FINANCIAL INFORMATION
April 25, 2024
For Eastman Chemical Company First Quarter 2024 Financial Results Release
Table 1 - Statements of Earnings
First Quarter
(Dollars in millions, except per share amounts; unaudited) | 2024 | 2023 | |||
Sales | $ | 2,310 | $ | 2,412 | |
Cost of sales (1)(2) | 1,778 | 1,883 | |||
Gross profit | 532 | 529 | |||
Selling, general and administrative expenses | 191 | 191 | |||
Research and development expenses | 59 | 62 | |||
Asset impairments and restructuring charges, net | 11 | 22 | |||
Other components of post-employment (benefit) cost, net | (5) | (3) | |||
Other (income) charges, net | 13 | 11 | |||
Earnings before interest and taxes | 263 | 246 | |||
Net interest expense | 49 | 52 | |||
Earnings before income taxes | 214 | 194 | |||
Provision for income taxes | 49 | 60 | |||
Net earnings | 165 | 134 | |||
Less: Net earnings attributable to noncontrolling interest | - | - | |||
Net earnings attributable to Eastman | $ | 165 | $ | 134 | |
Basic earnings per share attributable to Eastman | $ | 1.40 | $ | 1.13 | |
Diluted earnings per share attributable to Eastman | |||||
$ | 1.39 | $ | 1.12 | ||
Shares (in millions) outstanding at end of period | 117.6 | 119.2 | |||
Shares (in millions) used for earnings per share calculation | |||||
Basic | 117.4 | 118.9 | |||
Diluted | 118.2 | 119.7 |
- First quarter 2023 includes $8 million insurance proceeds, net of costs, from the previously reported operational incident at the Kingsport site as a result of a steam line failure (the "steam line incident").
- First quarter 2023 includes $23 million accelerated depreciation related to the closure of an acetate yarn manufacturing facility in Europe.
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Table 2A - Segment Sales Information
First Quarter
(Dollars in millions, unaudited) | 2024 | 2023 | |||
Sales by Segment | |||||
Advanced Materials | $ | 748 | $ | 742 | |
Additives & Functional Products | 704 | 777 | |||
Chemical Intermediates | 523 | 589 | |||
Fibers | 331 | 303 | |||
Total Sales by Segment | 2,306 | 2,411 | |||
Other | 4 | 1 | |||
Total Eastman Chemical Company | $ | 2,310 | $ | 2,412 | |
Fourth | ||
Quarter | ||
(Dollars in millions, unaudited) | 2023 | |
Sales by Segment | ||
Advanced Materials | $ | 705 |
Additives & Functional Products | 640 | |
Chemical Intermediates | 513 | |
Fibers | 346 | |
Total Sales by Segment | 2,204 | |
Other | 3 | |
Total Eastman Chemical Company | $ | 2,207 |
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Table 2B - Sales Revenue Change | |||||||||||||
First Quarter 2024 Compared to First Quarter 2023 | |||||||||||||
Change in Sales Revenue Due To | |||||||||||||
(Unaudited) | Revenue | Volume / | Exchange | ||||||||||
Product Mix | Price Effect | Rate | |||||||||||
% Change | Effect | Effect | |||||||||||
Advanced Materials | 1 % | 4 | % | (3) % | - % | ||||||||
Additives & Functional Products | (9) % | (1) % | (8) % | - | % | ||||||||
Chemical Intermediates | (11) % | 2 | % | (13) % | - | % | |||||||
Fibers | 9 % | 7 | % | 2 % | - % | ||||||||
Total Eastman Chemical Company | (4) % | 3 | % | (7) % | - | % | |||||||
First Quarter 2024 Compared to Fourth Quarter 2023 | |||||||||||||
Change in Sales Revenue Due To | |||||||||||||
Revenue | Volume / | Exchange | |||||||||||
Product Mix | Price Effect | Rate | |||||||||||
(Unaudited) | % Change | Effect | Effect | ||||||||||
Advanced Materials | 6 | % | 6 | % | (1) % | 1 | % | ||||||
Additives & Functional Products | 10 | % | 8 | % | 1 | % | 1 | % | |||||
Chemical Intermediates | 2 | % | 1 | % | 1 | % | - | % | |||||
Fibers | (4) % | (7) % | 3 % | - % | |||||||||
Total Eastman Chemical Company | 5 % | 4 | % | - % | 1 % | ||||||||
Table 2C - Sales by Customer Location | |||||||||||||
First Quarter | |||||||||||||
(Dollars in millions, unaudited) | 2024 | 2023 | |||||||||||
Sales by Customer Location | |||||||||||||
United States and Canada | $ | 969 | $ | 1,065 | |||||||||
Europe, Middle East, and Africa | 659 | 709 | |||||||||||
Asia Pacific | 564 | 521 | |||||||||||
Latin America | 118 | 117 | |||||||||||
Total Eastman Chemical Company | $ | 2,310 | $ | 2,412 | |||||||||
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Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)
First Quarter
(Dollars in millions, unaudited) | 2024 | 2023 | |||||||
Advanced Materials | |||||||||
Earnings before interest and taxes | $ | 104 | $ | 86 | |||||
Additives & Functional Products | |||||||||
Earnings before interest and taxes | 109 | 124 | |||||||
Chemical Intermediates | |||||||||
Earnings before interest and taxes | 16 | 42 | |||||||
Fibers | |||||||||
Earnings before interest and taxes | 117 | 65 | |||||||
Asset impairments and restructuring charges, net | - | 6 | |||||||
Accelerated depreciation | - | 23 | |||||||
Excluding non-core items | 117 | 94 | |||||||
Other | |||||||||
Loss before interest and taxes | (83) | (71) | |||||||
Asset impairments and restructuring charges, net (2) | 11 | 16 | |||||||
Steam line incident (insurance proceeds) costs, net | - | (8) | |||||||
Excluding non-core and unusual items | (72) | (63) | |||||||
Total Eastman Chemical Company | |||||||||
Earnings before interest and taxes | 263 | 246 | |||||||
Asset impairments and restructuring charges, net | 11 | 22 | |||||||
Steam line incident (insurance proceeds) costs, net | - | (8) | |||||||
Accelerated depreciation | - | 23 | |||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 274 | $ | 283 | |||||
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | |||||||||
Earnings before interest and taxes | $ | 263 | $ | 246 | |||||
Cost of sales | - | 15 | |||||||
Asset impairments and restructuring charges, net | 11 | 22 | |||||||
Total earnings before interest and taxes excluding non-core and unusual items | $ | 274 | $ | 283 | |||||
- See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of theQuarterly Report on Form10-Qfor first quarter 2023 for description of first quarter 2023 non-core and unusual items.
- Severance charges as part of fourth quarter 2023 cost reduction initiatives.
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Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued) (1)
Fourth | ||
Quarter | ||
(Dollars in millions, unaudited) | 2023 | |
Advanced Materials | ||
Earnings before interest and taxes | $ | 65 |
Additives & Functional Products | ||
Earnings before interest and taxes | 67 | |
Chemical Intermediates | ||
Earnings before interest and taxes | 347 | |
Gain on divested business | (323) | |
Excluding non-core item | 24 | |
Fibers | ||
Earnings before interest and taxes | 113 | |
Other | ||
Loss before interest and taxes | (115) | |
Mark-to-market pension and other postretirement benefit plans (gain), net | 53 | |
Asset impairments and restructuring charges, net | 15 | |
Excluding non-core and unusual items | (47) | |
Total Eastman Chemical Company | ||
Earnings before interest and taxes | $ | 477 |
Mark-to-market pension and other postretirement benefit plans (gain), net | 53 | |
Asset impairments and restructuring charges, net | 15 | |
Gain on divested business | (323) | |
Total earnings before interest and taxes excluding non-core and unusual items | $ | 222 |
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | ||
Earnings before interest and taxes | $ | 477 |
Asset impairments and restructuring charges, net | 15 | |
Other components of post-employment (benefit) cost, net | 53 | |
Net (gain) loss on divested businesses | (323) | |
Total earnings before interest and taxes excluding non-core and unusual items | $ | 222 |
- For the description of fourth quarter 2023 non-core and unusual items, see Table 3A in the Quarterly Report on Form8-Kfurnished for the fourth quarter 2023.
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Table 3B - Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins(1)(2)
First Quarter | |||||||||
(Dollars in millions, unaudited) | 2024 | 2023 | |||||||
Adjusted | Adjusted | Adjusted | Adjusted | ||||||
EBIT | EBIT | ||||||||
EBIT | Margin | EBIT | Margin | ||||||
Advanced Materials | $ | 104 | 13.9 % | $ | 86 | 11.6 % | |||
Additives & Functional Products | 109 | 15.5 % | 124 | 16.0 % | |||||
Chemical Intermediates | 16 | 3.1 % | 42 | 7.1 % | |||||
Fibers | 117 | 35.3 % | 94 | 31.0 % | |||||
Total segment EBIT excluding non-core and unusual items | 346 | 15.0 % | 346 | 14.4 % | |||||
Other | (72) | (63) | |||||||
Total EBIT excluding non-core and unusual items | $ | 274 | 11.9 % | $ | 283 | 11.7 % | |||
Fourth Quarter | |||||||||
(Dollars in millions, unaudited) | 2023 | ||||||||
Adjusted | Adjusted | ||||||||
EBIT | |||||||||
EBIT | Margin | ||||||||
Advanced Materials | $ | 65 | 9.2 % | ||||||
Additives & Functional Products | 67 | 10.5 % | |||||||
Chemical Intermediates | 24 | 4.7 % | |||||||
Fibers | 113 | 32.7 % | |||||||
Total segment EBIT excluding non-core and unusual items | 269 | 12.2 % | |||||||
Other | (47) | ||||||||
Total EBIT excluding non-core and unusual items | $ | 222 | 10.1 % |
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Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations
First Quarter 2024 | ||||||||||||||||||||||||||
Earnings | Earnings | Provision | Net Earnings | |||||||||||||||||||||||
Attributable to Eastman | ||||||||||||||||||||||||||
Before | Before | for | Effective | |||||||||||||||||||||||
(Dollars in millions, except per share amounts, | Interest | Income | Income | Income | After Tax | Per Diluted | ||||||||||||||||||||
unaudited) | and Taxes | Taxes | Taxes | Tax Rate | Share | |||||||||||||||||||||
As reported (GAAP) | $ | 263 | $ | 214 | $ | 49 | 23 % | $ | 165 | $ | 1.39 | |||||||||||||||
Non-Core and Unusual Items: (1) | ||||||||||||||||||||||||||
Asset impairments and restructuring | 11 | 11 | 3 | 8 | 0.07 | |||||||||||||||||||||
charges, net | ||||||||||||||||||||||||||
Interim adjustment to tax provision (2) | - | - | (17) | 17 | 0.15 | |||||||||||||||||||||
Non-GAAP (Excluding non-core and | ||||||||||||||||||||||||||
unusual items and with adjusted provision | ||||||||||||||||||||||||||
for income taxes) | $ | 274 | $ | 225 | $ | 35 | 16 % | $ | 190 | $ | 1.61 | |||||||||||||||
First Quarter 2023 | ||||||||||||||||||||||||||
Earnings | Earnings | Provision | Net Earnings | |||||||||||||||||||||||
Attributable to Eastman | ||||||||||||||||||||||||||
Before | Before | for | Effective | |||||||||||||||||||||||
(Dollars in millions, except per share amounts, | Interest | Income | Income | Income | After Tax | Per Diluted | ||||||||||||||||||||
unaudited) | and Taxes | Taxes | Taxes | Tax Rate | Share | |||||||||||||||||||||
As reported (GAAP) | $ | 246 | $ | 194 | $ | 60 | 31 % | $ | 134 | $ | 1.12 | |||||||||||||||
Non-Core and Unusual Items: (1) | ||||||||||||||||||||||||||
Asset impairments and restructuring | 22 | 22 | 4 | 18 | 0.14 | |||||||||||||||||||||
charges, net | ||||||||||||||||||||||||||
Accelerated depreciation | 23 | 23 | 3 | 20 | 0.17 | |||||||||||||||||||||
Steam line incident (insurance proceeds) | (8) | (8) | (2) | (6) | (0.05) | |||||||||||||||||||||
costs, net | ||||||||||||||||||||||||||
Adjustments from tax law changes (3) | - | - | (23) | 23 | 0.19 | |||||||||||||||||||||
Interim adjustment to tax provision (2) | - | - | (6) | 6 | 0.06 | |||||||||||||||||||||
Non-GAAP (Excluding non-core and | ||||||||||||||||||||||||||
unusual items and with adjusted provision | ||||||||||||||||||||||||||
for income taxes) | $ | 283 | $ | 231 | $ | 36 | 16 % | $ | 195 | $ | 1.63 | |||||||||||||||
- SeeTable 3Afor description of first quarter 2024 and 2023 non-core and unusual items excluded from non-GAAP EBIT. Provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
- Increase to the provision for state income taxes due to adjustment of the amount recognized in prior years resulting from state guidance issued in first quarter 2023 related to the 2017 Tax Cuts and Jobs Act.
- The adjusted provision for income taxes for first quarter 2024 and 2023 is calculated applying the forecasted full year effective tax rate as shown inTable 4B.
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Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations (continued)
Fourth Quarter 2023 | ||||||||||||||||
Earnings | Earnings | Provision | Net Earnings | |||||||||||||
Attributable to Eastman | ||||||||||||||||
Before | Before | for | Effective | |||||||||||||
(Dollars in millions, except per share amounts, | Interest | Income | Income | Income | After Tax | Per Diluted | ||||||||||
unaudited) | and Taxes | Taxes | Taxes | Tax Rate | Share | |||||||||||
As reported (GAAP) | $ | 477 | $ | 425 | $ | 114 | 27 % | $ | 310 | $ | 2.61 | |||||
Non-Core and Unusual Items: (1) | ||||||||||||||||
Asset impairments and restructuring | 15 | 15 | 1 | 14 | 0.12 | |||||||||||
charges, net | ||||||||||||||||
Gain on divested business | (323) | (323) | (98) | (225) | (1.89) | |||||||||||
Mark-to-market pension and other | 53 | 53 | 14 | 39 | 0.33 | |||||||||||
postretirement benefit plans loss, net | ||||||||||||||||
Interim adjustment to tax provision (2) | - | - | (17) | 17 | 0.14 | |||||||||||
Non-GAAP (Excluding non-core and | ||||||||||||||||
unusual items and with adjusted provision | ||||||||||||||||
for income taxes) | $ | 222 | $ | 170 | $ | 14 | 8 % | $ | 155 | $ | 1.31 |
- SeeTable 3Afor description of fourth quarter 2023 non-core and unusual items excluded from non-GAAP EBIT. Provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
- Fourth quarter 2023 is a reconciliation of the adjustments made in interim quarters to reflect the previously forecasted full year effective tax rate.
Table 4B - Adjusted Effective Tax Rate Calculation
First Three Months (1)
2024 | 2023 | |||
Effective tax rate | 23 % | 31 % | ||
Discrete tax items (2) | (1)% | - % | ||
Tax impact of current year non-core and unusual items (3) | 1 % | (8)% | ||
Changes in tax contingencies and valuation allowances | (1)% | (1)% | ||
Forecasted full year impact of expected tax events | (6)% | (6)% | ||
Forecasted full year adjusted effective tax rate | 16 % | 16 % | ||
- Effective tax rate percentages are rounded to the nearest whole percent. The forecasted full year effective tax rates are 15.5 percent in both first three months 2024 and 2023.
- "Discrete tax items" are items that are excluded from a company's estimated annual effective tax rate and recognized entirely in the quarter in which the item occurs. Discrete items for 2024 are related to share based compensation expense.
- Provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
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Table 5 - Statements of Cash Flows
First Three Months
(Dollars in millions, unaudited) | 2024 | 2023 | |||||||||
Operating activities | |||||||||||
Net earnings | $ | 165 | $ | 134 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 127 | 141 | |||||||||
(Benefit from) provision for deferred income taxes | (17) | (7) | |||||||||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||||||
(Increase) decrease in trade receivables | (105) | (91) | |||||||||
(Increase) decrease in inventories | (100) | (44) | |||||||||
Increase (decrease) in trade payables | 49 | (132) | |||||||||
Pension and other postretirement contributions (in excess of) less than expenses | (19) | (19) | |||||||||
Variable compensation payments (in excess of) less than expenses | (78) | (16) | |||||||||
Other items, net | (38) | 32 | |||||||||
Net cash used in operating activities | (16) | (2) | |||||||||
Investing activities | |||||||||||
Additions to properties and equipment | (185) | (174) | |||||||||
Proceeds from sale of businesses | - | 16 | |||||||||
Acquisition, net of cash acquired | - | (73) | |||||||||
Additions to capitalized software | (1) | (2) | |||||||||
Other items, net | 7 | (19) | |||||||||
Net cash used in investing activities | (179) | (252) | |||||||||
Financing activities | |||||||||||
Net decrease in commercial paper and other borrowings | - | (326) | |||||||||
Proceeds from borrowings | 742 | 796 | |||||||||
Repayment of borrowings | (498) | - | |||||||||
Dividends paid to stockholders | (95) | (94) | |||||||||
Other items, net | (1) | (19) | |||||||||
Net cash provided by financing activities | 148 | 357 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (2) | 3 | |||||||||
Net change in cash and cash equivalents | (49) | 106 | |||||||||
Cash and cash equivalents at beginning of period | 548 | 493 | |||||||||
Cash and cash equivalents at end of period | $ | 499 | $ | 599 | |||||||
Table 6 - Total Borrowings to Net Debt Reconciliations | |||||||||||
March 31, | December 31, | ||||||||||
(Dollars in millions, unaudited) | 2024 | 2023 | |||||||||
Total borrowings | $ | 5,080 | $ | 4,846 | |||||||
Less: Cash and cash equivalents | 499 | 548 | |||||||||
Net debt (1) | $ | 4,581 | $ | 4,298 | |||||||
- Includes non-cash decrease of $12 million in 2024 and non-cash increase of $20 million in 2023 resulting from foreign currency exchange rates.
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Eastman Chemical Company published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 09:17:01 UTC.