RETIREMENT PLANS (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Change in Benefit Obligation and Plan Assets, Funded Status and Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income (Loss)

Below is a summary balance sheet of the change in plan assets during 2017 and 2016, the funded status of the plans and amounts recognized in the Consolidated Statements of Financial Position.

Summary of Changes



	Pension Plans												Postretirement Benefit Plans
	2017						2016						2017			2016
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Change in projected benefit obligation:
Benefit obligation, beginning of year	$	2,141		$	801		$	2,262		$	763		$	737		$	853
Service cost	37			13			39			12			3			5
Interest cost	66			20			74			23			23			27
Actuarial (gain) loss	94			(11		)	38			123			30			12
Settlement	—			—			(54		)	—			—			—
Plan amendments and other	—			—			2			—			—			(106		)
Plan participants' contributions	—			1			—			1			12			14
Effect of currency exchange	—			90			—			(100		)	1			—
Federal subsidy on benefits paid	—			—			—			—			1			1
Benefits paid	(184		)	(21		)	(220		)	(21		)	(69		)	(69		)
Benefit obligation, end of year	$	2,154		$	893		$	2,141		$	801		$	738		$	737
Change in plan assets:
Fair value of plan assets, beginning of year	$	1,959		$	667		$	1,887		$	650		$	149		$	157
Actual return on plan assets	271			31			142			103			22			12
Effect of currency exchange	—			76			—			(84		)	—			—
Company contributions	8			19			204			18			43			39
Reserve for third party contributions	—			—			—			—			(10		)	(5		)
Plan participants' contributions	—			1			—			1			12			14
Benefits paid	(184		)	(21		)	(220		)	(21		)	(69		)	(69		)
Federal subsidy on benefits paid	—			—			—			—			1			1
Settlements	—			—			(54		)	—			—			—
Fair value of plan assets, end of year	$	2,054		$	773		$	1,959		$	667		$	148		$	149
Funded status at end of year	$	(100	)	$	(120	)	$	(182	)	$	(134	)	$	(590	)	$	(588	)
Amounts recognized in the Consolidated Statements of Financial Position consist of:
Other noncurrent assets	$	12		$	8		$	3		$	—		$	38		$	30
Current liabilities	(3		)	(1		)	(7		)	(1		)	(44		)	(42		)
Post-employment obligations	(109		)	(127		)	(178		)	(133		)	(584		)	(576		)
Net amount recognized, end of year	$	(100	)	$	(120	)	$	(182	)	$	(134	)	$	(590	)	$	(588	)
Accumulated benefit obligation	$	2,031		$	845		$	2,030		$	753
Amounts recognized in accumulated other comprehensive income consist of:
Prior service (credit) cost	$	1		$	1		$	(3	)	$	2		$	(222	)	$	(262	)

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block]

Information for pension plans with projected benefit obligations in excess of plan assets:



(Dollars in millions)	2017				2016
	U.S.		Non-U.S.		U.S.		Non-U.S.
Projected benefit obligation	$	1,709	$	658	$	1,865	$	801
Fair value of plan assets	1,597		530		1,680		667

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block]

Information for pension plans with accumulated benefit obligations in excess of plan assets:



(Dollars in millions)	2017				2016
	U.S. ⁽¹⁾		Non-U.S.		U.S.		Non-U.S.
Projected benefit obligation	$	170	$	618	$	1,865	$	557
Accumulated benefit obligation	159		596		1,754		535
Fair value of plan assets	117		492		1,680		434

Schedule of Benefit Cost and Amounts Recognized in Other Comprehensive Income

Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income



	Pension Plans																		Postretirement Benefit Plans
	2017						2016						2015						2017			2016			2015
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Components of net periodic benefit (credit) cost:
Service cost	$	37		$	13		$	39		$	12		$	39		$	15		$	3		$	5		$	8
Interest cost	66			20			74			23			87			26			23			27			39
Expected return on plan assets	(140		)	(35		)	(138		)	(32		)	(148		)	(37		)	(5		)	(6		)	(6		)
Curtailment gain ⁽¹⁾	—			—			—			—			—			(7		)	—			—			(2		)
Amortization of:
Prior service (credit) cost	(4		)	1			(4		)	—			(4		)	1			(40		)	(44		)	(24		)
Mark-to-market pension and other postretirement benefits (gain) loss, net	(37		)	(7		)	34			52			140			(20		)	23			11			(5		)
Net periodic benefit (credit) cost	$	(78	)	$	(8	)	$	5		$	55		$	114		$	(22	)	$	4		$	(7	)	$	10
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Curtailment gain	$	—		$	—		$	—		$	—		$	—		$	(3	)	$	—		$	—		$	—
Current year prior service credit (cost)	—			—			(3		)	—			—			—			—			106			140
Amortization of:
Prior service (credit) cost	(4		)	1			(4		)	—			(4		)	1			(40		)	(44		)	(24		)
Total	$	(4	)	$	1		$	(7	)	$	—		$	(4	)	$	(2	)	$	(40	)	$	62		$	116


⁽¹⁾	Gain of $7 million in 2015 in the Fibers segment related to the remeasurement of the Workington, UK pension plan, triggered by the closure of the Workington, UK acetate tow manufacturing facility.

Schedule of Assumptions Used to Develop the Projected Benefit Obligation

The assumptions used to develop the projected benefit obligation for Eastman's significant U.S. and non-U.S. defined benefit pension plans and U.S. postretirement benefit plans are provided in the following tables.



	Pension Plans												Postretirement Benefit Plans
Weighted-average assumptions used to determine benefit obligations for years ended December 31:	2017				2016				2015				2017		2016		2015
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.57	%	2.25	%	3.89	%	2.33	%	4.13	%	3.26	%	3.54	%	3.91	%	4.17	%
Rate of compensation increase	3.25	%	2.95	%	3.25	%	2.94	%	3.50	%	3.00	%	3.25	%	3.25	%	3.50	%
Health care cost trend
Initial													6.75	%	7.00	%	7.50	%
Decreasing to ultimate trend of													5.00	%	5.00	%	5.00	%
in year													2025		2021		2021
Weighted-average assumptions used to determine net periodic cost for years ended December 31:	2017				2016				2015				2017		2016		2015
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.89	%	2.33	%	4.13	%	3.26	%	3.80	%	3.10	%	3.91	%	4.17	%	3.91	%
Discount rate for service cost	3.89	%	2.33	%	4.13	%	3.26	%	3.80	%	3.10	%	4.31	%	4.57	%	3.91	%
Discount rate for interest cost	3.24	%	2.33	%	3.33	%	3.26	%	3.80	%	3.10	%	3.28	%	3.42	%	3.91	%
Expected return on assets	7.49	%	5.02	%	7.60	%	5.11	%	7.78	%	5.50	%	3.75	%	3.75	%	3.75	%
Rate of compensation increase	3.25	%	2.94	%	3.50	%	3.00	%	3.50	%	3.24	%	3.25	%	3.50	%	3.50	%
Health care cost trend
Initial													7.00	%	7.50	%	7.50	%
Decreasing to ultimate trend of													5.00	%	5.00	%	5.00	%
in year													2021		2021		2020

Schedule of Fair Value Measurements of Pension Plan Assets on a Recurring Basis

The following tables reflect the fair value of the defined benefit pension plans assets.



(Dollars in millions)					Fair Value Measurements at December 31, 2017
Description	December 31, 2017				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Pension Assets:	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Cash & Cash Equivalents ⁽¹⁾	$	20	$	57	$	20	$	57	$	—	$	—	$	—	$	—
Public Equity - United States ⁽²⁾	4		—		4		—		—		—		—		—
Other Investments ⁽³⁾	—		51		—		—		—		—		—		51
Total Assets at Fair Value	$	24	$	108	$	24	$	57	$	—	$	—	$	—	$	51
Investments Measured at Net Asset Value ⁽⁴⁾	2,030		665
Total Assets	$	2,054	$	773



(Dollars in millions)					Fair Value Measurements at December 31, 2016
Description	December 31, 2016				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Pension Assets:	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Cash & Cash Equivalents ⁽¹⁾	$	41	$	25	$	41	$	25	$	—	$	—	$	—	$	—
Public Equity - United States ⁽²⁾	4		—		4		—		—		—		—		—
Other Investments ⁽³⁾	—		44		—		—		—		—		—		44
Total Assets at Fair Value	$	45	$	69	$	45	$	25	$	—	$	—	$	—	$	44
Investments Measured at Net Asset Value ⁽⁴⁾	1,914		598
Total Assets	$	1,959	$	667


⁽¹⁾	Cash & Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts.


⁽²⁾	Public Equity - United States: Common stock equity securities which are primarily valued using a market approach based on the quoted market prices.


⁽³⁾	Other Investments: Primarily consist of insurance contracts which are generally valued using a crediting rate that approximates market returns and investments in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.

⁽⁴⁾

Investments Measured at Net Asset Value: The underlying debt and public equity investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date. The other alternative investments in this category are valued under the practical expedient method which is based on the most recently reported net asset value provided by the management of each private investment fund, adjusted as appropriate, for any lag between the date of the financial reports and the measurement date.

The following tables reflect the fair value of the postretirement benefit plan assets. The postretirement benefit plan is for the voluntary employees' beneficiary association ("VEBA") trust the Company assumed as part of the Solutia acquisition.



(Dollars in millions)			Fair Value Measurements at December 31, 2017
Description	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Postretirement Benefit Plan Assets:
Cash & Cash Equivalents ⁽¹⁾	$	2	$	2	$	—	$	—
Debt ⁽²⁾:
Fixed Income (U.S.)	82		—		82		—
Fixed Income (Non-U.S.)	31		—		31		—
Total	$	115	$	2	$	113	$	—



(Dollars in millions)			Fair Value Measurements at December 31, 2016
Description	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Postretirement Benefit Plan Assets:
Cash & Cash Equivalents⁽¹⁾	$	3	$	3	$	—	$	—
Debt ⁽²⁾:
Fixed Income (U.S.)	82		—		82		—
Fixed Income (Non-U.S.)	30		—		30		—
Total	$	115	$	3	$	112	$	—


⁽¹⁾	Cash & Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts.

⁽²⁾

Debt: The fixed income securities are primarily valued upon a market approach, using matrix pricing and considering a security’s relationship to other securities for which quoted prices in an active market may be available, or an income approach, converting future cash flows to a single present value amount. Inputs used in developing fair value estimates include reported trades, broker quotes, benchmark yields, and base spreads.

Schedule of Pension Plan Assets Classified within Level 3 of the Fair Value Hierarchy

The Company valued assets with unobservable inputs (Level 3), primarily insurance contracts, using a crediting rate that approximates market returns and investments in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Other Investments⁽¹⁾
(Dollars in millions)	Non-U.S. Pension Plans
Balance at December 31, 2015	$	42
Unrealized gains	2
Balance at December 31, 2016	44
Unrealized gains	7
Balance at December 31, 2017	$	51


⁽¹⁾	Primarily consists of insurance contracts.

Schedule of US and Non-US Pension Plans Asset Target Allocation by Category

The following table reflects the target allocation for the Company's U.S. and non-U.S. pension and postretirement benefit plans assets for 2018 and the asset allocation at December 31, 2017 and 2016, by asset category.



	U.S. Pension Plans			Non-U.S. Pension Plans			Postretirement Benefit Plan
	2018 Target Allocation	Plan Assets at December 31, 2017	Plan Assets at December 31, 2016	2018 Target Allocation	Plan Assets at December 31, 2017	Plan Assets at December 31, 2016	2018 Target Allocation	Plan Assets at December 31, 2017	Plan Assets at December 31, 2016
Asset category
Equity securities	44%	48%	47%	26%	22%	30%	—%	—%	—%
Debt securities	40%	40%	41%	51%	55%	52%	100%	100%	100%
Real estate	3%	2%	2%	5%	7%	2%	—%	—%	—%
Other investments ⁽¹⁾	13%	10%	10%	18%	16%	16%	—%	—%	—%
Total	100%	100%	100%	100%	100%	100%	100%	100%	100%


⁽¹⁾	U.S. primarily consists of private equity and natural resource and energy related limited partnership investments. Non-U.S. primarily consists of annuity contracts and alternative investments.

Schedule Benefits Expected to be Paid from Pension Plans and Benefits

The estimated future benefit payments, reflecting expected future service, as appropriate, are as follows:



	Pension Plans				Postretirement Benefit Plans
(Dollars in millions)	U.S.		Non-U.S.
2018	$	197	$	23	$	58
2019	165		23		58
2020	162		25		58
2021	154		25		57
2022	151		26		53
2023-2027	722		164		220