EX-99.01 14 emnexhibit990113q42013data.htm EXHIBIT EMN Exhibit 99.01 13Q4 2013 Databook




















Eastman Chemical Company
2013 Databook

1


Contents




  


















Eastman Chemical Company's products and operations are managed and reported in five reportable operating segments, consisting of Additives and Functional Products, Adhesives and Plasticizers, Advanced Materials, Fibers, and Specialty Fluids and Intermediates. Goods and services are transferred among the segments at cost.

Unless otherwise noted, information provided in this databook prior to 2013 is presented on a pro forma combined basis. The unaudited pro forma financial results for years ended December 31, 2012, 2011, 2010, and 2009 and the respective interim quarters combine the consolidated results of Eastman and Solutia giving effect to the acquisition of Solutia as if it had been completed on January 1, 2009, the beginning of the comparable prior annual reporting period presented.  For more information, see Exhibit A.


2


Eastman at a glance

Additives & Functional Products
 
 
Key Competitors:
Specialty Materials: Bayer AG, Styron LLC, Evonik Industries AG, Saudi Basic Industries Corporation, Mitsubishi Chemical Corporation, S.K. Chemical Industries, Sichuan Push Acetati Company Limited, Daicel Chemical Industries Ltd.
Interlayers: Sekisui Chemical Co., DuPont, Kuraray Co., Ltd.
Performance Films: 3M Company, Saint- Gobain S.A., Commonwealth Laminating & Coating, Inc., Garware Chemicals Limited

2013 Sales Revenue:
$1,719 million
 
2013 Operating Earnings:
406
 million
 
2013 Depreciation & Amortization Expense
95
 million
 
Key Products:
Solvents: TexanolTM, Ketones, Esters, Glycol Ethers, Alcohol Solvents
Polymers: Cellulosic, Polyester, and Polyolefin-based Polymers
Insoluble Sulfur: Marketed under the Crystex® brand
Antidegradants: Marketed under the Santoflex® brand
Key Markets & Applications:
Transportation: Insoluble sulfur and antidegradants used in rubber tire manufacturing, polymers and solvents used in OEM and refinish coatings
Building & Construction: Solvents used in architectural coatings
Durable Goods: Polymers and solvents used in industrial coatings applications
Key Raw Materials: Propane, Propylene, Napthenic Process Oil, Nitrobenzene, Methyl Isobutyl Ketone, Aniline, Sulfur, Ethane
Key Competitors: BASF SE, Dow, Oriental Carbon & Chemicals, Ltd., Shikoku Chemicals Corporation, Jiangsu Sinorgchem Technology Co. Ltd., Korea Kumho Petrochemical Co., Ltd., Lanxess AG
 
 
 
Fibers
 
 
2013 Sales Revenue:
$1,441 million
 
2013 Operating Earnings:
462
 million
 
2013 Depreciation & Amortization Expense
65
 million
 
Key Products:
Acetate Tow 
Acetate Yarn 
Acetyl Chemical Products: Includes cellulose diacetate flake, acetylation-grade acetic acid, acetic anhydride, triacetin plasticizers
Key Markets & Applications:
Tobacco: Cigarette filters
Consumables: Apparel
Health & Wellness: Medical Tape
Key Raw Materials: Wood Pulp, Methanol, High Sulfur Coal
Key Competitors:
Acetate Tow: Celanese, Solvay S.A., Daicel, Mitsubishi Rayon
Acetate Yarn: Industrias del Acetato de Celulosa S.A., UAB Korelita, Mitsubishi Rayon
Acetyl Chemical Products: Jiangsu Ruijia Chemistry Co., Ltd., Polynt SPA, Daicel, Celanese, Solvay S.A.
 
 
 
 
Adhesives & Plasticizers
 
 
2013 Sales Revenue:
$1,326 million
 
2013 Operating Earnings:
173
 million
 
2013 Depreciation & Amortization Expense
45
 million
 
Key Products:
Resins: Hydrocarbon Resins (PiccotacTM, Regalite™, Eastotac™), Rosins
Plasticizers: Primary Non-Phthalate and Phthalate Plasticizers (Eastman 168™, Eastman DOPTM), Niche Non-Phthalate Plasticizers (Benzoflex™, Eastman TXIB™)
Key Markets & Applications:
Consumables: Resins used in hygiene and packaging adhesives
Building & Construction: Non-phthalate plasticizers used in interior surfaces, resins for construction adhesives and interior flooring
Key Raw Materials: Propane, C9 Resin Oil, Piperylene, Propylene, Gum Rosin, Paraxylene
Key Competitors: BASF SE, Exxon Mobil Corp., LG Chem, Ltd.,
 
Specialty Fluids & Intermediates
 
 
2013 Sales Revenue:
$2,497 million
 
2013 Operating Earnings:
364
 million
 
2013 Depreciation & Amortization Expense
80
 million
 
Key Products:
Specialty Fluids: Heat transfer fluids marketed under the Therminol® brand, aviation hydraulic fluids marketed under the Skydrol® brand
Chemical Intermediates: Oxo alcohols and derivatives, acetic derivatives, acetic anhydride
Other Intermediates: Lower-margin intermediates produced to achieve high capacity utilization (includes ethylene, low-margin grades of acetic acid, oxo alcohols, and polymer intermediates)
Key Markets & Applications:
Industrial Chemicals & Processing: Heat transfer fluids for chemical processes, olefin & acetyl-based intermediates serving a wide range of industrial processing needs
Building & Construction: Intermediates for paint/coating applications, construction chemicals, building materials
Key Raw Materials: Propane, Ethane, Propylene, Coal, Metaxylene, Benzene, Natural Gas, Paraxylene
Key Competitors: BASF SE, Celanese, Dow, Exxon Mobil Corp.
 
 
 
Advanced Materials
 
 
2013 Sales Revenue:
$2,349 million
 
2013 Operating Earnings:
260
 million
 
2013 Depreciation & Amortization Expense
144
 million
 
Key Products:
Specialty Plastics: Specialty Copolyesters (including Eastman Tritan™), Cellulose Esters
Interlayers: PVB resin used as an adhesive interlayers in the production of laminated safetly glass and primarily marketed under the SAFLEX® brand name
Performance Films: Aftermarket window film products including the LLumar® and V-Kool® brands
Key Markets & Applications:
Transportation: Interlayers for automotive safety glass, automotive after-market window film
Consumables: Specialty copolyesters used in consumer packaging, personal care and cosmetics packaging, in-store fixtures and displays
Building & Construction: PVB for architectural interlayers, residential and commercial window films
Durable Goods: Specialty copolyesters and cellulose esters used in consumer housewares and appliances
Key Raw Materials: Paraxylene, Polyvinyl Alcohol, Ethylene Glycol, Cellulose, Polyethylene Terephthalate Film, Vinyl Acetate Monomer, Butyraldehyde, 2-EH, Ethanol
 
 
 
Eastman Chemical Company
 
2013 Sales Revenue by end-market
 
Transportation
Consumables
Building & Construction
Tobacco
Industrial Chemicals & Processing
Durable Goods
Health & Wellness
Energy, Fuels & Water
Electronics
Agriculture
Other
17 %
16 %
16 %
15 %
14 %
  7 %
  6 %
  3 %
  2 %
  2 %
  2 %

 
 
 
 
 
 
 
 

3


Regions
Global manufacturing locations



Sales revenue by region
(Dollars in millons)
 
 
 
 
 
Year
2013
2012
2011
2010
United States and Canada
$
4,290

$
4,264

$
4,364

$
3,468

Asia Pacific
2,584

2,396

2,315

2,023

Europe, Middle East, and Africa
1,975

1,968

2,119

1,855

Latin America
501

492

477

446

 
 
 
 
 
Eastman Chemical Company
$
9,350

$
9,120

$
9,275

$
7,792



4


Financial information


(Dollars in millions, except per share amounts)

Selected operating items
2013
2012
2011
2010
2009
Sales
$
9,350

$
9,120

$
9,275

$
7,792

$
6,014

Operating earnings
1,921

1,120

1,254

1,199

302

Additional costs of acquired Solutia inventories




79

Transaction and integration related to the acquisition of Solutia




69

Mark-to-market pension and other postretirement benefits (gains) losses, net
(383
)
276

209

4

89

Asset impairments and restructuring charges, net
53

93

11

45

281

Other operating (income) expense


(46
)

2

Operating earnings excluding non-core or non-recurring items
1,591

1,489

1,428

1,248

822

Depreciation and amortization expense
433

438

429

395

384

 
 
 
 
 
 
Diluted earnings from continuing operations per share*
7.44

2.92

4.24

2.81

0.76

Additional costs of acquired Solutia inventories, net of tax

0.37




Solutia transaction and integration costs, net of tax
0.15

0.35




Asset impairments and restructuring charges, net of tax
0.34

0.54

(0.03
)
0.12

0.86

Mark-to-market pension and other postretirement benefits (gains) losses, net of tax
(1.49
)
1.20

0.60

0.22

0.39

Early debt extinguishment costs, net of tax



0.48


Diluted earnings from continuing operations per share excluding non-core or non-recurring items
6.44

5.38

4.81

3.63

2.01



























* Diluted earnings from continuing operations per share and excluded items are presented on an Eastman historical basis as reported in the 2013 Annual Report to Shareholders on Form 10-K and the Current Report on Form 8-K dated January 30, 2014


5





Product and raw material information








6

2013 segment information

(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Additives & Functional Products
Sales
$
419

$
430

$
445

$
425

$
1,719

Operating earnings
98

104

111

92

405

Asset impairments and restructuring charges, net (1)(2)

1



1

Operating earnings excluding non-core or non-recurring item
98

105

111

92

406

Depreciation and amortization expense
 
 
 
 
95

Adhesives & Plasticizers
Sales
$
345

$
339

$
321

$
321

$
1,326

Operating earnings
49

49

41

33

172

Asset impairments and restructuring charges, net (1)

1



1

Operating earnings excluding non-core or non-recurring item
49

50

41

33

173

Depreciation and amortization expense
 
 
 
 
45

Advanced Materials
Sales
$
584

$
625

$
583

$
557

$
2,349

Operating earnings
65

82

69

41

257

Asset impairments and restructuring charges, net (1)(2)(3)

(1
)

4

3

Operating earnings excluding non-core or non-recurring item
65

81

69

45

260

Depreciation and amortization expense
 
 
 
 
144

Fibers
Sales
$
346

$
363

$
363

$
369

$
1,441

Operating earnings
114

116

113

119

462

Depreciation and amortization expense
 
 
 
 
65

Specialty Fluids & Intermediates
Sales
$
607

$
677

$
620

$
593

$
2,497

Operating earnings
95

117

90

61

363

Asset impairments and restructuring charges, net (1)

1



1

Operating earnings excluding non-core or non-recurring item
95

118

90

61

364

Depreciation and amortization expense
 
 
 
 
80

Other (4)
Sales (5)
$
6

$
6

$
6

$

$
18

Operating (loss) earnings
 
 
 
 
 
Growth initiatives and businesses not allocated to segments
(21
)
(32
)
(20
)
(59
)
(132
)
Pension and other postretirement benefits gain (loss) not allocated to operating segments
3

3

87

301

394

Operating (loss) earnings before non-core or non-recurring items
(18
)
(29
)
67

242

262

Mark-to-market pension and other postretirement benefits losses (gains), net (6)


(86
)
(297
)
(383
)
Asset impairments and restructuring charges, net (7)(8)

13


34

47

Operating loss excluding non-core or non-recurring items
(18
)
(16
)
(19
)
(21
)
(74
)
Depreciation and amortization expense
 
 
 
 
4

Eastman Chemical Company
Sales
$
2,307

$
2,440

$
2,338

$
2,265

$
9,350

Operating earnings
403

439

491

588

1,921

Mark-to-market pension and other postretirement benefits losses (gains), net (6)


(86
)
(297
)
(383
)
Asset impairments and restructuring charges, net (1)(2)(3)(7)(8)

15


38

53

Operating earnings excluding non-core or non-recurring items
403

454

405

329

1,591

Depreciation and amortization expense
 
 
 
 
433



Note: See Exhibit B for footnotes.

7

2012 segment information

(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Additives & Functional Products
Sales
$
400

$
423

$
406

$
384

$
1,613

Operating earnings
94

107

105

72

378

Asset impairments and restructuring charges, net (1)(2)(3)



17

17

Operating earnings excluding non-core or non-recurring item
94

107

105

89

395

Depreciation and amortization expense
 
 
 
 
93

Adhesives & Plasticizers
Sales
$
374

$
372

$
348

$
338

$
1,432

Operating earnings
66

72

73

49

260

Asset impairments and restructuring charges, net (1)



3

3

Operating earnings excluding non-core or non-recurring item
66

72

73

52

263

Depreciation and amortization expense
 
 
 
 
46

Advanced Materials
Sales
$
567

$
600

$
559

$
528

$
2,254

Operating earnings
57

62

57


176

Asset impairments and restructuring charges, net (1)(2)(4)
4

1


29

34

Operating earnings excluding non-core or non-recurring item
61

63

57

29

210

Depreciation and amortization expense
 
 
 
 
144

Fibers
Sales
$
323

$
318

$
349

$
325

$
1,315

Operating earnings
101

96

98

90

385

Asset impairments and restructuring charges, net (1)



3

3

Operating earnings excluding non-core or non-recurring item
101

96

98

93

388

Depreciation and amortization expense
 
 
 
 
66

Specialty Fluids & Intermediates
Sales
$
642

$
649

$
592

$
590

$
2,473

Operating earnings
73

97

96

84

350

Asset impairments and restructuring charges, net (1)(2)



9

9

Operating earnings excluding non-core or non-recurring item
73

97

96

93

359

Depreciation and amortization expense
 
 
 
 
82

Other (5)
Sales
$
13

$
11

$
5

$
4

$
33

Operating loss
 
 
 
 
 
Growth initiatives and businesses not allocated to segments
(25
)
(26
)
(36
)
(48
)
(135
)
Pension and other postretirement benefit gain (loss) not allocated to operating segments
(7
)
(6
)
(5
)
(276
)
(294
)
Operating loss before non-core or non-recurring items
(32
)
(32
)
(41
)
(324
)
(429
)
Mark-to-market pension and other postretirement benefits losses (gains), net (6)



276

276

Asset impairments and restructuring charges, net (1)(7)


9

18

27

Operating loss excluding non-core or non-recurring items
(32
)
(32
)
(32
)
(30
)
(126
)
Depreciation and amortization expense
 
 
 
 
7

Eastman Chemical Company
Sales
$
2,319

$
2,373

$
2,259

$
2,169

$
9,120

Operating earnings (loss)
359

402

388

(29
)
1,120

Mark-to-market pension and other postretirement benefits losses (gains), net (6)



276

276

Asset impairments and restructuring charges, net (1)(2)(3)(4)(7)
4

1

9

79

93

Operating earnings excluding non-core or non-recurring items
363

403

397

326

1,489

Depreciation and amortization expense
 
 
 
 
438




Note: See Exhibit B for footnotes.

8

2011 segment information

(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Additives & Functional Products
Sales
$
429

$
437

$
412

$
399

$
1,677

Operating earnings
125

105

84

68

382

Other operating income (1)
(17
)



(17
)
Operating earnings excluding non-core or non-recurring item
108

105

84

68

365

Depreciation and amortization expense
 
 
 
 
95

Adhesives & Plasticizers
Sales
$
340

$
371

$
349

$
321

$
1,381

Operating earnings
70

70

61

49

250

Depreciation and amortization expense
 
 
 
 
44

Advanced Materials
Sales
$
574

$
632

$
558

$
549

$
2,313

Operating earnings
69

82

63

37

251

Depreciation and amortization expense
 
 
 
 
135

Fibers
Sales
$
290

$
331

$
334

$
324

$
1,279

Operating earnings
86

97

98

84

365

Depreciation and amortization expense
 
 
 
 
68

Specialty Fluids & Intermediates
Sales
$
612

$
638

$
657

$
641

$
2,548

Operating earnings
76

79

69

47

271

Asset impairments and restructuring charges, net (2)


7


7

Operating earnings excluding non-core or non-recurring item
76

79

76

47

278

Depreciation and amortization expense
 
 
 
 
80

Other (3)
Sales
$
21

$
20

$
20

$
16

$
77

Operating (loss) earnings
 
 
 
 
 
Growth initiatives and businesses not allocated to segments
(20
)
5

10

(24
)
(29
)
Pension and other postretirement benefit gain (loss) not allocated to operating segments
9

(5
)
(10
)
(230
)
(236
)
Operating loss before non-core or non-recurring items
(11
)


(254
)
(265
)
Mark-to-market pension and other postretirement benefits losses (gains), net (4)
(15
)


224

209

Asset impairments and restructuring charges, net (5)(6)(7)
12

(14
)
6


4

Other operating expense (income) (8)


(29
)

(29
)
Operating loss excluding non-core or non-recurring items
(14
)
(14
)
(23
)
(30
)
(81
)
Depreciation and amortization expense
 
 
 
 
7

Eastman Chemical Company
Sales
$
2,266

$
2,429

$
2,330

$
2,250

$
9,275

Operating earnings
415

433

375

31

1,254

Mark-to-market pension and other postretirement benefits losses (gains), net (4)
(15
)


224

209

Asset impairments and restructuring charges, net (2)(5)(6)(7)
12

(14
)
13


11

Other operating expense (income) (1)(8)
(17
)

(29
)

(46
)
Operating earnings excluding non-core or non-recurring items
395

419

359

225

1,428

Depreciation and amortization expense
 
 
 
 
429







Note: See Exhibit B for footnotes.


9

2010 segment information

(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Additives & Functional Products
Sales
$
377

$
405

$
401

$
377

$
1,560

Operating earnings
81

106

104

70

361

Asset impairments and restructuring charges, net (1)(2)
5

4

1

5

15

Other operating income (3)



(5
)
(5
)
Operating earnings excluding non-core or non-recurring items
86

110

105

70

371

Depreciation and amortization expense
 
 
 
 
90

Adhesives & Plasticizers
Sales
$
217

$
283

$
276

$
274

$
1,050

Operating earnings
34

50

55

43

182

Asset impairments and restructuring charges, net (2)

3


2

5

Operating earnings excluding non-core or non-recurring item
34

53

55

45

187

Depreciation and amortization expense
 
 
 
 
37

Advanced Materials
Sales
$
486

$
545

$
526

$
513

$
2,070

Operating earnings
52

56

57

38

203

Asset impairments and restructuring charges, net (2)
1



5

6

Operating earnings excluding non-core or non-recurring item
53

56

57

43

209

Depreciation and amortization expense
 
 
 
 
129

Fibers
Sales
$
267

$
274

$
301

$
300

$
1,142

Operating earnings
82

85

93

79

339

Asset impairments and restructuring charges, net (2)



3

3

Operating earnings excluding non-core or non-recurring item
82

85

93

82

342

Depreciation and amortization expense
 
 
 
 
61

Specialty Fluids & Intermediates
Sales
$
468

$
485

$
487

$
467

$
1,907

Operating earnings
42

65

67

40

214

Asset impairments and restructuring charges, net (2)



4

4

Operating earnings excluding non-core or non-recurring item
42

65

67

44

218

Depreciation and amortization expense
 
 
 
 
72

Other
Sales
$
4

$
12

$
26

$
21

$
63

Operating loss
 
 
 
 
 
Growth initiatives and businesses not allocated to segments
(14
)
(14
)
(10
)
(20
)
(58
)
Pension and other postretirement benefit gain (loss) not allocated to operating segments
(8
)
(10
)
(9
)
(15
)
(42
)
Operating loss before non-core or non-recurring items
(22
)
(24
)
(19
)
(35
)
(100
)
Mark-to-market pension and other postretirement benefits losses (gains), net (5)



4

4

Asset impairments and restructuring charges, net (2)(6)
1

1


10

12

Other operating income (7)


5


5

Operating loss excluding non-core or non-recurring item
(21
)
(23
)
(14
)
(21
)
(79
)
Depreciation and amortization expense
 
 
 
 
6

Eastman Chemical Company
Sales
$
1,819

$
2,004

$
2,017

$
1,952

$
7,792

Operating earnings
269

338

357

235

1,199

Mark-to-market pension and other postretirement benefits losses (gains), net (5)



4

4

Asset impairments and restructuring charges, net (1)(2)(6)
7

8

1

29

45

Other operating income (3)(7)


5

(5
)

Operating earnings excluding non-core or non-recurring items
276

346

363

263

1,248

Depreciation and amortization expense
 
 
 
 
395


Note: See Exhibit B for footnotes.

10

2009 segment information

(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Additives & Functional Products
Sales
$
261

$
305

$
350

$
345

$
1,261

Operating earnings
17

64

100

101

282

Additional costs of acquired Solutia inventories (1)
21




21

Asset impairments and restructuring charges, net (2)(3)(4)(5)
6

(5
)

1

2

Other operating income (6)



(4
)
(4
)
Operating earnings excluding non-core or non-recurring items
44

59

100

98

301

Depreciation and amortization expense
 
 
 
 
87

Adhesives & Plasticizers
Sales
$
149

$
167

$
182

$
181

$
679

Operating earnings
2

18

34

30

84

Asset impairments and restructuring charges, net (2)
4

(1
)


3

Operating earnings excluding non-core or non-recurring item
6

17

34

30

87

Depreciation and amortization expense
 
 
 
 
37

Advanced Materials
Sales
$
324

$
401

$
435

$
464

$
1,624

Operating (loss) earnings
(62
)
34

48

37

57

Additional costs of acquired Solutia inventories (1)
41




41

Asset impairments and restructuring charges, net (2)(7)(8)
18

5

2

7

32

Operating (loss) earnings excluding non-core or non-recurring items
(3
)
39

50

44

130

Depreciation and amortization expense
 
 
 
 
123

Fibers
Sales
$
259

$
263

$
257

$
253

$
1,032

Operating earnings
72

77

82

77

308

Asset impairments and restructuring charges, net (2)
4




4

Operating earnings excluding non-core or non-recurring item
76

77

82

77

312

Depreciation and amortization expense
 
 
 
 
62

Specialty Fluids & Intermediates
Sales
$
302

$
323

$
378

$
396

$
1,399

Operating earnings (loss)
(18
)
16

36

28

62

Additional costs of acquired Solutia inventories (1)
17




17

Asset impairments and restructuring charges, net (2)
5




5

Operating earnings excluding non-core or non-recurring items
4

16

36

28

84

Depreciation and amortization expense
 
 
 
 
71

Other
Sales
$
6

$
6

$
4

$
3

$
19

Operating loss
 
 
 
 
 
Growth initiatives and businesses not allocated to segments
(16
)
(11
)
(20
)
(199
)
(246
)
Pension and other postretirement benefit gain (loss) not allocated to operating segments
(17
)
(17
)
(17
)
(93
)
(144
)
Transaction and integration related to the acquisition of Solutia
(160
)



(160
)
Operating loss before non-core or non-recurring items
(193
)
(28
)
(37
)
(292
)
(550
)
Transaction, integration, and restructuring costs related to the acquisition of Solutia
105




105

Mark-to-market pension and other postretirement benefits losses (gains), net (10)


8

81

89

Asset impairments and restructuring charges, net (2)(11)(12)
62


8

188

258

Other operating loss (13)


6


6

Operating loss excluding non-core or non-recurring items
(26
)
(28
)
(15
)
(23
)
(92
)
Depreciation and amortization expense
 
 
 
 
4

Eastman Chemical Company
Sales
$
1,301

$
1,465

$
1,606

$
1,642

$
6,014

Operating earnings (loss)
(182
)
181

263

(19
)
243

Additional costs of acquired Solutia inventories (1)
79




79

Transaction, integration, and restructuring costs related to the acquisition of Solutia
105




105

Mark-to-market pension and other postretirement benefits losses (gains), net (10)


8

81

89

Asset impairments and restructuring charges, net (1)(2)(3)(4)(5)(7)(8)(11)(12)
99

(1
)
10

196

304

Other operating loss (income) (6)(13)


6

(4
)
2

Operating earnings excluding non-core or non-recurring items
101

180

287

254

822

Depreciation and amortization expense
 
 
 
 
384


Note: See Exhibit B for footnotes.

11


Exhibit A

Unaudited Pro Forma Combined Segment Information


The unaudited actual financial results for the year ended December 31, 2013 and the pro forma financial results for years ended December 31, 2012, 2011, 2010, and 2009 combine the consolidated results of Eastman and Solutia giving effect to the acquisition of Solutia as if it had been completed on January 1, 2009, the beginning of the comparable prior annual reporting period presented.   As a result, additional costs of acquired Solutia inventories and transaction, integration, and restructuring costs occurring in 2013 and 2012 have been reallocated to first quarter 2009. The unaudited pro forma financial results presented 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, 2009.

The unaudited pro forma combined segment information reflects the combination of Eastman and Solutia and the impact of increased depreciation and amortization expense resulting from the fair valuation of assets acquired from Solutia in accordance with Accounting Standards Codification No. 805, “Business Combinations.” The information also includes adjustments to Solutia historical information to be consistent with Eastman's change in method of accounting for actuarial gains and losses for its pension and other postretirement benefit plans and adjustments to Solutia exclusions from operating earnings consistent with Eastman's historical presentation of non-GAAP results. In addition, corporate expenses, adjustments to environmental liabilities, and gains and losses from asset dispositions and restructuring charges that were previously reported as “Other” have been allocated to Eastman's reportable segments using a percentage of total revenue methodology based on Solutia's full year 2011 results. This allocation of corporate overhead from “Other” to the reportable segments is in accordance with Eastman's presentation of such costs. In conjunction with the change in accounting principle, the service cost, which represents the benefits earned by active employees during the period, and amortization of prior service credits continue to be allocated to each segment. Interest costs, expected return on assets, and the mark-to-market (“MTM”) adjustment for actuarial gains and losses are included in corporate expense and not allocated to segments.


12


Exhibit B
Notes to segment information

Year
 
Footnote
 
 
 
2013
1
Second quarter and twelve months 2013 earnings include 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, in each case primarily for severance.
 
2
Second quarter and full year 2013 earnings include 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.
 
3
Fourth quarter and twelve months 2013 include asset impairments of $4 million in the Advanced Materials segment for the fourth quarter decision to terminate efforts to develop a continuous resin process in Kuantan, Malaysia and Antwerp, Belgium. 
 
4
Research and development, pension and other postretirement benefits, and other expenses not identifiable to an operating segment are not included in segment operating results for any of the periods presented and are shown as "other" operating earnings (loss).
 
5
Businesses not allocated to segments include the Perennial WoodTM growth initiative and Photovoltaics product line. See footnotes 7 and 8 to this table for more information.
 
6
Fourth quarter and twelve months 2013 MTM gains for pension and other postretirement benefit plans actuarial adjustments. MTM gains, net, in twelve months 2013 included an $86 million gain for the third quarter 2013 interim remeasurement of the Eastman other postretirement benefit plan obligation, triggered by a plan change in life insurance benefits.
 
7
Second quarter and twelve months 2013 earnings include asset impairments and restructuring charges of $14 million primarily for the shut-down of the Photovoltaics product line primarily in Germany.
 
8
Fourth quarter and twelve months 2013 include asset impairment and restructuring charges of approximately $30 million for management's decision not to pursue its Perennial WoodTM growth initiative.
 
 
 
2012
1
Fourth quarter includes asset impairments and restructuring charges of $3 million, $3 million, $5 million, $3 million, and $6 million in the Additives & Functional Products, Adhesives & Plasticizers, Advanced Materials, Fibers, and Specialty Fluids & Intermediates segments, respectively, primarily due to a change in approach to address recently finalized boiler air emissions regulations.
 
2
Amounts include business exit costs and asset impairments of $8 million, $24 million, and $3 million in the Additives & Functional Products, Advanced Materials, and Specialty Fluids & Intermediates segments, respectively, for production businesses exited in Sao Jose dos Campos, Brazil in fourth quarter.
 
3
Amount includes asset impairments and restructuring charges of $6 million related to the closure of a production facility in China.
 
4
Amounts include acquisition related expenses on the Southwall Technologies Inc. acquisition.
 
5
Research and development, pension and other postretirement benefit, and other expenses 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).
 
6
Amounts are MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments.
 
7
Fourth quarter includes restructuring charges of $17 million for inventory costs in excess of recoverable value of certain discontinued Perennial WoodTM product lines and to accrue for losses on take-or-pay contracts with third parties. Third and fourth quarters include asset impairments and restructuring charges of $3 million and $1 million, respectively, for termination of the research and development activities for renewable chemicals. Third quarter also includes a charge of $6 million for the impairment of land retained from the terminated Beaumont, Texas industrial gasification project.

13


Exhibit B (continued)
Notes to segment information

Year
 
Footnote
 
 
 
2011
1
Amount includes gains on certain other rubber chemicals divestitures.
 
2
Amount includes restructuring charges primarily for severance associated with the acquisition and integration of Sterling Chemicals, Inc.
 
3
Research and development, pension and other postretirement benefit, and other expenses 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).
 
4
MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments. First quarter 2011 included MTM gain of $15 million in due to the interim remeasurement of the other postretirement benefit plan obligation, triggered by the exit of employees associated with the sale of the PET business.
 
5
First quarter, second quarter, third quarter, and full year include $12 million, $1 million, $1 million, and $14 million, respectively, for severance, pension settlement and other charges related to the relocation of European regional headquarters.
 
6
Second quarter and full year include $15 million gain from the sale of the previously impaired methanol and ammonia assets related to the terminated Beaumont, Texas industrial gasification project.
 
7
Third quarter and full year include $3 million for severance and $2 million for share-based compensation costs on executive officer separation agreement.
 
8
Third quarter and full year include $29 million gain related to the sale of remaining 2% ownership interest in Ascend Performance Materials Holdings Inc.
 
 
 
2010
1
First, second, third, and fourth quarters reflect restructuring costs of $4 million, $4 million, $1 million, and $1 million, respectively, related to the closure of the Ruabon and Cologne facilities.
 
2
Includes charges for severance programs of: $1 million and $4 million in first and fourth quarters, respectively, in the Additives and Functional Products segment; $3 million and $2 million in second and fourth quarters, respectively, in the Adhesives and Plasticizers segment; $1 million and $5 million in first and fourth quarters, respectively, in the Advanced Materials segment; $3 million in fourth quarter in the Fibers segment; $4 million in fourth quarter in the Specialty Fluids and Intermediates segment; and $1 million, $1 million, and $2 million in first, second, and fourth quarters, respectively, in Other.
 
3
Includes gain on the sale of select assets of Perkalink.
 
4
Research and development, pension and other postretirement benefit, and other expenses 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).
 
5
Amounts include MTM losses (gains), net, for pension and other postretirement benefit plans actuarial adjustments.
 
6
Fourth quarter includes $8 million for intangible asset impairment charges resulting from an environmental regulatory change during the fourth quarter impacting the fair value of air emission credits remaining from the previously discontinued Beaumont, Texas, gasification project.
 
7
Includes loss on the sale of European Plastic Products business.

14


Exhibit B (continued)
Notes to segment information

Year
 
Footnote
 
 
 
2009
1
As required by purchase accounting, the acquired Solutia inventories were marked to fair value. These inventories were sold in 2012 resulting in an increase in cost of sales, net of the LIFO impact for these inventories in third and fourth quarters 2012. For purposes of this pro forma combined financial information, the acquisition is presented as if the acquisition of Solutia had been consummated on January 1, 2009
 
2
Includes charges and adjustments for corporate severance program of: charges of $5 million and $1 million in first and fourth quarters, respectively, and an adjustment of $1 million in second quarter in the Additives and Functional Products segment; a charge of $4 million in first quarter and an adjustment of $1 million in second quarter in the Adhesives and Plasticizers segment; charges of $14 million, $4 million, $2 million, and $4 million in first, second, third, and fourth quarters in the Advanced Materials segment; charges of $4 million in first quarter in the Fibers segment; a charge of $5 million in first quarter in the Specialty Fluids and Intermediates segment; and charges of $7 million, $2 million, and $9 million in first, second, and fourth quarters, respectively, in Other.
 
3
First quarter, second quarter, and fourth quarter include charges of $1 million, gains of $4 million, and charges of $1 million, respectively, related to the announced closure of the Ruabon facility.
 
4
Fourth quarter includes $2 million gain from the reversal of a reserve for previously divested businesses and product lines within the former Coatings, Adhesives, and Specialty Polymers and Inks segment.
 
5
Fourth quarter includes $1 million impairment of intangible assets related to the sale of the Thiurams business.
 
6
Reflects gain on the sale of the Thiurams business.
 
7
First quarter and second quarter include $4 million and $1 million, respectively, related to the announced closure of the SAFLEX® plastic interlayer production line at the Trenton facility.
 
8
Fourth quarter includes net charges of $3 million related to consolidation of certain European manufacturing and distribution sites.
 
9
Research and development, pension and other postretirement benefits, and other expenses 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).
 
10
Amounts include MTM losses (gains), net, for pension and other postretirement benefits plans actuarial adjustments.
 
11
Amounts include restructuring charges of $55 million primarily for severance related to the acquisition and integration of Solutia.
 
12
Fourth quarter includes $179 million for asset impairments related to the Company's previously announced discontinuance of its Beaumont, Texas industrial gasification project.
 
13
Third quarter includes loss on the sale of North America Plastic Products and related impairment of intangible assets.


15


Stockholder information

Stock exchange listing
Eastman Chemical Company common stock is listed and traded on the New York Stock Exchange under the ticker symbol EMN.

Dividends
Quarterly dividends on common stock, if declared by the Board of Directors, are usually paid on or about the first business day of the month following the end of each quarter. On a split-adjusted basis, dividends declared were $1.25 in 2013, $1.08 in 2012, $0.99 in 2011, and $0.895 in 2010.

Corporate offices
Eastman Chemical Company
200 S Wilcox Drive
P.O. Box 431
Kingsport, TN 37660-5280 U.S.A.
http://www.eastman.com

Stock transfer agent and registrar
Inquiries and changes to stockholder accounts should be directed to our transfer agent:

American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038

In the United States: 800-937-5449
Outside the United States: (1) 212-936-5100
or (1) 718-921-8200

http://www.amstock.com

Eastman stockholder information
877-EMN-INFO (877-366-4636)
http://www.eastman.com

Eastman Databook
Eastman Chemical Company's databook has been developed to assist investors in understanding and evaluating Eastman. It provides financial and operations data and other information about the Company and its operating segments. The notes to the financial statements are not included. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations appear in Eastman's Annual Report on Form 10-K and Annual Report to Stockholders, both of which are available on http://www.eastman.com.

Eastman Investor Relations
www.eastman.com/Company/Investors/Pages/Introduction.aspx
877-366-4636

Gregory Riddle
Vice President, Investor Relations and Communications 1-212-835-1620
griddle@eastman.com

Josh Morgan
Investor Relations Manager
1-423-229-5503
jmorgan@eastman.com




16

















Eastman Chemical Company Kingsport, Tennessee, U.S.A.
423.229.2000
www.eastman.com


17