EASTMAN CHEMICAL CO
For the period ended Mar 31, 2024. Filed Apr 26, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed Apr 26, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Summary by Operating Segment
Table of Contents
SUMMARY BY OPERATING SEGMENT
Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers. For additional financial and product information for each operating segment, see Part I, Item 1, "Business - Business Segments" and Part II, Item 8, Note 20, "Segment and Regional Sales Information", in the Company's 2023 Annual Report on Form 10-K.
Advanced Materials Segment
| First Quarter | ||||||
|---|---|---|---|---|---|---|
| Change | ||||||
| 2024 · 2023 · $ · % | ||||||
| (Dollars in millions) | ||||||
| Sales | $748 | $742 | $6 | 1% | ||
| Volume / product mix effect | 32 | 4% | ||||
| Price effect | (23) | (3)% | ||||
| Exchange rate effect | (3) | —% | ||||
| Earnings before interest and taxes | $104 | $86 | $18 | 21% | ||
Sales revenue in first quarter 2024 increased compared to first quarter 2023 primarily due to higher sales volume partially offset by lower selling prices. Higher sales volume was the result of reduced levels of customer inventory destocking, particularly in the durables and electronics end-market. Higher sales volume was partially offset by continued customer inventory destocking in the medical end-market and lower sales volume in the performance films product line.
EBIT increased in first quarter 2024 compared to first quarter 2023 primarily due to $21 million lower raw material and energy costs and distribution costs, net of lower selling prices.
Additives & Functional Products Segment
| First Quarter | ||||||
|---|---|---|---|---|---|---|
| Change | ||||||
| 2024 · 2023 · $ · % | ||||||
| (Dollars in millions) | ||||||
| Sales | $704 | $777 | $(73) | (9)% | ||
| Volume / product mix effect | (8) | (1)% | ||||
| Price effect | (67) | (8)% | ||||
| Exchange rate effect | 2 | —% | ||||
| Earnings before interest and taxes | $109 | $124 | $(15) | (12)% | ||
Sales revenue in first quarter 2024 decreased compared to first quarter 2023 primarily due to lower selling prices. Lower selling prices were primarily attributable to cost pass-through contracts. Sales volume was relatively unchanged as lower sales volume, primarily attributed to the timing of the fulfillment of heat transfer fluid projects and continued customer inventory destocking in the agriculture end-market, was mostly offset by favorable mix in the coatings additives product line and higher sales volume in the care additives product line.
EBIT decreased in first quarter 2024 compared to first quarter 2023 primarily due to $26 million lower sales volume and higher manufacturing costs, including planned maintenance shutdowns. These impacts were partially offset by $15 million lower raw material and energy costs and distribution costs, net of lower selling prices.
Table of Contents
Chemical Intermediates Segment
| First Quarter | ||||||
|---|---|---|---|---|---|---|
| Change | ||||||
| 2024 · 2023 · $ · % | ||||||
| (Dollars in millions) | ||||||
| Sales | $523 | $589 | $(66) | (11)% | ||
| Volume / product mix effect | 13 | 2% | ||||
| Price effect | (80) | (13)% | ||||
| Exchange rate effect | 1 | —% | ||||
| Earnings before interest and taxes | $16 | $42 | $(26) | (62)% | ||
Sales revenue in first quarter 2024 decreased compared to first quarter 2023 primarily due to lower selling prices. Lower selling prices were attributed to weak market conditions as well as lower raw material and energy prices. Lower prices were partially offset by higher sales volume driven by growth in the plasticizers product line attributed to reduced levels of customer inventory destocking, particularly in the building and construction end-market.
EBIT decreased in first quarter 2024 compared to first quarter 2023 primarily due to $25 million lower selling prices, net of lower raw material and energy costs and distribution costs.
Fibers Segment
| First Quarter | ||||||
|---|---|---|---|---|---|---|
| Change | ||||||
| 2024 · 2023 · $ · % | ||||||
| (Dollars in millions) | ||||||
| Sales | $331 | $303 | $28 | 9% | ||
| Volume / product mix effect | 23 | 7% | ||||
| Price effect | 6 | 2% | ||||
| Exchange rate effect | (1) | —% | ||||
| Earnings before interest and taxes | $117 | $65 | $52 | 80% | ||
| Asset impairments and restructuring charges, net | — | 6 | (6) | |||
| Accelerated depreciation | — | 23 | (23) | |||
| Earnings before interest and taxes excluding non-core items | 117 | 94 | 23 | 24% | ||
Sales revenue in first quarter 2024 increased compared to first quarter 2023 primarily due to higher sales volume in textiles and higher selling prices in acetate tow, driven by an increase in industry capacity utilization.
EBIT in first quarter 2023 included asset impairments and restructuring charges and accelerated depreciation from a previously announced manufacturing facility closure. For more information regarding asset impairments and restructuring charges see Note 12, "Asset Impairments and Restructuring Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
EBIT excluding non-core items increased in first quarter 2024 compared to first quarter 2023 primarily due to $14 million higher selling prices and lower raw material and energy costs, and $12 million higher sales volume.
Table of Contents
Other
| First Quarter | ||
|---|---|---|
| 2024 | 2023 | |
| (Dollars in millions) | ||
| Sales | $4 | $1 |
| Loss before interest and taxes | ||
| Growth initiatives and businesses not allocated to operating segments | $(68) | $(51) |
| Pension and other postretirement benefits income (expense), net not allocated to operating segments | 2 | (4) |
| Asset impairments and restructuring charges, net | (11) | (16) |
| Steam line incident (costs) insurance proceeds, net | — | 8 |
| Other income (charges), net not allocated to operating segments | (6) | (8) |
| Loss before interest and taxes | $(83) | $(71) |
| Asset impairments and restructuring charges, net | 11 | 16 |
| Steam line incident costs (insurance proceeds), net | — | (8) |
| Loss before interest and taxes excluding non-core and unusual items | (72) | (63) |
Sales and costs related to growth initiatives, including circular economy and the cellulosics biopolymer platform, R&D costs, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are not included in operating segment results for any of the periods presented and are included in "Other". First quarter 2024 also includes pre-production costs for the Kingsport methanolysis facility.
EBIT in first quarter 2024 and 2023 included severance primarily in accordance with foreign regulatory requirements as a result of cost reduction initiatives in fourth quarter 2023 and 2022, respectively. In addition, first quarter 2023 included insurance proceeds from the steam line incident. For more information, see "Non-GAAP Financial Measures" in this MD&A. For more information regarding asset impairments and restructuring charges see Note 12, "Asset Impairments and Restructuring Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
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