantee payments that become probable and estimable are recognized as rent expense over the remaining life of the applicable lease. Management's current expectation is that the likelihood of material residual guarantee payments is remote. Lease costs during the period and other information is provided below: Third Quarter First Nine Months (Dollars in millions) 2020 2019 2020 2019 Lease costs: Operating lease costs $ 18 $ 17 $ 55 $ 49 Short-term lease costs 9 10 28 30 Sublease income (1) — (3) (1) Total $ 26 $ 27 $ 80 $ 78 Other operating lease information: Cash paid for amounts included in the measurement of lease liabilities $ 17 $ 17 $ 53 $ 52 Right-to-use assets obtained in exchange for new lease liabilities $ 10 $ 15 $ 40 $ 36 Weighted-average remaining lease term, in years 5 5 Weighted-average discount rate 3.8 % 4.1 % Debt and Other Commitments Eastman's obligations are summarized in the following table. (Dollars in millions) Payments Due for Period Debt Securities Credit Facilities and Other Interest Payable Purchase Obligations Operating Leases Other Liabilities Total Remainder of 2020 $ — $ 185 $ 52 $ 57 $ 17 $ 129 $ 440 2021 483 — 184 165 56 81 969 2022 743 — 174 103 42 88 1,150 2023 876 — 155 91 29 87 1,238 2024 241 — 135 94 16 100 586 2025 and beyond 3,337 — 1,407 1,959 35 1,139 7,877 Total $ 5,680 $ 185 $ 2,107 $ 2,469 $ 195 $ 1,624 $ 12,260 Estimated future payments of debt securities assumes the repayment of principal upon stated maturity, and actual amounts and the timing of such payments may differ materially due to repayment or other changes in the terms of such debt prior to maturity. The Company had various purchase obligations at September 30, 2020, totaling approximately $2.5 billion over a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business. Amounts in other liabilities represent the current estimated cash payments required to be made by the Company primarily for pension and other postretirement benefits, environmental matters, accrued compensation benefits, uncertain tax liabilities, and commodity and foreign exchange hedging in the periods indicated. Due to uncertainties in the timing of the effective settlement of tax positions with respect to taxing authorities, management is unable to determine the timing of payments related to uncertain tax liabilities and these amounts are included in the "2025 and beyond" line item. The amount and timing of pension and other postretirement benefit payments included in other liabilities is dependent upon interest rates, health care cost trends, actual returns on plan assets, retirement and attrition rates of employees, continuation or modification of the benefit plans, and other factors. Such factors can significantly impact the amount and timing of any future contributions by the Company. Excess contributions are periodically made by management in order to keep the plans' funded status above 80 percent under the funding provisions of the Pension Protection Act to avoid partial benefit restrictions on accelerated forms of payment. The Company's U.S. defined benefit pension plans are not currently under any benefit restrictions. See Note 7, "Retirement Plans". The resolution of uncertainties related to environmental matters included in other liabilities may have a material adverse effect on the Company's consolidated results of operations in the period recognized, however, because of the availability of legal defenses, the Company's preliminary assessment of actions that may be required, and, if applicable, the expected sharing of costs, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results or operations, or cash flows. See Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K |
ENVIRONMENTAL MATTERS AND ASSET
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Accrual for Environmental Loss Contingencies Disclosure [Abstract] | |
Environmental Matters | ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS Certain Eastman manufacturing facilities generate hazardous and nonhazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies. In connection with the cleanup of various hazardous waste sites, the Company, along with many other entities, has been designated a potentially responsible party ("PRP") by the U.S. Environmental Protection Agency under the Comprehensive Environmental Response, Compensation and Liability Act, which potentially subjects PRPs to joint and several liability for certain cleanup costs. In addition, the Company will incur costs for environmental remediation and closure and post-closure under the federal Resource Conservation and Recovery Act. Reserves for environmental contingencies have been established in accordance with Eastman's policies described in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . The resolution of uncertainties related to environmental matters included in other liabilities may have a material adverse effect on the Company's consolidated results of operations in the period recognized, however, because of the availability of legal defenses, the Company's preliminary assessment of actions that may be required, and, if applicable, the expected sharing of costs, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results or operations, or cash flows. The Company's total reserve for environmental loss contingencies was $287 million at both September 30, 2020 and December 31, 2019. Environmental Remediation and Environmental Asset Retirement Obligations The Company's total environmental reserve that management believes to be probable and reasonably estimable for environmental contingencies, including remediation costs and asset retirement obligations, is included as part of "Payables and other current liabilities" and "Other long-term liabilities" in the Unaudited Consolidated Statements of Financial Position as follows: (Dollars in millions) September 30, 2020 December 31, 2019 Environmental contingent liabilities, current $ 15 $ 20 Environmental contingent liabilities, long-term 272 267 Total $ 287 $ 287 Environmental Remediation Estimated future environmental expenditures for undiscounted remediation costs ranged from the best estimate or minimum of $260 million to the maximum of $504 million at September 30, 2020 and from the best estimate or minimum of $260 million to the maximum of $487 million at December 31, 2019. The best estimate or minimum estimated future environmental expenditures are considered to be probable and reasonably estimable and include the amounts recognized at both September 30, 2020 and December 31, 2019. Reserves for environmental remediation include liabilities expected to be paid within approximately 30 years. The amounts charged to pre-tax earnings for environmental remediation and related charges are included within "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings. Changes in the reserves for environmental remediation liabilities during first nine months 2020 and full year 2019 are summarized below: (Dollars in millions) Environmental Remediation Liabilities Balance at December 31, 2018 $ 271 Changes in estimates recognized in earnings and other 4 Cash reductions (15) Balance at December 31, 2019 260 Changes in estimates recognized in earnings and other 9 Cash reductions (9) Balance at September 30, 2020 $ 260 Environmental Asset Retirement Obligations An asset retirement obligation is an obligation for the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction, development, or normal operation of that long-lived asset. The Company recognizes asset retirement obligations in the period in which they are incurred if a reasonable estimate of fair value can be made. The asset retirement obligations are discounted to expected present value and subsequently adjusted for changes in fair value. The associated estimated asset retirement costs are capitalized as part of the carrying value of the long-lived assets and depreciated over their useful life. Environmental asset retirement obligations consist primarily of closure and post-closure costs. For sites that have environmental asset retirement obligations, the best estimate recognized to date for these environmental asset retirement obligation costs was $27 million at both September 30, 2020 and December 31, 2019. Non-Environmental Asset Retirement Obligations The Company has contractual asset retirement obligations not associated with environmental liabilities. Eastman's non-environmental asset retirement obligations are primarily associated with the future closure of leased manufacturing assets at Pace, Florida and Oulu, Finland. These recognized non-environmental asset retirement obligations were $50 million and $48 million at September 30, 2020 and December 31, 2019, respectively, and is included as part of "Other long-term liabilities" in the Unaudited Consolidated Statements of Financial Position. |
LEGAL MATTERS
LEGAL MATTERS | 9 Months Ended |
Sep. 30, 2020 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
LEGAL MATTERS | LEGAL MATTERSFrom time to time, Eastman and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are handled and defended in the ordinary course of business. While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Reconciliations of the changes in stockholders' equity for third quarter 2020 and 2019 are provided below: (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at June 30, 2020 $ 2 $ 2,117 $ 8,071 $ (209) $ (3,960) $ 6,021 $ 77 $ 6,098 Net Earnings — — 161 — — 161 4 165 Cash Dividends Declared (1) ($0.66 per share) — — (90) — — (90) — (90) Other Comprehensive Income (Loss) — — — (34) — (34) — (34) Share Based Compensation Expense (2) — 11 — — — 11 — 11 Stock Option Exercises — 6 — — — 6 — 6 Balance at September 30, 2020 $ 2 $ 2,134 $ 8,142 $ (243) $ (3,960) $ 6,075 $ 81 $ 6,156 (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at June 30, 2019 $ 2 $ 2,079 $ 7,848 $ (235) $ (3,825) $ 5,869 $ 77 $ 5,946 Net Earnings — — 266 — — 266 1 267 Cash Dividends Declared (1) ($0.62 per share) — — (85) — — (85) — (85) Other Comprehensive Income (Loss) — — — 32 — 32 — 32 Share Based Compensation Expense (2) — 13 — — — 13 — 13 Other — — — — — — (1) (1) Share Repurchase — — — — (75) (75) — (75) Balance at September 30, 2019 $ 2 $ 2,092 $ 8,029 $ (203) $ (3,900) $ 6,020 $ 77 $ 6,097 (1) Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. (2) Share-based compensation expense is the fair value of share-based awards. Reconciliations of the changes in stockholders' equity for first nine months 2020 and 2019 are provided below: (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at December 31, 2019 $ 2 $ 2,105 $ 7,965 $ (214) $ (3,900) $ 5,958 $ 74 $ 6,032 Net Earnings — — 446 — — 446 9 455 Cash Dividends Declared (1) ($1.98 per share) — — (269) — — (269) — (269) Other Comprehensive Income (Loss) — — — (29) — (29) — (29) Share-Based Compensation Expense (2) — 31 — — — 31 — 31 Stock Option Exercises — 9 — — — 9 — 9 Other (3) — (11) — — — (11) 1 (10) Share Repurchases — — — — (60) (60) — (60) Distributions to Noncontrolling Interest — — — — — — (3) (3) Balance at September 30, 2020 $ 2 $ 2,134 $ 8,142 $ (243) $ (3,960) $ 6,075 $ 81 $ 6,156 (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at December 31, 2018 $ 2 $ 2,048 $ 7,573 $ (245) $ (3,575) $ 5,803 $ 75 $ 5,878 Cumulative Effect of Adoption of New Accounting Standards (4) — — (20) 20 — — — — Net Earnings — — 733 — — 733 2 735 Cash Dividends Declared (1) ($1.86 per share) — — (257) — — (257) — (257) Other Comprehensive Income (Loss) — — — 22 — 22 — 22 Share-Based Compensation Expense (2) — 46 — — — 46 — 46 Stock Option Exercises — 8 — — — 8 — 8 Other (3) — (10) — — — (10) — (10) Share Repurchases — — — — (325) (325) — (325) Balance at September 30, 2019 $ 2 $ 2,092 $ 8,029 $ (203) $ (3,900) $ 6,020 $ 77 $ 6,097 (1) Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. (2) Share-based compensation expense is the fair value of share-based awards. (3) Additional paid-in capital consists of value of shares withheld for employees' taxes on vesting of share-based compensation awards. (4) On January 1, 2019, Eastman adopted ASU 2018-02 Income Statement - Reporting Comprehensive Income resulting in the reclassification of $20 million of stranded tax expense from AOCI to retained earnings. Accumulated Other Comprehensive Income (Loss), Net of Tax Cumulative Translation Adjustment Benefit Plans Unrecognized Prior Service Credits Unrealized Gains (Losses) on Derivative Instruments Unrealized Losses on Investments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ (309) $ 106 $ (41) $ (1) $ (245) Period change (1) 45 — (14) — 31 Balance at December 31, 2019 (264) 106 (55) (1) (214) Period change (15) (21) 7 — (29) Balance at September 30, 2020 $ (279) $ 85 $ (48) $ (1) $ (243) (1) Benefit plans unrecognized prior service credits includes $29 million reclassification of stranded tax expense from AOCI to retained earnings and unrealized gains (losses) on derivative instruments includes $9 million reclassification of stranded tax benefit from AOCI to retained earnings. Amounts of other comprehensive income (loss) are presented net of applicable taxes. Eastman recognizes deferred income taxes on the CTA related to branch operations and income from other entities included in the Company's consolidated U.S. tax return. No deferred income taxes are recognized on the CTA of other subsidiaries outside the United States, because the CTA is considered to be a component of indefinitely invested, unremitted earnings of these foreign subsidiaries. Components of other comprehensive income recognized in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects: Third Quarter 2020 2019 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ (20) $ (20) $ 23 $ 23 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (9) (7) (9) (7) Derivatives and hedging: Unrealized gain (loss) during period (17) (13) 13 10 Reclassification adjustment for (gains) losses included in net income, net 7 6 8 6 Total other comprehensive income (loss) $ (39) $ (34) $ 35 $ 32 First Nine Months 2020 2019 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ (15) $ (15) $ 40 $ 40 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (28) (21) (29) (22) Derivatives and hedging: Unrealized gain (loss) during period (12) (9) (3) (2) Reclassification adjustment for (gains) losses included in net income, net 21 16 8 6 Total other comprehensive income (loss) $ (34) $ (29) $ 16 $ 22 |
EARNINGS AND DIVIDENDS PER SHAR
EARNINGS AND DIVIDENDS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS AND DIVIDENDS PER SHARE | EARNINGS AND DIVIDENDS PER SHARE The following table sets forth the computation of basic and diluted earnings per share ("EPS") which are calculated using the treasury stock method: Third Quarter First Nine Months (In millions, except per share amounts) 2020 2019 2020 2019 Numerator Earnings attributable to Eastman, net of tax $ 161 $ 266 $ 446 $ 733 Denominator Weighted average shares used for basic EPS 135.3 136.8 135.5 137.9 Dilutive effect of stock options and other awards 1.0 1.0 0.9 1.0 Weighted average shares used for diluted EPS 136.3 137.8 136.4 138.9 (Calculated using whole dollars and shares) EPS Basic $ 1.19 $ 1.95 $ 3.29 $ 5.31 Diluted $ 1.18 $ 1.93 $ 3.27 $ 5.27 Shares underlying stock options excluded from third quarter 2020 and 2019 calculations of diluted EPS were 2,247,621 and 2,620,529, respectively, because the grant date exercise price of these options was greater than the average market price of the Company's common stock and the effect of including them in the calculation of diluted EPS would have been antidilutive. Third quarter 2019 reflects share repurchases of 1,032,623. There were no shares repurchased in third quarter 2020. Shares underlying stock options excluded from first nine months 2020 and 2019 calculations of diluted EPS were 2,809,028 and 2,219,514, respectively, because the grant date exercise price of these options was greater than the average market price of the Company's common stock and the effect of including them in the calculation of diluted EPS would have been antidilutive. First nine months 2020 and 2019 reflects share repurchases of 1,134,052 and 4,282,409, respectively. The Company declared cash dividends of $0.66 and $0.62 per share for third quarter 2020 and 2019, respectively, and $1.98 and $1.86 per share for first nine months 2020 and 2019, respectively. |
ASSETS IMPAIRMENTS AND RESTRUCT
ASSETS IMPAIRMENTS AND RESTRUCTURING | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
ASSET IMPAIRMENTS AND RESTRUCTURING | ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Dollars in millions) Third Quarter First Nine Months Fixed Asset Impairments 2020 2019 2020 2019 Site optimizations AFP - Tire additives (1) $ — $ — $ 5 $ — AM - Performance films (2) — — 4 — AFP - Animal nutrition (3) — — 3 — Discontinuation of growth initiatives (4) — — 8 — — — 20 — Intangible Asset Impairments AFP - Tradenames (5) — — 123 — AFP - Customer relationships (6) — — 2 — — — 125 — Severance Charges Business improvement and cost reduction actions (7) 46 1 46 45 CI & AFP - Singapore (8) 2 — 5 — Site optimizations AM - Advanced interlayers (9) 3 — 3 — AFP - Tire additives (1) 1 — 1 — AM - Performance films (2) — — 3 — AFP - Animal nutrition (3) — — 1 — 52 1 59 45 Other Restructuring Costs Cost reduction initiatives (7) 7 1 7 3 Discontinuation of growth initiatives contract termination fees (4) 1 — 4 — AFP - Discontinued capital project (10) — — — 4 8 1 11 7 Total $ 60 $ 2 $ 215 $ 52 (1) Fixed asset impairments and severance in the Additives & Functional Products ("AFP") segment from the closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . (2) Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the closure of a performance films manufacturing facility in North America as part of ongoing site optimization. (3) Fixed asset impairments and severance in the AFP segment from the closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. (4) Fixed asset impairments and contract termination fees resulting from management's decision to discontinue growth initiatives for polyester based microfibers, including Avra ™ performance fibers, the financial results of which were not allocated to an operating segment and reported in "Other". (5) Intangible asset impairment charges in the AFP segment tire additives business to reduce the carrying values of the Crystex ™ and Santoflex ™ tradenames to the estimated fair values. The estimated fair values were determined using an income approach, specifically, the relief from royalty method, including some unobservable inputs. The impairments are primarily the result of weakened demand in transportation markets impacted by COVID-19 and increased competitive pricing pressure as a result of global capacity increases. (6) Intangible asset impairment charge in the AFP segment for customer relationships. (7) Severance and related costs as part of business improvement and cost reduction initiatives which were reported in "Other". (8) Severance charges of $1 million and $4 million in third quarter and first nine months 2020, respectively, in the Chemical Intermediates ("CI") segment, and $1 million in both third quarter and first nine months 2020 in the AFP segment, resulting from the previously disclosed plan to discontinue production of certain products at the Singapore manufacturing site. Restructuring charges totaling up to $50 million are expected through 2020 and 2021 for this action. (9) Severance in the AM segment due to the closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $7 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in third quarter 2020 related to the closure of this facility. Management expects total charges of up to $30 million, mostly in "Cost of sales" and in "Asset impairments and restructuring charges, net" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings, in 2020 and 2021 for the closure of this facility. (10) Additional restructuring charge related to a capital project in the AFP segment that was discontinued in 2016. Changes in Reserves The following table summarizes the changes in asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in restructuring reserves for severance costs and site closure costs paid in first nine months 2020 and full year 2019: (Dollars in millions) Balance at January 1, 2020 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at September 30, 2020 Non-cash charges $ — $ 145 $ (145) $ — $ — Severance costs 17 60 — (12) 65 Other restructuring costs 11 10 — (8) 13 Total $ 28 $ 215 $ (145) $ (20) $ 78 Balance at January 1, 2019 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at December 31, 2019 Non-cash charges $ — $ 72 $ (72) $ — $ — Severance costs 6 45 — (34) 17 Other restructuring costs 8 9 1 (7) 11 Total $ 14 $ 126 $ (71) $ (41) $ 28 Substantially all severance costs remaining are expected to be applied to the reserves within one year. |
SHARE-BASED COMPENSATION AWARDS
SHARE-BASED COMPENSATION AWARDS | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | SHARE-BASED COMPENSATION AWARDS The Company utilizes share-based awards under employee and non-employee director compensation programs. These share-based awards have included restricted and unrestricted stock, restricted stock units, stock options, and performance shares. In third quarter 2020 and 2019, $11 million and $13 million, respectively, of compensation expense before tax were recognized in "Selling, general and administrative expenses" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for all share-based awards. The impact on third quarter 2020 and 2019 net earnings of $8 million and $9 million, respectively, is net of deferred tax expense related to share-based award compensation for each period. In first nine months 2020 and 2019, $31 million and $46 million, respectively, of compensation expense before tax were recognized in "Selling, general and administrative expenses" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for all share-based awards. The impact on first nine months 2020 and 2019 net earnings of $23 million and $34 million, respectively, is net of deferred tax expense related to share-based award compensation for each period. For additional information regarding share-based compensation plans and awards, see Note 17, "Share-Based Compensation Plans and Awards", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Included in the line item "Other items, net" of the "Operating activities" section of the Unaudited Consolidated Statements of Cash Flows are the following changes to Unaudited Consolidated Statements of Financial Position: (Dollars in millions) First Nine Months 2020 2019 Other current assets $ (1) $ 23 Other noncurrent assets (9) 13 Payables and other current liabilities 42 79 Long-term liabilities and equity 71 (25) Total $ 103 $ 90 The above changes resulted primarily from accrued taxes, deferred taxes, environmental liabilities, monetized positions from raw material and energy, currency, and certain interest rate hedges, prepaid insurance, miscellaneous deferrals, value-added taxes, and other miscellaneous receivables and accruals. |
SEGMENT AND REGIONAL SALES INFO
SEGMENT AND REGIONAL SALES INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT AND REGIONAL SALES INFORMATION Eastman's products and operations are managed and reported in four operating segments: Additives & Functional Products ("AFP"), Advanced Materials ("AM"), Chemical Intermediates ("CI"), and Fibers. The economic factors that impact the nature, amount, timing, and uncertainty of revenue and cash flows vary among the Company's business operating segments and the geographical regions in which they operate. For disaggregation of revenue by major product lines and regions for each business operating segment, see Note 19, "Segment and Regional Sales Information", to the consolidated financial statements in Part II, Item 8 of the Company's 2019 Annual Report on Form 10-K . For additional financial information for each segment, see Part I, Item 1, "Business - Business Segments", in the Company's 2019 Annual Report on Form 10-K . (Dollars in millions) Third Quarter First Nine Months Sales by Segment 2020 2019 2020 2019 Additives & Functional Products $ 742 $ 832 $ 2,249 $ 2,510 Advanced Materials 668 697 1,850 2,050 Chemical Intermediates 506 579 1,559 1,865 Fibers 206 217 629 643 Total Sales $ 2,122 $ 2,325 $ 6,287 $ 7,068 (Dollars in millions) Third Quarter First Nine Months Earnings (Loss) Before Interest and Taxes by Segment 2020 2019 2020 2019 Additives & Functional Products $ 107 $ 144 $ 194 $ 437 Advanced Materials 129 159 293 406 Chemical Intermediates 31 34 131 170 Fibers 41 51 140 144 Total Earnings Before Interest and Taxes by Operating Segment 308 388 758 1,157 Other Growth initiatives and businesses not allocated to operating segments (22) (26) (73) (78) Pension and other postretirement benefits income (expense), net not allocated to operating segments 21 12 62 35 Asset impairments and restructuring charges, net (54) (2) (65) (48) Other income (charges), net not allocated to operating segments (10) (5) (17) (8) Total Earnings Before Interest and Taxes $ 243 $ 367 $ 665 $ 1,058 (Dollars in millions) September 30, December 31, Assets by Segment (1) 2020 2019 Additives & Functional Products $ 6,142 $ 6,387 Advanced Materials 4,358 4,415 Chemical Intermediates 2,616 2,775 Fibers 986 1,014 Total Assets by Operating Segment 14,102 14,591 Corporate Assets 1,907 1,417 Total Assets $ 16,009 $ 16,008 (1) Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. (Dollars in millions) Third Quarter First Nine Months Sales by Customer Location 2020 2019 2020 2019 United States and Canada $ 894 $ 966 $ 2,660 $ 2,961 Asia Pacific 547 602 1,565 1,729 Europe, Middle East, and Africa 556 611 1,713 1,949 Latin America 125 146 349 429 Total Sales $ 2,122 $ 2,325 $ 6,287 $ 7,068 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared by Eastman Chemical Company ("Eastman" or the "Company") in accordance and consistent with the accounting policies stated in the Company's 2019 Annual Report on Form 10-K , and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of that report, with the exception of the items noted below. The December 31, 2019 financial position data included herein was derived from the consolidated financial statements included in the 2019 Annual Report on Form 10-K but does not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Standards Accounting Standards Update ("ASU") 2016-13 Financial Instruments - Credit Losses: On January 1, 2020, Eastman adopted this standard, and related releases, under the various required transition methods. The amendments require a financial asset (including trade receivables) to be presented at the net amount expected to be collected through the use of allowances for credit losses valuation account. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The adoption of this standard did not result in a material impact on the Company's financial statements and related disclosures. ASU 2018-13 Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement: On January 1, 2020, Eastman adopted this standard that is a part of the Financial Accounting Standards Board's ("FASB") disclosure framework project to improve the effectiveness of disclosures in the notes to financial statements. The primary changes applicable to Eastman in this update are the disclosures of fair value levels, assessment thereof, and transfers between those levels. The adoption under the various required transition methods did not impact the Company's related disclosures. ASU 2018-18 Collaborative Arrangements - Clarifying the Interaction between Topic 808 (Collaborative Arrangements) and Topic 606 (Revenue from Contracts with Customers): On January 1, 2020, Eastman adopted this standard, retrospectively to the date of the initial application of Topic 606 on January 1, 2017, that provides clarification in regards to which contracts are accounted for under Topic 808 and Topic 606 as well as alignment of guidance between the two pronouncements. The adoption of this standard did not impact the Company's financial statements and related disclosures. ASU 2019-01 Leases - Codification Improvements: On January 1, 2020, Eastman adopted this standard which was applied as of the adoption date and under the same transition methodology of ASU 2016-02 Lease previously adopted on January 1, 2019. The FASB issued this update in response to stakeholder inquiries regarding the new leasing standard. The adoption of this standard did not impact the Company's financial statements and related disclosures. ASU 2020-04 Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting : Eastman adopted this standard when issued and effective on March 12, 2020. The FASB issued this update to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform (the global financial markets transition in contracts, hedging relationships, and other transactions away from referencing the London Interbank Offered Rate (LIBOR) and other interbank offered rates and toward new reference rates) on financial reporting. As reference reform has not impacted Eastman as of the issuance and effective date, the adoption of this standard did not impact the Company's financial statements and related disclosures. Accounting Standards Issued But Not Adopted as of September 30, 2020 ASU 2018-14 Retirement Benefits - Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans: In August 2018, the FASB issued this update as a part of its disclosure framework project to improve the effectiveness of disclosures in the notes to financial statements. The primary change impacting Eastman is the addition of disclosures related to significant gains and losses related to changes in the benefit obligation for the period and weighted-average interest crediting rates for cash balance plans. This standard is effective for fiscal years ending after December 15, 2020. Upon adoption, this update is to be applied on a retrospective basis to all periods presented. Management does not expect that changes required by the new standard will materially impact the Company's related disclosures. ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes : In December 2019, the FASB issued this update as part of its initiative to reduce complexity in accounting standards which removes certain exceptions and provides simplification to specific tax items. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Adoption methods vary based on the specific items impacted. Management is currently evaluating the impact on the Company's financial statements and related disclosures. |
Off-Balance-Sheet Credit Exposure, Policy | Working Capital Management and Off Balance Sheet Arrangements Since 2019, the Company has been expanding its off balance sheet, uncommitted accounts receivable factoring program under which entire invoices may be sold, without recourse, to third-party financial institutions. Under these agreements, the Company sells the invoices at face value, less a transaction fee, which substantially equals the carrying value and fair value with no gain or loss recognized and no credit loss exposure is retained. Available capacity under these agreements, which the Company uses as a source of working capital funding, is dependent on the level of accounts receivable eligible to be sold and the financial institutions' willingness to purchase such receivables. In addition, certain agreements also require that the Company continue to service, administer, and collect the sold accounts receivable at market rates. The total amounts sold in third quarter 2020 and 2019 were $336 million and $190 million, respectively, and $1.20 billion and $460 million in first nine months 2020 and 2019, respectively. The Company works with suppliers to optimize payment terms and conditions on accounts payable to enhance timing of working capital and cash flows. As part of these efforts, in 2019 the Company introduced a voluntary supply chain finance program to provide suppliers with the opportunity to sell receivables due from Eastman to a participating financial institution. Eastman's responsibility is limited to making payments on the terms originally negotiated with suppliers, regardless of whether the suppliers sell their receivables to the financial institution. The range of payment terms Eastman negotiates with suppliers are consistent, regardless of whether a supplier participates in the program. All of Eastman's accounts payable and associated payments are reported consistently in the Company's Unaudited Consolidated Statements of Financial Position and Unaudited Consolidated Statements of Cash Flows regardless of whether they are associated with a vendor who participates in the program. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, December 31, (Dollars in millions) 2020 2019 Finished goods $ 873 $ 1,114 Work in process 191 220 Raw materials and supplies 510 576 Total inventories at FIFO or average cost 1,574 1,910 Less: LIFO reserve 236 248 Total inventories $ 1,338 $ 1,662 |
PAYABLES AND OTHER CURRENT LI_2
PAYABLES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of payables and other current liabilities | September 30, December 31, (Dollars in millions) 2020 2019 Trade creditors $ 663 $ 890 Accrued payroll and variable compensation 188 176 Accrued taxes 90 89 Post-employment obligations 139 93 Dividends payable to shareholders 89 90 Other 250 280 Total payables and other current liabilities $ 1,419 $ 1,618 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Third Quarter First Nine Months (Dollars in millions) 2020 2019 2020 2019 $ % $ % $ % $ % Provision for income taxes and tax rate $ 25 13 % $ 46 15 % $ 50 10 % $ 158 18 % |
BORROWINGS (Tables)
BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Borrowings | September 30, December 31, (Dollars in millions) 2020 2019 Borrowings consisted of: 4.5% notes due January 2021 (1) $ 185 $ 185 3.5% notes due December 2021 298 298 3.6% notes due August 2022 743 741 1.50% notes due May 2023 (2) 876 840 7 1/4% debentures due January 2024 198 198 7 5/8% debentures due June 2024 43 43 3.8% notes due March 2025 701 695 1.875% notes due November 2026 (2) 581 556 7.60% debentures due February 2027 195 195 4.5% notes due December 2028 493 493 4.8% notes due September 2042 493 493 4.65% notes due October 2044 874 874 Commercial paper and short-term borrowings 185 171 Total borrowings 5,865 5,782 Borrowings due within one year 370 171 Long-term borrowings $ 5,495 $ 5,611 (1) In October 2020, the Company repaid the 4.5% notes due January 2021 ($185 million principal) using available cash. |
DERIVATIVE AND NON-DERIVATIVE_2
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Cumulative basis adjustments for fair value hedges on balance sheet [Table Text Block] | As of September 30, 2020 and December 31, 2019, the following amounts were included in the Unaudited Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges. (Dollars in millions) Carrying amount of the hedged liabilities Cumulative amount of fair value hedging loss adjustment included in the carrying amount of the hedged liability Line item in the Unaudited Consolidated Statements of Financial Position in which the hedged item is included September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Long-term borrowings (1) $ 772 $ 763 $ (1) $ (7) (1) At September 30, 2020 and December 31, 2019, the cumulative amount of fair value hedging loss adjustment remaining for hedged liabilities for which hedge accounting has been discontinued was $5 million and $7 million, respectively. |
Derivative Instruments, Gain (Loss) [Table Text Block] | The following table presents the effect of fair value and cash flow hedge accounting on the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for third quarter 2020 and 2019. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships Third Quarter 2020 2019 (Dollars in millions) Sales Cost of Sales Net Interest Expense Sales Cost of Sales Net Interest Expense Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized $ 2,122 $ 1,621 $ 52 $ 2,325 $ 1,751 $ 54 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships: Interest contracts (fixed-for-floating interest rate swaps): Hedged items — 1 Derivatives designated as hedging instruments — (1) Gain or (loss) on cash flow hedging relationships: Interest contracts (forward starting interest rate and treasury lock swap contracts): Amount reclassified from AOCI into earnings (2) (2) Commodity Contracts: Amount reclassified from AOCI into earnings (5) (14) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings — 7 The following table presents the effect of fair value and cash flow hedge accounting on the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings for first nine months 2020 and 2019. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships First Nine Months 2020 2019 (Dollars in millions) Sales Cost of Sales Net Interest Expense Sales Cost of Sales Net Interest Expense Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized $ 6,287 $ 4,838 $ 159 $ 7,068 $ 5,331 $ 165 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships: Interest contracts (fixed-for-floating interest rate swaps): Hedged items 1 1 Derivatives designated as hedging instruments (1) (1) Gain or (loss) on cash flow hedging relationships: Interest contracts (forward starting interest rate and treasury lock swap contracts): Amount reclassified from AOCI into earnings (7) (4) Commodity Contracts: Amount reclassified from AOCI into earnings (26) (25) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings 12 20 |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table presents the notional amounts outstanding at September 30, 2020 and December 31, 2019 associated with Eastman's hedging programs. Notional Outstanding September 30, 2020 December 31, 2019 Derivatives designated as cash flow hedges: Foreign Exchange Forward and Option Contracts (in millions) EUR/USD (in EUR) €549 €630 Commodity Forward and Collar Contracts Feedstock (in million barrels) — 1 Energy (in million british thermal units) 22 27 Interest rate swaps for the future issuance of debt (in millions) $75 — Derivatives designated as fair value hedges: Fixed-for-floating interest rate swaps (in millions) $75 $75 Derivatives designated as net investment hedges: Cross-currency interest rate swaps (in millions) EUR/USD (in EUR) €853 €851 Non-derivatives designated as net investment hedges: Foreign Currency Net Investment Hedges (in millions) EUR/USD (in EUR) €1,244 €1,243 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table presents the effect of the Company's hedging instruments on "Other comprehensive income (loss), net of tax" ("OCI") and financial performance for third quarter and first nine months 2020 and 2019. Change in amount of after tax gain (loss) recognized in OCI on derivatives Pre-tax amount of gain (loss) reclassified from OCI into earnings (Dollars in millions) Third Quarter First Nine Months Third Quarter First Nine Months Hedging Relationships 2020 2019 2020 2019 2020 2019 2020 2019 Derivatives in cash flow hedging relationships: Commodity contracts $ 10 $ (1) $ 20 $ (7) $ (5) $ (14) $ (26) $ (25) Foreign exchange contracts (20) 16 (19) 10 — 7 12 20 Forward starting interest rate and treasury lock swap contracts 2 1 5 3 (2) (2) (7) (4) Non-derivatives in net investment hedging relationships (pre-tax): Net investment hedges (62) 60 (59) 68 — — — — Derivatives in net investment hedging relationships (pre-tax): Cross-currency interest rate swaps (44) 40 (45) 46 — — — — Cross-currency interest rate swaps excluded component (13) 9 25 22 — — — — |
Financial assets and liabilities valued on a recurring basis | The following table presents the financial assets and liabilities valued on a recurring and gross basis and includes where the financial assets and liabilities are within the Unaudited Consolidated Statements of Financial Position as of September 30, 2020 and December 31, 2019. The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis (Dollars in millions) Derivative Type Statements of Financial September 30, 2020 December 31, 2019 Derivatives designated as cash flow hedges: Commodity contracts Other current assets $ 5 $ — Commodity contracts Other noncurrent assets 1 — Foreign exchange contracts Other current assets 1 13 Foreign exchange contracts Other noncurrent assets 1 2 Derivatives designated as fair value hedges: Fixed-for-floating interest rate swap Other current assets — 1 Fixed-for-floating interest rate swap Other noncurrent assets 4 — Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other noncurrent assets 61 68 Total Derivative Assets $ 73 $ 84 Derivatives designated as cash flow hedges: Commodity contracts Payables and other current liabilities $ 4 $ 26 Commodity contracts Other long-term liabilities — 2 Foreign exchange contracts Payables and other current liabilities 8 1 Foreign exchange contracts Other long-term liabilities 7 2 Forward starting interest rate swap contracts Other long-term liabilities — — Derivatives designated as fair value hedges: Fixed-for-floating interest rate swap Long-term borrowings — 1 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other long-term liabilities 13 — Total Derivative Liabilities $ 32 $ 32 Total Net Derivative Assets (Liabilities) $ 41 $ 52 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost | Components of net periodic benefit (credit) cost were as follows: Third Quarter Pension Plans Other Postretirement Benefit Plans 2020 2019 2020 2019 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 6 $ 5 $ 6 $ 4 $ — $ — Interest cost 15 4 19 5 5 6 Expected return on assets (34) (9) (31) (8) (2) (2) Amortization of: Prior service credit, net — — — — (9) (9) Net periodic benefit (credit) cost $ (13) $ — $ (6) $ 1 $ (6) $ (5) First Nine Months Pension Plans Other Postretirement Benefit Plans 2020 2019 2020 2019 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 19 $ 13 $ 20 $ 11 $ — $ — Interest cost 43 11 57 15 14 19 Expected return on assets (101) (25) (96) (24) (4) (4) Amortization of: Prior service credit, net — — — — (28) (29) Net periodic benefit (credit) cost $ (39) $ (1) $ (19) $ 2 $ (18) $ (14) |
LEASES AND OTHER COMMITMENTS (T
LEASES AND OTHER COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of September 30, 2020, reconciliation of lease payments and operating lease liabilities is provided below: (Dollars in millions) Operating lease liabilities Remainder of 2020 $ 17 2021 56 2022 42 2023 29 2024 16 2025 and beyond 35 Total lease payments 195 Less: amounts of lease payments representing interest 18 Present value of future lease payments 177 Less: current obligations under leases 54 Long-term lease obligations $ 123 |
Lease, Cost [Table Text Block] | Lease costs during the period and other information is provided below: Third Quarter First Nine Months (Dollars in millions) 2020 2019 2020 2019 Lease costs: Operating lease costs $ 18 $ 17 $ 55 $ 49 Short-term lease costs 9 10 28 30 Sublease income (1) — (3) (1) Total $ 26 $ 27 $ 80 $ 78 Other operating lease information: Cash paid for amounts included in the measurement of lease liabilities $ 17 $ 17 $ 53 $ 52 Right-to-use assets obtained in exchange for new lease liabilities $ 10 $ 15 $ 40 $ 36 Weighted-average remaining lease term, in years 5 5 Weighted-average discount rate 3.8 % 4.1 % |
Other Commitments | Eastman's obligations are summarized in the following table. (Dollars in millions) Payments Due for Period Debt Securities Credit Facilities and Other Interest Payable Purchase Obligations Operating Leases Other Liabilities Total Remainder of 2020 $ — $ 185 $ 52 $ 57 $ 17 $ 129 $ 440 2021 483 — 184 165 56 81 969 2022 743 — 174 103 42 88 1,150 2023 876 — 155 91 29 87 1,238 2024 241 — 135 94 16 100 586 2025 and beyond 3,337 — 1,407 1,959 35 1,139 7,877 Total $ 5,680 $ 185 $ 2,107 $ 2,469 $ 195 $ 1,624 $ 12,260 |
ENVIRONMENTAL MATTERS AND ASS_2
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrual for Environmental Loss Contingencies Disclosure [Abstract] | |
Schedule of environmental liabilities, current and non-current | (Dollars in millions) September 30, 2020 December 31, 2019 Environmental contingent liabilities, current $ 15 $ 20 Environmental contingent liabilities, long-term 272 267 Total $ 287 $ 287 |
Schedule of changes to environmental remediation liabilities | Changes in the reserves for environmental remediation liabilities during first nine months 2020 and full year 2019 are summarized below: (Dollars in millions) Environmental Remediation Liabilities Balance at December 31, 2018 $ 271 Changes in estimates recognized in earnings and other 4 Cash reductions (15) Balance at December 31, 2019 260 Changes in estimates recognized in earnings and other 9 Cash reductions (9) Balance at September 30, 2020 $ 260 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of the changes in stockholders' equity | Reconciliations of the changes in stockholders' equity for third quarter 2020 and 2019 are provided below: (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at June 30, 2020 $ 2 $ 2,117 $ 8,071 $ (209) $ (3,960) $ 6,021 $ 77 $ 6,098 Net Earnings — — 161 — — 161 4 165 Cash Dividends Declared (1) ($0.66 per share) — — (90) — — (90) — (90) Other Comprehensive Income (Loss) — — — (34) — (34) — (34) Share Based Compensation Expense (2) — 11 — — — 11 — 11 Stock Option Exercises — 6 — — — 6 — 6 Balance at September 30, 2020 $ 2 $ 2,134 $ 8,142 $ (243) $ (3,960) $ 6,075 $ 81 $ 6,156 (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at June 30, 2019 $ 2 $ 2,079 $ 7,848 $ (235) $ (3,825) $ 5,869 $ 77 $ 5,946 Net Earnings — — 266 — — 266 1 267 Cash Dividends Declared (1) ($0.62 per share) — — (85) — — (85) — (85) Other Comprehensive Income (Loss) — — — 32 — 32 — 32 Share Based Compensation Expense (2) — 13 — — — 13 — 13 Other — — — — — — (1) (1) Share Repurchase — — — — (75) (75) — (75) Balance at September 30, 2019 $ 2 $ 2,092 $ 8,029 $ (203) $ (3,900) $ 6,020 $ 77 $ 6,097 (1) Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. (2) Share-based compensation expense is the fair value of share-based awards. Reconciliations of the changes in stockholders' equity for first nine months 2020 and 2019 are provided below: (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at December 31, 2019 $ 2 $ 2,105 $ 7,965 $ (214) $ (3,900) $ 5,958 $ 74 $ 6,032 Net Earnings — — 446 — — 446 9 455 Cash Dividends Declared (1) ($1.98 per share) — — (269) — — (269) — (269) Other Comprehensive Income (Loss) — — — (29) — (29) — (29) Share-Based Compensation Expense (2) — 31 — — — 31 — 31 Stock Option Exercises — 9 — — — 9 — 9 Other (3) — (11) — — — (11) 1 (10) Share Repurchases — — — — (60) (60) — (60) Distributions to Noncontrolling Interest — — — — — — (3) (3) Balance at September 30, 2020 $ 2 $ 2,134 $ 8,142 $ (243) $ (3,960) $ 6,075 $ 81 $ 6,156 (Dollars in millions, except per share amount) Common Stock at Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock at Cost Total Eastman Stockholders' Equity Noncontrolling Interest Total Equity Balance at December 31, 2018 $ 2 $ 2,048 $ 7,573 $ (245) $ (3,575) $ 5,803 $ 75 $ 5,878 Cumulative Effect of Adoption of New Accounting Standards (4) — — (20) 20 — — — — Net Earnings — — 733 — — 733 2 735 Cash Dividends Declared (1) ($1.86 per share) — — (257) — — (257) — (257) Other Comprehensive Income (Loss) — — — 22 — 22 — 22 Share-Based Compensation Expense (2) — 46 — — — 46 — 46 Stock Option Exercises — 8 — — — 8 — 8 Other (3) — (10) — — — (10) — (10) Share Repurchases — — — — (325) (325) — (325) Balance at September 30, 2019 $ 2 $ 2,092 $ 8,029 $ (203) $ (3,900) $ 6,020 $ 77 $ 6,097 |
Accumulated Other Comprehensive Income (Loss) | Cumulative Translation Adjustment Benefit Plans Unrecognized Prior Service Credits Unrealized Gains (Losses) on Derivative Instruments Unrealized Losses on Investments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ (309) $ 106 $ (41) $ (1) $ (245) Period change (1) 45 — (14) — 31 Balance at December 31, 2019 (264) 106 (55) (1) (214) Period change (15) (21) 7 — (29) Balance at September 30, 2020 $ (279) $ 85 $ (48) $ (1) $ (243) (1) Benefit plans unrecognized prior service credits includes $29 million reclassification of stranded tax expense from AOCI to retained earnings and unrealized gains (losses) on derivative instruments includes $9 million reclassification of stranded tax benefit from AOCI to retained earnings. |
Schedule of components of comprehensive income (loss) before tax and net of tax effects | Components of other comprehensive income recognized in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects: Third Quarter 2020 2019 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ (20) $ (20) $ 23 $ 23 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (9) (7) (9) (7) Derivatives and hedging: Unrealized gain (loss) during period (17) (13) 13 10 Reclassification adjustment for (gains) losses included in net income, net 7 6 8 6 Total other comprehensive income (loss) $ (39) $ (34) $ 35 $ 32 First Nine Months 2020 2019 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ (15) $ (15) $ 40 $ 40 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (28) (21) (29) (22) Derivatives and hedging: Unrealized gain (loss) during period (12) (9) (3) (2) Reclassification adjustment for (gains) losses included in net income, net 21 16 8 6 Total other comprehensive income (loss) $ (34) $ (29) $ 16 $ 22 |
EARNINGS AND DIVIDENDS PER SH_2
EARNINGS AND DIVIDENDS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted earnings per share ("EPS") which are calculated using the treasury stock method: Third Quarter First Nine Months (In millions, except per share amounts) 2020 2019 2020 2019 Numerator Earnings attributable to Eastman, net of tax $ 161 $ 266 $ 446 $ 733 Denominator Weighted average shares used for basic EPS 135.3 136.8 135.5 137.9 Dilutive effect of stock options and other awards 1.0 1.0 0.9 1.0 Weighted average shares used for diluted EPS 136.3 137.8 136.4 138.9 (Calculated using whole dollars and shares) EPS Basic $ 1.19 $ 1.95 $ 3.29 $ 5.31 Diluted $ 1.18 $ 1.93 $ 3.27 $ 5.27 |
ASSETS IMPAIRMENTS AND RESTRU_2
ASSETS IMPAIRMENTS AND RESTRUCTURING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
Restructuring and Related Costs [Table Text Block] | (Dollars in millions) Third Quarter First Nine Months Fixed Asset Impairments 2020 2019 2020 2019 Site optimizations AFP - Tire additives (1) $ — $ — $ 5 $ — AM - Performance films (2) — — 4 — AFP - Animal nutrition (3) — — 3 — Discontinuation of growth initiatives (4) — — 8 — — — 20 — Intangible Asset Impairments AFP - Tradenames (5) — — 123 — AFP - Customer relationships (6) — — 2 — — — 125 — Severance Charges Business improvement and cost reduction actions (7) 46 1 46 45 CI & AFP - Singapore (8) 2 — 5 — Site optimizations AM - Advanced interlayers (9) 3 — 3 — AFP - Tire additives (1) 1 — 1 — AM - Performance films (2) — — 3 — AFP - Animal nutrition (3) — — 1 — 52 1 59 45 Other Restructuring Costs Cost reduction initiatives (7) 7 1 7 3 Discontinuation of growth initiatives contract termination fees (4) 1 — 4 — AFP - Discontinued capital project (10) — — — 4 8 1 11 7 Total $ 60 $ 2 $ 215 $ 52 (1) Fixed asset impairments and severance in the Additives & Functional Products ("AFP") segment from the closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . (2) Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the closure of a performance films manufacturing facility in North America as part of ongoing site optimization. (3) Fixed asset impairments and severance in the AFP segment from the closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. (4) Fixed asset impairments and contract termination fees resulting from management's decision to discontinue growth initiatives for polyester based microfibers, including Avra ™ performance fibers, the financial results of which were not allocated to an operating segment and reported in "Other". (5) Intangible asset impairment charges in the AFP segment tire additives business to reduce the carrying values of the Crystex ™ and Santoflex ™ tradenames to the estimated fair values. The estimated fair values were determined using an income approach, specifically, the relief from royalty method, including some unobservable inputs. The impairments are primarily the result of weakened demand in transportation markets impacted by COVID-19 and increased competitive pricing pressure as a result of global capacity increases. (6) Intangible asset impairment charge in the AFP segment for customer relationships. (7) Severance and related costs as part of business improvement and cost reduction initiatives which were reported in "Other". (8) Severance charges of $1 million and $4 million in third quarter and first nine months 2020, respectively, in the Chemical Intermediates ("CI") segment, and $1 million in both third quarter and first nine months 2020 in the AFP segment, resulting from the previously disclosed plan to discontinue production of certain products at the Singapore manufacturing site. Restructuring charges totaling up to $50 million are expected through 2020 and 2021 for this action. (9) Severance in the AM segment due to the closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $7 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in third quarter 2020 related to the closure of this facility. Management expects total charges of up to $30 million, mostly in "Cost of sales" and in "Asset impairments and restructuring charges, net" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings, in 2020 and 2021 for the closure of this facility. (10) Additional restructuring charge related to a capital project in the AFP segment that was discontinued in 2016. |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table summarizes the changes in asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in restructuring reserves for severance costs and site closure costs paid in first nine months 2020 and full year 2019: (Dollars in millions) Balance at January 1, 2020 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at September 30, 2020 Non-cash charges $ — $ 145 $ (145) $ — $ — Severance costs 17 60 — (12) 65 Other restructuring costs 11 10 — (8) 13 Total $ 28 $ 215 $ (145) $ (20) $ 78 Balance at January 1, 2019 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at December 31, 2019 Non-cash charges $ — $ 72 $ (72) $ — $ — Severance costs 6 45 — (34) 17 Other restructuring costs 8 9 1 (7) 11 Total $ 14 $ 126 $ (71) $ (41) $ 28 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Included in the line item "Other items, net" of the "Operating activities" section of the Unaudited Consolidated Statements of Cash Flows are the following changes to Unaudited Consolidated Statements of Financial Position: (Dollars in millions) First Nine Months 2020 2019 Other current assets $ (1) $ 23 Other noncurrent assets (9) 13 Payables and other current liabilities 42 79 Long-term liabilities and equity 71 (25) Total $ 103 $ 90 |
SEGMENT AND REGIONAL SALES IN_2
SEGMENT AND REGIONAL SALES INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information Disclosure | (Dollars in millions) Third Quarter First Nine Months Sales by Segment 2020 2019 2020 2019 Additives & Functional Products $ 742 $ 832 $ 2,249 $ 2,510 Advanced Materials 668 697 1,850 2,050 Chemical Intermediates 506 579 1,559 1,865 Fibers 206 217 629 643 Total Sales $ 2,122 $ 2,325 $ 6,287 $ 7,068 (Dollars in millions) Third Quarter First Nine Months Earnings (Loss) Before Interest and Taxes by Segment 2020 2019 2020 2019 Additives & Functional Products $ 107 $ 144 $ 194 $ 437 Advanced Materials 129 159 293 406 Chemical Intermediates 31 34 131 170 Fibers 41 51 140 144 Total Earnings Before Interest and Taxes by Operating Segment 308 388 758 1,157 Other Growth initiatives and businesses not allocated to operating segments (22) (26) (73) (78) Pension and other postretirement benefits income (expense), net not allocated to operating segments 21 12 62 35 Asset impairments and restructuring charges, net (54) (2) (65) (48) Other income (charges), net not allocated to operating segments (10) (5) (17) (8) Total Earnings Before Interest and Taxes $ 243 $ 367 $ 665 $ 1,058 (Dollars in millions) September 30, December 31, Assets by Segment (1) 2020 2019 Additives & Functional Products $ 6,142 $ 6,387 Advanced Materials 4,358 4,415 Chemical Intermediates 2,616 2,775 Fibers 986 1,014 Total Assets by Operating Segment 14,102 14,591 Corporate Assets 1,907 1,417 Total Assets $ 16,009 $ 16,008 (1) Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. (Dollars in millions) Third Quarter First Nine Months Sales by Customer Location 2020 2019 2020 2019 United States and Canada $ 894 $ 966 $ 2,660 $ 2,961 Asia Pacific 547 602 1,565 1,729 Europe, Middle East, and Africa 556 611 1,713 1,949 Latin America 125 146 349 429 Total Sales $ 2,122 $ 2,325 $ 6,287 $ 7,068 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Standards (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Receivable Sold Under Factoring Arrangement | $ 336 | $ 190 | $ 1,200 | $ 460 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
At FIFO or average cost (approximates current cost) [Abstract] | ||
Finished goods | $ 873 | $ 1,114 |
Work in process | 191 | 220 |
Raw materials and supplies | 510 | 576 |
Total inventories at FIFO or average cost | 1,574 | 1,910 |
Less: LIFO reserve | 236 | 248 |
Total inventories | $ 1,338 | $ 1,662 |
Inventories valued on the LIFO method | 50.00% | 50.00% |
LIFO decrement | $ 10 |
PAYABLES AND OTHER CURRENT LI_3
PAYABLES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Trade creditors | $ 663 | $ 890 |
Accrued payroll and variable compensation | 188 | 176 |
Accrued taxes | 90 | 89 |
Post-employment obligations | 139 | 93 |
Dividends payable to shareholders | 89 | 90 |
Other | 250 | 280 |
Total payables and other current liabilities | $ 1,419 | $ 1,618 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Tax Examination [Line Items] | |||||
Provision for income taxes | $ 25 | $ 46 | $ 50 | $ 158 | |
Effective Income Tax Rate Reconciliation, Percent | 13.00% | 15.00% | 10.00% | 18.00% | |
Unrecognized Tax Benefits | $ 194 | $ 194 | $ 202 | ||
Effective Income Tax Rate Reconciliation, Tax Contingency, Amount | (19) | ||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | (7) | ||||
Minimum [Member] | |||||
Income Tax Examination [Line Items] | |||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 10 | 10 | |||
Maximum [Member] | |||||
Income Tax Examination [Line Items] | |||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 55 | $ 55 |
BORROWINGS Part 1 (Details) Sch
BORROWINGS Part 1 (Details) Schedule of Long-term Debt Instruments - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
Debt Instrument [Line Items] | |||
Total Borrowings | $ 5,865 | $ 5,782 | |
Borrowings due within one year | 370 | 171 | |
Long-term borrowings | 5,495 | 5,611 | |
4.5% notes due January 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings due within one year | [1] | $ 185 | 185 |
Debt Instrument, Maturity Date | Jan. 31, 2021 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||
3.5% Notes Due Dec 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 298 | 298 | |
Debt Instrument, Maturity Date | Dec. 31, 2021 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | ||
3.6% notes due August 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 743 | 741 | |
Debt Instrument, Maturity Date | Aug. 31, 2022 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.60% | ||
1.5% notes due May 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | [2] | $ 876 | 840 |
Debt Instrument, Maturity Date | May 31, 2023 | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | ||
7 1/4% debentures due January 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 198 | 198 | |
Debt Instrument, Maturity Date | Jan. 31, 2024 | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | ||
7 5/8% debentures due June 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 43 | 43 | |
Debt Instrument, Maturity Date | Jun. 30, 2024 | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.625% | ||
3.8% notes due March 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 701 | 695 | |
Debt Instrument, Maturity Date | Mar. 31, 2025 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.80% | ||
1.875% notes due November 2026 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | [2] | $ 581 | 556 |
Debt Instrument, Maturity Date | Nov. 30, 2026 | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.88% | ||
7.60% debentures due February 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 195 | 195 | |
Debt Instrument, Maturity Date | Feb. 28, 2027 | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.60% | ||
4.5% Notes Due Dec 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 493 | 493 | |
Debt Instrument, Maturity Date | Dec. 31, 2028 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||
4.8% notes due September 2042 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 493 | 493 | |
Debt Instrument, Maturity Date | Sep. 30, 2042 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.80% | ||
4.65% notes due October 2044 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 874 | 874 | |
Debt Instrument, Maturity Date | Oct. 31, 2044 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.65% | ||
Commercial paper and short-term borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Borrowings due within one year | $ 185 | $ 171 | |
[1] | In October 2020, the Company repaid the 4.5% notes due January 2021 ($185 million principal) using available cash. | ||
[2] | The carrying value of the euro-denominated 1.50% notes due May 2023 and 1.875% notes due November 2026 will fluctuate with changes in the euro exchange rate. The carrying value of these euro-denominated borrowings have been designated as non-derivative net investment hedges of a portion of the Company's net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations. |
BORROWINGS Part 2 (Details) Cre
BORROWINGS Part 2 (Details) Credit Facility and Commercial Paper Borrowings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Credit Facilities [Abstract] | |||||||
Borrowings due within one year | $ 370 | $ 370 | $ 171 | ||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | 0 | ||||||
Early debt extinguishment costs | 1 | $ 0 | $ 1 | $ 0 | |||
Revolving Credit Facility [Member] | |||||||
Credit Facilities [Abstract] | |||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 400 | ||||||
Repayments of Lines of Credit | $ 400 | ||||||
Line of Credit Facility, Expiration Date | Oct. 31, 2023 | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,500 | $ 1,500 | |||||
Commercial Paper [Member] | |||||||
Credit Facilities [Abstract] | |||||||
Commercial Paper | $ 185 | $ 185 | $ 170 | ||||
Debt, Weighted Average Interest Rate | 0.35% | 0.35% | 2.03% | ||||
A/R Facility [Member] | |||||||
Credit Facilities [Abstract] | |||||||
Credit Facility, Borrowing Capacity | $ 250 | $ 250 | |||||
Proceeds from Lines of Credit | 350 | ||||||
Repayments of Lines of Credit | $ 350 | ||||||
Line of Credit Facility, Expiration Date | Apr. 30, 2020 | ||||||
364-Day Term Loan [Member] | |||||||
Credit Facilities [Abstract] | |||||||
Borrowings due within one year | 250 | $ 250 | |||||
Early debt extinguishment costs | $ 1 |
BORROWINGS Part 3 (Details) Fai
BORROWINGS Part 3 (Details) Fair Value - Fair Value, Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 6,529 | $ 6,275 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 0 | $ 0 |
DERIVATIVE AND NON-DERIVATIVE_3
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Part 1 (Details) - Designated as Hedging Instrument [Member] € in Millions, bbl in Millions, MMBTU in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020USD ($)bblMMBTU | Sep. 30, 2020USD ($)bblMMBTU | Sep. 30, 2020EUR (€) | Dec. 31, 2019USD ($)bblMMBTU | Dec. 31, 2019EUR (€) | Sep. 30, 2020EUR (€)bblMMBTU | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019EUR (€)bblMMBTU | |
Foreign Exchange Contract [Member] | Euro Member Countries, Euro | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | € | € 549 | € 630 | |||||||
Commodity Contract [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Nonmonetary Notional Amount | bbl | 0 | 0 | 1 | 0 | 1 | ||||
Energy Related Derivative [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Nonmonetary Notional Amount | MMBTU | 22 | 22 | 27 | 22 | 27 | ||||
Interest Rate Contract [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | $ 75 | $ 75 | $ 0 | ||||||
Interest Rate Contract [Member] | Fair Value Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | 75 | 75 | 75 | ||||||
1.50% Notes Due 2023 and 1.875% Notes Due 2026 [Member] | Euro Member Countries, Euro | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Notional Amount of Nonderivative Instruments | 1,500 | € 1,244 | $ 1,400 | € 1,243 | |||||
Expected Debt Issuance Aug 2020 [Member] | Interest Rate Contract [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | 25 | 25 | $ 25 | $ 25 | |||||
Notes Due January 2021, Notes Due August 2022, Notes Due January 2024, Notes Due March 2025, and Notes Due February 2027 [Member] | Cross Currency Interest Rate Contract [Member] | Euro Member Countries, Euro | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | € | € 853 | € 851 | |||||||
Notes Due January 2021 [Member] | Cross Currency Interest Rate Contract [Member] | Euro Member Countries, Euro | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Debt Instrument, Face Amount | 150 | 150 | |||||||
Gain (Loss) on Derivative Used in Net Investment Hedge, after Tax | 3 | ||||||||
Notes Due January 2021 [Member] | Cross Currency Interest Rate Contract [Member] | United States of America, Dollars | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Debt Instrument, Face Amount | 180 | 180 | |||||||
4.5% Notes Due Dec 2028 [Member] | Cross Currency Interest Rate Contract [Member] | Euro Member Countries, Euro | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Debt Instrument, Face Amount | 152 | 152 | |||||||
4.5% Notes Due Dec 2028 [Member] | Cross Currency Interest Rate Contract [Member] | United States of America, Dollars | Net Investment Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 180 | $ 180 |
DERIVATIVE AND NON-DERIVATIVE_4
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Part 2 (Details) € in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020EUR (€) | Sep. 30, 2020USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Derivative Assets [Abstract] | ||||
Derivative Asset, Fair Value, Gross Asset | $ 73 | $ 84 | ||
Derivative Liabilities [Abstract] | ||||
Derivative Liability, Fair Value, Gross Liability | 32 | 32 | ||
Derivative, Fair Value, Net | 41 | 52 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 5 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 1 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | ||||
Derivative Liabilities [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 4 | 26 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||||
Derivative Liabilities [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 0 | 2 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 1 | 13 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 1 | 2 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | ||||
Derivative Liabilities [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 8 | 1 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||||
Derivative Liabilities [Abstract] | ||||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 7 | 2 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Fair Value Hedge Assets | 0 | 1 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Fair Value Hedge Assets | 4 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||||
Derivative Liabilities [Abstract] | ||||
Fair Value Hedge Liabilities | 0 | 1 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 0 | 0 | ||
Net Investment Hedging [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | ||||
Derivative Assets [Abstract] | ||||
Derivative Instruments in Hedges, Net Investment in Foreign Operations, Assets, Fair Value | 61 | 68 | ||
Net Investment Hedging [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Cross Currency Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||||
Derivative Assets [Abstract] | ||||
Derivative Instruments in Hedges, Net Investment in Foreign Operations, Assets, Fair Value | 13 | 0 | ||
Net Investment Hedging [Member] | Euro Member Countries, Euro | 1.50% Notes Due 2023 and 1.875% Notes Due 2026 [Member] | Designated as Hedging Instrument [Member] | ||||
Non-Derivatives, Carrying Value [Abstract] | ||||
Notional Amount of Nonderivative Instruments | € 1,244 | 1,500 | € 1,243 | 1,400 |
Fair Value Hedging [Member] | Interest Rate Contract [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged Liability, Fair Value Hedge | 772 | 763 | ||
Derivative Liabilities [Abstract] | ||||
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | 5 | 7 | ||
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | $ (1) | $ (7) |
DERIVATIVE AND NON-DERIVATIVE_5
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Part 3 (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Sales | $ 2,122 | $ 2,325 | $ 6,287 | $ 7,068 | |
Cost of sales | 1,621 | 1,751 | 4,838 | 5,331 | |
Net interest expense | 52 | 54 | 159 | 165 | |
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract] | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 7 | $ (14) | |||
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||||
Change in cumulative translation adjustment, before tax | (20) | 23 | (15) | 40 | |
Summary of Derivative Instruments [Abstract] | |||||
Monetized positions and mark to market in accumulated other comprehensive income before tax | 117 | 117 | (50) | ||
Price Risk Cash Flow Hedge Unrealized Gain to be Reclassified During Next 12 Months | (18) | (18) | |||
Commodity Contract [Member] | Cash Flow Hedging [Member] | |||||
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract] | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 10 | (1) | 20 | (7) | |
Commodity Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member] | |||||
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (5) | (14) | (26) | (25) | |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | |||||
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract] | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (20) | 16 | (19) | 10 | |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Sales [Member] | |||||
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 0 | 7 | 12 | 20 | |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | |||||
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract] | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 2 | 1 | 5 | 3 | |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Net Interest Expense | |||||
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (2) | (2) | (7) | (4) | |
Interest Rate Contract [Member] | Fair Value Hedging [Member] | |||||
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||||
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | (5) | (5) | $ (7) | ||
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge | 0 | 1 | 1 | 1 | |
Interest Rate Contract [Member] | Fair Value Hedging [Member] | Net Interest Expense | |||||
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | 0 | (1) | (1) | (1) | |
Foreign Exchange [Member] | Net Investment Hedging [Member] | |||||
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||||
Change in cumulative translation adjustment, before tax | (62) | 60 | (59) | 68 | |
Not Designated as Hedging Instrument [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (4) | 5 | 4 | 1 | |
Cross Currency Interest Rate Contract [Member] | Net Investment Hedging [Member] | |||||
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||||
Change in cumulative translation adjustment, before tax | (44) | 40 | (45) | 46 | |
AOCI, Derivative Qualifying as Hedge, Excluded Component | $ (13) | $ 9 | $ 25 | $ 22 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Postretirement Benefits Plan [Member] | ||||
Components of net periodic benefit cost [Abstract] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 5 | 6 | 14 | 19 |
Expected return on assets | (2) | (2) | (4) | (4) |
Prior service credit, net | (9) | (9) | (28) | (29) |
Net periodic benefit (credit) cost | (6) | (5) | (18) | (14) |
UNITED STATES | Pension Plan [Member] | ||||
Components of net periodic benefit cost [Abstract] | ||||
Service cost | 6 | 6 | 19 | 20 |
Interest cost | 15 | 19 | 43 | 57 |
Expected return on assets | (34) | (31) | (101) | (96) |
Prior service credit, net | 0 | 0 | 0 | 0 |
Net periodic benefit (credit) cost | (13) | (6) | (39) | (19) |
Foreign Plan [Member] | Pension Plan [Member] | ||||
Components of net periodic benefit cost [Abstract] | ||||
Service cost | 5 | 4 | 13 | 11 |
Interest cost | 4 | 5 | 11 | 15 |
Expected return on assets | (9) | (8) | (25) | (24) |
Prior service credit, net | 0 | 0 | 0 | 0 |
Net periodic benefit (credit) cost | $ 0 | $ 1 | $ (1) | $ 2 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |||||
Operating Lease, Right-of-Use Asset | $ 174 | $ 174 | $ 197 | ||
Operating Lease, Right-of-Use Asset, Reclassified | 8 | 8 | $ 8 | ||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | 17 | 17 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 56 | 56 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 42 | 42 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 29 | 29 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 16 | 16 | |||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 35 | 35 | |||
Lessee, Operating Lease, Liability, Payments, Due | 195 | 195 | |||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 18 | 18 | |||
Operating Lease, Liability | 177 | 177 | |||
Operating Lease, Liability, Current | 54 | 54 | |||
Operating Lease, Liability, Noncurrent | 123 | 123 | |||
Lease, Cost [Abstract] | |||||
Operating Lease, Cost | 18 | $ 17 | 55 | $ 49 | |
Short-term Lease, Cost | 9 | 10 | 28 | 30 | |
Sublease Income | (1) | 0 | (3) | (1) | |
Lease, Cost | 26 | 27 | 80 | 78 | |
Operating Lease, Payments | 17 | 17 | 53 | 52 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 10 | $ 15 | $ 40 | $ 36 | |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 5 years | 5 years | 5 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.80% | 4.10% | 3.80% | 4.10% |
COMMITMENTS (Details)
COMMITMENTS (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | |
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | $ 440 | $ 440 |
Other Commitment, Due in Second Year | 969 | 969 |
Other Commitment, Due in Third Year | 1,150 | 1,150 |
Other Commitment, Due in Fourth Year | 1,238 | 1,238 |
Other Commitment, Due in Fifth Year | 586 | 586 |
Other Commitment, Due after Fifth Year | 7,877 | 7,877 |
Other Commitment | 12,260 | $ 12,260 |
Unrecorded Unconditional Purchase Obligation, Term | 30 years | |
Guarantees [Abstract] | ||
Term, other guarantees | 30 years | |
Maximum potential future payment, other guarantees | 35 | $ 35 |
Debt Securities | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 0 | 0 |
Other Commitment, Due in Second Year | 483 | 483 |
Other Commitment, Due in Third Year | 743 | 743 |
Other Commitment, Due in Fourth Year | 876 | 876 |
Other Commitment, Due in Fifth Year | 241 | 241 |
Other Commitment, Due after Fifth Year | 3,337 | 3,337 |
Other Commitment | 5,680 | 5,680 |
Revolving Credit Facility [Member] | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 185 | 185 |
Other Commitment, Due in Second Year | 0 | 0 |
Other Commitment, Due in Third Year | 0 | 0 |
Other Commitment, Due in Fourth Year | 0 | 0 |
Other Commitment, Due in Fifth Year | 0 | 0 |
Other Commitment, Due after Fifth Year | 0 | 0 |
Other Commitment | 185 | 185 |
Interest Payable | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 52 | 52 |
Other Commitment, Due in Second Year | 184 | 184 |
Other Commitment, Due in Third Year | 174 | 174 |
Other Commitment, Due in Fourth Year | 155 | 155 |
Other Commitment, Due in Fifth Year | 135 | 135 |
Other Commitment, Due after Fifth Year | 1,407 | 1,407 |
Other Commitment | 2,107 | 2,107 |
Obligations | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 57 | 57 |
Other Commitment, Due in Second Year | 165 | 165 |
Other Commitment, Due in Third Year | 103 | 103 |
Other Commitment, Due in Fourth Year | 91 | 91 |
Other Commitment, Due in Fifth Year | 94 | 94 |
Other Commitment, Due after Fifth Year | 1,959 | 1,959 |
Other Commitment | 2,469 | 2,469 |
Unrecorded Unconditional Purchase Obligation, Purchases | 2,500 | |
Operating Leases | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 17 | 17 |
Other Commitment, Due in Second Year | 56 | 56 |
Other Commitment, Due in Third Year | 42 | 42 |
Other Commitment, Due in Fourth Year | 29 | 29 |
Other Commitment, Due in Fifth Year | 16 | 16 |
Other Commitment, Due after Fifth Year | 35 | 35 |
Other Commitment | 195 | 195 |
Other Liabilities | ||
Other Commitments [Line Items] | ||
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year | 129 | 129 |
Other Commitment, Due in Second Year | 81 | 81 |
Other Commitment, Due in Third Year | 88 | 88 |
Other Commitment, Due in Fourth Year | 87 | 87 |
Other Commitment, Due in Fifth Year | 100 | 100 |
Other Commitment, Due after Fifth Year | 1,139 | 1,139 |
Other Commitment | $ 1,624 | $ 1,624 |
ENVIRONMENTAL MATTERS AND ASS_3
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning of period | $ 287 | |
End of period | 287 | $ 287 |
Accrual for Environmental Loss Contingencies, Balance Sheet Classification [Abstract] | ||
Accrued Environmental Loss Contingencies, Current | 15 | 20 |
Accrued Environmental Loss Contingencies, Noncurrent | 272 | 267 |
Environmental Remediation [Member] | ||
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning of period | 260 | 271 |
Changes in estimates recognized in earnings and other | 9 | 4 |
Cash reductions | (9) | (15) |
End of period | $ 260 | 260 |
Expected Payment Period of Environmental Contingencies | approximately 30 years | |
Environmental Remediation [Member] | Minimum [Member] | ||
Site Contingency [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 260 | 260 |
Environmental Remediation [Member] | Maximum [Member] | ||
Site Contingency [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | 504 | 487 |
Environmental ARO [Member] | ||
Site Contingency [Line Items] | ||
Best Estimate Accrued to-date For Asset Retirement Obligation | 27 | 27 |
Non Environmental ARO [Member] | ||
Site Contingency [Line Items] | ||
Best Estimate Accrued to-date For Asset Retirement Obligation | $ 50 | $ 48 |
STOCKHOLDERS' EQUITY Part 1 (De
STOCKHOLDERS' EQUITY Part 1 (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |||
Stockholders' Equity Note [Abstract] | |||||||||||
Dividends, Per Share | $ 0.66 | $ 0.62 | $ 1.98 | $ 1.86 | |||||||
Stockholders' Equity Attributable to Parent | $ 6,075 | $ 6,075 | $ 5,958 | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 6,156 | $ 6,097 | 6,156 | $ 6,097 | $ 6,098 | 6,032 | $ 5,946 | $ 5,878 | |||
Net earnings attributable to Eastman | 161 | 266 | 446 | 733 | |||||||
Net earnings attributable to noncontrolling interest | 4 | 1 | 9 | 2 | |||||||
Net earnings including noncontrolling interest | 165 | 267 | 455 | 735 | |||||||
Cash dividends declared | (90) | (85) | (269) | (257) | |||||||
Other Comprehensive Income | (34) | 32 | (29) | 22 | |||||||
Share-based Compensation Expense | 11 | 13 | 31 | 46 | |||||||
Stock Option Exercises | 6 | 9 | 8 | ||||||||
Other | (1) | (10) | (10) | ||||||||
Share Repurchases | (75) | (60) | (325) | ||||||||
Distributions to Noncontrolling Interest | (3) | ||||||||||
Retained earnings | 8,142 | 8,029 | 8,142 | 8,029 | 8,071 | 7,965 | 7,848 | 7,573 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Retained earnings | (20) | ||||||||||
Common Stock [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |||
Net earnings attributable to Eastman | 0 | 0 | 0 | 0 | |||||||
Cash dividends declared | 0 | 0 | 0 | 0 | |||||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||||||
Share-based Compensation Expense | 0 | 0 | 0 | 0 | |||||||
Stock Option Exercises | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Share Repurchases | 0 | 0 | 0 | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Additional Paid-in Capital [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | 2,134 | 2,092 | 2,134 | 2,092 | 2,117 | 2,105 | 2,079 | 2,048 | |||
Net earnings attributable to Eastman | 0 | 0 | 0 | 0 | |||||||
Cash dividends declared | 0 | 0 | 0 | 0 | |||||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||||||
Share-based Compensation Expense | 11 | [1] | 13 | [1] | 31 | 46 | |||||
Stock Option Exercises | 6 | 9 | 8 | ||||||||
Other | 0 | (11) | (10) | ||||||||
Share Repurchases | 0 | 0 | 0 | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Retained Earnings [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | 8,142 | 8,029 | 8,142 | 8,029 | 8,071 | 7,965 | 7,848 | 7,573 | |||
Net earnings attributable to Eastman | 161 | 266 | 446 | 733 | |||||||
Cash dividends declared | (90) | [2] | (85) | [2] | (269) | (257) | |||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||||||
Share-based Compensation Expense | 0 | 0 | 0 | 0 | |||||||
Stock Option Exercises | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Share Repurchases | 0 | 0 | 0 | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Retained earnings | $ (20) | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | (243) | (203) | (243) | (203) | (209) | (214) | (235) | (245) | |||
Net earnings attributable to Eastman | 0 | 0 | 0 | 0 | |||||||
Cash dividends declared | 0 | 0 | 0 | 0 | |||||||
Other Comprehensive Income | (34) | 32 | (29) | 22 | |||||||
Share-based Compensation Expense | 0 | 0 | 0 | 0 | |||||||
Stock Option Exercises | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Share Repurchases | 0 | 0 | 0 | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Member] | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
AOCI Tax, Attributable to Parent | $ 20 | ||||||||||
Treasury Stock [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | (3,960) | (3,900) | (3,960) | (3,900) | (3,960) | (3,900) | (3,825) | (3,575) | |||
Net earnings attributable to Eastman | 0 | 0 | 0 | 0 | |||||||
Cash dividends declared | 0 | 0 | 0 | 0 | |||||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||||||
Share-based Compensation Expense | 0 | 0 | 0 | 0 | |||||||
Stock Option Exercises | 0 | 0 | 0 | ||||||||
Other | 0 | 0 | 0 | ||||||||
Share Repurchases | (75) | (60) | (325) | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Parent [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | 6,075 | 6,020 | 6,075 | 6,020 | 6,021 | 5,958 | 5,869 | 5,803 | |||
Net earnings attributable to Eastman | 161 | 266 | 446 | 733 | |||||||
Cash dividends declared | (90) | [2] | (85) | [2] | (269) | (257) | |||||
Other Comprehensive Income | (34) | 32 | (29) | 22 | |||||||
Share-based Compensation Expense | 11 | [1] | 13 | [1] | 31 | 46 | |||||
Stock Option Exercises | 6 | 9 | 8 | ||||||||
Other | 0 | (11) | (10) | ||||||||
Share Repurchases | (75) | (60) | (325) | ||||||||
Distributions to Noncontrolling Interest | 0 | ||||||||||
Noncontrolling Interest [Member] | |||||||||||
Stockholders' Equity Attributable to Parent | 81 | 77 | 81 | 77 | $ 77 | $ 74 | $ 77 | $ 75 | |||
Net earnings attributable to noncontrolling interest | 4 | 1 | 9 | 2 | |||||||
Cash dividends declared | 0 | 0 | 0 | 0 | |||||||
Other Comprehensive Income | 0 | 0 | 0 | 0 | |||||||
Share-based Compensation Expense | 0 | 0 | 0 | 0 | |||||||
Stock Option Exercises | $ 0 | 0 | 0 | ||||||||
Other | (1) | 1 | 0 | ||||||||
Share Repurchases | $ 0 | 0 | $ 0 | ||||||||
Distributions to Noncontrolling Interest | $ (3) | ||||||||||
[1] | Share-based compensation expense is the fair value of share-based awards. | ||||||||||
[2] | Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. |
STOCKHOLDERS' EQUITY Part 2 AOC
STOCKHOLDERS' EQUITY Part 2 AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Cumulative Translation Adjustment | $ (279) | $ (279) | $ (264) | $ (309) | ||
Change in cumulative translation adjustment | (20) | $ 23 | (15) | $ 40 | 45 | |
Benefit Plans Unrecognized Prior Service Credits | 85 | 85 | 106 | 106 | ||
Change in Benefit Plans Unrecognized Prior Service Credits | (21) | 0 | ||||
Unrealized Gains (Losses) on Derivative Instruments | (48) | (48) | (55) | (41) | ||
Change in Unrealized Gains (Losses) on Derivative Instruments | 7 | (14) | ||||
Unrealized Losses on Investments | (1) | (1) | (1) | (1) | ||
Change in Unrealized Losses on Investments | 0 | 0 | ||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 31 | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (243) | (243) | (214) | $ (245) | ||
Total other comprehensive income (loss), net of tax | $ (34) | $ 32 | $ (29) | $ 22 | ||
Accounting Standards Update 2018-02 [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Income Tax Effects Allocated Directly to Equity, Cumulative Effect of Change in Accounting Principle | 29 | |||||
Accounting Standards Update 2018-02 [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Income Tax Effects Allocated Directly to Equity, Cumulative Effect of Change in Accounting Principle | $ (9) |
STOCKHOLDERS' EQUITY Part 3 OCI
STOCKHOLDERS' EQUITY Part 3 OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||||
Change in cumulative translation adjustment, before tax | $ (20) | $ 23 | $ (15) | $ 40 | |
Amortization of unrecognized prior service credits included in net periodic costs, before tax | (9) | (9) | (28) | (29) | |
Unrealized gain (loss), before tax | (17) | 13 | (12) | (3) | |
Reclassification adjustment for (gain) loss included in net income, before tax | 7 | 8 | 21 | 8 | |
Total other comprehensive income (loss), before tax | (39) | 35 | (34) | 16 | |
Other comprehensive income (loss), net of tax: | |||||
Change in cumulative translation adjustment | (20) | 23 | (15) | 40 | $ 45 |
Amortization of unrecognized prior service credits | (7) | (7) | (21) | (22) | |
Unrealized gain (loss) | (13) | 10 | (9) | (2) | |
Reclassification adjustment for (gains) losses included in net income, net | 6 | 6 | 16 | 6 | |
Total other comprehensive income (loss), net of tax | $ (34) | $ 32 | $ (29) | $ 22 |
EARNINGS AND DIVIDENDS PER SH_3
EARNINGS AND DIVIDENDS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to Eastman | $ 161 | $ 266 | $ 446 | $ 733 |
Weighted average shares used for basic EPS (in shares) | 135,300,000 | 136,800,000 | 135,500,000 | 137,900,000 |
Dilutive effect of stock options and other awards | 1,000,000 | 1,000,000 | 900,000 | 1,000,000 |
Weighted average shares used for diluted EPS (in shares) | 136,300,000 | 137,800,000 | 136,400,000 | 138,900,000 |
Earnings Per Share, Basic | $ 1.19 | $ 1.95 | $ 3.29 | $ 5.31 |
Earnings Per Share, Diluted | $ 1.18 | $ 1.93 | $ 3.27 | $ 5.27 |
Underlying options excluded from the computation of diluted earnings per share (in shares) | 2,247,621 | 2,620,529 | 2,809,028 | 2,219,514 |
Shares repurchased (in shares) | 1,032,623 | 1,134,052 | 4,282,409 | |
Cash dividends declared (per share) | $ 0.66 | $ 0.62 | $ 1.98 | $ 1.86 |
Stock Repurchased During Period, Shares | 0 |
ASSETS IMPAIRMENTS AND RESTRU_3
ASSETS IMPAIRMENTS AND RESTRUCTURING (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 | $ 125 | $ 0 | ||||
Impairment of Long-Lived Assets to be Disposed of | 0 | 0 | 20 | 0 | ||||
Severance Costs | 52 | 1 | 59 | 45 | ||||
Business Exit Costs | 8 | 1 | 11 | 7 | ||||
Total | 60 | 2 | 215 | 52 | ||||
Restructuring Charge [Roll Forward] | ||||||||
Balance at Beginning of Period | 28 | 14 | $ 14 | |||||
Provision / Adjustments | 215 | 126 | ||||||
Restructuring Reserve, Accrual Adjustment | (145) | |||||||
Non-cash Reductions | (71) | |||||||
Cash Reductions | (20) | (41) | ||||||
Balance at End of Period | 78 | 78 | 28 | |||||
Facility Closing [Member] | ||||||||
Restructuring Charge [Roll Forward] | ||||||||
Balance at Beginning of Period | 11 | 8 | 8 | |||||
Provision / Adjustments | 10 | 9 | ||||||
Restructuring Reserve, Accrual Adjustment | 0 | 1 | ||||||
Cash Reductions | (8) | (7) | ||||||
Balance at End of Period | 13 | 13 | 11 | |||||
Employee Severance [Member] | ||||||||
Restructuring Charge [Roll Forward] | ||||||||
Balance at Beginning of Period | 17 | 6 | 6 | |||||
Provision / Adjustments | 60 | 45 | ||||||
Restructuring Reserve, Accrual Adjustment | 0 | 0 | ||||||
Cash Reductions | (12) | (34) | ||||||
Balance at End of Period | 65 | 65 | 17 | |||||
Non-Cash Charges [Member] | ||||||||
Restructuring Charge [Roll Forward] | ||||||||
Balance at Beginning of Period | 0 | 0 | 0 | |||||
Provision / Adjustments | 145 | 72 | ||||||
Non-cash Reductions | (145) | (72) | ||||||
Cash Reductions | 0 | 0 | ||||||
Balance at End of Period | 0 | 0 | $ 0 | |||||
Additives And Functional Products [Member] | Customer-Related Intangible Assets [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Intangible Assets (Excluding Goodwill) | [1] | 0 | 0 | 2 | 0 | |||
Additives And Functional Products [Member] | Trade Names [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Intangible Assets (Excluding Goodwill) | [2] | 0 | 0 | 123 | 0 | |||
Corporate Cost Actions 2019 [Member] | Corporate, Non-Segment [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | 1 | [1] | 45 | [3] | ||||
Restructuring Charge [Roll Forward] | ||||||||
Other Restructuring Costs | [3] | 1 | 3 | |||||
Capital Project AFP [Member] | Additives And Functional Products [Member] | ||||||||
Restructuring Charge [Roll Forward] | ||||||||
Other Restructuring Costs | [4] | 0 | 0 | 0 | 4 | |||
Site Closure North America 2020 [Member] | Advanced Materials [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Long-Lived Assets to be Disposed of | [5] | 0 | 0 | 4 | 0 | |||
Severance Costs | [5] | 0 | 0 | 3 | 0 | |||
Site Closure Asia Pacific [Member] | Additives And Functional Products [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Long-Lived Assets to be Disposed of | [6] | 0 | 0 | 3 | 0 | |||
Severance Costs | [6] | 0 | 0 | 1 | 0 | |||
Site Closure Singapore 2019 [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | [7] | 2 | 0 | 5 | 0 | |||
Restructuring Charge [Roll Forward] | ||||||||
Restructuring and Related Cost, Expected Cost | 50 | 50 | ||||||
Site Closure Singapore 2019 [Member] | Additives And Functional Products [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | 1 | 1 | ||||||
Site Closure Singapore 2019 [Member] | Chemical Intermediates [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | 1 | 4 | ||||||
Polyester Based Fibers [Member] | Corporate, Non-Segment [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Long-Lived Assets to be Disposed of | [8] | 0 | 0 | 8 | 0 | |||
Restructuring Charge [Roll Forward] | ||||||||
Other Restructuring Costs | [8] | 1 | 0 | 4 | 0 | |||
Site Closure Asia Pacific Tire Additives [Member] | Additives And Functional Products [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Impairment of Long-Lived Assets to be Disposed of | [9] | 0 | 0 | 5 | 0 | |||
Severance Costs | [9] | 1 | 0 | 1 | 0 | |||
Corporate Cost Actions 2020 | Corporate, Non-Segment [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | [3] | 46 | 46 | |||||
Restructuring Charge [Roll Forward] | ||||||||
Other Restructuring Costs | [3] | 7 | 7 | |||||
Site Closure Advanced Interlayers North America 2020 | Advanced Materials [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Severance Costs | [10] | 3 | $ 0 | 3 | $ 0 | |||
Restructuring Charge [Roll Forward] | ||||||||
Restructuring and Related Cost, Accelerated Depreciation | 7 | 7 | ||||||
Restructuring and Related Cost, Expected Cost | $ 30 | $ 30 | ||||||
[1] | Intangible asset impairment charge in the AFP segment for customer relationships. | |||||||
[2] | Intangible asset impairment charges in the AFP segment tire additives business to reduce the carrying values of the Crystex ™ and Santoflex ™ tradenames to the estimated fair values. The estimated fair values were determined using an income approach, specifically, the relief from royalty method, including some unobservable inputs. The impairments are primarily the result of weakened demand in transportation markets impacted by COVID-19 and increased competitive pricing pressure as a result of global capacity increases. | |||||||
[3] | Severance and related costs as part of business improvement and cost reduction initiatives which were reported in "Other". | |||||||
[4] | Additional restructuring charge related to a capital project in the AFP segment that was discontinued in 2016. | |||||||
[5] | Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the closure of a performance films manufacturing facility in North America as part of ongoing site optimization. | |||||||
[6] | Fixed asset impairments and severance in the AFP segment from the closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. | |||||||
[7] | Severance charges of $1 million and $4 million in third quarter and first nine months 2020, respectively, in the Chemical Intermediates ("CI") segment, and $1 million in both third quarter and first nine months 2020 in the AFP segment, resulting from the previously disclosed plan to discontinue production of certain products at the Singapore manufacturing site. Restructuring charges totaling up to $50 million are expected through 2020 and 2021 for this action. | |||||||
[8] | Fixed asset impairments and contract termination fees resulting from management's decision to discontinue growth initiatives for polyester based microfibers, including Avra ™ performance fibers, the financial results of which were not allocated to an operating segment and reported in "Other". | |||||||
[9] | Fixed asset impairments and severance in the Additives & Functional Products ("AFP") segment from the closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . | |||||||
[10] | Severance in the AM segment due to the closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $7 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in third quarter 2020 related to the closure of this facility. Management expects total charges of up to $30 million, mostly in "Cost of sales" and in "Asset impairments and restructuring charges, net" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings, in 2020 and 2021 for the closure of this facility. |
SHARE-BASED COMPENSATION AWAR_2
SHARE-BASED COMPENSATION AWARDS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 11 | $ 13 | $ 31 | $ 46 |
Share-based Payment Arrangement, Expense, after Tax | $ 8 | $ 9 | $ 23 | $ 34 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Other current assets | $ (1) | $ 23 |
Other noncurrent assets | (9) | 13 |
Payables and other current liabilities | 42 | 79 |
Long-term liabilities and equity | 71 | (25) |
Total | $ 103 | $ 90 |
SEGMENT AND REGIONAL SALES IN_3
SEGMENT AND REGIONAL SALES INFORMATION (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | ||
Segment Reporting Information [Line Items] | ||||||
Number of Operating Segments | Segment | 4 | |||||
Sales [Abstract] | ||||||
Sales | $ 2,122 | $ 2,325 | $ 6,287 | $ 7,068 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 243 | 367 | 665 | 1,058 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 16,009 | 16,009 | $ 16,008 | ||
Operating Segments [Member] | ||||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 308 | 388 | 758 | 1,157 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 14,102 | 14,102 | 14,591 | ||
Corporate, Non-Segment [Member] | ||||||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 1,907 | 1,907 | 1,417 | ||
Growth Initiatives and Businesses not Allocated to Segments [Member] | Corporate, Non-Segment [Member] | ||||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | (22) | (26) | (73) | (78) | ||
Pension and OPEB Costs Not Allocated to Operating Segments [Member] | Corporate, Non-Segment [Member] | ||||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 21 | 12 | 62 | 35 | ||
Restructuring and acquisition integration and transaction costs [Member] | Corporate, Non-Segment [Member] | ||||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | (54) | (2) | (65) | (48) | ||
Other Nonoperating Income (Expense) [Member] | Corporate, Non-Segment [Member] | ||||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | (10) | (5) | (17) | (8) | ||
Additives And Functional Products [Member] | Operating Segments [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 742 | 832 | 2,249 | 2,510 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 107 | 144 | 194 | 437 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 6,142 | 6,142 | 6,387 | ||
Advanced Materials [Member] | Operating Segments [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 668 | 697 | 1,850 | 2,050 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 129 | 159 | 293 | 406 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 4,358 | 4,358 | 4,415 | ||
Chemical Intermediates [Member] | Operating Segments [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 506 | 579 | 1,559 | 1,865 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 31 | 34 | 131 | 170 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 2,616 | 2,616 | 2,775 | ||
Fibers [Member] | Operating Segments [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 206 | 217 | 629 | 643 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||||
Earnings before interest and taxes | 41 | 51 | 140 | 144 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||||
Assets by Segment | [1] | 986 | 986 | $ 1,014 | ||
North America [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 894 | 966 | 2,660 | 2,961 | ||
Asia Pacific [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 547 | 602 | 1,565 | 1,729 | ||
EMEA [Member] | ||||||
Sales [Abstract] | ||||||
Sales | 556 | 611 | 1,713 | 1,949 | ||
Latin America [Member] | ||||||
Sales [Abstract] | ||||||
Sales | $ 125 | $ 146 | $ 349 | $ 429 | ||
[1] | Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. |