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RETIREMENT PLANS (Tables)

12 Months Ended

Dec. 31, 2019

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 2019 and 2018, the funded status of the plans and amounts recognized in the Consolidated Statements of Financial Position.

Summary of Changes



	Pension Plans												Postretirement Benefit Plans
	2019						2018						2019			2018
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Change in projected benefit obligation:
Benefit obligation, beginning of year	$	1,959		$	840		$	2,154		$	893		$	672		$	738
Service cost	27			14			35			14			—			—
Interest cost	76			20			67			20			25			22
Actuarial (gain) loss	200			113			(119		)	(20		)	71			(33		)
Plan participants' contributions	—			1			—			1			10			11
Effect of currency exchange	—			11			—			(45		)	1			(1		)
Benefits paid	(195		)	(27		)	(178		)	(23		)	(63		)	(65		)
Benefit obligation, end of year	$	2,067		$	972		$	1,959		$	840		$	716		$	672
Change in plan assets:
Fair value of plan assets, beginning of year	$	1,820		$	713		$	2,054		$	773		$	135		$	148
Actual return on plan assets	289			102			(61		)	(19		)	27			(6		)
Effect of currency exchange	—			9			—			(39		)	—			—
Company contributions	5			22			5			20			42			43
Reserve for third party contributions	—			—			—			—			(12		)	4
Plan participants' contributions	—			1			—			1			10			11
Benefits paid	(195		)	(27		)	(178		)	(23		)	(63		)	(65		)
Fair value of plan assets, end of year	$	1,919		$	820		$	1,820		$	713		$	139		$	135
Funded status at end of year	$	(148	)	$	(152	)	$	(139	)	$	(127	)	$	(577	)	$	(537	)
Amounts recognized in the Consolidated Statements of Financial Position consist of:
Other noncurrent assets	$	13		$	—		$	2		$	—		$	50		$	41
Current liabilities	(3		)	(1		)	(4		)	(1		)	(47		)	(45		)
Post-employment obligations	(158		)	(151		)	(137		)	(126		)	(580		)	(533		)
Net amount recognized, end of year	$	(148	)	$	(152	)	$	(139	)	$	(127	)	$	(577	)	$	(537	)
Accumulated benefit obligation	$	2,005		$	919		$	1,900		$	796
Amounts recognized in accumulated other comprehensive income consist of:
Prior service (credit) cost	$	2		$	—		$	2		$	—		$	(143	)	$	(182	)

Defined Benefit Plan, Plan with Projected Benefit Obligation in Excess of Plan Assets [Table Text Block]

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



(Dollars in millions)	2019				2018
	U.S.		Non-U.S.		U.S.		Non-U.S.
Projected benefit obligation	$	1,673	$	972	$	1,726	$	840
Fair value of plan assets	1,512		820		1,585		713

Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets [Table Text Block]

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



(Dollars in millions)	2019				2018
	U.S.		Non-U.S.		U.S.		Non-U.S.
Projected benefit obligation	$	1,673	$	651	$	1,726	$	568
Accumulated benefit obligation	1,611		625		1,667		547
Fair value of plan assets	1,512		513		1,585		448

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
	2019						2018						2017						2019			2018			2017
(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	$	27		$	14		$	35		$	14		$	37		$	13		$	—		$	—		$	3
Interest cost	76			20			67			20			66			20			25			22			23
Expected return on plan assets	(128		)	(32		)	(147		)	(37		)	(140		)	(35		)	(5		)	(5		)	(5		)
Amortization of:
Prior service (credit) cost	—			—			(1		)	1			(4		)	1			(39		)	(40		)	(40		)
Mark-to-market pension and other postretirement benefits (gain) loss, net	39			43			89			36			(37		)	(7		)	61			(26		)	23
Net periodic benefit (credit) cost	$	14		$	45		$	43		$	34		$	(78	)	$	(8	)	$	42		$	(49	)	$	4
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Amortization of:
Prior service (credit) cost	$	—		$	—		$	(1	)	$	1		$	(4	)	$	1		$	(39	)	$	(40	)	$	(40	)
Total	$	—		$	—		$	(1	)	$	1		$	(4	)	$	1		$	(39	)	$	(40	)	$	(40	)

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
	2019				2018				2017				2019		2018		2017
Weighted-average assumptions used to determine benefit obligations for years ended December 31:	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.25	%	1.56	%	4.29	%	2.35	%	3.57	%	2.25	%	3.21	%	4.26	%	3.54	%
Rate of compensation increase	3.25	%	2.94	%	3.25	%	2.94	%	3.25	%	2.95	%	3.25	%	3.25	%	3.25	%
Health care cost trend
Initial													6.50	%	6.50	%	6.75	%
Decreasing to ultimate trend of													5.00	%	5.00	%	5.00	%
in year													2026		2025		2025

Weighted-average assumptions used to determine net periodic cost for years ended December 31:	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	4.29	%	2.35	%	3.57	%	2.25	%	3.89	%	2.33	%	4.26	%	3.54	%	3.91	%
Discount rate for service cost	4.32	%	2.35	%	3.64	%	2.25	%	3.89	%	2.33	%	4.05	%	3.28	%	4.31	%
Discount rate for interest cost	3.96	%	2.35	%	3.18	%	2.25	%	3.24	%	2.33	%	3.93	%	3.14	%	3.28	%
Expected return on assets	7.43	%	4.49	%	7.48	%	4.83	%	7.49	%	5.02	%	3.75	%	3.75	%	3.75	%
Rate of compensation increase	3.25	%	2.94	%	3.25	%	2.95	%	3.25	%	2.94	%	3.25	%	3.25	%	3.25	%
Health care cost trend
Initial													6.50	%	6.75	%	7.00	%
Decreasing to ultimate trend of													5.00	%	5.00	%	5.00	%
in year													2025		2025		2021

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, 2019
Description	Total Fair Value				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⁾	$	35	$	72	$	35	$	72	$	—	$	—	$	—	$	—
Public Equity - United States ⁽²⁾	1		—		1		—		—		—		—		—
Other Investments ⁽³⁾	—		57		—		—		—		—		—		57
Total Assets at Fair Value	$	36	$	129	$	36	$	72	$	—	$	—	$	—	$	57
Investments Measured at Net Asset Value ⁽⁴⁾	1,883		691
Total Assets	$	1,919	$	820



(Dollars in millions)					Fair Value Measurements at December 31, 2018
Description	Total Fair Value				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⁾	$	16	$	53	$	16	$	53	$	—	$	—	$	—	$	—
Public Equity - United States ⁽²⁾	2		—		2		—		—		—		—		—
Other Investments ⁽³⁾	—		51		—		—		—		—		—		51
Total Assets at Fair Value	$	18	$	104	$	18	$	53	$	—	$	—	$	—	$	51
Investments Measured at Net Asset Value ⁽⁴⁾	1,802		609
Total Assets	$	1,820	$	713


⁽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, 2019
Description	Total Fair Value		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:
Debt ⁽¹⁾:
Fixed Income (U.S.)	$	85	$	—	$	85	$	—
Fixed Income (Non-U.S.)	26		—		26		—
Total	$	111	$	—	$	111	$	—



(Dollars in millions)			Fair Value Measurements at December 31, 2018
Description	Total Fair Value		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 ⁽²⁾	$	3	$	3	$	—	$	—
Debt ⁽¹⁾:
Fixed Income (U.S.)	78		—		78		—
Fixed Income (Non-U.S.)	26		—		26		—
Total	$	107	$	3	$	104	$	—

⁽¹⁾

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.


⁽²⁾	Cash & Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts.

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, 2017	$	51
Unrealized gains	—
Balance at December 31, 2018	51
Unrealized gains	5
Purchases, issuances, sales, and settlements	1
Balance at December 31, 2019	$	57

⁽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 2020 and the asset allocation at December 31, 2019 and 2018, by asset category.



	U.S. Pension Plans			Non-U.S. Pension Plans			Postretirement Benefit Plan
	2020 Target Allocation	Plan Assets at December 31, 2019	Plan Assets at December 31, 2018	2020 Target Allocation	Plan Assets at December 31, 2019	Plan Assets at December 31, 2018	2020 Target Allocation	Plan Assets at December 31, 2019	Plan Assets at December 31, 2018
Asset category
Equity securities	44%	50%	43%	24%	21%	19%	—%	—%	—%
Debt securities	39%	37%	44%	57%	53%	54%	100%	100%	100%
Real estate	2%	2%	2%	5%	8%	8%	—%	—%	—%
Other investments ⁽¹⁾	15%	11%	11%	14%	18%	19%	—%	—%	—%
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.
2020	$	197	$	31	$	57
2021	161		30		57
2022	156		31		53
2023	151		34		47
2024	151		38		47
2025-2029	686		210		223