EASTMAN CHEMICAL CO
For the period ended Sep 30, 2025. Filed Nov 4, 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.
Sep 30, 2025 · Filed Nov 4, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 2. Results of Operations
Sales
| Third Quarter · First Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change · Change | ||||||||||||
| (Dollars in millions) · 2025 · 2024 · $ · % · 2025 · 2024 · $ · % | ||||||||||||
| Sales | $2,202 | $2,464 | $(262) | (11)% | $6,779 | $7,137 | $(358) | (5)% | ||||
| Volume / product mix effect | (248) | (10)% | (344) | (5)% | ||||||||
| Price effect | (34) | (1)% | (15) | —% | ||||||||
| Exchange rate effect | 20 | —% | 1 | —% | ||||||||
Sales revenue decreased in third quarter 2025 compared to third quarter 2024 due to decreases across all segments. Sales revenue decreased in first nine months 2025 compared to first nine months 2024 primarily due to decreases in all segments except the AFP segment.
Gross Profit
| Third Quarter | First Nine Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Gross profit | $433 | $605 | (28)% | $1,506 | $1,736 | (13)% |
| Cost of sales impact from restructuring activities | 2 | 7 | 2 | 7 | ||
| Gross profit excluding non-core and unusual items | $435 | $612 | (29)% | $1,508 | $1,743 | (13)% |
Gross profit in third quarter and first nine months 2025 included inventory adjustments related to the decommissioning of certain assets at performance films facilities in North America. Gross profit in third quarter and first nine months 2024 included inventory adjustments related to the planned closure of a solvent-based resins production line at an advanced interlayers facility in North America. Excluding these non-core items, gross profit decreased in third quarter 2025 compared to third quarter 2024 in all segments. Gross profit decreased first nine months 2025 compared to first nine months 2024 due to decreases in the Fibers, CI, and AM segments, partially offset by increases in the AFP and Other segments. 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
| Third Quarter | First Nine Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Selling, general and administrative expenses | $160 | $183 | (13)% | $499 | $554 | (10)% |
Selling, general and administrative ("SG&A") expenses decreased in third quarter and first nine months 2025 compared to third quarter and first nine months 2024 primarily due to cost reduction initiatives and lower variable compensation costs.
Research and Development Expenses
| Third Quarter | First Nine Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Research and development expenses | $63 | $65 | (3)% | $197 | $184 | 7% |
R&D expenses decreased in third quarter 2025 compared to third quarter 2024 primarily due to targeted cost reduction initiatives across the Company. R&D expenses increased in first nine months 2025 compared to first nine months 2024 primarily due to strategic investment in innovation in first six months 2025.
Asset Impairments, Restructuring, and Other Charges, Net
| (Dollars in millions) | Third Quarter | First Nine Months | ||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Asset impairments | $— | $5 | $— | $5 |
| Severance charges | 14 | 10 | 25 | 21 |
| Restructuring and other charges | 6 | 15 | 17 | 15 |
| Total | $20 | $30 | $42 | $41 |
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
| Third Quarter | First Nine Months | |||
|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 |
| Other components of post-employment (benefit) cost, net | $(1) | $(5) | $(4) | $(14) |
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.
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Other (Income) Charges, Net
| Third Quarter | First Nine Months | |||
|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 |
| Foreign exchange transaction losses, net | $2 | $3 | $6 | $12 |
| (Income) loss from equity investments and other investment (gains) losses, net | — | (3) | 2 | (4) |
| Environmental and other costs | — | — | 40 | 16 |
| Other, net | 1 | 3 | 12 | 18 |
| Other (income) charges, net | $3 | $3 | $60 | $42 |
| Environmental and other costs | — | — | (40) | (16) |
| Other (income) charges, net excluding non-core item | $3 | $3 | $20 | $26 |
Other (income) charges, net in first nine months 2025 and 2024 included environmental and other costs related to previously divested businesses or non-operational sites and product lines. Excluding this non-core item, Other (income) charges, net remained unchanged in third quarter 2025 compared to third quarter 2024, and decreased in first nine months 2025 compared to first nine 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
| Third Quarter | First Nine Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Earnings before interest and taxes | $188 | $329 | (43)% | $712 | $929 | (23)% |
| Cost of sales impact from restructuring activities | 2 | 7 | 2 | 7 | ||
| Asset impairments, restructuring, and other charges, net | 20 | 30 | 42 | 41 | ||
| Environmental and other costs | — | — | 40 | 16 | ||
| Earnings before interest and taxes excluding non-core items | $210 | $366 | (43)% | $796 | $993 | (20)% |
Net Interest Expense
| Third Quarter | First Nine Months | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change |
| Gross interest costs | $60 | $58 | 3% | $177 | $174 | 2% |
| Less: Capitalized interest | 4 | 5 | 12 | 14 | ||
| Interest expense | 56 | 53 | 165 | 160 | ||
| Less: Interest income | 2 | 4 | 9 | 12 | ||
| Net interest expense | $54 | $49 | 10% | $156 | $148 | 5% |
Net interest expense increased in third quarter and first nine months 2025 compared to third quarter and first nine months 2024 due to higher borrowings, less capitalized interest, and less interest income.
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Provision for Income Taxes
| Third Quarter · First Nine Months | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| (Dollars in millions) | $ | % | $ | % | $ | % | $ | % |
| Provision for income taxes and effective tax rate | $87 | 65% | $99 | 35% | $186 | 34% | $204 | 26% |
| Tax provision for non-core items (1) | 6 | 10 | 21 | 16 | ||||
| Adjustment from tax law changes (2) | (22) | — | (22) | — | ||||
| Interim adjustment to tax provision (3) | (47) | (59) | (86) | (89) | ||||
| Adjusted provision for income taxes and effective tax rate | $24 | 16% | $50 | 16% | $99 | 16% | $131 | 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)Resulting from the enactment of the One Big Beautiful Bill Act (the "Act").
(3)Third quarter 2025 provision for income taxes was adjusted to reflect the current forecasted full year effective tax rate. Third quarter 2024 provision for income taxes was adjusted to reflect the then current forecasted full year effective tax rate.
| First Nine Months (1) | ||
|---|---|---|
| 2025 | 2024 | |
| Effective tax rate | 34% | 26% |
| Tax impact of current year non-core items (2) | (1)% | 2% |
| Changes in tax contingencies and valuation allowances | (1)% | (1)% |
| Forecasted full year impact of expected tax events (3) | (16)% | (11)% |
| 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 nine months 2025 and 2024, respectively.
(2)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.
(3)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.
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Net Earnings Attributable to Eastman and Diluted Earnings per Share
| Third Quarter | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions, except EPS) | $ | EPS | $ | EPS |
| Net earnings and diluted earnings per share attributable to Eastman | $47 | $0.40 | $180 | $1.53 |
| Cost of sales impact from restructuring activities | 1 | 0.01 | 5 | 0.04 |
| Asset impairments, restructuring, and other charges, net | 15 | 0.13 | 22 | 0.19 |
| Unusual items, net of tax: (1) | ||||
| Adjustment from tax law changes | 22 | 0.20 | — | — |
| Interim adjustment to tax provision | 47 | 0.40 | 59 | 0.50 |
| Adjusted net earnings and diluted earnings per share attributable to Eastman | $132 | $1.14 | $266 | $2.26 |
| First Nine Months | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in millions, except EPS) | $ | EPS | $ | EPS |
| Net earnings and diluted earnings per share attributable to Eastman | $369 | $3.18 | $575 | $4.86 |
| Non-core items, net of tax: (1) | ||||
| Cost of sales impact from restructuring activities | 1 | 0.01 | 5 | 0.04 |
| Asset impairments, restructuring, and other charges, net | 31 | 0.27 | 30 | 0.27 |
| Environmental and other costs | 31 | 0.26 | 13 | 0.10 |
| Unusual items, net of tax: (1) | ||||
| Adjustment from tax law changes | 22 | 0.20 | — | — |
| Interim adjustment to tax provision | 86 | 0.74 | 89 | 0.75 |
| Adjusted net earnings and diluted earnings per share attributable to Eastman | $540 | $4.66 | $712 | $6.02 |
(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.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.