Business Held for Sale

9 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

BUSINESS HELD FOR SALE

On June 9, 2021, Eastman entered into a definitive agreement to sell rubber additives (including Crystex™ insoluble sulfur and Santoflex™ antidegradants) and other product lines and related assets and technology of the global tire additives business of its Additives & Functional Products ("AFP") segment. The sale was completed November 1, 2021. The sale did not include the Eastman Impera™ and other performance resins product lines of the tire additives business. The Company will provide certain rubber additives business transition and post-closing services on agreed terms. The business being sold was not reported as a discontinued operation because the sale will not have a major effect on the Company's operations and financial results.

As of the definitive agreement date and until sale, the rubber additives business disposal group was classified as held for sale and was measured at its fair value less costs to sell, resulting in a $555 million loss on the business held for sale (including an estimated total purchase price, estimated working capital settlement, anticipated liquidation of cumulative translation adjustment, and certain costs to sell) in first nine months 2021. The fair value loss adjustment on the disposal group is reported as a component of "Assets held for sale" in the Unaudited Consolidated Statements of Financial Position.

The major classes of assets and liabilities of the business classified as held for sale as of September 30, 2021 were as follows:


	September 30,
(Dollars in millions)	2021
Assets held for sale
Trade receivables, net of allowance for doubtful accounts	$	103
Inventories	98
Other assets	26
Properties, net of accumulated depreciation	304
Goodwill	399
Intangible assets, net of accumulated amortization	378
Assets held for sale	1,308
Liabilities held for sale
Payables and other liabilities	51
Post-employment obligations	32
Other liabilities	14
Liabilities held for sale	97
Disposal group, net	$	1,211

Long-lived assets and definite-lived intangible assets are not depreciated or amortized while classified as held for sale. Separately, the Company recognized $3 million and $8 million of transaction costs for the sale of the business in third quarter 2021 and first nine months 2021, respectively. Transaction costs are expensed as incurred and are included in the "Selling, general and administrative expenses" line item in the Unaudited Consolidated Statements of Earnings, Comprehensive Income, and Retained Earnings.

On October 28, 2021, the Company entered into a definitive agreement to sell the adhesives resins business, which includes hydrocarbon resins (including Impera™ tire resins), pure monomer resins, polyolefin polymers, rosins and dispersions, and oleochemical and fatty-acid based resins product lines, of its AFP segment for $1 billion. The final purchase price is subject to working capital and other adjustments at closing. As of the definitive agreement date and until sale, the adhesives resins business disposal group will be classified as held for sale. The business being sold will not be reported as a discontinued operation because the sale will not have a major effect on the Company's operations and financial results.