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STOCKHOLDERS' EQUITY | 12 Months Ended
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Dec. 31, 2018
Stockholders' Equity Note [Abstract] |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY A reconciliation of the changes in stockholders' equity for 2018, 2017, and 2016 is provided below:
(Dollars in millions) | Common Stock at Par Value |  | Additional Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Treasury Stock at Cost |  | Total Eastman Stockholders' Equity |  | Noncontrolling Interest |  | Total Equity
Balance at December 31, 2015 | $ | 2 |  |  | $ | 1,863 |  |  | $ | 5,146 |  |  | $ | (390 | ) |  | $ | (2,680 | ) |  | $ | 3,941 |  |  | $ | 80 |  |  | $ | 4,021 |
Net Earnings | — |  |  | — |  |  | 854 |  |  | — |  |  | — |  |  | 854 |  |  | 5 |  |  | 859 |
Cash Dividends (1) | — |  |  | — |  |  | (279 | ) |  | — |  |  | — |  |  | (279 | ) |  | — |  |  | (279 | )
Other Comprehensive Income | — |  |  | — |  |  | — |  |  | 109 |  |  | — |  |  | 109 |  |  | — |  |  | 109 |
Share-Based Compensation Expense (2) | — |  |  | 35 |  |  | — |  |  | — |  |  | — |  |  | 35 |  |  | — |  |  | 35 |
Stock Option Exercises | — |  |  | 21 |  |  | — |  |  | — |  |  | — |  |  | 21 |  |  | — |  |  | 21 |
Other | — |  |  | (4 | ) |  | — |  |  | — |  |  | — |  |  | (4 | ) |  | (1 | ) |  | (5 | )
Share Repurchase | — |  |  | — |  |  | — |  |  | — |  |  | (145 | ) |  | (145 | ) |  | — |  |  | (145 | )
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8 | ) |  | (8 | )
Balance at December 31, 2016 | $ | 2 |  |  | $ | 1,915 |  |  | $ | 5,721 |  |  | $ | (281 | ) |  | $ | (2,825 | ) |  | $ | 4,532 |  |  | $ | 76 |  |  | $ | 4,608 |
Net Earnings | — |  |  | — |  |  | 1,384 |  |  | — |  |  | — |  |  | 1,384 |  |  | 4 |  |  | 1,388 |
Cash Dividends (1) | — |  |  | — |  |  | (303 | ) |  | — |  |  | — |  |  | (303 | ) |  | — |  |  | (303 | )
Other Comprehensive Income | — |  |  | — |  |  | — |  |  | 72 |  |  | — |  |  | 72 |  |  | — |  |  | 72 |
Share-Based Compensation Expense (2) | — |  |  | 52 |  |  | — |  |  | — |  |  | — |  |  | 52 |  |  | — |  |  | 52 |
Stock Option Exercises | — |  |  | 22 |  |  | — |  |  | — |  |  | — |  |  | 22 |  |  | — |  |  | 22 |
Other | — |  |  | (6 | ) |  | — |  |  | — |  |  | — |  |  | (6 | ) |  | 1 |  |  | (5 | )
Share Repurchase | — |  |  | — |  |  | — |  |  | — |  |  | (350 | ) |  | (350 | ) |  | — |  |  | (350 | )
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4 | ) |  | (4 | )
Balance at December 31, 2017 | $ | 2 |  |  | $ | 1,983 |  |  | $ | 6,802 |  |  | $ | (209 | ) |  | $ | (3,175 | ) |  | $ | 5,403 |  |  | $ | 77 |  |  | $ | 5,480 |
Cumulative Effect of Adoption of New Accounting Standards (3) | — |  |  | — |  |  | 16 |  |  | — |  |  | — |  |  | 16 |  |  | — |  |  | 16 |
Net Earnings | — |  |  | — |  |  | 1,080 |  |  | — |  |  | — |  |  | 1,080 |  |  | 4 |  |  | 1,084 |
Cash Dividends (1) | — |  |  | — |  |  | (325 | ) |  | — |  |  | — |  |  | (325 | ) |  | — |  |  | (325 | )
Other Comprehensive (Loss) | — |  |  | — |  |  | — |  |  | (36 | ) |  | — |  |  | (36 | ) |  | — |  |  | (36 | )
Share-Based Compensation Expense (2) | — |  |  | 64 |  |  | — |  |  | — |  |  | — |  |  | 64 |  |  | — |  |  | 64 |
Stock Option Exercises | — |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | 18 |  |  | — |  |  | 18 |
Other (4) | — |  |  | (17 | ) |  | — |  |  | — |  |  | — |  |  | (17 | ) |  | (1 | ) |  | (18 | )
Share Repurchase | — |  |  | — |  |  | — |  |  | — |  |  | (400 | ) |  | (400 | ) |  | — |  |  | (400 | )
Distributions to noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5 | ) |  | (5 | )
Balance at December 31, 2018 | $ | 2 |  |  | $ | 2,048 |  |  | $ | 7,573 |  |  | $ | (245 | ) |  | $ | (3,575 | ) |  | $ | 5,803 |  |  | $ | 75 |  |  | $ | 5,878 |
(1) | Cash dividends includes cash dividends paid and dividends declared, but unpaid.
(2) | Share-based compensation expense is the fair value of share-based awards.
(3) | On January 1, 2018, the Company adopted new accounting standards for revenue recognition, income taxes, and derivatives and hedging, which resulted in adjustments to beginning retained earnings. See Note 1, "Significant Accounting Policies", for specific amounts related to each standard.
(4) | Additional paid-in capital includes value of shares withheld for employees' taxes on vesting of share-based compensation awards.
Eastman is authorized to issue 400 million shares of all classes of stock, of which 50 million may be preferred stock, par value $0.01 per share, and 350 million may be common stock, par value $0.01 per share. The Company declared dividends per share of $2.30 in 2018, $2.09 in 2017, and $1.89 in 2016. The Company established a benefit security trust in 1997 to provide a degree of financial security for unfunded obligations under certain unfunded plans and contributed to the trust a warrant to purchase up to 6 million shares of common stock of the Company for par value. The warrant, which remains outstanding, is exercisable by the trustee if the Company does not meet certain funding obligations, which obligations would be triggered by certain occurrences, including a change in control or potential change in control, as defined, or failure by the Company to meet its payment obligations under certain covered unfunded plans. Such warrant is excluded from the computation of diluted earnings per share because the conditions upon which the warrant becomes exercisable have not been met. The additions to paid-in capital in 2018, 2017, and 2016 are primarily for compensation expense of equity awards and employee stock option exercises. In February 2014, the Company's Board of Directors authorized repurchase of up to $1 billion of the Company's outstanding common stock. The Company completed the $1 billion of repurchases in May 2018, acquiring a total of 12,215,950 shares. In February 2018, the Company's Board of Directors authorized repurchase of up to $2 billion of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined by management to be in the best interests of the Company. As of December 31, 2018, a total of 2,470,755 shares have been repurchased under this authorization for a total of $248 million. During 2018, the Company repurchased 3,959,878 shares of common stock for a cost of approximately $400 million. During 2017, the Company repurchased 4,184,637 shares of common stock for a cost of approximately $350 million. During 2016, the Company repurchased 2,131,501 shares of common stock for a cost of approximately $145 million. The Company's charitable foundation held 50,798 issued and outstanding shares of the Company's common stock at December 31, 2018, 2017, and 2016 which are included in treasury stock in the Consolidated Statements of Financial Position and excluded from calculations of diluted earnings per share. The following table sets forth the computation of basic and diluted earnings per share ("EPS"):
| For years ended December 31,
(In millions, except per share amounts) | 2018 |  | 2017 |  | 2016
Numerator |  |  |  |  |
Net earnings attributable to Eastman | $ | 1,080 |  |  | $ | 1,384 |  |  | $ | 854 |
Denominator |  |  |  |  |
Weighted average shares used for basic EPS | 141.2 |  |  | 144.8 |  |  | 147.3 |
Dilutive effect of stock options and other award plans | 1.7 |  |  | 1.3 |  |  | 1.1 |
Weighted average shares used for diluted EPS | 142.9 |  |  | 146.1 |  |  | 148.4 |
EPS (1) |  |  |  |  |
Basic | $ | 7.65 |  |  | $ | 9.56 |  |  | $ | 5.80 |
Diluted | $ | 7.56 |  |  | $ | 9.47 |  |  | $ | 5.75 |
(1) | Earnings per share are calculated using whole dollars and shares.
Stock options excluded from the 2018, 2017, and 2016 calculations of diluted earnings per share were 619,706, 204,978, and 1,072,468, respectively, because the market value of option exercises for these awards were less than the cash proceeds that would be received from these exercises. Shares of common stock issued, including shares held in treasury, are presented below:
| For years ended December 31,
| 2018 |  | 2017 |  | 2016
Balance at beginning of year | 218,369,992 |  |  | 217,707,600 |  |  | 216,899,964 |
Issued for employee compensation and benefit plans | 770,531 |  |  | 662,392 |  |  | 807,636 |
Balance at end of year | 219,140,523 |  |  | 218,369,992 |  |  | 217,707,600 |
Accumulated Other Comprehensive Income (Loss)
(Dollars in millions) | Cumulative Translation Adjustment |  | Benefit Plans Unrecognized Prior Service Credits |  | Unrealized Gains (Losses) on Cash Flow Hedges |  | Unrealized Losses on Investments |  | Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2016 | $ | (381 | ) |  | $ | 163 |  |  | $ | (62 | ) |  | $ | (1 | ) |  | $ | (281 | )
Period change | 85 |  |  | (27 | ) |  | 14 |  |  | — |  |  | 72 |
Balance at December 31, 2017 | (296 | ) |  | 136 |  |  | (48 | ) |  | (1 | ) |  | (209 | )
Period change | (13 | ) |  | (30 | ) |  | 7 |  |  | — |  |  | (36 | )
Balance at December 31, 2018 | $ | (309 | ) |  | $ | 106 |  |  | $ | (41 | ) |  | $ | (1 | ) |  | $ | (245 | )
Amounts of other comprehensive income (loss) are presented net of applicable taxes. Eastman records deferred income taxes on the cumulative translation adjustment related to branch operations and income from other entities included in the Company's consolidated U.S. tax return. No deferred income taxes are provided on the cumulative translation adjustment of other subsidiaries outside the United States, as the cumulative translation adjustment is considered to be a component of indefinitely invested, unremitted earnings of these foreign subsidiaries. Components of total other comprehensive income (loss) recorded in the Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings are presented below, before tax and net of tax effects:
| For years ended December 31,
| 2018 |  | 2017 |  | 2016
(Dollars in millions) | Before Tax |  | Net of Tax |  | Before Tax |  | Net of Tax |  | Before Tax |  | Net of Tax
Change in cumulative translation adjustment | $ | (13 | ) |  | $ | (13 | ) |  | $ | 85 |  |  | $ | 85 |  |  | $ | (97 | ) |  | $ | (97 | )
Defined benefit pension and other postretirement benefit plans: |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit arising during the period | — |  |  | — |  |  | — |  |  | — |  |  | 103 |  |  | 64 |
Amortization of unrecognized prior service credits included in net periodic costs | (40 | ) |  | (30 | ) |  | (43 | ) |  | (27 | ) |  | (48 | ) |  | (30 | )
Change in defined benefit pension and other postretirement benefit plans | (40 | ) |  | (30 | ) |  | (43 | ) |  | (27 | ) |  | 55 |  |  | 34 |
Derivatives and hedging: |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gain (loss) during period | 30 |  |  | 22 |  |  | 11 |  |  | 7 |  |  | 150 |  |  | 93 |
Reclassification adjustment for (gains) losses included in net income, net | (20 | ) |  | (15 | ) |  | 11 |  |  | 7 |  |  | 127 |  |  | 79 |
Change in derivatives and hedging | 10 |  |  | 7 |  |  | 22 |  |  | 14 |  |  | 277 |  |  | 172 |
Total other comprehensive income (loss) | $ | (43 | ) |  | $ | (36 | ) |  | $ | 64 |  |  | $ | 72 |  |  | $ | 235 |  |  | $ | 109 |
For additional information regarding the impact of reclassifications into earnings, refer to Note 9, "Derivative and Non-Derivative Financial Instruments", and Note 10, "Retirement Plans".

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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