Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
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 | 136,323,522 |
Entity Central Index Key | 0000915389 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
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 | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Sales | $ 2,409 | $ 2,241 |
Cost of sales | 1,811 | 1,664 |
Gross profit | 598 | 577 |
Selling, general and administrative expenses | 184 | 160 |
Research and development expenses | 58 | 61 |
Asset impairments and restructuring charges, net | 7 | 14 |
Other components of post-employment (benefit) cost, net | (36) | (30) |
Other (income) charges, net | (4) | 4 |
Earnings before interest and taxes | 389 | 368 |
Net interest expense | 50 | 52 |
Earnings before income taxes | 339 | 316 |
Provision for income taxes | 62 | 56 |
Net earnings | 277 | 260 |
Less: Net earnings attributable to noncontrolling interest | 3 | 2 |
Net earnings attributable to Eastman | $ 274 | $ 258 |
Earnings Per Share, Basic [Abstract] | ||
Basic earnings per share attributable to Eastman | $ 2.01 | $ 1.90 |
Diluted earnings per share attributable to Eastman | ||
Diluted earnings per share attributable to Eastman | $ 1.99 | $ 1.89 |
Comprehensive Income | ||
Net earnings including noncontrolling interest | $ 277 | $ 260 |
Other comprehensive income (loss), net of tax: | ||
Change in cumulative translation adjustment | 2 | 19 |
Defined benefit pension and other postretirement benefit plans: | ||
Amortization of unrecognized prior service credits | (7) | (7) |
Derivatives and hedging: | ||
Unrealized gain (loss) during period | 25 | 7 |
Reclassification adjustment for (gains) losses included in net income, net | 5 | (2) |
Total other comprehensive income (loss), net of tax | 25 | 17 |
Comprehensive income including noncontrolling interest | 302 | 277 |
Less: Net earnings attributable to noncontrolling interest | 3 | 2 |
Comprehensive income attributable to Eastman | 299 | 275 |
Retained Earnings | ||
Retained earnings at beginning of period | 8,080 | 7,965 |
Net earnings attributable to Eastman | 274 | 258 |
Cash dividends declared | (94) | (90) |
Retained earnings at end of period | $ 8,260 | $ 8,133 |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Current assets | |||
Cash and cash equivalents | $ 540 | $ 564 | |
Trade receivables, net of allowance for doubtful accounts | 1,229 | 1,033 | |
Miscellaneous receivables | 440 | 482 | |
Inventories | 1,505 | 1,379 | |
Other current assets | 83 | 83 | |
Total current assets | 3,797 | 3,541 | |
Properties | |||
Properties and equipment at cost | 13,527 | 13,531 | |
Less: Accumulated depreciation | 8,061 | 7,982 | |
Net properties | 5,466 | 5,549 | |
Goodwill | 4,446 | 4,465 | |
Intangible assets, net of accumulated amortization | 1,741 | 1,792 | |
Other noncurrent assets | 745 | 736 | |
Total assets | [1] | 16,195 | 16,083 |
Current liabilities | |||
Payables and other current liabilities | 1,692 | 1,689 | |
Borrowings due within one year | 324 | 349 | |
Total current liabilities | 2,016 | 2,038 | |
Long-term borrowings | 5,200 | 5,269 | |
Deferred income tax liabilities | 855 | 848 | |
Post-employment obligations | 1,116 | 1,143 | |
Other long-term liabilities | 689 | 677 | |
Total liabilities | 9,876 | 9,975 | |
Stockholders' equity | |||
Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 221,457,969 and 220,641,506 for 2021 and 2020, respectively) | 2 | 2 | |
Additional paid-in capital | 2,219 | 2,174 | |
Retained earnings | 8,260 | 8,080 | |
Accumulated other comprehensive income (loss) | (248) | (273) | |
Stockholder's Equity before Treasury Stock | 10,233 | 9,983 | |
Less: Treasury stock at cost (85,185,245 shares for 2021 and 84,830,450 shares for 2020) | 4,000 | 3,960 | |
Total Eastman stockholders' equity | 6,233 | 6,023 | |
Noncontrolling interest | 86 | 85 | |
Total equity | 6,319 | 6,108 | |
Total liabilities and stockholders' equity | $ 16,195 | $ 16,083 | |
[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 | Mar. 31, 2021 | Dec. 31, 2020 |
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) | 221,457,969 | 220,641,506 |
Treasury stock at cost (in shares) | 85,185,245 | 84,830,450 |
UNAUDITED CONSOLIDATED STATEM_4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net earnings | $ 277 | $ 260 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 149 | 139 |
Asset impairment charges | 0 | 9 |
Provision for (benefit from) deferred income taxes | 2 | 12 |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | ||
(Increase) decrease in trade receivables | (211) | (72) |
(Increase) decrease in inventories | (144) | (18) |
Increase (decrease) in trade payables | 197 | (104) |
Pension and other postretirement contributions (in excess of) less than expenses | (53) | (52) |
Variable compensation (in excess of) less than expenses | (78) | (74) |
Other items, net | 77 | 71 |
Net cash provided by operating activities | 216 | 171 |
Investing activities | ||
Additions to properties and equipment | (91) | (99) |
Additions to capitalized software | (6) | (2) |
Other items, net | (2) | 0 |
Net cash used in investing activities | (99) | (101) |
Financing activities | ||
Net increase (decrease) in commercial paper and other borrowings | (25) | 539 |
Dividends paid to stockholders | (94) | (90) |
Treasury stock purchases | (40) | (30) |
Other items, net | 22 | (11) |
Net cash (used in) provided by financing activities | (137) | 408 |
Effect of exchange rate changes on cash and cash equivalents | (4) | (2) |
Net change in cash and cash equivalents | (24) | 476 |
Cash and cash equivalents at beginning of period | 564 | 204 |
Cash and cash equivalents at end of period | $ 540 | $ 680 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Notes) | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 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 recently adopted accounting standards noted below. The December 31, 2020 financial position data included herein was derived from the consolidated financial statements included in the 2020 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") ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes : On January 1, 2021, Eastman adopted this update which is a part of the Financial Accounting Standards Board's ("FASB") initiative to reduce complexity in accounting standards. Adoption methods varied based on the specific tax items impacted. The adoption of this standard did not result in a material impact to 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: On January 1, 2021, Eastman prospectively adopted this update which provides 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. The adoption of this standard did not result in a material impact to the Company's financial statements and related disclosures. ASU 2021-01 Reference Rate Reform (Topic 848) : In January 2021, the FASB issued this update to clarify that certain optional expedients and exceptions under this topic for contract modifications and hedge accounting apply to derivatives instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result 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). This update was effective immediately upon release. As the Company has not experienced any reference rate reform modification to date, this update will be adopted on a prospective basis in the event of such modifications. Accounting Standards Issued But Not Adopted as of March 31, 2021 None applicable to Eastman. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES March 31, December 31, (Dollars in millions) 2021 2020 Finished goods $ 944 $ 891 Work in process 214 203 Raw materials and supplies 586 511 Total inventories at FIFO or average cost 1,744 1,605 Less: LIFO reserve 239 226 Total inventories $ 1,505 $ 1,379 Inventories valued on the last-in, first-out ("LIFO") method were approximately 45 percent and 50 percent of total inventories at March 31, 2021 and December 31, 2020, respectively. In 2020, a $13 million LIFO decrement was recognized due to inventory reduction actions, resulting in an increase to "Cost of sales" in the Audited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings and a decrease to "Inventories" in the Audited Consolidated Statements of Financial Position. |
PAYABLES AND OTHER CURRENT LIAB
PAYABLES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
PAYABLES AND OTHER CURRENT LIABILITIES | PAYABLES AND OTHER CURRENT LIABILITIES March 31, December 31, (Dollars in millions) 2021 2020 Trade creditors $ 976 $ 799 Accrued payroll and variable compensation 143 228 Accrued taxes 143 178 Post-employment obligations 106 138 Other 324 346 Total payables and other current liabilities $ 1,692 $ 1,689 "Other" consists primarily of accruals for dividends payable to stockholders, interest payable, the current portion of operating lease liabilities, the current portion of environmental liabilities, and miscellaneous accruals. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES | INCOME TAXES First Quarter (Dollars in millions) 2021 2020 $ % $ % Provision for income taxes and tax rate $ 62 18 % $ 56 18 % First quarter 2021 and 2020 effective tax rates included adjustments to the tax provision to reflect adjustments of prior years' income tax returns. At March 31, 2021 and December 31, 2020, Eastman had $256 million and $257 million, respectively, in unrecognized tax benefits. At March 31, 2021, 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 within the next 12 months by up to $70 million. Income tax incentives, in the form of tax holidays, have been granted to the Company in certain jurisdictions to attract investment and encourage industrial development. The expiration of these tax holidays varies by country. The tax holidays are conditional on the Company meeting certain requirements, including employment and investment thresholds; determination of compliance with these conditions may be subject to challenge by tax authorities in those jurisdictions. No individual tax holiday had a material impact to the Company's earnings in first quarter 2021 or 2020. |
BORROWINGS
BORROWINGS | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS March 31, December 31, (Dollars in millions) 2021 2020 Borrowings consisted of: 3.5% notes due December 2021 $ 299 $ 299 3.6% notes due August 2022 745 744 1.50% notes due May 2023 (1) 878 919 7 1/4% debentures due January 2024 198 198 7 5/8% debentures due June 2024 43 43 3.8% notes due March 2025 699 701 1.875% notes due November 2026 (1) 582 609 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 25 50 Total borrowings 5,524 5,618 Borrowings due within one year 324 349 Long-term borrowings $ 5,200 $ 5,269 (1) 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. Credit Facility and Commercial Paper Borrowings 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. At March 31, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Credit Facility. At March 31, 2021, the Company's commercial paper borrowings were $25 million with a weighted average interest rate of 0.25 percent. At December 31, 2020, the Company's commercial paper borrowings were $50 million with a weighted average interest rate of 0.25 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 maximum debt covenants to reflect the higher cash balance to enhance liquidity due to, and the expected negative impact on operating results of, the COVID-19 coronavirus global pandemic ("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 March 31, 2021 and December 31, 2020. Fair Value of Borrowings Eastman has classified its total borrowings at March 31, 2021 and December 31, 2020 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 2020 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 commercial paper, equals the carrying value and is classified as Level 2. At March 31, 2021 and December 31, 2020, the fair value of total borrowings was $6.153 billion and $6.449 billion, respectively. The Company had no borrowings classified as Level 3 as of March 31, 2021 and December 31, 2020. |
DERIVATIVE AND NON-DERIVATIVE F
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 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 March 31, 2021 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 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 Ins truments The following table presents the notional amounts outstanding at March 31, 2021 and December 31, 2020 associated with Eastman's hedging programs. Notional Outstanding March 31, 2021 December 31, 2020 Derivatives designated as cash flow hedges: Foreign Exchange Forward and Option Contracts (in millions) EUR/USD (in EUR) €483 €521 Commodity Forward and Collar Contracts Energy (in million british thermal units) 9 17 Interest rate swaps for the future issuance of debt (in millions) $75 $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 €853 Non-derivatives designated as net investment hedges: Foreign Currency Net Investment Hedges (in millions) EUR/USD (in EUR) €1,245 €1,245 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 March 31, 2021 and December 31, 2020. 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 first quarter 2021 or 2020. 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 March 31, 2021 and December 31, 2020. The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis (Dollars in millions) Derivative Type Statements of Financial March 31, 2021 December 31, 2020 Derivatives designated as cash flow hedges: Commodity contracts Other current assets $ 1 $ 1 Foreign exchange contracts Other current assets 3 — Foreign exchange contracts Other noncurrent assets 2 — Forward starting interest rate swap contracts Other noncurrent assets 8 1 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 2 4 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other noncurrent assets 43 40 Total Derivative Assets $ 59 $ 47 Derivatives designated as cash flow hedges: Commodity contracts Payables and other current liabilities $ — $ 6 Foreign exchange contracts Payables and other current liabilities 6 21 Foreign exchange contracts Other long-term liabilities 3 14 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other long-term liabilities 23 51 Total Derivative Liabilities $ 32 $ 92 Total Net Derivative Assets (Liabilities) $ 27 $ (45) 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 at both March 31, 2021 and December 31, 2020, 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 2020 Annual Report on Form 10-K . As of March 31, 2021 and December 31, 2020, 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 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Long-term borrowings (1) $ 771 $ 772 $ (2) $ (1) (1) At March 31, 2021 and December 31, 2020, the cumulative amount of fair value hedging loss adjustment remaining for hedged liabilities for which hedge accounting has been discontinued was $4 million and $5 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 first quarter 2021 and 2020. 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) First Quarter First Quarter Hedging Relationships 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Commodity contracts $ 1 $ (9) $ — $ (1) Foreign exchange contracts 23 13 (5) 6 Forward starting interest rate and treasury lock swap contracts 7 1 (2) (2) Non-derivatives in net investment hedging relationships (pre-tax): Net investment hedges 69 33 — — Derivatives in net investment hedging relationships (pre-tax): Cross-currency interest rate swaps 42 18 — — Cross-currency interest rate swaps excluded component (11) 41 — — 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 quarter 2021 and 2020. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships First Quarter 2021 2020 (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 $ 2,409 $ 1,811 $ 50 $ 2,241 $ 1,664 $ 52 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 — — Derivatives designated as hedging instruments — — 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 — (1) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings (5) 6 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 gain of $5 million and $7 million during first quarter 2021 and 2020, 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 $129 million and $270 million at March 31, 2021 and December 31, 2020, respectively. Losses in AOCI decreased between March 31, 2021 and December 31, 2020 primarily as a result of a decrease in foreign currency exchange rates associated with the euro. If recognized, approximately $17 million in pre-tax losses, as of March 31, 2021, would be reclassified into earnings during the next 12 months. |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 Annual Report on Form 10-K . Components of net periodic benefit (credit) cost were as follows: First Quarter Pension Plans Other Postretirement Benefit Plans 2021 2020 2021 2020 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 7 $ 4 $ 7 $ 4 $ — $ — Interest cost 9 3 14 4 3 5 Expected return on assets (32) (9) (34) (8) (1) (1) Amortization of: Prior service credit, net — — — — (9) (10) Net periodic benefit (credit) cost $ (16) $ (2) $ (13) $ — $ (7) $ (6) |
LEASES AND OTHER COMMITMENTS
LEASES AND OTHER COMMITMENTS | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and December 31, 2020, operating right-to-use assets of $177 million and $185 million, respectively, are included as a part of "Other noncurrent assets" in the Unaudited Consolidated Statements of Financial Position and includes $9 million at both periods of assets previously classified as lease intangibles and $8 million and $9 million of prepaid lease assets, respectively. 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 March 31, 2021, reconciliation of lease payments and operating lease liabilities is provided below: (Dollars in millions) Operating lease liabilities Remainder of 2021 $ 46 2022 47 2023 33 2024 19 2025 12 2026 and beyond 28 Total lease payments 185 Less: amounts of lease payments representing interest 16 Present value of future lease payments 169 Less: current obligations under leases 55 Long-term lease obligations $ 114 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 second 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: First Quarter (Dollars in millions) 2021 2020 Lease costs: Operating lease costs $ 18 $ 19 Short-term lease costs 8 9 Sublease income (1) (1) Total $ 25 $ 27 Other operating lease information: Cash paid for amounts included in the measurement of lease liabilities $ 17 $ 18 Right-to-use assets obtained in exchange for new lease liabilities $ 8 $ 16 Weighted-average remaining lease term, in years 5 5 Weighted-average discount rate 3.5 % 3.9 % Other Commitments Supplier Purchase Obligations The Company had various purchase obligations at March 31, 2021, totaling approximately $3.1 billion over a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business. Guarantees Guarantees and claims also arise during the ordinary course of business from relationships with customers, suppliers, joint venture partners, and other parties when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Non-performance under a contract could trigger an obligation of the Company. The Company's current guarantees relate to intellectual property, environmental matters, and other indemnifications and have arisen through the normal course of business. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims, if they were to occur. These guarantees have terms up to 30 years with maximum potential future payments of approximately $25 million in the aggregate, with none of these guarantees being individually significant to the Company's operating results, financial position, or liquidity. Management's current expectation is that future payment or performance related to non-performance under guarantees is remote. |
ENVIRONMENTAL MATTERS AND ASSET
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 Annual Report on Form 10-K . The resolution of uncertainties related to environmental matters 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 the extended period of time that the obligations are expected to be satisfied, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will have a material adverse effect on the Company's future liquidity or financial position. The Company's net reserve for environmental contingencies was $282 million and $285 million at March 31, 2021 and December 31, 2020, respectively. Environmental Remediation and Environmental Asset Retirement Obligations The Company's net environmental reserve for environmental contingencies, including remediation costs and asset retirement obligations, is included as part of "Other noncurrent assets", "Payables and other current liabilities", and "Other long-term liabilities" in the Consolidated Statements of Financial Position as follows: (Dollars in millions) March 31, 2021 December 31, 2020 Environmental contingencies, current $ 15 $ 15 Environmental contingencies, long-term 267 270 Total $ 282 $ 285 Environmental Remediation Estimated future environmental expenditures for undiscounted remediation costs ranged from the best estimate or minimum of $255 million to the maximum of $497 million and from the best estimate or minimum of $257 million to the maximum of $501 million at March 31, 2021 and December 31, 2020, respectively. The best estimate or minimum estimated future environmental expenditures are considered to be probable and reasonably estimable and include the amounts recognized at both March 31, 2021 and December 31, 2020. 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 three months 2021 and full year 2020 are summarized below: (Dollars in millions) Environmental Remediation Liabilities Balance at December 31, 2019 $ 260 Changes in estimates recognized in earnings and other 7 Cash reductions (10) Balance at December 31, 2020 257 Changes in estimates recognized in earnings and other 1 Cash reductions (3) Balance at March 31, 2021 $ 255 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. Environmental asset retirement obligations consist of primarily 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 and $28 million at March 31, 2021 and December 31, 2020, respectively. 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 $51 million at both March 31, 2021 and December 31, 2020, and is included as part of "Other long-term liabilities" in the Unaudited Consolidated Statements of Financial Position. |
LEGAL MATTERS
LEGAL MATTERS | 3 Months Ended |
Mar. 31, 2021 | |
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 position, results of operations, or cash flows. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Reconciliations of the changes in stockholders' equity for first quarter 2021 and 2020 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, 2020 $ 2 $ 2,174 $ 8,080 $ (273) $ (3,960) $ 6,023 $ 85 $ 6,108 Net Earnings — — 274 — — 274 3 277 Cash Dividends Declared (1) ($0.69 per share) — — (94) — — (94) — (94) Other Comprehensive Income (Loss) — — — 25 — 25 — 25 Share Based Compensation Expense (2) — 22 — — — 22 — 22 Stock Option Exercises — 38 — — — 38 — 38 Other (3) — (15) — — — (15) (1) (16) Share Repurchase — — — — (40) (40) — (40) Distributions to noncontrolling interest — — — — — — (1) (1) Balance at March 31, 2021 $ 2 $ 2,219 $ 8,260 $ (248) $ (4,000) $ 6,233 $ 86 $ 6,319 (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 — — 258 — — 258 2 260 Cash Dividends Declared (1) ($0.66 per share) — — (90) — — (90) — (90) Other Comprehensive Income (Loss) — — — 17 — 17 — 17 Share Based Compensation Expense (2) — 15 — — — 15 — 15 Other (3) — (11) — — — (11) (1) (12) Share Repurchase — — — — (30) (30) — (30) Balance at March 31, 2020 $ 2 $ 2,109 $ 8,133 $ (197) $ (3,930) $ 6,117 $ 75 $ 6,192 (1) Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. (2) Share-based compensation expense is based on the fair value of share-based awards. (3) Additional paid-in capital includes value of shares withheld for employees' taxes on vesting of share-based compensation awards. 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, 2019 $ (264) $ 106 $ (55) $ (1) $ (214) Period change (29) (19) (11) — (59) Balance at December 31, 2020 (293) 87 (66) (1) (273) Period change 2 (7) 30 — 25 Balance at March 31, 2021 $ (291) $ 80 $ (36) $ (1) $ (248) 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: First Quarter 2021 2020 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ 2 $ 2 $ 19 $ 19 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (9) (7) (10) (7) Derivatives and hedging: Unrealized gain (loss) during period 33 25 10 7 Reclassification adjustment for (gains) losses included in net income, net 7 5 (3) (2) Total other comprehensive income (loss) $ 33 $ 25 $ 16 $ 17 |
EARNINGS AND DIVIDENDS PER SHAR
EARNINGS AND DIVIDENDS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
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: First Quarter (In millions, except per share amounts) 2021 2020 Numerator Earnings attributable to Eastman, net of tax $ 274 $ 258 Denominator Weighted average shares used for basic EPS 136.1 136.0 Dilutive effect of stock options and other awards 1.5 0.5 Weighted average shares used for diluted EPS 137.6 136.5 (Calculated using whole dollars and shares) EPS Basic $ 2.01 $ 1.90 Diluted $ 1.99 $ 1.89 Shares underlying stock options excluded from first quarter 2021 and 2020 calculations of diluted EPS were 327,782 and 3,921,686, 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 quarter 2021 and 2020 reflect share repurchases of 354,795 and 510,301, respectively. The Company declared cash dividends of $0.69 and $0.66 per share for first quarter 2021 and 2020, respectively. |
ASSETS IMPAIRMENTS AND RESTRUCT
ASSETS IMPAIRMENTS AND RESTRUCTURING | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
ASSET IMPAIRMENTS AND RESTRUCTURING | ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Dollars in millions) First Quarter Fixed Asset Impairments 2021 2020 Site optimizations AM - Performance films (1) $ — $ 4 AFP - Animal nutrition (2) — 3 — 7 Gain on Sale of Previously Impaired Assets Site optimizations AFP - Animal nutrition (2) (1) — (1) — Intangible Asset Impairments AFP - Customer relationships (3) — 2 — 2 Severance Charges CI & AFP - Singapore (4) — 1 Site optimizations AM - Advanced interlayers (5) 1 — AM - Performance films (1) — 3 AFP - Animal nutrition (2) — 1 1 5 Other Restructuring Costs CI & AFP - Singapore (4) 5 — Site optimizations AFP - Tire additives (6) 2 — 7 — Total $ 7 $ 14 (1) Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the previously reported closure of a performance films manufacturing facility in North America as part of ongoing site optimization. (2) Fixed asset impairments, net and severance in the Additives & Functional Products ("AFP") segment from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. (3) Intangible asset impairment charge in the AFP segment for customer relationships. (4) Severance charges in first quarter 2020 of $1 million in the Chemical Intermediates ("CI") segment and site closure costs in first quarter 2021 of $4 million and $1 million in the CI and AFP segments, respectively, resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site. Excluding the fixed asset impairments in 2019, restructuring charges of up to $50 million are expected for this closure, of which $6 million was recognized in 2020. (5) Severance in the AM segment due to the previously reported closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $4 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in first quarter 2021 related to the closure of this facility. Management expects total charges of up to $30 million for the closure of this facility, 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, of which $13 million was recognized in 2020. (6) Site closure costs in the AFP segment from the previously reported closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . 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 three months 2021 and full year 2020: (Dollars in millions) Balance at January 1, 2021 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at March 31, 2021 Non-cash charges $ — $ — $ — $ — $ — Severance costs 65 1 — (23) 43 Other restructuring costs 14 6 — (6) 14 Total $ 79 $ 7 $ — $ (29) $ 57 (Dollars in millions) Balance at January 1, 2020 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at December 31, 2020 Non-cash charges $ — $ 145 $ (145) $ — $ — Severance costs 17 65 1 (18) 65 Other restructuring costs 11 17 — (14) 14 Total $ 28 $ 227 $ (144) $ (32) $ 79 Substantially all severance costs remaining are expected to be applied to the reserves within one year. |
SHARE-BASED COMPENSATION AWARDS
SHARE-BASED COMPENSATION AWARDS | 3 Months Ended |
Mar. 31, 2021 | |
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 first quarter 2021 and 2020, $22 million and $15 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 of which $4 million and $3 million, respectively, was for stock options. The compensation expense is recognized over the substantive vesting period, which may be shorter time period than the stated vesting period for qualifying termination eligible employees as defined in the award notices. For first quarter 2021 and 2020, $2 million and $1 million, respectively, of stock option compensation expense was recognized due to qualifying termination eligibility preceding the requisite service period. The impact on first quarter 2021 and 2020 net earnings of $17 million and $11 million, respectively, is net of deferred tax expense related to share-based award compensation for each period. Stock Option Grants In first quarter 2021 and 2020, the number of stock options granted under the 2017 Omnibus Stock Compensation Plan was approximately 450 thousand and 622 thousand, respectively. Options have an exercise price equal to the closing price of the Company's stock on the date of grant. The term of options is 10 years with vesting periods that vary up to three years. Vesting usually occurs ratably over the vesting period or at the end of the vesting period. The Company utilizes the Black Scholes Merton option valuation model which relies on certain assumptions to estimate an option's fair value. The assumptions used in the determination of fair value for stock options granted in first quarter 2021 and 2020 are provided in the table below: First Quarter Assumptions 2021 2020 Expected volatility rate 28.99% 21.56% Expected dividend yield 3.58% 3.30% Average risk-free interest rate 0.95% 0.94% Expected term years 6.0 5.9 The grant date exercise price and fair value of options granted during first quarter 2021 were $109.26 and $19.81, respectively, and first quarter 2020 were $61.51 and $7.92, respectively. For options unvested at March 31, 2021, $7 million in compensation expense will be recognized over the next three years. Other Share-Based Compensation Awards In addition to stock option grants, the Company has awarded long-term performance shares, restricted stock and restricted stock units, and stock appreciation rights. The long-term performance share awards are based upon actual return on capital compared to a target return on capital and total stockholder return compared to a peer group ranking by total stockholder return over a three year performance period and pay out in unrestricted shares of common stock at the end of the performance period. The awards are valued using a Monte Carlo Simulation based model and vest pro-ratably over the three year performance period. The number of long-term performance share target awards during first quarter 2021 and 2020 for the 2021-2023 and 2020-2022 periods were approximately 311 thousand and 423 thousand, respectively. The target shares awarded are assumed to be 100 percent. At the end of the three-year performance period, the actual number of shares awarded can range from zero to 250 percent of the target shares based on the award notice. The number of restricted stock unit awards, which pay out in unrestricted shares of common stock at the end of the vesting and performance (if any) period, during first quarter 2021 and 2020 were approximately 109 thousand and 123 thousand, respectively. The fair value of a restricted stock unit award is equal to the closing stock price of the Company's stock on the award date and normally vests over a period of three years. In first quarter 2021 and 2020, $18 million and $12 million, respectively, was recognized as compensation expense before tax for these other share-based awards and was included in the total compensation expense noted above for all share-based awards. The unrecognized compensation expense before tax for these same type awards at March 31, 2021 was approximately $90 million and will be recognized primarily over a period of three years. 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 2020 Annual Report on Form 10-K . |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
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 Three Months 2021 2020 Other current assets $ 10 $ 7 Other noncurrent assets 1 9 Payables and other current liabilities 5 58 Long-term liabilities and equity 61 (3) Total $ 77 $ 71 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, equity investment dividends, prepaid insurance, miscellaneous deferrals, value-added taxes, and other miscellaneous accruals. |
SEGMENT AND REGIONAL SALES INFO
SEGMENT AND REGIONAL SALES INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 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 2020 Annual Report on Form 10-K . (Dollars in millions) First Quarter Sales by Segment 2021 2020 Additives & Functional Products $ 871 $ 822 Advanced Materials 716 615 Chemical Intermediates 605 592 Fibers 217 212 Total Sales $ 2,409 $ 2,241 (Dollars in millions) First Quarter Earnings (Loss) Before Interest and Taxes by Segment 2021 2020 Additives & Functional Products $ 135 $ 143 Advanced Materials 146 100 Chemical Intermediates 69 80 Fibers 45 53 Total Earnings Before Interest and Taxes by Operating Segment 395 376 Other Growth initiatives and businesses not allocated to operating segments (29) (23) Pension and other postretirement benefits income (expense), net not allocated to operating segments 27 21 Other income (charges), net not allocated to operating segments (4) (6) Total Earnings Before Interest and Taxes $ 389 $ 368 (Dollars in millions) March 31, December 31, Assets by Segment (1) 2021 2020 Additives & Functional Products $ 6,304 $ 6,238 Advanced Materials 4,392 4,345 Chemical Intermediates 2,643 2,614 Fibers 996 978 Total Assets by Operating Segment 14,335 14,175 Corporate Assets 1,860 1,908 Total Assets $ 16,195 $ 16,083 (1) Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. (Dollars in millions) First Quarter Sales by Customer Location 2021 2020 United States and Canada $ 1,004 $ 980 Asia Pacific 608 495 Europe, Middle East, and Africa 656 631 Latin America 141 135 Total Sales $ 2,409 $ 2,241 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 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 recently adopted accounting standards noted below. The December 31, 2020 financial position data included herein was derived from the consolidated financial statements included in the 2020 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") ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes : On January 1, 2021, Eastman adopted this update which is a part of the Financial Accounting Standards Board's ("FASB") initiative to reduce complexity in accounting standards. Adoption methods varied based on the specific tax items impacted. The adoption of this standard did not result in a material impact to 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: On January 1, 2021, Eastman prospectively adopted this update which provides 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. The adoption of this standard did not result in a material impact to the Company's financial statements and related disclosures. ASU 2021-01 Reference Rate Reform (Topic 848) : In January 2021, the FASB issued this update to clarify that certain optional expedients and exceptions under this topic for contract modifications and hedge accounting apply to derivatives instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result 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). This update was effective immediately upon release. As the Company has not experienced any reference rate reform modification to date, this update will be adopted on a prospective basis in the event of such modifications. Accounting Standards Issued But Not Adopted as of March 31, 2021 None applicable to Eastman. |
Off-Balance-Sheet Credit Exposure, Policy | Working Capital Management and Off Balance Sheet ArrangementsThe Company has an 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 routine 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 first quarter 2021 and 2020 were $289 million and $457 million, respectively. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | March 31, December 31, (Dollars in millions) 2021 2020 Finished goods $ 944 $ 891 Work in process 214 203 Raw materials and supplies 586 511 Total inventories at FIFO or average cost 1,744 1,605 Less: LIFO reserve 239 226 Total inventories $ 1,505 $ 1,379 |
PAYABLES AND OTHER CURRENT LI_2
PAYABLES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of payables and other current liabilities | March 31, December 31, (Dollars in millions) 2021 2020 Trade creditors $ 976 $ 799 Accrued payroll and variable compensation 143 228 Accrued taxes 143 178 Post-employment obligations 106 138 Other 324 346 Total payables and other current liabilities $ 1,692 $ 1,689 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | First Quarter (Dollars in millions) 2021 2020 $ % $ % Provision for income taxes and tax rate $ 62 18 % $ 56 18 % |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Borrowings | March 31, December 31, (Dollars in millions) 2021 2020 Borrowings consisted of: 3.5% notes due December 2021 $ 299 $ 299 3.6% notes due August 2022 745 744 1.50% notes due May 2023 (1) 878 919 7 1/4% debentures due January 2024 198 198 7 5/8% debentures due June 2024 43 43 3.8% notes due March 2025 699 701 1.875% notes due November 2026 (1) 582 609 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 25 50 Total borrowings 5,524 5,618 Borrowings due within one year 324 349 Long-term borrowings $ 5,200 $ 5,269 |
DERIVATIVE AND NON-DERIVATIVE_2
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Cumulative basis adjustments for fair value hedges on balance sheet [Table Text Block] | As of March 31, 2021 and December 31, 2020, 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 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Long-term borrowings (1) $ 771 $ 772 $ (2) $ (1) (1) At March 31, 2021 and December 31, 2020, the cumulative amount of fair value hedging loss adjustment remaining for hedged liabilities for which hedge accounting has been discontinued was $4 million and $5 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 first quarter 2021 and 2020. Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships First Quarter 2021 2020 (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 $ 2,409 $ 1,811 $ 50 $ 2,241 $ 1,664 $ 52 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 — — Derivatives designated as hedging instruments — — 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 — (1) Foreign Exchange Contracts: Amount reclassified from AOCI into earnings (5) 6 |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table presents the notional amounts outstanding at March 31, 2021 and December 31, 2020 associated with Eastman's hedging programs. Notional Outstanding March 31, 2021 December 31, 2020 Derivatives designated as cash flow hedges: Foreign Exchange Forward and Option Contracts (in millions) EUR/USD (in EUR) €483 €521 Commodity Forward and Collar Contracts Energy (in million british thermal units) 9 17 Interest rate swaps for the future issuance of debt (in millions) $75 $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 €853 Non-derivatives designated as net investment hedges: Foreign Currency Net Investment Hedges (in millions) EUR/USD (in EUR) €1,245 €1,245 |
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 first quarter 2021 and 2020. 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) First Quarter First Quarter Hedging Relationships 2021 2020 2021 2020 Derivatives in cash flow hedging relationships: Commodity contracts $ 1 $ (9) $ — $ (1) Foreign exchange contracts 23 13 (5) 6 Forward starting interest rate and treasury lock swap contracts 7 1 (2) (2) Non-derivatives in net investment hedging relationships (pre-tax): Net investment hedges 69 33 — — Derivatives in net investment hedging relationships (pre-tax): Cross-currency interest rate swaps 42 18 — — Cross-currency interest rate swaps excluded component (11) 41 — — |
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 March 31, 2021 and December 31, 2020. The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis (Dollars in millions) Derivative Type Statements of Financial March 31, 2021 December 31, 2020 Derivatives designated as cash flow hedges: Commodity contracts Other current assets $ 1 $ 1 Foreign exchange contracts Other current assets 3 — Foreign exchange contracts Other noncurrent assets 2 — Forward starting interest rate swap contracts Other noncurrent assets 8 1 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 2 4 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other noncurrent assets 43 40 Total Derivative Assets $ 59 $ 47 Derivatives designated as cash flow hedges: Commodity contracts Payables and other current liabilities $ — $ 6 Foreign exchange contracts Payables and other current liabilities 6 21 Foreign exchange contracts Other long-term liabilities 3 14 Derivatives designated as net investment hedges: Cross-currency interest rate swaps Other long-term liabilities 23 51 Total Derivative Liabilities $ 32 $ 92 Total Net Derivative Assets (Liabilities) $ 27 $ (45) |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost | Components of net periodic benefit (credit) cost were as follows: First Quarter Pension Plans Other Postretirement Benefit Plans 2021 2020 2021 2020 (Dollars in millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 7 $ 4 $ 7 $ 4 $ — $ — Interest cost 9 3 14 4 3 5 Expected return on assets (32) (9) (34) (8) (1) (1) Amortization of: Prior service credit, net — — — — (9) (10) Net periodic benefit (credit) cost $ (16) $ (2) $ (13) $ — $ (7) $ (6) |
LEASES AND OTHER COMMITMENTS (T
LEASES AND OTHER COMMITMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of March 31, 2021, reconciliation of lease payments and operating lease liabilities is provided below: (Dollars in millions) Operating lease liabilities Remainder of 2021 $ 46 2022 47 2023 33 2024 19 2025 12 2026 and beyond 28 Total lease payments 185 Less: amounts of lease payments representing interest 16 Present value of future lease payments 169 Less: current obligations under leases 55 Long-term lease obligations $ 114 |
Lease, Cost [Table Text Block] | Lease costs during the period and other information is provided below: First Quarter (Dollars in millions) 2021 2020 Lease costs: Operating lease costs $ 18 $ 19 Short-term lease costs 8 9 Sublease income (1) (1) Total $ 25 $ 27 Other operating lease information: Cash paid for amounts included in the measurement of lease liabilities $ 17 $ 18 Right-to-use assets obtained in exchange for new lease liabilities $ 8 $ 16 Weighted-average remaining lease term, in years 5 5 Weighted-average discount rate 3.5 % 3.9 % |
ENVIRONMENTAL MATTERS AND ASS_2
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accrual for Environmental Loss Contingencies Disclosure [Abstract] | |
Schedule of environmental liabilities, current and non-current | (Dollars in millions) March 31, 2021 December 31, 2020 Environmental contingencies, current $ 15 $ 15 Environmental contingencies, long-term 267 270 Total $ 282 $ 285 |
Schedule of changes to environmental remediation liabilities | Changes in the reserves for environmental remediation liabilities during first three months 2021 and full year 2020 are summarized below: (Dollars in millions) Environmental Remediation Liabilities Balance at December 31, 2019 $ 260 Changes in estimates recognized in earnings and other 7 Cash reductions (10) Balance at December 31, 2020 257 Changes in estimates recognized in earnings and other 1 Cash reductions (3) Balance at March 31, 2021 $ 255 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of the changes in stockholders' equity | Reconciliations of the changes in stockholders' equity for first quarter 2021 and 2020 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, 2020 $ 2 $ 2,174 $ 8,080 $ (273) $ (3,960) $ 6,023 $ 85 $ 6,108 Net Earnings — — 274 — — 274 3 277 Cash Dividends Declared (1) ($0.69 per share) — — (94) — — (94) — (94) Other Comprehensive Income (Loss) — — — 25 — 25 — 25 Share Based Compensation Expense (2) — 22 — — — 22 — 22 Stock Option Exercises — 38 — — — 38 — 38 Other (3) — (15) — — — (15) (1) (16) Share Repurchase — — — — (40) (40) — (40) Distributions to noncontrolling interest — — — — — — (1) (1) Balance at March 31, 2021 $ 2 $ 2,219 $ 8,260 $ (248) $ (4,000) $ 6,233 $ 86 $ 6,319 (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 — — 258 — — 258 2 260 Cash Dividends Declared (1) ($0.66 per share) — — (90) — — (90) — (90) Other Comprehensive Income (Loss) — — — 17 — 17 — 17 Share Based Compensation Expense (2) — 15 — — — 15 — 15 Other (3) — (11) — — — (11) (1) (12) Share Repurchase — — — — (30) (30) — (30) Balance at March 31, 2020 $ 2 $ 2,109 $ 8,133 $ (197) $ (3,930) $ 6,117 $ 75 $ 6,192 (1) Cash dividends declared consists of cash dividends paid and dividends declared but unpaid. (2) Share-based compensation expense is based on the fair value of share-based awards. (3) Additional paid-in capital includes value of shares withheld for employees' taxes on vesting of share-based compensation awards. |
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, 2019 $ (264) $ 106 $ (55) $ (1) $ (214) Period change (29) (19) (11) — (59) Balance at December 31, 2020 (293) 87 (66) (1) (273) Period change 2 (7) 30 — 25 Balance at March 31, 2021 $ (291) $ 80 $ (36) $ (1) $ (248) |
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: First Quarter 2021 2020 (Dollars in millions) Before Tax Net of Tax Before Tax Net of Tax Other comprehensive income (loss) Change in cumulative translation adjustment $ 2 $ 2 $ 19 $ 19 Defined benefit pension and other postretirement benefit plans: Amortization of unrecognized prior service credits (9) (7) (10) (7) Derivatives and hedging: Unrealized gain (loss) during period 33 25 10 7 Reclassification adjustment for (gains) losses included in net income, net 7 5 (3) (2) Total other comprehensive income (loss) $ 33 $ 25 $ 16 $ 17 |
EARNINGS AND DIVIDENDS PER SH_2
EARNINGS AND DIVIDENDS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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: First Quarter (In millions, except per share amounts) 2021 2020 Numerator Earnings attributable to Eastman, net of tax $ 274 $ 258 Denominator Weighted average shares used for basic EPS 136.1 136.0 Dilutive effect of stock options and other awards 1.5 0.5 Weighted average shares used for diluted EPS 137.6 136.5 (Calculated using whole dollars and shares) EPS Basic $ 2.01 $ 1.90 Diluted $ 1.99 $ 1.89 |
ASSETS IMPAIRMENTS AND RESTRU_2
ASSETS IMPAIRMENTS AND RESTRUCTURING (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
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 three months 2021 and full year 2020: (Dollars in millions) Balance at January 1, 2021 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at March 31, 2021 Non-cash charges $ — $ — $ — $ — $ — Severance costs 65 1 — (23) 43 Other restructuring costs 14 6 — (6) 14 Total $ 79 $ 7 $ — $ (29) $ 57 (Dollars in millions) Balance at January 1, 2020 Provision/ Adjustments Non-cash Reductions/ Cash Reductions Balance at December 31, 2020 Non-cash charges $ — $ 145 $ (145) $ — $ — Severance costs 17 65 1 (18) 65 Other restructuring costs 11 17 — (14) 14 Total $ 28 $ 227 $ (144) $ (32) $ 79 |
Restructuring and Related Costs [Table Text Block] | (Dollars in millions) First Quarter Fixed Asset Impairments 2021 2020 Site optimizations AM - Performance films (1) $ — $ 4 AFP - Animal nutrition (2) — 3 — 7 Gain on Sale of Previously Impaired Assets Site optimizations AFP - Animal nutrition (2) (1) — (1) — Intangible Asset Impairments AFP - Customer relationships (3) — 2 — 2 Severance Charges CI & AFP - Singapore (4) — 1 Site optimizations AM - Advanced interlayers (5) 1 — AM - Performance films (1) — 3 AFP - Animal nutrition (2) — 1 1 5 Other Restructuring Costs CI & AFP - Singapore (4) 5 — Site optimizations AFP - Tire additives (6) 2 — 7 — Total $ 7 $ 14 (1) Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the previously reported closure of a performance films manufacturing facility in North America as part of ongoing site optimization. (2) Fixed asset impairments, net and severance in the Additives & Functional Products ("AFP") segment from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. (3) Intangible asset impairment charge in the AFP segment for customer relationships. (4) Severance charges in first quarter 2020 of $1 million in the Chemical Intermediates ("CI") segment and site closure costs in first quarter 2021 of $4 million and $1 million in the CI and AFP segments, respectively, resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site. Excluding the fixed asset impairments in 2019, restructuring charges of up to $50 million are expected for this closure, of which $6 million was recognized in 2020. (5) Severance in the AM segment due to the previously reported closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $4 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in first quarter 2021 related to the closure of this facility. Management expects total charges of up to $30 million for the closure of this facility, 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, of which $13 million was recognized in 2020. (6) Site closure costs in the AFP segment from the previously reported closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . |
SHARE-BASED COMPENSATION AWAR_2
SHARE-BASED COMPENSATION AWARDS SHARE-BASED COMPENSATION AWARDS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used in the determination of fair value for stock options granted in first quarter 2021 and 2020 are provided in the table below: First Quarter Assumptions 2021 2020 Expected volatility rate 28.99% 21.56% Expected dividend yield 3.58% 3.30% Average risk-free interest rate 0.95% 0.94% Expected term years 6.0 5.9 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 Three Months 2021 2020 Other current assets $ 10 $ 7 Other noncurrent assets 1 9 Payables and other current liabilities 5 58 Long-term liabilities and equity 61 (3) Total $ 77 $ 71 |
SEGMENT AND REGIONAL SALES IN_2
SEGMENT AND REGIONAL SALES INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information Disclosure | (Dollars in millions) First Quarter Sales by Segment 2021 2020 Additives & Functional Products $ 871 $ 822 Advanced Materials 716 615 Chemical Intermediates 605 592 Fibers 217 212 Total Sales $ 2,409 $ 2,241 (Dollars in millions) First Quarter Earnings (Loss) Before Interest and Taxes by Segment 2021 2020 Additives & Functional Products $ 135 $ 143 Advanced Materials 146 100 Chemical Intermediates 69 80 Fibers 45 53 Total Earnings Before Interest and Taxes by Operating Segment 395 376 Other Growth initiatives and businesses not allocated to operating segments (29) (23) Pension and other postretirement benefits income (expense), net not allocated to operating segments 27 21 Other income (charges), net not allocated to operating segments (4) (6) Total Earnings Before Interest and Taxes $ 389 $ 368 (Dollars in millions) March 31, December 31, Assets by Segment (1) 2021 2020 Additives & Functional Products $ 6,304 $ 6,238 Advanced Materials 4,392 4,345 Chemical Intermediates 2,643 2,614 Fibers 996 978 Total Assets by Operating Segment 14,335 14,175 Corporate Assets 1,860 1,908 Total Assets $ 16,195 $ 16,083 (1) Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. (Dollars in millions) First Quarter Sales by Customer Location 2021 2020 United States and Canada $ 1,004 $ 980 Asia Pacific 608 495 Europe, Middle East, and Africa 656 631 Latin America 141 135 Total Sales $ 2,409 $ 2,241 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Standards (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Receivable Sold Under Factoring Arrangement | $ 289 | $ 457 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Mar. 31, 2021 | |
At FIFO or average cost (approximates current cost) [Abstract] | ||
Finished goods | $ 891 | $ 944 |
Work in process | 203 | 214 |
Raw materials and supplies | 511 | 586 |
Total inventories at FIFO or average cost | 1,605 | 1,744 |
Less: LIFO reserve | 226 | 239 |
Total inventories | $ 1,379 | $ 1,505 |
Inventories valued on the LIFO method | 50.00% | 45.00% |
LIFO decrement | $ 13 |
PAYABLES AND OTHER CURRENT LI_3
PAYABLES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Trade creditors | $ 976 | $ 799 |
Accrued payroll and variable compensation | 143 | 228 |
Accrued taxes | 143 | 178 |
Post-employment obligations | 106 | 138 |
Other | 324 | 346 |
Total payables and other current liabilities | $ 1,692 | $ 1,689 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | |||
Provision for income taxes | $ 62 | $ 56 | |
Effective Income Tax Rate Reconciliation, Percent | 18.00% | 18.00% | |
Unrecognized Tax Benefits | $ 256 | $ 257 | |
Minimum [Member] | |||
Income Tax Examination [Line Items] | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 70 |
BORROWINGS Part 1 (Details) Sch
BORROWINGS Part 1 (Details) Schedule of Long-term Debt Instruments - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Debt Instrument [Line Items] | |||
Total Borrowings | $ 5,524 | $ 5,618 | |
Borrowings due within one year | 324 | 349 | |
Long-term borrowings | 5,200 | 5,269 | |
3.5% Notes Due Dec 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 299 | 299 | |
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 | $ 745 | 744 | |
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 | [1] | $ 878 | 919 |
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 | $ 699 | 701 | |
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 | [1] | $ 582 | 609 |
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 | $ 25 | $ 50 | |
[1] | 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 | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Credit Facilities [Abstract] | ||
Borrowings due within one year | $ 324 | $ 349 |
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 0 | 0 |
Revolving Credit Facility [Member] | ||
Credit Facilities [Abstract] | ||
Line of Credit Facility, Expiration Date | Oct. 31, 2023 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500 | |
Commercial Paper [Member] | ||
Credit Facilities [Abstract] | ||
Commercial Paper | $ 25 | $ 50 |
Debt, Weighted Average Interest Rate | 0.25% | 0.25% |
A/R Facility [Member] | ||
Credit Facilities [Abstract] | ||
Line of Credit Facility, Expiration Date | Apr. 30, 2020 |
BORROWINGS Part 3 (Details) Fai
BORROWINGS Part 3 (Details) Fair Value - Fair Value, Recurring [Member] - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 6,153 | $ 6,449 |
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, MMBTU in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2021USD ($)MMBTU | Mar. 31, 2021EUR (€) | Dec. 31, 2020USD ($)MMBTU | Dec. 31, 2020EUR (€) | Mar. 31, 2021EUR (€)MMBTU | Dec. 31, 2020EUR (€)MMBTU | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | |
Foreign Exchange Contract [Member] | Euro Member Countries, Euro | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | € | € 483 | € 521 | |||||||
Energy Related Derivative [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Nonmonetary Notional Amount | MMBTU | 9 | 17 | 9 | 17 | |||||
Interest Rate Contract [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | $ 75 | $ 75 | |||||||
Interest Rate Contract [Member] | Fair Value Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | 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 | € 1,245 | $ 1,500 | € 1,245 | |||||
Expected Debt Issuance Aug 2020 [Member] | Interest Rate Contract [Member] | Cash Flow Hedging [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative, Notional Amount | $ 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 | € 853 | |||||||
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 | ||||||||
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 |
DERIVATIVE AND NON-DERIVATIVE_4
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Part 2 (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021EUR (€) | Mar. 31, 2021USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2020USD ($) | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||||
Derivative Assets [Abstract] | ||||
Derivative Asset, Fair Value, Gross Asset | $ 59 | $ 47 | ||
Derivative Liabilities [Abstract] | ||||
Derivative Liability, Fair Value, Gross Liability | 32 | 92 | ||
Derivative, Fair Value, Net | 27 | (45) | ||
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 | 1 | 1 | ||
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 | 0 | 6 | ||
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 | 3 | 0 | ||
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 | 2 | 0 | ||
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 | 6 | 21 | ||
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 | 3 | 14 | ||
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 | 2 | 4 | ||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 8 | 1 | ||
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 | 43 | 40 | ||
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 | 23 | 51 | ||
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 | € 1,245 | 1,500 | € 1,245 | 1,500 |
Fair Value Hedging [Member] | Interest Rate Contract [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Hedged Liability, Fair Value Hedge | 771 | 772 | ||
Derivative Liabilities [Abstract] | ||||
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | 4 | 5 | ||
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | $ (2) | $ (1) |
DERIVATIVE AND NON-DERIVATIVE_5
DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS Part 3 (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Sales | $ 2,409 | $ 2,241 | |
Cost of sales | 1,811 | 1,664 | |
Net interest expense | 50 | 52 | |
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 | 30 | $ (11) | |
Other Comprehensive Income (Loss), Derivatives and Non-derivatives Qualifying as Hedges, before Tax [Abstract] | |||
Change in cumulative translation adjustment, before tax | 2 | 19 | |
Summary of Derivative Instruments [Abstract] | |||
Monetized positions and mark to market in accumulated other comprehensive income before tax | 129 | 270 | |
Price Risk Cash Flow Hedge Unrealized Gain to be Reclassified During Next 12 Months | (17) | ||
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 | 1 | (9) | |
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 | 0 | (1) | |
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 | 23 | 13 | |
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 | (5) | 6 | |
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 | 7 | 1 | |
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) | |
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) | (4) | $ (5) | |
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge | 0 | 0 | |
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 | 0 | |
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 | 69 | 33 | |
Not Designated as Hedging Instrument [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 5 | 7 | |
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 | 42 | 18 | |
AOCI, Derivative Qualifying as Hedge, Excluded Component | $ (11) | $ 41 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Postretirement Benefits Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 3 | 5 |
Expected return on assets | (1) | (1) |
Prior service credit, net | (9) | (10) |
Net periodic benefit (credit) cost | (7) | (6) |
UNITED STATES | Pension Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 7 | 7 |
Interest cost | 9 | 14 |
Expected return on assets | (32) | (34) |
Prior service credit, net | 0 | 0 |
Net periodic benefit (credit) cost | (16) | (13) |
Foreign Plan [Member] | Pension Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 4 | 4 |
Interest cost | 3 | 4 |
Expected return on assets | (9) | (8) |
Prior service credit, net | 0 | 0 |
Net periodic benefit (credit) cost | $ (2) | $ 0 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |||
Operating Lease, Right-of-Use Asset | $ 177 | $ 185 | |
Operating Lease, Right-of-Use Asset, Reclassified | 9 | 9 | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | 46 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 47 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 33 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 19 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 12 | ||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 28 | ||
Lessee, Operating Lease, Liability, Payments, Due | 185 | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 16 | ||
Operating Lease, Liability | 169 | ||
Operating Lease, Liability, Current | 55 | ||
Operating Lease, Liability, Noncurrent | 114 | ||
Lease, Cost [Abstract] | |||
Operating Lease, Cost | 18 | $ 19 | |
Short-term Lease, Cost | 8 | 9 | |
Sublease Income | (1) | (1) | |
Lease, Cost | 25 | 27 | |
Operating Lease, Payments | 17 | 18 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 8 | $ 16 | |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 5 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.50% | 3.90% | |
Other Prepaid Expense, Current | $ 8 | $ 9 |
COMMITMENTS (Details)
COMMITMENTS (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Other Commitments [Line Items] | |
Unrecorded Unconditional Purchase Obligation, Term | 30 years |
Guarantees [Abstract] | |
Term, other guarantees | 30 years |
Maximum potential future payment, other guarantees | $ 25 |
Obligations | |
Other Commitments [Line Items] | |
Unrecorded Unconditional Purchase Obligation, Purchases | $ 3,100 |
ENVIRONMENTAL MATTERS AND ASS_3
ENVIRONMENTAL MATTERS AND ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning of period | $ 285 | |
End of period | 282 | $ 285 |
Accrual for Environmental Loss Contingencies, Balance Sheet Classification [Abstract] | ||
Accrued Environmental Loss Contingencies, Current | 15 | 15 |
Accrued Environmental Loss Contingencies, Noncurrent | 267 | 270 |
Environmental Remediation [Member] | ||
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning of period | 257 | 260 |
Changes in estimates recognized in earnings and other | 1 | 7 |
Cash reductions | (3) | (10) |
End of period | $ 255 | 257 |
Expected Payment Period of Environmental Contingencies | approximately 30 years | |
Environmental Remediation [Member] | Minimum [Member] | ||
Site Contingency [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 255 | 257 |
Environmental Remediation [Member] | Maximum [Member] | ||
Site Contingency [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | 497 | 501 |
Environmental ARO [Member] | ||
Site Contingency [Line Items] | ||
Best Estimate Accrued to-date For Asset Retirement Obligation | 27 | 28 |
Non Environmental ARO [Member] | ||
Site Contingency [Line Items] | ||
Best Estimate Accrued to-date For Asset Retirement Obligation | $ 51 | $ 51 |
STOCKHOLDERS' EQUITY Part 1 (De
STOCKHOLDERS' EQUITY Part 1 (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Stockholders' Equity Note [Abstract] | |||||
Dividends, Per Share | $ 0.69 | $ 0.66 | |||
Stockholders' Equity Attributable to Parent | $ 6,233 | $ 6,023 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 6,319 | $ 6,192 | 6,108 | $ 6,032 | |
Net earnings attributable to Eastman | 274 | 258 | |||
Net earnings attributable to noncontrolling interest | 3 | 2 | |||
Net earnings including noncontrolling interest | 277 | 260 | |||
Cash dividends declared | (94) | (90) | |||
Other Comprehensive Income | 25 | 17 | (59) | ||
Share-based Compensation Expense | 22 | 15 | |||
Stock Option Exercises | 38 | ||||
Other | (16) | (12) | |||
Share Repurchases | (40) | (30) | |||
Distributions to Noncontrolling Interest | (1) | ||||
Retained earnings | 8,260 | 8,133 | 8,080 | 7,965 | |
Common Stock [Member] | |||||
Stockholders' Equity Attributable to Parent | 2 | 2 | 2 | 2 | |
Net earnings attributable to Eastman | 0 | 0 | |||
Cash dividends declared | 0 | 0 | |||
Other Comprehensive Income | 0 | 0 | |||
Share-based Compensation Expense | 0 | 0 | |||
Stock Option Exercises | 0 | ||||
Other | 0 | 0 | |||
Share Repurchases | 0 | 0 | |||
Distributions to Noncontrolling Interest | 0 | ||||
Additional Paid-in Capital [Member] | |||||
Stockholders' Equity Attributable to Parent | 2,219 | 2,109 | 2,174 | 2,105 | |
Net earnings attributable to Eastman | 0 | 0 | |||
Cash dividends declared | 0 | 0 | |||
Other Comprehensive Income | 0 | 0 | |||
Share-based Compensation Expense | [1] | 22 | 15 | ||
Stock Option Exercises | 38 | ||||
Other | [2] | (15) | (11) | ||
Share Repurchases | 0 | 0 | |||
Distributions to Noncontrolling Interest | 0 | ||||
Retained Earnings [Member] | |||||
Stockholders' Equity Attributable to Parent | 8,260 | 8,133 | 8,080 | 7,965 | |
Net earnings attributable to Eastman | 274 | 258 | |||
Cash dividends declared | [3] | (94) | (90) | ||
Other Comprehensive Income | 0 | 0 | |||
Share-based Compensation Expense | 0 | 0 | |||
Stock Option Exercises | 0 | ||||
Other | 0 | 0 | |||
Share Repurchases | 0 | 0 | |||
Distributions to Noncontrolling Interest | 0 | ||||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||
Stockholders' Equity Attributable to Parent | (248) | (197) | (273) | (214) | |
Net earnings attributable to Eastman | 0 | 0 | |||
Cash dividends declared | 0 | 0 | |||
Other Comprehensive Income | 25 | 17 | |||
Share-based Compensation Expense | 0 | 0 | |||
Stock Option Exercises | 0 | ||||
Other | 0 | 0 | |||
Share Repurchases | 0 | 0 | |||
Distributions to Noncontrolling Interest | 0 | ||||
Treasury Stock [Member] | |||||
Stockholders' Equity Attributable to Parent | (4,000) | (3,930) | (3,960) | (3,900) | |
Net earnings attributable to Eastman | 0 | 0 | |||
Cash dividends declared | 0 | 0 | |||
Other Comprehensive Income | 0 | 0 | |||
Share-based Compensation Expense | 0 | 0 | |||
Stock Option Exercises | 0 | ||||
Other | 0 | 0 | |||
Share Repurchases | (40) | (30) | |||
Distributions to Noncontrolling Interest | 0 | ||||
Parent [Member] | |||||
Stockholders' Equity Attributable to Parent | 6,233 | 6,117 | 6,023 | 5,958 | |
Net earnings attributable to Eastman | 274 | 258 | |||
Cash dividends declared | [3] | (94) | (90) | ||
Other Comprehensive Income | 25 | 17 | |||
Share-based Compensation Expense | [1] | 22 | 15 | ||
Stock Option Exercises | 38 | ||||
Other | [2] | (15) | (11) | ||
Share Repurchases | (40) | (30) | |||
Distributions to Noncontrolling Interest | 0 | ||||
Noncontrolling Interest [Member] | |||||
Stockholders' Equity Attributable to Parent | 86 | 75 | $ 85 | $ 74 | |
Net earnings attributable to noncontrolling interest | 3 | 2 | |||
Cash dividends declared | 0 | 0 | |||
Other Comprehensive Income | 0 | 0 | |||
Share-based Compensation Expense | 0 | 0 | |||
Stock Option Exercises | 0 | ||||
Other | (1) | (1) | |||
Share Repurchases | 0 | $ 0 | |||
Distributions to Noncontrolling Interest | $ (1) | ||||
[1] | Share-based compensation expense is based on the fair value of share-based awards. | ||||
[2] | Additional paid-in capital includes value of shares withheld for employees' taxes on vesting of share-based compensation awards. | ||||
[3] | 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 | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Cumulative Translation Adjustment | $ (291) | $ (293) | $ (264) | |
Change in cumulative translation adjustment | 2 | $ 19 | (29) | |
Benefit Plans Unrecognized Prior Service Credits | 80 | 87 | 106 | |
Change in Benefit Plans Unrecognized Prior Service Credits | (7) | (19) | ||
Unrealized Gains (Losses) on Derivative Instruments | (36) | (66) | (55) | |
Change in Unrealized Gains (Losses) on Derivative Instruments | 30 | (11) | ||
Unrealized Losses on Investments | (1) | (1) | (1) | |
Change in Unrealized Losses on Investments | 0 | 0 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (248) | (273) | $ (214) | |
Total other comprehensive income (loss), net of tax | $ 25 | $ 17 | $ (59) |
STOCKHOLDERS' EQUITY Part 3 OCI
STOCKHOLDERS' EQUITY Part 3 OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Change in cumulative translation adjustment, before tax | $ 2 | $ 19 | |
Amortization of unrecognized prior service credits included in net periodic costs, before tax | (9) | (10) | |
Unrealized gain (loss), before tax | 33 | 10 | |
Reclassification adjustment for (gain) loss included in net income, before tax | 7 | (3) | |
Total other comprehensive income (loss), before tax | 33 | 16 | |
Other comprehensive income (loss), net of tax: | |||
Change in cumulative translation adjustment | 2 | 19 | $ (29) |
Amortization of unrecognized prior service credits | (7) | (7) | |
Unrealized gain (loss) | 25 | 7 | |
Reclassification adjustment for (gains) losses included in net income, net | 5 | (2) | |
Total other comprehensive income (loss), net of tax | $ 25 | $ 17 | $ (59) |
EARNINGS AND DIVIDENDS PER SH_3
EARNINGS AND DIVIDENDS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net earnings attributable to Eastman | $ 274 | $ 258 |
Weighted average shares used for basic EPS (in shares) | 136,100,000 | 136,000,000 |
Dilutive effect of stock options and other awards | 1,500,000 | 500,000 |
Weighted average shares used for diluted EPS (in shares) | 137,600,000 | 136,500,000 |
Earnings Per Share, Basic | $ 2.01 | $ 1.90 |
Earnings Per Share, Diluted | $ 1.99 | $ 1.89 |
Underlying options excluded from the computation of diluted earnings per share (in shares) | 327,782 | 3,921,686 |
Shares repurchased (in shares) | 354,795 | 510,301 |
Cash dividends declared (per share) | $ 0.69 | $ 0.66 |
ASSETS IMPAIRMENTS AND RESTRU_3
ASSETS IMPAIRMENTS AND RESTRUCTURING (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 2 | ||
Impairment of Long-Lived Assets to be Disposed of | 0 | 7 | ||
Other Asset Impairment Charges | (1) | 0 | ||
Severance Costs | 1 | 5 | ||
Business Exit Costs | 7 | 0 | ||
Total | 7 | 14 | ||
Restructuring Charge [Roll Forward] | ||||
Balance at Beginning of Period | 79 | 28 | $ 28 | |
Provision / Adjustments | 7 | 227 | ||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Non-cash Reductions | (144) | |||
Cash Reductions | (29) | (32) | ||
Balance at End of Period | 57 | 79 | ||
Facility Closing [Member] | ||||
Restructuring Charge [Roll Forward] | ||||
Balance at Beginning of Period | 14 | 11 | 11 | |
Provision / Adjustments | 6 | 17 | ||
Restructuring Reserve, Accrual Adjustment | 0 | 0 | ||
Cash Reductions | (6) | (14) | ||
Balance at End of Period | 14 | 14 | ||
Employee Severance [Member] | ||||
Restructuring Charge [Roll Forward] | ||||
Balance at Beginning of Period | 65 | 17 | 17 | |
Provision / Adjustments | 1 | 65 | ||
Restructuring Reserve, Accrual Adjustment | 0 | 1 | ||
Cash Reductions | (23) | (18) | ||
Balance at End of Period | 43 | 65 | ||
Non-Cash Charges [Member] | ||||
Restructuring Charge [Roll Forward] | ||||
Balance at Beginning of Period | 0 | 0 | 0 | |
Provision / Adjustments | 0 | 145 | ||
Non-cash Reductions | 0 | (145) | ||
Cash Reductions | 0 | 0 | ||
Balance at End of Period | 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 | 2 | |
Site Closure North America 2020 [Member] | Advanced Materials [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of Long-Lived Assets to be Disposed of | [2] | 0 | 4 | |
Severance Costs | [2] | 0 | 3 | |
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 | [3] | 0 | 3 | |
Other Asset Impairment Charges | [3] | (1) | 0 | |
Severance Costs | [3] | 0 | 1 | |
Site Closure Singapore 2019 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | [4] | 0 | 1 | |
Restructuring Charge [Roll Forward] | ||||
Other Restructuring Costs | [4] | 5 | 0 | |
Restructuring and Related Cost, Expected Cost | 50 | |||
Restructuring Charges | 6 | |||
Site Closure Singapore 2019 [Member] | Additives And Functional Products [Member] | ||||
Restructuring Charge [Roll Forward] | ||||
Other Restructuring Costs | 1 | |||
Site Closure Singapore 2019 [Member] | Chemical Intermediates [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | 1 | |||
Restructuring Charge [Roll Forward] | ||||
Other Restructuring Costs | 4 | |||
Site Closure Asia Pacific Tire Additives [Member] | Additives And Functional Products [Member] | ||||
Restructuring Charge [Roll Forward] | ||||
Other Restructuring Costs | [5] | 2 | 0 | |
Site Closure Advanced Interlayers North America 2020 | Advanced Materials [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | [6] | 1 | $ 0 | |
Restructuring Charge [Roll Forward] | ||||
Restructuring and Related Cost, Accelerated Depreciation | 4 | |||
Restructuring and Related Cost, Expected Cost | $ 30 | |||
Restructuring Charges | $ 13 | |||
[1] | Intangible asset impairment charge in the AFP segment for customer relationships. | |||
[2] | Fixed asset impairments and severance in the Advanced Materials ("AM") segment from the previously reported closure of a performance films manufacturing facility in North America as part of ongoing site optimization. | |||
[3] | Fixed asset impairments, net and severance in the Additives & Functional Products ("AFP") segment from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization. | |||
[4] | Severance charges in first quarter 2020 of $1 million in the Chemical Intermediates ("CI") segment and site closure costs in first quarter 2021 of $4 million and $1 million in the CI and AFP segments, respectively, resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site. Excluding the fixed asset impairments in 2019, restructuring charges of up to $50 million are expected for this closure, of which $6 million was recognized in 2020. | |||
[5] | Site closure costs in the AFP segment from the previously reported closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization . | |||
[6] | Severance in the AM segment due to the previously reported closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $4 million was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in first quarter 2021 related to the closure of this facility. Management expects total charges of up to $30 million for the closure of this facility, 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, of which $13 million was recognized in 2020. |
SHARE-BASED COMPENSATION AWAR_3
SHARE-BASED COMPENSATION AWARDS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Payment Arrangement, Expense | $ 22 | $ 15 |
Share-based Payment Arrangement, Expense, after Tax | $ 17 | $ 11 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.99% | 21.56% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 3.58% | 3.30% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.95% | 0.94% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years | 5 years 10 months 24 days |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 109.26 | $ 61.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 19.81 | $ 7.92 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 7 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years | |
Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Payment Arrangement, Expense | $ 4 | $ 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 450 | 622 |
Qualifying Termination Eligibility Preceding Requisite Service Period | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Payment Arrangement, Expense | $ 2 | $ 1 |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 311 | 423 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 109 | 123 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
Share-based Payment Arrangement | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Payment Arrangement, Expense | $ 18 | $ 12 |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 90 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | ||
Other current assets | $ 10 | $ 7 |
Other noncurrent assets | 1 | 9 |
Payables and other current liabilities | 5 | 58 |
Long-term liabilities and equity | 61 | (3) |
Total | $ 77 | $ 71 |
SEGMENT AND REGIONAL SALES IN_3
SEGMENT AND REGIONAL SALES INFORMATION (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021USD ($)Segment | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | ||
Segment Reporting Information [Line Items] | ||||
Number of Operating Segments | Segment | 4 | |||
Sales [Abstract] | ||||
Sales | $ 2,409 | $ 2,241 | ||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 389 | 368 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 16,195 | $ 16,083 | |
Operating Segments [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 395 | 376 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 14,335 | 14,175 | |
Growth Initiatives and Businesses not Allocated to Segments [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | (29) | (23) | ||
Pension and OPEB Costs Not Allocated to Operating Segments [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 27 | 21 | ||
Other Nonoperating Income (Expense) [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | (4) | (6) | ||
Additives And Functional Products [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 135 | 143 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 6,304 | 6,238 | |
Additives And Functional Products [Member] | Operating Segments [Member] | ||||
Sales [Abstract] | ||||
Sales | 871 | 822 | ||
Advanced Materials [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 146 | 100 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 4,392 | 4,345 | |
Advanced Materials [Member] | Operating Segments [Member] | ||||
Sales [Abstract] | ||||
Sales | 716 | 615 | ||
Chemical Intermediates [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 69 | 80 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 2,643 | 2,614 | |
Chemical Intermediates [Member] | Operating Segments [Member] | ||||
Sales [Abstract] | ||||
Sales | 605 | 592 | ||
Fibers [Member] | ||||
Earnings (Loss) Before Interest and Taxes [Abstract] | ||||
Earnings before interest and taxes | 45 | 53 | ||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 996 | 978 | |
Fibers [Member] | Operating Segments [Member] | ||||
Sales [Abstract] | ||||
Sales | 217 | 212 | ||
Corporate and Other | ||||
Segment Reporting Information, Additional Information [Abstract] | ||||
Assets by Segment | [1] | 1,860 | $ 1,908 | |
North America [Member] | ||||
Sales [Abstract] | ||||
Sales | 1,004 | 980 | ||
Asia Pacific [Member] | ||||
Sales [Abstract] | ||||
Sales | 608 | 495 | ||
EMEA [Member] | ||||
Sales [Abstract] | ||||
Sales | 656 | 631 | ||
Latin America [Member] | ||||
Sales [Abstract] | ||||
Sales | $ 141 | $ 135 | ||
[1] | Segment assets include accounts receivable, inventory, fixed assets, goodwill, and intangible assets. |