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What changed in Eastman Chemical Company's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Eastman Chemical Company's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+244 added−245 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in Eastman Chemical Company's 2025 10-K

244 paragraphs added · 245 removed · 203 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+9 added−14 removed93 unchanged
Biggest changeFIBERS SEGMENT Overview In the Fibers segment, Eastman manufactures and sells acetate tow and triacetin plasticizers for use in filtration media, primarily cigarette filters; cellulosic filament yarn and staple fibers for use in apparel under the brand Naia ™ , home furnishings, and industrial fabrics; nonwoven media for use in filtration and friction applications, used primarily in transportation, industrial, and agricultural end-markets; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers.
Biggest changeFIBERS SEGMENT Overview In the Fibers segment, Eastman manufactures and sells acetate tow and triacetin plasticizers for use in filtration media, primarily cigarette filters; cellulosic filament yarn and staple fibers for use in apparel under the brand Naia ™ , home furnishings, and industrial fabrics; nonwoven media for use in filtration and friction applications, used primarily in transportation, industrial, and agricultural end-markets; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers. 13 Tab le of Contents The Fibers segment's competitive strengths include a reputation for high-quality products, technical expertise, large scale vertically-integrated processes, reliability of supply, internally produced acetate flake supply for Fibers segment's products, a reputation for customer service excellence, and a customer base characterized by strategic long-term customers and end-user relationships.
Recently developed, introduced, or commercialized innovation products, applications, and technologies include the following: • Molecular recycling technologies, including carbon renewal technology and polyester renewal technology, which are being used for production and commercial sales of multiple products, described below under " Sustainability and Circular Economy "; • Eastman Tritan™ Renew copolyester based on polyester renewal technology which transforms single-use polyester waste into basic building blocks that are then used to make durable, high performance materials; • Naia™, a biodegradable and compostable cellulosic biopolymer fiber product for the apparel market developed from proprietary cellulosic materials that are approximately 60 percent biopolymer derived, and Naia™ Renew, approximately 60 percent biopolymer and 40 percent waste plastics derived; • Aventa™, a biodegradable and compostable cellulosic biopolymer that is approximately 60 percent bio-content derived, and Aventa™ Renew, approximately 60 percent bio-derived and 40 percent recycled plastic derived, both used in food service and food packaging applications.
Recently developed, introduced, or commercialized innovation products, applications, and technologies include the following: • Molecular recycling technologies, including polyester renewal technology and carbon renewal technology, which are being used for production and commercial sales of multiple products, described below under " Sustainability and Circular Economy "; • Eastman Tritan™ Renew copolyester based on polyester renewal technology which transforms single-use polyester waste into basic building blocks that are then used to make durable, high performance materials; • Naia™, a biodegradable and compostable cellulosic biopolymer fiber product for the apparel market developed from proprietary cellulosic materials that are approximately 60 percent biopolymer derived, and Naia™ Renew, approximately 60 percent biopolymer and 40 percent waste plastics derived; • Aventa™, a biodegradable and compostable cellulosic biopolymer that is approximately 60 percent bio-content derived, and Aventa™ Renew, approximately 60 percent bio-content derived and 40 percent recycled plastic derived, both used in food service and food packaging applications.
The Company continues the use of its unique platform of solutions to address the challenges of plastic waste in the environment with advanced circular recycling, or molecular recycling, including carbon renewal and polyester renewal technologies.
The Company continues the use of its unique platform of solutions to address the challenges of plastic waste in the environment with advanced circular recycling, or molecular recycling, including polyester renewal and carbon renewal technologies.
When appropriate, the Company purchases raw materials from a single source supplier to maximize quality and reduce cost and has contingency plans to minimize the potential impact of any supply disruptions from single source suppliers. 17 While temporary shortages of raw materials and energy may occasionally occur, these items are generally sufficiently available to cover current and projected requirements.
When appropriate, the Company purchases raw materials from a single source supplier to maximize quality and reduce cost and has contingency plans to minimize the potential impact of any supply disruptions from single source suppliers. While temporary shortages of raw materials and energy may occasionally occur, these items are generally sufficiently available to cover current and projected requirements.
Intellectual Property, Trademarks, and Licensing While Eastman's intellectual property portfolio is an important Company asset that it expands and vigorously protects globally through a combination of patents, trademarks, copyrights, and trade secrets, its business is not substantially dependent upon any one particular patent, trademark, copyright, or trade secret.
Intellectual Property and Trademarks While Eastman's intellectual property portfolio is an important Company asset that it expands and vigorously protects globally through a combination of patents, trademarks, copyrights, and trade secrets, its business is not substantially dependent upon any one particular patent, trademark, copyright, or trade secret.
Federal Insecticide, Fungicide, and Rodenticide Act and similar non-U.S. counterparts, and the Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") program in the European Union) and laws protecting intellectual property (see "Intellectual Property, Trademarks, and Licensing") have the most impact on the Company's day-to-day operations and competitive position.
Federal Insecticide, Fungicide, and Rodenticide Act and similar non-U.S. counterparts, and the Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH") program in the European Union) and laws protecting intellectual property (see "Intellectual Property and Trademarks") have the most impact on the Company's day-to-day operations and competitive position.
See examples of recent product and technology innovations in "Corporate Overview - Business Strategy - Innovation". 16 Eastman manages certain growth initiatives and costs at the corporate level, including certain R&D costs not allocated to any one operating segment.
See examples of recent product and technology innovations in "Corporate Overview - Business Strategy - Innovation". Eastman manages certain growth initiatives and costs at the corporate level, including certain R&D costs not allocated to any one operating segment.
The Company has multiple suppliers for most key raw materials and energy sources and uses quality management principles, such as the establishment of long-term relationships with suppliers and ongoing performance assessments and benchmarking, as part of its supplier selection process.
The Company has multiple suppliers for most key raw materials and energy sources and uses quality management principles, such as the establishment of long-term relationships with suppliers and ongoing performance assessments and benchmarking, as part of its supplier management process.
Kingboard (Fo Gang) Specialty Resins Limited Chang Chun Petrochemical Co., Ltd. polyvinyl alcohol butyraldehyde 2-ethyl hexanol ethanol triethylene glycol vinyl acetate monomer transportation (automotive safety glass, automotive acoustic glass, and HUD) building and construction (PVB for architectural interlayers) Performance Films LLumar ™ Flexvue ™ SunTek ™ V-KOOL ™ Gila ™ window films and protective films products for aftermarket applied films XPEL, Inc. 3M Company Saint-Gobain S.A. polyethylene terephthalate film aliphatic thermoplastic polyurethane film transportation (automotive after- market window films and paint protection films) building and construction (residential and commercial window films) health and wellness (medical) Specialty Plastics Tritan ™ copolyesters Eastar ™ copolyesters Spectar ™ copolyesters Embrace ™ copolyesters Visualize ™ Eastman Aspira ™ family of resins Treva ™ standard copolyesters premium copolyesters cellulosic biopolymers molecular-recycled copolyesters S.K.
Kingboard (Fo Gang) Specialty Resins Limited Chang Chun Petrochemical Co., Ltd. polyvinyl alcohol butyraldehyde 2-ethyl hexanol ethanol triethylene glycol vinyl acetate monomer transportation (automotive safety glass, automotive acoustic glass, and HUD) building and construction (PVB for architectural interlayers) Performance Films LLumar ™ Flexvue ™ SunTek ™ V-KOOL ™ Gila ™ window films and protective films products for aftermarket applied films XPEL, Inc. 3M Company Saint-Gobain S.A. polyethylene terephthalate film aliphatic thermoplastic polyurethane film transportation (automotive after- market window films and paint protection films) building and construction (residential and commercial window films) Specialty Plastics Tritan ™ copolyesters Eastar ™ copolyesters Spectar ™ copolyesters Embrace ™ copolyesters Visualize ™ Eastman Aspira ™ family of resins Treva ™ standard copolyesters premium copolyesters cellulosic biopolymers molecular-recycled copolyesters S.K.
Management uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development, and relentlessly engaging the market. The Company sells differentiated products into diverse markets and geographic regions and engages the market by collaborating and co-innovating with customers and downstream users in existing and new niche markets to creatively solve problems.
Management uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development, and relentlessly engaging the market. The Company sells differentiated products into diverse markets and geographic regions and engages the market by collaborating and co-innovating with customers and downstream users in existing and new targeted markets to creatively solve problems.
The Company's innovation strategy is guided by the need to provide timely and practical solutions to sustainability macro-drivers that will improve the quality of life globally through material solutions. This strategy has been accelerated by investment in global differentiated application development capabilities that position Eastman as a strategic customer partner driving success within attractive niche markets.
The Company's innovation strategy is guided by the need to provide timely and practical solutions to sustainability macro-drivers that will improve the quality of life globally through material solutions. This strategy has been accelerated by investment in global differentiated application development capabilities that position Eastman as a strategic customer partner driving success within attractive targeted markets.
As Eastman develops new products to meet today's most pressing needs, the Company inspires innovative ideas by making every team member feel valued and empowered to do their best work. Building an inclusive workplace, powered by a global employee population of approximately 14,000 people worldwide is key to promoting innovation and driving results.
As Eastman develops new products to meet today's most pressing needs, the Company inspires innovative ideas by making every team member feel valued and empowered to do their best work. Building an inclusive workplace, powered by a global employee population of approximately 13,000 people worldwide is key to promoting innovation and driving results.
The Company's expertise and scalability within the Circular Economy platform allows true material to material recycling with an infinite loop and no compromise to quality. The Company's technologies create drop-in replacements for existing products by breaking down hard-to-recycle plastic waste feedstock to a molecular level and upcycling it back to food-grade products.
The Company's expertise and scalability within the Circular Economy platform allows true material to material recycling with an infinite loop and no compromise to quality. The Company's technologies create virgin equivalent drop-in replacements for existing products by breaking down hard-to-recycle plastic waste feedstock to a molecular level and upcycling it back to food-grade products.
For additional information regarding sales by customer location and by segment, see Note 20, "Segment and Regional Sales Information", to the Company's consolidated financial statements in Part II, Item 8, and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary by Operating Segment", and "Sales by Customer Location" in Part II, Item 7 of this Annual Report. 6 BUSINESS STRATEGY Eastman's objective is to be a global specialty materials company that enhances the quality of life in a material way with consistent, sustainable earnings growth and strong cash flow.
For additional information regarding sales by customer location and by segment, see Note 20, "Segment and Regional Sales Information", to the Company's consolidated financial statements in Part II, Item 8, and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Summary by Operating Segment", and "Sales by Customer Location" in Part II, Item 7 of this Annual Report. 6 Tab le of Contents BUSINESS STRATEGY Eastman's objective is to be a global specialty materials company that enhances the quality of life in a material way with consistent, sustainable earnings growth and strong cash flow.
Eastman began business in 1920 for the purpose of producing chemicals for Eastman Kodak Company's photographic business and became a public company, incorporated in Delaware, on December 31, 1993. Eastman has 36 manufacturing facilities and has equity interests in three manufacturing joint ventures in 12 countries that supply products to customers throughout the world.
Eastman began business in 1920 for the purpose of producing chemicals for Eastman Kodak Company's photographic business and became a public company, incorporated in Delaware, on December 31, 1993. Eastman has 36 manufacturing facilities and has equity interests in four manufacturing joint ventures in 12 countries that supply products to customers throughout the world.
Eastman's strategy is to target industries and markets where the Company can leverage its application development expertise to develop product offerings to provide differentiated value that address current and future customer and market needs. The Company's strategic marketing approach and capabilities leverage the Company's insights about trends, markets, and customers to drive development of specialty products.
Eastman's strategy is to target industries and markets where the Company can leverage its application development expertise to develop product offerings to provide differentiated value that addresses current and future customer and market needs. The Company's strategic marketing approach and capabilities leverage the Company's insights about trends, markets, and customers to drive development of specialty products.
Eastman's operations or products have been in the past, and may be in the future, adversely affected by these factors. See "Risk Factors" in Part I, Item 1A of this Annual Report. The Company's raw material and energy costs as a percent of total cost of operations were approximately 45 percent in 2024.
Eastman's operations or products have been in the past, and may be in the future, adversely affected by these factors. See "Risk Factors" in Part I, Item 1A of this Annual Report. The Company's raw material and energy costs as a percent of total cost of operations were approximately 45 percent in 2025.
Polyester stream products are converted for end-uses in cosmetics and personal care, medical devices, durable goods, and food packaging industries. • In the cellulosic biopolymers and acetyl stream, the Company begins with gasification of fossil fuels with oxygen. The resulting synthesis gas is converted into acetic acid and acetic anhydride.
Polyester stream products are converted for end-uses in cosmetics and personal care, medical devices, durable goods, and food packaging industries. • In the cellulosic biopolymer and acetyl stream, the Company begins with gasification of fossil fuels with oxygen. The resulting synthesis gas is converted into acetic acid and acetic anhydride.
Management believes that this innovation-driven growth model will enable the Company to leverage its proven technology capabilities to improve product mix, increasing emphasis on specialty businesses, and sustaining and expanding market share through leadership in attractive niche markets.
Management believes that this innovation-driven growth model will enable the Company to leverage its proven technology capabilities to improve product mix, increasing emphasis on specialty businesses, and sustaining and expanding market share through leadership in attractive targeted markets.
Cellulosic biopolymers derivative manufacturing at the Company begins with natural polymers, sourced from sustainably-managed forests, which, when combined with acetyl and olefin chemicals, provide differentiated product lines. Through a recent recycling innovation, carbon renewal technology is now enabling the recycling of complex plastics to serve as the basic building blocks of Eastman's cellulosic product stream.
Cellulosic biopolymers derivative manufacturing at the Company begins with natural polymers, sourced from sustainably-managed forests, which, when combined with acetyl and olefin chemicals, provide differentiated product lines. Through recycling innovation, carbon renewal technology is enabling the recycling of complex plastics to serve as the basic building blocks of Eastman's cellulosic product stream.
(4) Aventa ™ , a biodegradable and compostable cellulosic biopolymer, replaces single-use, traditional materials in food packaging and quick-service restaurants such as straws, cutlery, and protein trays. 8 Eastman is positioned to enhance the quality of life in a material way with its sustainable solutions.
(4) Aventa ™ , a biodegradable and compostable cellulosic biopolymer, replaces single-use, traditional materials in food packaging and quick-service restaurants such as straws, cutlery, and protein trays. 8 Tab le of Contents Eastman is positioned to enhance the quality of life in a material way with its sustainable solutions.
The Fibers segment also expects to benefit from Eastman's recently developed carbon renewal technology, which enables the substitution of fossil fuel feedstock with recycled waste content. Products using this technology are marketed and sold under the "Renew" product designation. See "Corporate Overview - Business Strategy - Sustainability and Circular Economy ".
The Fibers segment also expects to benefit from Eastman's carbon renewal technology, which enables the substitution of fossil feedstock with recycled waste content. Products using this technology are marketed and sold under the "Renew" product designation. See "Corporate Overview - Business Strategy - Sustainability and Circular Economy ".
OQ Chemicals Celanese Corporation Lonza Ineos Group Holdings S.A propane ethane propylene coal natural gas paraxylene industrial chemicals and processing building and construction (paint and coating applications, construction chemicals, building materials) pharmaceuticals and agriculture health and wellness packaging Plasticizers Eastman 168 ™ Dioctyl phthalate ("DOP") Benzoflex ™ TXIB ™ Effusion ™ primary non- phthalate and phthalate plasticizers and a range of niche non- phthalate plasticizers BASF SE Exxon Mobil Corporation LG Chem, Ltd.
OXEA Celanese Corporation Lonza Ineos Group Holdings S.A propane ethane propylene coal natural gas paraxylene industrial chemicals and processing building and construction (paint and coating applications, construction chemicals, building materials) pharmaceuticals and agriculture health and wellness packaging Plasticizers Eastman 168 ™ Dioctyl phthalate ("DOP") Benzoflex ™ TXIB ™ Effusion ™ primary non- phthalate and phthalate plasticizers and a range of targeted non- phthalate plasticizers BASF SE Exxon Mobil Corporation LG Chem, Ltd.
Sustainability and Circular Economy Central to Eastman's innovation-driven growth model is management's dedication to enhance the quality of life in a material way with an ongoing commitment to sustainability. 7 The Company's long history of technical expertise in chemical processes and polymer science positions it to provide innovative solutions to some of the world's most complex problems.
Sustainability and Circular Economy Central to Eastman's innovation-driven growth model is the Company's dedication to enhance the quality of life in a material way with an ongoing commitment to sustainability. 7 Tab le of Contents The Company's long history of technical expertise in chemical processes and polymer science positions it to provide innovative solutions to some of the world's most complex problems.
The Company focuses its market engagement on attractive niche markets, leveraging disruptive macro trends, and market activation throughout the value chain with both customers and downstream users.
The Company focuses its market engagement on attractive targeted markets, leveraging disruptive macro trends, and market activation throughout the value chain with both customers and downstream users.
Strategy Management applies Eastman's innovation-driven growth model in the AFP segment by leveraging proprietary technologies for the continued development of innovative product offerings and focusing growth efforts in end-markets such as food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics.
Strategy Management applies Eastman's innovation-driven growth model in the AFP segment by leveraging proprietary technologies for 11 Tab le of Contents the continued development of innovative product offerings and focusing growth efforts in end-markets such as food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics.
The top 100 customers accounted for approximately 60 percent of the Company's 2024 sales revenue. No single customer accounted for 10 percent or more of the Company's consolidated sales revenue during 2024.
The top 100 customers accounted for approximately 60 percent of the Company's 2025 sales revenue. No single customer accounted for 10 percent or more of the Company's consolidated sales revenue during 2025.
Management believes the AM segment's competitive advantages also include long-term customer relationships, vertical integration and scale in manufacturing, and leading market positions. 9 Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Advanced Interlayers Saflex ™ Saflex ™ Q Series Saflex ™ HUD interlayer products standard PVB sheet premium PVB sheet Sekisui Chemical Co., Ltd. Kuraray Co., Ltd.
Management believes the AM segment's competitive advantages also include long-term customer relationships, vertical integration and scale in manufacturing, and leading market positions. 9 Tab le of Contents Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Advanced Interlayers Saflex ™ Saflex ™ Q Series Saflex ™ HUD interlayer products standard PVB sheet premium PVB sheet Sekisui Chemical Co., Ltd.
As a producer of a broad range of advanced materials, specialty additives, chemicals, and fibers, Eastman owns over 800 active United States patents, approximately 1,700 active foreign patents, and over 4,500 active worldwide trademark applications and registrations.
As a producer of a broad range of advanced materials, specialty additives, chemicals, and fibers, Eastman owns over 700 active United States patents, over 1,600 active foreign patents, and over 4,500 active worldwide trademark applications and registrations.
Bayer AG Adisseo alkylamines acrylonitrile alcohols methanol ethylene oxide carbon disulfide ("CS2") caustic soda water treatment personal and home care pharmaceuticals agriculture and crop protection gut health solutions preservation and hygiene Coatings Additives Polymers cellulosics Tetrashield ™ polyesters polyolefins Additives and Solvents Texanol ™ Optifilm ™ ketones esters EastaPure ™ electronic chemicals specialty coalescents, specialty solvents, paint additives and specialty polymers BASF SE Dow Inc.
Adisseo DSM-Firmenich alkylamines acrylonitrile alcohols methanol ethylene oxide carbon disulfide ("CS2") caustic soda water treatment personal and home care pharmaceuticals agriculture and crop protection gut health solutions preservation and hygiene Coatings Additives Polymers cellulosics polyesters polyolefins Additives and Solvents Texanol ™ Optifilm ™ ketones esters EastaPure ™ electronic chemicals specialty coalescents specialty solvents paint additives specialty polymers BASF SE Dow Inc.
The Company's products are shipped to customers and downstream users directly from Eastman manufacturing plants and distribution centers worldwide. Research and Development Management applies its innovation-driven growth model by leveraging the Company's world class scalable technology platforms, such as cellulosic biopolymers and polyesters, that provide a competitive advantage and the foundation for sustainable earnings growth.
The Company's products are shipped to customers and downstream users directly from Eastman manufacturing plants and distribution centers worldwide. 15 Tab le of Contents Research and Development Management applies its innovation-driven growth model by leveraging the Company's world class scalable technology platforms, such as cellulosic biopolymers and polyesters, that provide a competitive advantage and the foundation for sustainable earnings growth.
Key raw materials include paraxylene, propane, propylene, cellulosic biopolymers, polyvinyl alcohol, methanol, fatty alcohol, and a wide variety of precursors for specialty organic chemicals. Key purchased energy sources include natural gas, coal, and electricity.
Key raw materials include cellulose, fatty alcohol, methanol, paraxylene, polyvinyl alcohol, propane, propylene, and a wide variety of precursors for specialty organic chemicals. Key purchased energy sources include natural gas, coal, and electricity.
BorgWarner Inc. natural and synthetic fibers inorganic and metallic additives resins filtration and friction media for transportation industrial agriculture and mining aerospace markets Strategy Management applies the innovation-driven growth model to the Fibers segment by leveraging its strong customer relationships and industry knowledge to maintain a leading industry position in the global market.
BorgWarner Inc. natural and synthetic fibers inorganic and metallic additives resins filtration and friction media for transportation industrial agriculture and mining aerospace markets 14 Tab le of Contents Strategy Management applies the innovation-driven growth model to the Fibers segment by leveraging its strong customer relationships and industry knowledge to maintain a leading industry position in the global market.
Other matters concerning health, safety, and the environment are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and in Note 1, "Significant Accounting Policies"; Note 13, "Environmental Matters and Asset Retirement Obligations"; and Note 21, "Reserve Rollforwards", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 20 Eastman's cash expenditures related to environmental protection and improvement were $307 million, $314 million, and $300 million in 2024, 2023, and 2022, respectively, and include operating costs associated with environmental protection equipment and facilities, engineering costs, and construction costs.
Other matters concerning health, safety, and the environment are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and in Note 1, "Significant Accounting Policies"; Note 13, "Environmental Matters and Asset Retirement Obligations"; and Note 21, "Reserve Rollforwards", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 19 Tab le of Contents Eastman's cash expenditures related to environmental protection and improvement were $339 million, $307 million, and $314 million in 2025, 2024, and 2023, respectively, and include operating costs associated with environmental protection equipment and facilities, engineering costs, and construction costs.
For Company sales revenue by end-use market, see Exhibit 99.01 "2024 Company and Segment Sales Revenue by End-Use Market" of this Annual Report. Approximately 60 percent of 2024 sales revenue was generated from outside the United States and Canada region.
For Company sales revenue by end-use market, see Exhibit 99.01 "2025 Company and Segment Sales Revenue by End-Use Market" of this Annual Report. Approximately 55 percent of 2025 sales revenue was generated from outside the United States and Canada region.
For textiles, the Fibers segment is offsetting declines in acetate tow through investments in differentiated application development capabilities and new product innovations, including circular solutions, to drive growth in textiles and apparel of Naia ™ yarns and fibers.
For textiles, the Fibers segment seeks to offset declines in acetate tow through investments in differentiated application development capabilities and new product innovations, including circular solutions, to drive growth in textiles and apparel of Naia ™ yarns and fibers.
These cash expenditures include environmental capital expenditures of approximately $70 million, $65 million, and $60 million in 2024, 2023, and 2022, respectively. Health and Safety Eastman places a strong emphasis on the health, safety, and well-being of its employees.
These cash expenditures include environmental capital expenditures of approximately $80 million, $70 million, and $65 million in 2025, 2024, and 2023, respectively. Health and Safety Eastman places a strong emphasis on the health, safety, and well-being of its employees.
OQ Chemicals Celanese Corporation Alternative Technologies wood pulp propane propylene building and construction (architectural coatings) transportation (OEM) and refinish coatings durable goods (wood, industrial coatings and applications) consumables (graphic arts, inks, and packaging) electronics Functional Amines Alkylamines methylamines and salts higher amines and solvents BASF SE Arclin Inc.
OXEA Celanese Corporation Alternative Technologies Elementis Global Clariant Specialty Chemicals wood pulp propane propylene building and construction (architectural coatings) transportation (OEM) and refinish coatings durable goods (wood, industrial coatings and applications) consumables (graphic arts, inks, and packaging) electronics Functional Amines Alkylamines methylamines and salts higher amines and solvents BASF SE Arclin Inc.
BUSINESS Page Corporate Overview 6 Business Strategy 7 Financial Strategy 9 Business Segments 9 Advanced Materials Segment 9 Additives & Functional Products Segment 11 Chemical Intermediates Segment 13 Fibers Segment 14 Eastman Chemical Company General Information 16 5 CORPORATE OVERVIEW Eastman Chemical Company ("Eastman" or the "Company") is a global specialty materials company that produces a broad range of products found in items people use every day.
BUSINESS Page Corporate Overview 6 Business Strategy 7 Financial Strategy 9 Business Segments 9 Advanced Materials Segment 9 Additives & Functional Products Segment 11 Chemical Intermediates Segment 12 Fibers Segment 13 Eastman Chemical Company General Information 15 5 Tab le of Contents CORPORATE OVERVIEW Eastman Chemical Company ("Eastman" or the "Company") is a global specialty materials company that produces a broad range of products found in items people use every day.
This analysis, which considers gender, race and ethnicity (in the U.S.), performance, tenure, specialty skills, and educational credentials, is completed during the annual compensation review process, when leadership makes pay decisions. 19 Customers Eastman has an extensive customer base and, while it is not dependent on any one customer, loss of certain top customers could adversely affect the Company until such business is replaced.
This analysis, which considers gender, race and ethnicity (in the United States), performance, tenure, specialty skills, and educational credentials, is completed during the annual compensation review process, when leadership makes pay decisions. 18 Tab le of Contents Customers Eastman has an extensive customer base and, while it is not dependent on any one customer, loss of certain top customers could adversely affect the Company until such business is replaced.
Examples of Eastman sustainable solutions within identified disruptive macro trends include: Innovation Pillar Growth Platform by Segment Circularity Caring For Society Climate Advanced Materials Specialty Plastics Circular Economy (Eastman Renew) x x x Next-Generation Copolyester Innovation x x Saflex™ Evoca™ for Electric Vehicles (1) x x Window and Paint Protection Films x Additives & Functional Products Tetrashield™ Protective Resin Systems (2) x Esmeri™ Personal Care Micropowder Ingredient (3) x x Fibers Naia™ Filament Growth x x Other Aventa™ Compostable Materials (4) x x x (1) Saflex ™ Evoca ™ interlayers improves acoustic performance, provides lightweight alternatives for windshields, and helps mitigate solar heat to increase maximum driving range and reduce strain on air conditioning systems in electric vehicles.
Examples of Eastman sustainable solutions within identified disruptive macro trends include: Innovation Pillar Growth Platform by Segment Mainstreaming Circularity Mitigating Climate Change Caring For Society Advanced Materials Circular Economy Solutions (Eastman Renew) x x x Next-Generation Copolyester Innovation x x Saflex™ Evoca™ for Electric Vehicles (1) x x Window and Paint Protection Films x Additives & Functional Products Solus™ Biobased Additive for Paper Coatings (2) x x Esmeri™ Micropowder for Personal Care (3) x x Fibers Naia™ Filament and Staple Fiber x x Other Aventa™ and Aventa™ Renew Compostable Materials (4) x x x (1) Saflex ™ Evoca ™ interlayers improves acoustic performance, provides lightweight alternatives for windshields, and helps mitigate solar heat to increase maximum driving range and reduce strain on air conditioning systems in electric vehicles.
Sales outside the United States tend to be made more frequently through dealers and contract representatives than sales in the United States. The combination of direct and indirect sales channels, including sales online through its Customer Center website, allows Eastman to reliably serve customers throughout the world.
Sales outside the United States tend to be made more frequently through dealers and contract representatives than sales in the United States. The combination of direct and indirect sales channels allows Eastman to reliably serve customers throughout the world.
Eastman has committed to reduce its absolute scope 1 (direct GHG emissions occurring from sources that are owned by Eastman) and scope 2 (indirect GHG associated with the purchase of electricity, steam, heat, or cooling as a result of Eastman's energy use) emissions by approximately one-third by 2030, measured from the Company's 2017 baseline year, in order to achieve carbon neutrality by 2050, and to innovate to provide products that enable energy savings and GHG emissions reductions to customers and end-users.
Eastman has committed to reduce its absolute scope 1 (direct GHG emissions occurring from sources that are owned by Eastman) and scope 2 (indirect GHG associated with the purchase of electricity, steam, heat, or cooling as a result of Eastman's energy use) emissions by 30 percent by 2035, measured from the Company's 2017 baseline year, in order to achieve net-zero operations by 2050, and to innovate to provide products that enable energy savings and GHG emissions reductions to customers and end-users.
The 10 largest Fibers segment customers accounted for approximately 60 percent of the segment's 2024 sales revenue, and include multinational as well as regional cigarette producers, fabric manufacturers, and other acetate fiber producers.
The 10 largest Fibers segment customers accounted for approximately 65 percent of the segment's 2025 sales revenue, and include multinational as well as regional cigarette producers, fabric manufacturers, textile distributors, and other acetate fiber producers.
The Company is enhancing the polyester stream by investing in plastic-to-plastic polyester renewal facilities to enable various waste plastics to be recycled into high quality, polyester Renew products.
The Company has further enhanced the polyester stream by investing in plastic-to-plastic polyester renewal facilities to enable various waste plastics to be recycled into high quality, polyester Renew products.
This keeps materials in use and decouples growth from scarce resource consumption, while allowing economic development and improvement in quality of life. The Company's sustainable innovation initiatives include biodegradation, molecular recycling, and strategic collaborations with end-user markets.
This keeps materials in use and decouples growth from scarce resource consumption by recycling carbon in the form of hard to recycle waste plastics, while allowing economic development and improvement in quality of life. The Company's sustainable innovation initiatives include biodegradation, molecular recycling, and strategic collaborations with end-user markets.
Aventa™ is both home and industrially compostable and does not persist in the environment as a microplastic; • Esmeri™, a cellulosic biopolymer for personal care applications including color cosmetics, sunscreens, and facial lotions; • Solus™, a biodegradable paper coating additive that enhances the end of life of packaging used in food service; • Saflex™ innovations in both the automotive and building and construction markets including: Saflex™ Horizon Vision, a next generation polyvinyl butyral ("PVB") interlayer product, for advanced Head-up Displays ("HUD") systems, enhancing virtual image and field of view; Saflex™ Evoca, a new platform for electrical vehicle glazing, offering acoustic, solar, or color options to design; and Saflex™ LiteCarbon Clear, a premium PVB interlayer that reduces the embodied carbon of laminated glass elements while maintaining the construction of safe buildings; and • Performance films innovations in automotive and architectural window films and paint protection films and expanded adoption of Eastman CORE™, a software platform that provides automotive dealership groups and professional installers access to shop management and automotive film patterns to improve installation quality and customer experience.
Aventa™ is both home and industrially compostable and does not persist in the environment as a microplastic; • Esmeri™, a naturally derived, biodegradable cellulose ester micropowder that delivers advanced optical effects and durable performance in color cosmetics, sun care, and skin care; • Solus™, a biodegradable paper coating additive that enhances the end of life of packaging used in food service; • Saflex™ innovations in both the automotive and building and construction markets including: Saflex™ Horizon Vision, a next generation polyvinyl butyral ("PVB") interlayer product, for advanced Head-up Displays ("HUD") systems, enhancing virtual image and field of view; Saflex™ Evoca, a new platform for electrical vehicle glazing, offering acoustic, solar, or color options to design; and Saflex™ LiteCarbon Clear, a premium PVB interlayer that reduces the embodied carbon of laminated glass elements while maintaining the construction of safe buildings; and • Eastman CORE™, a software platform that provides automotive dealership groups and professional installers access to shop management and automotive film patterns to improve installation quality and customer experience.
Molecular recycling technologies continue to be an area of investment focus for the Company and extend the level of differentiation afforded by its world class technology platforms. Eastman began operating one of the world's largest molecular recycling facilities in 2024.
Molecular recycling technologies continue to be an area of investment focus for the Company and extend the level of differentiation afforded by its world class technology platforms. Eastman began operating the world's largest polyester molecular recycling facility in 2024 and achieved strong improvement in operating rates in 2025.
The Company's fully integrated fibers manufacturing process employs unique technology that allows it to use a broad range of high-purity wood pulps for which the Company has dependable sources of supply. 14 Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Acetate Tow Estron ™ cellulose acetate tow Celanese Corporation Cerdia International Daicel Corporation Jinan Acetate Chemical wood pulp methanol high sulfur coal filtration media (primarily cigarette filters) Acetate Yarn and Fiber Naia ™ Estron ™ natural (undyed) acetate yarn solution dyed acetate yarn staple fiber UAB Dirbtinis Pluostas Lenzing AG Aditya Birla Group wood pulp methanol high sulfur coal waste plastics and textiles consumables (apparel, home furnishings, and industrial fabrics) health and wellness (medical tape) Acetyl Chemical Products Estrobond ™ triacetin cellulose acetate flake acetic acid acetic anhydride Daicel Corporation Celanese Corporation Cerdia International Jinan Acetate Chemical wood pulp methanol high sulfur coal filtration media (primarily cigarette filters) Nonwovens Nonwovens wetlaid nonwoven media specialty and engineered papers cellulose acetate fiber Hollingsworth and Vose Company Lydall, Inc.
Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Acetate Tow Estron ™ cellulose acetate tow Celanese Corporation Cerdia International Daicel Corporation Jinan Acetate Chemical wood pulp methanol high sulfur coal filtration media (primarily cigarette filters) Acetate Yarn and Fiber Naia ™ Estron ™ natural (undyed) acetate yarn solution dyed acetate yarn staple fiber UAB Dirbtinis Pluostas Lenzing AG Aditya Birla Group wood pulp methanol high sulfur coal waste plastics and textiles consumables (apparel, home furnishings, and industrial fabrics) health and wellness (medical tape) Acetyl Chemical Products Estrobond ™ triacetin cellulose acetate flake acetic acid acetic anhydride Daicel Corporation Celanese Corporation Cerdia International Jinan Acetate Chemical wood pulp methanol high sulfur coal filtration media (primarily cigarette filters) Nonwovens Nonwovens wetlaid nonwoven media specialty and engineered papers cellulose acetate fiber Hollingsworth and Vose Company Lydall, Inc.
Information Security The Company employs information systems to support its business, enable transformation, and deploy digital services. The Company utilizes a risk-based, multi-layered information security approach based on the U.S. National Institute of Standards and Technology Cybersecurity Framework.
Information Security The Company employs information systems to support its business, enable transformation, and deploy digital services. The Company utilizes a risk-based, multi-layered information security approach based on the U.S. National Institute of Standards and Technology Cybersecurity Framework ("US NIST") and International Organization for Standardization / International Electrotechnical Commission 27001:2022 ("ISO 27001").
US Amines Limited OQ Chemicals methanol ammonia acetone ethanol butanol agrochemicals energy consumables water treatment industrial intermediates Specialty Fluids & Energy Therminol ™ Turbo oils Skydrol ™ SkyKleen ™ Marlotherm ™ heat transfer and aviation fluids Dow Inc.
Advansix OXEA methanol ammonia acetone ethanol butanol agrochemicals energy pharmaceuticals water treatment industrial intermediates Specialty Fluids & Energy Therminol ™ Turbo oils Skydrol ™ SkyKleen ™ Marlotherm ™ heat transfer and aviation fluids Dow Inc.
The Company regularly reviews its benefits equity to better understand the needs of its employees in the current environment. Through this work, the Company continues to explore new ways to make benefits more attractive in an evolving talent marketplace.
The Company regularly reviews its benefits equity to better understand the needs of its employees in the current environment. Through this work, the Company continues to explore new ways to make benefits more attractive in an evolving talent marketplace. The Company also continues to provide global flexibility principles and resources to emphasize the importance of balancing work and personal responsibilities.
Management believes that these elements of the Company's innovation-driven growth model, combined with disciplined portfolio management and balanced capital deployment, are transforming Eastman into a global specialty materials company that enhances the quality of life in a material way.
The Company engages the market by working directly with customers and downstream users, targeting attractive markets, and leveraging disruptive macro trends. Management believes that these elements of the Company's innovation-driven growth model, combined with disciplined portfolio management and balanced capital deployment, are transforming Eastman into a global specialty materials company that enhances the quality of life in a material way.
In 2024, the Company reported sales revenue of $9.4 billion, earnings before interest and taxes ("EBIT") of $1.3 billion, and net earnings attributable to Eastman of $905 million. Diluted earnings per share were $7.67. Net cash provided by operating activities was $1.3 billion.
In 2025, the Company reported sales revenue of $8.8 billion, earnings before interest and taxes ("EBIT") of $776 million, and net earnings attributable to Eastman of $474 million. Diluted earnings per share were $4.10. Net cash provided by operating activities was $970 million.
Management has recently taken steps to reduce the impact of the trough of these cycles, including the use of refinery-grade propylene ("RGP") in the feedstock mix, resulting in reduced participation in the merchant ethylene market and the divestiture of its Texas City Operations in 2023.
Although future results are expected to fluctuate due to both general economic conditions and industry supply and demand, management has taken steps to reduce the impact of the trough of these cycles, including the use of refinery-grade propylene ("RGP") in the feedstock mix, resulting in reduced participation in the merchant ethylene market and the divestiture of its Texas City Operations in 2023.
Scale at the Kingsport, Tennessee manufacturing facility allows for competitive advantage in the production of acetic anhydride and other acetyl derivatives.
Through the CI segment, the Company has leveraged the advantage of its highly integrated manufacturing facilities. Scale at the Kingsport, Tennessee manufacturing facility allows for competitive advantage in the production of acetic anhydride and other acetyl derivatives.
Lanxess AG propane propylene paraxylene building and construction (non-phthalate plasticizers used in interior surfaces) consumables (food packaging, packaging adhesives, and glove applications) health and wellness (medical devices) See Exhibit 99.01 for CI segment revenue by end-use market. 13 Strategy To maintain and enhance its status as a low-cost producer and optimize earnings, the CI segment continuously focuses on cost control, operational efficiency, and capacity utilization.
Lanxess AG propane propylene paraxylene building and construction (non-phthalate plasticizers used in interior surfaces) consumables (food packaging, packaging adhesives, and glove applications) health and wellness (medical devices) See Exhibit 99.01 for CI segment revenue by end-use market.
Excluding non-core and unusual items, adjusted EBIT was $1.3 billion and adjusted diluted earnings per share were $7.89.
Excluding non-core and unusual items, adjusted EBIT was $930 million and adjusted diluted earnings per share were $5.42.
A critical element of the AFP segment's success is its close formulation collaboration with customers through advantaged application development capability. 11 Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Care Additives Alkylamine derivatives Organic acids and derivatives Cellulosic biopolymers amine derivative-based building blocks for production of flocculants intermediates for surfactants metam-based soil fumigants organic acid-based solutions BASF SE Huntsman Corporation Corteva, Inc.
Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Care Additives Alkylamine derivatives Organic acids and derivatives Cellulosic biopolymers amine derivative-based building blocks for production of flocculants intermediates for surfactants metam-based soil fumigants organic acid-based solutions BASF SE Huntsman Corporation Argo-Kanesho Co., Ltd.
The Company also continues to provide global flexibility principles and resources to emphasize the importance of balancing work and personal responsibilities. 18 Breakthroughs require creativity and unconventional ideas, and that takes diverse perspectives and an environment that empowers everyone to speak their mind and add value, so their ideas are translated into plans and actions.
Breakthroughs require creativity and unconventional ideas, and that takes diverse perspectives and an environment that empowers everyone to speak their mind and add value, so their ideas are translated into plans and actions.
Management believes maintaining a financial profile that supports a solid investment grade credit rating is important to its long-term strategy and financial flexibility. The Company employs a disciplined and balanced approach to capital allocation and deployment of cash. The priorities for uses of available cash include paying the quarterly dividend, funding targeted growth opportunities, repurchasing shares, and acquiring bolt-on acquisitions.
The Company employs a disciplined and balanced approach to capital allocation and deployment of cash. The priorities for uses of available cash include paying the quarterly dividend, funding targeted growth opportunities, and repurchasing shares, while maintaining a solid investment-grade balance sheet.
Human Capital To keep solving complex problems and growing its business, the Company must continue to attract, develop, and retain exceptional people ("human capital"), and motivate them to excel.
See "Risk Factors" in Part I, Item 1A of this Annual Report. 17 Tab le of Contents Human Capital To keep solving complex problems and growing its business, the Company must continue to attract, develop, and retain exceptional people ("human capital"), and motivate them to excel.
Sources and Availability of Raw Materials and Energy Eastman purchases a majority of its key raw materials and energy through different contract mechanisms, generally of one to three years in initial duration, with renewal or cancellation options for each party.
Through integration and optimization across these streams, the Company is able to create unique and differentiated products that have a performance advantage over competitive materials. 16 Tab le of Contents Sources and Availability of Raw Materials and Energy Eastman purchases a majority of its key raw materials and energy through different contract mechanisms, generally of one to three years in initial duration, with renewal or cancellation options for each party.
The AFP segment is focused on producing high-value additives that provide critical functionality but which comprise a small percentage of total customer product cost. The segment principally competes on the differentiated performance characteristics of its products and through leveraging its strong customer base and long-standing customer relationships to promote substantial recurring business and product development.
The segment principally competes on the differentiated performance characteristics of its products and through leveraging its strong customer base and long-standing customer relationships to promote substantial recurring business and product development. A critical element of the AFP segment's success is its close formulation collaboration with customers through advantaged application development capability.
This platform is further differentiated as it is able to reduce GHG emissions by up to 90 percent, including avoided emissions, when comparing to materials made from fossil feedstocks.
This platform is further differentiated as it is able to reduce GHG emissions by up to 70 percent, including avoided emissions, when comparing to materials made from fossil feedstocks. The Company's molecular recycling technology also overcomes barriers seen in mechanical recycling such as degradation in color and performance after multiple cycles.
Eastman's compensation philosophy, principles, and processes are designed to ensure the Company pays competitively in the market for top talent and that the pay is distributed fairly and consistently. An independent third party assesses pay equity each year by comparing pay for people in the same jobs, job levels, and locations.
An independent third party assesses pay equity each year by comparing pay for people in the same jobs, job levels, and locations.
Department of Energy for up to a $375 million supporting investment to build a world scale Methanolysis facility in Longview, Texas. FINANCIAL STRATEGY In its management of the Company's businesses and growth initiatives, management is committed to maintaining a strong financial position with appropriate financial flexibility and liquidity.
FINANCIAL STRATEGY In its management of the Company's businesses and growth initiatives, management is committed to maintaining a strong financial position with appropriate financial flexibility and liquidity. Management believes maintaining a financial profile that supports a solid investment grade credit rating is important to its long-term strategy and financial flexibility.
The AM segment expects to continue to improve its product mix from increased sales of premium products, including Tritan ™ copolyester, Tritan ™ Renew, Visualize ™ material, Saflex ™ Q acoustic series, Saflex ™ HUD interlayer products, LLumar ™ , V-KOOL ™ , and SunTek ™ window and protective films.
The AM segment expects to continue to benefit from sales of premium products, including Tritan ™ copolyester, Tritan ™ Renew, Visualize ™ material, Saflex ™ Q acoustic series, Saflex ™ HUD interlayer products, LLumar ™ , V-KOOL ™ , and SunTek ™ window and protective films. 10 Tab le of Contents ADDITIVES & FUNCTIONAL PRODUCTS SEGMENT Overview In the AFP segment, the Company manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics end-markets.
Future results are expected to fluctuate due to both general economic conditions and industry supply and demand. Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Intermediates Oxo alcohols and derivatives Acetic acid and derivatives Acetic anhydride Ethylene Glycol ethers Esters Organic acids and derivatives Olefin derivatives, acetyl derivatives, ethylene, commodity solvents Lyondell Bassell, BASF SE Dow Inc.
This E2P conversion will align the Company's strategy with business needs by balancing ethylene and propylene across the site structurally, improving feedstock mix, and improving downstream propylene usage. 12 Tab le of Contents Principal Products Product Description Principal Competitors Key Raw Materials End-Use Applications Intermediates Oxo alcohols and derivatives Acetic acid and derivatives Acetic anhydride Ethylene Glycol ethers Esters Organic acids and derivatives olefin derivatives acetyl derivatives ethylene commodity solvents Lyondell Bassell BASF SE Dow Inc.
As with other industry participants, the Company from time to time experiences attempted cyber-attacks of its information systems, none of which have resulted in a material adverse impact on the Company's operations or financial results, any penalties, or settlements. See "Risk Factors" in Part I, Item 1A and "Cybersecurity" in Part I, Item 1C of this Annual Report.
To date, the Company has not experienced a cybersecurity incident that has materially affected its business strategy, results of operations, or financial condition, nor has resulted in any penalties or settlements. See "Risk Factors" in Part I, Item 1A and "Cybersecurity" in Part I, Item 1C of this Annual Report.
This includes focusing on products used internally by other operating segments, thereby supporting growth in specialty product lines throughout the Company, and also external licensing opportunities. Through the CI segment, the Company has leveraged the advantage of its highly integrated manufacturing facilities.
Strategy To maintain and enhance its status as a low-cost producer and optimize earnings, the CI segment continuously focuses on cost control, operational efficiency, and capacity utilization. This includes focusing on products used internally by other operating segments, thereby supporting growth in specialty product lines throughout the Company.
(2) Tetrashield ™ performance polyester resins, based on proprietary monomer technology, have improved health, safety, and performance features for food and beverage packaging and industrial powder coatings. (3) Esmeri ™ is a cellulosic biopolymer for personal care applications including color cosmetics, sunscreens, and facial lotions.
(2) Solus ™ for paper coatings is a proprietary additive used in food service and food backing that is compatible with the recycle stream for paper. (3) Esmeri ™ is a cellulosic biopolymer for personal care applications including color cosmetics, sunscreens, and facial lotions.
These strengths have enabled the Company to achieve significant milestones in 2024 within the Circular Economy platform, including: • Operating one of the world's largest molecular recycling facilities; • Serving its customers with "Renew" branded polyester products, enabling them to meet their sustainability goals; and • Being selected by the U.S.
These strengths have enabled the Company to achieve significant milestones in 2025 within the Circular Economy platform, including: • Operating the world's largest polyester molecular recycling facility, which generated approximately 2.5 times greater output than 2024; and • Continued adoption of the Company's circular polyester offerings across multiple end-markets including consumer durables and packaging.
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The Company engages the market by working directly with customers and downstream users, targeting attractive niche markets, and leveraging disruptive macro trends.
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Key technology platforms are cellulosic biopolymers, polyester polymers, alkylamine derivatives, and propylene derivatives. The AFP segment is focused on producing high-value additives that provide critical functionality but which comprise a small percentage of total customer product cost.
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In 2024, the AM segment: • achieved key milestones within the Circular Economy platform (see "Corporate Overview - Business Strategy - Sustainability and Circular Economy - Circularity"); 10 • continued adoption of polyester renewal technology for products, including Tritan™ Renew, Cristal™ Renew, and Cristal™ One Renew across several end-markets, including cosmetic packaging, eyewear, and power tools; • continued to expand portfolio of differentiated post-applied window films and protective films for automotive and architectural applications, including LLumar™ Protective Wrap Film which integrates the look of car wraps with the resilience of paint protection film, helping elevate vehicle protection; and • launched Saflex™ LiteCarbon Clear, a premium polyvinyl butyral interlayer that reduces the embodied carbon of laminated glass elements while maintaining the construction of safe buildings, and Saflex Evoca™, a new platform designed to upgrade the glazing potential in electric vehicles that offers acoustic, solar or color options to assist in electric vehicle design.
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For example, Eastman EastaPure TM electronic chemicals is a portfolio of ultrapure solvents designed to meet the rigorous purity needs required in the electronics industry with our comprehensive material testing, multiple purification steps, shipping measures, and on-site, state-of-the-art, clean room that provides continuous monitoring and purity certification.
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ADDITIVES & FUNCTIONAL PRODUCTS SEGMENT Overview In the AFP segment, the Company manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics end-markets. Key technology platforms are cellulosic biopolymers, polyester polymers, alkylamine derivatives, and propylene derivatives.
Added
The Company is also developing solutions to address the environmental challenges caused by non-biodegradable materials in personal care products by leveraging its world-class biodegradable cellulosic biopolymer technology platform in biodegradable cellulose-ester micropowders for personal care applications.
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For example, Eastman BPA-NI Tetrashield ™ protective resins enable metal packaging coatings formulation with a unique balance of durability and flexibility, improving performance, regulatory compliance, shelf life, and consumer safety. Such protective resins can also be used in protective coatings, industrial coatings, and automotive coatings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSimilarly, as a company that operates and sells products worldwide, uncertainty in the global economy, labor market, and capital markets (including impacts from inflation, higher interest rates, and subsequent changes and disruptions in business, political, and economic conditions) have impacted and may adversely impact demand for and the costs of certain Eastman products and accordingly results of operations, and may 21 adversely impact the Company's financial condition and cash flows and ability to access the credit and capital markets under attractive rates and terms and negatively impact the Company's liquidity or ability to pursue certain growth initiatives.
Biggest changeSimilarly, as a company that operates and sells products worldwide, uncertainty in the global economy, labor market, and capital markets (including impacts from inflation, higher interest rates, changes in governing and legislative bodies, and subsequent changes and disruptions in business, political, and economic conditions) has impacted and may adversely impact demand for and the costs of certain Eastman products and accordingly results of operations.
Changes in the estimates on which the accruals are based, unanticipated government enforcement action, or changes in health, safety, environmental, chemical control regulations and actions, and testing requirements could result in higher costs. 25 The global nature of Eastman's business could subject the Company to risks of violations, or allegations, associated with the U.S.
Changes in the estimates on which the accruals are based, unanticipated government enforcement action, or changes in health, safety, environmental, chemical control regulations and actions, and testing requirements could result in higher costs. The global nature of Eastman's business could subject the Company to risks of violations, or allegations, associated with the U.S.
Eastman continues to identify and pursue growth opportunities through both organic and inorganic initiatives, such as Eastman's sustainable innovation initiatives, which aim to develop a more "circular economy." These and other growth opportunities include development and commercialization or licensing of innovative new products and technologies, expansion into new markets and geographic regions through, among other means, alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities.
Eastman continues to identify and pursue growth opportunities through both organic and inorganic initiatives, such as Eastman's sustainable innovation initiatives, which aim to develop a more "circular economy." These and other growth opportunities include development and commercialization of innovative new products and technologies, expansion into new markets and geographic regions through, among other means, alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities.
More than half of Eastman's sales for 2024 were to customers outside of North America. The Company expects sales from international markets to continue to represent a significant portion of its sales. Also, a significant portion of the Company's manufacturing capacity is located outside of the United States.
More than half of Eastman's sales for 2025 were to customers outside of North America. The Company expects sales from international markets to continue to represent a significant portion of its sales. Also, a significant portion of the Company's manufacturing capacity is located outside of the United States.
The cost and availability of these raw materials and energy commodities can be adversely impacted by factors such as business and economic conditions, anomalous severe weather events, natural disasters, global pandemics, plant interruptions, supply chain and transportation disruptions, changes in laws or regulations, levels of unemployment and inflation, currency exchange rates, higher interest rates, war or other outbreak of hostilities or terrorism (such as the ongoing Russia/Ukraine and Middle East conflicts), and breakdown or degradation of transportation and supply chain infrastructure.
The cost and availability of these raw materials and energy commodities can be adversely impacted by factors such as business and economic conditions, anomalous severe weather events, natural disasters, global pandemics, plant interruptions, supply chain and transportation disruptions, changes in laws or regulations, levels of unemployment and inflation, currency exchange rates, higher interest rates, war or other outbreak of hostilities or terrorism (such as the ongoing Russia/Ukraine conflict), and breakdown or degradation of transportation and supply chain infrastructure.
There can be no assurance that the consequences of these and other factors relating to its multinational operations will not have an adverse impact on Eastman's business, financial condition, or results of operations. 22 Risks Related to the Company's Business and Strategy The Company's business is subject to operating risks common to chemical and specialty materials manufacturing businesses, any of which could disrupt manufacturing operations or related infrastructure and adversely impact results of operations.
There can be no assurance that the consequences of these and other factors relating to its multinational operations will not have an adverse impact on Eastman's business, financial condition, or results of operations. 21 Tab le of Contents Risks Related to the Company's Business and Strategy The Company's business is subject to operating risks common to chemical and specialty materials manufacturing businesses, any of which could disrupt manufacturing operations or related infrastructure and adversely impact results of operations.
Actual or alleged violations of environmental, health or safety laws and regulations could result in restrictions or prohibitions on manufacturing operations as well as substantial damages, penalties, fines, civil or criminal sanctions and remediation costs.
Actual or alleged violations of environmental, health, or safety laws and regulations could result in restrictions or prohibitions on manufacturing operations as well as substantial damages, 24 Tab le of Contents penalties, fines, civil, or criminal sanctions and remediation costs.
The Company's insurance may not fully cover all potential exposures. Eastman maintains property, casualty, business interruption, and other insurance, but coverage limits may not be sufficient to cover all risks associated with the hazards of its business.
The Company's insurance may not fully cover all potential exposures. 25 Tab le of Contents Eastman maintains property, casualty, business interruption, and other insurance, but coverage limits may not be sufficient to cover all risks associated with the hazards of its business.
In the case of a divested business, the divestiture could reduce Eastman's revenue and, potentially, margins and increase its costs and liabilities in the form of transition costs and retained liabilities from the operations divested, including environmental liabilities.
In the case of a divested 23 Tab le of Contents business, the divestiture could reduce Eastman's revenue and, potentially, margins and increase its costs and liabilities in the form of transition costs and retained liabilities from the operations divested, including environmental liabilities.
Such initiatives are necessarily constrained by availability and development of additional resources. 23 There can be no assurance that such innovation, development and commercialization or licensing efforts, investments, or acquisitions and alliances (including integration of acquired businesses) will receive necessary governmental or regulatory approvals, or result in financially successful commercialization of products, or acceptance by existing or new customers, or successful entry into new markets or otherwise achieve their underlying strategic business objectives or that they will be beneficial to the Company's results of operations.
There can be no assurance that such innovation, development and commercialization, investments, or acquisitions and alliances (including integration of acquired businesses) will receive necessary governmental or regulatory approvals, or result in financially successful commercialization of products, or acceptance by existing or new customers, or successful entry into new markets or otherwise achieve their underlying strategic business objectives or that they will be beneficial to the Company's results of operations.
Changes to income tax laws and regulations or in the interpretation of such laws in any of the jurisdictions in which it operates, or the unfavorable resolution of tax matters could significantly increase the Company's effective tax rate and adversely impact its financial condition or results of operations.
Changes to income tax laws and regulations or in the interpretation of such laws in any of the jurisdictions in which it operates, including new legislation, such as the One Big Beautiful Bill Act, or the unfavorable resolution of tax matters could significantly increase the Company's effective tax rate and adversely impact its financial condition or results of operations.
The Company also may be required to expend significant additional resources in order to integrate any acquired business or specific assets or product lines into Eastman or separate any divested business or specific assets or product lines from Eastman.
The Company also may be required to expend significant additional resources in order to integrate any acquired business or specific assets or product lines into Eastman or separate any divested business or specific assets or product lines from Eastman. As such, the integration or separation efforts may not achieve the expected benefits.
In connection with the sale of certain properties and businesses, Eastman has agreed to indemnify the purchasers of such properties for certain types of matters, including unknown contingent liabilities for environmental matters or tax liabilities. In addition, the Company has assumed liabilities related to certain properties it has acquired.
The Company may be subject to indemnity claims relating to properties or businesses it has divested or acquired. In connection with the sale of certain properties and businesses, Eastman has agreed to indemnify the purchasers of such properties for certain types of matters, including unknown contingent liabilities for environmental matters or tax liabilities.
Several jurisdictions in which Eastman operates have enacted laws effective January 1, 2024, consistent with the OECD's framework. Details around the global minimum tax in each jurisdiction remain uncertain. The Company has so far experienced a modest increase in tax obligations in jurisdictions it conducts business and will continue to monitor and evaluate impacts.
Several jurisdictions in which Eastman operates have enacted laws effective January 1, 2024, consistent with the OECD's framework. Details around the global minimum tax in most jurisdictions remain uncertain.
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As such, the integration or separation efforts may not achieve the expected benefits. 24 The Company may be subject to indemnity claims relating to properties or businesses it has divested or acquired.
Added
These events may in turn adversely impact the Company's financial condition and cash flows 20 Tab le of Contents and ability to access the credit and capital markets under attractive rates and terms, negatively impacting the Company's liquidity or ability to pursue certain growth initiatives.
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Cybersecurity incidents, data breaches, and operational disruptions are constantly evolving, becoming more sophisticated, and conducted by groups and individuals with a wide range of expertise and motives, including foreign governments, cyber terrorists, cyber criminals, malicious employees, and other insiders and outsiders.
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The Company is subject to risks associated with the potential use of artificial intelligence in the Company’s own operations and by third-party partners that the Company may engage with. Eastman has been increasingly using AI tools and more traditional data science practices in its operations, research and development, and other areas to improve efficiency and effectiveness.
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The Company may be exposed to risks in cases where it utilizes AI in connection with certain business activities now or in the future.
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In addition, the use of AI by Eastman, its employees, or any of its third-party partners may result in unauthorized disclosure of data, which can result in, among other things, reputational harm, loss of confidence by the Company’s customers or employees, penalties, litigation costs, or legal 22 Tab le of Contents liability.
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Analyses, results, or business processes relying on AI may also be deficient, inaccurate, or biased, and the Company may fail to identify in a timely fashion, or at all, if or to the extent that is the case.
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Such initiatives are necessarily constrained by availability and development of additional resources.
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In addition, the Company has assumed liabilities related to certain properties it has acquired.
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The Company has so far experienced a modest increase in tax obligations in jurisdictions it conducts business, a large portion of which is expected to be temporary due to the OECD's January 5, 2026 "side by side" arrangement. Eastman will continue to monitor and evaluate impacts.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFrom 2007 until January 2014 he served as Vice President of Global R&D in the AM and AFP segments. He was appointed Senior Vice President and Chief Technology Officer effective January 2014, Senior Vice President, Chief Technology and Sustainability Officer effective October 2019, and Executive Vice President, Manufacturing and Chief Sustainability Officer effective October 2022. Mr.
Biggest changeCrawford joined Eastman in 1984 and held leadership positions of increasing responsibility in both the manufacturing and technology organizations. From 2007 until January 2014 he served as Vice President of Global R&D in the AM and AFP segments.
Prior to her current role, she was vice president, Tennessee operations site leader and global operations support, leading one of the largest manufacturing sites in the United States and associated sites across the globe. Ms. Caveness was appointed to her current position effective January 2025. Adrian J. Holt, age 55, is Senior Vice President and Chief Human Resources Officer. Mr.
Prior to her current role, she was vice president, Tennessee operations site leader and global operations support, leading one of the largest manufacturing sites in the United States and associated sites across the globe. Ms. Caveness was appointed to her current position effective January 2025. Adrian J. Holt, age 56, is Senior Vice President and Chief Human Resources Officer. Mr.
Iké Adeyemi, age 47, is Senior Vice President, Chief Legal Officer and Corporate Secretary. Ms. Adeyemi has leadership responsibility for Eastman's legal organization, which includes corporate governance, commercial law, litigation management and intellectual property, as well as responsibility for product stewardship and regulatory affairs, global business conduct, global trade compliance, and global public affairs. Before joining Eastman, Ms.
Iké Adeyemi, age 48, is Senior Vice President, Chief Legal Officer and Corporate Secretary. Ms. Adeyemi has leadership responsibility for Eastman's legal organization, which includes corporate governance, commercial law, litigation management and intellectual property, as well as responsibility for product stewardship and regulatory affairs, global business conduct, global trade compliance, and global public affairs. Before joining Eastman, Ms.
Costa was appointed Chief Executive Officer in January 2014 and named Board Chair effective July 2014. Mr. Costa also serves on the Board of Directors of International Flavors & Fragrances Inc. William T. McLain, Jr., age 52, is Executive Vice President and Chief Financial Officer. Mr.
Costa was appointed Chief Executive Officer in January 2014 and named Board Chair effective July 2014. Mr. Costa also serves on the Board of Directors of International Flavors & Fragrances Inc. William T. McLain, Jr., age 53, is Executive Vice President and Chief Financial Officer. Mr.
Travis Smith, age 51, is Executive Vice President, Additives & Functional Products, Manufacturing, WWE&C and HSE with responsibility for the global manufacturing and Worldwide Engineering and Construction ("WWE&C") in addition to leadership of the AFP segment and Health, Safety and Environment ("HSE"). Mr.
Travis Smith, age 52, is Executive Vice President, Additives & Functional Products, Manufacturing, WWE&C and HSE with responsibility for the global manufacturing and Worldwide Engineering and Construction ("WWE&C") in addition to leadership of the AFP segment and Health, Safety and Environment ("HSE"). Mr.
Adeyemi was appointed to her current position effective September 2024. 28 Michelle H. Caveness, age 51, is Senior Vice President and Chief Manufacturing Officer overseeing global manufacturing and operations support. Ms. Caveness joined Eastman in 1996 and has held leadership roles of increasing responsibility in engineering, technology and manufacturing as well as on cross-functional business teams.
Adeyemi was appointed to her current position effective September 2024. 28 Tab le of Contents Michelle H. Caveness, age 52, is Senior Vice President and Chief Manufacturing Officer overseeing global manufacturing and operations support. Ms. Caveness joined Eastman in 1996 and has held leadership roles of increasing responsibility in engineering, technology and manufacturing as well as on cross-functional business teams.
The Company ensures that all employees, including part-time and temporary employees, undergo cybersecurity training and compliance programs at least annually. 27 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Certain information about Eastman's executive officers is provided below: Mark J. Costa, age 58, is Chair of the Eastman Chemical Company Board of Directors and Chief Executive Officer. Mr.
The Company ensures that all employees, including part-time and temporary employees, undergo cybersecurity training and compliance programs at least annually. 27 Tab le of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Certain information about Eastman's executive officers is provided below: Mark J. Costa, age 59, is Chair of the Eastman Chemical Company Board of Directors and Chief Executive Officer. Mr.
Crawford was appointed to his current position effective January 2025. Brad A. Lich, age 57, is Executive Vice President and Chief Commercial Officer, with responsibility for the AM segment, including the circular platform, as well as leadership of marketing, sales, supply chain, corporate strategy, and regional leadership. Mr.
Crawford was appointed to his current position in November 2025. Brad A. Lich, age 58, is Executive Vice President and Chief Commercial Officer, with responsibility for the AM segment, including the circular platform, as well as leadership of marketing, sales, supply chain, corporate strategy, and regional leadership. Mr.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Cybersecurity is an integral part of the Company's overall risk management program. The Company takes a comprehensive approach to cybersecurity, involving key stakeholders in oversight and decision-making processes. The Company utilizes a risk-based, multi-layered information security strategy based on the U.S.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Cybersecurity is an integral part of the Company's overall risk management program. The Company takes a comprehensive approach to cybersecurity, involving key stakeholders in oversight and decision-making processes.
Governance The Board of Directors provides oversight of the Company's cybersecurity program. The Audit Committee, which consists of non-employee independent directors, receives updates from the Chief Information Officer ("CIO") on cybersecurity performance and recent industry trends at least quarterly.
The Audit Committee, which consists of non-employee independent directors, receives updates from the Chief Information Officer ("CIO") or the Chief Information Security Officer ("CISO") on cybersecurity performance and recent industry trends at least quarterly.
Stewart, age 53, is Vice President, Chief Accounting Officer and Corporate Controller. Since joining Eastman in 1995, Ms. Stewart has served in a number of positions with increasing responsibility in the finance organization. Prior to joining Eastman, Ms. Stewart worked for the public accounting firm KPMG Peat Marwick. Ms. Stewart was appointed to her current position effective October 2021. 29
Since joining Eastman in 1995, Ms. Stewart has served in a number of positions with increasing responsibility in the finance organization. Prior to joining Eastman, Ms. Stewart worked for the public accounting firm KPMG Peat Marwick. Ms. Stewart was appointed to her current position effective October 2021. 29 Tab le of Contents
McAlindon was with Avient Corporation as senior vice president, designed structures and solutions; and vice president of marketing. Prior to that, Ms. McAlindon's work experience includes a variety of leadership positions with The Dow Chemical Company. Ms. McAlindon was appointed to her current position effective June 2021. Michelle R.
McAlindon was with Avient Corporation as senior vice president, designed structures and solutions; and vice president of marketing. Prior to that, Ms. McAlindon's work experience includes a variety of leadership positions with Dow Inc. Ms. McAlindon was appointed to her current position effective June 2021. Michelle R. Stewart, age 54, is Vice President, Chief Accounting Officer and Corporate Controller.
This team is responsible for cybersecurity incident oversight and meets as needed, depending on the nature of an incident. The Company's internal audit team also provides independent assurance on the overall operations of the Company's cybersecurity program.
The Company also has a cross-functional Cybersecurity Incident Response Team consisting of senior-level management. This team is responsible for cybersecurity incident oversight and meets as needed, depending on the nature of an incident. The Company's internal audit team also provides independent assurance on the overall operations of the Company's cybersecurity program.
Holt served as Chief Human Resources Officer for WireCo World Group and as Vice President of Corporate Human Resources for BASF North America. Mr. Holt was appointed to his current position effective May 2023. Christopher M. Killian, age 55, is Senior Vice President, Chief Technology Officer, and Sustainability Officer. Dr.
Holt served as Chief Human Resources Officer for WireCo World Group and as Vice President of Corporate Human Resources for BASF North America. Mr. Holt was appointed to his current position effective May 2023. Julie A. McAlindon, age 58, is Senior Vice President, Regions and Chief Supply Chain Officer. Ms.
Prior to Eastman, Mr. McLain worked for the public accounting firm PricewaterhouseCoopers LLP. Mr. McLain was appointed to his current position effective February 2020. Stephen G.
Prior to Eastman, Mr. McLain worked for the public accounting firm PricewaterhouseCoopers LLP. Mr. McLain was appointed to his current position effective February 2020. Stephen G. Crawford, age 61, is Executive Vice President, Chief Technology and Sustainability Officer, leading the technology and sustainability organizations. Mr.
The Board is informed about risk profile status, adversary assessments, training initiatives, cybersecurity projects, emerging global policies and regulations, cybersecurity technologies and best practices, cyber readiness, third-party assessments, mitigation efforts, and response plans.
The Board is informed about risk profile status, adversary assessments, training initiatives, cybersecurity projects, emerging global policies and regulations, cybersecurity technologies and best practices, cyber readiness, third-party assessments, mitigation efforts, and response plans. 26 Tab le of Contents The Company has a dedicated CIO and CISO who are supported by a team of cybersecurity professionals (the "Cybersecurity Team") that are responsible for leading the company-wide cybersecurity program and risk mitigation efforts.
The CIO and Information Security Director, with over 35 and 25 years of experience, respectively, have cybersecurity expertise, coupled with experience in IT strategy, operational management, incident response, and business continuity maintenance. The Company also has a cross-functional Cybersecurity Incident Response Team consisting of senior-level management.
The CIO, CISO, and Cybersecurity Team work across all organizations within the Company to protect the Company and its employees, customers and suppliers against cybersecurity risks. The CIO and CISO, with over 35 and 25 years of experience, respectively, have cybersecurity expertise, coupled with experience in IT strategy, operational management, incident response, and business continuity maintenance.
However, the Company could face risks from cybersecurity threats in the future that could have a material adverse effect on its business strategy, results of operations, or financial condition. See "Risk Factors - Risks Related to the Company's Business and Strategy" in Part I, Item 1A of this Annual Report.
See "Risk Factors - Risks Related to the Company's Business and Strategy" in Part I, Item 1A of this Annual Report. Governance The Board of Directors provides oversight of the Company's cybersecurity program.
Removed
National Institute of Standards and Technology Cybersecurity Framework to assess, identify, and manage risks from cybersecurity threats.
Added
The Company utilizes a risk-based, multi-layered information security strategy based on the US NIST and ISO 27001 to assess, identify, and manage risks from cybersecurity threats.
Removed
The Company does not believe that there are currently any known risks from cybersecurity threats that are reasonably likely to materially affect the Company or its business strategy, results of operations, or financial condition.
Added
To date the Company has not experienced a cybersecurity incident that has materially affected its business strategy, results of operations, or financial condition. The Company maintains processes to asses the materiality of cybersecurity incidents, and where material, the Company will disclose such incidents via Form 8-K.
Removed
The Company has a dedicated CIO and an Information Security Director who are supported by a team of cybersecurity professionals (the "Cybersecurity Team") that are responsible for leading the company-wide cybersecurity program and risk mitigation efforts.
Added
He was appointed Senior Vice President and Chief Technology Officer effective January 2014, Senior Vice President, Chief Technology and Sustainability Officer effective October 2019, and Executive Vice President, Manufacturing and Chief Sustainability Officer effective October 2022, and Executive Vice President, Methanolysis Operations and Worldwide Engineering & Construction Transformation effective January 2025. Mr.
Removed
The CIO, the Information Security Director, and Cybersecurity Team work across all organizations within the Company to protect the Company and its employees, customers and suppliers against cybersecurity risks.
Removed
Crawford, age 60, is Executive Vice President, Methanolysis Operations and Worldwide Engineering & Construction Transformation, with executive responsibility for overseeing methanolysis operations in Kingsport, and leading efforts to strengthen Eastman's engineering processes and disciplines and building capabilities for large projects. Mr. Crawford joined Eastman in 1984 and held leadership positions of increasing responsibility in both the manufacturing and technology organizations.
Removed
Killian has responsibility for Eastman's global technology and innovation organization, and leadership of Eastman's sustainability strategy. Dr. Killian joined Eastman in 1996 as a research chemist. During his career at Eastman, he has held various leadership positions in technology and the business including Director, Tritan Growth Platform early in his career. Prior June 2021 Dr.
Removed
Killian served as Vice President of Technology for the AFP, CI, and AM segments and was appointed Senior Vice President and Chief Technology Officer effective June 2021. Dr. Killian was appointed to his current position effective January 2025. Julie A. McAlindon, age 57, is Senior Vice President, Regions and Chief Supply Chain Officer. Ms.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed7 unchanged
Biggest change(3) Eastman has more than one manufacturing facility at this location. 30 Segment using manufacturing location Location Advanced Materials Additives & Functional Products Chemical Intermediates Fibers Asia Pacific Dalian, China x Nanjing, China x Suzhou, China (1)(2)(3) x x Wuhan, China (4) x Zibo, China (5) x x Ulsan, Korea (6) x Kuantan, Malaysia (1) x Latin America Mauá, Brazil x Santo Toribio, Mexico x (1) Eastman leases from a third party and operates the site.
Biggest change(3) Eastman has more than one manufacturing facility at this location. 30 Tab le of Contents Segment using manufacturing location Location Advanced Materials Additives & Functional Products Chemical Intermediates Fibers Asia Pacific Dalian, China x Nanjing, China x Suzhou, China (1)(2)(3) x x Wuhan, China (4) x Zibo, China (5) x x Ulsan, Korea (6) x Kuantan, Malaysia (1) x Latin America Mauá, Brazil x Santo Toribio, Mexico x (1) Eastman leases from a third party and operates the site.
Eastman has 50 percent or less ownership in joint ventures that have manufacturing facilities at the following locations: Segment using manufacturing location Location Advanced Materials Additives & Functional Products Chemical Intermediates Fibers USA Kingsport, Tennessee x Asia Pacific Hefei, China x Shenzhen, China x Eastman has distribution facilities at all of its plant sites.
Eastman has 50 percent or less ownership in joint ventures that have manufacturing facilities at the following locations: Segment using manufacturing location Location Advanced Materials Additives & Functional Products Chemical Intermediates Fibers USA Kingsport, Tennessee x Asia Pacific Hefei, China x Ruian, China x Shenzhen, China x Eastman has distribution facilities at all of its plant sites.
(2) Eastman has more than one manufacturing facility at this location. (3) Eastman holds a 60 percent share of Solutia Therminol Co., Ltd. Suzhou in the Additives and Functional Products segment. (4) Eastman holds a 51 percent share of Eastman Specialties Wuhan Youji Chemical Co., Ltd. (5) Eastman holds a 51 percent share of Qilu Eastman Specialty Chemical, Ltd.
(2) Eastman has more than one manufacturing facility at this location. (3) Eastman holds a 60 percent share of Solutia Therminol Co., Ltd. Suzhou in the Additives & Functional Products segment. (4) Eastman holds a 51 percent share of Eastman Specialties Wuhan Youji Chemical Co., Ltd. (5) Eastman holds a 51 percent share of Qilu Eastman Specialty Chemical, Ltd.
ITEM 2. PROPERTIES At December 31, 2024, Eastman owned or operated 36 manufacturing facilities and had equity interests in three manufacturing joint ventures in a total of 12 countries. Utilization of these sites may vary with product mix and economic, seasonal, and other business conditions; however, none of the principal plants is substantially idle.
ITEM 2. PROPERTIES At December 31, 2025, Eastman owned or operated 36 manufacturing facilities and had equity interests in four manufacturing joint ventures in a total of 12 countries. Utilization of these sites may vary with product mix and economic, seasonal, and other business conditions; however, none of the principal plants are substantially idle.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed5 unchanged
Biggest changeConsistent with the requirements of Regulation S-K, Item 103, the Company's threshold for disclosing any environmental legal proceeding involving a governmental authority is potential monetary sanctions that management believes will meet or exceed $1 million. 31 Solutia Legacy Torts Claims Litigation Pursuant to an Amended and Restated Settlement Agreement effective February 28, 2008 between Solutia Inc.
Biggest changeConsistent with the requirements of Regulation S-K, Item 103, the Company's threshold for disclosing any environmental legal proceeding involving a governmental authority is potential monetary sanctions that management believes will meet or exceed $1 million. 31 Tab le of Contents Solutia Legacy Torts Claims Litigation Pursuant to an Amended and Restated Settlement Agreement effective February 28, 2008 between Solutia Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−1 removed4 unchanged
Biggest changeAs of December 31, 2024, a total of 11,612,158 shares have been repurchased under the 2021 authorization for $1.1 billion. Both dividends and share repurchases are key strategies employed by the Company to return value to its stockholders. During 2024, the Company repurchased 3,001,409 shares of common stock for $300 million.
Biggest changeAs of December 31, 2025, a total of 13,032,926 shares have been repurchased under the 2021 authorization for $1.2 billion. Both dividends and share repurchases are key strategies employed by the Company to return value to its stockholders. During 2025, the Company repurchased 1,420,768 shares of common stock for $100 million.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Eastman's common stock is traded on the New York Stock Exchange (the "NYSE") under the symbol "EMN". As of December 31, 2024, there were 115,168,382 shares of Eastman's common stock issued and outstanding, which shares were held by 10,132 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Eastman's common stock is traded on the New York Stock Exchange (the "NYSE") under the symbol "EMN". As of December 31, 2025, there were 114,097,314 shares of Eastman's common stock issued and outstanding, which shares were held by 9,520 stockholders of record.
Removed
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Plan or Program October 1-31, 2024 — $— — $1.515 billion November 1-30, 2024 554,243 $102.39 554,243 $1.458 billion December 1-31, 2024 428,892 $100.98 428,892 $1.415 billion Total 983,135 $101.72 983,135

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

85 edited+20 added−19 removed73 unchanged
Biggest changeAs a result, management cautions investors not to place undue reliance on any non-GAAP financial measure, but to consider such measures alongside the most directly comparable GAAP financial measure. 37 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Company Use of Non-GAAP Financial Measures Non-Core Items and any Unusual or Non-Recurring Items Excluded from Non-GAAP Earnings In addition to evaluating Eastman's financial condition, results of operations, liquidity, and cash flows as reported in accordance with GAAP, management evaluates Company and operating segment performance, and makes resource allocation and performance evaluation decisions, excluding the effect of transactions, costs, and losses or gains that do not directly result from Eastman's normal, or "core", business and operations, or are otherwise of an unusual or non-recurring nature. • Non-core transactions, costs, and losses or gains relate to, among other things, cost reductions, growth and profitability improvement initiatives, changes in businesses and assets, and other events outside of the Company's core business operations, and have included asset impairments, restructuring, and other charges and gains, costs of and related to acquisitions, gains and losses from and costs related to dispositions, closures, or shutdowns of businesses or assets, financing transaction costs, environmental and other costs related to previously divested businesses or non-operational sites and product lines, and mark-to-market losses or gains for pension and other postretirement benefit plans. • In 2023, the Company recognized unusual insurance proceeds, net of costs, from the previously reported January 31, 2022 operational incident at its Kingsport site as a result of a steam line failure (the "steam line incident").
Biggest changeAs a result, management cautions investors not to place undue reliance on any non-GAAP financial measure, but to consider such measures alongside the most directly comparable GAAP financial measure. 37 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Company Use of Non-GAAP Financial Measures Non-Core Items and any Unusual or Non-Recurring Items Excluded from Non-GAAP Earnings In addition to evaluating Eastman's financial condition, results of operations, liquidity, and cash flows as reported in accordance with GAAP, management evaluates Company and operating segment performance, and makes resource allocation and performance evaluation decisions, excluding the effect of transactions, costs, and losses or gains that do not directly result from Eastman's normal, or "core", business and operations, or are otherwise of an unusual or non-recurring nature.
For more detail about MTM pension and other postretirement benefit plans net gains and losses, including actual and expected return on plan assets and the components of the net gain or loss, see "Critical Accounting Estimates - Pension and Other Postretirement Benefits" above, and Note 11, "Retirement Plans", "Summary of Changes - Actuarial (gain) loss, Actual return on plan assets, and Reserve for third party contributions", and "Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income - Mark-to-market pension and other postretirement benefits (gain) loss, net" to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 39 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This MD&A includes the effect of the foregoing on the following GAAP financial measures: • Gross profit, • Other components of post-employment (benefit) cost, net, • Other (income) charges, net, • EBIT, • Provision for income taxes, • Net earnings attributable to Eastman, • Diluted EPS, and • Total borrowings.
For more detail about MTM pension and other postretirement benefit plans net gains and losses, including actual and expected return on plan assets and the components of the net gain or loss, see "Critical Accounting Estimates - Pension and Other Postretirement Benefits" above, and Note 11, "Retirement Plans", "Summary of Changes - Actuarial (gain) loss, Actual return on plan assets, and Reserve for third party contributions", and "Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income - Mark-to-market pension and other postretirement benefits (gain) loss, net" to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 39 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This MD&A includes the effect of the foregoing on the following GAAP financial measures: • Gross profit, • Other components of post-employment (benefit) cost, net, • Other (income) charges, net, • EBIT, • Provision for income taxes, • Net earnings attributable to Eastman, • Diluted EPS, and • Total borrowings.
Further, management understands that investors and securities analysts often use similar measures of Adjusted EBIT Margin, Adjusted EBITDA, Adjusted EBITDA Margin, ROIC, and Adjusted ROIC to compare the results, returns, and value of the Company with those of peer and other companies. 41 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers.
Further, management understands that investors and securities analysts often use similar measures of Adjusted EBIT Margin, Adjusted EBITDA, Adjusted EBITDA Margin, ROIC, and Adjusted ROIC to compare the results, returns, and value of the Company with those of peer and other companies. 41 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers.
Management believes these metrics can be useful to investors and securities analysts in comparing cash flow generation with that of peer and other companies. 40 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Alternative Non-GAAP Earnings Measures From time to time, Eastman may also disclose to investors and securities analysts the non-GAAP earnings measures "Adjusted EBIT Margin", "Adjusted EBITDA", "Adjusted EBITDA Margin", "Return on Invested Capital" (or "ROIC"), and "Adjusted ROIC".
Management believes these metrics can be useful to investors and securities analysts in comparing cash flow generation with that of peer and other companies. 40 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Alternative Non-GAAP Earnings Measures From time to time, Eastman may also disclose to investors and securities analysts the non-GAAP earnings measures "Adjusted EBIT Margin", "Adjusted EBITDA", "Adjusted EBITDA Margin", "Return on Invested Capital" (or "ROIC"), and "Adjusted ROIC".
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Critical Accounting Estimates 34 Non-GAAP Financial Measures 37 Overview 42 Results of Operations 42 Summary by Operating Segment 46 Sales by Customer Location 49 Liquidity and Other Financial Information 50 Inflation 53 Recently Issued Accounting Standards 53 This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based upon the consolidated financial statements of Eastman Chemical Company ("Eastman" or the "Company"), which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), and should be read in conjunction with the Company's consolidated financial statements and related notes, included in Part II, Item 8 of this Annual Report on Form 10-K (this "Annual Report").
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Critical Accounting Estimates 34 Non-GAAP Financial Measures 37 Overview 42 Results of Operations 42 Summary by Operating Segment 46 Sales by Customer Location 49 Liquidity and Other Financial Information 49 Inflation 52 Recently Issued Accounting Standards 52 This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based upon the consolidated financial statements of Eastman Chemical Company ("Eastman" or the "Company"), which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), and should be read in conjunction with the Company's consolidated financial statements and related notes, included in Part II, Item 8 of this Annual Report on Form 10-K (this "Annual Report").
The 2027 Term Loan is subject to interest at a spread above quoted market rates. The Credit Facility, and the 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 December 31, 2024.
The 2027 Term Loan is subject to interest at a spread above quoted market rates. The Credit Facility and the 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 December 31, 2025.
The Company aggregates certain components into reporting units based on economic similarities. An impairment is recognized when the reporting unit's estimated fair value is less than its carrying value. The Company elected to perform a qualitative impairment assessment of goodwill in 2024.
The Company aggregates certain components into reporting units based on economic similarities. An impairment is recognized when the reporting unit's estimated fair value is less than its carrying value. The Company elected to perform a qualitative impairment assessment of goodwill in 2025.
Key assumptions and estimates used in the Company's 2024 goodwill impairment testing included projections of revenues and EBIT determined using the Company's annual multi-year strategic plan, the estimated weighted average cost of capital ("WACC"), and projected long-term growth rates.
Key assumptions and estimates used in the Company's 2025 goodwill impairment testing included projections of revenues and EBIT determined using the Company's annual multi-year strategic plan, the estimated weighted average cost of capital ("WACC"), and projected long-term growth rates.
Due to uncertainties in the timing of the effective settlement of tax positions with taxing authorities, management is unable to determine the timing of payments related to uncertain tax liabilities and these amounts are included in the "2030 and beyond" line item.
Due to uncertainties in the timing of the effective settlement of tax positions with taxing authorities, management is unable to determine the timing of payments related to uncertain tax liabilities and these amounts are included in the "2031 and beyond" line item.
For a discussion of the year ended December 31, 2023, compared to the year ended December 31, 2022, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of Eastman's Annual Report on Form 10-K for the year ended December 31, 2023. 33 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRITICAL ACCOUNTING ESTIMATES In preparing the consolidated financial statements in conformity with GAAP, management must make decisions which impact the reported amounts and the related disclosures.
For a discussion of the year ended December 31, 2024, compared to the year ended December 31, 2023, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of Eastman's Annual Report on Form 10-K for the year ended December 31, 2024. 33 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRITICAL ACCOUNTING ESTIMATES In preparing the consolidated financial statements in conformity with GAAP, management must make decisions which impact the reported amounts and the related disclosures.
Change in Assumption Impact on 2025 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Pension Plans Impact on December 31, 2024 Projected Benefit Obligation for Pension Plans Impact on 2025 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Other Postretirement Benefit Plans Impact on December 31, 2024 Benefit Obligation for Other Postretirement Benefit Plans U.S.
Change in Assumption Impact on 2026 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Pension Plans Impact on December 31, 2025 Projected Benefit Obligation for Pension Plans Impact on 2026 Pre-tax Benefits Expense (Excludes mark-to-market impact) for Other Postretirement Benefit Plans Impact on December 31, 2025 Benefit Obligation for Other Postretirement Benefit Plans U.S.
In the event that the actual outcome of future tax consequences differs from management estimates and assumptions, the resulting change to the provision for income taxes could have a material impact on the consolidated results of operations and statements of financial position. As of December 31, 2024, valuation allowances of $686 million have been provided against certain deferred tax assets.
In the event that the actual outcome of future tax consequences differs from management estimates and assumptions, the resulting change to the provision for income taxes could have a material impact on the consolidated results of operations and statements of financial position. As of December 31, 2025, valuation allowances of $731 million have been provided against certain deferred tax assets.
Non-GAAP Measures in this Annual Report The following non-core items are excluded by management in its evaluation of certain earnings results in this Annual Report: • Asset impairments, restructuring, and other charges, net; • Cost of sales impact from restructuring activities; • Mark-to-market pension and other postretirement benefit plans gains and losses resulting from the changes in discount rates and other actuarial assumptions and the difference between actual and expected returns on plan assets during the period; • Environmental and other costs from previously divested or non-operational sites and product lines; and • Net gain on divested business.
Non-GAAP Measures in this Annual Report The following non-core items are excluded by management in its evaluation of certain earnings results in this Annual Report: • Asset impairments, restructuring, and other charges, net; • Cost of sales impact from restructuring activities; • Mark-to-market pension and other postretirement benefit plans gains and losses resulting from the changes in discount rates and other actuarial assumptions and the difference between actual and expected returns on plan assets during the period; and • Environmental and other costs from previously divested businesses, non-operational sites and product lines, and discontinued programs.
A summary of the Company's debt and other commitment obligations as of December 31, 2024 for each of the next five years and beyond is included in Note 12, "Leases and Other Commitments", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. At December 31, 2024, Eastman's borrowings totaled $5.0 billion with various maturities.
A summary of the Company's debt and other commitment obligations as of December 31, 2025 for each of the next five years and beyond is included in Note 12, "Leases and Other Commitments", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. At December 31, 2025, Eastman's borrowings totaled $4.8 billion with various maturities.
Available capacity under these programs, which the Company uses as a routine source of working capital funding, is dependent on the level of accounts receivable eligible to be sold and the financial institutions' willingness to purchase such receivables. The total amounts sold in 2024 and 2023 were $2.7 billion and $2.8 billion, respectively.
Available capacity under these programs, which the Company uses as a routine source of working capital funding, is dependent on the level of accounts receivable eligible to be sold and the financial institutions' willingness to purchase such receivables. The total amounts sold in both 2025 and 2024 were $2.7 billion.
See Note 9, "Borrowings", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report, for more information regarding total borrowings.
See Note 9, "Borrowings", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report, for more information regarding total borrowings and related activity.
The total amount of available borrowings under the Credit Facility was $1.50 billion as of December 31, 2024. For additional information regarding financial covenants under the Credit Facility, see Section 5.03 of the Credit Facility filed as Exhibit 10.03 to the Company's Annual Report on Form 10-K dated December 31, 2023.
The total amount of available borrowings under the Credit Facility was $1.50 billion as of December 31, 2025. For additional information regarding financial covenants under the Credit Facility, see Section 5.03 of the Credit Facility filed as Exhibit 10.01 to the Company's 2025 Annual Report on Form 10-K.
RECENTLY ISSUED ACCOUNTING STANDARDS For information regarding the impact of recently issued accounting standards, see Note 1, "Significant Accounting Policies", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 53
RECENTLY ISSUED ACCOUNTING STANDARDS For information regarding the impact of recently issued accounting standards, see Note 1, "Significant Accounting Policies", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 52 Table of Contents
The Company elected to perform a qualitative impairment assessment of indefinite-lived intangible assets in 2024. The qualitative assessment did not identify indicators of impairment, and it was determined that it is more likely than not the fair value of indefinite-lived intangible assets was greater than their carrying value.
The Company elected to perform a quantitative impairment assessment of indefinite-lived intangible assets in fourth quarter 2025. The qualitative assessment did not identify indicators of impairment, and it was determined that it is more likely than not the fair value of indefinite-lived intangible assets was greater than their carrying value.
Capital Expenditures Capital expenditures were $599 million and $828 million in 2024 and 2023, respectively. Capital expenditures in 2024 were primarily for the methanolysis plastic-to-plastic molecular recycling manufacturing facilities, other targeted growth initiatives, and site modernization projects.
Capital Expenditures Capital expenditures were $546 million and $599 million in 2025 and 2024, respectively. Capital expenditures in 2025 were primarily for the methanolysis plastic-to-plastic molecular recycling manufacturing facilities, other targeted growth initiatives, and site modernization projects.
Estimated future environmental expenditures for undiscounted remediation costs ranged from $252 million to $495 million with a best estimate or minimum of $252 million at December 31, 2024. The best estimate or minimum estimated future environmental expenditures are considered to be probable and reasonably estimable and include the amounts recognized at December 31, 2024.
Estimated future environmental expenditures for undiscounted remediation costs ranged from $285 million to $509 million with a best estimate or minimum of $285 million at December 31, 2025. The best estimate or minimum estimated future environmental expenditures are considered to be probable and reasonably estimable and include the amounts recognized at December 31, 2025.
The Company had $349 million in indefinite-lived intangible assets at December 31, 2024. There was no impairment of the Company's indefinite-lived intangible assets as a result of the tests performed during fourth quarter 2024. Declines in market conditions or forecasted revenue could result in a future impairment of indefinite-lived intangible assets.
The Company had $351 million in indefinite-lived intangible assets at December 31, 2025. There were no impairments of the Company's indefinite-lived intangible assets as a result of the tests performed during fourth quarter 2025. Declines in market conditions or forecasted revenue could result in a future impairment of indefinite-lived intangible assets.
For additional information, see Note 13, "Environmental Matters and Asset Retirement Obligations", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. Pension and Other Postretirement Benefits Eastman maintains defined benefit pension and other postretirement benefit plans that provide eligible employees with retirement benefits.
For additional information, see Note 13, "Environmental Matters and Asset Retirement Obligations", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 35 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pension and Other Postretirement Benefits Eastman maintains defined benefit pension and other postretirement benefit plans that provide eligible employees with retirement benefits.
The Board of Directors has declared a cash dividend of $0.83 per share during the first quarter of 2025, payable on April 7, 2025 to stockholders of record on March 14, 2025. Both dividends and share repurchases are key strategies employed by the Company to return value to its stockholders.
The Board of Directors has declared a cash dividend of $0.84 per share during the first quarter of 2026, payable on April 8, 2026 to stockholders of record on March 13, 2026. Both dividends and share repurchases are key strategies employed by the Company to return value to its stockholders.
For the Company's U.S. and non-U.S. defined benefit pension plans, the Company assumed weighted average discount rates of 5.64 percent and 4.40 percent, respectively, and weighted average expected returns on plan assets of 7.50 percent and 5.01 percent, respectively, at December 31, 2024.
For the Company's U.S. and non-U.S. defined benefit pension plans, the Company assumed weighted average discount rates of 5.26 percent and 4.81 percent, respectively, and weighted average expected returns on plan assets of 7.50 percent and 5.13 percent, respectively, at December 31, 2025.
(Dollars in millions) 2024 2023 Other components of post-employment (benefit) cost, net $ (72) $ 41 Service cost 30 30 Net periodic benefit (credit) cost (42) 71 Less: Mark-to-market pension and other postretirement benefits (gain) loss, net (54) 53 Components of post-employment (benefit) cost, net included in non-GAAP earnings measures $ 12 $ 18 Below is the calculation of the MTM pension and other post-retirement benefits (gain) loss disclosed above.
(Dollars in millions) 2025 2024 Other components of post-employment (benefit) cost, net $ (25) $ (72) Service cost 26 30 Net periodic benefit (credit) cost 1 (42) Less: Mark-to-market pension and other postretirement benefits (gain) loss, net (6) (54) Components of post-employment (benefit) cost, net included in non-GAAP earnings measures $ 7 $ 12 Below is the calculation of the MTM pension and other post-retirement benefits (gain) loss disclosed above.
Excluding these non-core items, Other (income) charges, net increased in 2024 compared to 2023 primarily due to the absence of gains on investments in 2024. For more information regarding components of foreign exchange transaction losses, see Note 10, "Derivative and Non-Derivative Financial Instruments", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
Excluding these non-core items, Other (income) charges, net decreased in 2025 compared to 2024 primarily due to lower factoring fees and foreign exchange transaction losses. For more information regarding components of foreign exchange transaction losses, see Note 10, "Derivative and Non-Derivative Financial Instruments", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
Non-U.S. 25 basis point decrease in discount rate $-1 Million $+28 Million $+21 Million $-1 Million $+8 Million 25 basis point increase in discount rate $+1 Million $-27 Million $-19 Million $+1 Million $-8 Million 25 basis point decrease in expected return on plan assets $+4 Million No Impact No Impact No Impact 25 basis point increase in expected return on plan assets $-4 Million No Impact No Impact No Impact The assumed discount rate and expected return on plan assets used to calculate the Company's pension and other postretirement benefit obligations are established each December 31.
Non-U.S. 25 basis point decrease in discount rate $-2 Million $+26 Million $+20 Million $+4 Million 25 basis point increase in discount rate $+1 Million $-26 Million $-18 Million $-4 Million 25 basis point decrease in expected return on plan assets $+5 Million No Impact No Impact No Impact 25 basis point increase in expected return on plan assets $-5 Million No Impact No Impact No Impact The assumed discount rate and expected return on plan assets used to calculate the Company's pension and other postretirement benefit obligations are established each December 31.
Restructuring, and Other Charges, Net (Dollars in millions) 2024 2023 Asset impairments 5 — Severance charges 25 31 Site closure and other charges 21 6 Total $ 51 $ 37 For detailed information regarding asset impairments, restructuring, and other charges, net see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 43 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other Components of Post-employment (Benefit) Cost, Net (Dollars in millions) 2024 2023 Change Other components of post-employment (benefit) cost, net $ (72) $ 41 >100% Mark-to-market pension and other postretirement benefit gain (loss), net 54 (53) Other components of post-employment (benefit) cost, net excluding non-core item $ (18) $ (12) 50 % For more information regarding "Other components of post-employment (benefit) cost, net" see Note 1, "Significant Accounting Policies", and Note 11, "Retirement Plans", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
Asset Impairments, Restructuring, and Other Charges, Net (Dollars in millions) 2025 2024 Asset impairments $ 33 $ 5 Severance charges 39 25 Restructuring and other charges 24 21 Total $ 96 $ 51 For detailed information regarding asset impairments, restructuring, and other charges, net see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. 43 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other Components of Post-employment (Benefit) Cost, Net (Dollars in millions) 2025 2024 Change Other components of post-employment (benefit) cost, net $ (25) $ (72) (65) % Mark-to-market pension and other postretirement benefit gain (loss), net 6 54 Other components of post-employment (benefit) cost, net excluding non-core item $ (19) $ (18) 6 % For more information regarding "Other components of post-employment (benefit) cost, net" see Note 1, "Significant Accounting Policies", and Note 11, "Retirement Plans", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
(Dollars in millions) 2024 2023 Actual return and percentage of return on assets $ 81 4 % $ 140 7 % Less: expected return on assets 128 6 % 114 6 % Mark-to-market gain (loss) on assets (47) 26 Actuarial (loss) gain (1) 101 (79) Total mark-to-market (loss) gain $ 54 $ (53) Global weighted-average assumed discount rate for year ended December 31: 5.33 % 4.87 % (1) Actuarial (loss) gain resulted primarily from the change in discount rates from the prior year and changes in other actuarial assumptions.
(Dollars in millions) 2025 2024 Actual return and percentage of return on assets $ 166 8 % $ 81 4 % Less: expected return on assets 125 6 % 128 6 % Mark-to-market gain (loss) on assets 41 (47) Actuarial (loss) gain (1) (35) 101 Total mark-to-market (loss) gain $ 6 $ 54 Global weighted-average assumed discount rate for year ended December 31: 5.12 % 5.33 % (1) Actuarial (loss) gain resulted primarily from the change in discount rates from the prior year and changes in other actuarial assumptions.
Net Debt December 31, December 31, (Dollars in millions) 2024 2023 Total borrowings $ 5,017 $ 4,846 Less: Cash and cash equivalents 837 548 Net debt (1) $ 4,180 $ 4,298 (1) Includes non-cash decrease of $32 million in 2024 and non-cash increase of $20 million in 2023 resulting from foreign currency exchange rates.
Net Debt December 31, December 31, (Dollars in millions) 2025 2024 Total borrowings $ 4,787 $ 5,017 Less: Cash and cash equivalents 566 837 Net debt (1) $ 4,221 $ 4,180 (1) Includes non-cash increase of $68 million in 2025 and non-cash decrease of $32 million in 2024 resulting from foreign currency exchange rates.
As described above, the alternative non-GAAP measure of debt, "net debt", is also presented in this Annual Report. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Non-GAAP Financial Measures - Non-Core and Unusual Items Excluded from Earnings (Dollars in millions) 2024 2023 Non-core items impacting EBIT: Cost of sales impact from restructuring activities $ 7 $ 23 Asset impairments, restructuring, and other charges, net 51 37 Mark-to-market pension and other postretirement benefits (gain) loss, net (54) 53 Environmental and other costs 16 13 Net gain on divested business — (323) Unusual item impacting EBIT: Steam line incident (insurance proceeds) costs, net — (8) Total non-core and unusual items impacting EBIT 20 (205) Less: Items impacting provision for income taxes: Tax effect for non-core and unusual items 1 (74) Tax expense associated with previously divested business (7) — Total items impacting provision for income taxes (6) (74) Total items impacting net earnings attributable to Eastman $ 26 $ (131) Below is the calculation of the "Other components of post-employment (benefit) cost, net" that are not included in the above non-core item "mark-to-market pension and other postretirement benefits loss (gain), net" and that are included in the non-GAAP results.
As described above, the alternative non-GAAP measure of debt, "net debt", is also presented in this Annual Report. 38 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Non-GAAP Financial Measures - Non-Core and Unusual Items Excluded from Earnings (Dollars in millions) 2025 2024 Non-core items impacting EBIT: Cost of sales impact from restructuring activities $ 2 $ 7 Asset impairments, restructuring, and other charges, net 96 51 Mark-to-market pension and other postretirement benefits (gain) loss, net (6) (54) Environmental and other costs 62 16 Total non-core items impacting EBIT 154 20 Less: Items impacting provision for income taxes: Tax effect for non-core items 34 1 Income tax related items (33) (7) Total items impacting provision for income taxes 1 (6) Total items impacting net earnings attributable to Eastman $ 153 $ 26 Below is the calculation of the "Other components of post-employment (benefit) cost, net" that are not included in the above non-core item "mark-to-market pension and other postretirement benefits loss (gain), net" and that are included in the non-GAAP results.
The Company's U.S. defined benefit pension plans are not currently under any benefit restrictions. See Note 11, "Retirement Plans", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report, for more information regarding pension and other postretirement benefit obligations.
For further information regarding pension and other postretirement benefit obligations, see Note 11, "Retirement Plans", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
The Company engages in off-balance sheet, uncommitted accounts receivable factoring programs as a routine part of its ordinary business operations. Through these programs, entire invoices may be sold to third-party financial institutions, the vast majority of which are without recourse.
Eastman expects to continue utilizing the programs described below to support operating cash flow consistent with the Company's past practices. The Company engages in off-balance sheet, uncommitted accounts receivable factoring programs as a routine part of its ordinary business operations. Through these programs, entire invoices may be sold to third-party financial institutions, the vast majority of which are without recourse.
Net earnings and EPS and adjusted net earnings and EPS were as follows: 2024 2023 (Dollars in millions, except diluted EPS) $ EPS $ EPS Net earnings attributable to Eastman $ 905 $ 7.67 $ 894 $ 7.49 Total non-core and unusual items, net of tax 26 0.22 (131) (1.09) Net earnings attributable to Eastman excluding non-core and unusual items $ 931 $ 7.89 $ 763 $ 6.40 The Company generated $1.3 billion and $1.4 billion of cash from operating activities in 2024 and 2023, respectively.
Net earnings and EPS and adjusted net earnings and EPS were as follows: 2025 2024 (Dollars in millions, except diluted EPS) $ EPS $ EPS Net earnings attributable to Eastman $ 474 $ 4.10 $ 905 $ 7.67 Total non-core and unusual items, net of tax 153 1.32 26 0.22 Net earnings attributable to Eastman excluding non-core and unusual items $ 627 $ 5.42 $ 931 $ 7.89 The Company generated $970 million and $1.3 billion of cash from operating activities in 2025 and 2024, respectively.
Net Earnings Attributable to Eastman and Diluted Earnings per Share 2024 2023 (Dollars in millions, except per share amounts) $ EPS $ EPS Net earnings and diluted earnings per share attributable to Eastman $ 905 $ 7.67 $ 894 $ 7.49 Non-core items, net of tax: (1) Cost of sales impact from restructuring activities 5 0.04 20 0.17 Asset impairments, restructuring, and other charges, net 41 0.36 32 0.26 Mark-to-market pension and other postretirement benefit (gain) loss, net (40) (0.34) 39 0.33 Environmental and other costs 13 0.10 9 0.08 Net gain on divested business — — (225) (1.88) Unusual items, net of tax: (1) Steam line incident (insurance proceeds) costs, net — — (6) (0.05) Tax expense associated with previously divested business 7 0.06 — — Adjusted net earnings and diluted earnings per share attributable to Eastman $ 931 $ 7.89 $ 763 $ 6.40 (1) The provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible. 45 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY BY OPERATING SEGMENT Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers.
Net Earnings Attributable to Eastman and Diluted Earnings per Share 2025 2024 (Dollars in millions, except per share amounts) $ EPS $ EPS Net earnings and diluted earnings per share attributable to Eastman $ 474 $ 4.10 $ 905 $ 7.67 Non-core items, net of tax: (1) Cost of sales impact from restructuring activities 1 0.01 5 0.04 Asset impairments, restructuring, and other charges, net 75 0.65 41 0.36 Mark-to-market pension and other postretirement benefit (gain) loss, net (3) (0.03) (40) (0.34) Environmental and other costs 47 0.41 13 0.10 Unusual items: Income tax related items 33 0.28 7 0.06 Adjusted net earnings and diluted earnings per share attributable to Eastman $ 627 $ 5.42 $ 931 $ 7.89 (1) The provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible. 45 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY BY OPERATING SEGMENT Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers.
Eastman uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development capabilities, and relentlessly engaging the market. The Company's world class technology platforms form the foundation of sustainable growth by differentiated products through significant scale advantages in research and development ("R&D") and advantaged global market access.
Eastman uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development capabilities, and relentlessly engaging the market. The Company's world class technology platforms, scale advantage, and sustainability macrotrends form the foundation of the Company's research and development ("R&D") and innovation initiatives.
For more information regarding asset impairments, restructuring, and other charges, net, see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
EBIT in 2024 included inventory adjustments, and asset impairments, restructuring, and other charges, net related to the closure of a solvent-based resins production line. For more information regarding asset impairments, restructuring, and other charges, net, see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
Research and Development Expenses (Dollars in millions) 2024 2023 Change Research and development expenses $ 250 $ 239 5 % R&D expenses increased in 2024 compared to 2023 primarily due to strategic investment in innovation. Asset Impairments.
Research and Development Expenses (Dollars in millions) 2025 2024 Change Research and development expenses $ 255 $ 250 2 % R&D expenses slightly increased in 2025 compared to 2024 primarily due to strategic investment in innovation.
EBIT in 2024 included asset impairments, restructuring, and other charges, net, and inventory adjustments, related to the planned closure of a solvent-based resins production line.
EBIT in 2025 included asset impairments, restructuring, and other charges, net related to the closure of a heat-transfer fluids production line at a specialty fluids and energy facility in North America. EBIT in 2024 included inventory adjustments related to the closure of a solvent-based resins production line.
Other (Income) Charges, Net (Dollars in millions) 2024 2023 Foreign exchange transaction losses (gains), net $ 11 $ 11 (Income) loss from equity investments and other investment (gains) losses, net — (10) Other, net 36 37 Other (income) charges, net $ 47 $ 38 Environmental and other costs (16) (13) Other (income) charges, net excluding non-core items $ 31 $ 25 Other (income) charges, net in 2024 and 2023 included environmental and other costs related to previously divested businesses or non-operational sites and product lines.
Other (Income) Charges, Net (Dollars in millions) 2025 2024 Foreign exchange transaction losses (gains), net $ 9 $ 11 (Income) loss from equity investments and other investment (gains) losses, net 1 — Environmental and other costs 62 16 Other, net 12 20 Other (income) charges, net $ 84 $ 47 Environmental and other costs (62) (16) Other (income) charges, net excluding non-core items $ 22 $ 31 Other (income) charges, net in 2025 and 2024 included environmental and other costs related to previously divested businesses, non-operational sites and product lines, and discontinued programs.
The resolution of uncertainties related to environmental matters included in other liabilities may have a material adverse effect on the Company's consolidated results of operations in the period recognized, however, because of the availability of legal defenses, the Company's preliminary assessment of actions that may be required, and, if applicable, the expected sharing of costs, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results of operations, or cash flows.
See Note 11, "Retirement Plans", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report, for more information regarding pension and other postretirement benefit obligations. 50 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The resolution of uncertainties related to environmental matters included in other liabilities may have a material adverse effect on the Company's consolidated results of operations in the period recognized, however, because of the availability of legal defenses, the Company's preliminary assessment of actions that may be required, and, if applicable, the expected sharing of costs, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results of operations, or cash flows.
For years ended December 31, (Dollars in millions) 2024 2023 Net cash provided by (used in): Operating activities $ 1,287 $ 1,374 Investing activities (534) (432) Financing activities (454) (888) Effect of exchange rate changes on cash and cash equivalents (10) 1 Net change in cash and cash equivalents 289 55 Cash and cash equivalents at beginning of period 548 493 Cash and cash equivalents at end of period $ 837 $ 548 Cash provided by operating activities decreased $87 million primarily due to higher working capital and higher variable compensation payout partially offset by higher net earnings excluding a gain on divested business in 2023.
For years ended December 31, (Dollars in millions) 2025 2024 Net cash provided by (used in): Operating activities $ 970 $ 1,287 Investing activities (462) (534) Financing activities (797) (454) Effect of exchange rate changes on cash and cash equivalents 18 (10) Net change in cash and cash equivalents (271) 289 Cash and cash equivalents at beginning of period 837 548 Cash and cash equivalents at end of period $ 566 $ 837 Cash provided by operating activities decreased $317 million primarily due to lower net earnings and higher variable compensation payout partially offset by lower working capital driven by inventory consumption in 2025 compared to build in 2024.
Selling, General and Administrative Expenses (Dollars in millions) 2024 2023 Change Selling, general and administrative expenses $ 736 $ 727 1 % Selling, general and administrative ("SG&A") expense increased in 2024 compared to 2023 primarily as a result of higher variable compensation costs, partially offset by cost reduction initiatives.
Selling, General and Administrative Expenses (Dollars in millions) 2025 2024 Change Selling, general and administrative expenses $ 658 $ 736 (11) % Selling, general and administrative ("SG&A") expense decreased in 2025 compared to 2024 primarily as a result of cost reduction initiatives and lower variable compensation costs.
Management believes that these elements of the Company's innovation-driven growth model, combined with disciplined portfolio management and balanced capital deployment, will result in consistent, sustainable earnings growth and strong cash flow from operations.
The Company engages the market by working directly with customers and downstream users, targeting attractive markets, and leveraging disruptive macro trends. Management believes that these elements of the Company's innovation-driven growth model, combined with disciplined portfolio management and balanced capital deployment, will result in consistent, sustainable earnings growth and strong cash flow from operations.
As of December 31, 2024, a total of 11,612,158 shares have been repurchased under the 2021 authorization for $1.1 billion. During 2024, the Company repurchased 3,001,409 shares of common stock for $300 million. During 2023, the Company repurchased 1,866,866 shares of common stock for $150 million.
As of December 31, 2025, a total of 13,032,926 shares have been repurchased under the 2021 authorization for $1.2 billion. During 2025, the Company repurchased 1,420,768 shares of common stock for $100 million. During 2024, the Company repurchased 3,001,409 shares of common stock for $300 million.
Declines in market conditions or forecasted revenue and EBIT could result in a future impairment of goodwill. 34 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Indefinite-lived Intangible Assets Indefinite-lived intangible assets, consisting primarily of tradenames, are tested for potential impairment by comparing the estimated fair value to the carrying amount.
As of December 31, 2025, goodwill allocated to the performance films reporting unit was $812 million. Declines in market conditions or forecasted revenue and EBIT could result in a future impairment of goodwill. Indefinite-lived Intangible Assets Indefinite-lived intangible assets, consisting primarily of tradenames, are tested for potential impairment by comparing the estimated fair value to the carrying amount.
Excluding this non-core item, EBIT increased in 2024 compared to 2023 primarily due to $48 million higher selling prices, net of lower raw material and energy costs, partially offset by $15 million lower sales volume.
Excluding this non-core item, EBIT decreased in 2025 compared to 2024 primarily due to $129 million lower sales volume and $51 million higher raw material and energy costs and lower selling prices. These higher costs were partially offset by lower SG&A expenses.
Provision for Income Taxes (Dollars in millions) 2024 2023 $ % $ % Provision for income taxes and effective tax rate $ 170 16 % $ 191 18 % Tax provision for non-core and unusual items (1) 1 (74) Tax expense associated with previously divested business (7) — Adjusted provision for income taxes and effective tax rate $ 164 15 % $ 117 13 % (1) Provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
Provision for Income Taxes (Dollars in millions) 2025 2024 $ % $ % Provision for income taxes and effective tax rate $ 93 16 % $ 170 16 % Tax provision for non-core items (1) 34 1 Income tax related items (2) (33) (7) Adjusted provision for income taxes and effective tax rate $ 94 13 % $ 164 15 % (1) Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
Excluding these items, adjusted provision for income taxes increased in 2024 compared to 2023 primarily as a result of the tax effect of increased adjusted earnings and the foreign rate variance due to the Company's mix of earnings, partially offset by a decrease in the reserves for tax contingencies.
Excluding these items, adjusted provision for income taxes decreased in 2025 compared to 2024 primarily as a result of changes in unrecognized tax benefits and the tax effect of decreased adjusted earnings, partially offset by foreign tax effects due to the Company's mix of earnings and effects of cross border tax laws, net of credits.
Earnings Before Interest and Taxes (Dollars in millions) 2024 2023 Change EBIT $ 1,278 $ 1,302 (2) % Cost of sales impact from restructuring activities 7 23 Steam line incident (insurance proceeds) costs, net — (8) Asset impairments, restructuring, and other charges, net 51 37 Mark-to-market pension and other postretirement benefit (gain) loss, net (54) 53 Environmental and other costs 16 13 Net gain on divested business — (323) EBIT excluding non-core and unusual items $ 1,298 $ 1,097 18 % For more information regarding items that impact EBIT, see "Overview", and items described above in "Results of Operations". 44 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Interest Expense (Dollars in millions) 2024 2023 Change Gross interest expense $ 233 $ 243 Less: Capitalized interest 17 18 Interest Expense 216 225 Less: Interest income 16 10 Net interest expense $ 200 $ 215 (7) % Net interest expense decreased in 2024 compared to 2023 primarily as a result of lower average interest rates on outstanding debt and higher interest income.
Earnings Before Interest and Taxes (Dollars in millions) 2025 2024 Change EBIT $ 776 $ 1,278 (39) % Cost of sales impact from restructuring activities 2 7 Asset impairments, restructuring, and other charges, net 96 51 Mark-to-market pension and other postretirement benefit (gain) loss, net (6) (54) Environmental and other costs 62 16 EBIT excluding non-core items $ 930 $ 1,298 (28) % For more information regarding items that impact EBIT, see "Overview", and items described above in "Results of Operations". 44 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Interest Expense (Dollars in millions) 2025 2024 Change Gross interest expense $ 234 $ 233 — % Less: Capitalized interest 15 17 Interest Expense 219 216 Less: Interest income 11 16 Net interest expense $ 208 $ 200 4 % Net interest expense increased in 2025 compared to 2024 primarily as a result of lower interest income and lower capital expenditures.
For more information regarding asset impairments, restructuring, and other charges, net, see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
EBIT in 2025 included asset impairments, restructuring, and other charges, net due to a loss on sale related to the 2022 closure of an acetate yarn manufacturing facility in Europe. For more information see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
Moreover, the expected return on plan assets is a long-term assumption and on average is expected to approximate the actual return on plan assets. Actual returns will be subject to year-to-year variances and could vary materially from assumptions.
Moreover, the expected return on plan assets is a long-term assumption and on average is expected to approximate the actual return on plan assets.
The Company calculates service and interest cost components of net periodic benefit costs for its significant defined benefit pension and other postretirement benefit plans by applying the specific spot rates along the yield curve to the plans' projected cash flows.
Actual returns will be subject to year-to-year variances and could vary materially from assumptions. 36 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company calculates service and interest cost components of net periodic benefit costs for its significant defined benefit pension and other postretirement benefit plans by applying the specific spot rates along the yield curve to the plans' projected cash flows.
Excluding this non-core item, EBIT increased in 2024 compared to 2023 primarily due to $32 million lower raw material and energy costs and distribution costs, net of lower selling prices and $25 million higher sales volume.
Excluding these non-core items, EBIT decreased in 2025 compared to 2024 due to $116 million lower sales volume and $9 million higher raw material and energy costs and lower selling prices.
Provision for income taxes and effective tax rate in 2024 included tax expense associated with previously divested business. The tax effect of non-core and unusual items were included in both 2024 and 2023.
Provision for income taxes and effective tax rate in 2025 and 2024 included the tax effect of non-core items and other income tax related items.
Based on the original terms of receivables sold for certain programs and actual outstanding balance of receivables under servicing agreements, the Company estimates that $385 million and $397 million of these receivables would have been outstanding as of December 31, 2024 and 2023, respectively, had they not been sold under these factoring programs. 50 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Eastman works with suppliers to optimize payment terms and conditions on accounts payable to enhance timing of working capital and cash flows.
Based on the original terms of receivables sold for certain programs and actual outstanding balance of receivables under servicing agreements, the Company estimates that $346 million and $385 million of these receivables would have been outstanding as of December 31, 2025 and 2024, respectively, had they not been sold under these factoring programs.
The estimated cost of providing plan benefits also depends on demographic assumptions including retirements, mortality, turnover, and plan participation. 35 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The projected benefit obligation as of December 31, 2024 and expense for 2025 are affected by year-end 2024 assumptions.
The Company assumed a weighted average discount rate of 5.13 percent for its other postretirement benefit plans at December 31, 2025. The estimated cost of providing plan benefits also depends on demographic assumptions including retirements, mortality, turnover, and plan participation. The projected benefit obligation as of December 31, 2025 and expense for 2026 are affected by year-end 2025 assumptions.
The Company does not currently expect near term environmental capital expenditures arising from requirements of environmental laws and regulations to materially impact the Company's planned level of annual capital expenditures for environmental control facilities. 52 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Dividends and Stock Repurchases In December 2021, the Company's Board of Directors authorized the repurchase of up to $2.5 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 interest of the Company and its stockholders (the "2021 authorization").
Dividends and Stock Repurchases In December 2021, the Company's Board of Directors authorized the repurchase of up to $2.5 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 interest of the Company and its stockholders (the "2021 authorization").
The following unusual items are excluded by management in its evaluation of certain earnings results in this Annual Report: • Steam line incident (insurance proceeds) costs, net; and • Income tax expense associated with a previously divested business.
The following unusual items are excluded by management in its evaluation of certain earnings results in this Annual Report: • Income tax related items.
For more information regarding the divested business, see Note 2, "Divestitures", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
See "Environmental Costs" in Note 1, "Significant Accounting Policies", and Note 13, "Environmental Matters and Asset Retirement Obligations", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for more information regarding outstanding environmental matters and asset retirement obligations.
Advanced Materials Segment Change (Dollars in millions) 2024 2023 $ % Sales $ 3,050 $ 2,932 $ 118 4 % Volume / product mix effect 227 8 % Price effect (103) (4) % Exchange rate effect (6) — % Earnings before interest and taxes $ 442 $ 343 $ 99 29 % Cost of sales impact from restructuring activities 4 — 4 Asset impairments, restructuring, and other charges, net 18 — 18 Earnings before interest and taxes excluding non-core item 464 343 121 35 % Sales revenue increased in 2024 compared to 2023 due to higher sales volume partially offset by lower selling prices.
Advanced Materials Segment Change (Dollars in millions) 2025 2024 $ % Sales $ 2,880 $ 3,050 $ (170) (6) % Volume / product mix effect (137) (4) % Price effect (36) (2) % Exchange rate effect 3 — % Earnings before interest and taxes $ 319 $ 442 $ (123) (28) % Cost of sales impact from restructuring activities 2 4 (2) Asset impairments, restructuring, and other charges, net 28 18 10 Earnings before interest and taxes excluding non-core items 349 464 (115) (25) % Sales revenue decreased in 2025 compared to 2024 primarily due to lower sales volume in the advanced interlayers and performance films product lines.
The Credit Facility includes sustainability-linked pricing terms, provides available liquidity for general corporate purposes, and supports commercial paper borrowings. At December 31, 2024, the Company had no outstanding borrowings under the Credit Facility and no commercial paper borrowings.
The Credit Facility provides available liquidity for general corporate purposes, and supports commercial paper borrowings. At December 31, 2025, the Company had no outstanding borrowings under the Credit Facility and no commercial paper borrowings. In 2025, the Company repaid $100 million of the remaining $250 million five-year term loan (the "2027 Term Loan").
The Company has a voluntary supplier finance program to provide suppliers with the opportunity to sell receivables due from Eastman to a participating financial institution. See Note 1, "Significant Accounting Policies", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for additional information regarding both programs.
The Company also maintains a structured payables program that utilizes a payables processing arrangement with a financial institution to support the processing and settlement of freight and logistics invoices. See Note 1, "Significant Accounting Policies", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for additional information regarding both programs.
Excluding this non-core item, EBIT decreased in 2024 compared to 2023 primarily due to $46 million lower selling prices and higher raw material costs, net of lower energy costs partially offset by $28 million lower manufacturing and operating costs, and $4 million higher sales volume.
EBIT excluding non-core items decreased in 2025 compared to 2024 primarily due to lower sales volume, lower selling prices and higher raw material and energy costs, and lower asset utilization. These factors were partially offset by cost reduction initiatives, lower manufacturing costs, and lower variable compensation costs.
See Note 20, "Segment and Regional Sales Information", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report for segment sales revenues by customer location. 49 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND OTHER FINANCIAL INFORMATION Cash Flows The Company had cash and cash equivalents as follows: (Dollars in millions) December 31, 2024 2023 Cash and cash equivalents $ 837 $ 548 Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet known short and long-term cash requirements.
LIQUIDITY AND OTHER FINANCIAL INFORMATION Cash Flows The Company had cash and cash equivalents as follows: (Dollars in millions) December 31, 2025 2024 Cash and cash equivalents $ 566 $ 837 Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet known short and long-term cash requirements.
As a result of the goodwill impairment testing performed during fourth quarter 2024, fair values were determined to exceed the carrying values for each reporting unit tested.
As a result of the goodwill impairment testing performed during fourth quarter 2025, fair values were determined to significantly exceed the carrying values for each reporting unit tested with the exception of performance films (part of the Advanced Materials operating segment as described in Part I, Item 1, "Business", of this Annual Report).
Working Capital Management Eastman applies a proactive and disciplined approach to working capital management to optimize cash flow and to enable a full range of capital allocation options in support of the Company's strategy. Eastman expects to continue utilizing the programs described below to support operating cash flow consistent with the Company's past practices.
For additional information, see "Liquidity and Other Financial Information - Debt and Other Commitments" in this MD&A. Working Capital Management Eastman applies a proactive and disciplined approach to working capital management to optimize cash flow and to enable a full range of capital allocation options in support of the Company's strategy.
The WACC is calculated incorporating weighted average returns on debt and equity from market participants. Therefore, changes in the market, which are beyond the control of the Company, may have an impact on future estimates of fair value. The Company had $3.6 billion of goodwill as of December 31, 2024.
Therefore, changes in the market, which are beyond the control of the Company, may have an impact on future estimates of fair value. 34 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company had $3.7 billion of goodwill as of December 31, 2025.
For more information regarding Non-GAAP items, see "Non-GAAP Financial Measures" in this MD&A. For more information regarding asset impairments, restructuring, and other charges, net, see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
For more information see Note 16, "Asset Impairments, Restructuring, and Other Charges, Net", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report. Excluding these non-core items, EBIT increased in 2025 compared to 2024 due to lower SG&A expenses and lower operating costs, partially offset by $19 million lower sales volume.
In 2024, the Company repaid the $300 million 2024 Term Loan and repaid $250 million of the $500 million five-year term loan (the "2027 Term Loan"). The balance outstanding of the 2027 Term Loan was $250 million at December 31, 2024 and $499 million at December 31, 2023, with variable interest rates of 5.58% and 6.58%, respectively.
There were no extinguishment costs associated with the partial repayment of the 2027 Term Loan. The outstanding balance on the 2027 Term Loan was $150 million at December 31, 2025 and $250 million at December 31, 2024, with variable interest rates of 5.14% and 5.58%, respectively.
In February 2024, the Credit Facility was amended to extend the maturity to February 2029. All other material terms of the Credit Facility remain unchanged. 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.
Credit Facility, Term Loans, and Commercial Paper Borrowings The Company has access to a $1.50 billion revolving credit agreement (the "Credit Facility") in which 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 .
Molecular recycling technologies continue to be an area of investment focus for the Company and extends the level of differentiation afforded by its world class technology platforms. Differentiated application development converts market complexity into opportunities for growth and accelerates innovation by enabling a deeper understanding of the value of Eastman's products and how they perform within customers' and end-user products.
Differentiated application development converts market complexity into opportunities for growth and accelerates innovation by enabling a deeper understanding of the value of Eastman's products and how they perform within customers' and end-user products. Key areas of application development include thermoplastic conversion, functional films, coatings formulations, textiles, and personal and home care formulations.
Gross Profit (Dollars in millions) 2024 2023 Change Gross profit $ 2,290 $ 2,061 11 % Costs of sales impact from restructuring activities 7 23 Steam line incident (insurance proceeds) costs, net — (8) Gross profit excluding non-core and unusual items $ 2,297 $ 2,076 11 % Gross profit in 2024 included inventory adjustments related to the planned closure of a solvent-based resins production line at an advanced interlayers facility in North America.
Gross profit in 2024 included inventory adjustments related to the closure of a solvent-based resins production line at an advanced interlayers facility in North America. Excluding these non-core items, gross profit decreased in 2025 compared to 2024 due to lower sales volume and higher raw material and energy costs and lower selling prices.
Chemical Intermediates Segment Change (Dollars in millions) 2024 2023 $ % Sales $ 2,134 $ 2,143 $ (9) — % Volume / product mix effect 53 3 % Price effect (63) (3) % Exchange rate effect 1 — % Earnings before interest and taxes $ 101 $ 434 $ (333) (77) % Net gain on divested business — (323) 323 Earnings before interest and taxes excluding non-core items 101 111 (10) (9) % 47 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales revenue was relatively unchanged in 2024 compared to 2023 primarily due to lower selling prices being mostly offset by higher sales volume.
This was partially offset by cost reduction initiatives and lower SG&A expenses. 46 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Additives & Functional Products Segment Change (Dollars in millions) 2025 2024 $ % Sales $ 2,880 $ 2,862 $ 18 1 % Volume / product mix effect (82) (3) % Price effect 82 3 % Exchange rate effect 18 1 % Earnings before interest and taxes $ 512 $ 487 $ 25 5 % Cost of sales impact from restructuring activities — 3 (3) Asset impairments, restructuring, and other charges, net 4 — 4 Earnings before interest and taxes excluding non-core items 516 490 26 5 % Sales revenue remained relatively unchanged in 2025 compared to 2024 primarily due to higher selling prices offset by lower sales volume.
See the calculation of the MTM pension and other post-retirement benefits (gain) loss table below in "NON-GAAP FINANCIAL MEASURES - Non-GAAP Financial Measures - Non-Core and Unusual Items Excluded from Earnings". 36 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS While changes in obligations do not correspond directly to cash funding requirements, it is an indication of the amount the Company will be required to contribute to the plans in future years.
See the calculation of the MTM pension and other post-retirement benefits (gain) loss table below in "NON-GAAP FINANCIAL MEASURES - Non-GAAP Financial Measures - Non-Core and Unusual Items Excluded from Earnings".
Sales, EBIT, and EBIT excluding non-core and unusual items were as follows: (Dollars in millions) 2024 2023 Sales $ 9,382 $ 9,210 Earnings before interest and taxes 1,278 1,302 Earnings before interest and taxes excluding non-core and unusual items 1,298 1,097 Sales revenue increased in 2024 compared to 2023 due to higher sales volume partially offset by lower selling prices.
Sales, EBIT, and EBIT excluding non-core items were as follows: (Dollars in millions) 2025 2024 Sales $ 8,752 $ 9,382 Earnings before interest and taxes 776 1,278 Earnings before interest and taxes excluding non-core items 930 1,298 Sales revenue decreased in 2025 compared to 2024 due to lower sales volume primarily driven by acetate tow customer inventory destocking and industry capacity share adjustments as well as end-market weakness in most consumer discretionary end markets.
EBIT excluding non-core and unusual items increased in 2024 compared to 2023 primarily due to higher sales volume, including higher capacity utilization, and lower raw material and energy costs, net of lower selling prices. Further discussion of sales revenue and EBIT changes is presented in "Results of Operations" and "Summary by Operating Segment" in this MD&A.
Further discussion of sales revenue and EBIT changes is presented in "Results of Operations" and "Summary by Operating Segment" in this MD&A.
The Company expects that 2025 capital spending will be between $700 million and $800 million, primarily for targeted growth initiatives, including the AM segment methanolysis plastic-to-plastic molecular recycling manufacturing facilities, and site modernization projects. The Company had capital expenditures related to environmental protection and improvement of approximately $70 million and $65 million in 2024 and 2023, respectively.
The Company expects that 2026 capital spending will be approximately $400 million, primarily for maintenance capital and limited growth capital for projects already in progress. 51 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company had capital expenditures related to environmental protection and improvement of approximately $80 million and $70 million in 2025 and 2024, respectively.
Initiatives In 2024, the Fibers segment: • continued to benefit from and execute multi-year raw material and energy cost pass-through contracts across the acetate tow customer base; • commercialized Naia™ Renew Enhanced Sustainability, an offering sourced from 60 percent recycled content with a global fashion brand known for its sustainability focus; and • reached over 70 signed trademark licensing agreements with high profile brands ranging from major multinational fashion brands to sustainable champions in outdoor clothing. 48 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other (Dollars in millions) 2024 2023 Sales $ 18 $ 6 Loss before interest and taxes Growth initiatives and businesses not allocated to operating segments $ (208) $ (198) Steam line incident insurance proceeds (costs), net — 8 Asset impairments, restructuring, and other charges, net (33) (31) Pension and other postretirement benefit plans income (expense), net not allocated to operating segments 62 (68) Other income (charges), net not allocated to operating segments (27) (15) Loss before interest and taxes $ (206) $ (304) Steam line incident (insurance proceeds) costs, net — (8) Asset impairments, restructuring, and other charges, net 33 31 Mark-to-market pension and other postretirement benefits (gain) loss, net (54) 53 Environmental and other costs 16 13 Loss before interest and taxes excluding non-core and unusual items (211) (215) Sales and costs related to growth initiatives, including the cellulosics biopolymer platform and circular economy, R&D costs, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are included in "Other".
Other (Dollars in millions) 2025 2024 Sales $ 17 $ 18 Loss before interest and taxes Growth initiatives and businesses not allocated to operating segments $ (178) $ (208) Asset impairments, restructuring, and other charges, net (53) (33) Pension and other postretirement benefit plans income (expense), net not allocated to operating segments 14 62 Other income (charges), net not allocated to operating segments (61) (27) Loss before interest and taxes $ (278) $ (206) Asset impairments, restructuring, and other charges, net 53 33 Mark-to-market pension and other postretirement benefits (gain) loss, net (6) (54) Environmental and other costs 49 16 Loss before interest and taxes excluding non-core items (182) (211) Sales and costs related to growth initiatives, including the cellulosic biopolymer and circular economy platforms, R&D costs, certain components of pension and other postretirement benefits, and other expenses and income not identifiable to an operating segment are included in "Other".

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2024, the market risk associated with these derivative contracts, assuming an instantaneous parallel shift in the underlying commodity price of 10 percent and no corresponding change in the selling price of finished goods, was $4 million, with an additional $400 thousand of exposure at December 31, 2024 for each one percentage point move in closing price thereafter. 54 Interest Rate Risk Eastman is exposed to interest rate risk primarily as a result of its borrowing and investing activities, which include long-term borrowings used to maintain liquidity and to fund its business operations and capital requirements.
Biggest changeAt December 31, 2025, the market risk associated with these derivative contracts, assuming an instantaneous parallel shift in the underlying commodity price of 10 percent and no corresponding change in the selling price of finished goods, was $4 million, with an additional $400 thousand of exposure at December 31, 2025 for each one percentage point move in closing price thereafter. 53 Table of Contents Interest Rate Risk Eastman is exposed to interest rate risk primarily as a result of its borrowing and investing activities, which include long-term borrowings used to maintain liquidity and to fund its business operations and capital requirements.
Eastman may also enter into interest rate swaps, collars, or similar instruments with the objective of reducing interest rate volatility relating to the Company's borrowing costs. As of December 31, 2024, the Company did not have outstanding interest rate swaps.
Eastman may also enter into interest rate swaps, collars, or similar instruments with the objective of reducing interest rate volatility relating to the Company's borrowing costs. As of December 31, 2025, the Company did not have outstanding interest rate swaps.
At December 31, 2024, the market risk associated with certain cash flows under these derivative transactions assuming a 10 percent adverse move in the U.S. dollar relative to these foreign currencies was $43 million, with an additional $4 million exposure for each additional one percentage point adverse change in those foreign currency rates.
At December 31, 2025, the market risk associated with certain cash flows under these derivative transactions assuming a 10 percent adverse move in the U.S. dollar relative to these foreign currencies was $41 million, with an additional $4 million exposure for each additional one percentage point adverse change in those foreign currency rates.
The nature and amount of the Company's long-term and short-term debt may vary from time to time as a result of business requirements, market conditions, and other factors. The Company manages global interest rate exposure as part of regular operational and financing strategies. The Company had $250 million variable interest rate borrowings at December 31, 2024.
The nature and amount of the Company's long-term and short-term debt may vary from time to time as a result of business requirements, market conditions, and other factors. The Company manages global interest rate exposure as part of regular operational and financing strategies. The Company had $150 million variable interest rate borrowings at December 31, 2025.
At December 31, 2024, a 10 percent fluctuation in the euro and Japanese yen currency rates would have had an impact of $212 million and $5 million, respectively, on the designated net investment values in the foreign subsidiaries.
At December 31, 2025, a 10 percent fluctuation in the euro and Japanese yen currency rates would have had an impact of $259 million and $5 million, respectively, on the designated net investment values in the foreign subsidiaries.
For purposes of calculating the market risks associated with interest-rate-sensitive instruments, the Company uses a hypothetical 10 percent increase in interest rates. The corresponding market risk was $1 million as of December 31, 2024. 55
For purposes of calculating the market risks associated with interest-rate-sensitive instruments, the Company uses a hypothetical 10 percent increase in interest rates. The corresponding market risk was $1 million as of December 31, 2025. 54 Table of Contents