XML 25 R10.htm IDEA: XBRL DOCUMENT v3.22.2.2
BORROWINGS
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS
 September 30,December 31,
(Dollars in millions)20222021
Borrowings consisted of:
3.6% notes due August 2022$— $747 
1.50% notes due May 2023 (1)
731 850 
7 1/4% debentures due January 2024198 198 
7 5/8% debentures due June 202443 43 
3.80% notes due March 2025694 698 
1.875% notes due November 2026 (1)
485 565 
7.60% debentures due February 2027195 195 
4.5% notes due December 2028495 494 
4.8% notes due September 2042494 494 
4.65% notes due October 2044876 875 
2027 Term loan499 — 
Commercial paper and short-term borrowings355 — 
Total borrowings5,065 5,159 
Less: Borrowings due within one year1,086 747 
Long-term borrowings$3,979 $4,412 
(1)The carrying value of the euro-denominated 1.50% notes due May 2023 and 1.875% notes due November 2026 will fluctuate with changes in the euro to U.S. dollar exchange rate. The carrying value of these euro-denominated borrowings have been designated as non-derivative net investment hedges of a portion of the Company's net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations.

The Company repaid the 3.6% notes due August 2022, of which $550 million was repaid in second quarter 2022 primarily from proceeds from the 2027 Term Loan discussed below and $200 million was repaid in third quarter 2022 using available cash. There were no debt extinguishment costs associated with the repayment of this debt.

Credit Facility, Term Loan, and Commercial Paper Borrowings

The Company has access to a $1.50 billion revolving credit agreement (the "Credit Facility") expiring December 2026. Borrowings under the Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused commitment. The Credit Facility includes sustainability-linked pricing terms, provides available liquidity for general corporate purposes, and supports commercial paper borrowings. Commercial paper borrowings are classified as short-term. At September 30, 2022 and December 31, 2021, the Company had no outstanding borrowings under the Credit Facility. At September 30, 2022, the Company's commercial paper borrowings were $355 million with a weighted average interest rate of 3.64 percent. At December 31, 2021, the Company had no outstanding commercial paper borrowings.

In April 2022, the Company borrowed $500 million under a five-year term loan agreement (the "2027 Term Loan"). The 2027 Term Loan had a variable interest rate of 4.30 percent as of September 30, 2022. Borrowings under the 2027 Term Loan are subject to interest at varying spreads above quoted market rates.

The Credit Facility and 2027 Term Loan contain customary covenants, including requirements to maintain certain financial ratios, that determine the events of default, amounts available, and terms of borrowings. The Company was in compliance with all applicable covenants at both September 30, 2022 and December 31, 2021.
Fair Value of Borrowings

Eastman has classified its total borrowings at September 30, 2022 and December 31, 2021 under the fair value hierarchy as defined in the accounting policies in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2021 Annual Report on Form 10-K. The fair value for fixed-rate debt securities is based on quoted market prices for the same or similar debt instruments and is classified as Level 2. The fair value for the Company's other borrowings, such as commercial paper and the 2027 Term Loan, equals the carrying value and is classified as Level 2. At September 30, 2022 and December 31, 2021, the fair values of total borrowings were $4.719 billion and $5.737 billion, respectively. The Company had no borrowings classified as Level 1 and Level 3 as of September 30, 2022 and December 31, 2021.