EASTMAN CHEMICAL CO
For the period ended Sep 30, 2024. Filed Nov 1, 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.
Sep 30, 2024 · Filed Nov 1, 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
| Third Quarter · First Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| 2024 · 2023 · $ · % · 2024 · 2023 · $ · % | ||||||||||||
| (Dollars in millions) | ||||||||||||
| Sales | $787 | $746 | $41 | 5% | $2,330 | $2,227 | $103 | 5% | ||||
| Volume / product mix effect | 65 | 8% | 210 | 9% | ||||||||
| Price effect | (22) | (3)% | (97) | (4)% | ||||||||
| Exchange rate effect | (2) | —% | (10) | —% | ||||||||
| Earnings before interest and taxes | $100 | $93 | $7 | 8% | $335 | $278 | $57 | 21% | ||||
| Asset impairments, restructuring, and other charges, net | 18 | — | 18 | 18 | — | 18 | ||||||
| Cost of sales impact of restructuring activities | 4 | — | 4 | 4 | — | 4 | ||||||
| Earnings before interest and taxes excluding non-core item | 122 | 93 | 29 | 31% | 357 | 278 | 79 | 28% | ||||
Sales revenue increased in third quarter and first nine months 2024 compared to third quarter and first nine months 2023 primarily due to higher sales volume, partially offset by lower selling prices. Higher sales volume was primarily attributed to the end of customer inventory destocking in consumer durables, and product growth of premium interlayers products.
EBIT in third quarter 2024 and first nine months 2024 includes asset impairments, restructuring, and other charges, net, and inventory adjustments, related to the planned closure of a solvent-based resins production line. For more information regarding asset impairments, restructuring, and other charges see Note 12, "Asset Impairments, Restructuring, and Other Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
EBIT excluding non-core items increased third quarter 2024 compared to third quarter 2023 primarily due to $37 million higher sales volume and improved asset utilization, net of higher manufacturing costs associated with Kingsport methanolysis. These impacts were partially offset by $4 million higher SG&A expenses.
EBIT excluding non-core items increased in first nine months 2024 compared to first nine months 2023 primarily due to $88 million higher sales volume. This impact was partially offset by a $10 million unfavorable shift in foreign currency exchange rates.
Table of Contents
Additives & Functional Products Segment
| Third Quarter · First Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| 2024 · 2023 · $ · % · 2024 · 2023 · $ · % | ||||||||||||
| (Dollars in millions) | ||||||||||||
| Sales | $744 | $670 | $74 | 11% | $2,166 | $2,194 | $(28) | (1)% | ||||
| Volume / product mix effect | 77 | 11% | 80 | 4% | ||||||||
| Price effect | (2) | —% | (107) | (5)% | ||||||||
| Exchange rate effect | (1) | —% | (1) | —% | ||||||||
| Earnings before interest and taxes | $127 | $105 | $22 | 21% | $359 | $369 | $(10) | (3)% | ||||
| Cost of sales impact of restructuring activities | 3 | — | 3 | 3 | — | 3 | ||||||
| Earnings before interest and taxes excluding non-core item | 130 | 105 | 25 | 24% | 362 | 369 | (7) | (2)% | ||||
Sales revenue increased in third quarter 2024 compared to third quarter 2023 primarily due to higher sales volume and favorable mix in the functional amines and coatings additives product lines and the timing of heat transfer fluid projects.
Sales revenue decreased in first nine months 2024 compared to first nine months 2023 primarily due to lower selling prices, partially offset by higher sales volume and favorable mix. Lower selling prices were primarily attributed to lower raw material costs, including cost pass-through contracts. Higher sales volume and favorable mix was primarily attributable to the coatings additives and care additives product lines, partially offset by the reduction of heat transfer fluid projects.
EBIT in third quarter 2024 and first nine months 2024 includes inventory adjustments related to the planned closure of a solvent-based resins production line. For more information see Note 12, "Asset Impairments, Restructuring, and Other Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
EBIT excluding non-core items increased in third quarter 2024 compared to third quarter 2023 primarily due to $37 million higher sales volume, partially offset by $9 million SG&A expenses.
EBIT excluding non-core items decreased in first nine months 2024 compared to first nine months 2023 primarily due to $8 million higher SG&A expenses. Lower raw material and energy costs and distribution costs, net of lower selling prices were offset primarily by lower sales volume and higher manufacturing costs.
Chemical Intermediates Segment
| Third Quarter · First Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| 2024 · 2023 · $ · % · 2024 · 2023 · $ · % | ||||||||||||
| (Dollars in millions) | ||||||||||||
| Sales | $593 | $527 | $66 | 13% | $1,631 | $1,630 | $1 | —% | ||||
| Volume / product mix effect | 35 | 7% | 79 | 5% | ||||||||
| Price effect | 32 | 6% | (77) | (5)% | ||||||||
| Exchange rate effect | (1) | —% | (1) | —% | ||||||||
| Earnings before interest and taxes | $43 | $6 | $37 | >100% | $81 | $87 | $(6) | (7)% | ||||
Table of Contents
Sales revenue increased in third quarter 2024 compared to third quarter 2023 primarily due to higher sales volume and higher selling prices. Sales revenue in first nine months 2024 was relatively unchanged compared to first nine months 2023 due to higher sales volume being offset by lower selling prices. Higher sales volume was primarily attributed to the end of customer inventory destocking and improved market conditions in 2024. Fluctuations in selling prices were driven by changes in raw material and energy prices.
EBIT increased in third quarter 2024 compared to third quarter 2023 primarily due to $28 million higher selling prices, net of higher raw material and energy costs and $10 million lower manufacturing costs, including higher capacity utilization, partially offset by $5 million higher SG&A expenses.
EBIT decreased in first nine months 2024 compared to first nine months 2023 due to $33 million lower selling prices, net of lower raw material and energy costs. These impacts were partially offset by $28 million lower manufacturing costs, including higher capacity utilization.
Fibers Segment
| Third Quarter · First Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| 2024 · 2023 · $ · % · 2024 · 2023 · $ · % | ||||||||||||
| (Dollars in millions) | ||||||||||||
| Sales | $336 | $323 | $13 | 4% | $997 | $949 | $48 | 5% | ||||
| Volume / product mix effect | 6 | 2% | 25 | 3% | ||||||||
| Price effect | 7 | 2% | 25 | 3% | ||||||||
| Exchange rate effect | — | —% | (2) | (1)% | ||||||||
| Earnings before interest and taxes | $112 | $109 | $3 | 3% | $351 | $280 | $71 | 25% | ||||
| Asset impairments, restructuring, and other charges, net | — | — | — | — | 6 | (6) | ||||||
| Cost of sales impact of restructuring activities | — | — | — | — | 23 | (23) | ||||||
| Earnings before interest and taxes excluding non-core items | 112 | 109 | 3 | 3% | 351 | 309 | 42 | 14% | ||||
Sales revenue increased in third quarter and first nine months 2024 compared to third quarter and first nine months 2023 primarily due to higher selling prices in acetate tow and higher sales volume in textiles.
EBIT in first nine months 2023 included asset impairments, restructuring, and other charges, net, and accelerated depreciation from a previously announced manufacturing facility closure. For more information regarding asset impairments, restructuring, and other charges, net see Note 12, "Asset Impairments, Restructuring, and Other Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
EBIT increased in third quarter 2024 compared to third quarter 2023 primarily due to $7 million higher selling prices, partially offset by $5 million higher SG&A expenses.
EBIT excluding non-core items increased in first nine months 2024 compared to first nine months 2023 primarily due to $32 million higher selling prices and lower raw material and energy costs, and $11 million higher sales volume. These impacts were partially offset by $4 million higher SG&A expenses.
Table of Contents
Other
| Third Quarter | First Nine Months | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (Dollars in millions) | ||||
| Sales | $4 | $1 | $13 | $3 |
| Loss before interest and taxes | ||||
| Growth initiatives and businesses not allocated to operating segments | $(43) | $(49) | $(155) | $(145) |
| Pension and other postretirement benefits income (expense), net not allocated to operating segments | 2 | (4) | 6 | (12) |
| Asset impairments, restructuring, and other charges, net | (12) | — | (23) | (16) |
| Steam line incident (costs) insurance proceeds, net | — | — | — | 8 |
| Other income (charges), net not allocated to operating segments | — | (4) | (25) | (24) |
| Loss before interest and taxes | $(53) | $(57) | $(197) | $(189) |
| Asset impairments, restructuring, and other charges, net | 12 | — | 23 | 16 |
| Steam line incident costs (insurance proceeds), net | — | — | — | (8) |
| Environmental and other costs | — | — | 16 | 13 |
| Loss before interest and taxes excluding non-core and unusual items | (41) | (57) | (158) | (168) |
Sales and costs related to growth initiatives, including the cellulosics biopolymer platform and circular economy, R&D costs, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are included in "Other". First quarter 2024 also includes pre-production costs for the Kingsport methanolysis facility.
EBIT in third quarter and first nine months 2024 and first nine months 2023 included severance primarily in accordance with foreign regulatory requirements as a result of cost reduction initiatives in fourth quarter 2023 and 2022, respectively. EBIT in third quarter and first nine months 2024 also includes growth and profitability improvement initiatives. Third quarter and first nine months 2024 and 2023 EBIT included environmental and other costs from previously divested or non-operational sites. In addition, first nine months 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, restructuring, and other charges, net, see Note 12, "Asset Impairments, Restructuring, and Other Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.