SEGMENT INFORMATION

The Company's products and operations are currently managed and reported in five operating segments: Additives & Functional Products ("AFP"), Adhesives & Plasticizers ("A&P"), Advanced Materials ("AM"), Fibers, and Specialty Fluids & Intermediates ("SFI"). For additional information concerning the Company's segments' businesses and products, see Note 21, "Segment Information" to the consolidated financial statements in Part II, Item 8 of the Company's 2013 Annual Report on Form 10-K.

Included in third quarter and first nine months 2014 "other" was sales revenue from the acquired Knowlton business, part of the Eastman^TM microfibers technology platform. Included in third quarter and first nine months 2013 "other" sales revenue were the Perennial Wood™ growth initiative and the Photovoltaics product line acquired from Solutia in 2012. There was no sales revenue related to Perennial Wood™ included in third quarter or first nine months 2014 as a result of decisions made by management in 2013 not to continue its Perennial Wood^TM growth initiative.



	Third Quarter
(Dollars in millions)	2014		2013
Sales
Additives & Functional Products	$	458	$	445
Adhesives & Plasticizers	347		321
Advanced Materials	604		583
Fibers	346		363
Specialty Fluids & Intermediates	650		620
Total Sales by Segment	2,405		2,332
Other	8		6
Total Sales	$	2,413	$	2,338

	First Nine Months
(Dollars in millions)	2014		2013
Sales
Additives & Functional Products	$	1,333	$	1,294
Adhesives & Plasticizers	1,050		1,005
Advanced Materials	1,816		1,792
Fibers	1,086		1,072
Specialty Fluids & Intermediates	1,884		1,904
Total Sales by Segment	7,169		7,067
Other	9		18
Total Sales	$	7,178	$	7,085



	Third Quarter
(Dollars in millions)	2014			2013
Operating Earnings (Loss)
Additives & Functional Products ^(1)(2)(3)	$	37		$	111
Adhesives & Plasticizers	52			41
Advanced Materials ⁽³⁾	76			69
Fibers	112			113
Specialty Fluids & Intermediates ⁽⁴⁾	90			90
Total Operating Earnings by Segment	367			424
Other ⁽⁵⁾
Growth initiatives and businesses not allocated to segments ⁽⁶⁾	(18		)	(20		)
Pension and other postretirement benefit costs not allocated to operating segments ⁽⁷⁾	3			87
Acquisition transaction, integration, and restructuring costs ^(8)(9)(10)	(14		)	(12		)
Total Operating Earnings	$	338		$	479


⁽¹⁾	Included in third quarter 2014 earnings are asset impairments and restructuring charges of $42 million for costs of the planned closure of a Crystex^® R&D facility in France. This closure is subject to certain local legal and regulatory requirements.


⁽²⁾	Included in third quarter 2014 earnings is a $22 million asset impairment of the Crystex^® tradename.


⁽³⁾	Included in third quarter 2014 earnings are asset impairments and restructuring charges of $1 million and $4 million in the AFP and AM segments, respectively, related to a change in estimate of certain costs of the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site.


⁽⁴⁾	As required by purchase accounting, acquired BP plc global aviation turbine engine oil business inventories were marked to fair value. Included in third quarter 2014 earnings are additional costs of these inventories. Approximately 75 percent, or $6 million, of these inventories were sold in third quarter 2014 resulting in an increase in cost of sales.


⁽⁵⁾	R&D, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are not included in segment operating results and are shown as "other" operating earnings (loss).


⁽⁶⁾	Businesses not allocated to segments in 2013 included the Perennial Wood™ growth initiative and Photovoltaics product line, both of which ceased production in the second half of 2013. Businesses not allocated to segments in 2014 include Eastman™ microfiber technology platform.


⁽⁷⁾	Included in third quarter 2013 earnings is a MTM other postretirement benefit plan gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."


⁽⁸⁾	Included in third quarter 2014 earnings are transaction costs of $7 million for the pending acquisitions of Taminco and Commonwealth Laminating & Coating, and for the completed acquisition of the global aviation turbine engine oil business from BP plc.


⁽⁹⁾	Included in third quarter 2014 earnings are integration costs of $5 million for the acquired Solutia and global aviation turbine engine oil businesses. Included in third quarter 2013 earnings are integration costs of $9 million for the acquired Solutia businesses.


⁽¹⁰⁾	Included in third quarter 2014 earnings are restructuring charges of $2 million for severance associated with the continued integration of the acquired Solutia businesses. Included in third quarter 2013 earnings are restructuring charges of $3 million primarily for severance associated with the continued integration of the acquired Solutia businesses.



	First Nine Months
(Dollars in millions)	2014			2013
Operating Earnings (Loss)
Additives & Functional Products ^{(1)(2)(3)(4)(5)(6)}	$	236		$	313
Adhesives & Plasticizers ⁽⁶⁾	155			139
Advanced Materials ^(3)(5)(6)(7)	217			216
Fibers	352			343
Specialty Fluids & Intermediates ⁽⁶⁾⁽⁸⁾	248			302
Total Operating Earnings by Segment	1,208			1,313
Other ⁽⁹⁾
Growth initiatives and businesses not allocated to segments^(10)(11)(12)	(46		)	(73		)
Pension and other postretirement benefit costs not allocated to operating segments ⁽¹³⁾	9			93
Acquisition transaction, integration, and restructuring costs ^(14)(15)(16)	(36		)	(33		)
Total Operating Earnings	$	1,135		$	1,300


⁽¹⁾	Included in first nine months 2014 earnings are asset impairments and restructuring charges of $42 million for costs of the planned closure of a Crystex^® R&D facility in France. This closure is subject to certain local legal and regulatory requirements.


⁽²⁾	Included in first nine months 2014 earnings is a $22 million asset impairment of the Crystex^® tradename.


⁽³⁾	Included in first nine months 2014 earnings are asset impairments and restructuring charges of $1 million and $4 million in the AFP and AM segments, respectively, related to a change in estimate of certain costs of the fourth quarter 2012 termination of the operating agreement for the Sao Jose dos Campos, Brazil site.


⁽⁴⁾	Included in first nine months 2014 earnings is a $2 million gain on the sale of previously impaired assets at a former polymers production facility in China.


⁽⁵⁾	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 AFP and AM segments, respectively.


⁽⁶⁾	Included in first nine months 2013 earnings are restructuring charges of $2 million, $1 million, $2 million, and $1 million in the AFP, A&P, AM, and SFI segments, respectively, primarily for severance


⁽⁷⁾	Included in first nine months 2014 earnings are asset impairments and restructuring charges of $10 million primarily for the closure of a production facility in Taiwan for the Flexvue^® product line.


⁽⁸⁾	As required by purchase accounting, acquired BP plc's global aviation turbine engine oil business inventories were marked to fair value. Included in first nine months 2014 earnings are additional costs of these inventories. Approximately $8 million were sold in first nine months 2014 resulting in an increase in cost of sales.


⁽⁹⁾	R&D, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are not included in segment operating results and are shown as "other" operating earnings (loss).


⁽¹⁰⁾	Businesses not allocated to segments in 2013 included the Perennial Wood™ growth initiative and Photovoltaics product line, both of which ceased production in the second half of 2013. Businesses not allocated to segments in 2014 include Eastman™ microfiber technology platform.


⁽¹¹⁾	Included in first nine months 2014 earnings is a $5 million gain on sales of previously impaired assets at the former Photovoltaics production facility in Germany.


⁽¹²⁾	Included in first nine months 2013 earnings are asset impairments and restructuring charges of $13 million primarily for the closure of a production facility in Germany for the Photovoltaics product line.


⁽¹³⁾	Included in first nine months 2013 earnings is a MTM other postretirement benefit plan gain of $86 million for a change in benefits. See Note 8, "Retirement Plans."


⁽¹⁴⁾	Included in first nine months 2014 earnings are transaction costs of $10 million for the pending acquisition of Taminco and Commonwealth Laminating & Coating, and for the completed acquisition of the global aviation turbine engine oil business from BP plc.


⁽¹⁵⁾	Included in first nine months 2014 earnings are integration costs of $21 million for the acquired Solutia and the global aviation turbine engine oil businesses. Included in first nine months 2013 earnings are integration costs of $24 million for the acquired Solutia businesses.


⁽¹⁶⁾	Included in first nine months 2014 and 2013 earnings are restructuring charges of $5 million and $9 million, respectively, primarily for severance associated with the continued integration of the acquired Solutia businesses.



	September 30,		December 31,
(Dollars in millions)	2014		2013
Assets by Segment ⁽¹⁾
Additives & Functional Products	$	2,963	$	2,940
Adhesives & Plasticizers	1,025		996
Advanced Materials	3,794		3,807
Fibers	986		974
Specialty Fluids & Intermediates	2,376		2,054
Total Assets by Segment	11,144		10,771
Corporate Assets	991		1,074
Total Assets	$	12,135	$	11,845


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