EX-99.03 12 emn20181231ex9903.htm QUARTERLY NON-GAAP EARNINGS (LOSS) BEFORE INTEREST AND TAXES RECONCILIATIONS
Exhibit 99.03

Quarterly Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations
|  | 2018
(Dollars in millions, unaudited) |  | First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Twelve Months
Additives & Functional Products |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | $ | 176 |  |  | $ | 192 |  |  | $ | 186 |  |  | $ | 85 |  |  | $ | 639 |
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | — |  |  | 38 |  |  | 38 |
Net coal gasification incident (insurance) costs |  | 2 |  |  | (4 | ) |  | (4 | ) |  | — |  |  | (6 | )
Excluding non-core and unusual items |  | 178 |  |  | 188 |  |  | 182 |  |  | 123 |  |  | 671 |
Advanced Materials |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 135 |  |  | 150 |  |  | 153 |  |  | 71 |  |  | 509 |
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |
Net coal gasification incident (insurance) costs |  | 3 |  |  | (6 | ) |  | (6 | ) |  | — |  |  | (9 | )
Excluding non-core and unusual items |  | 138 |  |  | 144 |  |  | 147 |  |  | 72 |  |  | 501 |
Chemical Intermediates |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 70 |  |  | 85 |  |  | 109 |  |  | 44 |  |  | 308 |
Net coal gasification incident (insurance) costs |  | 19 |  |  | (21 | ) |  | (30 | ) |  | 2 |  |  | (30 | )
Excluding unusual item |  | 89 |  |  | 64 |  |  | 79 |  |  | 46 |  |  | 278 |
Fibers |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 43 |  |  | 83 |  |  | 84 |  |  | 47 |  |  | 257 |
Net coal gasification incident (insurance) costs |  | 13 |  |  | (25 | ) |  | (27 | ) |  | 1 |  |  | (38 | )
Excluding unusual item |  | 56 |  |  | 58 |  |  | 57 |  |  | 48 |  |  | 219 |
Other |  |  |  |  |  |  |  |  |  |
Loss before interest and taxes |  | (15 | ) |  | (19 | ) |  | (15 | ) |  | (112 | ) |  | (161 | )
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | — |  |  | 99 |  |  | 99 |
Asset impairments and restructuring charges, net |  | 2 |  |  | 4 |  |  | — |  |  | — |  |  | 6 |
Costs resulting from tax law changes and outside-U.S. entity reorganizations |  | 11 |  |  | 8 |  |  | 1 |  |  | — |  |  | 20 |
Excluding non-core and unusual items |  | (2 | ) |  | (7 | ) |  | (14 | ) |  | (13 | ) |  | (36 | )
Total Eastman Chemical Company |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 409 |  |  | 491 |  |  | 517 |  |  | 135 |  |  | 1,552 |
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | — |  |  | 99 |  |  | 99 |
Asset impairments and restructuring charges, net |  | 2 |  |  | 4 |  |  | — |  |  | 39 |  |  | 45 |
Net coal gasification incident (insurance) costs |  | 37 |  |  | (56 | ) |  | (67 | ) |  | 3 |  |  | (83 | )
Costs resulting from tax law changes and outside-U.S. entity reorganizations |  | 11 |  |  | 8 |  |  | 1 |  |  | — |  |  | 20 |
Total earnings before interest and taxes excluding non-core and unusual items |  | $ | 459 |  |  | $ | 447 |  |  | $ | 451 |  |  | $ | 276 |  |  | $ | 1,633 |

Exhibit 99.03

Quarterly Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued)
|  | 2017
(Dollars in millions, unaudited) |  | First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Twelve Months
Additives & Functional Products |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | $ | 153 |  |  | $ | 161 |  |  | $ | 189 |  |  | $ | 150 |  |  | $ | 653 |
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | — |  |  | 3 |  |  | 3 |
Net coal gasification incident (insurance) costs |  | — |  |  | — |  |  | — |  |  | 8 |  |  | 8 |
Gain from sale of business |  | — |  |  | — |  |  | (3 | ) |  | — |  |  | (3 | )
Excluding non-core and unusual items |  | 153 |  |  | 161 |  |  | 186 |  |  | 161 |  |  | 661 |
Advanced Materials |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 121 |  |  | 137 |  |  | 142 |  |  | 83 |  |  | 483 |
Net coal gasification incident (insurance) costs |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |
Excluding unusual item |  | 121 |  |  | 137 |  |  | 142 |  |  | 94 |  |  | 494 |
Chemical Intermediates |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 82 |  |  | 83 |  |  | 81 |  |  | 9 |  |  | 255 |
Net coal gasification incident (insurance) costs |  | — |  |  | — |  |  | — |  |  | 44 |  |  | 44 |
Excluding unusual item |  | 82 |  |  | 83 |  |  | 81 |  |  | 53 |  |  | 299 |
Fibers |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 52 |  |  | 56 |  |  | 68 |  |  | 5 |  |  | 181 |
Net coal gasification incident (insurance) costs |  | — |  |  | — |  |  | — |  |  | 49 |  |  | 49 |
Excluding unusual item |  | 52 |  |  | 56 |  |  | 68 |  |  | 54 |  |  | 230 |
Other |  |  |  |  |  |  |  |  |  |
Loss before interest and taxes |  | (7 | ) |  | (17 | ) |  | (16 | ) |  | (2 | ) |  | (42 | )
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | — |  |  | (21 | ) |  | (21 | )
Cost of disposition of claims against discontinued Solutia operations |  | — |  |  | — |  |  | — |  |  | 9 |  |  | 9 |
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 5 |
Excluding non-core and unusual items |  | (7 | ) |  | (17 | ) |  | (16 | ) |  | (9 | ) |  | (49 | )
Total Eastman Chemical Company |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 401 |  |  | 420 |  |  | 464 |  |  | 245 |  |  | 1,530 |
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | — |  |  | (21 | ) |  | (21 | )
Cost of disposition of claims against discontinued Solutia operations |  | — |  |  | — |  |  | — |  |  | 9 |  |  | 9 |
Gain from sale of business |  | — |  |  | — |  |  | (3 | ) |  | — |  |  | (3 | )
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | — |  |  | 8 |  |  | 8 |
Net coal gasification incident (insurance) costs |  | — |  |  | — |  |  | — |  |  | 112 |  |  | 112 |
Total earnings before interest and taxes excluding non-core and unusual items |  | $ | 401 |  |  | $ | 420 |  |  | $ | 461 |  |  | $ | 353 |  |  | $ | 1,635 |

Exhibit 99.03

Quarterly Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued)
|  | 2016
(Dollars in millions, unaudited) |  | First Quarter |  | Second Quarter |  | Third Quarter |  | Fourth Quarter |  | Twelve Months
Additives & Functional Products |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | $ | 154 |  |  | $ | 171 |  |  | $ | 162 |  |  | $ | 120 |  |  | $ | 607 |
Asset impairments and restructuring charges, net |  | (2 | ) |  | — |  |  | — |  |  | 12 |  |  | 10 |
Excluding non-core item |  | 152 |  |  | 171 |  |  | 162 |  |  | 132 |  |  | 617 |
Advanced Materials |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 108 |  |  | 132 |  |  | 141 |  |  | 91 |  |  | 472 |
Chemical Intermediates |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 67 |  |  | 15 |  |  | 39 |  |  | 50 |  |  | 171 |
Fibers |  |  |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 85 |  |  | 90 |  |  | 80 |  |  | 76 |  |  | 331 |
Gain from sale of business |  | — |  |  | (17 | ) |  | — |  |  | — |  |  | (17 | )
Excluding non-core item |  | 85 |  |  | 73 |  |  | 80 |  |  | 76 |  |  | 314 |
Other |  |  |  |  |  |  |  |  |  |
Loss before interest and taxes |  | (27 | ) |  | (12 | ) |  | (69 | ) |  | (84 | ) |  | (192 | )
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | 30 |  |  | 67 |  |  | 97 |
Cost of disposition of claims against discontinued Solutia operations |  | 5 |  |  | — |  |  | — |  |  | — |  |  | 5 |
Asset impairments and restructuring charges, net |  | — |  |  | — |  |  | 30 |  |  | 5 |  |  | 35 |
Acquisition integration and transaction costs |  | 9 |  |  | — |  |  | — |  |  | — |  |  | 9 |
Excluding non-core items |  | (13 | ) |  | (12 | ) |  | (9 | ) |  | (12 | ) |  | (46 | )
Total Eastman Chemical Company |  |  |  |  |  |  |  |  |  |
Earnings before interest and taxes |  | 387 |  |  | 396 |  |  | 353 |  |  | 253 |  |  | 1,389 |
Mark-to-market pension and other postretirement benefit plans (gain) loss, net |  | — |  |  | — |  |  | 30 |  |  | 67 |  |  | 97 |
Cost of disposition of claims against discontinued Solutia operations |  | 5 |  |  | — |  |  | — |  |  | — |  |  | 5 |
Gain from sale of business |  | — |  |  | (17 | ) |  | — |  |  | — |  |  | (17 | )
Asset impairments and restructuring charges, net |  | (2 | ) |  | — |  |  | 30 |  |  | 17 |  |  | 45 |
Acquisition integration and transaction costs |  | 9 |  |  | — |  |  | — |  |  | — |  |  | 9 |
Total earnings before interest and taxes excluding non-core items |  | $ | 399 |  |  | $ | 379 |  |  | $ | 413 |  |  | $ | 337 |  |  | $ | 1,528 |