Attached files
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| 8-K - THIRD QUARTER 2011 EARNINGS RELEASE - EASTMAN CHEMICAL CO | form8k_q32011.htm |
Eastman Announces Third-Quarter 2011 Financial Results
KINGSPORT, Tenn., October 27, 2011 – Eastman Chemical Company (NYSE:EMN) today announced earnings from continuing operations of $1.16 per diluted share for third quarter 2011 versus $1.11 per diluted share for third quarter 2010. Excluding $7 million of restructuring charges primarily for severance associated with the acquisition and integration of Sterling Chemicals, Inc., earnings from continuing operations were $1.19 per diluted share in third quarter 2011. For reconciliation to reported company and segment earnings, see Tables 3 and 4 in the accompanying third-quarter 2011 financial tables.
“Third-quarter 2011 operating earnings reflect solid performance across the company,” said Jim Rogers, Chairman and CEO. “Going forward, the strength of our core businesses and balance sheet gives us confidence our earnings will remain resilient despite the economic uncertainty.”
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(In millions, except per share amounts)
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3Q2011
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3Q2010
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||
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Sales revenue
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$
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1,812
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$
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1,507
|
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Earnings per diluted share from continuing operations
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$
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1.16
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$
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1.11
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Earnings per diluted share from continuing operations excluding restructuring charges*
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$
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1.19
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$
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1.11
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Net cash provided by operating activities
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$
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212
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$
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316
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*For reconciliation to reported company and segment earnings, see Tables 3 and 4 in the accompanying third-quarter 2011 financial tables.
Sales revenue for third quarter 2011 was $1.8 billion, a 20 percent increase compared with third quarter 2010 primarily due to higher selling prices.
Operating earnings excluding restructuring charges in third quarter 2011 were $263 million compared with operating earnings of $266 million in third quarter 2010. Operating earnings in third quarter 2011 included $11 million of costs from an unplanned outage of an olefin cracking unit in Longview, Texas, and $8 million from an acetyl technology license. Operating earnings in third quarter 2010 included $22 million from the partial settlement of an insurance claim related to a power outage at the Longview, Texas, manufacturing facility. In third quarter 2011 compared with third quarter 2010, higher selling prices more than offset higher raw material and energy costs.
Segment Results 3Q 2011 versus 3Q 2010
Coatings, Adhesives, Specialty Polymers and Inks – Sales revenue increased by 14 percent primarily due to higher selling prices which were in response to higher raw material and energy costs. Operating earnings in third quarter 2011 were $82 million compared with operating earnings of $89 million in third quarter 2010. Third-quarter 2011 operating earnings included $3 million of costs from the unplanned outage of an olefin cracking unit, while third quarter 2010 operating earnings included $9 million from the partial settlement of an insurance claim. Third-quarter 2011 operating earnings were positively impacted by higher selling prices, which more than offset higher raw material and energy costs.
Fibers – Sales revenue increased by 11 percent due to a favorable shift in product mix and higher selling prices. The favorable shift in product mix was mainly due to higher acetate tow sales volume resulting from increased utilization of the acetate tow manufacturing facility in Korea. The higher selling prices were in response to higher raw material and energy costs, particularly for wood pulp. Operating earnings in third quarter 2011 increased to $92 million compared with $89 million in third quarter 2010 due to higher acetate tow sales volume in Asia Pacific and higher selling prices, mostly offset by higher raw material and energy costs.
Performance Chemicals and Intermediates – Sales revenue increased by 39 percent due to higher selling prices and a favorable shift in product mix. The higher selling prices were in response to higher raw material and energy costs. The favorable shift in product mix was due to increased sales revenue from plasticizer product lines, $8 million from an acetyl technology license, and $15 million of sales revenue from the recently acquired Sterling Chemicals business. Operating earnings in third quarter 2011 increased to $78 million excluding restructuring charges compared to $74 million in third quarter 2010. Third-quarter 2011 operating earnings included $8 million of costs from the unplanned outage of an olefin cracking unit and $8 million from an acetyl technology license. Operating earnings in third quarter 2010 included $12 million from the partial settlement of an insurance claim. In third quarter 2011 compared with third quarter 2010, operating earnings were positively impacted by higher selling prices and the favorable shift in product mix more than offsetting higher raw material and energy costs.
Specialty Plastics – Sales revenue increased by 4 percent as higher selling prices were partially offset by lower sales volume. The higher selling prices were in response to higher raw material and energy costs, particularly for paraxylene. The lower sales volume was attributed to weakened demand for copolyester product lines, particularly in packaging, consumer durable goods and LCD end markets, customer inventory destocking, and some customer shift to other plastic materials that do not use paraxylene as a raw material. Operating earnings were $29 million in both third quarter 2011 and third quarter 2010 as higher selling prices were offset by higher raw material and energy costs and lower sales volume.
Cash Flow
Eastman generated $212 million in cash from operating activities during third quarter 2011 driven by strong net earnings. Inventories increased during the quarter primarily due to preparation for planned manufacturing maintenance in the fourth quarter. Third-quarter 2011 cash flows included $28 million of a total anticipated $110 million tax payment for the gain on the sale of the PET business completed in first quarter 2011. During third quarter 2011, share repurchases totaled $115 million.
Outlook
Commenting on the outlook for fourth quarter and full year 2011, Rogers said: "For the remainder of the year, we expect sales volume to decline due to normal seasonality and customer inventory destocking. We also expect continued volatility in raw material and energy costs. As a result, we expect fourth quarter 2011 earnings per share to be higher than fourth quarter 2010 and for full-year 2011 earnings per share to be approximately $4.62, excluding asset impairments and restructuring charges and gains."
Eastman will host a conference call with industry analysts on October 28 at 8:00 a.m. Eastern Time. To listen to the live webcast of the conference call and view the accompanying slides, go to www.investors.eastman.com, Events & Presentations. To listen via telephone, the dial-in number is 913-312-0845, passcode number 7815514. A web replay, a replay in downloadable MP3 format, and the accompanying slides will be available at www.investors.eastman.com, Events & Presentations. A telephone replay will be available continuously from 11:00 a.m. EDT, October 28, to 11:00 a.m. EDT, November 7, at (888) 203-1112 or (719) 457-0820, passcode 7815514.
Forward-Looking Statements: This news release includes forward-looking statements concerning current expectations for economic conditions, sales volume, raw material and energy costs, and earnings for fourth quarter and full year 2011. Such expectations are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company's filings with the Securities and Exchange Commission, including the Form 10-Q filed for second quarter 2011 available, and the Form 10-Q to be filed for third quarter 2011 and to be available, on the Eastman web site at www.eastman.com in the Investors, SEC information section.
Eastman’s chemicals, fibers and plastics are used as key ingredients in products that people use every day. Approximately 10,000 Eastman employees around the world blend technical expertise and innovation to deliver practical solutions. The company is committed to finding sustainable business opportunities within the diverse markets it serves. A global company headquartered in Kingsport, Tenn., USA, Eastman had 2010 sales of $6 billion. For more information, visit www.eastman.com.
# # #
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Contacts:
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Media: Tracy Broadwater
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423-224-0498 / tkbroadwater@eastman.com
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Investors: Greg Riddle
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212-835-1620 / griddle@eastman.com
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EASTMAN CHEMICAL COMPANY – EMN
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October 27, 2011
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5:00 PM EDT
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FINANCIAL INFORMATION
October 27, 2011
For use in the Eastman Chemical Company Conference Call
at 8:00 AM (EDT), October 28, 2011.
Table of Contents
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Item
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Page
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|
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TABLE 1
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Statements of Earnings
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1
|
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TABLE 2A
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Segment Sales Information
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2
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TABLE 2B
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Sales Revenue Change
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2
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TABLE 2C
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Sales by Region
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3
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TABLE 2D
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Sales Revenue Change by Region
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3
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TABLE 3
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Operating Earnings and Asset Impairments and Restructuring Charges (Gains), Net, by Segment; Segment Operating Earnings Reconciliations
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4
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TABLE 4
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Operating Earnings, Earnings, and Earnings Per Share from Continuing Operations Reconciliation
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5
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TABLE 5
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Statements of Cash Flows
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6
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TABLE 5A
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Total Cash and Cash Equivalents and Short-Term Time Deposits
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6
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TABLE 5B
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Net Cash Provided By Operating Activities Reconciliation and Free Cash Flow
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7
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TABLE 6
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Selected Balance Sheet Items
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7
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The Company completed the sale of the polyethylene terephthalate ("PET") business, related assets at the Columbia, South Carolina, site, and technology of its Performance Polymers segment on January 31, 2011. The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented and are therefore not included in results from continuing operations under accounting principles generally accepted in the United States.
In third quarter 2011, the Company's Board of Directors declared a two-for-one split of the Company's common stock in the form of a 100 percent stock dividend. Stockholders of record as of September 15, 2011 were issued one additional share of common stock on October 3, 2011 for each share held. Treasury shares were treated as shares outstanding in the stock split. All shares and per share amounts have been adjusted for all periods presented for the stock split.
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EASTMAN CHEMICAL COMPANY – EMN
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October 27, 2011
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5:00 PM EDT
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Page 1
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| TABLE 1 – STATEMENTS OF EARNINGS |
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Third Quarter
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First Nine Months
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|||||||
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(Dollars in millions, except per share amounts; unaudited)
|
2011
|
2010
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2011
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2010
|
||||
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Sales
|
$
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1,812
|
$
|
1,507
|
$
|
5,455
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$
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4,379
|
|
Cost of sales
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1,392
|
1,085
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4,139
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3,256
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||||
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Gross profit
|
420
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422
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1,316
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1,123
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||||
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Selling, general and administrative expenses
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116
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114
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350
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311
|
||||
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Research and development expenses
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41
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42
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116
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108
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||||
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Asset impairments and restructuring charges (gains), net
|
7
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--
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(8)
|
3
|
||||
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Operating earnings
|
256
|
266
|
858
|
701
|
||||
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Net interest expense
|
20
|
25
|
57
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75
|
||||
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Other charges (income), net
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(2)
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(3)
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(14)
|
11
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||||
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Earnings from continuing operations before income taxes
|
238
|
244
|
815
|
615
|
||||
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Provision for income taxes from continuing operations
|
73
|
82
|
258
|
207
|
||||
|
Earnings from continuing operations
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$
|
165
|
$
|
162
|
$
|
557
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$
|
408
|
|
Earnings from discontinued operations, net of tax
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--
|
8
|
8
|
11
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||||
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Gain from disposal of discontinued operations, net of tax
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--
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--
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31
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--
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||||
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Net earnings
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$
|
165
|
$
|
170
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$
|
596
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$
|
419
|
|
Basic earnings per share
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||||||||
|
Earnings from continuing operations
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$
|
1.19
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$
|
1.13
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$
|
3.96
|
$
|
2.83
|
|
Earnings from discontinued operations
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--
|
0.06
|
0.28
|
0.08
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||||
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Basic earnings per share
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$
|
1.19
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$
|
1.19
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$
|
4.24
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$
|
2.91
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|
Diluted earnings per share
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||||||||
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Earnings from continuing operations
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$
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1.16
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$
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1.11
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$
|
3.86
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$
|
2.77
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|
Earnings from discontinued operations
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--
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0.05
|
0.27
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0.08
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||||
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Diluted earnings per share
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$
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1.16
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$
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1.16
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$
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4.13
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$
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2.85
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Shares (in millions) outstanding at end of period
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137.6
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144.3
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137.6
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144.3
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||||
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Shares (in millions) used for earnings per share calculation
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||||||||
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Basic
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139.1
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143.8
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140.6
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144.3
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||||
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Diluted
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142.4
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146.6
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144.1
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147.2
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||||
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EASTMAN CHEMICAL COMPANY – EMN
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October 27, 2011
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5:00 PM EDT
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Page 2
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| TABLE 2A – SEGMENT SALES INFORMATION |
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Third Quarter
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First Nine Months
|
|||||||
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(Dollars in millions, unaudited)
|
2011
|
2010
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2011
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2010
|
||||
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Sales by Segment
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||||||||
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Coatings, Adhesives, Specialty Polymers, and Inks
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$
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461
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$
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406
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$
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1,419
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$
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1,195
|
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Fibers
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334
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301
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955
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842
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||||
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Performance Chemicals and Intermediates
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740
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534
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2,163
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1,557
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||||
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Specialty Plastics
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277
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266
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918
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785
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||||
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Total Eastman Chemical Company
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$
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1,812
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$
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1,507
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$
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5,455
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$
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4,379
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TABLE 2B – SALES REVENUE CHANGE
|
|
Third Quarter 2011 Compared to Third Quarter 2010
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|||||||||
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(Unaudited)
|
Change in Sales Revenue Due To
|
||||||||
|
Revenue
% Change
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Volume Effect
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Price Effect
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Product
Mix
Effect
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Exchange
Rate
Effect
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|||||
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Coatings, Adhesives, Specialty Polymers, and Inks
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14 %
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1 %
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13 %
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(1) %
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1 %
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||||
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Fibers
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11 %
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-- %
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5 %
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6 %
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-- %
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||||
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Performance Chemicals and Intermediates
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39 %
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4 %
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25 %
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9 %
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1 %
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||||
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Specialty Plastics
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4 %
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(12) %
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16 %
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(1) %
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1 %
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||||
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Total Eastman Chemical Company
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20 %
|
-- %
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16 %
|
4 %
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-- %
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||||
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First Nine Months 2011 Compared to First Nine Months 2010
|
|||||||||
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(Unaudited)
|
Change in Sales Revenue Due To
|
||||||||
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Revenue
% Change
|
Volume Effect
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Price Effect
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Product
Mix
Effect
|
Exchange
Rate
Effect
|
|||||
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Coatings, Adhesives, Specialty Polymers, and Inks
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19 %
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6 %
|
13 %
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(1) %
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1 %
|
||||
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Fibers
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13 %
|
3 %
|
4 %
|
6 %
|
-- %
|
||||
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Performance Chemicals and Intermediates
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39 %
|
14 %
|
21 %
|
4 %
|
-- %
|
||||
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Specialty Plastics
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17 %
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-- %
|
16 %
|
1 %
|
-- %
|
||||
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Total Eastman Chemical Company
|
25 %
|
7 %
|
15 %
|
2 %
|
1 %
|
||||
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EASTMAN CHEMICAL COMPANY – EMN
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October 27, 2011
|
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5:00 PM EDT
|
|
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Page 3
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TABLE 2C – SALES BY REGION
|
|
Third Quarter
|
First Nine Months
|
|||||||
|
(Dollars in millions, unaudited)
|
2011
|
2010
|
2011
|
2010
|
||||
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Sales by Region
|
||||||||
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United States and Canada
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$
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978
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$
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771
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$
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2,900
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$
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2,253
|
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Asia Pacific
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433
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369
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1,264
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1,058
|
||||
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Europe, Middle East, and Africa
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323
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291
|
1,048
|
851
|
||||
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Latin America
|
78
|
76
|
243
|
217
|
||||
|
Total Eastman Chemical Company
|
$
|
1,812
|
$
|
1,507
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$
|
5,455
|
$
|
4,379
|
|
TABLE 2D – SALES REVENUE CHANGE BY REGION
|
|
Third Quarter 2011 Compared to Third Quarter 2010
|
|||||||||
|
Change in Sales Revenue Due To
|
|||||||||
|
(Unaudited)
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
||||
|
United States and Canada
|
27 %
|
1 %
|
21 %
|
5 %
|
-- %
|
||||
|
Asia Pacific
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17 %
|
-- %
|
11 %
|
5 %
|
1 %
|
||||
|
Europe, Middle East, and Africa
|
11 %
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(2) %
|
11 %
|
(1) %
|
3 %
|
||||
|
Latin America
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4 %
|
(13) %
|
9 %
|
8 %
|
-- %
|
||||
|
Total Eastman Chemical Company
|
20 %
|
-- %
|
16 %
|
4 %
|
-- %
|
||||
|
First Nine Months 2011 Compared to First Nine Months 2010
|
|||||||||
|
Change in Sales Revenue Due To
|
|||||||||
|
(Unaudited)
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
||||
|
United States and Canada
|
29 %
|
9 %
|
17 %
|
3 %
|
-- %
|
||||
|
Asia Pacific
|
19 %
|
4 %
|
11 %
|
4 %
|
-- %
|
||||
|
Europe, Middle East, and Africa
|
23 %
|
8 %
|
13 %
|
1 %
|
1 %
|
||||
|
Latin America
|
12 %
|
(2) %
|
13 %
|
1 %
|
-- %
|
||||
|
Total Eastman Chemical Company
|
25 %
|
7 %
|
15 %
|
2 %
|
1 %
|
||||
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EASTMAN CHEMICAL COMPANY – EMN
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October 27, 2011
|
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5:00 PM EDT
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Page 4
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| TABLE 3 - OPERATING EARNINGS AND ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES (GAINS), NET, BY SEGMENT; SEGMENT OPERATING EARNINGS RECONCILIATIONS |
|
Third Quarter
|
First Nine Months
|
|||||||
|
(Dollars in millions, unaudited)
|
2011
|
2010
|
2011
|
2010
|
||||
|
Operating Earnings by Segment and Item
|
||||||||
|
Coatings, Adhesives, Specialty Polymers, and Inks
|
||||||||
|
Operating earnings
|
$
|
82
|
$
|
89
|
$
|
279
|
$
|
246
|
|
Fibers
|
||||||||
|
Operating earnings
|
92
|
89
|
266
|
248
|
||||
|
Performance Chemicals and Intermediates
|
||||||||
|
Operating earnings
|
71
|
74
|
247
|
177
|
||||
|
Asset impairments and restructuring charges, net (1)(2)
|
7
|
--
|
7
|
3
|
||||
|
Operating earnings excluding item
|
78
|
74
|
254
|
180
|
||||
|
Specialty Plastics
|
||||||||
|
Operating earnings
|
29
|
29
|
96
|
69
|
||||
|
Total Operating Earnings by Segment and Item
|
||||||||
|
Total operating earnings
|
274
|
281
|
888
|
740
|
||||
|
Total asset impairments and restructuring charges, net
|
7
|
--
|
7
|
3
|
||||
|
Total operating earnings excluding item
|
281
|
281
|
895
|
743
|
||||
|
Other (3)
|
||||||||
|
Operating loss
|
(18)
|
(15)
|
(30)
|
(39)
|
||||
|
Asset impairments and restructuring charges (gains), net (4)
|
--
|
--
|
(15)
|
--
|
||||
|
Operating loss excluding item
|
(18)
|
(15)
|
(45)
|
(39)
|
||||
|
Total Eastman Chemical Company
|
||||||||
|
Total operating earnings
|
$
|
256
|
$
|
266
|
$
|
858
|
$
|
701
|
|
Total asset impairments and restructuring charges (gains), net
|
7
|
--
|
(8)
|
3
|
||||
|
Total operating earnings excluding item
|
$
|
263
|
$
|
266
|
$
|
850
|
$
|
704
|
|
(1)
|
Third quarter and first nine months 2011 include $7 million in restructuring charges primarily for severance associated with the acquisition and integration of Sterling Chemicals, Inc.
|
|
(2)
|
First nine months 2010 includes restructuring charges of $3 million, primarily for severance associated with the acquisition and integration of Genovique Specialties Corporation.
|
|
(3)
|
Research and development and other expenses and asset impairments and restructuring charges (gains), net, 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 loss.
|
|
(4)
|
First nine months 2011 includes $15 million gain from the sale of the previously impaired methanol and ammonia assets related to the terminated Beaumont, Texas industrial gasification project.
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EASTMAN CHEMICAL COMPANY – EMN
|
October 27, 2011
|
|
5:00 PM EDT
|
|
|
Page 5
|
| TABLE 4 – OPERATING EARNINGS, EARNINGS, AND EARNINGS PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION |
|
EARNINGS PER DILUTED SHARE FROM CONTINUING OPERATIONS EXCLUDING CERTAIN ITEM
|
|
Third Quarter 2011
|
||||||||
|
Earnings from Continuing Operations
|
||||||||
|
(Dollars in millions, unaudited)
|
Operating
Earnings
|
Before Tax
|
After Tax
|
Per Diluted Share
|
||||
|
As reported
|
$
|
256
|
$
|
238
|
$
|
165
|
$
|
1.16
|
|
Certain Item:
|
||||||||
|
Asset impairments and restructuring charges, net
|
7
|
7
|
5
|
0.03
|
||||
|
Excluding item
|
$
|
263
|
$
|
245
|
$
|
170
|
$
|
1.19
|
|
Third Quarter 2010
|
||||||||
|
Earnings from Continuing Operations
|
||||||||
|
(Dollars in millions, unaudited)
|
Operating
Earnings
|
Before Tax
|
After Tax
|
Per Diluted Share
|
||||
|
As reported
|
$
|
266
|
$
|
244
|
$
|
162
|
$
|
1.11
|
|
First Nine Months 2011
|
||||||||
|
Earnings from Continuing Operations
|
||||||||
|
(Dollars in millions, unaudited)
|
Operating
Earnings
|
Before Tax
|
After Tax
|
Per Diluted Share
|
||||
|
As reported
|
$
|
858
|
$
|
815
|
$
|
557
|
$
|
3.86
|
|
Certain Item:
|
||||||||
|
Asset impairments and restructuring charges (gains), net
|
(8)
|
(8)
|
(5)
|
(0.03)
|
||||
|
Excluding item
|
$
|
850
|
$
|
807
|
$
|
552
|
$
|
3.83
|
|
First Nine Months 2010
|
||||||||
|
Earnings from Continuing Operations
|
||||||||
|
(Dollars in millions, unaudited)
|
Operating
Earnings
|
Before Tax
|
After Tax
|
Per Diluted Share
|
||||
|
As reported
|
$
|
701
|
$
|
615
|
$
|
408
|
$
|
2.77
|
|
Certain Item:
|
||||||||
|
Asset impairments and restructuring charges, net
|
3
|
3
|
2
|
0.02
|
||||
|
Excluding item
|
$
|
704
|
$
|
618
|
$
|
410
|
$
|
2.79
|
|
EASTMAN CHEMICAL COMPANY – EMN
|
October 27, 2011
|
|
5:00 PM EDT
|
|
|
Page 6
|
| TABLE 5 – STATEMENTS OF CASH FLOWS |
|
Third Quarter
|
First Nine Months
|
||||||||
|
(Dollars in millions, unaudited)
|
2011
|
2010
|
2011
|
2010
|
|||||
|
Cash flows from operating activities
|
|||||||||
|
Net earnings
|
$
|
165
|
$
|
170
|
$
|
596
|
$
|
419
|
|
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
|||||||||
|
Depreciation and amortization
|
69
|
73
|
204
|
212
|
|||||
|
Gain on sale of assets
|
--
|
--
|
(70)
|
--
|
|||||
|
Provision (benefit) for deferred income taxes
|
14
|
40
|
(18)
|
52
|
|||||
|
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|||||||||
|
(Increase) decrease in trade receivables
|
65
|
36
|
(147)
|
(397)
|
|||||
|
(Increase) decrease in inventories
|
(104)
|
(10)
|
(225)
|
(100)
|
|||||
|
Increase (decrease) in trade payables
|
(36)
|
(34)
|
34
|
56
|
|||||
|
Increase (decrease) in liabilities for employee benefits and incentive pay
|
31
|
19
|
(108)
|
9
|
|||||
|
Other items, net
|
8
|
22
|
7
|
46
|
|||||
|
Net cash provided by operating activities
|
212
|
316
|
273
|
297
|
|||||
|
Cash flows from investing activities
|
|||||||||
|
Additions to properties and equipment
|
(127)
|
(57)
|
(333)
|
(133)
|
|||||
|
Proceeds from sale of assets and investments
|
7
|
--
|
651
|
11
|
|||||
|
Acquisitions and investments in joint ventures
|
(154)
|
--
|
(154)
|
(189)
|
|||||
|
Additions to short-term time deposits
|
--
|
--
|
(200)
|
--
|
|||||
|
Additions to capitalized software
|
(2)
|
(2)
|
(7)
|
(5)
|
|||||
|
Other items, net
|
33
|
(7)
|
27
|
(7)
|
|||||
|
Net cash used in investing activities
|
(243)
|
(66)
|
(16)
|
(323)
|
|||||
|
Cash flows from financing activities
|
|||||||||
|
Net increase in commercial paper, credit facility and other borrowings
|
--
|
--
|
1
|
1
|
|||||
|
Repayment of borrowings
|
--
|
(4)
|
(2)
|
(4)
|
|||||
|
Dividends paid to stockholders
|
(33)
|
(32)
|
(100)
|
(96)
|
|||||
|
Treasury stock purchases
|
(115)
|
(15)
|
(292)
|
(68)
|
|||||
|
Proceeds from stock option exercises and other items, net
|
(8)
|
8
|
67
|
41
|
|||||
|
Net cash used in financing activities
|
(156)
|
(43)
|
(326)
|
(126)
|
|||||
|
Effect of exchange rate changes on cash and cash equivalents
|
1
|
--
|
1
|
1
|
|||||
|
Net change in cash and cash equivalents
|
(186)
|
207
|
(68)
|
(151)
|
|||||
|
Cash and cash equivalents at beginning of period
|
634
|
435
|
516
|
793
|
|||||
|
Cash and cash equivalents at end of period
|
$
|
448
|
$
|
642
|
$
|
448
|
$
|
642
|
|
| TABLE 5A – TOTAL CASH AND CASH EQUIVALENTS AND SHORT-TERM TIME DEPOSITS |
|
First Nine Months
|
||||
|
(Dollars in millions, unaudited)
|
2011
|
2010
|
||
|
Cash and cash equivalents at end of period
|
$
|
448
|
$
|
642
|
|
Short-term time deposits
|
201
|
--
|
||
|
Total cash and cash equivalents and short-term time deposits
|
$
|
649
|
$
|
642
|
|
EASTMAN CHEMICAL COMPANY – EMN
|
October 27, 2011
|
|
5:00 PM EDT
|
|
|
Page 7
|
| TABLE 5B – NET CASH PROVIDED BY OPERATING ACTIVITIES RECONCILIATION AND FREE CASH FLOW |
|
Third Quarter
|
First Nine Months
|
|||||||
|
(Dollars in millions, unaudited)
|
2011
|
2010
|
2011
|
2010
|
||||
|
Net cash provided by operating activities
|
$
|
212
|
$
|
316
|
$
|
273
|
$
|
297
|
|
Impact of adoption of amended accounting guidance (1)
|
--
|
--
|
--
|
200
|
||||
|
Impact of tax payment on the sale of the PET business (2)
|
28
|
--
|
83
|
--
|
||||
|
Net cash provided by operating activities excluding items
|
240
|
316
|
356
|
497
|
||||
|
Additions to properties and equipment
|
(127)
|
(57)
|
(333)
|
(133)
|
||||
|
Dividends paid to stockholders
|
(33)
|
(32)
|
(100)
|
(96)
|
||||
|
Free Cash Flow
|
$
|
80
|
$
|
227
|
$
|
(77)
|
$
|
268
|
|
(1)
|
First nine months 2010 cash from operating activities reflected the adoption of amended accounting guidance for transfers of financial assets which resulted in $200 million of receivables, which were previously accounted for as sold and removed from the balance sheet when transferred under the accounts receivable securitization program, being included on the first quarter balance sheet as trade receivables, net. This increase in receivables reduced cash from operations by $200 million in first quarter 2010.
|
|
(2)
|
First nine months 2011 cash flows included $83 million of a total anticipated $110 million tax payment for the tax gain on the sale of the PET business completed in first quarter 2011.
|
| TABLE 6 – SELECTED BALANCE SHEET ITEMS |
|
September 30,
|
December 31,
|
|||
|
(Dollars in millions)
|
2011
|
2010
|
||
|
(unaudited)
|
||||
|
Current Assets
|
$
|
2,354
|
$
|
2,047
|
|
Net Properties and Equipment
|
3,058
|
3,219
|
||
|
Other Assets
|
771
|
720
|
||
|
Total Assets
|
$
|
6,183
|
$
|
5,986
|
|
Payables and Other Current Liabilities
|
$
|
1,047
|
$
|
1,064
|
|
Short-term Borrowings
|
154
|
6
|
||
|
Long-term Borrowings
|
1,445
|
1,598
|
||
|
Other Liabilities
|
1,628
|
1,691
|
||
|
Stockholders’ Equity
|
1,909
|
1,627
|
||
|
Total Liabilities and Stockholders’ Equity
|
$
|
6,183
|
$
|
5,986
|