10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2013
	OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______________ to ______________

Commission file number 1-12626

EASTMAN CHEMICAL COMPANY

(Exact name of registrant as specified in its charter)

Delaware	62-1539359
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)
200 South Wilcox Drive
Kingsport, Tennessee	37662
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (423) 229-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [X]  NO  [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES [X]  NO  [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[X]		Accelerated filer	[  ]
Non-accelerated filer	[   ]	(Do not check if a smaller reporting company)	Smaller reporting company	[  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [  ]  NO  [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Number of Shares Outstanding at September 30, 2013
Common Stock, par value $0.01 per share	153,920,316

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PAGE 1 OF 69 TOTAL SEQUENTIALLY NUMBERED PAGES

EXHIBIT INDEX ON PAGE 68

1

TABLE OF CONTENTS

ITEM PAGE

PART I.  FINANCIAL INFORMATION

1.	Financial Statements
	Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings	3
	Unaudited Consolidated Statements of Financial Position	5
	Unaudited Consolidated Statements of Cash Flows	6
	Notes to the Unaudited Consolidated Financial Statements	7
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
3.	Quantitative and Qualitative Disclosures About Market Risk	64
4.	Controls and Procedures	64

PART II.  OTHER INFORMATION

1.	Legal Proceedings	65
1A.	Risk Factors	65
2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
6.	Exhibits	66

SIGNATURES

Signatures 67

EXHIBIT INDEX

Exhibit Index 68

2

UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS,

COMPREHENSIVE INCOME AND RETAINED EARNINGS

	Third Quarter					First Nine Months
(Dollars in millions, except per share amounts)	2013		2012			2013		2012
Sales	$	2,338	$	2,259		$	7,085	$	5,933
Cost of sales	1,649		1,734			5,103		4,496
Gross profit	689		525			1,982		1,437
Selling, general and administrative expenses	159		173			510		420
Research and development expenses	48		52			148		136
Asset impairments and restructuring charges, net	3		37			24		37
Operating earnings	479		263			1,300		844
Net interest expense	44		48			137		95
Other charges (income), net	1		(6		)	2		14
Earnings from continuing operations before income taxes	434		221			1,161		735
Provision for income taxes from continuing operations	125		64			338		240
Earnings from continuing operations	309		157			823		495
Gain from disposal of discontinued operations, net of tax	—		—			—		1
Net earnings	$	309	$	157		$	823	$	496
Less: Net earnings attributable to noncontrolling interest	1		3			4		5
Net earnings attributable to Eastman	$	308	$	154		$	819	$	491
Amounts attributable to Eastman stockholders
Earnings from continuing operations, net of tax	$	308	$	154		$	819	$	490
Gain from discontinued operations, net of tax	—		—			—		1
Net earnings attributable to Eastman stockholders	$	308	$	154		$	819	$	491
Basic earnings per share attributable to Eastman
Earnings from continuing operations	$	2.00	$	1.01		$	5.31	$	3.43
Earnings from discontinued operations	—		—			—		0.01
Basic earnings per share attributable to Eastman	$	2.00	$	1.01		$	5.31	$	3.44
Diluted earnings per share attributable to Eastman
Earnings from continuing operations	$	1.97	$	0.99		$	5.23	$	3.35
Earnings from discontinued operations	—		—			—		—
Diluted earnings per share attributable to Eastman	$	1.97	$	0.99		$	5.23	$	3.35

3

UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS,

COMPREHENSIVE INCOME AND RETAINED EARNINGS (continued)

	Third Quarter						First Nine Months
(Dollars in millions, except per share amounts)	2013			2012			2013			2012
Comprehensive Income
Net earnings including noncontrolling interest	$	309		$	157		$	823		$	496
Other comprehensive income (loss), net of tax
Change in cumulative translation adjustment	45			30			10			21
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs	25			(4		)	18			(12		)
Derivatives and hedging:
Unrealized (loss) gain during period	(13		)	(3		)	(4		)	(33		)
Reclassification adjustment for (losses) gains included in net income	—			(4		)	—			(5		)
Total other comprehensive income (loss), net of tax	57			19			24			(29		)
Comprehensive income including noncontrolling interest	366			176			847			467
Comprehensive income attributable to noncontrolling interest	1			3			4			5
Comprehensive income attributable to Eastman	$	365		$	173		$	843		$	462
Retained Earnings
Retained earnings at beginning of period	$	3,456		$	3,024		$	3,038		$	2,760
Net earnings attributable to Eastman	308			154			819			491
Cash dividends declared	(46		)	(39		)	(139		)	(112		)
Retained earnings at end of period	$	3,718		$	3,139		$	3,718		$	3,139

The accompanying notes are an integral part of these consolidated financial statements.

4

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	September 30,		December 31,
(Dollars in millions, except per share amounts)	2013		2012
Assets
Current assets
Cash and cash equivalents	$	222	$	249
Trade receivables, net	967		846
Miscellaneous receivables	181		151
Inventories	1,274		1,260
Other current assets	123		88
Total current assets	2,767		2,594
Properties
Properties and equipment at cost	9,872		9,681
Less:  Accumulated depreciation	5,655		5,500
Net properties	4,217		4,181
Goodwill	2,634		2,644
Intangible assets, net of accumulated amortization	1,801		1,849
Other noncurrent assets	308		351
Total assets	$	11,727	$	11,619
Liabilities and Stockholders' Equity
Current liabilities
Payables and other current liabilities	$	1,323	$	1,360
Borrowings due within one year	—		4
Total current liabilities	1,323		1,364
Long-term borrowings	4,429		4,779
Deferred income tax liabilities	204		91
Post-employment obligations	1,624		1,856
Other long-term liabilities	478		501
Total liabilities	8,058		8,591
Stockholders' equity
Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 214,950,611 and 213,406,523 for 2013 and 2012, respectively)	2		2
Additional paid-in capital	1,763		1,709
Retained earnings	3,718		3,038
Accumulated other comprehensive income	147		123
	5,630		4,872
Less: Treasury stock at cost (61,081,093 shares for 2013 and 59,511,662 shares for 2012)	2,042		1,929
Total Eastman stockholders' equity	3,588		2,943
Noncontrolling interest	81		85
Total equity	$	3,669	$	3,028
Total liabilities and stockholders' equity	$	11,727	$	11,619

The accompanying notes are an integral part of these consolidated financial statements.

5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	First Nine Months
(Dollars in millions)	2013			2012
Cash flows from operating activities
Net earnings including noncontrolling interest	$	823		$	496
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	326			252
Asset impairment charges	6			9
Provision for deferred income taxes	118			63
Mark-to-market pension and other post-employment benefits (gain) loss	(86		)	—
Pension and other post-employment contributions (in excess of) less than expenses	(120		)	(85		)
Variable compensation (in excess of) less than expenses	30			(5		)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables	(119		)	(63		)
(Increase) decrease in inventories	(14		)	30
Increase (decrease) in trade payables	(67		)	13
Other items, net	(103		)	(22		)
Net cash provided by operating activities	794			688
Cash flows from investing activities
Additions to properties and equipment	(312		)	(297		)
Proceeds from redemption of short-term time deposits	—			200
Proceeds from sale of assets and investments	6			7
Acquisitions and investments in joint ventures, net of cash acquired	—			(2,668		)
Additions to capitalized software	(2		)	(4		)
Other items, net	—			(33		)
Net cash used in investing activities	(308		)	(2,795		)
Cash flows from financing activities
Net increase (decrease) in commercial paper, credit facility, and other borrowings	300			(1		)
Proceeds from borrowings	150			3,511
Repayment of borrowings	(805		)	(1,666		)
Dividends paid to stockholders	(94		)	(107		)
Treasury stock purchases	(113		)	—
Dividends paid to noncontrolling interest	(10		)	(4		)
Proceeds from stock option exercises and other items, net	55			32
Net cash provided by (used in) financing activities	(517		)	1,765
Effect of exchange rate changes on cash and cash equivalents	4			2
Net change in cash and cash equivalents	(27		)	(340		)
Cash and cash equivalents at beginning of period	249			577
Cash and cash equivalents at end of period	$	222		$	237

The accompanying notes are an integral part of these consolidated financial statements.

6

ITEM		Page
Note 1.	Basis of Presentation	8
Note 2.	Acquisitions and Investments in Joint Ventures	8
Note 3.	Inventories	11
Note 4.	Payables and Other Current Liabilities	11
Note 5.	Provision for Income Taxes	12
Note 6.	Borrowings	13
Note 7.	Derivatives	14
Note 8.	Retirement Plans	18
Note 9.	Commitments	20
Note 10.	Environmental Matters	21
Note 11.	Legal Matters	22
Note 12.	Stockholders' Equity	22
Note 13.	Earnings and Dividends Per Share	23
Note 14.	Asset Impairments and Restructuring Charges, Net	24
Note 15.	Share-Based Compensation Awards	25
Note 16.	Supplemental Cash Flow Information	26
Note 17.	Segment Information	26
Note 18.	Recently Issued Accounting Standards	29

7

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared by Eastman Chemical Company (the "Company" or "Eastman") in accordance and consistent with the accounting policies stated in the Company's 2012 Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP") and of necessity include some amounts that are based upon management estimates and judgments.  Future actual results could differ from such current estimates.  The unaudited consolidated financial statements include assets, liabilities, sales revenue, and expenses of all majority-owned subsidiaries and joint ventures in which a controlling interest is maintained.  Eastman accounts for other joint ventures and investments where it exercises significant influence on the equity basis.  Intercompany transactions and balances are eliminated in consolidation.  Certain prior period data has been reclassified in the Consolidated Financial Statements and accompanying footnotes to conform to current period presentation.

Solutia acquisition

Information related to the Solutia Inc. ("Solutia") acquisition completed July 2, 2012 is in Note 2, "Acquisitions and Investments in Joint Ventures".  As of the date of acquisition, results of the acquired Solutia businesses are included in Eastman results. 

2. ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES

Solutia Inc.

On July 2, 2012, the Company completed its acquisition of Solutia, a global leader in performance materials and specialty chemicals.  In the acquisition, each outstanding share of Solutia common stock was cancelled and converted automatically into the right to receive $22.00 in cash and 0.12 shares of Eastman common stock.  In total, 14.7 million shares of Eastman common stock were issued in the transaction.  The fair value of total consideration transferred was $4.8 billion, consisting of cash of $2.6 billion, net of cash acquired; equity in the form of Eastman stock of approximately $700 million; and the assumption and subsequent repayment of Solutia's debt at fair value of $1.5 billion.  

The funding of the cash portion of the purchase price, repayment of Solutia's debt, and acquisition costs was provided primarily from borrowings, including the $2.3 billion net proceeds from the public offering of notes on June 5, 2012 and borrowings of $1.2 billion on July 2, 2012 under a five-year term loan agreement (the "Term Loan").  See Note 6, "Borrowings".

The purchase price allocation for the July 2, 2012 Solutia acquisition was finalized as of June 30, 2013. Updates to the December 31, 2012 preliminary purchase price allocation of the Solutia acquisition during second quarter 2013 for finalization of current and deferred income taxes were reflected in the Company's Consolidated Statements of Financial Position as of June 30, 2013 and are summarized in the table below. These adjustments were primarily for finalization of valuation allowances against Federal and state deferred tax assets in connection with the filing of the final Solutia consolidated federal tax return. These updates were not material to the Company's financial position or results of operations for 2012 or 2013.

Assets acquired and liabilities assumed on July 2, 2012
(Dollars in millions)	Initial Valuation			2012 Net Adjustments to Fair Value			December 31, 2012			2013 Net Adjustments to Fair Value			June 30, 2013
Current assets	$	901		$	19		$	920		$	2		$	922
Properties and equipment	940			7			947			—			947
Intangible assets	1,807			(16		)	1,791			—			1,791
Other noncurrent assets	612			2			614			67			681
Goodwill	1,965			265			2,230			(22		)	2,208
Current liabilities	(461		)	(1		)	(462		)	—			(462		)
Long-term liabilities	(2,389		)	(276		)	(2,665		)	(47		)	(2,712		)
Equity and cash consideration, net of $88 million cash acquired	$	3,375		$	—		$	3,375		$	—		$	3,375

8

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Company used the income, market, or cost approach (or a combination thereof) for the valuation as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions.  Market participants are considered to be buyers and sellers unrelated to Eastman in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on information available to Eastman management. The fair value of receivables acquired from Solutia on July 2, 2012 was $350 million, with gross contractual amounts receivable of $366 million. Acquired intangible assets are primarily customer relationships, trade names, and developed technologies.  Long-term liabilities are primarily Solutia's debt, which was repaid by Eastman at closing, deferred tax liabilities, environmental liabilities, and pension and other post-employment welfare plan obligations. The Company finalized the acquisition accounting related to the transaction during fourth quarter 2012 with the exception of income taxes which were completed during second quarter 2013 and did not have a material impact on the Company's financial position or results of operations.

The acquisition of Solutia broadens Eastman's global presence, facilitates growth opportunities through enhanced access to markets such as the automotive and architectural industries, and expands Eastman's portfolio of sustainable products.  In connection with the purchase, the Company recorded goodwill, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of liabilities assumed. The goodwill is attributed primarily to Solutia as a going concern and the fair value of expected cost synergies and revenue growth from combining the Eastman and Solutia businesses.  The going concern element represents the ability to earn a higher return on the combined assembled collection of assets and businesses of Solutia than if those assets and businesses were to be acquired and managed separately.  Other relevant elements of goodwill are the benefits of access to certain markets and work force. Goodwill from the Solutia acquisition has been allocated to certain of the Company's reportable segments. None of the goodwill is deductible for tax purposes. 

Goodwill	Goodwill by Segment
(Dollars in millions)
Additives & Functional Products	$	745
Advanced Materials	1,004
Specialty Fluids & Intermediates	459
Total	$	2,208

Properties acquired included a number of manufacturing, sales, and distribution sites and related facilities, land and leased sites that include leasehold improvements, and machinery and equipment for use in manufacturing operations.  Management valued properties using the cost approach supported where available by observable market data which includes consideration of obsolescence.

Intangible assets acquired included a number of trade names and trademarks that are both business-to-business and business-to-consumer in nature, including Crystex^®, Saflex^®, and Llumar^®.  Also acquired was technology related to products protected by a number of existing patents, patent applications, and trade secrets.  In addition to these intangible assets, the Company acquired a number of customer relationships in industries such as automotive tires and aviation. Management valued intangible assets using the relief from royalty and multi-period excess earnings methods, both forms of the income approach supported by observable market data for peer chemical companies.

Intangible Assets
(Dollars in millions)	Fair Value		Weighted-Average Amortization Period (Years)
Amortizable intangible assets
Customer relationships	$	809	22
Developed technologies	440		13
Indefinite-lived intangible assets
Trade names	542
Total	$	1,791

9

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Management estimated the fair market value of fixed-rate debt based on the viewpoint that the exit price approximated the entry price given the lack of observable market prices. Additionally, acquired interest rate swaps and foreign exchange contracts were terminated and settled immediately following the acquisition. Because these derivatives were recorded at fair value in the opening balance sheet, there were no gains or losses associated with these settlements.

Management also evaluated probable loss contingencies, including those for legal and environmental matters, as prescribed under applicable GAAP. Due to the lack of observable market inputs, assumed liabilities for environmental loss contingencies that were both probable and estimable were recorded based upon estimates of future cash outflows for such contingencies as of the acquisition date. See Note 10, "Environmental Matters", for more information.

In third quarter and first nine months2013 the Company recognized $9 million and $24 million, respectively, in integration costs. In third quarter and first nine months 2012, the Company recognized $15 million and $28 million, respectively, in Solutia acquisition transaction costs and $7 million and $9 million, respectively, in integration costs. In first nine months 2012, the Company recognized $32 million in financing costs related to the acquisition. Transaction costs and integration costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item, and financing costs are included in the "Net interest expense" and "Other charges (income), net" line items in the Unaudited Consolidated Statements of Earnings, Comprehensive Income, and Retained Earnings. In third quarter and first nine months 2012, there were $28 million in restructuring charges for severance associated with the acquisition and integration of Solutia. As required by purchase accounting, the acquired inventories were marked to fair value. These inventories were sold in third quarter 2012 resulting in a one-time $75 million increase in cost of sales, net of the LIFO impact of these inventories, in third quarter and first nine months 2012.   

Beginning third quarter 2012, the Company's consolidated results of operations include the results of the acquired Solutia businesses.  The unaudited pro forma financial results for three months and nine months endedSeptember 30, 2012 combine the consolidated results of Eastman and Solutia giving effect to the acquisition of Solutia as if it had been completed on January 1, 2011, the beginning of the comparable annual reporting period prior to the year of acquisition.  The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition.  This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2011.

The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of Solutia depreciable fixed assets and definite-life amortizable assets acquired in the transaction.  The unaudited pro forma results also include adjustments to net interest expense and elimination of early debt extinguishment costs historically recorded by Solutia based upon the retirement of Solutia's debt and issuance of additional debt related to the transaction.  The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results, as well as the elimination of historical net changes in valuation allowances against certain deferred tax assets of Solutia.

Additionally, in the preparation of unaudited pro forma sales and earnings from continuing operations including noncontrolling interest, Solutia's historical consolidated results have been retrospectively adjusted for the change in accounting methodology for pension and other post-employment benefit ("OPEB") plans actuarial gains and losses adopted by Eastman during first quarter 2012.  For additional information, see Note 14, "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

	2012
(Dollars in millions)	Third Quarter		First Nine Months
Pro forma sales	$	2,259	$	6,951
Pro forma earnings from continuing operations including noncontrolling interest	241		689

10

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Non-recurring costs directly attributable to the acquisition, which will not have an ongoing impact, are excluded from unaudited pro forma earnings from continuing operations including noncontrolling interest in third quarter 2012. These items include transaction, integration, and financing costs incurred by Eastman during third quarter and first nine months 2012 as well as transaction costs of $45 million and expenses of $19 million for the accelerated vesting of stock-based compensation awards incurred by Solutia prior to its acquisition by Eastman. Additionally, the non-recurring costs of acquired inventories have been eliminated from the unaudited pro forma earnings from continuing operations in third quarter 2012 and first nine months 2012.

3. INVENTORIES

	September 30,			December 31,
(Dollars in millions)	2013			2012
At FIFO or average cost (approximates current cost)
Finished goods	$	966		$	941
Work in process	297			288
Raw materials and supplies	511			536
Total inventories	1,774			1,765
LIFO Reserve	(500		)	(505		)
Total inventories	$	1,274		$	1,260

Inventories valued on the LIFO method were approximately 60 percent of total inventories as of bothSeptember 30, 2013 and December 31, 2012.

4. PAYABLES AND OTHER CURRENT LIABILITIES

	September 30,		December 31,
(Dollars in millions)	2013		2012
Trade creditors	$	657	$	723
Accrued payrolls, vacation, and variable-incentive compensation	172		171
Accrued taxes	97		76
Post-employment obligations	60		62
Interest payable	36		59
Environmental contingent liabilities, current portion	35		35
Other	266		234
Total payables and other current liabilities	$	1,323	$	1,360

The current portion of post-employment obligations is an estimate of current year payments. Included in "Other" above are dividends payable, certain accruals for payroll deductions and employee benefits, the current portion of hedging liabilities, and other payables and accruals.

11

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

5. PROVISION FOR INCOME TAXES

	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Provision for income taxes	$	125		$	64		$	338		$	240
Effective tax rate	29		%	29		%	29		%	33		%

The third quarter 2013 effective tax rate was impacted by a $14 million benefit primarily due to adjustments to the tax provision to reflect the finalization of the 2012 consolidated U.S. Federal income tax return. The first nine months2013 effective tax rate was impacted by the $14 million benefit of the adjustment and enactment of the American Taxpayer Relief Act of 2012 in January 2013 which resulted in a $10 million benefit primarily related to a research and development ("R&D") tax credit. The third quarter and first nine months2012 effective tax rates included an $8 million benefit from the settlement of U.S. and non-U.S. income tax audits and a $5 million benefit from the reversal of tax reserves due to the expiration of the relevant statute of limitations.

The following table reflects a revision of a 2012 deferred tax liability line item reported in Note 9, "Provision for Income Taxes" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The "Amortization" line item was mischaracterized as "Inventory reserves". There was no impact on net deferred tax liability reported in the Company's 2012 Annual Report on Form 10-K.

(Dollars in millions)	December 31, 2012
Deferred tax assets
Post-employment obligations	$	715
Net operating loss carryforwards	630
Tax credit carryforwards	230
Environmental reserves	145
Other	82
Total deferred tax assets	1,802
Less valuation allowance	(215		)
Deferred tax assets less valuation allowance	$	1,587
Deferred tax liabilities
Depreciation	$	(951	)
Amortization	(666		)
Total deferred tax liabilities	$	(1,617	)
Net deferred tax liabilities	$	(30	)
As recorded in the Consolidated Statements of Financial Position:
Other current assets	$	34
Other noncurrent assets	30
Payables and other current liabilities	(3		)
Deferred income tax liabilities	(91		)
Net deferred tax liabilities	$	(30	)

12

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

6. BORROWINGS

	September 30,		December 31,
(Dollars in millions)	2013		2012
Borrowings consisted of:
3% notes due 2015	$	250	$	250
2.4% notes due 2017	997		997
6.30% notes due 2018	172		174
5.5% notes due 2019	250		250
4.5% notes due 2021	250		250
3.6% notes due 2022	894		893
7 1/4% debentures due 2024	243		243
7 5/8% debentures due 2024	54		54
7.60% debentures due 2027	222		222
4.8% notes due 2042	497		496
Credit facility and commercial paper borrowings	600		950
Other	—		4
Total borrowings	4,429		4,783
Borrowings due within one year	—		4
Long-term borrowings	$	4,429	$	4,779

Credit Facility and Commercial Paper Borrowings

On July 2, 2012, the Company borrowed the entire $1.2 billion available under the five-year Term Loan. Proceeds from these borrowings were used to pay, in part, the cash portion of the Solutia acquisition, repay Solutia debt, and pay acquisition costs. During the first nine months of 2013, the Company repaid $800 million of its Term Loan using $300 million of commercial paper borrowings, $150 million of its accounts receivable securitization facility (the "A/R Facility"), and $350 million in cash. At September 30, 2013 and December 31, 2012, the Term Loan balances outstanding were $150 million and $950 million, respectively. The interest rate on the Term Loan as of September 30, 2013 was 1.69 percent.

The Company has a $750 million revolving credit agreement (the "Revolving Credit Facility") expiring December 2016.  Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. At September 30, 2013 and December 31, 2012, the Company had no outstanding borrowings under the Revolving Credit Facility.

The Revolving Credit Facility provides liquidity support for commercial paper borrowings and general corporate purposes.  Accordingly, any outstanding commercial paper borrowings reduce capacity for borrowings available under the Revolving Credit Facility.  Given the expiration date of the Revolving Credit Facility, any commercial paper borrowings supported by the Revolving Credit Facility are classified as long-term borrowings because the Company has the ability and intent to refinance such borrowings on a long-term basis. At September 30, 2013 the Company's commercial paper borrowings were $300 million with a weighted average interest rate of 0.33 percent, and the proceeds were used to repay a portion of the Term Loan. There were no commercial paper borrowings at December 31, 2012.

The Company also has a $250 million line of credit under the A/R Facility, expiring April 2016.  Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility.  At September 30, 2013, the Company's borrowings under the A/R Facility were $150 million secured by trade receivables with an interest rate of 0.91 percent, and the proceeds were used to repay a portion of the Term Loan. At December 31, 2012, the Company had no outstanding borrowings under the A/R Facility.

13

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Term Loan, Revolving Credit Facility, and the A/R Facility contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented.  As of September 30, 2013, as a result of the $300 million in commercial paper borrowings, the amount available under the Revolving Credit Facility was $450 million. As of September 30, 2013, as a result of the $150 million borrowings under the A/R Facility, $100 million was available under this facility. As of December 31, 2012, substantially all of the amounts under these facilities were available for borrowing. The Company would not violate applicable covenants for these periods if the total available amounts of the facilities had been borrowed.

Fair Value of Borrowings

The Company has classified its long-term borrowings at September 30, 2013 and December 31, 2012 under the fair value hierarchy as defined in the accounting policies in Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.  The fair value for fixed-rate borrowings is based on current market prices and is classified in level 1.  The fair value for the Company's floating-rate borrowings, which relate to the Term Loan, the A/R Facility, and commercial paper, equals the carrying value and is classified within level 2.

			Fair Value Measurements at September 30, 2013
(Dollars in millions)	Recorded Amount September 30, 2013		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,429	$	4,569	$	3,969	$	600	$	—

			Fair Value Measurements at December 31, 2012
(Dollars in millions)	Recorded Amount December 31, 2012		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,779	$	5,165	$	4,215	$	950	$	—

7. DERIVATIVES

Hedging Programs

The Company is exposed to market risk, such as changes in currency exchange rates, commodity prices, and interest rates.  The Company uses various derivative financial instruments when appropriate pursuant to the Company's hedging policies to mitigate these market risk factors and their effect on the cash flows of the underlying transactions.  Designation is performed on a specific exposure basis to support hedge accounting.  The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the cash flows of the underlying exposures being hedged.  The Company does not hold or issue derivative financial instruments for trading purposes.  For further information, see Note 12, "Derivatives", to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

Fair Value Hedges

Fair value hedges are defined as derivative or non-derivative instruments designated as and used to hedge the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk.  For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.  As of September 30, 2013 and December 31, 2012, the Company had no fair value hedges.

14

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Cash Flow Hedges

Cash flow hedges are derivative instruments designated as and used to hedge the exposure to variability in expected future cash flows that is attributable to a particular risk.  For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income, net of income taxes and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

As of September 30, 2013, the total notional amounts of the Company's foreign exchange forward and option contracts were €867 million (approximately $1.2 billion equivalent) and ¥9.1 billion (approximately $94 million equivalent), respectively. The total notional volume hedged for contract ethylene sales was approximately 26 thousand metric tons, and the total notional volume hedged for feedstock was approximately 10 million barrels.  The Company had no outstanding hedges for energy or interest rate swaps.

As of December 31, 2012, the total notional amounts of the Company's foreign exchange forward and option contracts were €480 million (approximately $635 million equivalent) and ¥3.2 billion (approximately $35 million equivalent), respectively. The total notional volume hedged for contract ethylene sales was approximately 49 thousand metric tons, and the total notional volume hedged for feedstock was approximately 3 million barrels.  The Company had no outstanding hedges for energy or interest rate swaps.

Fair Value Measurements

For additional information on fair value measurement, see Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

The following chart shows the gross financial assets and liabilities valued on a recurring basis.

(Dollars in millions)				Fair Value Measurements at September 30, 2013
Description	September 30, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	42		$	—	$	42		$	—
Derivative Liabilities	(46		)	—		(43		)	(3		)
	$	(4	)	$	—	$	(1	)	$	(3	)

(Dollars in millions)				Fair Value Measurements at December 31, 2012
Description	December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	28		$	—	$	28		$	—
Derivative Liabilities	(24		)	—		(19		)	(5		)
	$	4		$	—	$	9		$	(5	)

The majority of the Company's derivative assets are classified as Level 2.  Level 2 fair value is based on estimates using standard pricing models.  These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves and currency spot and forward rates.  The fair value of commodity contracts is derived using forward curves supplied by an industry recognized and unrelated third party.  In addition, on an ongoing basis, the Company tests a subset of its valuations against valuations received from the transaction's counterparty to validate the accuracy of its standard pricing models.  Counterparties to these derivative contracts are highly rated financial institutions which the Company believes carry only a minimal risk of nonperformance.

15

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Company holds Level 3 assets for commodity hedges.  The fair values of Level 3 instruments are determined using pricing data similar to that used in Level 2 financial instruments described above, and reflect adjustments for less liquid markets or longer contractual terms.  All Level 3 hedges will mature in the current year.  The Company determines the fair value of paraxylene derivative forward contracts based on related inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets, and which influence the actual forward price of the commodity.  Due to the fact that the forward price of the commodity itself is considered unobservable, the Company has categorized these forward contracts as Level 3. The Company determines the fair value of ethylene derivative forward contracts using an average of unadjusted forward ethylene prices provided by industry recognized experts.

The table below presents a rollforward of activity for these assets (liabilities) for the period ended September 30, 2013:

Fair Value Measurements Using Level 3 Inputs
Commodity Contracts	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Balance at beginning of period	$	(7	)	$	(8	)	$	(5	)	$	—
Realized gain (loss) in sales revenue	(3		)	—			(10		)	—
Change in unrealized gain (loss)	4			4			2			(5		)
Settlements	3			3			10			4
Transfers (out) in of Level 3	—			—			—			—
Ending balance at Balance at September 30	$	(3	)	$	(1	)	$	(3	)	$	(1	)

The following chart shows the financial assets and liabilities valued on a recurring basis and their location in the Unaudited Consolidated Statements of Financial Position.  The Company had no nonqualifying derivatives or derivatives that are not designated as hedges as of September 30, 2013 and December 31, 2012. All of the Company's derivative contracts are subject to master netting arrangements, or similar agreements, which provide for the option to settle contracts on a net basis when they settle on the same day and the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event. The Company has elected to present the derivative contracts on a gross basis in the Unaudited Consolidated Statements of Financial Position. Had it chosen to present the derivatives contracts on a net basis, it would have a derivative in a net asset position of $17 million and a derivative in a net liability position of $21 million as of September 30, 2013. The Company also does not have any cash collateral due under such agreements.

Fair Value of Derivatives Designated as Hedging Instruments

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Assets	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Other current assets	$	13	$	7
Commodity contracts	Other noncurrent assets	4		—
Foreign exchange contracts	Other current assets	13		8
Foreign exchange contracts	Other noncurrent assets	12		13
		$	42	$	28

16

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Liabilities	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Payables and other current liabilities	$	11	$	13
Commodity contracts	Other long-term liabilities	6		—
Foreign exchange contracts	Payables and other current liabilities	14		8
Foreign exchange contracts	Other long-term liabilities	15		3
		$	46	$	24

Derivatives' Hedging Relationships

	Third Quarter
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	8		$	3		Sales	$	(3	)	$	—
							Cost of Sales	4			1
Foreign exchange contracts	(22		)	(11		)	Sales	2			12
Forward starting interest rate swap contracts	1			1			Net interest expense	(2		)	(2		)
	$	(13	)	$	(7	)		$	1		$	11
	First Nine Months
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	4		$	(1	)	Sales	$	(10	)	$	—
							Cost of sales	1			(17		)
Foreign exchange contracts	(11		)	(8		)	Sales	8			29
Forward starting interest rate swap contracts	3			(29		)	Net interest expense	(6		)	(3		)
	$	(4	)	$	(38	)		$	(7	)	$	9

In first nine months 2012, forward starting interest rate swaps contracts related to the issuance of debt for the Solutia acquisition were settled, resulting in an additional loss, net of tax of $44 million recorded in Other Comprehensive Income.

17

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Hedging Summary

Monetized positions and mark-to-market gains and losses from raw materials and energy, currency, and certain interest rate hedges that were included in accumulated other comprehensive income before taxes totaled losses of approximately $80 million at September 30, 2013 and $66 million at September 30, 2012.  If realized, approximately $6 million in losses in third quarter 2013 will be reclassified into earnings during the next 12 months.  Ineffective portions of hedges are immediately recognized in cost of sales or other charges (income), net.  There were no material gains or losses related to the ineffective portion of hedges recognized in third quarter and first nine months2013. For third quarter 2012, there was no material ineffectiveness. For first nine months2012, the ineffective portion of the Company's qualifying hedges was $2 million.

The gains or losses on nonqualifying derivatives or derivatives that are not designated as hedges are marked to market in the line item "Other charges (income), net" of the Statements of Earnings, and, in all periods presented, represent foreign exchange derivatives denominated in multiple currencies and are transacted and settled in the same quarter.  The Company recognized $3 million net losses during third quarter 2013 and approximately $2 million net gains during third quarter2012 on nonqualifying derivatives.  The Company recognized approximately $4 million net losses and $4 million net gains on nonqualifying derivatives during first nine months2013 and 2012, respectively.

8. RETIREMENT PLANS

As described in more detail below, Eastman offers various postretirement benefits to its employees.

DEFINED BENEFIT PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFIT PLANS

Pension Plans

Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits.  Costs recognized for these benefits are recorded using estimated amounts, which may change as actual costs derived for the year are determined.

In July 2012, as part of its acquisition of Solutia, the Company assumed Solutia's U.S. and non-U.S. defined benefit pension plans.  These U.S. plans were closed to new participants prior to the acquisition and were no longer accruing additional benefits.  For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

Other Post-Employment Benefit Plans

Under its OPEB Plans, Eastman provides a subsidy for life insurance, health care, and dental benefits to eligible retirees hired prior to January 1, 2007, and a subsidy for health care and dental benefits to retirees' eligible survivors.  In general, Eastman provides those benefits to retirees eligible under the Company's U.S. plans. Similar benefits are also made available to retirees of Holston Defense Corporation, a wholly-owned subsidiary of the Company that, prior to January 1, 1999, operated a government-owned ammunition plant.

Eligible employees hired on or after January 1, 2007 have access to postretirement health care benefits, but Eastman does not provide a subsidy for the premium cost of postretirement benefits for those employees.  A few of the Company's non-U.S. operations have supplemental health benefit plans for certain retirees, the cost of which is not significant to the Company.

In July 2012, as part of its acquisition of Solutia, the Company assumed Solutia's OPEB plans.  For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

18

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Costs recognized for benefits for eligible retirees hired prior to January 1, 2007 are recognized using estimated amounts which may change as actual costs for the year are determined.  Components of net periodic benefit cost were as follows:

	Third Quarter
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	11		$	3		$	9		$	3		$	2		$	2
Interest cost	22			7			24			7			11			12
Expected return on assets	(32		)	(9		)	(30		)	(8		)	(1		)	(2		)
Amortization of:
Prior service cost (credit)	(1		)	—			(1		)	—			(6		)	(4		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	—		$	1		$	2		$	2		$	(80	)	$	8

	First Nine Months
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	32		$	10		$	29		$	6		$	8		$	7
Interest cost	66			21			61			13			33			33
Expected return on assets	(96		)	(26		)	(72		)	(16		)	(5		)	(3		)
Amortization of:
Prior service cost (credit)	(3		)	—			(3		)	—			(16		)	(14		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	(1	)	$	5		$	15		$	3		$	(66	)	$	23

⁽¹⁾Mark-to-market gain in third quarter and first nine months2013 due to the interim remeasurement of the Eastman OPEB plan obligation, triggered by a plan change in life insurance benefits in third quarter.

19

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In third quarter 2013, the Company changed life insurance benefits provided to future retirees by the Eastman OPEB plan which triggered an interim remeasurement of this OPEB plan obligation. The remeasurement resulted in a reduction in the Accumulated Post-Employment Benefit Obligation of approximately $47 million which will be amortized as a prior service credit from Accumulated Other Comprehensive Income over 8 years. The remeasurement of the plan also resulted in a mark-to-market actuarial gain of $86 million in third quarter 2013. The actuarial gain was primarily due to a higher assumed discount rate of 4.72 percent in third quarter 2013 compared to 4.01 percent at December 31, 2012. The higher assumed discount rate is reflective of changes in global market conditions and interest rates on high-grade corporate bonds. For additional information concerning the Company's accounting methodology for pension and OPEB actuarial gains and losses, see Note 1, "Significant Accounting Policies" and Note 14 "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

The Company contributed $99 million and $87 million to its U.S. defined benefit pension plans in first nine months2013 and 2012, respectively.

9. COMMITMENTS

Purchase Obligations and Lease Commitments

The Company had various purchase obligations at September 30, 2013 totaling $2.8 billionover a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business.  The Company also had various lease commitments for property and equipment under cancelable, noncancelable, and month-to-month operating leases totaling approximately $225 million over a period of several years.  Of the total lease commitments, approximately 5 percent relate to machinery and equipment, including computer and communications equipment and production equipment; approximately 60 percent relate to real property, including office space, storage facilities, and land; and approximately 35 percent relate to railcars.

Guarantees

The Company has operating leases with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease as well as other guarantees.  Disclosures about each group of similar guarantees are provided below.

Residual Value Guarantees

The Company has operating leases with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease.  These residual value guarantees at September 30, 2013 totaled $117 million and consisted primarily of leases for railcars and company aircraft and will expire beginning in 2016.  Management believes, based on current facts and circumstances, that the likelihood of material residual guarantee payments is remote.

Other Guarantees

Guarantees and claims also arise during the ordinary course of business from relationships with joint venture partners, suppliers, customers, and other parties when the Company undertakes an obligation to guarantee the performance of others, if specified triggering events occur.  Non-performance under a contract could trigger an obligation of the Company.  The Company's current other guarantees include guarantees relating primarily to intellectual property, environmental matters, and other indemnifications and have arisen through the normal course of business.  The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims, if they were to occur.  These other guarantees have terms of between 1 and 15 years with maximum potential future payments of approximately $54 million in the aggregate, with none of these guarantees individually significant to the Company's operating results, financial position, or liquidity.  The Company's current expectation is that future payment or performance related to non-performance under other guarantees is considered remote.

20

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

10. ENVIRONMENTAL MATTERS

Certain Eastman manufacturing sites generate hazardous and nonhazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies.  In connection with the cleanup of various hazardous waste sites, the Company, along with many other entities, has been designated a potentially responsible party ("PRP") by the U.S. Environmental Protection Agency under the Comprehensive Environmental Response, Compensation and Liability Act, which potentially subjects PRPs to joint and several liability for such cleanup costs.  In addition, the Company will be required to incur costs for environmental remediation and closure and postclosure under the federal Resource Conservation and Recovery Act.  Reserves for environmental contingencies have been established in accordance with Eastman's policies described in Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The Company's total reserve for environmental contingencies was $373 million and $394 million at September 30, 2013 and December 31, 2012, respectively.  At both September 30, 2013 and December 31, 2012, this reserve included $8 million related to sites previously closed and impaired by Eastman and sites that have been divested by Eastman but for which the Company retains the environmental liability related to these sites.

Estimated future environmental expenditures for remediation costs ranged from the minimum or best estimate of $344 million to the maximum of $600 million and from the minimum or best estimate of $365 million to the maximum of $623 million at September 30, 2013 and December 31, 2012, respectively.  The maximum estimated future costs are considered to be reasonably possible and include the amounts accrued at both September 30, 2013 and December 31, 2012.  Although the resolution of uncertainties related to these environmental matters may have a material adverse effect on the Company's consolidated results of operations in the period recognized, because of expected sharing of costs, the availability of legal defenses, and the Company's preliminary assessment of actions that may be required, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position or cash flows.  

For facilities that have asset retirement obligations, the best estimate accrued to date over the facilities' estimated useful lives for these asset retirement obligation costs was $29 million at both September 30, 2013 and December 31, 2012. 

Reserves for environmental remediation that management believes to be probable and estimable are recorded as current and long-term liabilities in the Unaudited Consolidated Statements of Financial Position. These reserves include liabilities expected to be paid out within 30 years. Changes in the reserves for environmental remediation liabilities during first nine months2013 including net charges taken, which are included in cost of goods sold, and cash reductions are summarized below:

(Dollars in millions)	Environmental Remediation Liabilities
Balance at December 31, 2012	$	365
Net charges taken	—
Cash reductions	(21		)
Balance at September 30, 2013	$	344

The Company's total environmental reserve for environmental contingencies, including remediation costs and asset retirement obligations, is recorded in the Unaudited Consolidated Statements of Financial Position as follows:

(Dollars in millions)	September 30, 2013		December 31, 2012
Environmental contingent liabilities, current	$	35	$	35
Environmental contingent liabilities, long-term	338		359
Total	$	373	$	394

On July 2, 2012, as described in Note 2, "Acquisitions and Investments in Joint Ventures", the Company completed the acquisition of Solutia, resulting in a $368 million increase to the Company's reserve for remediation costs and $1 million in additional asset retirement obligation costs. Included in the additional remediation reserve are costs associated with damages to natural resources. The additional environmental remediation reserve includes costs of $149 million and $107 million related to the Anniston, Alabama and the Sauget, Illinois plant sites, respectively.

21

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

11. LEGAL MATTERS

General

From time to time, the Company and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are being handled and defended in the ordinary course of business.  While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

12. STOCKHOLDERS' EQUITY

A reconciliation of the changes in stockholders' equity for first nine months 2013 is provided below:

(Dollars in millions)	Common Stock at Par Value $	Paid-in Capital $	Retained Earnings $		Accumulated Other Comprehensive Income (Loss) $	Treasury Stock at Cost $		Total Stockholders' Equity Attributed to Eastman $		Noncontrolling Interest $		Total Stockholders' Equity $
Balance at December 31, 2012	2	1,709	3,038		123	(1,929	)	2,943		85		3,028
Net Earnings	—	—	819		—	—		819		4		823
Cash Dividends Declared (1)	—	—	(139	)	—	—		(139	)	—		(139	)
Other Comprehensive Income	—	—	—		24	—		24		—		24
Share-Based Compensation Expense (2)	—	26	—		—	—		26		—		26
Stock Option Exercises	—	10	—		—	—		10		—		10
Shares Issued for Business Combination (3)	—	16	—		—	—		16		—		16
Other (4)	—	2	—		—	—		2		1		3
Share Repurchase	—	—	—		—	(113	)	(113	)	—		(113	)
Distributions to Noncontrolling Interest	—	—	—		—	—		—		(9	)	(9	)
Balance at September 30, 2013	2	1,763	3,718		147	(2,042	)	3,588		81		3,669

⁽¹⁾  Includes cash dividends declared, but unpaid.

⁽²⁾  Includes the fair value of share-based awards recognized for share-based compensation.

⁽³⁾  Proceeds of warrant exercises related to the Company's acquisition of Solutia.

⁽⁴⁾  Primarily tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

(Dollars in millions)	Cumulative Translation Adjustment		Unrecognized Prior Service Credits for Benefit Plans			Unrealized Gains (Losses) on Derivative Instruments			Unrealized Losses on Investments			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2011	$	64	$	78		$	(3	)	$	(1	)	$	138
Period change	41		(13		)	(43		)	—			(15		)
Balance at December 31, 2012	105		65			(46		)	(1		)	123
Period change	10		18			(4		)	—			24
Balance at September 30, 2013	$	115	$	83		$	(50	)	$	(1	)	$	147

22

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Amounts of other comprehensive income (loss) are presented net of applicable taxes.  The Company records deferred income taxes on the cumulative translation adjustment related to branch operations and other entities included in the Company's consolidated U.S. tax return.  No deferred income taxes are provided on the cumulative translation adjustment of subsidiaries outside the United States, as such cumulative translation adjustment is considered to be a component of permanently invested, unremitted earnings of these foreign subsidiaries.

Components of other comprehensive income recorded in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects:

	Third Quarter
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	43		$	45		$	32		$	30
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	40			25			(5		)	(4		)
Derivatives and hedging:
Unrealized loss during period	(19		)	(13		)	(5		)	(3		)
Reclassification adjustment for losses included in net income (2)	(2		)	—			(7		)	(4		)
Total other comprehensive income (loss)	$	62		$	57		$	15		$	19
	First Nine Months
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	8		$	10		$	23		$	21
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	$	28		18			(17		)	(12		)
Derivatives and hedging:
Unrealized gain (loss) during period	(13		)	(4		)	(53		)	(33		)
Reclassification adjustment for gains (losses) included in net income (2)	6			—			(8		)	(5		)
Total other comprehensive income (loss)	$	29		$	24		$	(55	)	$	(29	)

⁽¹⁾  Included in the calculation of net periodic benefit costs for pension and OPEB. See Note 8, "Retirement Plans".

⁽²⁾  Gains and losses from derivatives and hedging are included in sales, cost of sales, and net interest expense. See Note 7, "Derivatives".

13. EARNINGS AND DIVIDENDS PER SHARE

	Third Quarter		First Nine Months
	2013	2012	2013	2012
Shares used for earnings per share calculation (in millions):
Basic	154.0	152.9	154.3	142.8
Diluted	156.4	156.4	156.7	146.3

23

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In July 2012, as part of the Company's acquisition of Solutia, the Company issued 14.7 million shares of Eastman common stock and 4,481,250 warrants to purchase 0.12 shares of Eastman common stock and $22.00 cash per warrant upon payment of the warrant exercise price of $29.70. Third quarter and first nine months 2013 include the shares issued in the Solutia acquisition. First nine months 2013 also reflects the impact of exercised Solutia acquisition warrants. Unexercised warrants expired on February 27, 2013. For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

In third quarter2013, common shares underlying options to purchase 125,019 shares of common stock were excluded from the shares treated as outstanding for computation of diluted earnings per share because the total market value of option exercises for these awards was less than the total cash proceeds that would be received for these exercises. In first nine months2013, there were no outstanding options to purchase shares of common stock excluded from the computation of diluted earnings per share. Third quarter and first nine months2013 reflect the impact of share repurchases of 463,418 and 1,579,118 shares, respectively.

In third quarter and first nine months2012, the only shares excluded from the computation of diluted earnings per share were 537,750 shares issuable upon exercise of the warrants issued in the Solutia acquisition. There were no share repurchases in third quarter or first nine months 2012.

The Company declared cash dividends of $0.30 and $0.26 per share in third quarter2013 and 2012, respectively, and $0.90 and $0.78 per share in first nine months2013 and 2012, respectively.

14. ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET

In third quarter and first nine months2013, there were $3 million and $24 million, respectively, of net asset impairments and restructuring charges, including $3 million and $9 million, respectively, of restructuring charges primarily for severance associated with the continued integration of Solutia.

During first nine months 2013, management announced its intent and finalized its decision to close a production facility in Germany for the Photovoltaics product line. This resulted in the Company recognizing asset impairments of $7 million and restructuring charges of $5 million including charges for severance. During first nine months 2013, management also approved and recorded severance charges of $6 million primarily for a voluntary separation plan for certain employees. In addition, during first nine months2013, a change in estimate for certain costs for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site resulted in a reduction of $4 million to previously recorded asset impairments and restructuring charges. Analysis of total site shutdown costs is ongoing and is subject to the finalization of certain aspects of the operating agreement termination.

In third quarter and first nine months2012, there were $37 million of asset impairments and restructuring charges. Restructuring charges of $28 million were for severance costs associated with the acquisition and integration of Solutia. The Company also recognized asset impairments of $9 million, primarily related to land retained from the previously discontinued Beaumont, Texas industrial gasification project. Based on fair value indicators, the carrying value of the Beaumont land was reduced by $6 million. For additional information related to the acquisition of Solutia, see Note 2, "Acquisitions and Investments in Joint Ventures".

24

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Changes in Reserves for Asset Impairments, Restructuring Charges, and Severance Charges

The following table summarizes the changes in other asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in shutdown reserves for severance costs and site closure costs paid for full year 2012 and first nine months2013:

(Dollars in millions)	Balance at January 1, 2012		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at December 31, 2012
Non-cash charges, net	$	—	$	43	$	(43	)	$	—		$	—
Severance costs	2		34		—			(32		)	4
Site closure and restructuring costs	—		43		(20		)	(2		)	21
Total	$	2	$	120	$	(63	)	$	(34	)	$	25

(Dollars in millions)	Balance at January 1, 2013		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at September 30, 2013
Non-cash charges, net	$	—	$	8	$	(8	)	$	—		$	—
Severance costs	4		16		1			(8		)	13
Site closure and restructuring costs	21		—		(1		)	(8		)	12
Total	$	25	$	24	$	(8	)	$	(16	)	$	25

The costs remaining for severance are expected to be applied to the reserves within one year.

15. SHARE-BASED COMPENSATION AWARDS

The Company utilizes share-based awards under employee and non-employee director compensation programs.  These share-based awards may include restricted and unrestricted stock, restricted stock units, stock options, and performance shares.  In third quarter2013 and 2012, approximately $8 million and $7 million, respectively, of compensation expense before tax were recognized in selling, general and administrative expense in the Unaudited Consolidated Statements of Earnings for all share-based awards. The impact on both third quarter2013 and 2012 net earnings of approximately $5 million is net of deferred tax expense related to share-based award compensation for each period.

In first nine months2013 and 2012, approximately $27 million and $24 million, respectively, of compensation expense before tax were recognized in selling, general and administrative expense in the Unaudited Consolidated Statements of Earnings for all share-based awards. The impact on first nine months2013 and 2012 net earnings of approximately $17 million and $15 million, respectively, is net of deferred tax expense related to share-based award compensation for each period.

For additional information regarding share-based compensation plans and awards, see Note 21, "Share-Based Compensation Plans and Awards", to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

25

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

16. SUPPLEMENTAL CASH FLOW INFORMATION

Included in the line item "Other items, net" of the "Cash flows from operating activities" section of the Unaudited Consolidated Statements of Cash Flows are the following changes to balance sheet line items:

(Dollars in millions)	First Nine Months
	2013			2012
Current assets	$	(1	)	$	(15	)
Other assets	20			45
Current liabilities	(24		)	2
Long-term liabilities and equity	(98		)	(54		)
Total	$	(103	)	$	(22	)

These changes included transactions such as monetized positions from raw material and energy, currency, and certain interest rate hedges, prepaid insurance, miscellaneous deferrals, accrued taxes, interest accruals, environmental accruals, and other miscellaneous accruals.

17. SEGMENT INFORMATION

The Company's products and operations are currently managed and reported in five operating segments -- Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, Fibers, and Specialty Fluids & Intermediates. Sales revenue for Perennial Wood™ and the Photovoltaics product line acquired from Solutia is shown in the tables below as "other" sales revenue. R&D, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown in the tables below as "other" operating earnings (loss).  For additional information concerning the Company's segments' businesses and products, see Note 23, "Segment Information" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

Included in third quarter and first nine months2013 "other" operating loss were Solutia acquisition integration costs of $9 million and $24 million, respectively, and restructuring charges of $3 million and $9 million, respectively, primarily for severance associated with the continued integration of Solutia. Included in third quarter and first nine months2012 "other" operating loss were Solutia acquisition transaction costs of $15 million and $28 million, respectively, and integration costs of $7 million and $9 million, respectively, and restructuring charges of $28 million in both periods for the acquisition of Solutia.

26

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Third Quarter
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	445	$	406
Adhesives & Plasticizers	321		348
Advanced Materials	583		559
Fibers	363		349
Specialty Fluids & Intermediates	620		592
Total Sales by Segment	2,332		2,254
Other	6		5
Total Sales	$	2,338	$	2,259
	First Nine Months
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	1,294	$	948
Adhesives & Plasticizers	1,005		1,094
Advanced Materials	1,792		1,166
Fibers	1,072		990
Specialty Fluids & Intermediates	1,904		1,728
Total Sales by Segment	7,067		5,926
Other	18		7
Total Sales	$	7,085	$	5,933

27

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Third Quarter
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)	$	111		$	86
Adhesives & Plasticizers	41			73
Advanced Materials (1)	69			18
Fibers	113			98
Specialty Fluids & Intermediates (1)	90			79
Total Operating Earnings by Segment	424			354
Other (2)
Growth initiatives and businesses not allocated to segments (3)	(20		)	(36		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	87			(5		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(12		)	(50		)
Total Operating Earnings	$	479		$	263
	First Nine Months
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)(5)(6)	$	313		$	215
Adhesives & Plasticizers (5)	139			211
Advanced Materials (1)(5)(6)	216			86
Fibers	343			295
Specialty Fluids & Intermediates (1)(5)	302			204
Total Operating Earnings by Segment	1,313			1,011
Other (2)
Growth initiatives and businesses not allocated to segments (3)(7)	(73		)	(84		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	93			(18		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(33		)	(65		)
Total Operating Earnings	$	1,300		$	844

⁽¹⁾  Included in third quarter and first nine months2012 are additional costs of $19 million, $39 million, and $17 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, of acquired Solutia inventories. See Note 2, "Acquisitions and Investments in Joint Ventures."

⁽²⁾  Research and development, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as "other" operating earnings (loss).

⁽³⁾  Included in third quarter and first nine months 2012 are $9 million in asset impairments, primarily of land retained from the previously discontinued Beaumont, Texas industrial gasification project. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁴⁾  Included in third quarter and first nine months 2013 earnings is a mark-to-market OPEB gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."

⁽⁵⁾  Included in third quarter and first nine months 2013 earnings are restructuring charges of $3 million in "Other" and included in first nine months 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, primarily for severance. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁶⁾  Included in first nine months 2013 earnings is a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the Additives & Functional Products and Advanced Materials segments, respectively. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁷⁾  Included in first nine months 2013 earnings are asset impairments and restructuring charges of $13 million primarily for closure costs of a production facility in Germany for the Photovoltaics product line.

28

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	September 30,		December 31,
(Dollars in millions)	2013		2012
Assets by Segment (1)
Additives & Functional Products	$	2,947	$	2,892
Adhesives & Plasticizers	987		1,088
Advanced Materials	3,803		3,744
Fibers	966		937
Specialty Fluids & Intermediates	2,079		1,987
Total Assets by Segment	10,782		10,648
Corporate Assets	945		971
Total Assets	$	11,727	$	11,619

⁽¹⁾  The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.

18. RECENTLY ISSUED ACCOUNTING STANDARDS

In February 2013, the Financial Accounting Standards Board issued accounting guidance, given divergence in practice, covering loss contingencies that are joint and several liability arrangements for which the settlement amount is fixed and is not covered by other GAAP. Under the new requirements, an entity is to measure the obligation as the amount the entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the entity expects to pay on behalf of it co-obligors. This guidance is effective for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In March 2013, the Financial Accounting Standards Board issued amended accounting guidance to address the release of cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than an in-substance real estate sale or oil/gas mineral rights) within a foreign entity. The cumulative translation adjustments should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, in the event of a step acquisition when the acquirer obtains control of an acquiree in which it held an equity interest immediately prior to the acquisition, the cumulative translation adjustments would be released into net income. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In April 2013, the Financial Accounting Standards Board issued clarifying guidance that requires financial statements to be prepared using the liquidation basis of accounting to present relevant information about an entity's expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation when liquidation is imminent. Liquidation is considered imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (i.e. involuntary bankruptcy). This guidance is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will have no impact on the Company's financial position or results of operations.

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance to permit the use of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. In addition, the update also removes the restriction on using different benchmark rates for similar hedges. This guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

29

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance, given divergence in practice, that addresses the financial statement presentation of tax items eligible for netting. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. Retrospective application and early adoption is permitted. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

30

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM	Page
Critical Accounting Estimates	32
Presentation of Non-GAAP and Pro Forma Combined Financial Measures	33
Overview	36
Results of Operations	38
Summary by Operating Segment	44
Summary by Customer Location	53
Liquidity, Capital Resources, and Other Financial Information	54
Recently Issued Accounting Standards	58
2013 Outlook	59
Forward-Looking Statements and Risk Factors	60

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based upon the consolidated financial statements for Eastman Chemical Company ("Eastman" or the "Company"), which have been prepared in accordance with accounting principles generally accepted ("GAAP") in the United States, and should be read in conjunction with the Company's audited consolidated financial statements, including related notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's 2012 Annual Report on Form 10-K, and the Company's unaudited consolidated financial statements, including related notes, included elsewhere in this Quarterly Report on Form 10-Q. All references to earnings per share ("EPS") contained in this report are diluted earnings per share unless otherwise noted.

On July 2, 2012, the Company completed its acquisition of Solutia Inc. ("Solutia"), a global leader in performance materials and specialty chemicals.  The fair value of total consideration transferred was $4.8 billion, consisting of cash of $2.6 billion, net of cash acquired; equity in the form of Eastman stock of approximately $700 million; and the assumption and subsequent repayment of Solutia's debt at fair value of $1.5 billion.  See Note 6, "Borrowings" and Note 2, "Acquisitions and Investments in Joint Ventures", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.  As of the date of acquisition, results of the acquired Solutia businesses are included in Eastman results. 

31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING ESTIMATES

In preparing the consolidated financial statements in conformity with GAAP, the Company's management must make decisions which impact the reported amounts and the related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and assumptions on which to base estimates and judgments that affect the reported amounts of assets, liabilities, sales revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to allowances for doubtful accounts, impairment of long-lived assets, environmental costs, pension and other post-employment benefits, litigation and contingent liabilities, income taxes, and purchase accounting. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company's management believes the critical accounting estimates described in Part II, Item 7 of the Company's 2012 Annual Report on Form 10-K as updated below are the most important to the fair presentation of the Company's financial condition and results. These estimates require management's most significant judgments in the preparation of the Company's consolidated financial statements.

Impairment of Long-Lived Assets

The Company conducted its annual testing of goodwill and indefinite-lived intangible assets in third quarter of 2013, as described below.

Goodwill

The testing of goodwill is performed at the reporting unit level which the Company has determined to be its components. Components are defined as one level below an operating segment, and in order to be a reporting unit, the component must 1) be a "business" as defined by applicable accounting standards (an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits directly to the investors or other owners, member, or participants); 2) have discrete financial information available; and 3) be reviewed regularly by Company operating segment management. The Company aggregates certain components into reporting units based on economic similarities. During 2013 testing, the Company did not evaluate the acquired Solutia components for aggregation, instead testing each component as a separate reporting unit. However, management will continue to review further aggregation as those components become integrated with Eastman.

The Company uses an income approach and applies a fair value methodology based on discounted cash flows in testing the carrying value of goodwill for each reporting unit. The key assumptions and estimates used in the Company’s 2013 goodwill impairment testing included a long-term projection of revenues, expenses, and cash flows, the estimated discount rate, and the estimated tax rate. The Company believes these assumptions are consistent with those a hypothetical market participant would use given circumstances that were present at the time the estimates were made. However, actual results and amounts may be significantly different from the Company’s estimates. In addition, the use of different estimates or assumptions could result in materially different determinations. If the estimated fair value of a reporting unit is determined to be less than the carrying value of the net assets of the reporting unit including goodwill, additional steps, including an allocation of the estimated fair value to the assets and liabilities of the reporting unit, would be necessary to determine the amount, if any, of goodwill impairment.

As a result of the tests performed during third quarter 2013, there was no impairment of the Company's goodwill. Fair values substantially exceeded the carrying values for each reporting unit tested, except for the performance films (a part of the Advanced Materials operating segment) and rubber chemicals (a part of the Additives & Functional Products operating segment) reporting units acquired from Solutia. As anticipated, because of the recent acquisition of Solutia, the fair value of these two reporting units was not substantially in excess of the carrying value.

Goodwill of $743 million is allocated to the rubber chemicals reporting unit, whose fair value exceeded its carrying value by 16 percent. Two of the most critical assumptions used in the calculation of the fair value of the rubber chemicals reporting unit are the long-term growth rate and the discount rate. The Company performed a sensitivity analysis on both of those assumptions. The fair value exceeds the carrying value with either a 1 percent decrease in the long-term growth rate or a 1 percent increase in the discount rate.

32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Goodwill of $532 million is allocated to the performance films reporting unit, whose fair value exceeded its carry value by 11 percent. Two of the most critical assumptions used in the calculation of the fair value of the performance films reporting unit are the long-term growth rate and the discount rate. The Company performed a sensitivity analysis on both of those assumptions. The fair value exceeds the carrying value with a 1 percent decrease in the long-term growth rate; however, with a 1 percent increase in the discount rate, the fair value was 2 percent less than the carrying value.

In order to determine the discount rate, the Company uses a market perspective weighted average cost of capital ("WACC") approach. The WACC is calculated incorporating weighted average returns on debt and equity from market participants. Therefore, changes in the market, which are beyond the control of the Company, may have an impact on future calculations of estimated fair value.

Indefinite-lived Intangible Assets

The carrying value of indefinite-lived intangible assets is considered to be impaired when the fair value, as established by appraisal or based on discounted future cash flows of certain related products, is less than their respective carrying values.

Indefinite-lived intangible assets, consisting of various trademarks, are tested for potential impairment by comparing the estimated fair value to the carrying amount. The Company uses an income approach, specifically the relief from royalty method, to test indefinite-lived intangible assets. The estimated fair value of the trademarks is determined based on an assumed royalty rate savings, discounted by the calculated market participant WACC plus a 1 percent risk premium. The carrying value of indefinite-lived intangible assets is considered to be impaired when the estimated fair value is less than the carrying value of the trademarks.

As of July 1, 2013, the testing date, the Company had $568.4 million in indefinite-lived intangible assets. There was no impairment of the Company's indefinite-lived intangible assets as a result of the tests performed during third quarter 2013.

The Company will continue to monitor both goodwill and indefinite-lived intangible assets for any indication of triggering events which might require additional testing before the next required annual impairment test.

PRESENTATION OF NON-GAAP AND PRO FORMA COMBINED FINANCIAL MEASURES

In addition to evaluating the Company's financial condition, results of operations, liquidity and cash flows as reported in accordance with GAAP, Eastman management also evaluates Company and operating segment performance, and makes resource allocation and performance evaluation decisions, excluding the effect of transactions, costs, and losses or gains that do not directly arise from Eastman's normal, or "core", business and operations, or are otherwise of an unusual or non-recurring nature. These transactions, costs, and losses or gains relate to, among other things, cost reduction, growth and profitability improvement initiatives, and other events outside of core business operations (such as mark-to-market ("MTM") losses or gains for pension and other post-employment benefit ("OPEB") plans, typically in the fourth quarter of each year and any quarters in which an interim remeasurement is triggered). Because non-core or non-recurring transactions, costs, and losses or gains may materially affect the Company's, or any particular operating segment's, financial condition or results in a specific period in which they are recognized, Eastman believes it is appropriate to evaluate both the financial measures prepared and calculated in accordance with GAAP and the related non-GAAP financial measures excluding the effect on our results of these non-core or non-recurring items. In addition to using such measures to evaluate results in a specific period, management evaluates such non-GAAP measures, and believes that investors may also evaluate such measures, because such measures may provide more complete and consistent comparisons of the Company's, and its segments', operational performance on a period-over-period historical basis and, as a result, provide a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess the Company's, and its operating segments', performance, make resource allocation decisions and evaluate organizational and individual performance in determining certain performance-based compensation. Non-GAAP measures do not have definitions under GAAP, and may be defined differently by, and not be comparable to, similarly titled measures used by other companies. As a result, management cautions investors not to place undue reliance on any non-GAAP measure, but to consider such measures with the most directly comparable GAAP measure.

33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The non-core or non-recurring items excluded by management in its evaluation of certain results in this Quarterly Report are:

• Costs resulting from the sale of acquired Solutia inventories at fair value, net of the last-in, first-out ("LIFO") impact of these inventories (as required by purchase accounting, these inventories were marked to fair value, and were sold in 2012);

• Solutia acquisition, financing, transaction, and integration costs, including the costs and fees for borrowings used to complete the Solutia acquisition and pre-acquisition interest expense for acquisition-related borrowings, which resulted from non-core transactions not expected to impact Eastman's results consistently; and

• MTM OPEB gain due to an interim remeasurement of the OPEB plan obligation triggered by a change in future retiree life insurance benefits. This actuarial gain was primarily due to a higher than assumed discount rate reflective of changes in global market conditions and interest rates on high-grade corporate bonds, and did not directly arise from Eastman's core business and operations; and

• Asset impairments and restructuring charges and gains, net, which, other than certain severance costs, are not cash transactions impacting profitability,

in each case for the periods and in the amounts in the table below.

Non - GAAP Financial Measures -- Excluded Non-Core or Non-Recurring Items

	Third Quarter					First Nine Months
(Dollars in millions)	2013			2012		2013			2012
Non-core or non-recurring items impacting operating earnings:
Additional costs of acquired Solutia inventories	$	—		$	75	$	—		$	75
Transaction costs related to the acquisition of Solutia	—			15		—			28
Integration costs related to the acquisition of Solutia	9			7		24			9
Mark-to-market pension and other post-employment benefits (gain) loss	(86		)	—		(86		)	—
Asset impairments and restructuring charges, net	3			37		24			37
Non-core or non-recurring items impacting earnings before income taxes:
Financing costs related to the acquisition of Solutia	—			—		—			32

This MD&A includes the effect of the foregoing on the following financial measures:

• Gross profit

• Selling, general, and administrative ("SG&A") expenses,

• Research and development ("R&D") expenses,

• Operating earnings,

• Net interest expense,

• Other charges (income), net,

• Provision for income taxes,

• Earnings from continuing operations, and

• Diluted earnings per share.

34

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

In addition to the above, in order to provide the most meaningful comparison of results, some of the following corporate and segment discussion and analysis includes both actual results for all periods presented and results on a "pro forma combined" basis. The unaudited pro forma combined information is based on the historical consolidated financial statements of both Eastman and Solutia and has been prepared to illustrate the effects of the Company's acquisition of Solutia, assuming the acquisition of Solutia had been consummated January 1, 2011, the beginning of the comparable annual reporting period prior to the year of acquisition.  The accompanying pro forma combined financial information does not give pro forma effect to any other transactions or events. Sales revenue and operating earnings of the acquired Solutia businesses are included in both third quarter 2013 and third quarter 2012. Accordingly, there is no pro forma combined information for these quarters. First nine months pro forma combined sales revenue, operating earnings, and discussion include pro forma combined for the first six months.

The unaudited pro forma combined information is not necessarily indicative of the results of operations that would have actually occurred, or the financial position, had the acquisition been completed as of the dates indicated, nor is it indicative of the future operating results, or financial position, of Eastman. The unaudited pro forma combined information does not reflect future events that may occur after the acquisition of Solutia, including the potential realization of any future operating cost savings (synergies) or restructuring activities or other costs related to the planned integration of Solutia and yet to be incurred, and does not consider potential impacts of current market conditions on revenues or expense efficiencies.

The unaudited pro forma combined information reflects only the combination of Eastman and Solutia. The unaudited pro forma combined financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of Solutia depreciable fixed assets and limited-life amortizable assets acquired in the transaction.  Additionally, in the preparation of unaudited pro forma combined sales and earnings from continuing operations, Solutia's historical consolidated results have been retrospectively adjusted for the change in accounting methodology for pension and OPEB plans actuarial losses and gains adopted by Eastman during first quarter 2012.  For additional information, see Note 14, "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" to the Company's consolidated financial statements in Part II, Item 8 of the 2012 Annual Report on Form 10-K. The information also includes adjustments to Solutia exclusions from operating earnings in order to be consistent with Eastman's non-GAAP presentation.

These non-GAAP and pro forma combined financial measures, and the accompanying reconciliations of the non-GAAP financial measures to the most comparable GAAP measures, are presented in "Overview", "Results of Operations", and "Summary by Operating Segment" in this MD&A.

In addition to the non-GAAP measures presented in this Quarterly Report and other periodic reports, from time to time management evaluates and discloses to investors and securities analysts the non-GAAP measure cash provided by operating activities excluding certain non-core or non-recurring items ("cash provided by operating activities, as adjusted") when analyzing, among other things, business performance, liquidity and financial position, and performance-based compensation.  Eastman management uses this non-GAAP measure in conjunction with the GAAP measure cash provided by operating activities because it believes it is a more appropriate metric to evaluate the cash flows from Eastman's core operations that are available to grow the business and create stockholder value, as well as because it allows for a more consistent period-over-period presentation of such amounts.  In its evaluation, Eastman management generally excludes the impact of certain non-core activities and decisions of management because such activities and decisions are not considered core, ongoing components of continuing operations and the decisions to undertake or not to undertake such activities may be made irrespective of the cash generated from continuing operations.  From time to time, management discloses this non-GAAP measure and the related reconciliation to investors and securities analysts to allow them to better understand and evaluate the information used by management in its decision making processes and because management believes investors and securities analysts use similar measures to assess Company performance, liquidity, and financial position over multiple periods and to compare these with other companies.

35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Similarly, from time to time, Eastman discloses to investors and securities analysts a non-GAAP measure of free cash flow, which management defines as cash provided by operating activities, as adjusted, described above, less the amounts of capital expenditures and dividends, as management believes such items are generally funded from available cash and, as such, should be considered in determining free cash flow.  Eastman management believes this is the appropriate metric to use to evaluate the Company's overall ability to generate cash to fund future operations, inorganic growth opportunities, and to meet the Company's debt repayment obligations.  Management believes this metric is useful to investors and securities analysts in order to provide them with information similar to that used by management in evaluating potential future cash available for various initiatives and because management believes investors and securities analysts often use a similar measure of free cash flow to compare the results, and value, of comparable companies.

OVERVIEW

Eastman's portfolio of specialty businesses holds leading market positions and manufactures products that enhance performance in a variety of end markets such as transportation, building and construction, and consumables. Management believes that despite ongoing economic uncertainty, the Company's key end markets, including transportation and building and construction markets, benefited during first nine months 2013 from continued economic growth in Asia and modest economic growth in the United States. The Additives & Functional Products segment realized higher sales volume in solvents product lines, attributed to strengthened coatings demand in the United States building and construction market. The Advanced Materials segment realized higher sales volume for Eastman Tritan^TM copolyester in the durable goods market and in interlayers product lines, attributed to strengthened demand in transportation markets. While the Adhesives & Plasticizers segment experienced weakened demand for adhesives resins used in the consumables market, particularly tapes, labels, and packaging, the segment continued to benefit from the substitution of phthalate plasticizers with non-phthalate plasticizers, particularly in the building and construction market. Management expects continued challenges in the Adhesives & Plasticizers segment. Eastman management believes that the Company's global market and manufacturing presence, combined with global trends such as energy efficiency, a rising middle class in emerging economies, and increased health and wellness will continue to support the Company's achievement of its growth objectives in the long term.

The Company generated sales revenue of $2.3 billion in both third quarter2013 and 2012 and sales revenue of $7.1 billion and $5.9 billion in first nine months2013 and 2012, respectively. The sales revenue in third quarter was relatively unchanged as higher sales volume in the Additives & Functional Products and Advanced Materials segments was mostly offset by lower sales revenue in the Adhesives & Plasticizers segment. The increase in sales revenue in first nine months was primarily due to sales volume in first six months 2013 from the acquired Solutia product lines in the Advanced Materials, Additives & Functional Products, and Specialty Fluids & Intermediates segments.

On a pro forma combined basis, the Company generated sales revenue of $7.1 billion and $7.0 billion in first nine months2013 and 2012, respectively. Sales revenue increased primarily due to higher sales volume in all other operating segments more than offsetting lower sales volume in the Adhesives & Plasticizers segment.

Operating earnings were $479 million in third quarter2013 compared with $263 million in third quarter2012.  Excluding the non-core or non-recurring items referenced in "Non-GAAP and Pro Forma Combined Financial Measures", operating earnings increased in the Fibers, Advanced Materials, and Additives & Functional Products segments partially offset by lower operating earnings in the Adhesives & Plasticizers and Specialty Fluids & Intermediates segments. Operating earnings also benefited from decreased "Other" loss primarily due to lower operating costs for Perennial Wood^TM.

Operating earnings were $1.3 billion in first nine months2013 compared with $844 million in first nine months2012. Excluding the non-core or non-recurring items referenced in "Non-GAAP and Pro Forma Combined Financial Measures", operating earnings increased primarily due to earnings from acquired Solutia product lines, lower raw material and energy costs more than offsetting lower selling prices particularly in the Specialty Fluids & Intermediates segment, higher selling prices more than offsetting slightly higher raw material and energy costs in the Fibers segment, higher volumes, and higher capacity utilization. Operating earnings also benefited from decreased "Other" loss primarily due to lower operating costs for Perennial Wood^TM.

36

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

On a pro forma combined basis, operating earnings increased to $1.3 billion in first nine months2013 compared to $984 million in first nine months2012. In addition to the non-core or non-recurring items referenced in "Non-GAAP and Pro Forma Combined Financial Measures", pro forma combined operating earnings in 2012 also included $5 million for restructuring charges related to Solutia's acquisition of Southwall Technologies Inc. ("Southwall"). Excluding these non-core or non-recurring items, operating earnings increased primarily due to higher sales volume and higher capacity utilization, and lower raw material and energy costs more than offsetting lower selling prices. Pro forma combined operating earnings also increased due to lower operating costs for Perennial Wood^TM.

Earnings from continuing operations were $308 million in third quarter2013 compared to $154 million in third quarter2012.  Earnings from continuing operations were $1.97 per diluted share compared to $0.99 per diluted share.  Excluding the non-core or non-recurring items referenced in "Non-GAAP and Pro Forma Combined Financial Measures", earnings from continuing operations in third quarter2013 and 2012 were $263 million and $246 million, respectively.  Excluding these non-core or non-recurring items, earnings from continuing operations for third quarter 2013 and 2012 were $1.68 per diluted share and $1.57 per diluted share, respectively.

Earnings from continuing operations were $819 million in first nine months2013 compared to $490 million in first nine months2012.  Earnings from continuing operations were $5.23 per diluted share compared to $3.35 per diluted share.  Excluding the non-core or non-recurring items referenced in "Non-GAAP and Pro Forma Combined Financial Measures", earnings from continuing operations in first nine months2013 and 2012 were $798 million and $615 million, respectively.  Excluding these non-core or non-recurring items, earnings from continuing operations for first nine months 2013 and 2012 were $5.09 per diluted share and $4.20 per diluted share, respectively.

The Company generated $794 million in cash from operating activities during first nine months2013, net of $99 million cash contributed to its U.S. defined benefit pension plans, compared to $688 million cash generated in operating activities during first nine months2012, net of $87 million cash contributed to its U.S. defined benefit pension plans.  The increase in cash from operating activities was primarily due to increased cash earnings from the Company's businesses and the absence of one-time payments related to the July 2, 2012 acquisition of Solutia partially offset by an increase in working capital requirements, higher income tax payments, and higher interest payments. The Company reduced long-term borrowings by $350 million in first nine months 2013.

In 2013, the Company made progress on both organic (internal growth) and inorganic (external growth through joint venture and acquisition) growth initiatives including:

• continuing the integration of Solutia, which was acquired on July 2, 2012 and which:

◦ broadens Eastman's global presence;

◦ establishes a combined platform with extensive organic growth opportunities through complementary technologies and business capabilities, and an overlap of key end markets; and

◦ expands Eastman's portfolio of sustainable products;

• in the Additives & Functional Products segment, completing an expansion for ethylene oxide derivative capacity in Longview, Texas in second quarter 2013;

• in the Adhesives & Plasticizers segment, announcing plans for an expansion of Eastman 168™ non-phthalate plasticizers capacity at its manufacturing facility in Texas City, Texas, which is expected to be operational by mid-2014;

• in the Advanced Materials segment, announcing plans for an expansion of Eastman Tritan^TM copolyester capacity at the Kingsport, Tennessee manufacturing facility which is expected to be operational by mid-2014;

• in the Fibers segment, construction was completed during third quarter 2013 on a new 30,000 metric ton acetate tow manufacturing facility in Hefei, China, a joint venture with China National Tobacco Corporation; and

• in the Specialty Fluids & Intermediates segment:

◦ completing a debottlenecking project in its largest olefins cracking unit in Longview, Texas, which was operational in first quarter 2013 and will primarily produce more ethylene, and is expected to improve Eastman's olefin cost position; and

◦ beginning construction of the Therminol^® heat transfer fluid capacity expansion in Newport, Wales, which is expected to be operational in the second half of 2014 and will support expected demand growth in the industrial chemicals and processing market.

37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

	Third Quarter						First Nine Months
(Dollars in millions)	2013		2012		Change		2013		2012		Change
Sales	$	2,338	$	2,259	3	%	$	7,085	$	5,933	19	%
Volume effect					2	%					19	%
Price effect					1	%					—	%
Exchange rate effect					—	%					—	%
Pro Forma Combined Sales							7,085		6,951		2	%
Volume effect											2	%
Price effect											—	%
Exchange rate effect											—	%

Sales revenue increased $79 million in third quarter2013 compared to third quarter2012. Sales revenue increased primarily due to higher sales volume in the Additives & Functional Products and Advanced Materials segments partially offset by lower sales revenue in the Adhesives & Plasticizers segment.

Sales revenue increased $1.2 billion in first nine months2013 compared to first nine months2012. The increase in sales revenue was primarily due to volume in first six months 2013 from the acquired Solutia product lines in the Advanced Materials, Additives & Functional Products, and Specialty Fluids & Intermediates segments.

On a pro forma combined basis, sales revenue was $7.1 billion and $7.0 billion in first nine months2013 and 2012, respectively. Sales revenue increased primarily due to higher sales volume in all other operating segments more than offsetting lower sales volume in the Adhesives & Plasticizers segment.

	Third Quarter							First Nine Months
(Dollars in millions)	2013			2012		Change		2013			2012		Change
Gross Profit	$	689		$	525	31	%	$	1,982		$	1,437	38	%
Additional costs of acquired Solutia inventories	—			75				—			75
Mark-to-market pension and other post-employment benefits (gain) loss	(68		)	—				(68		)	—
Gross Profit excluding non-core or non-recurring items	$	621		$	600	4	%	$	1,914		$	1,512	27	%

Gross profit increased$164 million in third quarter2013 compared with third quarter2012. Gross profit in third quarter2013 included a $68 million MTM gain triggered by an OPEB plan amendment. Gross profit in third quarter2012 included $75 million of additional costs of acquired Solutia inventories. Excluding these non-core or non-recurring items, higher gross profit was primarily due to higher selling price in the Fibers segment, higher sales volume and higher capacity utilization in the Advanced Materials segment, and higher sales volume in the Additives & Functional Products segment. Gross profit also benefited from decreased "Other" loss primarily for lower operating costs for Perennial Wood^TM. The increase in gross profit was partially offset by a decrease in gross profit primarily due to lower selling prices and higher raw material and energy costs and lower sales volume in the Adhesives & Plasticizers segment.

38

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Gross profit increased$545 million in first nine months2013 compared with first nine months2012. Gross profit in first nine months2013 included a $68 million MTM gain triggered by an OPEB plan amendment. Gross profit in first nine months2012 included $75 million of additional costs of acquired Solutia inventories. Excluding these non-core or non-recurring items, higher gross profit was primarily due to $284 million in first six months 2013 from the acquired Solutia product lines. Higher gross profit was also due to lower raw material and energy costs more than offsetting lower selling prices particularly in the Specialty Fluids & Intermediates segment, and higher selling prices more than offsetting slightly higher raw material and energy costs in the Fibers segment. Additionally, gross profit increased due to higher sales volume primarily in the Additives & Functional Products and Specialty Fluids & Intermediates segments and higher sales volume and higher capacity utilization in the Advanced Materials segment. Gross profit also benefited from decreased "Other" loss, primarily for lower operating costs for Perennial Wood^TM. The increase in gross profit was partially offset by a decrease in gross profit primarily due to lower selling prices and lower sales volume in the Adhesives & Plasticizers segment.

	Third Quarter								First Nine Months
(Dollars in millions)	2013			2012			Change		2013			2012			Change
Selling, General and Administrative Expenses	$	159		$	173		(8	)%	$	510		$	420		21	%
Transaction costs related to the acquisition of Solutia	—			(15		)			—			(28		)
Integration costs related to the acquisition of Solutia	(9		)	(7		)			(24		)	(9		)
Mark-to-market pension and other post-employment benefits (gain) loss	15			—					15			—
Selling, General, and Administrative Expenses excluding non-core or non-recurring items	$	165		$	151		9	%	$	501		$	383		31	%

SG&A expenses in third quarter2013 were lower compared to third quarter2012 primarily due to Solutia acquisition transaction costs in third quarter 2012, the MTM gain triggered by an OPEB plan amendment, partially offset by higher costs of growth initiatives for existing businesses and the related supporting functions.

SG&A expenses in first nine months2013 were higher compared to first nine months2012 primarily due to SG&A costs of the acquired Solutia businesses during first six months 2013 of $101 million, higher Solutia integration costs, and higher costs of growth initiatives for existing businesses and the related supporting functions with no Solutia acquisition transaction costs and the MTM gain triggered by an OPEB plan amendment in first nine months2013.

Excluding non-core or non-recurring items, SG&A expenses in third quarter2013 were higher compared to third quarter2012 primarily due to higher costs of growth initiatives for existing businesses and the related supporting functions. Excluding non-core or non-recurring items, SG&A expenses in first nine months2013 were higher compared to first nine months2012 primarily due to SG&A expenses of the acquired Solutia businesses during first six months 2013 of $101 million and higher costs of growth initiatives for existing businesses and the related supporting functions.

39

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

	Third Quarter						First Nine Months
(Dollars in millions)	2013		2012		Change		2013		2012		Change
Research and Development Expenses	$	48	$	52	(8	)%	$	148	$	136	9	%
Mark-to-market pension and other post-employment benefits (gain) loss	3		—				3		—
Research and Development Expenses excluding non-core or non-recurring items	$	51	$	52	(2	)%	$	151	$	136	11	%

R&D expenses were relatively unchanged in third quarter2013 compared to third quarter2012. R&D expenses were higher in first nine months2013 compared to first nine months2012 primarily due to R&D costs of the acquired Solutia businesses during the first six months 2013 of $26 million partially offset by lower R&D costs for corporate growth initiatives, including Perennial Wood^TM.

Asset Impairments and Restructuring Charges, Net

In third quarter and first nine months2013, there were $3 million and $24 million, respectively, of net asset impairments and restructuring charges, including $3 million and $9 million, respectively, of restructuring charges primarily for severance associated with the continued integration of Solutia.

During first nine months 2013, management announced its intent and finalized its decision to close a production facility in Germany for the Photovoltaics product line. This resulted in the Company recognizing asset impairments of $7 million and restructuring charges of $5 million including charges for severance. During first nine months 2013, management also approved a voluntary separation plan for certain employees, resulting in recognition of severance charges of $6 million. In addition, during first nine months2013, a change in estimate for certain costs for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site resulted in a reduction of $4 million to previously recognized asset impairments and restructuring charges. Analysis of total Brazil site shutdown costs is ongoing and is subject to the finalization of certain aspects of the operating agreement termination.

In third quarter and first nine months2012, there were $37 million of asset impairments and restructuring charges. Restructuring charges of $28 million were for severance costs associated with the acquisition and integration of Solutia. The Company also recognized asset impairments of $9 million, primarily related to land retained from the previously discontinued Beaumont, Texas industrial gasification project. Based on fair value indicators, the carrying value of the Beaumont land was reduced by $6 million. For additional information related to the acquisition of Solutia, see Note 2, "Acquisitions and Investments in Joint Ventures".

For more information regarding asset impairments and restructuring charges see Note 14, "Asset Impairments and Restructuring Charges, Net", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

40

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Operating Earnings

	Third Quarter							First Nine Months
(Dollars in millions)	2013			2012		Change		2013			2012		Change
Operating earnings	$	479		$	263	82	%	$	1,300		$	844	54	%
Additional costs of acquired Solutia inventories	—			75				—			75
Transaction costs related to the acquisition of Solutia	—			15				—			28
Integration costs related to the acquisition of Solutia	9			7				24			9
Mark-to-market pension and other post-employment benefits (gain) loss	(86		)	—				(86		)	—
Asset impairments and restructuring charges, net	3			37				24			37
Operating earnings excluding non-core or non-recurring items	$	405		$	397	2	%	$	1,262		$	993	27	%

Pro Forma Combined Operating Earnings

	First Nine Months
(Dollars in millions)	2013			2012		Change
Operating earnings	$	1,300		$	984	32	%
Additional costs of acquired Solutia inventories	—			75
Transaction and integration costs related to the acquisition of Solutia	24			62
Mark-to-market pension and other post-employment benefits (gain) loss	(86		)	—
Asset impairments and restructuring charges, net (1)	24			42
Operating earnings excluding non-core or non-recurring items	$	1,262		$	1,163	9	%

⁽¹⁾ Acquisition related expenses in first nine months2012 includes $5 million for the Solutia Southwall acquisition in first quarter 2012.

On a pro forma combined basis, operating earnings increased in first nine months2013 compared to first nine months2012. Excluding non-core or non-recurring items, operating earnings increased primarily due to higher sales volume and higher capacity utilization of approximately $55 million and lower raw material and energy costs more than offsetting lower selling prices by approximately $35 million. Pro forma combined operating earnings also increased due to lower costs for "Other" including Perennial Wood^TM.

41

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Net Interest Expense

	Third Quarter						First Nine Months
(Dollars in millions)	2013		2012		Change		2013		2012			Change
Gross interest costs	$	48	$	50			$	144	$	103
Less:  Capitalized interest	2		—				3		3
Interest expense	46		50		(8	)%	141		100			41	%
Interest income	2		2				4		5
Net interest expense	44		48		(8	)%	137		95			44	%
Solutia financing costs	—		—				—		(9		)
Net interest expense excluding Solutia financing costs	$	44	$	48	(8	)%	$	137	$	86		59	%

Net interest expense decreased$4 million in third quarter2013 compared to third quarter2012. The decrease was primarily due to a reduction in borrowings. Net interest expense increased$42 million in first nine months2013 compared to first nine months2012. The increase was primarily due to increased borrowing to finance the acquisition of Solutia. Solutia financing costs included in first nine months2012 reflected pre-acquisition interest expense for acquisition borrowing.

Other Charges (Income), Net

	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Foreign exchange transaction losses, net	$	3		$	—		$	7		$	—
Solutia financing costs	—			—			—			23
Investment (gains) losses, net	(2		)	(3		)	(5		)	(8		)
Other, net	—			(3		)	—			(1		)
Other charges (income), net	1			(6		)	2			14
Solutia financing costs	—			—			—			(23		)
Other charges (income), net excluding Solutia financing costs	$	1		$	(6	)	$	2		$	(9	)

First nine months2012 included Solutia acquisition financing costs.  Financing costs recorded in "Other charges (income), net" during 2012 were primarily for fees for Solutia acquisition borrowings.

42

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Provision for Income Taxes

	Third Quarter									First Nine Months
(Dollars in millions)	2013					2012				2013					2012
	$			%		$		%		$			%		$		%
Provision for income taxes, as reported	$	125		29	%	$	64	29	%	$	338		29	%	$	240	33	%
Tax impact of non-core or non-recurring items	(28		)			45				(13		)			61
Excluding non-core or non-recurring items	$	97		27	%	$	109	31	%	$	325		29	%	$	301	33	%

The third quarter 2013 effective tax rate was impacted by a $14 million benefit primarily due to adjustments to the tax provision to reflect the finalization of the 2012 consolidated U.S. Federal income tax return. The first nine months2013 effective tax rate was impacted by the $14 million benefit of the adjustment and enactment of the American Taxpayer Relief Act of 2012 in January 2013 which resulted in a $10 million benefit primarily related to a research and development ("R&D") tax credit. The third quarter and first nine months2012 effective tax rates included an $8 million benefit from the settlement of U.S. and non-U.S. income tax audits and a $5 million benefit from the reversal of tax reserves due to the expiration of the relevant statute of limitations. The Company's expected full year tax rate on 2013 reported earnings from continuing operations before income tax is approximately 30 percent.

In third quarter and first nine months2013 the lower effective tax rates reflect the positive impact of integrating the Eastman and Solutia tax structures.

Earnings from Continuing Operations and Diluted Earnings per Share

	Third Quarter
	2013						2012
(Dollars in millions, except diluted EPS)	$			EPS			$		EPS
Earnings from continuing operations attributable to Eastman	$	308		$	1.97		$	154	$	0.99
Additional costs of acquired Solutia inventories, net of tax	—			—			53		0.34
Solutia transaction and integration costs, net of tax	6			0.04			15		0.10
Mark-to-market pension and other post-employment benefits (gain) loss, net of tax	(53		)	(0.34		)	—		—
Asset impairments and restructuring charges, net of tax	2			0.01			24		0.14
Earnings from continuing operations excluding non-core or non-recurring items, net of tax	$	263		$	1.68		$	246	$	1.57
	First Nine Months
	2013						2012
(Dollars in millions, except diluted EPS)	$			EPS			$		EPS
Earnings from continuing operations attributable to Eastman	$	819		$	5.23		$	490	$	3.35
Additional costs of acquired Solutia inventories, net of tax	—			—			53		0.36
Solutia transaction, integration, and financing costs, net of tax	16			0.10			48		0.32
Mark-to-market pension and other post-employment benefits (gain) loss, net of tax	(53		)	(0.34		)	—		—
Asset impairments and restructuring charges, net of tax	16			0.10			24		0.17
Earnings from continuing operations excluding non-core or non-recurring items, net of tax	$	798		$	5.09		$	615	$	4.20

43

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Net Earnings and Diluted Earnings per Share

	Third Quarter
	2013				2012
(Dollars in millions, except diluted EPS)	$		EPS		$		EPS
Net earnings	$	308	$	1.97	$	154	$	0.99
	First Nine Months
	2013				2012
(Dollars in millions, except diluted EPS)	$		EPS		$		EPS
Earnings from continuing operations attributable to Eastman	$	819	$	5.23	$	490	$	3.35
Gain from disposal of discontinued operations, net of tax	—		—		1		—
Net earnings	$	819	$	5.23	$	491	$	3.35

SUMMARY BY OPERATING SEGMENT

Beginning in third quarter 2012, the Company changed its reportable segments due to changes in the Company's organization resulting from the July 2, 2012 acquisition of Solutia. The new reporting structure has been retrospectively applied to financial results of all periods presented.  The Company's products and operations are currently managed and reported in five reportable operating segments -- Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, Fibers, and Specialty Fluids & Intermediates. For additional information concerning the Company's segments' businesses and products, see Note 23, "Segment Information" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Additives & Functional Products Segment

	Third Quarter								First Nine Months
					Change								Change
(Dollars in millions)	2013		2012		$		%		2013		2012		$			%
Sales	$	445	$	406	$	39	10	%	$	1,294	$	948	$	346		36	%
Volume effect					39		10	%					352			37	%
Price effect					—		—	%					(5		)	(1	)%
Exchange rate effect					—		—	%					(1		)	—	%
Operating earnings	111		86		25		29	%	313		215		98			46	%
Additional costs of acquired Solutia inventories	—		19						—		19
Asset impairments and restructuring charges, net	—		—						1		—
Operating earnings excluding non-core or non-recurring items	111		105		6		6	%	314		234		80			34	%
Pro forma combined sales									$	1,294	$	1,229	$	65		5	%
Volume effect													81			6	%
Price effect													(14		)	(1	)%
Exchange rate effect													(2		)	—	%
Pro forma combined operating earnings									313		287		26			9	%
Additional costs of acquired Solutia inventories									—		19
Pro forma combined asset impairments and restructuring charges, net									1		—
Pro forma combined operating earnings excluding non-core or non-recurring items									314		306		8			3	%

Sales revenue in third quarter2013 increased compared to third quarter2012 primarily due to higher sales volume of the solvents product lines attributed to strengthened coatings demand in the building and construction market supported by recent capacity additions at the Longview, Texas manufacturing facility. Higher sales revenue was also due to higher sales volume of cellulosic polymers and Crystex^® insoluble sulfur, both attributed to increased demand in the transportation market. Third quarter 2013 sales revenue for the polymers product lines included sales revenue of certain products sold primarily into the tires market which were previously reported in the Adhesives & Plasticizers segment.  These products had sales revenue of $13 million in third quarter 2012.

Sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to $276 million in sales volume in first six months 2013 from the Solutia product lines acquired in third quarter 2012. Sales revenue also increased due to higher sales volume of solvents product lines attributed to strengthened coatings demand in the building and construction market. First nine months 2013 sales revenue for the polymers product lines included sales revenue of certain products sold primarily into the tires market which were previously reported in the Adhesives & Plasticizers segment.  These products had sales revenue of $38 million in first nine months 2012.

45

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Pro forma combined sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to higher sales volume. The higher sales volume was primarily in the polymers and solvents product lines. First nine months 2013 sales revenue for the polymers product lines included sales revenue of certain products sold primarily into the tires market which were previously reported in the Adhesives & Plasticizers segment.  These products had sales revenue of $38 million in first nine months 2012, respectively.

Operating earnings in third quarter2013 increased compared to third quarter2012 primarily due to higher sales volume of $16 million partially offset by higher raw material and energy costs, particularly for propane, of $7 million. Operating earnings in third quarter 2012 included $19 million of additional costs of acquired Solutia inventories.

Operating earnings in first nine months2013 increased compared to first nine months2012 primarily due to $52 million of operating earnings in first six months 2013 from the acquired Solutia product lines. In addition, operating earnings increased primarily due to higher sales volume. Restructuring charges of $2 million in first nine months2013 primarily for severance for a voluntary separation plan for certain employees were partially offset by a reduction of $1 million in previously recognized charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site. Operating earnings in first nine months 2012 included $19 million of additional costs of acquired Solutia inventories.

Pro forma combined operating earnings in first nine months2013 increased slightly compared to first nine months2012. Operating earnings increased due to higher sales volume of $33 million. This increase was offset by $24 million for higher raw material and energy costs, particularly for benzene, and lower selling prices in the rubber additives product lines. Restructuring charges of $2 million in first nine months2013 primarily for severance for a voluntary separation plan for certain employees were partially offset by a reduction of $1 million in previously recognized charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site. Operating earnings in first nine months 2012 included $19 million of additional costs of acquired Solutia inventories.

In second quarter 2013, the Company completed an expansion for ethylene oxide derivative capacity in Longview, Texas. In addition, the Company continues to make progress in the refinement and enhancement of its technology for the manufacture of Crystex^® insoluble sulfur in order to improve its cost position and introduce a higher performance product into the tires industry. By the end of 2013, management plans to complete evaluation of the timing of incorporating this technology into a capacity expansion at the Kuantan, Malaysia manufacturing facility to capitalize on expected high industrial growth rates in the Asia Pacific region.

Adhesives & Plasticizers Segment

	Third Quarter									First Nine Months
					Change									Change
(Dollars in millions)	2013		2012		$			%		2013		2012		$			%
Sales	$	321	$	348	$	(27	)	(8	)%	$	1,005	$	1,094	$	(89	)	(8	)%
Volume effect					(16		)	(5	)%					(62		)	(6	)%
Price effect					(10		)	(3	)%					(21		)	(2	)%
Exchange rate effect					(1		)	—	%					(6		)	—	%
Operating earnings	41		73		(32		)	(44	)%	139		211		(72		)	(34	)%
Asset impairments and restructuring charges, net	—		—							1		—
Operating earnings excluding non-core or non-recurring item	41		73		(32		)	(44	)%	140		211		(71		)	(34	)%

46

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Sales revenue in third quarter2013 decreased compared to third quarter2012 primarily due to lower selling prices for both adhesives resins and plasticizers product lines and lower sales volume of adhesives resins product lines. Lower selling prices for adhesives resins were primarily attributed to increased competitive pressure due to greater industry supply attributed to improved availability of key raw materials and additional competitor capacity. Lower selling prices for plasticizers were primarily attributed to competitive pressures resulting from continued weakened demand in Asia Pacific and Europe. Lower sales volume was primarily due to $13 million of revenue in third quarter 2012 from sales of certain products sold primarily into the tires market which are now reported in the Additives & Functional Products segment to combine the tires growth platforms of Solutia and Eastman. The decreased sales volume was partially offset by continued substitution of phthalate plasticizers with non-phthalate plasticizers. 

Sales revenue in first nine months2013 decreased compared to first nine months2012 primarily due to lower sales volume, primarily of adhesives resins, and lower selling prices for both adhesives resins and plasticizers. The lower sales volume of adhesives resins was primarily attributed to weakened demand in certain end markets including tapes, labels, and packaging, and customer destocking occurring mainly in the first half of 2013. The decreased sales volume was partially offset by continued substitution of phthalate plasticizers with non-phthalate plasticizers. Lower selling prices for adhesives resins were primarily attributed to increased competitive pressure due to greater industry supply attributed to increased availability of key raw materials. Lower selling prices for plasticizers were primarily attributed to competitive pressures resulting from continued weakened demand in Asia and Europe. First nine months 2012 included $38 million of revenue from sales of certain products sold primarily into the tires market which are now reported in the Additives & Functional Products segment to combine the tires growth platforms of Solutia and Eastman. 

Operating earnings in third quarter2013 decreased compared to third quarter2012 primarily due to $18 million for lower selling prices and higher raw material and energy costs and $8 million primarily for lower sales volume and an unfavorable shift in regional mix due to relatively lower sales of adhesives resins product lines in North America.

Operating earnings in first nine months2013 decreased compared to first nine months2012 primarily due to $27 million for lower selling prices and $31 million for lower sales volume and lower capacity utilization. Restructuring charges of $1 million in first nine months2013 were primarily for severance for a voluntary separation plan for certain employees.

In October 2013, the Company announced it is expanding capacity of its Eastman 168™ non-phthalate plasticizers at its manufacturing facility in Texas City, Texas. The expansion is expected to be operational by mid-2014.

The Company has the flexibility to adjust the timing of the completion of its joint venture to build a 50,000 metric ton hydrogenated hydrocarbon resin plant in Nanjing, China, based on market and customer demand and requirements and in consultation with its joint venture partner, and is currently assessing its options.

47

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Advanced Materials Segment

	Third Quarter									First Nine Months
					Change										Change
(Dollars in millions)	2013		2012		$			%		2013			2012		$			%
Sales	$	583	$	559	$	24		4	%	$	1,792		$	1,166	$	626		54	%
Volume effect					26			5	%						632			54	%
Price effect					(3		)	(1	)%						(2		)	—	%
Exchange rate effect					1			—	%						(4		)	—	%
Operating earnings	69		18		51			283	%	216			86		130			151	%
Additional costs of acquired Solutia inventories	—		39							—			39
Asset impairments and restructuring charges, net	—		—							(1		)	—
Operating earnings excluding non-core or non-recurring items	69		57		12			21	%	215			125		90			72	%
Pro forma combined sales										$	1,792		$	1,726	$	66		4	%
Volume effect															80			5	%
Price effect															(8		)	(1	)%
Exchange rate effect															(6		)	—	%
Pro forma combined operating earnings										216			137		79			58	%
Additional costs of acquired Solutia inventories										—			39
Pro forma combined asset impairments and restructuring charges, net										(1		)	5
Pro forma combined operating earnings excluding non-core or non-recurring items										215			181		34			19	%

Sales revenue in third quarter2013 increased compared to third quarter2012 primarily due to higher sales volume for Eastman Tritan^TM copolyester.

Sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to $588 million in sales volume in first six months 2013 from the Solutia product lines acquired in third quarter 2012. Sales revenue also increased primarily due to higher sales volume for Eastman Tritan^TM copolyester.

Pro forma combined sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to higher sales volume for Eastman Tritan™ copolyester and higher sales volume for interlayers products primarily attributed to strengthened demand in the transportation market.

48

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Third quarter2013 operating earnings increased compared to third quarter2012 due to higher sales volume and higher capacity utilization which led to lower unit costs, attributed to increased demand for specialty plastics products, including for Eastman Tritan^TM copolyester. Operating earnings in third quarter 2012 included $39 million of additional costs of acquired Solutia inventories.

First nine months2013 operating earnings increased compared to first nine months2012 primarily due to operating earnings of $63 million in first six months 2013 from the acquired Solutia product lines. Operating earnings also increased due to higher sales volume and higher capacity utilization which led to lower unit costs for Eastman Tritan^TM copolyester. Restructuring charges of $2 million in first nine months2013 primarily for severance for a voluntary separation plan for certain employees were more than offset by a reduction of $3 million in previously recorded charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site. Operating earnings in first nine months 2012 included $39 million of additional costs of acquired Solutia inventories.

Pro forma combined operating earnings in first nine months2013 increased compared to first nine months2012 primarily due to higher sales volume and increased sales of higher margin products, including Eastman Tritan^TM copolyester and V-Kool^® brand window films, and higher capacity utilization which led to lower unit costs. Restructuring charges of $2 million in first nine months2013 primarily for severance for a voluntary separation plan for certain employees were more than offset by a reduction of $3 million in previously recorded charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site. Restructuring charges of $5 million in first nine months2012 were related to Solutia's Southwall acquisition. Operating earnings in third quarter 2012 included $39 million of additional costs of acquired Solutia inventories.

On July 29, 2013, the Company announced plans for an expansion of Eastman Tritan^TM copolyester capacity at its Kingsport, Tennessee manufacturing facility. This expansion is expected to be completed by mid-2014.

The Company is also progressing on enhancements and innovations to improve its cost position in its polyvinyl butyral ("PVB") resin technology supporting growth in the transportation and building and construction markets. By the end of 2013, management plans to complete evaluation of the timing of incorporating this technology into a capacity expansion at the Kuantan, Malaysia PVB manufacturing facility.

Fibers Segment

	Third Quarter									First Nine Months
					Change									Change
(Dollars in millions)	2013		2012		$			%		2013		2012		$			%
Sales	$	363	$	349	$	14		4	%	$	1,072	$	990	$	82		8	%
Volume effect					(8		)	(2	)%					26			2	%
Price effect					22			6	%					57			6	%
Exchange rate effect					—			—	%					(1		)	—	%
Operating earnings	113		98		15			15	%	343		295		48			16	%

Sales revenue in third quarter2013 increased compared to third quarter2012 due to higher selling prices partially offset by lower sales volume. Higher selling prices were in response to higher raw material and energy costs, particularly for wood pulp. Lower sales volume was primarily due to customer buying patterns for acetate tow products partially offset by higher sales volume in acetyl chemicals product lines for acetate flake sales to the new China acetate tow joint venture.

Sales revenue in first nine months2013 increased compared to first nine months2012 due to higher selling prices and higher sales volume. Higher selling prices were in response to higher raw material and energy costs, particularly for wood pulp. Higher sales volume was in acetyl chemicals product lines for acetate flake sales to the new China acetate tow joint venture and acetate yarn primarily attributed to recovery in the apparel market.

49

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Operating earnings in third quarter2013 increased compared to third quarter2012 primarily due to higher selling prices of $22 million primarily for acetate tow partially offset by lower sales volume.

Operating earnings in first nine months2013 increased compared to first nine months2012 primarily due to higher selling prices more than offsetting slightly higher raw material and energy costs.

In third quarter 2013, the Company completed construction of the 30,000 metric ton acetate tow joint venture manufacturing facility in China. Eastman has 45 percent ownership of the joint venture and expects to supply 100 percent of the acetate flake raw material to the joint venture from the Company's manufacturing facility in Kingsport. The Company expects earnings through its equity investment, reported in "Other (income) charges, net" in the Consolidated Statement of Earnings, in the joint venture beginning in 2014.

Specialty Fluids & Intermediates Segment

	Third Quarter									First Nine Months
					Change									Change
(Dollars in millions)	2013		2012		$			%		2013		2012		$			%
Sales	$	620	$	592	$	28		5	%	$	1,904	$	1,728	$	176		10	%
Volume effect					14			2	%					187			11	%
Price effect					14			3	%					(9		)	(1	)%
Exchange rate effect					—			—	%					(2		)	—	%
Operating earnings	90		79		11			14	%	302		204		98			48	%
Additional costs of acquired Solutia inventories	—		17							—		17
Asset impairments and restructuring charges, net	—		—							1		—
Operating earnings excluding non-core or non-recurring items	90		96		(6		)	(6	)%	303		221		82			37	%
Pro forma combined sales										$	1,904	$	1,883	$	21		1	%
Volume effect														29			2	%
Price effect														(7		)	(1	)%
Exchange rate effect														(1		)	—	%
Pro forma combined operating earnings										302		249		53			21	%
Additional costs of acquired Solutia inventories										—		17
Pro forma combined asset impairments and restructuring charges, net										1		—
Pro forma combined operating earnings excluding non-core or non-recurring items										303		266		37			14	%

50

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Sales revenue in third quarter2013 increased compared to third quarter2012 primarily due to higher selling prices and higher sales volume.  Higher selling prices were for several product lines. Sales volume primarily increased due to higher sales volume of olefin-based products primarily in the Asia Pacific region.

Sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to higher sales volume.  Higher sales volume in first six months 2013 included $174 million in sales volume in first six months 2013 from the Solutia product lines acquired in third quarter 2012. Sales volume primarily increased due to higher sales volume of olefin-based products particularly in the Asia Pacific region.

Pro forma combined sales revenue in first nine months2013 increased compared to first nine months2012 primarily due to higher sales volume of olefin-based products particularly in the Asia Pacific region.

Operating earnings in third quarter2013 increased compared to third quarter2012. Operating earnings in third quarter 2012 included $17 million of additional costs of acquired Solutia inventories. Excluding these costs, operating earnings decreased primarily due to higher raw material and energy costs, particularly for propane, more than offsetting higher selling prices.

Operating earnings in first nine months2013 increased compared to first nine months2012. Operating earnings included $39 million of operating earnings from the acquired Solutia product lines in first six months 2013. Operating earnings in first nine months2013 also included lower raw material and energy costs, particularly for propane, more than offsetting lower selling prices by $23 million, and higher sales volume of $12 million. Restructuring charges of $1 million in first nine months2013 were primarily for severance for a voluntary separation plan for certain employees. Operating earnings in first nine months 2012 included $17 million of additional costs of acquired Solutia inventories.

Pro forma combined operating earnings in first nine months2013 increased compared to first nine months2012 primarily due to lower raw material and energy costs, particularly for propane, more than offsetting lower selling prices by $18 million, and higher sales volume of $18 million. Restructuring charges of $1 million in first nine months2013 were primarily for severance for a voluntary separation plan for certain employees. Operating earnings in first nine months 2012 included $17 million of additional costs of acquired Solutia inventories.

The Company completed a debottlenecking of its largest olefins cracking unit in Longview, Texas in first quarter 2013. This will allow the facility to produce more ethylene, and it is expected to improve Eastman's olefin cost position. Additionally, the Company began construction of the Therminol^® heat transfer fluid capacity expansion in Newport, Wales, which is expected to be operational in the second half of 2014 and will support expected demand growth in the industrial chemicals and processing market.

The Company continues to actively pursue options with third parties for monetizing the Company's excess ethylene capacity.  The Company intends to retain its cost-advantaged integrated position to propylene.

51

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Other

	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Sales	$	6		$	5		$	18		$	7
Operating loss
Growth initiatives and businesses not allocated to segments	$	(20	)	$	(36	)	$	(73	)	$	(84	)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments	87			(5		)	93			(18		)
Transaction, integration, and restructuring costs related to the acquisition of Solutia	(12		)	(50		)	(33		)	(65		)
Operating loss before exclusions	55			(91		)	(13		)	(167		)
Transaction and integration costs related to the acquisition of Solutia	9			22			24			37
Mark-to-market pension and other post-employment benefits (gain) loss	(86		)	—			(86		)	—
Asset impairments and restructuring charges, net	3			37			22			37
Operating loss excluding non-core or non-recurring items	$	(19	)	$	(32	)	$	(53	)	$	(93	)
Pro forma combined sales							$	18		$	29
Pro forma combined operating loss
Growth initiatives and businesses not allocated to segments							$	(73	)	$	(87	)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments							93			(18		)
Transaction, integration, and restructuring costs related to the acquisition of Solutia							(33		)	(90		)
Pro forma combined operating loss before exclusions							(13		)	(195		)
Transaction and integration costs related to the acquisition of Solutia							24			62
Mark-to-market pension and other post-employment benefits (gain) loss							(86		)	—
Pro forma combined asset impairments and restructuring charges, net							22			37
Pro forma combined operating loss excluding non-core or non-recurring items							$	(53	)	$	(96	)

Sales revenue and R&D, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown as "other" sales revenue and "other" operating earnings (loss), including sales revenue of $4 million and $16 million in third quarter and first nine months2013 and $5 million in both third quarter and first nine months2012 for the Photovoltaics product line acquired from Solutia.  For more information, see Note 17, "Segment Information", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During first nine months2013, there were $13 million of asset impairments and restructuring charges primarily for closure costs of a production facility in Germany for the Photovoltaics product line. In third quarter and first nine months2013, there were $3 million and $9 million, respectively, of restructuring charges primarily for severance for the continued integration of Solutia. For more information, see Note 14, "Asset Impairments and Restructuring Charges, Net", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

52

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Pension income (expense) and gain (loss) not allocated to operating segments included an $86 million MTM gain due to the interim remeasurement of the Eastman OPEB plan obligation which was triggered by a plan change in life insurance benefits. The actuarial gain was primarily due to a higher assumed discount rate in third quarter2013 compared to December 31, 2012 reflective of changes in global market conditions and interest rates on high-grade corporate bonds. For more information, see Note 8, "Retirement Plans", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Excluding transaction and integration costs related to the continued integration of Solutia and asset impairments and restructuring charges, the decreased operating losses were primarily due to reduced Perennial Wood^TM operating costs.

The Company continues to explore and invest in research and development initiatives at a corporate level that are aligned with macro trends in sustainability, consumerism, and energy efficiency through high performance materials, advanced cellulosics, and environmentally-friendly chemistry.  These initiatives include Eastman^TM microfiber technology, Cerfis™ technology, and acetylated wood, branded as Perennial Wood^TM.

SUMMARY BY CUSTOMER LOCATION

	Sales Revenue
	Third Quarter
(Dollars in millions)	2013		2012		Change
United States and Canada	$	1,069	$	1,036	3	%
Asia Pacific	658		627		5	%
Europe, Middle East, and Africa	481		468		3	%
Latin America	130		128		2	%
	$	2,338	$	2,259	3	%

Sales revenue in United States and Canada increased in third quarter2013 compared to third quarter2012 primarily due to higher sales revenue in the Specialty Fluids & Intermediates and Additives & Functional Products segments partially offset by lower sales revenue in the Adhesives & Plasticizers segment.

Sales revenue in Asia Pacific increased in third quarter2013 compared to third quarter2012 primarily due to higher sales revenue in all segments other than the Adhesives & Plasticizers segment, particularly the Fibers and Specialty Fluids & Intermediates segments.

Sales revenue in Europe, Middle East, and Africa increased in third quarter2013 compared to third quarter2012 primarily due to the Additives & Functional Products and Advanced Materials segments partially offset by the other segments.

Sales revenue in Latin America increased in third quarter2013 compared to third quarter2012 primarily due to higher sales revenue in the Advance Materials and Additives & Functional Products segments partially offset by lower sales revenue in the Specialty Fluids & Intermediates and Adhesives & Plasticizers segments.

	Sales Revenue						Pro Forma Combined Sales Revenue
	First Nine Months						First Nine Months
(Dollars in millions)	2013		2012		Change		2013		2012		Change
United States and Canada	$	3,271	$	3,026	8	%	$	3,271	$	3,295	(1	)%
Asia Pacific	1,935		1,470		32	%	1,935		1,778		9	%
Europe, Middle East, and Africa	1,503		1,143		31	%	1,503		1,506		—	%
Latin America	376		294		28	%	376		372		1	%
	$	7,085	$	5,933	19	%	$	7,085	$	6,951	2	%

53

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Sales revenue in United States and Canada increased in first nine months2013 compared to first nine months2012 primarily due to $307 million of sales volume in first six months 2013 from the acquired Solutia businesses and increased sales revenue in the Additives & Functional Products and Fibers segments partially offset by decreased sales revenue in the Adhesives & Plasticizers and Specialty Fluids & Intermediates segments. Pro forma combined sales revenue in the region decreased primarily due to decreased sales revenue in the Adhesives & Plasticizers segment, partially offset by increased pro forma combined sales revenue in the Additives & Functional Products segment.

Sales revenue in Asia Pacific increased in first nine months2013 compared to first nine months2012 primarily due to $314 million of sales volume in first six months 2013 from the acquired Solutia businesses and higher sales revenue in all segments except the Adhesives & Plasticizers segment. Pro forma combined sales revenue in the region increased primarily due to increased sales revenue in the Fibers segment and increased pro forma combined sales revenue in the Specialty Fluids & Intermediates and Advanced Materials segments. Eastman serves the Asia Pacific region with a portfolio of specialty products that benefit from both the emerging middle class and a focused shift in China to a consumer driven economy and has significantly less exposure to government infrastructure spending.

Sales revenue in Europe, Middle East, and Africa increased in first nine months2013 compared to first nine months2012 primarily due to $350 million of sales volume in first six months 2013 from the acquired Solutia businesses. Pro forma combined sales revenue in the region decreased primarily due to decreased pro forma combined sales revenue in the Specialty Fluids & Intermediates segment and "Other" sales revenue and lower sales volume in the Adhesives & Plasticizers and Fibers segments, partially offset by increased pro forma combined sales revenue in the Additives & Functional Products and Advanced Materials segments.

Sales revenue in Latin America increased in first nine months2013 compared to first nine months2012 primarily due to $78 million of sales volume in first six months 2013 from the acquired Solutia businesses. Pro forma combined sales revenue in the region increased due to increased pro forma combined sales revenue in the Advanced Materials segment partially offset by decreased pro forma combined sales revenue in the Adhesives & Plasticizers and Additives & Functional Products segments.

With a substantial portion of sales to customers outside the United States, Eastman is subject to the risks associated with operating in international markets.  To mitigate its exchange rate risks, the Company frequently seeks to negotiate payment terms in U.S. dollars or euros.  In addition, where it deems such actions advisable, the Company engages in foreign currency hedging transactions and requires letters of credit and prepayment for shipments where its assessment of individual customer and country risks indicates their use is appropriate.  For additional information concerning these practices, see Note 12, "Derivatives", to the consolidated financial statements in Part II, Item 8 and Part II, Item 7A "Qualitative and Quantitative Disclosures About Market Risk" of the Company's 2012 Annual Report on Form 10-K and "Forward-Looking Statements and Risk Factors" of this Quarterly Report on Form 10-Q.

LIQUIDITY, CAPITAL RESOURCES, AND OTHER FINANCIAL INFORMATION

Cash and Cash Flows

	First Nine Months
(Dollars in millions)	2013			2012
Net cash provided by (used in)
Operating activities	$	794		$	688
Investing activities	(308		)	(2,795		)
Financing activities	(517		)	1,765
Effect of exchange rate changes on cash and cash equivalents	4			2
Net change in cash and cash equivalents	(27		)	(340		)
Cash and cash equivalents at beginning of period	249			577
Cash and cash equivalents at end of period	$	222		$	237

54

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Cash provided by operating activities increased$106 million in first nine months2013 compared with first nine months2012.  The increase was primarily due to increased cash earnings from the Company's businesses and the absence of one-time payments related to the July 2, 2012 acquisition of Solutia partially offset by an increase in working capital requirements, higher income tax payments, and higher interest payments. The increase in working capital requirements was primarily due to trade receivables and trade payables. The increase in trade receivables was higher in first nine months 2013 due to a greater increase in sales revenue during the first nine months of 2013 as compared with the first nine months of 2012. The decrease in trade payables during the first nine months of 2013 was primarily due to timing of year-end payments and realignment of payment terms on certain payables acquired from Solutia as compared to relatively unchanged trade payables during first nine months of 2012. Interest payments were higher first nine months 2013 as compared with first nine months 2012 primarily due to increased borrowings for the acquisition of Solutia.

Cash used in investing activities decreased $2.5 billion in first nine months2013 compared with first nine months2012. The decrease was primarily due to the $2.6 billion cash portion of the purchase price for the acquisition of Solutia in first nine months 2012. Cash used for additions to properties and equipment was $312 million in first nine months 2013 and $297 million in first nine months 2012, respectively.

Cash used in financing activities was $517 million in first nine months2013 and cash provided by financing activities was $1.8 billion in first nine months2012.  During first nine months 2013, the Company received $300 million in proceeds from commercial paper borrowings and $150 million in proceeds from its accounts receivable securitization facility ("A/R Facility"). The Company repaid $800 million of borrowings under its five-year term loan agreement (the "Term Loan"). First nine months 2013 included $16 million received from stock warrant exercises and $113 million of stock repurchases. First nine months 2012 included proceeds from the issuance of debt for the Solutia acquisition. Proceeds from the issuance of Solutia acquisition debt are presented net of original issue discounts, issuance costs, and the monetization of interest rate swaps. The payment of dividends, which was $94 million in first nine months 2013 and $107 million in first nine months 2012, is also reflected in financing activities in all periods. First nine months 2013 reflected the payment of the fourth quarter 2012 dividend of $45 million in December 2012 rather than January 2013.

In 2013, the Company expects capital expenditures of approximately $500 million and funding of its U.S. defined benefit pension plans of $120 million.  The priorities for uses of available cash in 2013 are expected to be payment of the quarterly cash dividend, repayment of debt, funding targeted growth initiatives, pension funding, and stock repurchases primarily to offset dilution.

Liquidity and Capital Resources

At September 30, 2013, the Company had access to the sources of liquidity described below.

On July 2, 2012, the Company borrowed the entire $1.2 billion available under the five-year Term Loan. Proceeds from these borrowings were used to pay, in part, the cash portion of the Solutia acquisition, repay Solutia debt, and pay acquisition costs. During the first nine months 2013, the Company repaid $800 million of its Term Loan using $300 million of commercial paper borrowings, $150 million of its accounts receivable securitization facility (the "A/R Facility"), and $350 million in cash. At September 30, 2013 and December 31, 2012, the Term Loan balances outstanding were $150 million and $950 million, respectively. The interest rate on the Term Loan as of September 30, 2013 was 1.69 percent.

The Company has a $750 million revolving credit agreement (the "Revolving Credit Facility") expiring December 2016.  Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. At September 30, 2013 and December 31, 2012, the Company had no outstanding borrowings under the Revolving Credit Facility.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The Revolving Credit Facility provides liquidity support for commercial paper borrowings and general corporate purposes.  Accordingly, any outstanding commercial paper borrowings reduce capacity for borrowings available under the Revolving Credit Facility.  Given the expiration date of the Revolving Credit Facility, any commercial paper borrowings supported by the Revolving Credit Facility are classified as long-term borrowings because the Company has the ability and intent to refinance such borrowings on a long-term basis. At September 30, 2013 the Company's commercial paper borrowings were $300 million with a weighted average interest rate of 0.33 percent, and the proceeds were used to repay a portion of the Term Loan. There were no commercial paper borrowings at December 31, 2012.

The Company also has a $250 million line of credit under its A/R Facility, expiring April 2016.  Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility.  At September 30, 2013, the Company's borrowings under the A/R Facility were $150 million secured by trade receivables with an interest rate of 0.91 percent, and the proceeds were used to repay a portion of the Term Loan. At December 31, 2012, the Company had no outstanding borrowings under the A/R Facility.

The Term Loan, Revolving Credit Facility, and the A/R Facility contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented.  As of September 30, 2013, as a result of the $300 million in commercial paper borrowings, the amount available under the Revolving Credit Facility was $450 million. As of September 30, 2013, as result of the $150 million borrowings under the A/R Facility, $100 million was available under this facility. As of December 31, 2012, substantially all of the amounts under these facilities were available for borrowing. The Company would not violate applicable covenants for these periods if the total available amounts of the facilities had been borrowed.

In first nine months2013, the Company made $99 million in contributions to its U.S. defined benefit pension plans.  Including Solutia pension plans, the Company expects to make total cash contributions of approximately $120 million to its U.S. defined benefit pension plans in 2013, of which approximately $70 million is the minimum required cash contribution under the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended.  In 2012, the Company made $124 million in contributions to its U.S. defined benefit pension plans, of which approximately $70 million was the minimum required cash contribution under the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended.  Excess contributions made in 2012 and those anticipated for 2013 are made in order to achieve targeted funding objectives.

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.  An analysis of trends including the aging of accounts receivable and days sales outstanding is performed on a regular basis in order to ensure appropriate adjustments are made to the allowance for doubtful accounts in a timely manner.  No significant variances were identified in the trend analysis performed for third quarter2013 compared to second quarter2013.  The Company believes, based on historical results and its regular analysis, the likelihood of write-offs having a material impact on financial results is remote.

Cash flows from operations, cash and cash equivalents, and the other sources of liquidity described above are expected to be available and sufficient to meet foreseeable cash flow requirements.  However, the Company's cash flows from operations can be affected by numerous factors including risks associated with global operations, raw material availability and cost, demand for and pricing of Eastman's products, capacity utilization, and other factors described under "Forward-Looking Statements and Risk Factors" below.  Eastman management believes maintaining a financial profile consistent with an investment grade company is important to its long-term strategic and financial flexibility.

Capital Expenditures

Capital expenditures were $312 million and $297 million in first nine months2013 and 2012, respectively.  The expenditures in first nine months2013 were primarily for improvements to plants, purchases of equipment, and organic growth initiatives particularly in the Specialty Fluids & Intermediates and Advanced Materials segments.  The expenditures in first nine months2012 were primarily for organic growth initiatives, particularly in the Specialty Fluids & Intermediates and Advanced Materials segments.  The Company expects that 2013 capital spending will be approximately $500 million.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Environmental Matters

Certain Eastman manufacturing sites generate hazardous and nonhazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies.  In connection with the cleanup of various hazardous waste sites, the Company, along with many other entities, has been designated a potentially responsible party ("PRP"), by the U.S. Environmental Protection Agency under the Comprehensive Environmental Response, Compensation and Liability Act, which potentially subjects PRPs to joint and several liability for such cleanup costs.  In addition, the Company will be required to incur costs for environmental remediation and closure and postclosure under the federal Resource Conservation and Recovery Act.  Reserves for environmental contingencies have been established in accordance with Eastman's policies described in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The Company's total reserve for environmental contingencies was $373 million and $394 million at September 30, 2013 and December 31, 2012, respectively.  At both September 30, 2013 and December 31, 2012, this reserve included $8 million related to previously closed and impaired sites, as well as sites that have been divested but for which the Company retains the environmental liability related to these sites.

Estimated future environmental expenditures for remediation costs ranged from the minimum or best estimate of $344 million to the maximum of $600 million and from the minimum or best estimate of $365 million to the maximum of $623 million at September 30, 2013 and December 31, 2012, respectively.  The maximum estimated future costs are considered to be reasonably possible and are inclusive of the amounts accrued at both September 30, 2013 and December 31, 2012.  Although the resolution of uncertainties related to these environmental matters may have a material adverse effect on the Company's consolidated results of operations in the period recognized, because of expected sharing of costs, the availability of legal defenses, and the Company's preliminary assessment of actions that may be required, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position or cash flows.  

The best estimate accrued to date over the facilities' estimated useful lives for asset retirement obligation costs was $29 million at both September 30, 2013 and December 31, 2012.  

Reserves for environmental remediation that management believes to be probable and estimable are recorded as current and long-term liabilities in the Unaudited Consolidated Statements of Financial Position. These reserves include liabilities expected to be paid out within 30 years. Changes in the reserves for environmental remediation liabilities during first nine months2013 including net charges taken, which are included in cost of goods sold, and cash reductions are summarized below:

(Dollars in millions)	Environmental Remediation Liabilities
Balance at December 31, 2012	$	365
Net charges taken	—
Cash reductions	(21		)
Balance at September 30, 2013	$	344

Other Commitments

At September 30, 2013, the Company's obligations under notes and debentures and credit facilities totaled $4.4 billion to be paid over a period of approximately 30 years.  See Note 6, "Borrowings", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The Company had various purchase obligations at September 30, 2013, totaling $2.8 billionover a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business.  The Company also had various lease commitments for property and equipment under cancelable, noncancelable, and month-to-month operating leases totaling approximately $225 million over a period of several years.  Of the total lease commitments, approximately 5 percent relate to machinery and equipment, including computer and communications equipment and production equipment; approximately 60 percent relate to real property, including office space, storage facilities, and land; and approximately 35 percent relate to railcars.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

In addition, the Company had other liabilities at September 30, 2013, totaling $2.2 billion related primarily to pension, retiree medical, other post-employment obligations, and environmental reserves.

As of September 30, 2013, there have been no material changes to the Company's commitments at December 31, 2012. See Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company's 2012 Annual Report on Form 10-K.

Off Balance Sheet and Other Financing Arrangements

If certain operating leases are terminated by the Company, it has guaranteed a portion of the residual value loss, if any, incurred by the lessors in disposing of the related assets.  For information on the Company's residual value guarantees, see Note 9, "Commitments", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Guarantees and claims also arise during the ordinary course of business from relationships with joint venture partners, suppliers, customers, and other parties when the Company undertakes an obligation to guarantee the performance of others, if specified triggering events occur.  Non-performance under a contract could trigger an obligation of the Company.  The Company's current other guarantees include guarantees relating primarily to intellectual property, environmental matters, and other indemnifications and have arisen through the normal course of business.  The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims, if they were to occur.  These other guarantees have terms of between 1 and 15 years with maximum potential future payments of approximately $54 million in the aggregate, with none of these guarantees individually significant to the Company's operating results, financial position, or liquidity.  The Company's current expectation is that future payment or performance related to non-performance under other guarantees is considered remote.

Treasury Stock

In February 2011, the Company's Board of Directors authorized repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company.  The Company completed these $300 million repurchases in August 2013, acquiring a total of 6,141,999 shares.

In May 2013, the Company's Board of Directors authorized an additional repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company.  As of September 30, 2013, a total of 194,758 shares of common stock have been repurchased under this authorization for a total amount of $15 million.

During first nine months2013, the Company repurchased 1,579,118 shares of common stock for a cost of approximately $113 million. The Company did not repurchase any shares of common stock during 2012.

Dividends

The Company declared cash dividends of $0.30 per share and $0.26 per share in third quarter2013 and 2012, respectively, and $0.90 per share and $0.78 per share in first nine months2013 and 2012, respectively.

RECENTLY ISSUED ACCOUNTING STANDARDS

In February 2013, the Financial Accounting Standards Board issued accounting guidance, given divergence in practice, covering loss contingencies that are joint and several liability arrangements for which the settlement amount is fixed and is not covered by other GAAP. Under the new requirements, an entity is to measure the obligation as the amount the entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the entity expects to pay on behalf of it co-obligors. This guidance is effective for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

In March 2013, the Financial Accounting Standards Board issued amended accounting guidance to address the release of cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than an in-substance real estate sale or oil/gas mineral rights) within a foreign entity. The cumulative translation adjustments should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, in the event of a step acquisition when the acquirer obtains control of an acquiree in which it held an equity interest immediately prior to the acquisition, the cumulative translation adjustments would be released into net income. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In April 2013, the Financial Accounting Standards Board issued clarifying guidance that requires financial statements to be prepared using the liquidation basis of accounting to present relevant information about an entity's expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation when liquidation is imminent. Liquidation is considered imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (i.e. involuntary bankruptcy). This guidance is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will have no impact on the Company's financial position or results of operations.

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance to permit the use of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. In addition, the update also removes the restriction on using different benchmark rates for similar hedges. This guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance, given divergence in practice, that addresses the financial statement presentation of tax items eligible for netting. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. Retrospective application and early adoption is permitted. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

2013 OUTLOOK    

Eastman is focused on achieving consistent earnings growth through a market-driven approach that takes advantage of the Company's existing technology platforms, global marketing and manufacturing presence, and leading positions in end markets. This focus is supported by the Company's geographic and end-market diversity as it serves global markets, including emerging economies with above average growth rates, and offers both original equipment manufacturing and after-market products in a variety of end markets, such as transportation, building and construction, and consumables.

The Company expects global growth in 2013 to be slightly above two percent, with the U.S. remaining constant at two percent, Europe approximately zero for the full year, and China near eight percent.

The Company expects that market prices for commodity products and raw material and energy costs will continue to be volatile, and the Company will continue to use pricing and hedging strategies to offset this volatility.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

For 2013, the Company expects:

• cash generated by operating activities of approximately $1.3 billion;

• capital spending to be approximately $500 million; and

• its full year tax rate on reported earnings from continuing operations before income tax to be approximately 30 percent.

Based upon the foregoing expectations, despite a normally seasonally slower fourth quarter, uncertain pace of global economic growth, and continued challenges in the Adhesives & Plasticizers segment, the Company expects full year 2013 earnings per diluted share from continuing operations to be between $6.30 and $6.40 per share, excluding non-core or non-recurring costs, charges, losses or gains.

See "Forward-Looking Statements and Risk Factors" below.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

Certain statements made in this Quarterly Report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements are all statements, other than statements of historical fact, that may be made by us from time to time. In some cases, you can identify forward-looking statements by terminology such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would," and similar expressions or expressions of the negative of these terms. Forward-looking statements may relate to, among other things, such matters as planned and expected capacity increases and utilization; anticipated capital spending; expected depreciation and amortization; environmental matters; pending and future legal proceedings; exposure to, and effects of hedging of, raw material and energy costs, foreign currencies and interest rates; global and regional economic, political, and business conditions; competition; growth opportunities; supply and demand, volume, price, cost, margin and sales; earnings, cash flow, dividends and other expected financial results and conditions; expectations, strategies, and plans for individual assets and products, businesses, and segments as well as for the whole of Eastman; cash requirements and uses of available cash; financing plans and activities; pension expenses and funding; credit ratings; anticipated and other future restructuring, acquisition, divestiture, and consolidation activities; cost reduction and control efforts and targets; the timing and costs of, and benefits from, the integration of, and expected business and financial performance of, acquired businesses; strategic initiatives and development, production, commercialization and acceptance of new products, services and technologies and related costs; asset, business and product portfolio changes; and expected tax rates and net interest costs.

Forward-looking statements are based upon certain underlying assumptions as of the date such statements were made. Such assumptions are based upon internal estimates and other analyses of current market conditions and trends, management expectations, plans, and strategies, economic conditions, and other factors. Forward-looking statements and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions and expectations proves to be inaccurate or is unrealized. In addition to the factors described elsewhere in this Quarterly Report, the following are the most significant known factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.

The Company cautions you not to place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report. Additional factors not presently known to the Company, or that the Company does not currently believe to be material, may also cause actual results to differ materially from expectations. Except as may be required by law, the Company undertakes no obligation to update or alter these forward-looking statements, whether as a result of new information, future events, or otherwise.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Continued uncertain conditions in the global economy and the financial markets could negatively impact the Company.

While economic and financial market conditions have improved from those in 2008 and 2009, continued uncertain conditions in the global economy and global capital markets and uncertainty about the length and stability of economic recovery may adversely affect the Company's results of operations, financial condition, and cash flows.  The Company's business and operating results were affected by the impact of the most recentglobal recession, including the credit market crisis, declining consumer and business confidence, fluctuating commodity prices, volatile exchange rates, and other challenges that  affected the global economy.  If the global economy or financial markets again deteriorate or experience significant new disruptions, the Company's results of operations, financial condition, and cash flows could be materially adversely affected; in addition the Company's ability to access the credit and capital markets under attractive rates and terms could be constrained, which may negatively impact the Company's liquidity or ability to pursue certain growth initiatives.

Volatility in costs for strategic raw material and energy commodities or disruption in the supply of these commodities could adversely affect our financial results.

The Company is reliant on certain strategic raw material and energy commodities for its operations and utilizes risk management tools, including hedging, as appropriate, to mitigate short-term market fluctuations in raw material and energy costs.  These risk mitigation measures cannot eliminate all exposure to market fluctuations.  In addition, natural disasters, plant interruptions, changes in laws or regulations, war or other outbreak of hostilities or terrorism, and breakdown or degradation of transportation infrastructure used for delivery of strategic raw material and energy commodities, could adversely impact both the cost and availability of these commodities.

The Company's business is subject to operating risks common to chemical manufacturing businesses, any of which could disrupt manufacturing operations or related infrastructure and adversely affect results of operations.

As a global specialty chemicals manufacturing company, our business is subject to operating risks common to chemical manufacturing, storage, handling, and transportation. Significant limitation on the Company's ability to manufacture products due to disruption of manufacturing operations or related infrastructure could have a material adverse effect on the Company's sales revenue, costs, results of operations, and financial condition.  Disruptions could occur due to internal factors such as computer or equipment malfunction (accidental or intentional), operator error, or process failures; or external factors such as computer or equipment malfunction at third-party service providers, natural disasters, pandemic illness, changes in laws or regulations, war or other outbreak of hostilities or terrorism, cyber attacks, or breakdown or degradation of transportation infrastructure used for delivery of supplies to the Company or for delivery of products to customers.  (The Company has in the past had cyber attacks and breaches of its computer information systems, and although none of these has had a material adverse effect on the Company's operations, no assurances can be provided against the impact of any future disruptions due to these, or other, circumstances.) Such disruptions could result in an unplanned event that could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on the Company's results of operations.

Loss or financial weakness of any of the Company's largest customers could adversely affect our financial results.

The Company has an extensive customer base; however, loss of, or material financial weakness of, certain of our largest customers could adversely affect the Company's financial condition and results of operations until such business is replaced and no assurances can be made that the Company would be able to regain or replace any lost customers.

61

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Growth initiatives may not achieve desired business or financial objectives and may require a significant use of resources in excess of those estimated or budgeted for such initiatives.

The Company continues to identify and pursue growth opportunities through both internal (or "organic") development and acquisitions and joint ventures to diversify and extend the portfolio of our businesses.  These growth opportunities include development and commercialization of new products and technologies, expansion into new markets and geographic regions, and alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities.  There can be no assurance that such efforts, investments, or acquisitions and alliances (including integration of acquired businesses) will result in financially successful commercialization of products, or acceptance by existing or new customers, or successful entry into new markets or otherwise achieve their underlying strategic business objectives or that they will be beneficial to the Company's results of operations.  There also can be no assurance regarding the timing of completion of proposed acquisitions, expected benefits of proposed acquisitions, completion of integration plans, and synergies therefrom.  There also can be no assurance that capital projects for growth efforts can be completed within the time or at the costs projected due, among other things, to demand for and availability of construction materials and labor and obtaining regulatory approvals and operating permits and reaching agreement on terms of key agreements and arrangements with potential suppliers and customers.  Any such delays or cost overruns or the inability to obtain such approvals or to reach such agreements on acceptable terms could negatively affect the returns from any proposed or current investments and projects.

Significant acquisitions expose the Company to risks and uncertainties, the occurrence of any of which could materially adversely affect the Company's business, financial condition, and results of operations.

The acquisition of large companies such as Solutia subjects the Company to a number of risks and uncertainties, the occurrence of any of which could have a material adverse effect on Eastman. These include, but are not limited to:

• that the financial performance of the acquired business may be significantly worse than expected;

• that significant additional indebtedness may constrain the Company's ability to access the credit and capital markets at attractive interest rates and favorable terms, which may negatively impact the Company's liquidity or ability to pursue certain growth initiatives;

• that the Company may not be able to achieve the cost, revenue, tax, or other "synergies" expected from any acquisition, or that there may be delays in achieving any such synergies;

• that the Company may be required to expend significant additional resources in order to integrate any acquired business into Eastman or that the integration efforts will not achieve the expected benefits;

• lost sales and customer dues to customer dissatisfaction with any transaction;

• loss of key employees from an acquired company; or

• assumption of unexpected or unknown liabilities.

Legislative or regulatory actions could increase the Company's future compliance costs.

The Company's facilities and businesses are subject to complex health, safety and environmental laws and regulations, which require and will continue to require significant expenditures to remain in compliance with such laws and regulations.  The Company's accruals for such costs and associated liabilities are subject to changes in estimates on which the accruals are based.  The amount accrued reflects the Company's assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number and financial viability of other potentially responsible parties.  Changes in the estimates on which the accruals are based, unanticipated government enforcement action, or changes in health, safety, environmental, chemical control regulations, and testing requirements could result in higher costs.  Pending and proposed U.S. Federal legislation and regulation increase the likelihood that the Company's manufacturing sites will in the future be impacted by regulation of greenhouse gas emissions and energy policy, which legislation and regulation, if enacted, may result in capital expenditures, increases in costs for raw materials and energy, limitations on raw material and energy source and supply choices, and other direct compliance costs.

62

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

In addition to the foregoing most significant known risk factors to the Company, there may be other factors, not currently known to the Company, which could, in the future, materially adversely affect the Company, its business, financial condition, or results of operations.  The foregoing discussion of the most significant risk factors to the Company does not necessarily present them in order of importance.  This disclosure, including that under "Outlook" and "Forward-Looking Statements and Risk Factors", and other forward-looking statements and related disclosures made by the Company in this Quarterly Report and elsewhere from time to time, represents management's best judgment as of the date the information is given.  The Company does not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law.  Investors are advised, however, to consult any further public Company disclosures (such as in filings with the Securities and Exchange Commission or in Company press releases) on related subjects.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There are no material changes to the Company's market risks from those disclosed in Part II, Item 7A of the Company's 2012 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.  An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures.  Based on that evaluation, the CEO and CFO have concluded that as of September 30, 2013, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed was accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting that occurred during the third quarter of 2013 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

From time to time, Eastman Chemical Company ("Eastman" or the "Company") and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are being handled and defended in the ordinary course of business.  While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters (including those described below) will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

Certain Solutia Historical Legal and Administrative Proceedings

Legacy Tort Claims Litigation.  Pursuant to an Amended and Restated Settlement Agreement effective February 28, 2008 between Solutia Inc. ("Solutia") and Monsanto Company ("Monsanto") in connection with Solutia's emergence from Chapter 11 bankruptcy proceedings (the "Monsanto Settlement Agreement"), Monsanto is responsible to defend and indemnify Solutia against any Legacy Tort Claims (as defined in the Monsanto Settlement Agreement) and Solutia agreed to retain responsibility for certain tort claims, if any, that may arise from Solutia's conduct after its spinoff from Pharmacia Corporation ("Pharmacia") (f/k/a Monsanto), which occurred on September 1, 1997.  Solutia, which became a wholly owned subsidiary of Eastman on July 2, 2012, has been named as a defendant in several such proceedings, and has submitted the matters to Monsanto as Legacy Tort Claims.  To the extent these matters are not within the meaning of Legacy Tort Claims, Solutia could potentially be liable thereunder.  In connection with the completion of the acquisition, Eastman guaranteed the obligations of Solutia and Eastman was added as an indemnified party under the Monsanto Settlement Agreement.

Medicare Reimbursement Litigation.  On December 1, 2009, the Department of Justice ("DOJ"), on behalf of the United States government, filed suit in the United States District Court, Northern District of Alabama (in a case captioned United States of America v. Stricker, et al.), against Solutia, Monsanto, Pharmacia and the attorneys and law firms who represented the plaintiffs in the Abernathy v. Solutia Inc., et al. ("Abernathy") lawsuit arising out of polychlorinated biphenyl ("PCB") contamination in Anniston, Alabama.  The DOJ alleged the defendants failed to reimburse Medicare for medical expenses paid to Abernathy settlement recipients who were Medicare beneficiaries.  The DOJ sought recovery of these allegedly unpaid reimbursements. The district court granted defendants' motions to dismiss, finding the DOJ failed to file the action within the applicable statute of limitations.  The DOJ appealed the case to the United States Court of Appeals for the Eleventh Circuit, which heard oral argument on the case July 26, 2012; one year later, that Court affirmed the district court, ruling in favor of Solutia and the other defendants.  The DOJ did not petition the Eleventh Circuit for a rehearing and the Company has learned from the DOJ that it does not intend to appeal the ruling to the United States Supreme Court. The Company now considers the matter closed.

ITEM 1A. RISK FACTORS

For identification and discussion of the most significant risks applicable to the Company and its business, see "Forward-Looking Statements and Risk Factors" in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this Quarterly Report on Form 10-Q.

65

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Purchases of Equity Securities by the Issuer

Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)	Approximate Dollar Value (in millions) that May Yet Be Purchased Under the Plans or Programs (3)
July 1 - 31, 2013	143,887	$	73.89	143,887	$	310
August 1 - 31, 2013	138,400	$	78.91	138,400	$	299
September 1 - 30, 2013	181,131	$	77.22	181,131	$	285
Total	463,418	$	76.69	463,418

⁽¹⁾  Shares repurchased under a Company announced repurchase plan.

⁽²⁾  Average price paid per share reflects the weighted average purchase price paid for share.

⁽³⁾  In February 2011, the Board of Directors authorized repurchase of up to $300 million of the Company's outstanding common stock. The Company completed these $300 million repurchases in August 2013, acquiring a total of 6,141,999 shares. In May 2013, the Board of Directors authorized an additional repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company. The May 2013 authorization was in addition to the remaining amount available under the February 2011 repurchase authorization. As of September 30, 2013, a total of 194,758 shares have been repurchased under this authorization for a total amount of $15 million. During first nine months2013, the Company repurchased 1,579,118 shares of common stock for a cost of approximately $113 million. For additional information, see Note 12, "Stockholders' Equity", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 6. EXHIBITS

Exhibits filed as part of this report are listed in the Exhibit Index appearing on page 68.

66

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Eastman Chemical Company
Date:	October 28, 2013	By:	/s/ Curtis E. Espeland
			Curtis E. Espeland
			Senior Vice President and Chief Financial Officer

67

	EXHIBIT INDEX
Exhibit Number	Description	Sequential Page Number
2.01	Agreement and Plan of Merger, dated January 26, 2012, by and among Eastman Chemical Company, Solutia Inc. and Eagle Merger Sub Corporation (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated January 26, 2012)
3.01	Amended and Restated Certificate of Incorporation of Eastman Chemical Company (incorporated herein by reference to Exhibit 3.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012)
3.02	Amended and Restated Bylaws of Eastman Chemical Company	70
4.01	Form of Eastman Chemical Company common stock certificate as amended February 1, 2001 (incorporated herein by reference to Exhibit 4.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
4.02	Indenture, dated as of January 10, 1994, between Eastman Chemical Company and The Bank of New York, as Trustee (the "Indenture") (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated January 10, 1994)
4.03	Indenture, dated as of June 5, 2012, between Eastman Chemical Company and Wells Fargo Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated June 5, 2012)
4.04	Form of 7 1/4% Debentures due January 15, 2024 (incorporated herein by reference to Exhibit 4(d) to the Company's Current Report on Form 8-K dated January 10, 1994)
4.05	Officers' Certificate pursuant to Sections 201 and 301 of the Indenture (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated June 8, 1994)
4.06	Form of 7 5/8% Debentures due June 15, 2024 (incorporated herein by reference to Exhibit 4(b) to the Company's Current Report on Form 8-K dated June 8, 1994)
4.07	Form of 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)
4.08	Officer's Certificate pursuant to Sections 201 and 301 of the Indenture related to 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 2006)
4.09	Form of 5.500% Notes due 2019 (incorporated  herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 2, 2009)
4.10	Form of 6.30% Notes due 2018 (incorporated herein by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003)
4.11	Form of 3% Note due 2015 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 10, 2010)
4.12	Form of 4.5% Note due 2021 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 10, 2010)

68

	EXHIBIT INDEX
Exhibit Number	Description	Sequential Page Number
4.13	Form of 2.4% Note due 2017 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated June 5, 2012)
4.14	Form of 3.6% Note due 2022 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K dated June 5, 2012)
4.15	Form of 4.8% Note due 2042 (incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K dated June 5, 2012)
12.01	Statement re: Computation of Ratios of Earnings to Fixed Charges	80
31.01	Rule 13a – 14(a) Certification by James P. Rogers, Chief Executive Officer, for the quarter ended September 30, 2013	81
31.02	Rule 13a – 14(a) Certification by Curtis E. Espeland, Senior Vice President and Chief Financial Officer, for the quarter ended September 30, 2013	82
32.01	Section 1350 Certification by James P. Rogers, Chief Executive Officer, for the quarter ended September 30, 2013	83
32.02	Section 1350 Certification by Curtis E. Espeland, Senior Vice President and Chief Financial Officer, for the quarter ended September 30, 2013	84
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

69

EX-3.02

Exhibit 3.02

EASTMAN CHEMICAL COMPANY BYLAWS

SECTION I

Capital Stock

Section 1.1. Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the Chairman of the Board of Directors, the Chief Executive Officer, or the Vice Chairman or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation certifying the number of shares in the Corporation owned by such holder. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.

Section 1.2. Record Ownership. A record of the name and address of the holder of each certificate, the number of shares represented thereby and the date of issue thereof shall be made on the Corporation's books. The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by the laws of the State of Delaware.

Section 1.3. Transfer of Record Ownership. Transfers of stock shall be made on the books of the Corporation only by direction of the person named in the certificate or such person's attorney, lawfully constituted in writing, and only upon the surrender of the certificate therefor and a written assignment of the shares evidenced thereby, which certificate shall be canceled before the new certificate is issued.

Section 1.4. Lost Certificates. Any person claiming a stock certificate in lieu of one lost, stolen or destroyed shall give the Corporation an affidavit as to such person's ownership of the certificate and of the facts which go to prove its loss, theft or destruction. Such person shall also, if required by policies adopted by the Board of Directors, give the Corporation a bond, in such form as may be approved by the Corporation, sufficient to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of the certificate or the issuance of a new certificate.

Section 1.5. Transfer Agents; Registrars; Rules Respecting Certificates. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars. The Board of Directors may make such further rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock certificates of the Corporation.

Section 1.6. Record Date. The Board of Directors may fix in advance a future date, not exceeding 60 days (nor, in the case of a stockholders' meeting, less than ten days) preceding the date of any meeting of stockholders, payment of dividend or other distribution, allotment of rights, or change, conversion or exchange of capital stock or for the purpose of any other lawful action, as the record date for determination of the stockholders entitled to notice of and to vote at any such meeting and any adjournment thereof, or to receive any such dividend or other distribution or allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to participate in any such other lawful action, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of and to vote at such meeting and any adjournment thereof, or to receive such dividend or other distribution or allotment of rights, or to exercise such rights, or to participate in any such other lawful action, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

70

Exhibit 3.02

SECTION II

Meetings of Stockholders

Section 2.1. Annual. The annual meeting of stockholders for the election of directors and the transaction of such other proper business shall be held on the first Thursday in May, unless otherwise specified by resolution adopted by the Board of Directors, and at the time and place, within or without the State of Delaware, as determined by the Board of Directors.

Section 2.2. Special. (a) Special meetings of stockholders for any purpose or purposes may be called only by the Board of Directors, (i) pursuant to a resolution adopted by a majority of the members of the Board of Directors then in office, or (ii) upon the written request of the holders of at least twenty-five percent of the outstanding voting stock of the Corporation (a “Request”) in accordance with the requirements set forth in Section 2.2(b) hereof.

(b) Any Request shall set forth with particularity (i) the names and business addresses of the stockholder or stockholders requesting the meeting (each a “Meeting Proponent”) and all Persons (as such term is defined in Article V of the Certificate of Incorporation) acting in concert with any Meeting Proponent; (ii) the name and address of each Meeting Proponent and the Persons identified in clause (i), as they appear on the Corporation’s books (if they so appear); (iii) the class and number of shares of the Corporation beneficially owned by each Meeting Proponent and the Persons identified in clause (i); (iv) the text of the proposal or business (including the text of any resolutions proposed for consideration and, if the business includes a proposal to amend these Bylaws or the Certificate of Incorporation, the language of the proposed amendment); and (v) all arrangements or understandings between each Meeting Proponent and any other Persons, including their names, in connection with the proposed business of the special meeting and any material interest of each Meeting Proponent in such business. Except as permitted in Section 2.2(c), the only business that may be conducted at the special meeting shall be the business proposed in the Request. The Request shall be delivered personally or sent by registered mail to the Secretary of the Corporation at its principal executive offices. If the Board of Directors determines that the Request complies with the Certificate of Incorporation and the provisions of these Bylaws and that the proposal to be considered or business to be conducted is a proper subject for stockholder action under applicable law, the Board of Directors shall call and send notice of a special meeting for the purpose set forth in the Request in accordance with Section 2.3 of these Bylaws. The Board of Directors shall determine the date for such special meeting, which date shall be not later than 90 days following the Corporation’s receipt of the Request, and the record date(s) for stockholders entitled to notice of and to vote at such special meeting.

(c) Special meetings may be held at any place, within or without the State of Delaware, as determined by the Board of Directors. The only business which may be conducted at a special meeting, other than procedural matters and matters relating to the conduct of the special meeting, shall be the matter or matters described in the notice of the meeting.

Section 2.3. Notice. Notice of each meeting of stockholders, shall be made in writing, or electronically to such stockholders as have consented to the receipt of such notice by electronic means, or by any such other means permitted by the Delaware General Corporation Law. Such notice shall state the date, time, place and, in the case of a special meeting, the purpose thereof, shall be given as provided by law by the Secretary or an Assistant Secretary not less than ten days nor more than 60 days before such meeting (unless a different time is specified by law) to every stockholder entitled by law to notice of such meeting.

Section 2.4. List of Stockholders. A complete list of the stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be prepared by the Secretary. Such list shall be available for examination of any stockholder, for any purpose germane to the meeting, either on a reasonably accessible electronic network or, during normal business hours, at the Corporation’s principal place of business, for at least ten days before the meeting and at the place of the meeting during the whole time of the meeting. In the event that such list is to be made available on an electronic network, the notice of meeting given under Section 2.3 hereof shall provide the information required to gain access to such list.

Section 2.5. Quorum. The holders of shares of stock entitled to cast a majority of the votes on the matters at issue at a meeting of stockholders, present in person or represented by proxy, shall constitute a quorum, except as otherwise required by the Delaware General Corporation Law. In the event of a lack of a quorum, the chairman of the meeting or a majority in interest of the stockholders present in person or represented by proxy may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be obtained. At any such adjourned meeting at which there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.

71

Exhibit 3.02

Section 2.6. Organizationand Procedure. (a) The Chairman of the Board, the Chief Executive Officer, or such other officer of the Corporation designated by a majority of the directors that the Corporation would have if there were no vacancies on the Board of Directors (the “Whole Board”), will call meetings of the stockholders to order and will act as presiding officer thereof. Unless otherwise determined prior to the meeting by a majority of the Whole Board, the presiding officer of the meeting of the stockholders will have the right and the authority to determine and maintain the rules, regulations and procedures for the proper conduct of the meeting, including, without limitation, restricting entry to the meeting after it has commenced, maintaining order and the safety of those in attendance, opening and closing the polls for voting, dismissing business or proposals not properly submitted, limiting the time allowed for discussion of the business of the meeting, restricting the persons (other than stockholders of the Corporation or their duly appointed proxies) that may attend the meeting, and ascertaining whether any stockholder or proxy holder may be excluded from the meeting based upon any determination by the presiding officer, in his or her sole discretion, that the stockholder or proxy holder is unduly disruptive or is likely to disrupt the meeting. The Secretary of the Corporation shall act as secretary, but in the absence of the Secretary, the presiding officer may appoint a secretary.

(b) At an annual meeting of the stockholders, only such business will be conducted or considered as is properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given in accordance with these bylaws, (ii) brought before the meeting by the presiding officer or by or at the direction of a majority of the Whole Board, or (iii) otherwise properly requested to be brought before the meeting by a stockholder of the Corporation in accordance with these bylaws.

(c) At a special meeting of stockholders, only such business may be conducted or considered as is properly brought before the meeting. To be properly brought before a special meeting, business must be (i) specified in the notice of the meeting (or any supplement thereto) given in accordance with these bylaws or (ii) brought before the meeting by the presiding officer or by or at the direction of a majority of the Whole Board. The determination of whether any business sought to be brought before any annual or special meeting of the stockholders is properly brought before such meeting will be made by the presiding officer of the meeting. If the presiding officer determines that any business is not properly brought before such meeting, he or she will so declare at the meeting and any such business will not be conducted or considered.

Section 2.7. Stockholder Nominations and Proposals. (a) No proposal for a stockholder vote shall be submitted by a stockholder (a "Stockholder Proposal") to the Corporation's stockholders unless the stockholder submitting such proposal (the "Proponent") shall have filed a written notice setting forth with particularity (i) the names and business addresses of the Proponent and all Persons (as such term is defined in Article V of the Certificate of Incorporation) acting in concert with the Proponent; (ii) the name and address of the Proponent and the Persons identified in clause (i), as they appear on the Corporation's books (if they so appear); (iii) the class and number of shares of the Corporation beneficially owned by the Proponent and the Persons identified in clause (i); (iv) a description of the Stockholder Proposal containing all material information relating thereto; and (v) such other information as the Board of Directors reasonably determines is necessary or appropriate to enable the Board of Directors and stockholders of the Corporation to consider the Stockholder Proposal. The presiding officer at any stockholders' meeting may determine that any Stockholder Proposal was not made in accordance with the procedures prescribed in these Bylaws or is otherwise not in accordance with law, and if it is so determined, such officer shall so declare at the meeting and the Stockholder Proposal shall be disregarded.

72

Exhibit 3.02

(b) Only persons who are selected and recommended by the Board of Directors or the committee of the Board of Directors designated to make recommendations, or who are nominated by stockholders in accordance with the procedures set forth in this Section 2.7 (a “Stockholder Nomination”), shall be eligible for election, or qualified to serve, as directors. Nominations of individuals for election to the Board of Directors of the Corporation at any annual meeting or any special meeting of stockholders at which directors are to be elected may be made by any stockholder of the Corporation entitled to vote for the election of directors at that meeting by compliance with the procedures set forth in this Section 2.7. Nominations by stockholders shall be made by written notice (a "Nomination Notice"), which shall set forth (i) as to each individual nominated, (A) the name, date of birth, business address and residence address of such individual; (B) the business experience during the past five years of such nominee, including his or her principal occupations and employment during such period, the name and principal business of any corporation or other organization in which such occupations and employment were carried on, and such other information as to the nature of his or her responsibilities and level of professional competence as may be sufficient to permit assessment of his or her prior business experience; (C) whether the nominee is or has ever been at any time a director, officer or owner of 5% or more of any class of capital stock, partnership interests or other equity interest of any corporation, partnership or other entity; (D) any directorships currently held, or held within the preceding five years, by such nominee in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, as amended; (E) whether, in the last ten years, such nominee has been convicted in a criminal proceeding or has been subject to a judgment, order, finding or decree of any federal, state or other governmental entity, concerning any violation of federal, state or other law, or any proceeding in bankruptcy, which conviction, order, finding, decree or proceeding may be material to an evaluation of the ability or integrity of the nominee; and (F) all information relevant to a determination of the nominee's status as to "independence," including references to the criteria established by the New York Stock Exchange (or any other exchange or quotation system on which the Corporation's equity securities are then listed or quoted) and the Corporation's Corporate Governance Guidelines, in each case as in effect at the time of such Stockholder Nomination; (ii) as to the Person submitting the Nomination Notice and any Person acting in concert with such Person, (x) the name and business address of such Person, (y) the name and address of such Person as they appear on the Corporation's books (if they so appear), and (z) the class and number of shares of the Corporation that are beneficially owned by such Person; and (iii) if the Person submitting the Nomination Notice is seeking to have the nominee included as such in the Corporation’s proxy statement for the Stockholder Nomination, the information required by Rule 14a-11 under the Securities Exchange Act of 1934. A written consent to being named in a proxy statement as a nominee, and to serve as a director if elected, signed by the nominee, shall be filed with any Nomination Notice. If the presiding officer at any stockholders' meeting determines that a nomination was not made in accordance with the procedures prescribed by these Bylaws, he shall so declare to the meeting and the defective nomination shall be disregarded.

(c) In the case of an annual meeting of stockholders, Nomination Notices and Stockholder Proposals shall be delivered to the Secretary at the principal executive office of the Corporation no earlier than 150 days and not later than 120 days prior to the date on which the notice of the immediately preceding year's annual meeting of stockholders was first sent to the stockholders of the Corporation. In the case of a special meeting of stockholders, Nomination Notices and Stockholder Proposals shall be delivered to the Secretary at the principal executive office of the Corporation no later than the close of business on the 15th day following the day on which notice of the date of a special meeting of stockholders was given.

Section 2.8. Voting. Unless otherwise provided in a resolution or resolutions providing for any class or series of Preferred Stock pursuant to Article IV of the Certificate of Incorporation or by the Delaware General Corporation Law, each stockholder shall be entitled to one vote, in person or by proxy, for each share held of record by such stockholder who is entitled to vote generally in the election of directors. Each stockholder voting by proxy shall grant such authority in writing, by electronic or telephonic transmission or communication, or by any such other means permitted by the Delaware General Corporation Law. All questions, including elections for the Board of Directors, shall be decided by a majority of the votes cast, except as otherwise required by the Delaware General Corporation Law or as provided for in the Certificate of Incorporation or these Bylaws. Abstentions shall not be considered to be votes cast. For purposes of this Bylaw, a majority of votes cast shall mean that the number of shares voted "for" a director's election exceeds 50% of the number of votes cast with respect to that director's election or, in the case where the number of nominees exceeds the number of directors to be elected, cast with respect to election of directors generally. Votes cast shall include votes to withhold authority in each case and exclude abstentions with respect to that director's election, or, in the case where the number of nominees exceeds the number of directors to be elected, abstentions with respect to election of directors generally.

73

Exhibit 3.02

If a nominee for director who is an incumbent director is not elected and no successor has been elected at such meeting, the director shall promptly tender his or her resignation to the Board of Directors. The Nominating and Corporate Governance Committee of the Board of Directors shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board of Directors shall act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee's recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission, or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale for the decision within 90 days from the date of the certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation, and the Board of Directors in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The director who tenders his or her resignation will not participate in the recommendation of the Nominating and Corporate Governance Committee or the decision of the Board of Directors with respect to his or her resignation. If such incumbent director's resignation is not accepted by the Board of Directors, such director shall continue to serve until the next annual meeting of stockholders at which such director’s term expires and until his or her successor is duly elected, or his or her earlier resignation and removal. If a director's resignation is accepted by the Board of Directors pursuant to this Bylaw, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board of Directors pursuant to the Delaware General Corporation Law and the Certificate of Incorporation and these Bylaws of the Company.

Section 2.9. Inspectors. The Board of Directors by resolution shall, in advance of any meeting of stockholders, appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. One or more persons may be designated by the Board of Directors as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by the Delaware General Corporation Law.

SECTION III

Board of Directors

Section 3.1. Number and Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The number of directors constituting the Board of Directors shall be as authorized from time to time exclusively by a vote of a majority of the members of the Board of Directors then in office. A person who is not serving as a director shall not be eligible for nomination, appointment, or election if such person has or will have reached age 70 on the date of his or her appointment or election, and any director reaching the age of 70 during any term of office shall continue to be qualified to serve as a director only until the next annual meeting of stockholders following his or her 70th birthday; provided, however, that the Board of Directors is authorized, in circumstances it deems appropriate, to render a director then in office eligible to serve for one or more additional one year term or terms of office.

Section 3.2. Resignation. A director may resign at any time by giving notice, in writing, by electronic transmission or by any other means permitted by the Delaware General Corporation Law, to the Chairman of the Board or to the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof.

Section 3.3. Regular Meetings. Regular meetings of the Board of Directors may be held without further notice at such time as shall from time to time be determined by the Board of Directors. Unless otherwise determined by the Board of Directors, the locations of the regular meetings of the Board of Directors shall be in Kingsport, Tennessee. A meeting of the Board of Directors for the election of officers and the transaction of such other business as may come before it may be held without notice immediately following the annual meeting of stockholders.

74

Exhibit 3.02

Section 3.4. Special Meetings. Special meetings of the full Board of Directors may be called by the Chairman of the Board, the Lead Director, or the Vice Chairman. Special meetings of the non-employee, independent directors may be called by the Lead Director. Special meetings of the Board of Directors or of the non-employee, independent directors also may be called at the request in writing of one-third of the members of the Board of Directors then in office.

Section 3.5. Notice of Special Meetings. Notice of the date, time and place of each special meeting shall be mailed by regular mail to each director at his designated address at least six days before the meeting; or sent by overnight courier to each director at his designated address at least two days before the meeting (with delivery scheduled to occur no later than the day before the meeting); or given orally by telephone or other means, or by telegraph or telecopy, or by any other means comparable to any of the foregoing, to each director, as applicable, at his designated address at least 24 hours before the meeting; provided, however, that if less than five days' notice is provided and one third of the members of the Board of Directors then in office, or one-third of the number of non-employee, independent directors (in the case of a meeting of such directors) object in writing prior to or at the commencement of the meeting, such meeting shall be postponed until five days after such notice was given pursuant to this sentence (or such shorter period to which a majority of those who objected in writing agree), provided that notice of such postponed meeting shall be given in accordance with this Section 3.5. The notice of the special meeting shall state the general purpose of the meeting, with no other routine business conducted at the special meeting without such matter being stated in the notice.

Section 3.6. Place of Meetings. The Board of Directors may hold their meetings and have an office or offices inside or outside of the State of Delaware.

Section 3.7. Telephonic Meeting and Participation. Any or all of the directors may participate in a meeting of the Board of Directors or any committee thereof by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.

Section 3.8 Action by Directors Without a Meeting.Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the full Board of Directors, the non-employee, independent directors, or of any committee thereof, may be taken without a meeting if all members of the Board, the non-employee, independent directors, or of such committee, as the case may be, consent thereto in writing, by electronic transmission, or by any other means permitted by the Delaware General Corporation Law, and the writing or writings or, if the consent action is taken by electronic transmission, paper reproductions of such electronic transmissions, are filed with the minutes of proceedings of the Board or committee.

Section 3.9. Quorum and Adjournment. A majority of the directors then holding office, or a majority of non-employee, independent directors then in office, for purposes of a meeting of such directors, shall constitute a quorum. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, or of the non-employee, independent directors, as the case may be. Whether or not a quorum is present to conduct a meeting, any meeting of the Board of Directors, or of the non-employee, independent directors, as the case may be (including an adjourned meeting) may be adjourned by a majority of the directors present, to reconvene at a specific time and place. It shall not be necessary to give to the directors present at the adjourned meeting notice of the reconvened meeting or of the business to be transacted, other than by announcement at the meeting that was adjourned; provided, however, notice of such reconvened meeting, stating the date, time, and place of the reconvened meeting, shall be given to the directors not present at the adjourned meeting in accordance with the requirements of Section 3.5 hereof.

Section 3.10. Organization. The Chairman of the Board, or, in the absence of the Chairman of the Board, the Lead Director or the Vice Chairman, or in the absence of the Lead Director or Vice Chairman, a member of the Board selected by the members present, shall preside at meetings of the Board. The Secretary of the Corporation shall act as secretary, but in the absence of the Secretary, the presiding officer may appoint a secretary.

75

Exhibit 3.02

Section 3.11. Compensation of Directors. Directors shall receive such compensation for their services as the Board of Directors may determine. Any director may serve the Corporation in any other capacity and receive compensation therefor. No person shall qualify for service as a director of the Corporation if he or she is a party to any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity other than the Corporation, or has received any such compensation or other payment from any person or entity other than the Corporation, in each case in connection with candidacy or service as a director of the Corporation; provided that agreements providing only for indemnification and/or reimbursement of out-of-pocket expenses in connection with candidacy as a director (but not in connection with service as a director) and any pre-existing employment agreement a candidate has with his or her employer (not entered into in contemplation of the employer’s investment in the Corporation or such employee’s candidacy as a director), shall not be disqualifying under this Section 3.11.

Section 3.12. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors when a vote on any matter is taken is deemed to have assented to the action taken unless he votes against or abstains from the action taken, or unless at the beginning of the meeting or promptly upon arrival the director objects to the holding of the meeting or transacting specified business at the meeting. Any such dissenting votes, abstentions or objections shall be entered in the minutes of the meeting.

SECTION IV

Chairman, Lead Director, and Committees of the Board of Directors

Section 4.1. Chairman. The Board of Directors shall, by resolution passed by a majority of the members of the Board of Directors, designate a member of the Board of Directors to serve as Chairman. The Chairman of the Board may also be the Chief Executive Officer, or other officer of the Corporation, and shall have such powers and perform such duties as may be provided for herein, and as may be incident to the office and as may be assigned by the Board of Directors.

Section 4.2. Lead Director. If the Chairman is the Chief Executive Officer or other officer or employee of the Corporation or is not an independent (as determined by the Board of Directors) director, the non-employee, independent directors, by resolution passed by a majority of the non-employee, independent members of the Board of Directors, shall designate a non-employee, independent member of the Board of Directors to serve as Lead Director. The Lead Director shall have such powers and perform such duties as may be provided for herein and as may be incident to the office and as may be assigned by the non-employee, independent members of Board of Directors.

Section 4.3. Committees. The Board of Directors shall, by resolutions passed by a majority of the members of the Board of Directors, designate members of the Board of Directors to constitute committees which shall in each case consist of such number of directors, and shall have and may execute such powers as may be determined and specified in the respective resolutions appointing them. Any such committee may fix its rules of procedure, determine its manner of acting and the time and place, whether within or without the State of Delaware, of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise by resolution provide. Unless otherwise provided by the Board of Directors or such committee, the quorum, voting and other procedures shall be the same as those applicable to actions taken by the Board of Directors. A majority of the members of the Board of Directors then in office shall have the power to change the membership of any such committee at any time, to fill vacancies therein and to discharge any such committee or to remove any member thereof, either with or without cause, at any time.

SECTION V

Officers

Section 5.1. Designation. The officers of the Corporation shall be a Chief Executive Officer, a Chief Financial Officer, a Treasurer, a Controller, and a Secretary, and such other officers as the Board of Directors may elect or appoint, or provide for the appointment of, as may from time to time appear necessary or advisable in the conduct of the business and affairs of the Corporation. Any number of offices may be held by the same persons.

76

Exhibit 3.02

Section 5.2. Election Term. At its first meeting after each annual meeting of stockholders, the Board of Directors shall elect the officers or provide for the appointment thereof. Subject to Section 5.3 and Section 5.4 hereof, the term of each officer elected by the Board of Directors shall be until the first meeting of the Board of Directors following the next annual meeting of stockholders and until such officer’s successor is chosen and qualified.

Section 5.3. Resignation. Any officer may resign at any time by giving written notice to the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof.

Section 5.4. Removal. Any officer may be removed at any time with or without cause by affirmative vote of a majority of the members of the Board of Directors then in office. Any officer appointed by another officer may be removed with or without cause by such officer or the Chief Executive Officer.

Section 5.5. Vacancies. A vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors or, in the case of offices held by officers who may be appointed by other officers, by any officer authorized to appoint such officer.

Section 5.6. Chief Executive Officer. The Chief Executive Officer shall be responsible for carrying out the policies adopted by the Board of Directors.

Section 5.7. Chief Financial Officer. The Chief Financial Officer shall act in an executive financial capacity, and assist the Chief Executive Officer in the general supervision of the Corporation’s financial policies and affairs, and shall perform all acts incident to the position of Chief Financial Officer, subject to the control of the Board of Directors.

Section 5.8. Treasurer. The Treasurer shall have charge of all funds of the Corporation and shall perform all acts incident to the position of Treasurer, subject to the control of the Board of Directors.

Section 5.9. Controller. The Controller shall serve as principal accounting officer of the Corporation, having the custody and operation of the accounting books and records of the Corporation, and shall perform all acts incident to the position of Controller, subject to the control of the Board of Directors.

Section 5.10. Secretary. The Secretary shall keep the minutes, and give notices, of all meetings of stockholders and directors and of such committees as directed by the Board of Directors. The Secretary shall have charge of such books and papers as the Board of Directors may require. The Secretary (or any Assistant Secretary) is authorized to certify copies of extracts from minutes and of documents in the Secretary’s charge and anyone may rely on such certified copies to the same effect as if such copies were originals and may rely upon any statement of fact concerning the Corporation certified by the Secretary (or any Assistant Secretary). The Secretary shall perform all acts incident to the office of Secretary, subject to the control of the Board of Directors.

Section 5.11. Compensation of Officers. The officers of the Corporation shall receive such compensation for their services as the Board of Directors or the appropriate committee thereof may determine. The Board of Directors may delegate its authority to determine compensation (other than that of the Chief Executive Officer) to designated officers of the Corporation.

Section 5.12. Execution of Instruments. Checks, notes, drafts, other commercial instruments, assignments, guarantees of signatures and contracts (except as otherwise provided herein or by law) shall be executed by the Chief Executive Officer or other officers or employees or agents, in any such case as the Board of Directors may direct or authorize.

Section 5.13. Mechanical Endorsements. The Chief Executive Officer, the Secretary, or other authorized officers may authorize any endorsement on behalf of the Corporation to be made by such mechanical means or stamps as any of such officers may deem appropriate.

77

Exhibit 3.02

SECTION VI

Indemnification

Section 6.1. Indemnification Provisions in Certificate of Incorporation. The provisions of this Section VI are intended to supplement Article VII of the Certificate of Incorporation pursuant to Sections 7.2 and 7.3 thereof. To the extent that this Section VI contains any provisions inconsistent with said Article VII, the provisions of the Certificate of Incorporation shall govern. Terms defined in such Article VII shall have the same meaning in this Section VI.

Section 6.2. Indemnification of Employees. The Corporation shall indemnify and advance expenses to its employees to the same extent as to its directors and officers, as set forth in the Certificate of Incorporation and in this Section VI of the Bylaws of the Corporation.

Section 6.3. Undertakings for Advances of Expenses. If and to the extent the Delaware General Corporation Law requires, an advancement by the Corporation of expenses incurred by an indemnitee pursuant to clause (iii) of the last sentence of Section 7.1 of the Certificate of Incorporation (hereinafter an "advancement of expenses") shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under Article VII of the Certificate of Incorporation or otherwise.

Section 6.4. Claims for Indemnification. If a claim for indemnification under Section 7.1 of the Certificate of Incorporation is not paid in full by the Corporation within 60 days after it has been received in writing by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses only upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in Section 145 of the Delaware General Corporation Law (or any successor provision or provisions). Neither the failure of the Corporation (including the Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in Section 145 of the Delaware General Corporation Law (or any successor provision or provisions), nor an actual determination by the Corporation (including the Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to have or retain such advancement of expenses, under Article VII of the Certificate of Incorporation or this Section VI or otherwise, shall be on the Corporation.

Section 6.5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, trustee, officer, employee or agent of the Corporation or another enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

Section 6.6. Severability. In the event that any of the provisions of this Section VI (including any provision within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions are severable and shall remain enforceable to the full extent permitted by law.

78

Exhibit 3.02

SECTION VII

Miscellaneous

Section 7.1. Seal. The Corporation shall have a suitable seal, containing the name of the Corporation. The Secretary shall be in charge of the seal and may authorize one or more duplicate seals to be kept and used by any other officer or person.

Section 7.2. Waiver of Notice. Whenever any notice is required to be given, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein shall be deemed equivalent thereto. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 7.3. Voting of Stock Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, the Chief Executive Officer, the Vice Chairman, any Vice President or such officers or employees or agents as the Board of Directors or any of such designated officers may direct. Any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may from time to time confer like powers upon any other person or persons.

SECTION VIII

Amendment of Bylaws

Section 8.1. Power to Amend. Except as otherwise provided by law or by the certificate of incorporation or these bylaws, these bylaws or any of them may be amended in any respect or repealed at any time, either (i) at any meeting of stockholders, subject to these bylaws, provided that any amendment or supplement proposed to be acted upon at any such meeting has been described in reasonable detail in the notice of such meeting, or (ii) at any meeting of the Board of Directors, provided in all events that no amendment to any by-law that conflicts or varies with, or frustrates the purposes or effect of, any provision of the certificate of incorporation or other provisions of these bylaws may be adopted (including, without limitation, any bylaw the purpose or effect of which is to require approvals of matters by supermajority vote of the Board of Directors or a committee) without amendment of such provision of the certificate of incorporation or other provision of the bylaws in accordance with applicable law and, to the extent otherwise applicable, these bylaws.

Section 8.2. Approval of Amendments. Notwithstanding the foregoing and anything contained in these bylaws to the contrary, these bylaws may not be amended, supplemented, or repealed by the stockholders, and no provision inconsistent in intent, operation, or effect therewith may be adopted by the stockholders, without the affirmative vote of the holders of a majority of the votes cast with respect to adoption, supplementing, or repeal of these bylaws.

79

EX-12.01

EXHIBIT 12.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

Computation of Ratios of Earnings to Fixed Charges

		Third Quarter				First Nine Months
(Dollars in millions)		2013		2012		2013		2012
Earnings from continuing operations before income taxes	$	433	$	218	$	1,157	$	730
Add:
Interest expense		46		50		141		100
Appropriate portion of rental expense (1)		6		7		19		16
Amortization of capitalized interest		2		2		5		5
Earnings as adjusted	$	487	$	277	$	1,322	$	851
Fixed charges:
Interest expense	$	46	$	50	$	141	$	100
Appropriate portion of rental expense (1)		6		7		19		16
Capitalized interest		1		1		3		3
Total fixed charges	$	53	$	58	$	163	$	119
Ratio of earnings to fixed charges		9.2x		4.8x		8.1x		7.2x

⁽¹⁾  For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense.

80

EX-31.01

Exhibit 31.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

Rule 13a - 14(a)/15d - 14(a) Certifications

I, James P. Rogers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eastman Chemical Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

Date:  October 28, 2013

/s/ James P. Rogers

James P. Rogers

Chief Executive Officer

81

EX-31.02

Exhibit 31.02

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

Rule 13a - 14(a)/15d - 14(a) Certifications

I, Curtis E. Espeland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eastman Chemical Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

Date:  October 28, 2013

/s/ Curtis E. Espeland                                  

Curtis E. Espeland

Senior Vice President and Chief Financial Officer

82

EX-32.01

Exhibit 32.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

Section 1350 Certifications

In connection with the Quarterly Report of Eastman Chemical Company (the "Company") on Form 10-Q for the period ending September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

A signed original of this written statement required by Section 906 has been provided to Eastman Chemical Company and will be retained by Eastman Chemical Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:   October 28, 2013

/s/ James P. Rogers

James P. Rogers

Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

83

EX-32.02

Exhibit 32.02

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

Section 1350 Certifications

In connection with the Quarterly Report of Eastman Chemical Company (the "Company") on Form 10-Q for the period ending September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

A signed original of this written statement required by Section 906 has been provided to Eastman Chemical Company and will be retained by Eastman Chemical Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:  October 28, 2013

/s/ Curtis E. Espeland                 

Curtis E. Espeland

Senior Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

84

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

A reconciliation of the changes in stockholders' equity for first nine months 2013 is provided below:

(Dollars in millions)	Common Stock at Par Value $	Paid-in Capital $	Retained Earnings $		Accumulated Other Comprehensive Income (Loss) $	Treasury Stock at Cost $		Total Stockholders' Equity Attributed to Eastman $		Noncontrolling Interest $		Total Stockholders' Equity $
Balance at December 31, 2012	2	1,709	3,038		123	(1,929	)	2,943		85		3,028
Net Earnings	—	—	819		—	—		819		4		823
Cash Dividends Declared (1)	—	—	(139	)	—	—		(139	)	—		(139	)
Other Comprehensive Income	—	—	—		24	—		24		—		24
Share-Based Compensation Expense (2)	—	26	—		—	—		26		—		26
Stock Option Exercises	—	10	—		—	—		10		—		10
Shares Issued for Business Combination (3)	—	16	—		—	—		16		—		16
Other (4)	—	2	—		—	—		2		1		3
Share Repurchase	—	—	—		—	(113	)	(113	)	—		(113	)
Distributions to Noncontrolling Interest	—	—	—		—	—		—		(9	)	(9	)
Balance at September 30, 2013	2	1,763	3,718		147	(2,042	)	3,588		81		3,669

⁽¹⁾  Includes cash dividends declared, but unpaid.

⁽²⁾  Includes the fair value of share-based awards recognized for share-based compensation.

⁽³⁾  Proceeds of warrant exercises related to the Company's acquisition of Solutia.

⁽⁴⁾  Primarily tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

(Dollars in millions)	Cumulative Translation Adjustment		Unrecognized Prior Service Credits for Benefit Plans			Unrealized Gains (Losses) on Derivative Instruments			Unrealized Losses on Investments			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2011	$	64	$	78		$	(3	)	$	(1	)	$	138
Period change	41		(13		)	(43		)	—			(15		)
Balance at December 31, 2012	105		65			(46		)	(1		)	123
Period change	10		18			(4		)	—			24
Balance at September 30, 2013	$	115	$	83		$	(50	)	$	(1	)	$	147

Amounts of other comprehensive income (loss) are presented net of applicable taxes.  The Company records deferred income taxes on the cumulative translation adjustment related to branch operations and other entities included in the Company's consolidated U.S. tax return.  No deferred income taxes are provided on the cumulative translation adjustment of subsidiaries outside the United States, as such cumulative translation adjustment is considered to be a component of permanently invested, unremitted earnings of these foreign subsidiaries.

Components of other comprehensive income recorded in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects:

	Third Quarter
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	43		$	45		$	32		$	30
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	40			25			(5		)	(4		)
Derivatives and hedging:
Unrealized loss during period	(19		)	(13		)	(5		)	(3		)
Reclassification adjustment for losses included in net income (2)	(2		)	—			(7		)	(4		)
Total other comprehensive income (loss)	$	62		$	57		$	15		$	19
	First Nine Months
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	8		$	10		$	23		$	21
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	$	28		18			(17		)	(12		)
Derivatives and hedging:
Unrealized gain (loss) during period	(13		)	(4		)	(53		)	(33		)
Reclassification adjustment for gains (losses) included in net income (2)	6			—			(8		)	(5		)
Total other comprehensive income (loss)	$	29		$	24		$	(55	)	$	(29	)

⁽¹⁾  Included in the calculation of net periodic benefit costs for pension and OPEB. See Note 8, "Retirement Plans".

⁽²⁾  Gains and losses from derivatives and hedging are included in sales, cost of sales, and net interest expense. See Note 7, "Derivatives".

XML

EARNINGS AND DIVIDENDS PER SHARE (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Jul. 02, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Shares used for earnings per share calculation, Basic (in shares)		154,000,000	152,900,000	154,300,000	142,800,000
Shares used for earnings per share calculation, Diluted (in shares)		156,400,000	156,400,000	156,700,000	146,300,000
Number of shares issued in business acquisitions	14,700,000
Class of Warrant or Right, Outstanding	4,481,250
Class of Warrant or Right, Number of Securities Called by Warrants or Right, Per Warrant	0.12
Class of Warrant or Right, Cash Consideration Received Upon Exercise of Warrant or Right, Per Warrant	22.00
Class of Warrant or Right, Exercise Price of Warrants or Rights	29.70
Underlying options excluded from the computation of diluted earnings per share (in shares)		125,019	537,750	0	537,750
Shares repurchased (in shares)		463,418	0	1,579,118	0
Cash dividends declared (per share)		$ 0.30	$ 0.26	$ 0.90	$ 0.78

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	214,950,611	213,406,523
Treasury stock at cost (in shares)	61,081,093	59,511,662

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PROVISION FOR INCOME TAXES

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Provision for income taxes	$	125		$	64		$	338		$	240
Effective tax rate	29		%	29		%	29		%	33		%

The third quarter 2013 effective tax rate was impacted by a $14 million benefit primarily due to adjustments to the tax provision to reflect the finalization of the 2012 consolidated U.S. Federal income tax return. The first nine months2013 effective tax rate was impacted by the $14 million benefit of the adjustment and enactment of the American Taxpayer Relief Act of 2012 in January 2013 which resulted in a $10 million benefit primarily related to a research and development ("R&D") tax credit. The third quarter and first nine months2012 effective tax rates included an $8 million benefit from the settlement of U.S. and non-U.S. income tax audits and a $5 million benefit from the reversal of tax reserves due to the expiration of the relevant statute of limitations.

The following table reflects a revision of a 2012 deferred tax liability line item reported in Note 9, "Provision for Income Taxes" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The "Amortization" line item was mischaracterized as "Inventory reserves". There was no impact on net deferred tax liability reported in the Company's 2012 Annual Report on Form 10-K.

(Dollars in millions)	December 31, 2012
Deferred tax assets
Post-employment obligations	$	715
Net operating loss carryforwards	630
Tax credit carryforwards	230
Environmental reserves	145
Other	82
Total deferred tax assets	1,802
Less valuation allowance	(215		)
Deferred tax assets less valuation allowance	$	1,587
Deferred tax liabilities
Depreciation	$	(951	)
Amortization	(666		)
Total deferred tax liabilities	$	(1,617	)
Net deferred tax liabilities	$	(30	)
As recorded in the Consolidated Statements of Financial Position:
Other current assets	$	34
Other noncurrent assets	30
Payables and other current liabilities	(3		)
Deferred income tax liabilities	(91		)
Net deferred tax liabilities	$	(30	)

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ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES (Tables)

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The purchase price allocation for the July 2, 2012 Solutia acquisition was finalized as of June 30, 2013. Updates to the December 31, 2012 preliminary purchase price allocation of the Solutia acquisition during second quarter 2013 for finalization of current and deferred income taxes were reflected in the Company's Consolidated Statements of Financial Position as of June 30, 2013 and are summarized in the table below. These adjustments were primarily for finalization of valuation allowances against Federal and state deferred tax assets in connection with the filing of the final Solutia consolidated federal tax return. These updates were not material to the Company's financial position or results of operations for 2012 or 2013.

Assets acquired and liabilities assumed on July 2, 2012
(Dollars in millions)	Initial Valuation			2012 Net Adjustments to Fair Value			December 31, 2012			2013 Net Adjustments to Fair Value			June 30, 2013
Current assets	$	901		$	19		$	920		$	2		$	922
Properties and equipment	940			7			947			—			947
Intangible assets	1,807			(16		)	1,791			—			1,791
Other noncurrent assets	612			2			614			67			681
Goodwill	1,965			265			2,230			(22		)	2,208
Current liabilities	(461		)	(1		)	(462		)	—			(462		)
Long-term liabilities	(2,389		)	(276		)	(2,665		)	(47		)	(2,712		)
Equity and cash consideration, net of $88 million cash acquired	$	3,375		$	—		$	3,375		$	—		$	3,375

Schedule of acquisition goodwill allocation

Goodwill	Goodwill by Segment
(Dollars in millions)
Additives & Functional Products	$	745
Advanced Materials	1,004
Specialty Fluids & Intermediates	459
Total	$	2,208

Schedule of intangible assets acquired in an acquisition

Intangible Assets
(Dollars in millions)	Fair Value		Weighted-Average Amortization Period (Years)
Amortizable intangible assets
Customer relationships	$	809	22
Developed technologies	440		13
Indefinite-lived intangible assets
Trade names	542
Total	$	1,791

Schedule of business acquisition pro forma information

	2012
(Dollars in millions)	Third Quarter		First Nine Months
Pro forma sales	$	2,259	$	6,951
Pro forma earnings from continuing operations including noncontrolling interest	241		689

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Supplemental Cash Flow Information [Abstract]
Current assets	$ (1)	$ (15)
Other assets	20	45
Current liabilities	(24)	2
Long-term liabilities and equity	(98)	(54)
Total	$ (103)	$ (22)

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EARNINGS AND DIVIDENDS PER SHARE

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

EARNINGS AND DIVIDENDS PER SHARE

EARNINGS AND DIVIDENDS PER SHARE

	Third Quarter		First Nine Months
	2013	2012	2013	2012
Shares used for earnings per share calculation (in millions):
Basic	154.0	152.9	154.3	142.8
Diluted	156.4	156.4	156.7	146.3

In July 2012, as part of the Company's acquisition of Solutia, the Company issued 14.7 million shares of Eastman common stock and 4,481,250 warrants to purchase 0.12 shares of Eastman common stock and $22.00 cash per warrant upon payment of the warrant exercise price of $29.70. Third quarter and first nine months 2013 include the shares issued in the Solutia acquisition. First nine months 2013 also reflects the impact of exercised Solutia acquisition warrants. Unexercised warrants expired on February 27, 2013. For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

In third quarter2013, common shares underlying options to purchase 125,019 shares of common stock were excluded from the shares treated as outstanding for computation of diluted earnings per share because the total market value of option exercises for these awards was less than the total cash proceeds that would be received for these exercises. In first nine months2013, there were no outstanding options to purchase shares of common stock excluded from the computation of diluted earnings per share. Third quarter and first nine months2013 reflect the impact of share repurchases of 463,418 and 1,579,118 shares, respectively.

In third quarter and first nine months2012, the only shares excluded from the computation of diluted earnings per share were 537,750 shares issuable upon exercise of the warrants issued in the Solutia acquisition. There were no share repurchases in third quarter or first nine months 2012.

The Company declared cash dividends of $0.30 and $0.26 per share in third quarter2013 and 2012, respectively, and $0.90 and $0.78 per share in first nine months2013 and 2012, respectively.

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DERIVATIVES Part 5 (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract]
Unrealized Gains (Losses) on Derivative Instruments	$ (13)	$ (7)	$ (4)	$ (38)	$ (43)
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract]
Derivative Instruments, Gain (Loss) Reclassified From Accumulated Other Comprehensive Income, Effective Portion, Net Total	1	11	(7)	9
Hedging Summary [Abstract]
Loss on Cash Flow Hedge Ineffectiveness				2
Monetized positions and mark to market gain (loss) in accumulated other comprehensive income before tax	(80)	(66)	(80)	(66)
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months	(6)		(6)
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	3	2	(4)	4
Commodity Contract [Member] | Cash Flow Hedging [Member]
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract]
Unrealized Gains (Losses) on Derivative Instruments	8	3	4	(1)
Commodity Contract [Member] | Cash Flow Hedging [Member] | Sales [Member]
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract]
Derivative Instruments, Gain (Loss) Reclassified From Accumulated Other Comprehensive Income, Effective Portion, Net Total	(3)	0	(10)	0
Commodity Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract]
Derivative Instruments, Gain (Loss) Reclassified From Accumulated Other Comprehensive Income, Effective Portion, Net Total	4	1	1	(17)
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member]
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract]
Unrealized Gains (Losses) on Derivative Instruments	(22)	(11)	(11)	(8)
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Sales [Member]
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract]
Derivative Instruments, Gain (Loss) Reclassified From Accumulated Other Comprehensive Income, Effective Portion, Net Total	2	12	8	29
Forward Starting Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Amount After Tax of Gain (Loss) Recognized in Other Comprehensive Income On Derivatives, Effective Portion [Abstract]
Unrealized Gains (Losses) on Derivative Instruments	1	1	3	(29)
Derivative Instruments, Loss Recognized in Other Comprehensive Income (Loss), Effective Portion				44
Forward Starting Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Net Interest Expense
Pre-tax Amount of Gain (Loss) reclassified From Accumulated Other Comprehensive Income Into Income (Effective Portion) [Abstract]
Derivative Instruments, Gain (Loss) Reclassified From Accumulated Other Comprehensive Income, Effective Portion, Net Total	$ (2)	$ (2)	$ (6)	$ (3)

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SEGMENT INFORMATION (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended				12 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012		Dec. 31, 2012
Segment Reporting Information [Line Items]
Number of Operating Segments					5
Restructuring Charges					$ 24				$ 120
Asset impairments and restructuring charges (gains), net	3		37		24		37
Defined Benefit Plan, Actuarial Gain (Loss)					(86)		0
Sales [Abstract]
Sales	2,338		2,259		7,085		5,933
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	479		263		1,300		844
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	11,727				11,727				11,619
Brazil Site Closure [Member]
Segment Reporting Information [Line Items]
Asset impairments and restructuring charges (gains), net					(4)
Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information [Line Items]
Restructuring Charges	3				9
Segment Reporting Information, Additional Information [Abstract]
Business Combinations, Additional Costs Of Acquired Inventory, Net			75
Operating Segments [Member]
Sales [Abstract]
Sales	2,332		2,254		7,067		5,926
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	424		354		1,313		1,011
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	10,782	[1]			10,782	[1]			10,648	[1]
Corporate and Other [Member]
Sales [Abstract]
Sales	6		5		18		7
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	945				945				971
Growth Initiatives and Businesses not Allocated to Segments [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Asset impairments and restructuring charges (gains), net					13
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	(20)	[2]	(36)	[2],[3]	(73)	[2]	(84)	[2],[3]
Growth Initiatives and Businesses not Allocated to Segments [Member] | Corporate and Other [Member] | Terminated Gasification Project [Member]
Segment Reporting Information [Line Items]
Asset impairments and restructuring charges (gains), net			9				9
Pension and OPEB Costs Not Allocated to Operating Segments [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Defined Benefit Plan, Actuarial Gain (Loss)	86				86
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	87	[2],[4]	(5)	[2]	93	[2],[4]	(18)	[2]
Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information [Line Items]
Integration Costs	9		7		24		9
Restructuring Charges	3		28		9		28
Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Severance Charges	3				3
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	(12)	[2],[5]	(50)	[2]	(33)	[2],[5]	(65)	[2]
Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Corporate and Other [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information [Line Items]
Transaction costs			15				28
Additives And Functional Products [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Severance Charges					2
Sales [Abstract]
Sales	445		406		1,294		948
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	111		86	[6]	313	[5],[7]	215	[6]
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	2,947	[1]			2,947	[1]			2,892	[1]
Additives And Functional Products [Member] | Operating Segments [Member] | Brazil Site Closure [Member]
Segment Reporting Information [Line Items]
Asset impairments and restructuring charges (gains), net					(1)
Additives And Functional Products [Member] | Operating Segments [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information, Additional Information [Abstract]
Business Combinations, Additional Costs Of Acquired Inventory, Net			19				19
Adhesives And Plasticizers [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Severance Charges					1
Sales [Abstract]
Sales	321		348		1,005		1,094
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	41		73		139	[5]	211
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	987	[1]			987	[1]			1,088	[1]
Advanced Materials [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Severance Charges					2
Sales [Abstract]
Sales	583		559		1,792		1,166
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	69		18	[6]	216	[5],[7]	86	[6]
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	3,803	[1]			3,803	[1]			3,744	[1]
Advanced Materials [Member] | Operating Segments [Member] | Brazil Site Closure [Member]
Segment Reporting Information [Line Items]
Asset impairments and restructuring charges (gains), net					(3)
Advanced Materials [Member] | Operating Segments [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information, Additional Information [Abstract]
Business Combinations, Additional Costs Of Acquired Inventory, Net			39				39
Fibers [Member] | Operating Segments [Member]
Sales [Abstract]
Sales	363		349		1,072		990
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	113		98		343		295
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	966	[1]			966	[1]			937	[1]
Specialty Fluids And Intermediates [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Severance Charges					1
Sales [Abstract]
Sales	620		592		1,904		1,728
Operating Earnings (loss) [Abstract]
Operating Earnings (loss)	90		79	[6]	302	[5]	204	[6]
Segment Reporting Information, Additional Information [Abstract]
Assets by Segment	2,079	[1]			2,079	[1]			1,987	[1]
Specialty Fluids And Intermediates [Member] | Operating Segments [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Segment Reporting Information, Additional Information [Abstract]
Business Combinations, Additional Costs Of Acquired Inventory, Net			$ 17				$ 17

[1] September 30, December 31,(Dollars in millions)2013 2012Assets by Segment (1) Additives & Functional Products$2,947 $2,892Adhesives & Plasticizers987 1,088Advanced Materials3,803 3,744Fibers966 937Specialty Fluids & Intermediates2,079 1,987Total Assets by Segment10,782 10,648Corporate Assets945 971Total Assets$11,727 $11,619(1) The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible

[2] Research and development, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as "other" operating earnings (loss).

[3] Included in third quarter and first nine months 2012 are $9 million in asset impairments, primarily of land retained from the previously discontinued Beaumont, Texas industrial gasification project. See Note 14, "Asset Impairments and Restructuring Charges, Net".

[4] Included in third quarter and first nine months 2013 earnings is a mark-to-market OPEB gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."

[5] Included in third quarter and first nine months 2013 earnings are restructuring charges of $3 million in "Other" and included in first nine months 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, primarily for severance. See Note 14, "Asset Impairments and Restructuring Charges, Net".

[6] Included in third quarter and first nine months 2012 are additional costs of $19 million, $39 million, and $17 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, of acquired Solutia inventories. See Note 2, "Acquisitions and Investments in Joint Ventures."

[7] Included in first nine months 2013 earnings is a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the Additives & Functional Products and Advanced Materials segments, respectively. See Note 14, "Asset Impairments and Restructuring Charges, Net".

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INVENTORIES (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
At FIFO or average cost (approximates current cost) [Abstract]
Finished goods	$ 966	$ 941
Work in process	297	288
Raw materials and supplies	511	536
Total inventories	1,774	1,765
LIFO Reserve	(500)	(505)
Total inventories	$ 1,274	$ 1,260
Inventories valued on the LIFO method (in hundredths)	60.00%	60.00%

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PROVISION FOR INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Provision for income taxes	$	125		$	64		$	338		$	240
Effective tax rate	29		%	29		%	29		%	33		%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The following table reflects a revision of a 2012 deferred tax liability line item reported in Note 9, "Provision for Income Taxes" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The "Amortization" line item was mischaracterized as "Inventory reserves". There was no impact on net deferred tax liability reported in the Company's 2012 Annual Report on Form 10-K.

(Dollars in millions)	December 31, 2012
Deferred tax assets
Post-employment obligations	$	715
Net operating loss carryforwards	630
Tax credit carryforwards	230
Environmental reserves	145
Other	82
Total deferred tax assets	1,802
Less valuation allowance	(215		)
Deferred tax assets less valuation allowance	$	1,587
Deferred tax liabilities
Depreciation	$	(951	)
Amortization	(666		)
Total deferred tax liabilities	$	(1,617	)
Net deferred tax liabilities	$	(30	)
As recorded in the Consolidated Statements of Financial Position:
Other current assets	$	34
Other noncurrent assets	30
Payables and other current liabilities	(3		)
Deferred income tax liabilities	(91		)
Net deferred tax liabilities	$	(30	)

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PAYABLES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Schedule of payables and other current liabilities

	September 30,		December 31,
(Dollars in millions)	2013		2012
Trade creditors	$	657	$	723
Accrued payrolls, vacation, and variable-incentive compensation	172		171
Accrued taxes	97		76
Post-employment obligations	60		62
Interest payable	36		59
Environmental contingent liabilities, current portion	35		35
Other	266		234
Total payables and other current liabilities	$	1,323	$	1,360

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DERIVATIVES Part 3 (Details) (Commodity Contract [Member], USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Commodity Contract [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation Calculation [Roll Forward]
Beginning Balance	$ (7)	$ (8)	$ (5)	$ 0
Realized gain (loss)	(3)	0	(10)	0
Change in unrealized gain (loss)	4	4	2	(5)
Purchases, sales and settlements	3	3	10	4
Transfers (out) in of Level 3	0	0	0	0
Ending Balance	$ (3)	$ (1)	$ (3)	$ (1)

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ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Tables)

9 Months Ended

Sep. 30, 2013

Restructuring Costs and Asset Impairment Charges [Abstract]

Changes to restructuring reserve and related activities

The following table summarizes the changes in other asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in shutdown reserves for severance costs and site closure costs paid for full year 2012 and first nine months2013:

(Dollars in millions)	Balance at January 1, 2012		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at December 31, 2012
Non-cash charges, net	$	—	$	43	$	(43	)	$	—		$	—
Severance costs	2		34		—			(32		)	4
Site closure and restructuring costs	—		43		(20		)	(2		)	21
Total	$	2	$	120	$	(63	)	$	(34	)	$	25

(Dollars in millions)	Balance at January 1, 2013		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at September 30, 2013
Non-cash charges, net	$	—	$	8	$	(8	)	$	—		$	—
Severance costs	4		16		1			(8		)	13
Site closure and restructuring costs	21		—		(1		)	(8		)	12
Total	$	25	$	24	$	(8	)	$	(16	)	$	25

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PROVISION FOR INCOME TAXES PROVISION FOR INCOME TAXES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 125	$ 64	$ 338	$ 240
Effective tax rate	29.00%	29.00%	29.00%	33.00%
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	14		14	8
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount			10
Effective Income Tax Rate Reconciliation, Tax Credit, Other, Amount				5
Components of Deferred Tax Assets [Abstract]
Post-employment obligations					715
Net operating loss carryforwards					630
Tax credit carryforwards					230
Environmental reserves					145
Other					82
Total deferred tax assets					1,802
Less valuation allowance					215
Deferred tax assets less valuation allowance					1,587
Deferred Tax Liabilities, Gross [Abstract]
Depreciation					951
Amortization					666
Total deferred tax liabilities					1,617
Net deferred tax liabilities					(30)
Deferred Tax Liabilities, Net, Classification [Abstract]
Other current assets					34
Other noncurrent assets					30
Payables and other current liabilities					(3)
Deferred Tax Liabilities, Net, Noncurrent	(204)		(204)		(91)
Net deferred tax liabilities					$ (30)

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RETIREMENT PLANS (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012	Dec. 31, 2012
Components of net periodic benefit cost [Abstract]
Defined Benefit Plan, Actuarial Gain (Loss)				$ 86		$ 0
Amount of U.S. defined benefit penson plan funded by the company				99		87
United States Pension Plans of US Entity, Defined Benefit [Member]
Components of net periodic benefit cost [Abstract]
Service cost	11		9	32		29
Interest cost	22		24	66		61
Expected return on assets	(32)		(30)	(96)		(72)
Amortization of prior service credit	(1)		(1)	(3)		(3)
Defined Benefit Plan, Actuarial Gain (Loss)	0		0	0		0
Net periodic benefit cost	0		2	(1)		15
Foreign Pension Plans, Defined Benefit [Member]
Components of net periodic benefit cost [Abstract]
Service cost	3		3	10		6
Interest cost	7		7	21		13
Expected return on assets	(9)		(8)	(26)		(16)
Amortization of prior service credit	0		0	0		0
Defined Benefit Plan, Actuarial Gain (Loss)	0		0	0		0
Net periodic benefit cost	1		2	5		3
Post Retirement Welfare Plans [Member]
Components of net periodic benefit cost [Abstract]
Service cost	2		2	8		7
Interest cost	11		12	33		33
Expected return on assets	(1)		(2)	(5)		(3)
Amortization of prior service credit	(6)		(4)	(16)		(14)
Defined Benefit Plan, Actuarial Gain (Loss)	(86)	[1]	0	(86)	[1]	0
Net periodic benefit cost	(80)		8	(66)		23
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Plan Amendments	$ 47
Amortization Period of Prior Service Credits	8			8
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	4.72%			4.72%			4.01%

[1] Mark-to-market gain in third quarter and first nine months 2013 due to the interim remeasurement of the Eastman OPEB plan obligation, triggered by a plan change in life insurance benefits in third quarter.

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ENVIRONMENTAL MATTERS (Tables)

9 Months Ended

Sep. 30, 2013

Accrual for Environmental Loss Contingencies Disclosure [Abstract]

Schedule of changes to environmental remediation liabilities

Reserves for environmental remediation that management believes to be probable and estimable are recorded as current and long-term liabilities in the Unaudited Consolidated Statements of Financial Position. These reserves include liabilities expected to be paid out within 30 years. Changes in the reserves for environmental remediation liabilities during first nine months2013 including net charges taken, which are included in cost of goods sold, and cash reductions are summarized below:

(Dollars in millions)	Environmental Remediation Liabilities
Balance at December 31, 2012	$	365
Net charges taken	—
Cash reductions	(21		)
Balance at September 30, 2013	$	344

Schedule of environmental remediation liabilities, current and non-current

The Company's total environmental reserve for environmental contingencies, including remediation costs and asset retirement obligations, is recorded in the Unaudited Consolidated Statements of Financial Position as follows:

(Dollars in millions)	September 30, 2013		December 31, 2012
Environmental contingent liabilities, current	$	35	$	35
Environmental contingent liabilities, long-term	338		359
Total	$	373	$	394

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BORROWINGS Part 3 (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term borrowings	$ 4,429	$ 4,779
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Borrowings, Fair Value	4,569	5,165
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Borrowings, Fair Value	3,969	4,215
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Borrowings, Fair Value	600	950
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Borrowings, Fair Value	$ 0	$ 0

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INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Schedule of inventories

	September 30,			December 31,
(Dollars in millions)	2013			2012
At FIFO or average cost (approximates current cost)
Finished goods	$	966		$	941
Work in process	297			288
Raw materials and supplies	511			536
Total inventories	1,774			1,765
LIFO Reserve	(500		)	(505		)
Total inventories	$	1,274		$	1,260

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared by Eastman Chemical Company (the "Company" or "Eastman") in accordance and consistent with the accounting policies stated in the Company's 2012 Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP") and of necessity include some amounts that are based upon management estimates and judgments.  Future actual results could differ from such current estimates.  The unaudited consolidated financial statements include assets, liabilities, sales revenue, and expenses of all majority-owned subsidiaries and joint ventures in which a controlling interest is maintained.  Eastman accounts for other joint ventures and investments where it exercises significant influence on the equity basis.  Intercompany transactions and balances are eliminated in consolidation.  Certain prior period data has been reclassified in the Consolidated Financial Statements and accompanying footnotes to conform to current period presentation.

Solutia acquisition

Information related to the Solutia Inc. ("Solutia") acquisition completed July 2, 2012 is in Note 2, "Acquisitions and Investments in Joint Ventures".  As of the date of acquisition, results of the acquired Solutia businesses are included in Eastman results.

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INVENTORIES

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

	September 30,			December 31,
(Dollars in millions)	2013			2012
At FIFO or average cost (approximates current cost)
Finished goods	$	966		$	941
Work in process	297			288
Raw materials and supplies	511			536
Total inventories	1,774			1,765
LIFO Reserve	(500		)	(505		)
Total inventories	$	1,274		$	1,260

Inventories valued on the LIFO method were approximately 60 percent of total inventories as of bothSeptember 30, 2013 and December 31, 2012.

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BORROWINGS

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

	September 30,		December 31,
(Dollars in millions)	2013		2012
Borrowings consisted of:
3% notes due 2015	$	250	$	250
2.4% notes due 2017	997		997
6.30% notes due 2018	172		174
5.5% notes due 2019	250		250
4.5% notes due 2021	250		250
3.6% notes due 2022	894		893
7 1/4% debentures due 2024	243		243
7 5/8% debentures due 2024	54		54
7.60% debentures due 2027	222		222
4.8% notes due 2042	497		496
Credit facility and commercial paper borrowings	600		950
Other	—		4
Total borrowings	4,429		4,783
Borrowings due within one year	—		4
Long-term borrowings	$	4,429	$	4,779

Credit Facility and Commercial Paper Borrowings

On July 2, 2012, the Company borrowed the entire $1.2 billion available under the five-year Term Loan. Proceeds from these borrowings were used to pay, in part, the cash portion of the Solutia acquisition, repay Solutia debt, and pay acquisition costs. During the first nine months of 2013, the Company repaid $800 million of its Term Loan using $300 million of commercial paper borrowings, $150 million of its accounts receivable securitization facility (the "A/R Facility"), and $350 million in cash. At September 30, 2013 and December 31, 2012, the Term Loan balances outstanding were $150 million and $950 million, respectively. The interest rate on the Term Loan as of September 30, 2013 was 1.69 percent.

The Company has a $750 million revolving credit agreement (the "Revolving Credit Facility") expiring December 2016.  Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. At September 30, 2013 and December 31, 2012, the Company had no outstanding borrowings under the Revolving Credit Facility.

The Revolving Credit Facility provides liquidity support for commercial paper borrowings and general corporate purposes.  Accordingly, any outstanding commercial paper borrowings reduce capacity for borrowings available under the Revolving Credit Facility.  Given the expiration date of the Revolving Credit Facility, any commercial paper borrowings supported by the Revolving Credit Facility are classified as long-term borrowings because the Company has the ability and intent to refinance such borrowings on a long-term basis. At September 30, 2013 the Company's commercial paper borrowings were $300 million with a weighted average interest rate of 0.33 percent, and the proceeds were used to repay a portion of the Term Loan. There were no commercial paper borrowings at December 31, 2012.

The Company also has a $250 million line of credit under the A/R Facility, expiring April 2016.  Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility.  At September 30, 2013, the Company's borrowings under the A/R Facility were $150 million secured by trade receivables with an interest rate of 0.91 percent, and the proceeds were used to repay a portion of the Term Loan. At December 31, 2012, the Company had no outstanding borrowings under the A/R Facility.

The Term Loan, Revolving Credit Facility, and the A/R Facility contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented.  As of September 30, 2013, as a result of the $300 million in commercial paper borrowings, the amount available under the Revolving Credit Facility was $450 million. As of September 30, 2013, as a result of the $150 million borrowings under the A/R Facility, $100 million was available under this facility. As of December 31, 2012, substantially all of the amounts under these facilities were available for borrowing. The Company would not violate applicable covenants for these periods if the total available amounts of the facilities had been borrowed.

Fair Value of Borrowings

The Company has classified its long-term borrowings at September 30, 2013 and December 31, 2012 under the fair value hierarchy as defined in the accounting policies in Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.  The fair value for fixed-rate borrowings is based on current market prices and is classified in level 1.  The fair value for the Company's floating-rate borrowings, which relate to the Term Loan, the A/R Facility, and commercial paper, equals the carrying value and is classified within level 2.

			Fair Value Measurements at September 30, 2013
(Dollars in millions)	Recorded Amount September 30, 2013		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,429	$	4,569	$	3,969	$	600	$	—

			Fair Value Measurements at December 31, 2012
(Dollars in millions)	Recorded Amount December 31, 2012		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,779	$	5,165	$	4,215	$	950	$	—

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PAYABLES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

PAYABLES AND OTHER CURRENT LIABILITIES

PAYABLES AND OTHER CURRENT LIABILITIES

	September 30,		December 31,
(Dollars in millions)	2013		2012
Trade creditors	$	657	$	723
Accrued payrolls, vacation, and variable-incentive compensation	172		171
Accrued taxes	97		76
Post-employment obligations	60		62
Interest payable	36		59
Environmental contingent liabilities, current portion	35		35
Other	266		234
Total payables and other current liabilities	$	1,323	$	1,360

The current portion of post-employment obligations is an estimate of current year payments. Included in "Other" above are dividends payable, certain accruals for payroll deductions and employee benefits, the current portion of hedging liabilities, and other payables and accruals.

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BORROWINGS Part 1 (Details) (USD $)	0 Months Ended			9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended
	Jun. 05, 2012	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 3% debentures due 2015 [Member]	Dec. 31, 2012 3% debentures due 2015 [Member]	Sep. 30, 2013 2.4% notes due 2017 [Member]	Dec. 31, 2012 2.4% notes due 2017 [Member]	Sep. 30, 2013 6.30% notes due 2018 [Member]	Dec. 31, 2012 6.30% notes due 2018 [Member]	Sep. 30, 2013 5.5% notes due 2019 [Member]	Dec. 31, 2012 5.5% notes due 2019 [Member]	Sep. 30, 2013 4.5% debentures due 2021 [Member]	Dec. 31, 2012 4.5% debentures due 2021 [Member]	Sep. 30, 2013 3.6% notes due 2022 [Member]	Dec. 31, 2012 3.6% notes due 2022 [Member]	Sep. 30, 2013 7 1/4% debentures due 2024 [Member]	Dec. 31, 2012 7 1/4% debentures due 2024 [Member]	Sep. 30, 2013 7 5/8% debentures due 2024 [Member]	Dec. 31, 2012 7 5/8% debentures due 2024 [Member]	Sep. 30, 2013 7.60% debentures due 2027 [Member]	Dec. 31, 2012 7.60% debentures due 2027 [Member]	Sep. 30, 2013 4.8% notes due 2042 [Member]	Dec. 31, 2012 4.8% notes due 2042 [Member]	Sep. 30, 2013 Credit Facility [Member]	Dec. 31, 2012 Credit Facility [Member]	Sep. 30, 2013 Other debt [Member]	Dec. 31, 2012 Other debt [Member]	Sep. 30, 2013 Term Loan Agreement [Member]	Dec. 31, 2012 Term Loan Agreement [Member]	Sep. 30, 2013 Accounts Receivable Facility [Member]	Dec. 31, 2012 Accounts Receivable Facility [Member]	Sep. 30, 2013 Commercial Paper [Member]	Dec. 31, 2012 Commercial Paper [Member]
Debt Instrument [Line Items]
Stated Interest Rate (in hundredths)				3.00%		2.40%		6.30%		5.50%		4.50%		3.60%		7.25%		7.625%		7.60%		4.80%						1.69%		0.91%		0.33%
Debt Instrument, Maturity Date				Dec. 31, 2015		Dec. 31, 2017		Dec. 31, 2018		Dec. 31, 2019		Dec. 31, 2021		Dec. 31, 2022		Dec. 31, 2024		Dec. 31, 2024		Dec. 31, 2027		Dec. 31, 2042
Long-term Debt		$ 4,429,000,000	$ 4,783,000,000	$ 250,000,000	$ 250,000,000	$ 997,000,000	$ 997,000,000	$ 172,000,000	$ 174,000,000	$ 250,000,000	$ 250,000,000	$ 250,000,000	$ 250,000,000	$ 894,000,000	$ 893,000,000	$ 243,000,000	$ 243,000,000	$ 54,000,000	$ 54,000,000	$ 222,000,000	$ 222,000,000	$ 497,000,000	$ 496,000,000	$ 600,000,000	$ 950,000,000	$ 0	$ 4,000,000	$ 150,000,000	$ 950,000,000	$ 150,000,000	$ 0	$ 300,000,000	$ 0
Borrowings due within one year		0	4,000,000
Long-term borrowings, net of current portion		4,429,000,000	4,779,000,000
Proceeds from debt issuance, net of issuance costs	$ 2,300,000,000

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BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Long-term Borrowings

	September 30,		December 31,
(Dollars in millions)	2013		2012
Borrowings consisted of:
3% notes due 2015	$	250	$	250
2.4% notes due 2017	997		997
6.30% notes due 2018	172		174
5.5% notes due 2019	250		250
4.5% notes due 2021	250		250
3.6% notes due 2022	894		893
7 1/4% debentures due 2024	243		243
7 5/8% debentures due 2024	54		54
7.60% debentures due 2027	222		222
4.8% notes due 2042	497		496
Credit facility and commercial paper borrowings	600		950
Other	—		4
Total borrowings	4,429		4,783
Borrowings due within one year	—		4
Long-term borrowings	$	4,429	$	4,779

Fair Value of Borrowings

			Fair Value Measurements at September 30, 2013
(Dollars in millions)	Recorded Amount September 30, 2013		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,429	$	4,569	$	3,969	$	600	$	—

			Fair Value Measurements at December 31, 2012
(Dollars in millions)	Recorded Amount December 31, 2012		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-term borrowings	$	4,779	$	5,165	$	4,215	$	950	$	—

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Reconciliation of the changes in stockholders' equity

A reconciliation of the changes in stockholders' equity for first nine months 2013 is provided below:

(Dollars in millions)	Common Stock at Par Value $	Paid-in Capital $	Retained Earnings $		Accumulated Other Comprehensive Income (Loss) $	Treasury Stock at Cost $		Total Stockholders' Equity Attributed to Eastman $		Noncontrolling Interest $		Total Stockholders' Equity $
Balance at December 31, 2012	2	1,709	3,038		123	(1,929	)	2,943		85		3,028
Net Earnings	—	—	819		—	—		819		4		823
Cash Dividends Declared (1)	—	—	(139	)	—	—		(139	)	—		(139	)
Other Comprehensive Income	—	—	—		24	—		24		—		24
Share-Based Compensation Expense (2)	—	26	—		—	—		26		—		26
Stock Option Exercises	—	10	—		—	—		10		—		10
Shares Issued for Business Combination (3)	—	16	—		—	—		16		—		16
Other (4)	—	2	—		—	—		2		1		3
Share Repurchase	—	—	—		—	(113	)	(113	)	—		(113	)
Distributions to Noncontrolling Interest	—	—	—		—	—		—		(9	)	(9	)
Balance at September 30, 2013	2	1,763	3,718		147	(2,042	)	3,588		81		3,669

⁽¹⁾  Includes cash dividends declared, but unpaid.

⁽²⁾  Includes the fair value of share-based awards recognized for share-based compensation.

⁽³⁾  Proceeds of warrant exercises related to the Company's acquisition of Solutia.

⁽⁴⁾  Primarily tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items.

Accumulated Other Comprehensive Income (Loss)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

(Dollars in millions)	Cumulative Translation Adjustment		Unrecognized Prior Service Credits for Benefit Plans			Unrealized Gains (Losses) on Derivative Instruments			Unrealized Losses on Investments			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2011	$	64	$	78		$	(3	)	$	(1	)	$	138
Period change	41		(13		)	(43		)	—			(15		)
Balance at December 31, 2012	105		65			(46		)	(1		)	123
Period change	10		18			(4		)	—			24
Balance at September 30, 2013	$	115	$	83		$	(50	)	$	(1	)	$	147

Schedule of components of comprehensive income (loss) before tax and net of tax effects

Components of other comprehensive income recorded in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects:

	Third Quarter
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	43		$	45		$	32		$	30
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	40			25			(5		)	(4		)
Derivatives and hedging:
Unrealized loss during period	(19		)	(13		)	(5		)	(3		)
Reclassification adjustment for losses included in net income (2)	(2		)	—			(7		)	(4		)
Total other comprehensive income (loss)	$	62		$	57		$	15		$	19
	First Nine Months
	2013						2012
(Dollars in millions)	Before Tax			Net of Tax			Before Tax			Net of Tax
Other comprehensive income (loss)
Change in cumulative translation adjustment	$	8		$	10		$	23		$	21
Defined benefit pension and other post-employment benefit plans:
Amortization of unrecognized prior service credits included in net periodic costs (1)	$	28		18			(17		)	(12		)
Derivatives and hedging:
Unrealized gain (loss) during period	(13		)	(4		)	(53		)	(33		)
Reclassification adjustment for gains (losses) included in net income (2)	6			—			(8		)	(5		)
Total other comprehensive income (loss)	$	29		$	24		$	(55	)	$	(29	)

⁽¹⁾  Included in the calculation of net periodic benefit costs for pension and OPEB. See Note 8, "Retirement Plans".

⁽²⁾  Gains and losses from derivatives and hedging are included in sales, cost of sales, and net interest expense. See Note 7, "Derivatives".

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ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES (Details) (USD $)	0 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 02, 2012	Jun. 05, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Business Acquisition [Line Items]
Allocated Share-based Compensation Expense			$ 8,000,000	$ 7,000,000	$ 27,000,000	$ 24,000,000
Number of shares issued in business acquisitions	14,700,000
Proceeds from debt issuance, net of issuance costs		2,300,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill			2,634,000,000		2,634,000,000		2,644,000,000
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Restructuring Charges					24,000,000		120,000,000
Business Acquisition, Pro Forma Information [Abstract]
Sales Revenue, Goods, Net			2,338,000,000	2,259,000,000	7,085,000,000	5,933,000,000
Earnings from continuing operations			309,000,000	157,000,000	823,000,000	495,000,000
Term Loan Agreement [Member]
Business Acquisition [Line Items]
Proceeds from Term Loan borrowings	1,200,000,000
Eastman Chemical Company [Member] | Solutia [Member]
Business Acquisition [Line Items]
Cash Amount Per Share Paid to Acquired Company's Shareholders	$ 22.00
Number of Shares of Company Stock Issued Per Share to Acquired Company's Shareholders	0.12
Number of shares issued in business acquisitions	14,700,000
Business Combination, Consideration Transferred	4,800,000,000
Cash paid in acquisition	2,600,000,000
New equity from acquisition	700,000,000
Retirement of Solutia debt	1,500,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Current assets	922,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	947,000,000
Intangible assets	1,791,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	681,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	462,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	2,712,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	3,375,000,000
Goodwill	2,208,000,000
Cash Acquired from Acquisition	88,000,000
Acquired receivables, fair value	350,000,000
Acquired receivables, gross contractual amount	366,000,000
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Acquired Indefinite-lived Intangible Asset, Amount	542,000,000
Business Combinations, Additional Costs Of Acquired Inventory, Net				75,000,000
Restructuring Charges			3,000,000		9,000,000
Financing Costs						32,000,000
Eastman Chemical Company [Member] | Solutia [Member] | Customer Relationships [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Acquired Finite-lived Intangible Asset, Amount	809,000,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	22 years
Eastman Chemical Company [Member] | Solutia [Member] | Developed Technology Rights [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Acquired Finite-lived Intangible Asset, Amount	440,000,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years
Eastman Chemical Company [Member] | Solutia [Member] | Pro Forma [Member]
Business Acquisition [Line Items]
Allocated Share-based Compensation Expense						19,000,000
Business Acquisition, Pro Forma Information [Abstract]
Business Acquisition, Pro Forma Information, Description					Beginning third quarter 2012, the Company's consolidated results of operations include the results of the acquired Solutia businesses.  The unaudited pro forma financial results for three months and six months ended June 30, 2012 combine the consolidated results of Eastman and Solutia giving effect to the acquisition of Solutia as if it had been completed on January 1, 2011, the beginning of the comparable annual reporting period prior to the year of acquisition.  The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition.  This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2011. The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of Solutia depreciable fixed assets and definite-life amortizable assets acquired in the transaction.  The unaudited pro forma results also include adjustments to net interest expense and elimination of early debt extinguishment costs historically recorded by Solutia based upon the retirement of Solutia's debt and issuance of additional debt related to the transaction.  The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results, as well as the elimination of historical net changes in valuation allowances against certain deferred tax assets of Solutia. Additionally, in the preparation of unaudited pro forma sales and earnings from continuing operations including noncontrolling interest, Solutia's historical consolidated results have been retrospectively adjusted for the change in accounting methodology for pension and other post-employment benefit ("OPEB") plans actuarial gains and losses adopted by Eastman during first quarter 2012.  For additional information, see Note 14, "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.
Sales Revenue, Goods, Net				2,259,000,000		6,951,000,000
Earnings from continuing operations				241,000,000		689,000,000
Transaction costs						45,000,000
Eastman Chemical Company [Member] | Solutia [Member] | Purchase Price Allocation Previously Reported [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Current assets	901,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	940,000,000
Intangible assets	1,807,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets	612,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	461,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	2,389,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	3,375,000,000
Goodwill	1,965,000,000
Eastman Chemical Company [Member] | Solutia [Member] | Purchase Price Allocation Measurement Period Adjustments, Initial [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Current assets	19,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	7,000,000
Intangible assets	(16,000,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	2,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	1,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	276,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	0
Goodwill	265,000,000
Eastman Chemical Company [Member] | Solutia [Member] | Purchase Price Allocation Previously Reported, End of Acquisition Year [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Current assets	920,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	947,000,000
Intangible assets	1,791,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	614,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	462,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	2,665,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	3,375,000,000
Goodwill	2,230,000,000
Eastman Chemical Company [Member] | Solutia [Member] | Purchase Price Allocation Measurement Period Adjustments, Final [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Current assets	2,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	0
Intangible assets	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	67,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	47,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	0
Goodwill	(22,000,000)
Additives And Functional Products [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill	745,000,000
Advanced Materials [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill	1,004,000,000
Specialty Fluids And Intermediates [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract]
Goodwill	459,000,000
Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Integration Costs					24,000,000
Employee Severance [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Restructuring Charges					16,000,000		34,000,000
Employee Severance [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Restructuring Charges						28,000,000
Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Integration Costs			9,000,000	7,000,000	24,000,000	9,000,000
Restructuring Charges			3,000,000	28,000,000	9,000,000	28,000,000
Corporate and Other [Member] | Transaction, Integration, and Restructuring Costs Related to Solutia Acquisition [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Business Acquisition, Pro Forma Information [Abstract]
Transaction costs				$ 15,000,000		$ 28,000,000

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SHARE-BASED COMPENSATION AWARDS (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Allocated Share-based Compensation Expense	$ 8	$ 7	$ 27	$ 24
Share-based compensation net of deferred tax expense	$ 5	$ 5	$ 17	$ 15

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COMMITMENTS (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Purchase obligations [Abstract]
Purchase Obligations	$ 2,800,000,000
Purchase Obligation Description	over a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business.
Lease commitments [Abstract]
Operating Lease Commitments, Cancelable Noncancelable and Month-to-month	225,000,000
Percentage of Operating Lease Commitments related to machinery and equipment (in hundredths)	5.00%
Percentage of Operating Lease Commitments related to real property (in hundredths)	60.00%
Percentage of Operating Lease Commitments related to railcars (in hundredths)	35.00%
Guarantees [Abstract]
Operating Lease Residual Value Guarantees	117,000,000
Maximum potential future payment, other guarantees	$ 54,000,000
Guarantor Obligations, Term	other guarantees have terms of between 1 and 15 years

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DERIVATIVES Part 2 (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 42	$ 28
Derivative Liability, Fair Value, Gross Liability	(46)	(24)
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset, Fair Value, Gross Asset	42	28
Derivative Liability, Fair Value, Gross Liability	(46)	(24)
Derivative, Fair Value, Net	(4)	4
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Fair Value, Net	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset, Fair Value, Gross Asset	42	28
Derivative Liability, Fair Value, Gross Liability	(43)	(19)
Derivative, Fair Value, Net	(1)	9
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	(3)	(5)
Derivative, Fair Value, Net	$ (3)	$ (5)

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 222	$ 249
Trade receivables, net	967	846
Miscellaneous receivables	181	151
Inventories	1,274	1,260
Other current assets	123	88
Total current assets	2,767	2,594
Properties
Properties and equipment at cost	9,872	9,681
Less: Accumulated depreciation	5,655	5,500
Net properties	4,217	4,181
Goodwill	2,634	2,644
Intangible assets, net of accumulated amortizaton	1,801	1,849
Other noncurrent assets	308	351
Total assets	11,727	11,619
Current liabilities
Payables and other current liabilities	1,323	1,360
Borrowings due within one year	0	4
Total current liabilities	1,323	1,364
Long-term borrowings	4,429	4,779
Deferred income tax liabilities	204	91
Post-employment obligations	1,624	1,856
Other long-term liabilities	478	501
Total liabilities	8,058	8,591
Stockholders' equity
Common stock	2	2
Additional paid-in capital	1,763	1,709
Retained earnings	3,718	3,038
Accumulated other comprehensive income	147	123
Total stockholders' equity before treasury stock	5,630	4,872
Treasury stock at cost	2,042	1,929
Total Eastman stockholders' equity	3,588	2,943
Noncontrolling interest	81	85
Total equity	3,669	3,028
Total liabilities and stockholders' equity	$ 11,727	$ 11,619

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COMMITMENTS

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

COMMITMENTS

Purchase Obligations and Lease Commitments

The Company had various purchase obligations at September 30, 2013 totaling $2.8 billionover a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business.  The Company also had various lease commitments for property and equipment under cancelable, noncancelable, and month-to-month operating leases totaling approximately $225 million over a period of several years.  Of the total lease commitments, approximately 5 percent relate to machinery and equipment, including computer and communications equipment and production equipment; approximately 60 percent relate to real property, including office space, storage facilities, and land; and approximately 35 percent relate to railcars.

Guarantees

The Company has operating leases with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease as well as other guarantees.  Disclosures about each group of similar guarantees are provided below.

Residual Value Guarantees

The Company has operating leases with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease.  These residual value guarantees at September 30, 2013 totaled $117 million and consisted primarily of leases for railcars and company aircraft and will expire beginning in 2016.  Management believes, based on current facts and circumstances, that the likelihood of material residual guarantee payments is remote.

Other Guarantees

Guarantees and claims also arise during the ordinary course of business from relationships with joint venture partners, suppliers, customers, and other parties when the Company undertakes an obligation to guarantee the performance of others, if specified triggering events occur.  Non-performance under a contract could trigger an obligation of the Company.  The Company's current other guarantees include guarantees relating primarily to intellectual property, environmental matters, and other indemnifications and have arisen through the normal course of business.  The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims, if they were to occur.  These other guarantees have terms of between 1 and 15 years with maximum potential future payments of approximately $54 million in the aggregate, with none of these guarantees individually significant to the Company's operating results, financial position, or liquidity.  The Company's current expectation is that future payment or performance related to non-performance under other guarantees is considered remote.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities
Net earnings including noncontrolling interest	$ 823	$ 496
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	326	252
Asset impairment charges	6	9
Provision (benefit) for deferred income taxes	118	63
Defined Benefit Plan, Actuarial Gain (Loss)	(86)	0
Pension and other postretirement contributions (in excess of) less than expenses	(120)	(85)
Variable compensation (in excess of) less than expenses	30	(5)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables	(119)	(63)
(Increase) decrease in inventories	(14)	30
Increase (decrease) in trade payables	(67)	13
Other items, net	(103)	(22)
Net cash provided by operating activities	794	688
Cash flows from investing activities
Additions to properties and equipment	(312)	(297)
Proceeds from redemption of short-term time deposits	0	200
Proceeds from sales of assets and investments	6	7
Acquisitions and investments in joint ventures, net of cash acquired	0	(2,668)
Additions to capitalized software	(2)	(4)
Other items, net	0	(33)
Net cash (used in) provided by investing activities	(308)	(2,795)
Cash flows from financing activities
Net (decrease) increase in commercial paper, credit facility, and other borrowings	300	(1)
Proceeds from borrowings	150	3,511
Repayment of borrowings	(805)	(1,666)
Dividends paid to stockholders	(94)	(107)
Treasury stock purchases	(113)	0
Dividends paid to noncontrolling interest	(10)	(4)
Proceeds from stock option exercises and other items, net	55	32
Net cash provided by (used in) financing activities	(517)	1,765
Effect of exchange rate changes on cash and cash equivalents	4	2
Net change in cash and cash equivalents	(27)	(340)
Cash and cash equivalents at beginning of period	249	577
Cash and cash equivalents at end of period	$ 222	$ 237

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UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED EARNINGS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]
Sales	$ 2,338	$ 2,259	$ 7,085	$ 5,933
Cost of sales	1,649	1,734	5,103	4,496
Gross profit	689	525	1,982	1,437
Selling, general and administrative expenses	159	173	510	420
Research and development expenses	48	52	148	136
Asset impairments and restructuring charges (gains), net	3	37	24	37
Operating earnings	479	263	1,300	844
Net interest expense	44	48	137	95
Other charges (income), net	1	(6)	2	14
Earnings from continuing operations before income taxes	434	221	1,161	735
Provision for income taxes from continuing operations	125	64	338	240
Earnings from continuing operations	309	157	823	495
Gain from disposal of discontinued operations, net of tax	0	0	0	1
Net earnings	309	157	823	496
Less: Net earnings attributable to noncontrolling interest	1	3	4	5
Net earnings attributable to Eastman stockholders	308	154	819	491
Amounts attributable to Eastman stockholders
Earnings from continuing operations, net of tax	308	154	819	490
Gain from discontinued operations, net of tax	0	0	0	1
Net earnings attributable to Eastman stockholders	308	154	819	491
Basic earnings per share attributable to Eastman
Earnings from continuing operations	$ 2.00	$ 1.01	$ 5.31	$ 3.43
Earnings from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.01
Basic earnings per share attributable to Eastman	$ 2.00	$ 1.01	$ 5.31	$ 3.44
Diluted earnings per share attributable to Eastman
Earnings from continuing operations	$ 1.97	$ 0.99	$ 5.23	$ 3.35
Earnings from discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Diluted earnings per share attributable to Eastman	$ 1.97	$ 0.99	$ 5.23	$ 3.35
Comprehensive Income
Net earnings including noncontrolling interest	309	157	823	496
Other comprehensive income (loss), net of tax
Change in cumulative translation adjustment	45	30	10	21
Defined benefit pension and other postretirement benefit plans [Abstract]
Amortization of unrecognized prior service credits included in net periodic costs	25	(4)	18	(12)
Derivatives and hedging [Abstract]
Unrealized (loss) gain during period	(13)	(3)	(4)	(33)
Reclassification adjustment for (losses) gains included in net income	0	(4)	0	(5)
Total other comprehensive income (loss), net of tax	57	19	24	(29)
Comprehensive income including noncontrolling interest	366	176	847	467
Less: Net earnings attributable to noncontrolling interest	1	3	4	5
Comprehensive income attributable to Eastman	365	173	843	462
Retained Earnings
Retained earnings at beginning of period	3,456	3,024	3,038	2,760
Net earnings attributable to Eastman stockholders	308	154	819	491
Cash dividends declared	(46)	(39)	(139)	(112)
Retained earnings at end of period	$ 3,718	$ 3,139	$ 3,718	$ 3,139

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ENVIRONMENTAL MATTERS (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended		9 Months Ended			0 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Environmental Remediation [Member] Minimum [Member]	Sep. 30, 2013 Environmental Remediation [Member] Maximum [Member]	Dec. 31, 2012 Environmental Remediation [Member] Maximum [Member]	Jul. 02, 2012 Solutia [Member]	Jul. 02, 2012 Solutia [Member] Anniston, Alabama Site [Member]	Jul. 02, 2012 Solutia [Member] Sauget, Illinois Site [Member]
Site Contingency [Line Items]
Amount Accrued to Date for Environmental Contingent Liabilities	$ 373		$ 344	$ 600	$ 623
Portion Of Environmental Reserve Related To Previously Closed, Impaired, And Divested Sites	8	8
Best Estimate Accrued to-date For Asset Retirement Obligation	29	29
Accrual for Environmental Loss Contingencies [Roll Forward]
Beginning of period	394		365	600	623
Net charges taken			0
Cash reductions			(21)
End of period	373		344	600	623
Accrual for Environmental Loss Contingencies, Balance Sheet Classification [Abstract]
Accrued Environmental Loss Contingencies, Current	35	35
Accrued Environmental Loss Contingencies, Noncurrent	338	359
Amount Accrued to Date for Environmental Contingent Liabilities	373		344	600	623
Estimated Future Environmental Expenditures For Remediation Costs For Acquired Businesses, Minimum						368	149	107
Asset Retirement Obligation, Liabilities Assumed In Acquisitions						$ 1
Accrual for Environmental Loss Contingencies, Significant Assumptions	Reserves for environmental remediation that management believes to be probable and estimable are recorded as current and long-term liabilities in the Unaudited Consolidated Statements of Financial Position. These reserves include liabilities expected to be paid out within 30 years.

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DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial assets and liabilities valued on a recurring basis

The following chart shows the gross financial assets and liabilities valued on a recurring basis.

(Dollars in millions)				Fair Value Measurements at September 30, 2013
Description	September 30, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	42		$	—	$	42		$	—
Derivative Liabilities	(46		)	—		(43		)	(3		)
	$	(4	)	$	—	$	(1	)	$	(3	)

(Dollars in millions)				Fair Value Measurements at December 31, 2012
Description	December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	28		$	—	$	28		$	—
Derivative Liabilities	(24		)	—		(19		)	(5		)
	$	4		$	—	$	9		$	(5	)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a rollforward of activity for these assets (liabilities) for the period ended September 30, 2013:

Fair Value Measurements Using Level 3 Inputs
Commodity Contracts	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Balance at beginning of period	$	(7	)	$	(8	)	$	(5	)	$	—
Realized gain (loss) in sales revenue	(3		)	—			(10		)	—
Change in unrealized gain (loss)	4			4			2			(5		)
Settlements	3			3			10			4
Transfers (out) in of Level 3	—			—			—			—
Ending balance at Balance at September 30	$	(3	)	$	(1	)	$	(3	)	$	(1	)

Schedule of Derivative Financial Assets and Liabilities Based on Fair Value on Recurring Basis and Balance Sheet Location

Fair Value of Derivatives Designated as Hedging Instruments

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Assets	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Other current assets	$	13	$	7
Commodity contracts	Other noncurrent assets	4		—
Foreign exchange contracts	Other current assets	13		8
Foreign exchange contracts	Other noncurrent assets	12		13
		$	42	$	28

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Liabilities	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Payables and other current liabilities	$	11	$	13
Commodity contracts	Other long-term liabilities	6		—
Foreign exchange contracts	Payables and other current liabilities	14		8
Foreign exchange contracts	Other long-term liabilities	15		3
		$	46	$	24

Derivative Instrument Gain Loss in Statement of Financial Performance

Derivatives' Hedging Relationships

	Third Quarter
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	8		$	3		Sales	$	(3	)	$	—
							Cost of Sales	4			1
Foreign exchange contracts	(22		)	(11		)	Sales	2			12
Forward starting interest rate swap contracts	1			1			Net interest expense	(2		)	(2		)
	$	(13	)	$	(7	)		$	1		$	11
	First Nine Months
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	4		$	(1	)	Sales	$	(10	)	$	—
							Cost of sales	1			(17		)
Foreign exchange contracts	(11		)	(8		)	Sales	8			29
Forward starting interest rate swap contracts	3			(29		)	Net interest expense	(6		)	(3		)
	$	(4	)	$	(38	)		$	(7	)	$	9

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RECENTLY ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

RECENTLY ISSUED ACCOUNTING STANDARDS

RECENTLY ISSUED ACCOUNTING STANDARDS

In February 2013, the Financial Accounting Standards Board issued accounting guidance, given divergence in practice, covering loss contingencies that are joint and several liability arrangements for which the settlement amount is fixed and is not covered by other GAAP. Under the new requirements, an entity is to measure the obligation as the amount the entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the entity expects to pay on behalf of it co-obligors. This guidance is effective for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In March 2013, the Financial Accounting Standards Board issued amended accounting guidance to address the release of cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than an in-substance real estate sale or oil/gas mineral rights) within a foreign entity. The cumulative translation adjustments should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, in the event of a step acquisition when the acquirer obtains control of an acquiree in which it held an equity interest immediately prior to the acquisition, the cumulative translation adjustments would be released into net income. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In April 2013, the Financial Accounting Standards Board issued clarifying guidance that requires financial statements to be prepared using the liquidation basis of accounting to present relevant information about an entity's expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation when liquidation is imminent. Liquidation is considered imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (i.e. involuntary bankruptcy). This guidance is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013. The Company has concluded that this new guidance will have no impact on the Company's financial position or results of operations.

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance to permit the use of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. In addition, the update also removes the restriction on using different benchmark rates for similar hedges. This guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

In July 2013, the Financial Accounting Standards Board issued amended accounting guidance, given divergence in practice, that addresses the financial statement presentation of tax items eligible for netting. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This guidance is effective prospectively for reporting periods beginning after December 15, 2013. Retrospective application and early adoption is permitted. The Company has concluded that this new guidance will not have a material impact on the Company's financial position or results of operations.

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DERIVATIVES Part 1 (Details) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] EUR Foreign Exchange Contracts [Member] USD ($)	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] EUR Foreign Exchange Contracts [Member] EUR (€)	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] EUR Foreign Exchange Contracts [Member] USD ($)	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] EUR Foreign Exchange Contracts [Member] EUR (€)	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] JPY Foreign Exchange Contracts [Member] USD ($)	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] JPY Foreign Exchange Contracts [Member] JPY (¥)	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] JPY Foreign Exchange Contracts [Member] USD ($)	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] JPY Foreign Exchange Contracts [Member] JPY (¥)	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] Contract Ethylene Sales Contracts [Member] t	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] Contract Ethylene Sales Contracts [Member] t	Sep. 30, 2013 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] Feedstock Contracts [Member] bbl	Dec. 31, 2012 Designated as Hedging Instrument [Member] Cash Flow Hedging [Member] Feedstock Contracts [Member] bbl
Hedging Programs [Abstract]
Objectives for Using Derivative Instruments	The Company is exposed to market risk, such as changes in currency exchange rates, commodity prices, and interest rates.  The Company uses various derivative financial instruments when appropriate pursuant to the Company's hedging policies to mitigate these market risk factors and their effect on the cash flows of the underlying transactions.  Designation is performed on a specific exposure basis to support hedge accounting.  The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the cash flows of the underlying exposures being hedged.  The Company does not hold or issue derivative financial instruments for trading purposes.
Derivative [Line Items]
Derivative, Notional Amount		$ 1,200	€ 867	$ 635	€ 480	$ 94	¥ 9,100	$ 35	¥ 3,200
Derivative, Nonmonetary Notional Amount										26,000	49,000	10,000,000	3,000,000

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ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Restructuring Cost and Reserve [Line Items]
Asset impairments and restructuring charges (gains), net	$ 3	$ 37	$ 24	$ 37
Asset Impairment Charges			6	9
Restructuring Charges			24		120
Impairment of Real Estate				6
Restructuring Charge [Roll Forward]
Balance at Beginning of Period			25	2	2
Restructuring Charges			24		120
Non-cash Reductions			(8)		(63)
Cash Reductions			(16)		(34)
Balance at End of Period	25		25		25
Eastman Chemical Company [Member] | Solutia [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	3		9
Restructuring Charge [Roll Forward]
Restructuring Charges	3		9
Non-Cash Charges [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges			8		43
Restructuring Charge [Roll Forward]
Balance at Beginning of Period			0	0	0
Restructuring Charges			8		43
Non-cash Reductions			(8)		(43)
Cash Reductions			0		0
Balance at End of Period	0		0		0
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges			16		34
Restructuring Charge [Roll Forward]
Balance at Beginning of Period			4	2	2
Restructuring Charges			16		34
Non-cash Reductions			1		0
Cash Reductions			(8)		(32)
Balance at End of Period	13		13		4
Employee Severance [Member] | Eastman Chemical Company [Member] | Solutia [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges				28
Restructuring Charge [Roll Forward]
Restructuring Charges				28
Facility Closing [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges			0		43
Restructuring Charge [Roll Forward]
Balance at Beginning of Period			21	0	0
Restructuring Charges			0		43
Non-cash Reductions			(1)		(20)
Cash Reductions			(8)		(2)
Balance at End of Period	12		12		21
Germany Site Closure [Member]
Restructuring Cost and Reserve [Line Items]
Asset Impairment Charges			7
Restructuring Charges			5
Restructuring Charge [Roll Forward]
Restructuring Charges			5
Voluntary Separation Plan [Member]
Restructuring Cost and Reserve [Line Items]
Severance Charges			6
Brazil Site Closure [Member]
Restructuring Cost and Reserve [Line Items]
Asset impairments and restructuring charges (gains), net			$ (4)

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PAYABLES AND OTHER CURRENT LIABILITIES (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Payables and Accruals [Abstract]
Trade creditors	$ 657	$ 723
Accrued payrolls, vacation, and variable-incentive compensation	172	171
Accrued taxes	97	76
Post-employment obligations	60	62
Interest payable	36	59
Environmental contingent liabilities, current portion	35	35
Other	266	234
Total payables and other current liabilities	$ 1,323	$ 1,360

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

9 Months Ended

Sep. 30, 2013

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

Included in the line item "Other items, net" of the "Cash flows from operating activities" section of the Unaudited Consolidated Statements of Cash Flows are the following changes to balance sheet line items:

(Dollars in millions)	First Nine Months
	2013			2012
Current assets	$	(1	)	$	(15	)
Other assets	20			45
Current liabilities	(24		)	2
Long-term liabilities and equity	(98		)	(54		)
Total	$	(103	)	$	(22	)

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information Disclosure

	Third Quarter
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	445	$	406
Adhesives & Plasticizers	321		348
Advanced Materials	583		559
Fibers	363		349
Specialty Fluids & Intermediates	620		592
Total Sales by Segment	2,332		2,254
Other	6		5
Total Sales	$	2,338	$	2,259
	First Nine Months
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	1,294	$	948
Adhesives & Plasticizers	1,005		1,094
Advanced Materials	1,792		1,166
Fibers	1,072		990
Specialty Fluids & Intermediates	1,904		1,728
Total Sales by Segment	7,067		5,926
Other	18		7
Total Sales	$	7,085	$	5,933

	Third Quarter
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)	$	111		$	86
Adhesives & Plasticizers	41			73
Advanced Materials (1)	69			18
Fibers	113			98
Specialty Fluids & Intermediates (1)	90			79
Total Operating Earnings by Segment	424			354
Other (2)
Growth initiatives and businesses not allocated to segments (3)	(20		)	(36		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	87			(5		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(12		)	(50		)
Total Operating Earnings	$	479		$	263
	First Nine Months
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)(5)(6)	$	313		$	215
Adhesives & Plasticizers (5)	139			211
Advanced Materials (1)(5)(6)	216			86
Fibers	343			295
Specialty Fluids & Intermediates (1)(5)	302			204
Total Operating Earnings by Segment	1,313			1,011
Other (2)
Growth initiatives and businesses not allocated to segments (3)(7)	(73		)	(84		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	93			(18		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(33		)	(65		)
Total Operating Earnings	$	1,300		$	844

⁽¹⁾  Included in third quarter and first nine months2012 are additional costs of $19 million, $39 million, and $17 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, of acquired Solutia inventories. See Note 2, "Acquisitions and Investments in Joint Ventures."

⁽²⁾  Research and development, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as "other" operating earnings (loss).

⁽³⁾  Included in third quarter and first nine months 2012 are $9 million in asset impairments, primarily of land retained from the previously discontinued Beaumont, Texas industrial gasification project. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁴⁾  Included in third quarter and first nine months 2013 earnings is a mark-to-market OPEB gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."

⁽⁵⁾  Included in third quarter and first nine months 2013 earnings are restructuring charges of $3 million in "Other" and included in first nine months 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, primarily for severance. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁶⁾  Included in first nine months 2013 earnings is a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the Additives & Functional Products and Advanced Materials segments, respectively. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁷⁾  Included in first nine months 2013 earnings are asset impairments and restructuring charges of $13 million primarily for closure costs of a production facility in Germany for the Photovoltaics product line.

	September 30,		December 31,
(Dollars in millions)	2013		2012
Assets by Segment (1)
Additives & Functional Products	$	2,947	$	2,892
Adhesives & Plasticizers	987		1,088
Advanced Materials	3,803		3,744
Fibers	966		937
Specialty Fluids & Intermediates	2,079		1,987
Total Assets by Segment	10,782		10,648
Corporate Assets	945		971
Total Assets	$	11,727	$	11,619

⁽¹⁾  The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.

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RETIREMENT PLANS

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLANS

RETIREMENT PLANS

As described in more detail below, Eastman offers various postretirement benefits to its employees.

DEFINED BENEFIT PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFIT PLANS

Pension Plans

Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits.  Costs recognized for these benefits are recorded using estimated amounts, which may change as actual costs derived for the year are determined.

In July 2012, as part of its acquisition of Solutia, the Company assumed Solutia's U.S. and non-U.S. defined benefit pension plans.  These U.S. plans were closed to new participants prior to the acquisition and were no longer accruing additional benefits.  For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

Other Post-Employment Benefit Plans

Under its OPEB Plans, Eastman provides a subsidy for life insurance, health care, and dental benefits to eligible retirees hired prior to January 1, 2007, and a subsidy for health care and dental benefits to retirees' eligible survivors.  In general, Eastman provides those benefits to retirees eligible under the Company's U.S. plans. Similar benefits are also made available to retirees of Holston Defense Corporation, a wholly-owned subsidiary of the Company that, prior to January 1, 1999, operated a government-owned ammunition plant.

Eligible employees hired on or after January 1, 2007 have access to postretirement health care benefits, but Eastman does not provide a subsidy for the premium cost of postretirement benefits for those employees.  A few of the Company's non-U.S. operations have supplemental health benefit plans for certain retirees, the cost of which is not significant to the Company.

In July 2012, as part of its acquisition of Solutia, the Company assumed Solutia's OPEB plans.  For more information on the Solutia acquisition, see Note 2, "Acquisitions and Investments in Joint Ventures".

Costs recognized for benefits for eligible retirees hired prior to January 1, 2007 are recognized using estimated amounts which may change as actual costs for the year are determined.  Components of net periodic benefit cost were as follows:

	Third Quarter
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	11		$	3		$	9		$	3		$	2		$	2
Interest cost	22			7			24			7			11			12
Expected return on assets	(32		)	(9		)	(30		)	(8		)	(1		)	(2		)
Amortization of:
Prior service cost (credit)	(1		)	—			(1		)	—			(6		)	(4		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	—		$	1		$	2		$	2		$	(80	)	$	8

	First Nine Months
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	32		$	10		$	29		$	6		$	8		$	7
Interest cost	66			21			61			13			33			33
Expected return on assets	(96		)	(26		)	(72		)	(16		)	(5		)	(3		)
Amortization of:
Prior service cost (credit)	(3		)	—			(3		)	—			(16		)	(14		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	(1	)	$	5		$	15		$	3		$	(66	)	$	23

⁽¹⁾Mark-to-market gain in third quarter and first nine months2013 due to the interim remeasurement of the Eastman OPEB plan obligation, triggered by a plan change in life insurance benefits in third quarter.

In third quarter 2013, the Company changed life insurance benefits provided to future retirees by the Eastman OPEB plan which triggered an interim remeasurement of this OPEB plan obligation. The remeasurement resulted in a reduction in the Accumulated Post-Employment Benefit Obligation of approximately $47 million which will be amortized as a prior service credit from Accumulated Other Comprehensive Income over 8 years. The remeasurement of the plan also resulted in a mark-to-market actuarial gain of $86 million in third quarter 2013. The actuarial gain was primarily due to a higher assumed discount rate of 4.72 percent in third quarter 2013 compared to 4.01 percent at December 31, 2012. The higher assumed discount rate is reflective of changes in global market conditions and interest rates on high-grade corporate bonds. For additional information concerning the Company's accounting methodology for pension and OPEB actuarial gains and losses, see Note 1, "Significant Accounting Policies" and Note 14 "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

The Company contributed $99 million and $87 million to its U.S. defined benefit pension plans in first nine months2013 and 2012, respectively.

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RETIREMENT PLANS (Tables)

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Components of net periodic benefit cost

Costs recognized for benefits for eligible retirees hired prior to January 1, 2007 are recognized using estimated amounts which may change as actual costs for the year are determined.  Components of net periodic benefit cost were as follows:

	Third Quarter
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	11		$	3		$	9		$	3		$	2		$	2
Interest cost	22			7			24			7			11			12
Expected return on assets	(32		)	(9		)	(30		)	(8		)	(1		)	(2		)
Amortization of:
Prior service cost (credit)	(1		)	—			(1		)	—			(6		)	(4		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	—		$	1		$	2		$	2		$	(80	)	$	8

	First Nine Months
	Pension Plans												Other Post-Employment Benefit Plans
	2013						2012						2013			2012
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit cost:
Service cost	$	32		$	10		$	29		$	6		$	8		$	7
Interest cost	66			21			61			13			33			33
Expected return on assets	(96		)	(26		)	(72		)	(16		)	(5		)	(3		)
Amortization of:
Prior service cost (credit)	(3		)	—			(3		)	—			(16		)	(14		)
Mark-to-market pension and other post-employment benefits (gain) loss (1)	—			—			—			—			(86		)	—
Net periodic benefit cost	$	(1	)	$	5		$	15		$	3		$	(66	)	$	23

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BORROWINGS Part 2 (Details) (USD $)	0 Months Ended	9 Months Ended
	Jul. 02, 2012	Sep. 30, 2013
Credit Facilities [Abstract]
Repayments of Lines of Credit		$ 350,000,000
Revolving Credit Facility [Member]
Credit Facilities [Abstract]
Credit Facility, Description		The Company has a $750 million revolving credit agreement (the "Revolving Credit Facility") expiring December 2016.  Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. At September 30, 2013 and December 31, 2012, the Company had no outstanding borrowings under the Revolving Credit Facility.
Credit Facility, Borrowing Capacity		750,000,000
Line of Credit Facility, Remaining Borrowing Capacity		450,000,000
Credit Facility, Expiration		Dec. 31, 2016
Credit Facility Covenant Compliance		contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented
Line of Credit Facility, Commitment Fee Description		Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment.
Accounts Receivable Facility [Member]
Credit Facilities [Abstract]
Credit Facility, Description		The Company also has a $250 million line of credit under the A/R Facility, expiring April 2016.  Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility.
Credit Facility, Borrowing Capacity		250,000,000
Line of Credit Facility, Remaining Borrowing Capacity		100,000,000
Credit Facility, Expiration		Apr. 30, 2016
Credit Facility Covenant Compliance		contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented
Commercial Loan [Member]
Line of Credit Facility [Line Items]
Proceeds from Term Loan borrowings	1,200,000,000
Credit Facilities [Abstract]
Credit Facility, Description		On July 2, 2012, the Company borrowed the entire $1.2 billion available under the five-year Term Loan. Proceeds from these borrowings were used to pay, in part, the cash portion of the Solutia acquisition, repay Solutia debt, and pay acquisition costs. During the first nine months of 2013, the Company repaid $800 million of its Term Loan using $300 million of commercial paper borrowings, $150 million of its accounts receivable securitization facility (the "A/R Facility"), and $350 million in cash. At September 30, 2013 and December 31, 2012, the Term Loan balances outstanding were $150 million and $950 million, respectively. The interest rate on the Term Loan as of September 30, 2013 was 1.69 percent.
Repayments of Lines of Credit		$ 800,000,000
Commercial Loan [Member]
Credit Facilities [Abstract]
Credit Facility Covenant Compliance		contain a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented

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LEGAL MATTERS

9 Months Ended

Sep. 30, 2013

Loss Contingency, Information about Litigation Matters [Abstract]

LEGAL MATTERS

LEGAL MATTERS

General

From time to time, the Company and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are being handled and defended in the ordinary course of business.  While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows.

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DERIVATIVES

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

Hedging Programs

The Company is exposed to market risk, such as changes in currency exchange rates, commodity prices, and interest rates.  The Company uses various derivative financial instruments when appropriate pursuant to the Company's hedging policies to mitigate these market risk factors and their effect on the cash flows of the underlying transactions.  Designation is performed on a specific exposure basis to support hedge accounting.  The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the cash flows of the underlying exposures being hedged.  The Company does not hold or issue derivative financial instruments for trading purposes.  For further information, see Note 12, "Derivatives", to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

Fair Value Hedges

Fair value hedges are defined as derivative or non-derivative instruments designated as and used to hedge the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk.  For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.  As of September 30, 2013 and December 31, 2012, the Company had no fair value hedges.

Cash Flow Hedges

Cash flow hedges are derivative instruments designated as and used to hedge the exposure to variability in expected future cash flows that is attributable to a particular risk.  For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income, net of income taxes and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

As of September 30, 2013, the total notional amounts of the Company's foreign exchange forward and option contracts were €867 million (approximately $1.2 billion equivalent) and ¥9.1 billion (approximately $94 million equivalent), respectively. The total notional volume hedged for contract ethylene sales was approximately 26 thousand metric tons, and the total notional volume hedged for feedstock was approximately 10 million barrels.  The Company had no outstanding hedges for energy or interest rate swaps.

As of December 31, 2012, the total notional amounts of the Company's foreign exchange forward and option contracts were €480 million (approximately $635 million equivalent) and ¥3.2 billion (approximately $35 million equivalent), respectively. The total notional volume hedged for contract ethylene sales was approximately 49 thousand metric tons, and the total notional volume hedged for feedstock was approximately 3 million barrels.  The Company had no outstanding hedges for energy or interest rate swaps.

Fair Value Measurements

For additional information on fair value measurement, see Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

The following chart shows the gross financial assets and liabilities valued on a recurring basis.

(Dollars in millions)				Fair Value Measurements at September 30, 2013
Description	September 30, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	42		$	—	$	42		$	—
Derivative Liabilities	(46		)	—		(43		)	(3		)
	$	(4	)	$	—	$	(1	)	$	(3	)

(Dollars in millions)				Fair Value Measurements at December 31, 2012
Description	December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Derivative Assets	$	28		$	—	$	28		$	—
Derivative Liabilities	(24		)	—		(19		)	(5		)
	$	4		$	—	$	9		$	(5	)

The majority of the Company's derivative assets are classified as Level 2.  Level 2 fair value is based on estimates using standard pricing models.  These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves and currency spot and forward rates.  The fair value of commodity contracts is derived using forward curves supplied by an industry recognized and unrelated third party.  In addition, on an ongoing basis, the Company tests a subset of its valuations against valuations received from the transaction's counterparty to validate the accuracy of its standard pricing models.  Counterparties to these derivative contracts are highly rated financial institutions which the Company believes carry only a minimal risk of nonperformance.

The Company holds Level 3 assets for commodity hedges.  The fair values of Level 3 instruments are determined using pricing data similar to that used in Level 2 financial instruments described above, and reflect adjustments for less liquid markets or longer contractual terms.  All Level 3 hedges will mature in the current year.  The Company determines the fair value of paraxylene derivative forward contracts based on related inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets, and which influence the actual forward price of the commodity.  Due to the fact that the forward price of the commodity itself is considered unobservable, the Company has categorized these forward contracts as Level 3. The Company determines the fair value of ethylene derivative forward contracts using an average of unadjusted forward ethylene prices provided by industry recognized experts.

The table below presents a rollforward of activity for these assets (liabilities) for the period ended September 30, 2013:

Fair Value Measurements Using Level 3 Inputs
Commodity Contracts	Third Quarter						First Nine Months
(Dollars in millions)	2013			2012			2013			2012
Balance at beginning of period	$	(7	)	$	(8	)	$	(5	)	$	—
Realized gain (loss) in sales revenue	(3		)	—			(10		)	—
Change in unrealized gain (loss)	4			4			2			(5		)
Settlements	3			3			10			4
Transfers (out) in of Level 3	—			—			—			—
Ending balance at Balance at September 30	$	(3	)	$	(1	)	$	(3	)	$	(1	)

The following chart shows the financial assets and liabilities valued on a recurring basis and their location in the Unaudited Consolidated Statements of Financial Position.  The Company had no nonqualifying derivatives or derivatives that are not designated as hedges as of September 30, 2013 and December 31, 2012. All of the Company's derivative contracts are subject to master netting arrangements, or similar agreements, which provide for the option to settle contracts on a net basis when they settle on the same day and the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event. The Company has elected to present the derivative contracts on a gross basis in the Unaudited Consolidated Statements of Financial Position. Had it chosen to present the derivatives contracts on a net basis, it would have a derivative in a net asset position of $17 million and a derivative in a net liability position of $21 million as of September 30, 2013. The Company also does not have any cash collateral due under such agreements.

Fair Value of Derivatives Designated as Hedging Instruments

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Assets	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Other current assets	$	13	$	7
Commodity contracts	Other noncurrent assets	4		—
Foreign exchange contracts	Other current assets	13		8
Foreign exchange contracts	Other noncurrent assets	12		13
		$	42	$	28

(Dollars in millions)		Fair Value Measurements Significant Other Observable Inputs
Derivative Liabilities	Statement of Financial Position Location	September 30, 2013		December 31, 2012
Cash Flow Hedges
Commodity contracts	Payables and other current liabilities	$	11	$	13
Commodity contracts	Other long-term liabilities	6		—
Foreign exchange contracts	Payables and other current liabilities	14		8
Foreign exchange contracts	Other long-term liabilities	15		3
		$	46	$	24

Derivatives' Hedging Relationships

	Third Quarter
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	8		$	3		Sales	$	(3	)	$	—
							Cost of Sales	4			1
Foreign exchange contracts	(22		)	(11		)	Sales	2			12
Forward starting interest rate swap contracts	1			1			Net interest expense	(2		)	(2		)
	$	(13	)	$	(7	)		$	1		$	11
	First Nine Months
(Dollars in millions)	Change in amount after tax of gain/(loss) recognized in Other Comprehensive Income on derivatives (effective portion)						Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)	Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into income (effective portion)
Derivatives' Cash Flow Hedging Relationships	September 30, 2013			September 30, 2012				September 30, 2013			September 30, 2012
Commodity contracts	$	4		$	(1	)	Sales	$	(10	)	$	—
							Cost of sales	1			(17		)
Foreign exchange contracts	(11		)	(8		)	Sales	8			29
Forward starting interest rate swap contracts	3			(29		)	Net interest expense	(6		)	(3		)
	$	(4	)	$	(38	)		$	(7	)	$	9

In first nine months 2012, forward starting interest rate swaps contracts related to the issuance of debt for the Solutia acquisition were settled, resulting in an additional loss, net of tax of $44 million recorded in Other Comprehensive Income.

Hedging Summary

Monetized positions and mark-to-market gains and losses from raw materials and energy, currency, and certain interest rate hedges that were included in accumulated other comprehensive income before taxes totaled losses of approximately $80 million at September 30, 2013 and $66 million at September 30, 2012.  If realized, approximately $6 million in losses in third quarter 2013 will be reclassified into earnings during the next 12 months.  Ineffective portions of hedges are immediately recognized in cost of sales or other charges (income), net.  There were no material gains or losses related to the ineffective portion of hedges recognized in third quarter and first nine months2013. For third quarter 2012, there was no material ineffectiveness. For first nine months2012, the ineffective portion of the Company's qualifying hedges was $2 million.

The gains or losses on nonqualifying derivatives or derivatives that are not designated as hedges are marked to market in the line item "Other charges (income), net" of the Statements of Earnings, and, in all periods presented, represent foreign exchange derivatives denominated in multiple currencies and are transacted and settled in the same quarter.  The Company recognized $3 million net losses during third quarter 2013 and approximately $2 million net gains during third quarter2012 on nonqualifying derivatives.  The Company recognized approximately $4 million net losses and $4 million net gains on nonqualifying derivatives during first nine months2013 and 2012, respectively.

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ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES

Solutia Inc.

On July 2, 2012, the Company completed its acquisition of Solutia, a global leader in performance materials and specialty chemicals.  In the acquisition, each outstanding share of Solutia common stock was cancelled and converted automatically into the right to receive $22.00 in cash and 0.12 shares of Eastman common stock.  In total, 14.7 million shares of Eastman common stock were issued in the transaction.  The fair value of total consideration transferred was $4.8 billion, consisting of cash of $2.6 billion, net of cash acquired; equity in the form of Eastman stock of approximately $700 million; and the assumption and subsequent repayment of Solutia's debt at fair value of $1.5 billion.  

The funding of the cash portion of the purchase price, repayment of Solutia's debt, and acquisition costs was provided primarily from borrowings, including the $2.3 billion net proceeds from the public offering of notes on June 5, 2012 and borrowings of $1.2 billion on July 2, 2012 under a five-year term loan agreement (the "Term Loan").  See Note 6, "Borrowings".

The purchase price allocation for the July 2, 2012 Solutia acquisition was finalized as of June 30, 2013. Updates to the December 31, 2012 preliminary purchase price allocation of the Solutia acquisition during second quarter 2013 for finalization of current and deferred income taxes were reflected in the Company's Consolidated Statements of Financial Position as of June 30, 2013 and are summarized in the table below. These adjustments were primarily for finalization of valuation allowances against Federal and state deferred tax assets in connection with the filing of the final Solutia consolidated federal tax return. These updates were not material to the Company's financial position or results of operations for 2012 or 2013.

Assets acquired and liabilities assumed on July 2, 2012
(Dollars in millions)	Initial Valuation			2012 Net Adjustments to Fair Value			December 31, 2012			2013 Net Adjustments to Fair Value			June 30, 2013
Current assets	$	901		$	19		$	920		$	2		$	922
Properties and equipment	940			7			947			—			947
Intangible assets	1,807			(16		)	1,791			—			1,791
Other noncurrent assets	612			2			614			67			681
Goodwill	1,965			265			2,230			(22		)	2,208
Current liabilities	(461		)	(1		)	(462		)	—			(462		)
Long-term liabilities	(2,389		)	(276		)	(2,665		)	(47		)	(2,712		)
Equity and cash consideration, net of $88 million cash acquired	$	3,375		$	—		$	3,375		$	—		$	3,375

The Company used the income, market, or cost approach (or a combination thereof) for the valuation as appropriate, and used valuation inputs in these models and analyses that were based on market participant assumptions.  Market participants are considered to be buyers and sellers unrelated to Eastman in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on information available to Eastman management. The fair value of receivables acquired from Solutia on July 2, 2012 was $350 million, with gross contractual amounts receivable of $366 million. Acquired intangible assets are primarily customer relationships, trade names, and developed technologies.  Long-term liabilities are primarily Solutia's debt, which was repaid by Eastman at closing, deferred tax liabilities, environmental liabilities, and pension and other post-employment welfare plan obligations. The Company finalized the acquisition accounting related to the transaction during fourth quarter 2012 with the exception of income taxes which were completed during second quarter 2013 and did not have a material impact on the Company's financial position or results of operations.

The acquisition of Solutia broadens Eastman's global presence, facilitates growth opportunities through enhanced access to markets such as the automotive and architectural industries, and expands Eastman's portfolio of sustainable products.  In connection with the purchase, the Company recorded goodwill, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of liabilities assumed. The goodwill is attributed primarily to Solutia as a going concern and the fair value of expected cost synergies and revenue growth from combining the Eastman and Solutia businesses.  The going concern element represents the ability to earn a higher return on the combined assembled collection of assets and businesses of Solutia than if those assets and businesses were to be acquired and managed separately.  Other relevant elements of goodwill are the benefits of access to certain markets and work force. Goodwill from the Solutia acquisition has been allocated to certain of the Company's reportable segments. None of the goodwill is deductible for tax purposes. 

Goodwill	Goodwill by Segment
(Dollars in millions)
Additives & Functional Products	$	745
Advanced Materials	1,004
Specialty Fluids & Intermediates	459
Total	$	2,208

Properties acquired included a number of manufacturing, sales, and distribution sites and related facilities, land and leased sites that include leasehold improvements, and machinery and equipment for use in manufacturing operations.  Management valued properties using the cost approach supported where available by observable market data which includes consideration of obsolescence.

Intangible assets acquired included a number of trade names and trademarks that are both business-to-business and business-to-consumer in nature, including Crystex^®, Saflex^®, and Llumar^®.  Also acquired was technology related to products protected by a number of existing patents, patent applications, and trade secrets.  In addition to these intangible assets, the Company acquired a number of customer relationships in industries such as automotive tires and aviation. Management valued intangible assets using the relief from royalty and multi-period excess earnings methods, both forms of the income approach supported by observable market data for peer chemical companies.

Intangible Assets
(Dollars in millions)	Fair Value		Weighted-Average Amortization Period (Years)
Amortizable intangible assets
Customer relationships	$	809	22
Developed technologies	440		13
Indefinite-lived intangible assets
Trade names	542
Total	$	1,791

Management estimated the fair market value of fixed-rate debt based on the viewpoint that the exit price approximated the entry price given the lack of observable market prices. Additionally, acquired interest rate swaps and foreign exchange contracts were terminated and settled immediately following the acquisition. Because these derivatives were recorded at fair value in the opening balance sheet, there were no gains or losses associated with these settlements.

Management also evaluated probable loss contingencies, including those for legal and environmental matters, as prescribed under applicable GAAP. Due to the lack of observable market inputs, assumed liabilities for environmental loss contingencies that were both probable and estimable were recorded based upon estimates of future cash outflows for such contingencies as of the acquisition date. See Note 10, "Environmental Matters", for more information.

In third quarter and first nine months2013 the Company recognized $9 million and $24 million, respectively, in integration costs. In third quarter and first nine months 2012, the Company recognized $15 million and $28 million, respectively, in Solutia acquisition transaction costs and $7 million and $9 million, respectively, in integration costs. In first nine months 2012, the Company recognized $32 million in financing costs related to the acquisition. Transaction costs and integration costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item, and financing costs are included in the "Net interest expense" and "Other charges (income), net" line items in the Unaudited Consolidated Statements of Earnings, Comprehensive Income, and Retained Earnings. In third quarter and first nine months 2012, there were $28 million in restructuring charges for severance associated with the acquisition and integration of Solutia. As required by purchase accounting, the acquired inventories were marked to fair value. These inventories were sold in third quarter 2012 resulting in a one-time $75 million increase in cost of sales, net of the LIFO impact of these inventories, in third quarter and first nine months 2012.   

Beginning third quarter 2012, the Company's consolidated results of operations include the results of the acquired Solutia businesses.  The unaudited pro forma financial results for three months and nine months endedSeptember 30, 2012 combine the consolidated results of Eastman and Solutia giving effect to the acquisition of Solutia as if it had been completed on January 1, 2011, the beginning of the comparable annual reporting period prior to the year of acquisition.  The unaudited pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition.  This unaudited pro forma financial information is presented for informational purposes only and is not indicative of future operations or results had the acquisition been completed as of January 1, 2011.

The unaudited pro forma financial results include certain adjustments for additional depreciation and amortization expense based upon the fair value step-up and estimated useful lives of Solutia depreciable fixed assets and definite-life amortizable assets acquired in the transaction.  The unaudited pro forma results also include adjustments to net interest expense and elimination of early debt extinguishment costs historically recorded by Solutia based upon the retirement of Solutia's debt and issuance of additional debt related to the transaction.  The provision for income taxes from continuing operations has also been adjusted for all periods, based upon the foregoing adjustments to historical results, as well as the elimination of historical net changes in valuation allowances against certain deferred tax assets of Solutia.

Additionally, in the preparation of unaudited pro forma sales and earnings from continuing operations including noncontrolling interest, Solutia's historical consolidated results have been retrospectively adjusted for the change in accounting methodology for pension and other post-employment benefit ("OPEB") plans actuarial gains and losses adopted by Eastman during first quarter 2012.  For additional information, see Note 14, "Accounting Methodology Change for Pension and Other Postretirement Benefit Plans" in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

	2012
(Dollars in millions)	Third Quarter		First Nine Months
Pro forma sales	$	2,259	$	6,951
Pro forma earnings from continuing operations including noncontrolling interest	241		689

Non-recurring costs directly attributable to the acquisition, which will not have an ongoing impact, are excluded from unaudited pro forma earnings from continuing operations including noncontrolling interest in third quarter 2012. These items include transaction, integration, and financing costs incurred by Eastman during third quarter and first nine months 2012 as well as transaction costs of $45 million and expenses of $19 million for the accelerated vesting of stock-based compensation awards incurred by Solutia prior to its acquisition by Eastman. Additionally, the non-recurring costs of acquired inventories have been eliminated from the unaudited pro forma earnings from continuing operations in third quarter 2012 and first nine months 2012.

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STOCKHOLDERS' EQUITY (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended				12 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012		Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity [Roll Forward]
Beginning Balance					$ 2,943
Net Earnings	308		154		819		491
Net Income (Loss) Attributable to Noncontrolling Interest	1		3		4		5
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	309		157		823		496
Cash dividends declared	(46)		(39)		(139)		(112)
Other Comprehensive Income (Loss)	57		19		24		(29)		(15)
Share-Based Compensation Expense					26	[1]
Stock Option Exercises					10
Stock Issued During Period, Value, Acquisitions					16	[2]
Stockholders' Equity, Other					3	[3]
Stock Repurchases					(113)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					(9)
Ending Balance	3,588				3,588				2,943
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	3,669				3,669				3,028
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Cumulative Translation Adjustment	115				115				105	64
Unrecognized Prior Service Credits for Benefit Plans	83				83				65	78
Unrealized Gains (Losses) on Derivative Instruments	(50)				(50)				(46)	(3)
Unrealized Losses on Investments	(1)				(1)				(1)	(1)
Accumulated other comprehensive income (loss)	147				147				123	138
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	45		30		10		21		41
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Costs Arising During Period, Net of Tax	25		(4)		18		(12)		(13)
Unrealized Gains (Losses) on Derivative Instruments	(13)		(7)		(4)		(38)		(43)
Unrealized Losses on Investments					0				0
Other Comprehensive Income (Loss), Net of Tax	57		19		24		(29)		(15)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax	43		32		8		23
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	45		30		10		21		41
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax	40	[4]	(5)	[4]	28	[4]	(17)	[4]
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Costs Arising During Period, Net of Tax	25		(4)		18		(12)		(13)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax	(19)		(5)		(13)		(53)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	(13)		(3)		(4)		(33)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	(2)	[5]	(7)	[5]	6	[5]	(8)	[5]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax	0		4		0		5
Other Comprehensive Income (Loss), before Tax	62		15		29		(55)
Other Comprehensive Income (Loss), Net of Tax	57		19		24		(29)		(15)
Common Stock [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					2
Net Earnings					0
Cash dividends declared					0
Other Comprehensive Income (Loss)					0
Share-Based Compensation Expense					0
Stock Option Exercises					0
Stock Issued During Period, Value, Acquisitions					0
Stockholders' Equity, Other					0
Stock Repurchases					0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	2				2
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					0
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					0
Additional Paid In Capital [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					1,709
Net Earnings					0
Cash dividends declared					0
Other Comprehensive Income (Loss)					0
Share-Based Compensation Expense					26	[1]
Stock Option Exercises					10
Stock Issued During Period, Value, Acquisitions					16	[2]
Stockholders' Equity, Other					2	[3]
Stock Repurchases					0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	1,763				1,763
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					0
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					0
Retained Earnings [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					3,038
Net Earnings					819
Cash dividends declared					(139)	[6]
Other Comprehensive Income (Loss)					0
Share-Based Compensation Expense					0
Stock Option Exercises					0
Stock Issued During Period, Value, Acquisitions					0
Stockholders' Equity, Other					0
Stock Repurchases					0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	3,718				3,718
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					0
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					0
Accumulated Other Comprehensive Income [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					123
Net Earnings					0
Cash dividends declared					0
Other Comprehensive Income (Loss)					24
Share-Based Compensation Expense					0
Stock Option Exercises					0
Stock Issued During Period, Value, Acquisitions					0
Stockholders' Equity, Other					0
Stock Repurchases					0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	147				147
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					24
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					24
Treasury Stock [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					(1,929)
Net Earnings					0
Cash dividends declared					0
Other Comprehensive Income (Loss)					0
Share-Based Compensation Expense					0
Stock Option Exercises					0
Stock Issued During Period, Value, Acquisitions					0
Stockholders' Equity, Other					0
Stock Repurchases					(113)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	(2,042)				(2,042)
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					0
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					0
Parent [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					2,943
Net Earnings					819
Cash dividends declared					(139)	[6]
Other Comprehensive Income (Loss)					24
Share-Based Compensation Expense					26	[1]
Stock Option Exercises					10
Stock Issued During Period, Value, Acquisitions					16	[2]
Stockholders' Equity, Other					2	[3]
Stock Repurchases					(113)
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					0
Ending Balance	3,588				3,588
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					24
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					24
Noncontrolling Interest [Member]
Stockholders' Equity [Roll Forward]
Beginning Balance					85
Net Income (Loss) Attributable to Noncontrolling Interest					4
Cash dividends declared					0
Other Comprehensive Income (Loss)					0
Share-Based Compensation Expense					0
Stock Option Exercises					0
Stock Issued During Period, Value, Acquisitions					0
Stockholders' Equity, Other					1	[3]
Stock Repurchases					0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders					(9)
Ending Balance	81				81
Accumulated Other Comprehensive Income Loss Net Of Tax Abstract
Other Comprehensive Income (Loss), Net of Tax					0
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Net of Tax					$ 0

[1] Includes the fair value of share-based awards recognized for share-based compensation.

[2] Proceeds of warrant exercises related to the Company's acquisition of Solutia.

[3] Primarily tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items.

[4] Included in the calculation of net periodic benefit costs for pension and OPEB. See Note 8, "Retirement Plans".

[5] Gains and losses from derivatives and hedging are included in sales, cost of sales, and net interest expense.

[6] Includes cash dividends declared, but unpaid.

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DERIVATIVES Part 4 (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 17
Derivative Liabilities	(21)
Derivative Assets [Abstract]
Derivative Asset, Fair Value, Gross Asset	42	28
Derivative Liabilities [Abstract]
Derivative Liability, Fair Value, Gross Liability	46	24
Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Derivative Assets [Abstract]
Derivative Assets, Cash Flow Hedge, Fair Value	13	7
Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member]
Derivative Assets [Abstract]
Derivative Assets, Cash Flow Hedge, Fair Value	4	0
Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Payables And Other Current Liabilities [Member]
Derivative Liabilities [Abstract]
Derivative Liability, Cash Flow Hedge, Fair Value	11	13
Commodity Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]
Derivative Liabilities [Abstract]
Derivative Liability, Cash Flow Hedge, Fair Value	6	0
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Derivative Assets [Abstract]
Derivative Assets, Cash Flow Hedge, Fair Value	13	8
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member]
Derivative Assets [Abstract]
Derivative Assets, Cash Flow Hedge, Fair Value	12	13
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Payables And Other Current Liabilities [Member]
Derivative Liabilities [Abstract]
Derivative Liability, Cash Flow Hedge, Fair Value	14	8
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]
Derivative Liabilities [Abstract]
Derivative Liability, Cash Flow Hedge, Fair Value	$ 15	$ 3

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EARNINGS AND DIVIDENDS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings per share, basic and diluted

	Third Quarter		First Nine Months
	2013	2012	2013	2012
Shares used for earnings per share calculation (in millions):
Basic	154.0	152.9	154.3	142.8
Diluted	156.4	156.4	156.7	146.3

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ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES (GAINS), NET

9 Months Ended

Sep. 30, 2013

Restructuring Costs and Asset Impairment Charges [Abstract]

ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES (GAINS), NET

ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET

In third quarter and first nine months2013, there were $3 million and $24 million, respectively, of net asset impairments and restructuring charges, including $3 million and $9 million, respectively, of restructuring charges primarily for severance associated with the continued integration of Solutia.

During first nine months 2013, management announced its intent and finalized its decision to close a production facility in Germany for the Photovoltaics product line. This resulted in the Company recognizing asset impairments of $7 million and restructuring charges of $5 million including charges for severance. During first nine months 2013, management also approved and recorded severance charges of $6 million primarily for a voluntary separation plan for certain employees. In addition, during first nine months2013, a change in estimate for certain costs for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site resulted in a reduction of $4 million to previously recorded asset impairments and restructuring charges. Analysis of total site shutdown costs is ongoing and is subject to the finalization of certain aspects of the operating agreement termination.

In third quarter and first nine months2012, there were $37 million of asset impairments and restructuring charges. Restructuring charges of $28 million were for severance costs associated with the acquisition and integration of Solutia. The Company also recognized asset impairments of $9 million, primarily related to land retained from the previously discontinued Beaumont, Texas industrial gasification project. Based on fair value indicators, the carrying value of the Beaumont land was reduced by $6 million. For additional information related to the acquisition of Solutia, see Note 2, "Acquisitions and Investments in Joint Ventures".

Changes in Reserves for Asset Impairments, Restructuring Charges, and Severance Charges

The following table summarizes the changes in other asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in shutdown reserves for severance costs and site closure costs paid for full year 2012 and first nine months2013:

(Dollars in millions)	Balance at January 1, 2012		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at December 31, 2012
Non-cash charges, net	$	—	$	43	$	(43	)	$	—		$	—
Severance costs	2		34		—			(32		)	4
Site closure and restructuring costs	—		43		(20		)	(2		)	21
Total	$	2	$	120	$	(63	)	$	(34	)	$	25

(Dollars in millions)	Balance at January 1, 2013		Provision/ Adjustments		Non-cash Reductions/ Adjustments			Cash Reductions			Balance at September 30, 2013
Non-cash charges, net	$	—	$	8	$	(8	)	$	—		$	—
Severance costs	4		16		1			(8		)	13
Site closure and restructuring costs	21		—		(1		)	(8		)	12
Total	$	25	$	24	$	(8	)	$	(16	)	$	25

The costs remaining for severance are expected to be applied to the reserves within one year.

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ENVIRONMENTAL MATTERS

9 Months Ended

Sep. 30, 2013

Accrual for Environmental Loss Contingencies Disclosure [Abstract]

Environmental Matters

ENVIRONMENTAL MATTERS

Certain Eastman manufacturing sites generate hazardous and nonhazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies.  In connection with the cleanup of various hazardous waste sites, the Company, along with many other entities, has been designated a potentially responsible party ("PRP") by the U.S. Environmental Protection Agency under the Comprehensive Environmental Response, Compensation and Liability Act, which potentially subjects PRPs to joint and several liability for such cleanup costs.  In addition, the Company will be required to incur costs for environmental remediation and closure and postclosure under the federal Resource Conservation and Recovery Act.  Reserves for environmental contingencies have been established in accordance with Eastman's policies described in Note 1, "Significant Accounting Policies" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K. The Company's total reserve for environmental contingencies was $373 million and $394 million at September 30, 2013 and December 31, 2012, respectively.  At both September 30, 2013 and December 31, 2012, this reserve included $8 million related to sites previously closed and impaired by Eastman and sites that have been divested by Eastman but for which the Company retains the environmental liability related to these sites.

Estimated future environmental expenditures for remediation costs ranged from the minimum or best estimate of $344 million to the maximum of $600 million and from the minimum or best estimate of $365 million to the maximum of $623 million at September 30, 2013 and December 31, 2012, respectively.  The maximum estimated future costs are considered to be reasonably possible and include the amounts accrued at both September 30, 2013 and December 31, 2012.  Although the resolution of uncertainties related to these environmental matters may have a material adverse effect on the Company's consolidated results of operations in the period recognized, because of expected sharing of costs, the availability of legal defenses, and the Company's preliminary assessment of actions that may be required, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position or cash flows.  

For facilities that have asset retirement obligations, the best estimate accrued to date over the facilities' estimated useful lives for these asset retirement obligation costs was $29 million at both September 30, 2013 and December 31, 2012. 

Reserves for environmental remediation that management believes to be probable and estimable are recorded as current and long-term liabilities in the Unaudited Consolidated Statements of Financial Position. These reserves include liabilities expected to be paid out within 30 years. Changes in the reserves for environmental remediation liabilities during first nine months2013 including net charges taken, which are included in cost of goods sold, and cash reductions are summarized below:

(Dollars in millions)	Environmental Remediation Liabilities
Balance at December 31, 2012	$	365
Net charges taken	—
Cash reductions	(21		)
Balance at September 30, 2013	$	344

The Company's total environmental reserve for environmental contingencies, including remediation costs and asset retirement obligations, is recorded in the Unaudited Consolidated Statements of Financial Position as follows:

(Dollars in millions)	September 30, 2013		December 31, 2012
Environmental contingent liabilities, current	$	35	$	35
Environmental contingent liabilities, long-term	338		359
Total	$	373	$	394

On July 2, 2012, as described in Note 2, "Acquisitions and Investments in Joint Ventures", the Company completed the acquisition of Solutia, resulting in a $368 million increase to the Company's reserve for remediation costs and $1 million in additional asset retirement obligation costs. Included in the additional remediation reserve are costs associated with damages to natural resources. The additional environmental remediation reserve includes costs of $149 million and $107 million related to the Anniston, Alabama and the Sauget, Illinois plant sites, respectively.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company's products and operations are currently managed and reported in five operating segments -- Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, Fibers, and Specialty Fluids & Intermediates. Sales revenue for Perennial Wood™ and the Photovoltaics product line acquired from Solutia is shown in the tables below as "other" sales revenue. R&D, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown in the tables below as "other" operating earnings (loss).  For additional information concerning the Company's segments' businesses and products, see Note 23, "Segment Information" to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

Included in third quarter and first nine months2013 "other" operating loss were Solutia acquisition integration costs of $9 million and $24 million, respectively, and restructuring charges of $3 million and $9 million, respectively, primarily for severance associated with the continued integration of Solutia. Included in third quarter and first nine months2012 "other" operating loss were Solutia acquisition transaction costs of $15 million and $28 million, respectively, and integration costs of $7 million and $9 million, respectively, and restructuring charges of $28 million in both periods for the acquisition of Solutia.

	Third Quarter
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	445	$	406
Adhesives & Plasticizers	321		348
Advanced Materials	583		559
Fibers	363		349
Specialty Fluids & Intermediates	620		592
Total Sales by Segment	2,332		2,254
Other	6		5
Total Sales	$	2,338	$	2,259
	First Nine Months
(Dollars in millions)	2013		2012
Sales
Additives & Functional Products	$	1,294	$	948
Adhesives & Plasticizers	1,005		1,094
Advanced Materials	1,792		1,166
Fibers	1,072		990
Specialty Fluids & Intermediates	1,904		1,728
Total Sales by Segment	7,067		5,926
Other	18		7
Total Sales	$	7,085	$	5,933

	Third Quarter
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)	$	111		$	86
Adhesives & Plasticizers	41			73
Advanced Materials (1)	69			18
Fibers	113			98
Specialty Fluids & Intermediates (1)	90			79
Total Operating Earnings by Segment	424			354
Other (2)
Growth initiatives and businesses not allocated to segments (3)	(20		)	(36		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	87			(5		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(12		)	(50		)
Total Operating Earnings	$	479		$	263
	First Nine Months
(Dollars in millions)	2013			2012
Operating Earnings (Loss)
Additives & Functional Products (1)(5)(6)	$	313		$	215
Adhesives & Plasticizers (5)	139			211
Advanced Materials (1)(5)(6)	216			86
Fibers	343			295
Specialty Fluids & Intermediates (1)(5)	302			204
Total Operating Earnings by Segment	1,313			1,011
Other (2)
Growth initiatives and businesses not allocated to segments (3)(7)	(73		)	(84		)
Pension and OPEB income (expense) and gain (loss) not allocated to operating segments (4)	93			(18		)
Transaction, integration, and severance costs related to the acquisition of Solutia (5)	(33		)	(65		)
Total Operating Earnings	$	1,300		$	844

⁽¹⁾  Included in third quarter and first nine months2012 are additional costs of $19 million, $39 million, and $17 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, of acquired Solutia inventories. See Note 2, "Acquisitions and Investments in Joint Ventures."

⁽²⁾  Research and development, certain components of pension and OPEB, and other expenses and income not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown as "other" operating earnings (loss).

⁽³⁾  Included in third quarter and first nine months 2012 are $9 million in asset impairments, primarily of land retained from the previously discontinued Beaumont, Texas industrial gasification project. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁴⁾  Included in third quarter and first nine months 2013 earnings is a mark-to-market OPEB gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."

⁽⁵⁾  Included in third quarter and first nine months 2013 earnings are restructuring charges of $3 million in "Other" and included in first nine months 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, primarily for severance. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁶⁾  Included in first nine months 2013 earnings is a reduction in previous charges for the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site, which is reported as reductions of $1 million and $3 million in the Additives & Functional Products and Advanced Materials segments, respectively. See Note 14, "Asset Impairments and Restructuring Charges, Net".

⁽⁷⁾  Included in first nine months 2013 earnings are asset impairments and restructuring charges of $13 million primarily for closure costs of a production facility in Germany for the Photovoltaics product line.

	September 30,		December 31,
(Dollars in millions)	2013		2012
Assets by Segment (1)
Additives & Functional Products	$	2,947	$	2,892
Adhesives & Plasticizers	987		1,088
Advanced Materials	3,803		3,744
Fibers	966		937
Specialty Fluids & Intermediates	2,079		1,987
Total Assets by Segment	10,782		10,648
Corporate Assets	945		971
Total Assets	$	11,727	$	11,619

⁽¹⁾  The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.

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SHARE-BASED COMPENSATION AWARDS

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION AWARDS

SHARE-BASED COMPENSATION AWARDS

The Company utilizes share-based awards under employee and non-employee director compensation programs.  These share-based awards may include restricted and unrestricted stock, restricted stock units, stock options, and performance shares.  In third quarter2013 and 2012, approximately $8 million and $7 million, respectively, of compensation expense before tax were recognized in selling, general and administrative expense in the Unaudited Consolidated Statements of Earnings for all share-based awards. The impact on both third quarter2013 and 2012 net earnings of approximately $5 million is net of deferred tax expense related to share-based award compensation for each period.

In first nine months2013 and 2012, approximately $27 million and $24 million, respectively, of compensation expense before tax were recognized in selling, general and administrative expense in the Unaudited Consolidated Statements of Earnings for all share-based awards. The impact on first nine months2013 and 2012 net earnings of approximately $17 million and $15 million, respectively, is net of deferred tax expense related to share-based award compensation for each period.

For additional information regarding share-based compensation plans and awards, see Note 21, "Share-Based Compensation Plans and Awards", to the consolidated financial statements in Part II, Item 8 of the Company's 2012 Annual Report on Form 10-K.

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Document and Entity Information (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	EASTMAN CHEMICAL CO
Entity Central Index Key	0000915389
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 7,718,806,138
Entity Common Stock, Shares Outstanding	153,920,316
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013

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SUPPLEMENTAL CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2013

Supplemental Cash Flow Information [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

Included in the line item "Other items, net" of the "Cash flows from operating activities" section of the Unaudited Consolidated Statements of Cash Flows are the following changes to balance sheet line items:

(Dollars in millions)	First Nine Months
	2013			2012
Current assets	$	(1	)	$	(15	)
Other assets	20			45
Current liabilities	(24		)	2
Long-term liabilities and equity	(98		)	(54		)
Total	$	(103	)	$	(22	)

These changes included transactions such as monetized positions from raw material and energy, currency, and certain interest rate hedges, prepaid insurance, miscellaneous deferrals, accrued taxes, interest accruals, environmental accruals, and other miscellaneous accruals.