EASTMAN CHEMICAL CO
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
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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.
Jun 30, 2025 · Filed Aug 1, 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
Sales
| Second Quarter · First Six Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| (Dollars in millions) · 2025 · 2024 · $ · % · 2025 · 2024 · $ · % | ||||||||||||
| Sales | $2,287 | $2,363 | $(76) | (3)% | $4,577 | $4,673 | $(96) | (2)% | ||||
| Volume / product mix effect | (77) | (3)% | (85) | (2)% | ||||||||
| Price effect | (6) | —% | 6 | —% | ||||||||
| Exchange rate effect | 7 | —% | (17) | —% | ||||||||
Sales revenue decreased in second quarter and first six months 2025 compared to second quarter and first six months 2024 primarily due to decreases in all segments except the AFP segment.
Gross Profit
| Second Quarter | First Six Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Gross profit | $506 | $599 | (16)% | $1,073 | $1,131 | (5)% |
Gross profit decreased in second quarter and first six months 2025 compared to second quarter and first six months 2024 due to decreases in all segments except the AFP segment. Further discussion of sales revenue and EBIT changes is presented in "Summary by Operating Segment" in this MD&A.
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Selling, General and Administrative Expenses
| Second Quarter | First Six Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Selling, general and administrative expenses | $157 | $180 | (13)% | $339 | $371 | (9)% |
Selling, general and administrative ("SG&A") expenses decreased in second quarter and first six months 2025 compared to second quarter and first six months 2024 primarily due to lower variable compensation costs.
Research and Development Expenses
| Second Quarter | First Six Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Research and development expenses | $67 | $60 | 12% | $134 | $119 | 13% |
R&D expenses increased in second quarter and first six months 2025 compared to second quarter and first six months 2024 primarily due to strategic investment in innovation.
Asset Impairments, Restructuring, and Other Charges, Net
| (Dollars in millions) | Second Quarter | First Six Months | ||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Severance charges | $10 | $— | $11 | $11 |
| Restructuring and other charges | 3 | — | 11 | — |
| Total | $13 | $— | $22 | $11 |
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
| Second Quarter | First Six Months | |||
|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 |
| Other components of post-employment (benefit) cost, net | $(2) | $(4) | $(3) | $(9) |
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
| Second Quarter | First Six Months | |||
|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 |
| Foreign exchange transaction losses, net | $4 | $4 | $4 | $9 |
| (Income) loss from equity investments and other investment (gains) losses, net | 1 | (1) | 2 | (1) |
| Environmental and other costs | 40 | 16 | 40 | 16 |
| Other, net | 4 | 7 | 11 | 15 |
| Other (income) charges, net | $49 | $26 | $57 | $39 |
| Environmental and other costs | (40) | (16) | (40) | (16) |
| Other (income) charges, net excluding non-core item | $9 | $10 | $17 | $23 |
Table of Contents
Other (income) charges, net in second quarter and first six months 2025 and 2024 included environmental and other costs related to previously divested businesses or non-operational sites and product lines. Excluding these non-core items, Other (income) charges, net decreased in second quarter 2025 compared to second quarter 2024 primarily due to lower factoring fees, and decreased in first six months 2025 compared to first six months 2024 primarily due to lower foreign exchange transaction losses and lower factoring fees, partially offset by losses from equity investments. 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
| Second Quarter | First Six Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Earnings before interest and taxes | $222 | $337 | (34)% | $524 | $600 | (13)% |
| Asset impairments, restructuring, and other charges, net | 13 | — | 22 | 11 | ||
| Environmental and other costs | 40 | 16 | 40 | 16 | ||
| Earnings before interest and taxes excluding non-core items | $275 | $353 | (22)% | $586 | $627 | (7)% |
Net Interest Expense
| Second Quarter | First Six Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Gross interest costs | $59 | $58 | 2% | $117 | $116 | 1% |
| Less: Capitalized interest | 3 | 4 | 8 | 9 | ||
| Interest expense | 56 | 54 | 109 | 107 | ||
| Less: Interest income | 3 | 4 | 7 | 8 | ||
| Net interest expense | $53 | $50 | 6% | $102 | $99 | 3% |
Net interest expense increased slightly in second quarter and first six months 2025 compared to second quarter and first six months 2024 due to higher borrowings.
Provision for Income Taxes
| Second Quarter · First Six Months | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| (Dollars in millions) | $ | % | $ | % | $ | % | $ | % |
| Provision for income taxes and effective tax rate | $29 | 17% | $56 | 20% | $99 | 23% | $105 | 21% |
| Tax provision for non-core items (1) | 14 | 3 | 15 | 6 | ||||
| Interim adjustment to tax provision (2) | (7) | (13) | (39) | (30) | ||||
| Adjusted provision for income taxes and effective tax rate | $36 | 16% | $46 | 16% | $75 | 16% | $81 | 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)Second quarter 2025 provision for income taxes was adjusted to reflect the current forecasted full year effective tax rate. Second quarter 2024 provision for income taxes was adjusted to reflect the then current forecasted full year effective tax rate.
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| First Six Months (1) | ||
|---|---|---|
| 2025 | 2024 | |
| Effective tax rate | 23% | 21% |
| Discrete tax items (2) | (1)% | —% |
| Tax impact of current year non-core items (3) | 4% | 1% |
| Changes in tax contingencies and valuation allowances | (2)% | (1)% |
| Forecasted full year impact of expected tax events (4) | (8)% | (5)% |
| 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 six 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 six months 2025 are related to share based compensation expense and adjustments to certain prior year tax returns.
(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
| Second Quarter | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions, except EPS) | $ | EPS | $ | EPS |
| Net earnings and diluted earnings per share attributable to Eastman | $140 | $1.20 | $230 | $1.94 |
| Asset impairments, restructuring, and other charges, net | 8 | 0.08 | — | — |
| Environmental and other costs | 31 | 0.26 | 13 | 0.10 |
| Unusual items, net of tax: (1) | ||||
| Interim adjustment to tax provision | 7 | 0.06 | 13 | 0.11 |
| Adjusted net earnings and diluted earnings per share attributable to Eastman | $186 | $1.60 | $256 | $2.15 |
| First Six Months | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions, except EPS) | $ | EPS | $ | EPS |
| Net earnings and diluted earnings per share attributable to Eastman | $322 | $2.77 | $395 | $3.33 |
| Non-core items, net of tax: (1) | ||||
| Asset impairments, restructuring, and other charges, net | 16 | 0.14 | 8 | 0.07 |
| Environmental and other costs | 31 | 0.26 | 13 | 0.10 |
| Unusual items, net of tax: (1) | ||||
| Interim adjustment to tax provision | 39 | 0.34 | 30 | 0.26 |
| Adjusted net earnings and diluted earnings per share attributable to Eastman | $408 | $3.51 | $446 | $3.76 |
(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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