EASTMAN CHEMICAL CO
For the period ended Mar 31, 2025. Filed Apr 25, 2025.
View on SEC.govAbout this filing
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, 2025 · Filed Apr 25, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 2. Results of Operations
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RESULTS OF OPERATIONS
Sales
| First Quarter | ||||||
|---|---|---|---|---|---|---|
| Change | ||||||
| (Dollars in millions) · 2025 · 2024 · $ · % | ||||||
| Sales | $2,290 | $2,310 | $(20) | (1)% | ||
| Volume / product mix effect | (23) | (1)% | ||||
| Price effect | 27 | 1% | ||||
| Exchange rate effect | (24) | (1)% | ||||
Sales revenue decreased in first quarter 2025 compared to first quarter 2024 primarily as a result of decreases in the Fibers and AM segments partially offset by increases in the AFP and CI segments. Further discussion by operating segment is presented in "Summary by Operating Segment" in this MD&A.
Gross Profit
| First Quarter | |||
|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change |
| Gross profit | $567 | $532 | 7% |
Gross profit increased in first quarter 2025 compared to first quarter 2024 due to increases in all segments except Fibers. Further discussion of sales revenue and EBIT changes is presented in "Summary by Operating Segment" in this MD&A.
Selling, General and Administrative Expenses
| First Quarter | |||
|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change |
| Selling, general and administrative expenses | $182 | $191 | (5)% |
Selling, general and administrative ("SG&A") expenses decreased in first quarter 2025 compared to first quarter 2024 primarily due to lower deferred compensation expenses.
Research and Development Expenses
| First Quarter | |||
|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change |
| Research and development expenses | $67 | $59 | 14% |
R&D expenses increased in first quarter 2025 compared to first quarter 2024 primarily due to strategic investment in innovation.
Asset Impairments, Restructuring, and Other Charges, Net
| (Dollars in millions) | First Quarter | |
|---|---|---|
| 2025 | 2024 | |
| Severance charges | $1 | $11 |
| Restructuring and other charges | 8 | — |
| Total | $9 | $11 |
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For detailed information regarding asset impairments, restructuring, and other charges, net see Note 11, "Asset Impairments, Restructuring, and Other Charges, Net", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
Other Components of Post-employment (Benefit) Cost, Net
| First Quarter | ||
|---|---|---|
| (Dollars in millions) | 2025 | 2024 |
| Other components of post-employment (benefit) cost, net | $(1) | $(5) |
For more information regarding other components of post-employment (benefit) cost, net see Note 6, "Retirement Plans", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
Other (Income) Charges, Net
| First Quarter | ||
|---|---|---|
| (Dollars in millions) | 2025 | 2024 |
| Foreign exchange transaction losses, net | $— | $5 |
| (Income) loss from equity investments and other investment (gains) losses, net | 1 | — |
| Other, net | 7 | 8 |
| Other (income) charges, net | $8 | $13 |
Other (income) charges, net decreased in first quarter 2025 compared to first quarter 2024 primarily due to the absence of losses on foreign exchange transactions in first quarter 2025. For more information regarding components of foreign exchange transaction losses, see Note 5, "Derivative and Non-Derivative Financial Instruments", to the unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report.
Earnings Before Interest and Taxes
| First Quarter | |||
|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change |
| Earnings before interest and taxes | $302 | $263 | 15% |
| Asset impairments, restructuring, and other charges, net | 9 | 11 | |
| Earnings before interest and taxes excluding non-core items | $311 | $274 | 14% |
Net Interest Expense
| First Quarter | |||
|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change |
| Gross interest costs | $58 | $58 | —% |
| Less: Capitalized interest | 5 | 5 | |
| Interest expense | 53 | 53 | |
| Less: Interest income | 4 | 4 | |
| Net interest expense | $49 | $49 | —% |
Net interest expense remained unchanged in first quarter 2025 compared to first quarter 2024.
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Provision for Income Taxes
| First Quarter | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions) | $ | % | $ | % |
| Provision for income taxes and effective tax rate | $70 | 28% | $49 | 23% |
| Tax provision for non-core items (1) | 1 | 3 | ||
| Interim adjustment to tax provision (2) | (32) | (17) | ||
| Adjusted provision for income taxes and effective tax rate | $39 | 16% | $35 | 16% |
(1)Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
(2)First quarter 2025 provision for income taxes was adjusted to reflect the current forecasted full year effective tax rate. First quarter 2024 provision for income taxes was adjusted to reflect the then current forecasted full year effective tax rate.
| First Three Months (1) | ||
|---|---|---|
| 2025 | 2024 | |
| Effective tax rate | 28% | 23% |
| Discrete tax items (2) | (2)% | (1)% |
| Tax impact of current year non-core items (3) | 1% | 1% |
| Changes in tax contingencies and valuation allowances | (2)% | (1)% |
| Forecasted full year impact of expected tax events (4) | (9)% | (6)% |
| Forecasted full year adjusted effective tax rate | 16% | 16% |
(1)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 2025 and 2024, respectively.
(2)"Discrete tax items" are items that are excluded from the Company's estimated annual effective tax rate and recognized entirely in the quarter in which the item occurs. Discrete tax items for first three months 2025 are related to share based compensation expense and adjustments to certain prior year tax returns and first three months 2024 are related to share based compensation expense.
(3)Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
(4)Expected future tax events may include finalization of tax returns; federal, state, and foreign examinations or the expiration of statutes of limitation; and corporate restructurings.
Net Earnings Attributable to Eastman and Diluted Earnings per Share
| First Quarter | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions, except EPS) | $ | EPS | $ | EPS |
| Net earnings and diluted earnings per share attributable to Eastman | $182 | $1.57 | $165 | $1.39 |
| Non-core items, net of tax: (1) | ||||
| Asset impairments, restructuring, and other charges, net | 8 | 0.06 | 8 | 0.07 |
| Interim adjustment to tax provision | 32 | 0.28 | 17 | 0.15 |
| Adjusted net earnings and diluted earnings per share attributable to Eastman | $222 | $1.91 | $190 | $1.61 |
(1)Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
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