(Mark
One)
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2011
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______________ to ______________
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Commission file number 1-12626
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EASTMAN CHEMICAL COMPANY
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(Exact name of registrant as specified in its charter)
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Delaware
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62-1539359
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification no.)
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200 South Wilcox Drive
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||
Kingsport, Tennessee
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37662
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: (423) 229-2000
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Securities registered pursuant to Section 12(b) of the Act:
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||
Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
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Yes
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No
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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[X]
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Yes
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
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[X]
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Yes
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No
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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[X]
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Yes
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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[X]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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[X]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [X] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [ ]
(Do not check if a smaller reporting company)
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||
Yes
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No
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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[X]
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ITEM
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PAGE
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1.
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5
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1A.
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24
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116
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9A.
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117
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121
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Item
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Page
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ITEM 1. Business
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6
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6
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6
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7
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9
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10
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10
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10
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12
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14
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16
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19
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20
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20
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20
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ITEM 1. BUSINESS
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·
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In the PCI segment, the Company completed several initiatives in 2011 to expand its non-phthalate plasticizer business, including the acquisitions of Sterling Chemicals, Inc. ("Sterling") and Scandiflex do Brasil S.A. Indústrias Químicas ("Scandiflex"). The acquired Sterling idled plasticizer manufacturing unit is being retrofitted to produce non-phthalate plasticizers, with the first of two phases expected to be online in the first half of 2012. The Company also plans to increase capacity of 2-ethyl hexanol in first half 2012 to support expected growth in the plasticizers, coatings, and fuel additive markets.
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·
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In the Specialty Plastics segment, the Company is adding another 30,000 metric tons of resin capacity at its facility in Kingsport, Tennessee for TritanTM copolyester polymer, which is expected to be operational in early 2012. The Company is expanding its capacity for cyclohexane dimethanol ("CHDM"), a monomer used in the manufacture of copolyesters, by 25 percent in two phases with the first operational in fourth quarter 2011 and the second expected to be operational in first quarter 2012. In addition, the Company is expanding its cellulose triacetate capacity by 70 percent, with the new capacity expected to be operational in first quarter 2012.
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·
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In the CASPI segment, the Company completed an additional 20 percent expansion of its hydrogenated hydrocarbon resins manufacturing capacity in Middelburg, the Netherlands, and an additional 10 percent debottleneck of the hydrogenated hydrocarbon facility in Longview, Texas in 2011. The Company also acquired Dynaloy, LLC ("Dynaloy") in 2011 as part of its electronic materials growth initiative.
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·
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In the Fibers segment, in 2011 the Company entered into a joint venture for a 30,000 metric ton acetate tow manufacturing facility in China, expected to be operational in mid-2013.
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·
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The Company continues to explore and invest in R&D initiatives at a corporate level that are aligned with macro trends in sustainability, consumerism, and energy efficiency through high performance materials, advanced cellulosics, and environmentally-friendly chemistry. These initiatives include the completion of a demonstration facility for market testing of acetylated wood, branded as Perennial WoodTM, in second half 2011 and commercial introduction in first quarter 2012 to select markets; the initial commercial introduction of the new Eastman CerfisTM building and construction products technology, with anticipation that the application will be expanded nationwide by the end of 2012; and the announcement of the new EastmanTM microfiber technology.
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·
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On January 26, 2012, the Company entered into a definitive agreement to acquire Solutia Inc. ("Solutia"), a global leader in performance materials and specialty chemicals. The transaction remains subject to approval by Solutia's shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid-2012. The acquisition of Solutia is expected to:
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o
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broaden Eastman's global presence, particularly in Asia Pacific;
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o
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establish a combined platform with organic growth opportunities through complementary technologies and business capabilities and an overlap of key end-markets; and
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o
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expand Eastman's portfolio of sustainable products.
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·
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In the acetyl stream, the Company begins with high sulfur coal which is then gasified in its coal gasification facility. The resulting synthesis gas is converted into a number of chemicals including methanol, methyl acetate, acetic acid, and acetic anhydride. These chemicals are used in manufacturing products throughout the Company including acetate tow, acetate yarn, and cellulose esters. The Company's ability to use coal is a raw material cost advantage. The Company continues to evaluate opportunities to further leverage its gasification expertise to produce additional cost advantaged chemicals from petroleum coke or coal in addition to natural gas and petroleum. Manufacturing capacities in 2011 of select chemicals and product lines in the acetyl stream for acetic chemicals included: 611 million pounds of acetic acid; 1,631 million pounds of acetic anhydride; and 475 million pounds of methanol. These quantities are an average for the year based on the number of operating days and daily rates per manufacturing asset.
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·
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In the olefins stream, the Company begins primarily with propane and ethane, which are then cracked at its facility in Longview, Texas into propylene, as well as ethylene. "Cracking" is a chemical process in which gases are converted into more reactive molecules for use in the manufacturing process. The Company also purchases propylene for use at its Longview facility and its facilities outside the U.S. The propylene is used in oxo derivative products. The ethylene is used in oxo derivative products, acetaldehyde and ethylene glycol production and is also sold commercially. There are four cracking units located at the Company's Longview, Texas facility. Eastman had previously shut down the first of the three units identified for a staged phase-out and idled the second cracking unit. In 2010, a decision was made to restart the idled cracking unit due to the Company's improved competitive position based on low cost feedstocks and olefin market conditions. The Company continues to evaluate options to further improve its olefin cost position including consideration to produce more propylene. Petrochemical business cycles are influenced by periods of over- and under-capacity. Capacity additions to steam cracker units around the world, combined with demand for light olefins, determine the operating rate and thus profitability of producing olefins. Historically, periodic additions of large blocks of capacity have caused profit margins of light olefins to expand and contract, resulting in "ethylene" or "olefins" cycles. The Company believes it is less impacted by the these cycles than it has been historically due to actions it has taken to leverage its diverse derivatives products to take advantage of regulatory trends and focus on more durable markets. Manufacturing capacities in 2011 of select chemicals and product lines in the olefins stream included: 1,310 million pounds of ethylene; 404 million pounds of acetaldehyde and 220 million pounds of ethylene glycol (both ethylene derivatives); 567 million pounds of propylene; and 2,013 million pounds of oxo aldehydes, 1,077 million pounds of oxo alcohols, and 654 million pounds of plasticizers (all oxo products). These quantities are calculated as described above in the acetyl stream. Manufacturing capacities of ethylene and propylene increased from 1,010 million pounds and 392 million pounds, respectively, for 2010 as a result of the restart of the idled cracking unit. Plasticizers production capacity increased from 496 million pounds in 2009 as a result of the acquisitions of Genovique Specialties Corporation ("Genovique") in 2010 and Sterling and Scandiflex in 2011.
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·
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In the polyester stream, the Company begins with purchased paraxylene and produces purified terephthalic acid ("PTA") and dimethyl terephthalate ("DMT") for polyesters and copolyesters. PTA or DMT is then reacted with ethylene glycol, which the Company both makes and purchases, along with other raw materials (some of which the Company makes and are proprietary) to produce polyesters. The Company believes that this backward integration of polyester manufacturing is a competitive advantage, giving Eastman a low cost position, as well as surety of intermediate supply. In addition, Eastman can add specialty monomers to copolyesters to provide clear, tough, chemically resistant product characteristics. As a result, the Company's copolyesters can effectively compete with materials such as polycarbonate and acrylic.
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SEGMENT
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ACETYL STREAM
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POLYESTER STREAM
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OLEFINS STREAM
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KEY PRODUCTS, MARKETS, AND
END USES
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CASPI
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X
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X
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Polymers, resins, and solvents for paints and coatings used in architectural, transportation, industrial, and original equipment manufacturing ("OEM"); inks used in packaging; adhesives ingredients used in tapes, labels, personal care products and building and construction uses; and other formulated products
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Fibers
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X
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Acetate fibers for filter products and textiles
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PCI
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X
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X
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X
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Intermediate chemicals for agriculture, transportation, beverages, nutrition, building and construction, pharmaceuticals, coatings, medical devices, toys, adhesives, household products, polymers, textiles, consumer and industrial products, and health and wellness uses
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Specialty Plastics
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X
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X
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X
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Copolyesters and cellulosics for appliances, store fixtures and displays, building and construction, electronic packaging, medical devices and packaging, graphic arts, general purpose packaging, personal care and cosmetics, food and beverage packaging, performance films, tape and labels, fibers/nonwovens, photographic and optical films, and liquid crystal displays ("LCD")
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BUSINESS SEGMENTS
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·
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Overview
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·
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Products |
·
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Strategy and Innovation
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·
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Customers and Markets
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·
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Competition
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·
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Overview |
·
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Products
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·
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Strategy and Innovation
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Ø
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Growth
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Ø
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Continue to Capitalize on Fibers Technology Expertise
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· | Customers and Markets |
· | Competition |
·
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Overview
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· |
Products
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· | Strategy and Innovation |
·
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Customers and Markets
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· |
Competition
|
·
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Overview
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· | Products |
Ø
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Specialty Copolyesters
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Ø
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Cellulosic Plastics
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·
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Strategy and Innovation
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·
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Customers and Markets
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·
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Competition
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REGIONAL BUSINESS OVERVIEW
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CASPI
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Fibers
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PCI
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Specialty Plastics
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Total
|
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United States and Canada
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25 %
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5 %
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55 %
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15 %
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100 %
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Asia Pacific
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20 %
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35 %
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25 %
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20 %
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100 %
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Europe, Middle East, and Africa
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35 %
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25 %
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20 %
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20 %
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100 %
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Latin America
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40 %
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10 %
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40 %
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10 %
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100 %
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CORPORATE INITIATIVES
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DISCONTINUED OPERATIONS
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EASTMAN CHEMICAL COMPANY GENERAL INFORMATION
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SEGMENT
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KEY RAW MATERIALS
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CASPI
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Propane, propylene, piperline, C9 resin oil, rosin, acetone, pygas, styrene, ethane
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Fibers
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High sulfur coal, wood pulp, methanol
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PCI
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Propane, propylene, paraxylene, ethane, toluene
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Specialty Plastics
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Ethylene glycol, paraxylene, cellulose
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ITEM 1A. RISK FACTORS
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ITEM 1B. UNRESOLVED STAFF COMMENTS
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EXECUTIVE OFFICERS OF THE COMPANY
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Segment using manufacturing facility
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||||
Location
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CASPI
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Fibers
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PCI
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Specialty Plastics
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USA
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||||
Chestertown, Maryland
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x
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|||
Columbia, South Carolina(1)
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x
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|||
Franklin, Virginia(2)
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x
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|||
Indianapolis, Indiana
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x
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|||
Jefferson, Pennsylvania
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x
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|||
Kingsport, Tennessee
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x
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x
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x
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x
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Longview, Texas
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x
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x
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x
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Texas City, Texas
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x
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|||
Europe
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||||
Workington, England
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x
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|||
Middelburg, the Netherlands
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x
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|||
Kohtla-Järve, Estonia
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x
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|||
Asia Pacific
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||||
Jurong Island, Singapore (2)
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x
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x
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||
Kuantan, Malaysia (2)
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x
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|||
Tong Xiang, China
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x
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|||
Ulsan, Korea
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x
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Wuhan, China (3)
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x
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|||
Zibo City, China(4)
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x
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x
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||
Latin America
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||||
Uruapan, Mexico
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x
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|||
San Paulo, Brazil
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x
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(1)
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Although nearly all of the manufacturing facility was included in the first quarter 2011 divestiture of the Company's polyethylene terephthalate ("PET") business and related assets, a portion has been retained subsequent to the sale.
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(2)
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Indicates a location that Eastman leases from a third party.
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(3)
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Eastman holds a 51 percent share in the joint venture Genovique Specialties Wuhan Youji Chemical Co., Ltd.
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(4)
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Eastman holds a 51 percent share in the joint venture Qilu Eastman Specialty Chemical Ltd.
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High
|
Low
|
Cash Dividends Declared
|
|||||
2011
|
First Quarter
|
$
|
50.07
|
$
|
42.39
|
$
|
0.235
|
Second Quarter
|
55.36
|
46.82
|
0.235
|
||||
Third Quarter
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53.31
|
32.45
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0.260
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||||
Fourth Quarter
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42.62
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33.21
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0.260
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||||
2010
|
First Quarter
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$
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32.34
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$
|
27.94
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$
|
0.220
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Second Quarter
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35.98
|
26.63
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0.220
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||||
Third Quarter
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37.43
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25.55
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0.220
|
||||
Fourth Quarter
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42.29
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36.82
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0.235
|
Period
(1)
|
Total Number
of Shares
Purchased
(2)
|
Average Price Paid Per Share
(3)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
or Programs
(4)
|
Approximate Dollar
Value (in Millions) that May Yet Be Purchased Under the Plans or Programs
(4)
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|||
October 1- 31, 2011
|
693,209
|
$
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36.04
|
693,209
|
$
|
98
|
|
November 1-30, 2011
|
--
|
$
|
--
|
--
|
$
|
98
|
|
December 1-31, 2011
|
--
|
$
|
--
|
--
|
$
|
98
|
|
Total
|
693,209
|
$
|
36.04
|
693,209
|
(1)
|
Shares and share prices have been retrospectively adjusted for all periods presented for the two-for-one stock split on October 3, 2011. For additional information, see Note 17, "Stockholders' Equity", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
|
(2)
|
Shares repurchased under a Company announced repurchase plan.
|
(3)
|
Average price paid per share reflects the weighted average purchase price paid for shares.
|
(4)
|
In February 2011, the Board of Directors authorized repurchase of up to $300 million of the Company's outstanding common stock at such times, in such amounts, and on such terms, as determined to be in the best interests of the Company. As of December 31, 2011, a total of 4,757,639 shares have been repurchased under this authorization for a total amount of approximately $202 million. During 2011, the Company repurchased 7,258,031 shares of common stock for a cost of approximately $316 million under the current and a previous stock repurchase authorization. For additional information, see Note 17, "Stockholders' Equity", to the Company's consolidated financial statements in Part II, Item 8 of this Annual Report.
|
Operating Data
|
Year Ended December 31,
|
|||||||||||||||||||
(Dollars in millions, except per share amounts)
|
2011
|
2010
|
2009
|
2008
|
2007
|
|||||||||||||||
Sales
|
$ | 7,178 | $ | 5,842 | $ | 4,396 | $ | 5,936 | $ | 5,513 | ||||||||||
Operating earnings
|
1,021 | 862 | 345 | 551 | 683 | |||||||||||||||
Earnings from continuing operations
|
657 | 425 | 154 | 345 | 434 | |||||||||||||||
Earnings (loss) from discontinued operations
|
8 | 13 | (18 | ) | (17 | ) | (123 | ) | ||||||||||||
Gain (loss) from disposal of discontinued operations
|
31 | -- | -- | 18 | (11 | ) | ||||||||||||||
Net earnings
|
$ | 696 | $ | 438 | $ | 136 | $ | 346 | $ | 300 | ||||||||||
Basic earnings per share
|
||||||||||||||||||||
Earnings from continuing operations
|
$ | 4.70 | $ | 2.95 | $ | 1.06 | $ | 2.29 | $ | 2.62 | ||||||||||
Earnings (loss) from discontinued operations
|
0.28 | 0.09 | (0.12 | ) | 0.01 | (0.81 | ) | |||||||||||||
Net earnings
|
$ | 4.98 | $ | 3.04 | $ | 0.94 | $ | 2.30 | $ | 1.81 | ||||||||||
Diluted earnings per share
|
||||||||||||||||||||
Earnings from continuing operations
|
$ | 4.59 | $ | 2.88 | $ | 1.05 | $ | 2.27 | $ | 2.59 | ||||||||||
Earnings (loss) from discontinued operations
|
0.27 | 0.08 | (0.12 | ) | 0.00 | (0.80 | ) | |||||||||||||
Net earnings
|
$ | 4.86 | $ | 2.96 | $ | 0.93 | $ | 2.27 | $ | 1.79 | ||||||||||
Statement of Financial Position Data
|
||||||||||||||||||||
Current assets
|
$ | 2,302 | $ | 2,047 | $ | 1,735 | $ | 1,423 | $ | 2,293 | ||||||||||
Net properties
|
3,107 | 3,219 | 3,110 | 3,198 | 2,846 | |||||||||||||||
Total assets
|
6,184 | 5,986 | 5,515 | 5,281 | 6,009 | |||||||||||||||
Current liabilities
|
1,114 | 1,070 | 800 | 832 | 1,122 | |||||||||||||||
Long-term borrowings
|
1,445 | 1,598 | 1,604 | 1,442 | 1,535 | |||||||||||||||
Total liabilities
|
4,314 | 4,359 | 4,002 | 3,728 | 3,927 | |||||||||||||||
Total stockholders' equity
|
1,870 | 1,627 | 1,513 | 1,553 | 2,082 | |||||||||||||||
Dividends declared per share
|
0.990 | 0.895 | 0.880 | 0.880 | 0.880 |
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Page
|
|
35
|
|
39
|
|
40
|
|
42
|
|
46
|
|
52
|
|
53
|
|
59
|
|
60
|
|
60
|
|
61
|
|
62
|
|
Change in
Assumption
|
Impact on
2012 Pre-tax U.S.
Benefits Expense
|
Impact on
December 31, 2011 Projected Benefit Obligation for U.S. Pension Plans
|
Impact on
December 31, 2011 Accumulated Postretirement Benefit Obligation for Other U.S. Postretirement Plans
|
25 basis point
decrease in discount
rate
|
+$6 Million
|
+$49 Million
|
+$27 Million
|
25 basis point
increase in discount
rate
|
-$6 Million
|
-$47 Million
|
-$26 Million
|
25 basis point
decrease in expected return on assets
|
+$3 Million
|
No Impact
|
N/A
|
25 basis point
increase in expected
return on assets
|
-$3 Million
|
No Impact
|
N/A
|
·
|
Company and segment operating earnings excluding asset impairments and restructuring charges and gains described below;
|
·
|
Company earnings from continuing operations and diluted earnings per share excluding asset impairments and restructuring charges and gains and early debt extinguishment costs described below;
|
·
|
Cash flows from operating activities excluding the impact of adoption of amended accounting guidance for transfers of financial assets and the impact of a tax payment for the gain on the sale of the polyethylene terephthalate ("PET") business, described below; and
|
·
|
Free cash flow (as defined), described below.
|
·
|
In the PCI segment, the Company completed several initiatives in 2011 to expand its non-phthalate plasticizer business, including the acquisitions of Sterling and Scandiflex do Brasil S.A. Indústrias Químicas ("Scandiflex"). The acquired Sterling idled plasticizer manufacturing unit is being retrofitted to produce non-phthalate plasticizers, with the first of two phases expected to be online in the first half of 2012. The Company also plans to increase capacity of 2-ethyl hexanol in first half 2012 to support expected growth in the plasticizers, coatings, and fuel additive markets.
|
·
|
In the Specialty Plastics segment, the Company is adding another 30,000 metric tons of resin capacity at its facility in Kingsport, Tennessee for TritanTM copolyester polymer, which is expected to be operational in early 2012. The Company is expanding its capacity for cyclohexane dimethanol ("CHDM"), a monomer used in the manufacture of copolyesters, in two phases with the first operational in fourth quarter 2011 and the second expected to be operational in first quarter 2012. The Company is also expanding its cellulose triacetate capacity, with the new capacity expected to be operational in first quarter 2012.
|
·
|
In the CASPI segment, the Company completed an additional 20 percent expansion of its hydrogenated hydrocarbon resins manufacturing capacity in Middelburg, the Netherlands, and an additional 10 percent debottleneck of the hydrogenated hydrocarbon facility in Longview, Texas in 2011. The Company also acquired Dynaloy, LLC ("Dynaloy") in 2011 as part of its electronic materials growth initiative.
|
·
|
In the Fibers segment, in 2011 the Company entered into a joint venture for a 30,000 metric ton acetate tow manufacturing facility in China, expected to be operational in mid-2013.
|
·
|
The Company continues to explore and invest in research and development ("R&D") initiatives at a corporate level that are aligned with macro trends in sustainability, consumerism, and energy efficiency through high performance materials, advanced cellulosics, and environmentally-friendly chemistry. These initiatives include the completion of a demonstration facility for market testing of acetylated wood, branded as Perennial WoodTM, in second half 2011 and commercial introduction in first quarter 2012 to select markets; the initial commercial introduction of the new Eastman CerfisTM technology, with anticipation that the application will be expanded nationwide by the end of 2012; and the announcement of the new EastmanTM microfiber technology.
|
·
|
On January 26, 2012, the Company entered into a definitive agreement to acquire Solutia Inc. ("Solutia"), a global leader in performance materials and specialty chemicals. Under the terms of the agreement, Solutia stockholders will receive $22.00 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock, a total transaction value of approximately $4.7 billion, as of January 26, 2012, including the assumption of Solutia's debt. The transaction remains subject to approval by Solutia's shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid-2012. The acquisition of Solutia is expected to:
|
o
|
broaden Eastman's global presence, particularly in Asia Pacific;
|
o
|
establish a combined platform with extensive organic growth opportunities through complementary technologies and business capabilities and an overlap of key end-markets; and
|
o
|
expand Eastman's portfolio of sustainable products.
|
2011 Compared to 2010 | 2010 Compared to 2009 | |||||||||||||||||||||||
(Dollars in millions) |
2011
|
2010
|
%
|
2010
|
2009
|
%
|
||||||||||||||||||
Sales | $ | 7,178 | $ | 5,842 | 23 | % | $ | 5,842 | $ | 4,396 | 33 | % | ||||||||||||
Volume effect | 7 | % | 19 | % | ||||||||||||||||||||
Price effect | 14 | % | 10 | % | ||||||||||||||||||||
Product mix effect | 2 | % | 4 | % | ||||||||||||||||||||
Exchange rate effect | -- | % | -- | % |
2011 Compared to 2010
|
2010 Compared to 2009
|
|||||||||||||||||||||||
(Dollars in millions) |
2011
|
2010
|
Change
|
2010
|
2009
|
Change
|
||||||||||||||||||
Gross Profit
|
$ | 1,640 | $ | 1,474 | 11 | % | $ | 1,474 | $ | 1,032 | 43 | % | ||||||||||||
As a percentage of sales
|
23 | % | 25 | % | 25 | % | 23 | % |
2011 Compared to 2010
|
2010 Compared to 2009
|
|||||||||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
Change
|
2010
|
2009
|
Change
|
||||||||||||||||||
Selling, General and Administrative Expenses
|
$ | 469 | $ | 431 | 9 | % | $ | 431 | $ | 367 | 17 | % | ||||||||||||
Research and Development Expenses
|
158 | 152 | 4 | % | 152 | 124 | 23 | % | ||||||||||||||||
$ | 627 | $ | 583 | 8 | % | $ | 583 | $ | 491 | 19 | % | |||||||||||||
As a percentage of sales
|
9 | % | 10 | % | 10 | % | 11 | % |
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
Change
|
2010
|
2009
|
Change
|
|||||||||||||||
Operating earnings
|
$ | 1,021 | $ | 862 | 18 | % | $ | 862 | $ | 345 |
>100 %
|
||||||||||
Asset impairments and restructuring charges (gains), net
|
(8 | ) | 29 | 29 | 196 | ||||||||||||||||
Operating earnings excluding asset impairments and restructuring charges (gains), net
|
$ | 1,013 | $ | 891 | 14 | % | $ | 891 | $ | 541 |
65 %
|
2011 Compared to 2010
|
2010 Compared to 2009
|
|||||||||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
Change
|
2010
|
2009
|
Change
|
||||||||||||||||||
Gross interest costs
|
$ | 92 | $ | 108 | $ | 108 | $ | 99 | ||||||||||||||||
Less: Capitalized interest
|
9 | 3 | 3 | 14 | ||||||||||||||||||||
Interest expense
|
83 | 105 | (21 | ) % | 105 | 85 | 24 | % | ||||||||||||||||
Interest income
|
7 | 6 | 6 | 7 | ||||||||||||||||||||
Net interest expense
|
$ | 76 | $ | 99 | (23 | ) % | $ | 99 | $ | 78 | 27 | % | ||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Foreign exchange transaction (gains) losses, net
|
$ | (2 | ) | $ | 8 | $ | 5 | |||||
Investment (gains) losses, net
|
(16 | ) | (1 | ) | 5 | |||||||
Other, net
|
(1 | ) | 5 | 3 | ||||||||
Other charges (income), net
|
$ | (19 | ) | $ | 12 | $ | 13 |
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
Change
|
2010
|
2009
|
Change
|
|||||||||||||||
Provision for income taxes from continuing operations
|
$ | 307 | $ | 211 | 45 | % | $ | 211 | $ | 100 |
>100 %
|
||||||||||
Effective tax rate
|
32 | % | 33 | % | 33 | % | 39 | % |
2011
|
2010
|
2009
|
||||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$ | EPS | $ | EPS | $ | EPS | ||||||||||||||||||
Earnings from continuing operations
|
$ | 657 | $ | 4.59 | $ | 425 | $ | 2.88 | $ | 154 | $ | 1.05 | ||||||||||||
Asset impairments and restructuring charges (gains), net of tax
|
(5 | ) | (0.03 | ) | 18 | 0.12 | 127 | 0.86 | ||||||||||||||||
Early debt extinguishment costs, net of tax
|
-- | -- | 71 | 0.48 | -- | -- | ||||||||||||||||||
Earnings from continuing operations excluding items
|
$ | 652 | $ | 4.56 | $ | 514 | $ | 3.48 | $ | 281 | $ | 1.91 |
2011
|
2010
|
2009
|
||||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
$ | EPS | $ | EPS | $ | EPS | ||||||||||||||||||
Earnings from continuing operations
|
$ | 657 | $ | 4.59 | $ | 425 | $ | 2.88 | $ | 154 | $ | 1.05 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax
|
8 | 0.06 | 13 | 0.08 | (18 | ) | (0.12 | ) | ||||||||||||||||
Gain from disposal of discontinued operations, net of tax
|
31 | 0.21 | -- | -- | -- | -- | ||||||||||||||||||
Net earnings
|
$ | 696 | $ | 4.86 | $ | 438 | $ | 2.96 | $ | 136 | $ | 0.93 |
CASPI Segment
|
|||||||||||||||||
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||
Change
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
$
|
%
|
2010
|
2009
|
$
|
%
|
|||||||||
Sales
|
$
|
1,844
|
$
|
1,574
|
$
|
270
|
17 %
|
$
|
1,574
|
$
|
1,217
|
$
|
357
|
29 %
|
|||
Volume effect
|
79
|
5 %
|
198
|
16 %
|
|||||||||||||
Price effect
|
197
|
13 %
|
122
|
10 %
|
|||||||||||||
Product mix effect
|
(11)
|
(1) %
|
43
|
4 %
|
|||||||||||||
Exchange rate effect
|
5
|
-- %
|
(6)
|
(1) %
|
|||||||||||||
Operating earnings
|
331
|
293
|
38
|
13 %
|
293
|
221
|
72
|
33 %
|
|||||||||
Asset impairments and restructuring charges (gains), net
|
--
|
6
|
(6)
|
6
|
3
|
3
|
|||||||||||
Operating earnings excluding asset impairments and restructuring charges (gains), net
|
331
|
299
|
32
|
11 %
|
299
|
224
|
75
|
34 %
|
|||||||||
Fibers Segment
|
|||||||||||||||||
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||
Change
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
$
|
%
|
2010
|
2009
|
$
|
%
|
|||||||||
Sales
|
$
|
1,279
|
$
|
1,142
|
$
|
137
|
12 %
|
$
|
1,142
|
$
|
1,032
|
$
|
110
|
11 %
|
|||
Volume effect
|
35
|
3 %
|
61
|
6 %
|
|||||||||||||
Price effect
|
46
|
4 %
|
4
|
-- %
|
|||||||||||||
Product mix effect
|
55
|
5 %
|
46
|
5 %
|
|||||||||||||
Exchange rate effect
|
1
|
-- %
|
(1)
|
-- %
|
|||||||||||||
Operating earnings
|
346
|
323
|
23
|
7 %
|
323
|
292
|
31
|
11 %
|
|||||||||
Asset impairments and restructuring charges (gains), net
|
--
|
3
|
(3)
|
3
|
4
|
(1)
|
|||||||||||
Operating earnings excluding asset impairments and restructuring charges (gains), net
|
346
|
326
|
20
|
6 %
|
326
|
296
|
30
|
10 %
|
|||||||||
PCI Segment
|
|||||||||||||||||
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||
Change
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
$
|
%
|
2010
|
2009
|
$
|
%
|
|||||||||
Sales
|
$
|
2,860
|
$
|
2,083
|
$
|
777
|
37 %
|
$
|
2,083
|
1,398
|
$
|
685
|
49 %
|
||||
Volume effect
|
289
|
14 %
|
333
|
24 %
|
|||||||||||||
Price effect
|
392
|
19 %
|
295
|
21 %
|
|||||||||||||
Product mix effect
|
89
|
4 %
|
58
|
4 %
|
|||||||||||||
Exchange rate effect
|
7
|
-- %
|
(1)
|
-- %
|
|||||||||||||
Operating earnings
|
289
|
224
|
65
|
29 %
|
224
|
41
|
183
|
>100 %
|
|||||||||
Asset impairments and restructuring charges (gains), net
|
7
|
7
|
--
|
7
|
6
|
1
|
|||||||||||
Operating earnings excluding asset impairments and restructuring charges (gains), net
|
296
|
231
|
65
|
28 %
|
231
|
47
|
184
|
>100 %
|
Specialty Plastics Segment
|
|||||||||||||||||
2011 Compared to 2010
|
2010 Compared to 2009
|
||||||||||||||||
Change
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
$
|
%
|
2010
|
2009
|
$
|
%
|
|||||||||
Sales
|
$
|
1,195
|
$
|
1,043
|
$
|
152
|
15 %
|
$
|
1,043
|
$
|
749
|
$
|
294
|
39 %
|
|||
Volume effect
|
(23)
|
(2) %
|
240
|
32 %
|
|||||||||||||
Price effect
|
161
|
16 %
|
14
|
2 %
|
|||||||||||||
Product mix effect
|
11
|
1 %
|
37
|
5 %
|
|||||||||||||
Exchange rate effect
|
3
|
-- %
|
3
|
-- %
|
|||||||||||||
Operating earnings
|
105
|
88
|
17
|
19 %
|
88
|
9
|
79
|
>100 %
|
|||||||||
Asset impairments and restructuring charges (gains), net
|
--
|
5
|
(5)
|
5
|
4
|
1
|
|||||||||||
Operating earnings excluding asset impairments and restructuring charges (gains), net
|
105
|
93
|
12
|
13 %
|
93
|
13
|
80
|
>100 %
|
(Dollars in millions)
|
2011
|
2010
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||
United States and Canada
|
$
|
3,824
|
$
|
2,957
|
29 %
|
10 %
|
17 %
|
2 %
|
-- %
|
|||||
Asia Pacific
|
1,681
|
1,446
|
16 %
|
2 %
|
10 %
|
4 %
|
-- %
|
|||||||
Europe, Middle East, and Africa
|
1,352
|
1,150
|
18 %
|
5 %
|
11 %
|
1 %
|
1 %
|
|||||||
Latin America
|
321
|
289
|
11 %
|
(2) %
|
12 %
|
1 %
|
-- %
|
|||||||
$
|
7,178
|
$
|
5,842
|
23 %
|
7 %
|
14 %
|
2 %
|
-- %
|
(Dollars in millions)
|
2010
|
2009
|
Change
|
Volume Effect
|
Price Effect
|
Product
Mix Effect
|
Exchange
Rate
Effect
|
|||||||
United States and Canada
|
$
|
2,957
|
$
|
2,252
|
31 %
|
19 %
|
12 %
|
-- %
|
-- %
|
|||||
Asia Pacific
|
1,446
|
1,062
|
36 %
|
18 %
|
10 %
|
7 %
|
1 %
|
|||||||
Europe, Middle East, and Africa
|
1,150
|
835
|
38 %
|
23 %
|
5 %
|
12 %
|
(2) %
|
|||||||
Latin America
|
289
|
247
|
17 %
|
9 %
|
7 %
|
1 %
|
-- %
|
|||||||
$
|
5,842
|
$
|
4,396
|
33 %
|
19 %
|
10 %
|
4 %
|
-- %
|
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||
Net cash provided by (used in):
|
||||||
Operating activities
|
$
|
625
|
$
|
575
|
$
|
758
|
Investing activities
|
(142)
|
(442)
|
(369)
|
|||
Financing activities
|
(423)
|
(411)
|
18
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
1
|
(1)
|
|||
Net change in cash and cash equivalents
|
$
|
61
|
$
|
(277)
|
$
|
406
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
577
|
$
|
516
|
$
|
793
|
(Dollars in millions)
|
2011
|
2010
|
2009
|
||||
Net cash provided by operating activities
|
$
|
625
|
$
|
575
|
$
|
758
|
|
Impact of adoption of amended accounting guidance (1)
|
--
|
200
|
--
|
||||
Impact of tax payment on the sale of the PET business(2)
|
110
|
--
|
--
|
||||
Net cash provided by operating activities excluding items
|
735
|
775
|
758
|
||||
Additions to properties and equipment
|
(457)
|
(243)
|
(310)
|
||||
Dividends paid to stockholders
|
(136)
|
(127)
|
(128)
|
||||
Free Cash Flow
|
$
|
142
|
$
|
405
|
$
|
320
|
(1)
|
Net cash provided by operating activities in 2010 reflected the adoption of amended accounting guidance for transfers of financial assets which resulted in $200 million of receivables, which were previously accounted for as sold and removed from the balance sheet when transferred under the accounts receivable securitization program, being included on the 2010 balance sheet as trade receivables, net. This increase in receivables reduced cash from operations by $200 million in first quarter 2010.
|
(2)
|
Net cash provided by operating activities in 2011 included the use of $110 million for the tax payment for the tax gain on the sale of the PET business completed in first quarter 2011.
|
(Dollars in millions) | December 31, | |||||||||||
2011
|
2010
|
2009
|
||||||||||
Cash and cash equivalents
|
$ | 577 | $ | 516 | $ | 793 | ||||||
Short-term time deposits
|
200 | -- | -- | |||||||||
Total cash and cash equivalents and short-term time deposits (1)
|
$ | 777 | $ | 516 | $ | 793 |
(1)
|
Cash and cash equivalents and short-term time deposits are primarily held in the United States.
|
(Dollars in millions)
|
Payments Due for | |||||||||||||||||||||||||||
Period
|
Notes and Debentures
|
Credit Facility Borrowings and Other
|
Interest Payable
|
Purchase Obligations
|
Operating Leases
|
Other Liabilities (a)
|
Total
(b)
|
|||||||||||||||||||||
2012
|
$ | 147 | $ | 6 | $ | 87 | $ | 276 | $ | 27 | $ | 270 | $ | 813 | ||||||||||||||
2013
|
-- | 81 | 264 | 20 | 51 | 416 | ||||||||||||||||||||||
2014
|
- | -- | 81 | 143 | 11 | 52 | 287 | |||||||||||||||||||||
2015
|
250 | -- | 82 | 137 | 8 | 56 | 533 | |||||||||||||||||||||
2016
|
-- | 74 | 137 | 7 | 67 | 285 | ||||||||||||||||||||||
2017 and beyond
|
1,195 | -- | 454 | 461 | 32 | 1,100 | 3,242 | |||||||||||||||||||||
Total
|
$ | 1,592 | $ | 6 | $ | 859 | $ | 1,418 | $ | 105 | $ | 1,596 | $ | 5,576 |
(a)
|
Amounts represent the current estimated cash payments to be made by the Company primarily for pension and other post-employment benefits and taxes payable in the periods indicated. The amount and timing of such payments is dependent upon interest rates, health care cost trends, actual returns on plan assets, retirement and attrition rates of employees, continuation or modification of the benefit plans, and other factors. Such factors can significantly impact the amount and timing of any future contributions by the Company.
|
(b)
|
Not included in the above table is the expected payment of approximately $2.7 billion in cash in order to complete the Solutia acquisition or any obligations to be assumed upon completion of the acquisition of Solutia.
|
·
|
capital spending to be between $400 million and $425 million for organic growth initiatives and maintenance; and
|
·
|
between $250 million and $300 million of free cash flow (operating cash flow less capital expenditures and dividends).
|
·
|
that the Company may not complete the acquisition of Solutia on terms contained in the merger agreement, which could impact the purchase price to be paid, assets to be acquired, covenants relating to Eastman's or Solutia's operations, or timing thereof;
|
·
|
that the Company may continue to incur significant additional costs and expend significant additional time and effort prior to the closing and if the transaction is delayed or not consummated, the Company may not be able to realize any benefit therefrom;
|
·
|
that the Company may not be able to obtain the financing it intends to obtain in order to complete the acquisition of Solutia; and
|
·
|
that Solutia can require Eastman to complete the acquisition in certain situations that could result in the Company incurring significant additional costs.
|
·
|
will be required to incur substantial additional indebtedness in order to complete the acquisition of Solutia;
|
·
|
may not be able to achieve the cost, revenue, or tax synergies expected from the acquisition of Solutia, or there may be delays in achieving any such synergies; and
|
·
|
may be required to expend significant additional resources in order to integrate Solutia's businesses into Eastman's.
|
ITEM
|
Page
|
67
|
|
68
|
|
69
|
|
70
|
|
71
|
|
Notes to the Audited Consolidated Financial Statements
|
|
72
|
|
77
|
|
78
|
|
79
|
|
80
|
|
80
|
|
81
|
|
81
|
|
82
|
|
86
|
|
87
|
|
87
|
|
90
|
|
97
|
|
99
|
|
99
|
|
100
|
|
102
|
|
104
|
|
104
|
|
107
|
|
108
|
|
112
|
|
114
|
|
115
|
|
115
|
/s/ James P. Rogers | /s/ Curtis E. Espeland | |
James P. Rogers
|
Curtis E. Espeland
|
|
Chief Executive Officer
|
Senior Vice President and
|
|
Chief Financial Officer
|
||
February 22, 2012
|
||
For years ended December 31,
|
||||||||||||
(Dollars in millions, except per share amounts)
|
2011
|
2010
|
2009
|
|||||||||
Sales
|
$ | 7,178 | $ | 5,842 | $ | 4,396 | ||||||
Cost of sales
|
5,538 | 4,368 | 3,364 | |||||||||
Gross profit
|
1,640 | 1,474 | 1,032 | |||||||||
Selling, general and administrative expenses
|
469 | 431 | 367 | |||||||||
Research and development expenses
|
158 | 152 | 124 | |||||||||
Asset impairments and restructuring charges (gains), net
|
(8 | ) | 29 | 196 | ||||||||
Operating earnings
|
1,021 | 862 | 345 | |||||||||
Net interest expense
|
76 | 99 | 78 | |||||||||
Early debt extinguishment costs
|
-- | 115 | -- | |||||||||
Other charges (income), net
|
(19 | ) | 12 | 13 | ||||||||
Earnings from continuing operations before income taxes
|
964 | 636 | 254 | |||||||||
Provision for income taxes from continuing operations
|
307 | 211 | 100 | |||||||||
Earnings from continuing operations
|
657 | 425 | 154 | |||||||||
Earnings (loss) from discontinued operations, net of tax
|
8 | 13 | (18 | ) | ||||||||
Gain from disposal of discontinued operations, net of tax
|
31 | -- | -- | |||||||||
Net earnings
|
$ | 696 | $ | 438 | $ | 136 | ||||||
Basic earnings per share
|
||||||||||||
Earnings from continuing operations
|
$ | 4.70 | $ | 2.95 | $ | 1.06 | ||||||
Earnings (loss) from discontinued operations
|
0.28 | 0.09 | (0.12 | ) | ||||||||
Basic earnings per share
|
$ | 4.98 | $ | 3.04 | $ | 0.94 | ||||||
Diluted earnings per share
|
||||||||||||
Earnings from continuing operations
|
$ | 4.59 | $ | 2.88 | $ | 1.05 | ||||||
Earnings (loss) from discontinued operations
|
0.27 | 0.08 | (0.12 | ) | ||||||||
Diluted earnings per share
|
$ | 4.86 | $ | 2.96 | $ | 0.93 | ||||||
Comprehensive Income
|
||||||||||||
Net earnings
|
$ | 696 | $ | 438 | $ | 136 | ||||||
Other comprehensive income (loss), net of tax
|
||||||||||||
Change in cumulative translation adjustment
|
(15 | ) | 2 | 17 | ||||||||
Change in unrecognized losses and prior service credits for benefit plans
|
(71 | ) | (39 | ) | (74 | ) | ||||||
Change in unrealized gains (losses) on derivative instruments
|
(20 | ) | (10 | ) | 7 | |||||||
Total other comprehensive income (loss), net of tax
|
(106 | ) | (47 | ) | (50 | ) | ||||||
Comprehensive income
|
$ | 590 | $ | 391 | $ | 86 | ||||||
Retained Earnings
|
||||||||||||
Retained earnings at beginning of period
|
$ | 2,879 | $ | 2,570 | $ | 2,562 | ||||||
Net earnings
|
696 | 438 | 136 | |||||||||
Cash dividends declared
|
(139 | ) | (129 | ) | (128 | ) | ||||||
Retained earnings at end of period
|
$ | 3,436 | $ | 2,879 | $ | 2,570 |
(Dollars in millions, except per share amounts)
|
December 31,
|
December 31,
|
||||||
2011
|
2010
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 577 | $ | 516 | ||||
Short-term time deposits
|
200 | -- | ||||||
Trade receivables, net
|
632 | 545 | ||||||
Miscellaneous receivables
|
72 | 131 | ||||||
Inventories
|
779 | 608 | ||||||
Other current assets
|
42 | 30 | ||||||
Current assets held for sale
|
-- | 217 | ||||||
Total current assets
|
2,302 | 2,047 | ||||||
Properties
|
||||||||
Properties and equipment at cost
|
8,383 | 7,908 | ||||||
Less: Accumulated depreciation
|
5,276 | 5,063 | ||||||
Properties and equipment held for sale, net
|
-- | 374 | ||||||
Net properties
|
3,107 | 3,219 | ||||||
Goodwill
|
406 | 375 | ||||||
Other noncurrent assets
|
369 | 322 | ||||||
Noncurrent assets held for sale
|
-- | 23 | ||||||
Total assets
|
$ | 6,184 | $ | 5,986 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities
|
||||||||
Payables and other current liabilities
|
$ | 961 | $ | 1,012 | ||||
Borrowings due within one year
|
153 | 6 | ||||||
Current liabilities related to assets held for sale
|
-- | 52 | ||||||
Total current liabilities
|
1,114 | 1,070 | ||||||
Long-term borrowings
|
1,445 | 1,598 | ||||||
Deferred income tax liabilities
|
210 | 284 | ||||||
Post-employment obligations
|
1,411 | 1,274 | ||||||
Other long-term liabilities
|
134 | 130 | ||||||
Noncurrent liabilities related to assets held for sale
|
-- | 3 | ||||||
Total liabilities
|
4,314 | 4,359 | ||||||
Commitments and contingencies (Note 14)
|
||||||||
Stockholders' equity
|
||||||||
Common stock ($0.01 par value per share – 350,000,000 shares authorized; shares issued – 196,455,131 and 193,688,890 for 2011 and 2010, respectively)
|
2 | 2 | ||||||
Additional paid-in capital
|
900 | 793 | ||||||
Retained earnings
|
3,436 | 2,879 | ||||||
Accumulated other comprehensive loss
|
(538 | ) | (432 | ) | ||||
3,800 | 3,242 | |||||||
Less: Treasury stock at cost (59,539,633 shares for 2011 and 52,345,308 shares for 2010)
|
1,930 | 1,615 | ||||||
Total stockholders' equity
|
1,870 | 1,627 | ||||||
Total liabilities and stockholders' equity
|
$ | 6,184 | $ | 5,986 |
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Cash flows from operating activities
|
||||||||||||
Net earnings
|
$ | 696 | $ | 438 | $ | 136 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
273 | 280 | 274 | |||||||||
Asset impairments charges
|
-- | 8 | 179 | |||||||||
Gains on sale of assets
|
(70 | ) | -- | -- | ||||||||
Early debt extinguishment costs
|
-- | 115 | -- | |||||||||
Provision for deferred income taxes
|
11 | 59 | 185 | |||||||||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
||||||||||||
(Increase) decrease in trade receivables
|
(73 | ) | (358 | ) | 2 | |||||||
(Increase) decrease in inventories
|
(156 | ) | (160 | ) | 100 | |||||||
Increase (decrease) in trade payables
|
(51 | ) | 152 | 16 | ||||||||
Increase (decrease) in liabilities for employee benefits and incentive pay
|
(90 | ) | 11 | (149 | ) | |||||||
Other items, net
|
85 | 30 | 15 | |||||||||
Net cash provided by operating activities
|
625 | 575 | 758 | |||||||||
Cash flows from investing activities
|
||||||||||||
Additions to properties and equipment
|
(457 | ) | (243 | ) | (310 | ) | ||||||
Proceeds from sale of assets and investments
|
651 | 13 | 30 | |||||||||
Acquisitions and investments in joint ventures
|
(156 | ) | (190 | ) | (68 | ) | ||||||
Additions to short-term time deposits
|
(200 | ) | -- | -- | ||||||||
Additions to capitalized software
|
(9 | ) | (7 | ) | (8 | ) | ||||||
Other items, net
|
29 | (15 | ) | (13 | ) | |||||||
Net cash used in investing activities
|
(142 | ) | (442 | ) | (369 | ) | ||||||
Cash flows from financing activities
|
||||||||||||
Net increase in commercial paper, credit facility, and other borrowings
|
1 | 2 | 3 | |||||||||
Proceeds from borrowings
|
-- | 496 | 248 | |||||||||
Repayment of borrowings
|
(2 | ) | (620 | ) | (101 | ) | ||||||
Dividends paid to stockholders
|
(136 | ) | (127 | ) | (128 | ) | ||||||
Treasury stock purchases
|
(316 | ) | (280 | ) | (21 | ) | ||||||
Proceeds from stock option exercises and other items
|
30 | 118 | 17 | |||||||||
Net cash provided by (used in) financing activities
|
(423 | ) | (411 | ) | 18 | |||||||
Effect of exchange rate changes on cash and cash equivalents
|
1 | 1 | (1 | ) | ||||||||
Net change in cash and cash equivalents
|
61 | (277 | ) | 406 | ||||||||
Cash and cash equivalents at beginning of period
|
516 | 793 | 387 | |||||||||
Cash and cash equivalents at end of period
|
$ | 577 | $ | 516 | $ | 793 |
1.
|
SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES
|
Dollars in millions
|
||||
Current assets
|
$ | 33 | ||
Properties and equipment
|
129 | |||
Intangible assets
|
11 | |||
Other noncurrent assets
|
20 | |||
Goodwill
|
33 | |||
Current liabilities
|
(23 | ) | ||
Long-term liabilities
|
(70 | ) | ||
Total purchase price
|
$ | 133 |
Dollars in millions
|
||||
Current assets
|
$ | 48 | ||
Properties and equipment
|
33 | |||
Intangible assets
|
59 | |||
Other noncurrent assets
|
2 | |||
Goodwill
|
63 | |||
Current liabilities
|
(17 | ) | ||
Long-term liabilities
|
(28 | ) | ||
Total purchase price
|
$ | 160 |
3.
|
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Sales
|
$ | 105 | $ | 849 | $ | 651 | ||||||
Earnings (loss) before income taxes
|
15 | 26 | (28 | ) | ||||||||
Earnings (loss) from discontinued operations, net of tax
|
8 | 13 | (18 | ) | ||||||||
Gain from disposal of discontinued operations, net of tax
|
31 | -- | -- |
December 31,
|
||||
(Dollars in millions)
|
2010
|
|||
Current assets
|
||||
Trade receivables, net
|
$ | 116 | ||
Inventories
|
101 | |||
Total current assets held for sale
|
217 | |||
Non-current assets
|
||||
Properties and equipment, net
|
374 | |||
Goodwill
|
1 | |||
Other noncurrent assets
|
22 | |||
Total noncurrent assets held for sale
|
397 | |||
Total assets
|
$ | 614 | ||
Current liabilities
|
||||
Payables and other current liabilities
|
$ | 52 | ||
Total current liabilities held for sale
|
52 | |||
Noncurrent liabilities
|
||||
Other noncurrent liabilities
|
3 | |||
Total noncurrent liabilities
|
3 | |||
Total liabilities
|
$ | 55 |
4.
|
December 31,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
||||||
At FIFO or average cost (approximates current cost)
|
||||||||
Finished goods
|
$ | 777 | $ | 611 | ||||
Work in process
|
239 | 206 | ||||||
Raw materials and supplies
|
353 | 281 | ||||||
Total inventories
|
1,369 | 1,098 | ||||||
LIFO Reserve
|
(590 | ) | (490 | ) | ||||
Total inventories
|
$ | 779 | $ | 608 |
5.
|
PROPERTIES AND ACCUMULATED DEPRECIATION
|
December 31,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
||||||
Properties
|
||||||||
Land
|
$ | 113 | $ | 77 | ||||
Buildings and building equipment
|
772 | 743 | ||||||
Machinery and equipment
|
7,176 | 6,851 | ||||||
Construction in progress
|
322 | 237 | ||||||
Properties and equipment at cost
|
$ | 8,383 | $ | 7,908 | ||||
Less: Accumulated depreciation
|
5,276 | 5,063 | ||||||
Net properties
|
$ | 3,107 | $ | 2,845 |
6.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
(Dollars in millions)
|
CASPI Segment
|
PCI Segment
|
Other Segments
|
Total
|
||||||||||||
Reported balance at December 31, 2009
|
$ | 309 | $ | 1 | $ | 5 | $ | 315 | ||||||||
Additions
|
-- | 63 | -- | 63 | ||||||||||||
Adjustment for assets held for sale
|
-- | -- | (1 | ) | (1 | ) | ||||||||||
Currency translation adjustments
|
(2 | ) | -- | -- | (2 | ) | ||||||||||
Reported balance at December 31, 2010
|
$ | 307 | $ | 64 | $ | 4 | $ | 375 | ||||||||
Additions
|
1 | 33 | 1 | 35 | ||||||||||||
Currency translation adjustments
|
-- | (4 | ) | -- | (4 | ) | ||||||||||
Reported balance at December 31, 2011
|
$ | 308 | $ | 93 | $ | 5 | $ | 406 |
7.
|
EQUITY INVESTMENTS
|
8.
|
PAYABLES AND OTHER CURRENT LIABILITIES
|
December 31,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
||||||
Trade creditors
|
$ | 529 | $ | 569 | ||||
Accrued payrolls, vacation, and variable-incentive compensation
|
146 | 166 | ||||||
Accrued taxes
|
40 | 44 | ||||||
Post-employment obligations
|
58 | 62 | ||||||
Interest payable
|
26 | 21 | ||||||
Other
|
162 | 150 | ||||||
Total payables and other current liabilities
|
$ | 961 | $ | 1,012 |
9.
|
PROVISION FOR INCOME TAXES
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Earnings from continuing operations before income taxes
|
||||||||||||
United States
|
$ | 816 | $ | 507 | $ | 193 | ||||||
Outside the United States
|
148 | 129 | 61 | |||||||||
Total
|
$ | 964 | $ | 636 | $ | 254 | ||||||
Provision (benefit) for income taxes on earnings from continuing operations
|
||||||||||||
United States
|
||||||||||||
Current
|
$ | 165 | $ | 115 | $ | (82 | ) | |||||
Deferred
|
100 | 44 | 156 | |||||||||
Outside the United States
|
||||||||||||
Current
|
20 | 29 | 17 | |||||||||
Deferred
|
12 | 9 | 1 | |||||||||
State and other
|
||||||||||||
Current
|
16 | 18 | (11 | ) | ||||||||
Deferred
|
(6 | ) | (4 | ) | 19 | |||||||
Total
|
$ | 307 | $ | 211 | $ | 100 |
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Unrecognized losses and prior service credits for benefit plans
|
$ | (48 | ) | $ | (28 | ) | $ | (47 | ) | |||
Cumulative translation adjustment
|
-- | 3 | 2 | |||||||||
Unrealized gains (losses) on cash flow hedges
|
(12 | ) | (6 | ) | 4 | |||||||
Total
|
$ | (60 | ) | $ | (31 | ) | $ | (41 | ) |
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Continuing operations
|
$ | 307 | $ | 211 | $ | 100 | ||||||
Discontinued operations
|
27 | 13 | (10 | ) | ||||||||
Other comprehensive income
|
(60 | ) | (31 | ) | (41 | ) | ||||||
Total
|
$ | 274 | $ | 193 | $ | 49 |
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Amount computed using the statutory rate
|
$ | 337 | $ | 224 | $ | 89 | ||||||
State income taxes, net
|
5 | 9 | 5 | |||||||||
Foreign rate variance
|
(20 | ) | (11 | ) | (2 | ) | ||||||
Domestic manufacturing deduction
|
(17 | ) | (14 | ) | 5 | |||||||
Change in reserves for tax contingencies
|
-- | -- | (5 | ) | ||||||||
General business credits
|
(5 | ) | (4 | ) | 7 | |||||||
Other
|
7 | 7 | 1 | |||||||||
Provision for income taxes
|
$ | 307 | $ | 211 | $ | 100 |
December 31,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
||||||
Deferred tax assets
|
||||||||
Post-employment obligations
|
$ | 562 | $ | 512 | ||||
Net operating loss carryforwards
|
87 | 61 | ||||||
Other
|
27 | 22 | ||||||
Total deferred tax assets
|
676 | 595 | ||||||
Less valuation allowance
|
(42 | ) | (48 | ) | ||||
Deferred tax assets less valuation allowance
|
$ | 634 | $ | 547 | ||||
Deferred tax liabilities
|
||||||||
Depreciation
|
$ | (793 | ) | $ | (781 | ) | ||
Inventory reserves
|
(44 | ) | (37 | ) | ||||
Total deferred tax liabilities
|
$ | (837 | ) | $ | (818 | ) | ||
Net deferred tax liabilities
|
$ | (203 | ) | $ | (271 | ) | ||
As recorded in the Consolidated Statements of Financial Position:
|
||||||||
Other current assets
|
$ | 2 | $ | 2 | ||||
Other noncurrent assets
|
18 | 24 | ||||||
Payables and other current liabilities
|
(13 | ) | (13 | ) | ||||
Deferred income tax liabilities
|
(210 | ) | (284 | ) | ||||
Net deferred tax liabilities
|
$ | (203 | ) | $ | (271 | ) |
December 31,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
||||||
Miscellaneous receivables
|
$ | 5 | $ | 45 | ||||
Payables and other current liabilities
|
8 | 7 | ||||||
Other long-term liabilities
|
10 | 9 | ||||||
Total income taxes payable
|
$ | 18 | $ | 16 |
December 31,
|
||||||||||||
(Dollars in millions) |
2011
|
2010
|
2009
|
|||||||||
Balance at January 1
|
$ | 9 | $ | 6 | $ | 11 | ||||||
Additions based on tax positions related to current year
|
1 | 5 | -- | |||||||||
Lapse of statute of limitations
|
-- | (2 | ) | (5 | ) | |||||||
Balance at December 31
|
$ | 10 | $ | 9 | $ | 6 |
10.
|
December 31,
|
||||
(Dollars in millions)
|
2011
|
2010
|
||
Borrowings consisted of:
|
||||
7% notes due 2012
|
$
|
147
|
$
|
151
|
3% debentures due 2015
|
250
|
250
|
||
6.30% notes due 2018
|
176
|
178
|
||
5.5% notes due 2019
|
250
|
250
|
||
4.5% debentures due 2021
|
250
|
250
|
||
7 1/4% debentures due 2024
|
243
|
243
|
||
7 5/8% debentures due 2024
|
54
|
54
|
||
7.60% debentures due 2027
|
222
|
222
|
||
Credit facility borrowings
|
--
|
--
|
||
Other
|
6
|
6
|
||
Total borrowings
|
1,598
|
1,604
|
||
Borrowings due within one year
|
(153)
|
(6)
|
||
Long-term borrowings
|
$
|
1,445
|
$
|
1,598
|
December 31, 2011
|
December 31, 2010
|
|||||||||||||||
(Dollars in millions)
|
Recorded Amount
|
Fair Value
|
Recorded Amount
|
Fair Value
|
||||||||||||
Long-term borrowings
|
$ | 1,445 | $ | 1,656 | $ | 1,598 | $ | 1,688 |
11.
|
EARLY DEBT EXTINGUISHMENT COSTS
|
(Dollars in millions)
|
Book Value
|
|||
6.30% notes due 2018
|
$ | 24 | ||
7 1/4% debentures due 2024
|
255 | |||
7 5/8% debentures due 2024
|
146 | |||
7.60% debentures due 2027
|
76 | |||
Total
|
$ | 501 |
12.
|
(Dollars in millions)
|
Fair Value Measurements
Significant Other Observable Inputs
(Level 2)
|
||||||||
Derivative Assets
|
Statement of Financial Position Location
|
December 31, 2011
|
December 31, 2010
|
||||||
Fair Value Hedges
|
|||||||||
Interest rate swaps
|
Other noncurrent assets
|
$ | -- | $ | 2 | ||||
Cash Flow Hedges
|
|||||||||
Commodity contracts
|
Other current assets
|
1 | 4 | ||||||
Commodity contracts
|
Other noncurrent assets
|
1 | -- | ||||||
Foreign exchange contracts
|
Other current assets
|
20 | 23 | ||||||
Foreign exchange contracts
|
Other noncurrent assets
|
12 | 12 | ||||||
Forward starting interest rate swap contracts
|
Other current assets
|
-- | 4 | ||||||
$ | 34 | $ | 45 |
(Dollars in millions)
|
Fair Value Measurements
Significant Other Observable Inputs
(Level 2)
|
||||||||
Derivative Liabilities
|
Statement of Financial Position Location
|
December 31, 2011
|
December 31, 2010
|
||||||
Cash Flow Hedges
|
|||||||||
Commodity contracts
|
Payables and other current liabilities
|
$ | 8 | $ | 2 | ||||
Foreign exchange contracts
|
Payables and other current liabilities
|
7 | 6 | ||||||
Foreign exchange contracts
|
Other long-term liabilities
|
7 | 9 | ||||||
Forward starting interest rate swap contracts
|
Payables and other current liabilities
|
1 | -- | ||||||
$ | 23 | $ | 17 |
(Dollars in millions)
|
Amount of gain/ (loss) recognized in Income on Derivatives
|
||||||||
Derivatives in Fair Value Hedging Relationships
|
Location of gain/(loss) recognized in Income on Derivatives
|
December 31,
2011
|
December 31,
2010
|
||||||
Interest rate contracts
|
Net interest expense
|
$ | 1 | $ | 1 | ||||
$ | 1 | $ | 1 |
(Dollars in millions)
|
Amount of after tax of gain/ (loss) recognized in Other Comprehensive Income on Derivatives (effective portion)
|
Pre-tax amount of gain/(loss) reclassified from Accumulated Other Comprehensive Income into Income (effective portion)
|
|||||||||||||||
Derivatives' Cash Flow Hedging Relationships
|
December 31, 2011
|
December 31, 2010
|
Location of gain/(loss) reclassified from Accumulated Other Comprehensive Income into Income (effective portion)
|
December 31, 2011
|
December 31, 2010
|
||||||||||||
Commodity contracts
|
$ | (6 | ) | $ | (3 | ) |
Cost of sales
|
$ | -- | $ | 1 | ||||||
Foreign exchange contracts
|
12 | (9 | ) |
Sales
|
-- | 44 | |||||||||||
Forward starting interest rate swap contracts
|
(26 | ) | 2 | ||||||||||||||
$ | (20 | ) | $ | (10 | ) | $ | -- | $ | 45 |
13.
|
RETIREMENT PLANS
|
Summary Balance Sheet
|
||||||||||||||||
Pension Plans
|
Postretirement Welfare Plans
|
|||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Change in projected benefit obligation:
|
||||||||||||||||
Benefit obligation, beginning of year
|
$ | 1,621 | $ | 1,508 | $ | 827 | $ | 777 | ||||||||
Service cost
|
45 | 44 | 9 | 9 | ||||||||||||
Interest cost
|
87 | 85 | 44 | 44 | ||||||||||||
Actuarial loss
|
57 | 75 | 36 | 40 | ||||||||||||
Curtailment
|
-- | 6 | -- | -- | ||||||||||||
Settlement
|
(7 | ) | -- | -- | ||||||||||||
Acquisitions
|
142 | -- | 6 | -- | ||||||||||||
Plan amendments and other
|
(2 | ) | -- | -- | -- | |||||||||||
Plan participants' contributions
|
1 | -- | 14 | 12 | ||||||||||||
Effect of currency exchange
|
(2 | ) | (16 | ) | -- | -- | ||||||||||
Benefits paid
|
(154 | ) | (81 | ) | (55 | ) | (55 | ) | ||||||||
Benefit obligation, end of year
|
$ | 1,788 | $ | 1,621 | $ | 881 | $ | 827 | ||||||||
Change in plan assets:
|
||||||||||||||||
Fair value of plan assets, beginning of year
|
$ | 1,178 | $ | 1,087 | $ | 52 | $ | 51 | ||||||||
Actual return on plan assets
|
45 | 133 | 1 | 9 | ||||||||||||
Effect of currency exchange
|
(3 | ) | (14 | ) | -- | -- | ||||||||||
Company contributions
|
125 | 53 | 36 | 39 | ||||||||||||
Reserve for third party contributions
|
-- | -- | 7 | (4 | ) | |||||||||||
Plan participants' contributions
|
1 | -- | 14 | 12 | ||||||||||||
Benefits paid
|
(154 | ) | (81 | ) | (55 | ) | (55 | ) | ||||||||
Settlements
|
(7 | ) | -- | -- | -- | |||||||||||
Acquisitions
|
94 | -- | -- | -- | ||||||||||||
Fair value of plan assets, end of year
|
$ | 1,279 | $ | 1,178 | $ | 55 | $ | 52 | ||||||||
Funded status at end of year
|
$ | (509 | ) | $ | (443 | ) | $ | (826 | ) | $ | (775 | ) | ||||
Amounts recognized in the Consolidated Statements of Financial Position consist of:
|
||||||||||||||||
Other noncurrent asset
|
$ | 24 | $ | 9 | $ | -- | $ | -- | ||||||||
Current liability
|
(3 | ) | (8 | ) | (42 | ) | (40 | ) | ||||||||
Noncurrent liability
|
(530 | ) | (444 | ) | (784 | ) | (735 | ) | ||||||||
Net amount recognized, end of year
|
$ | (509 | ) | $ | (443 | ) | $ | (826 | ) | $ | (775 | ) | ||||
Amounts recognized in accumulated other comprehensive income consist of:
|
||||||||||||||||
Net actuarial loss
|
$ | 847 | $ | 780 | $ | 246 | $ | 229 | ||||||||
Prior service credit
|
(26 | ) | (36 | ) | (99 | ) | (125 | ) | ||||||||
Accumulated other comprehensive loss
|
$ | 821 | $ | 744 | $ | 147 | $ | 104 | ||||||||
Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income
|
||||||||||||||||||||||||
Pension Plans
|
Postretirement Welfare Plans
|
|||||||||||||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||||||||||||||
Components of net periodic benefit cost:
|
||||||||||||||||||||||||
Service cost
|
$ | 45 | $ | 44 | $ | 42 | $ | 9 | $ | 9 | $ | 8 | ||||||||||||
Interest cost
|
87 | 85 | 87 | 44 | 44 | 45 | ||||||||||||||||||
Expected return on assets
|
(111 | ) | (104 | ) | (100 | ) | (2 | ) | (3 | ) | (3 | ) | ||||||||||||
Curtailment (gain) charge (1)
|
-- | 4 | -- | (5 | ) | -- | -- | |||||||||||||||||
Settlement charge
|
3 | -- | -- | -- | -- | -- | ||||||||||||||||||
Amortization of:
|
||||||||||||||||||||||||
Prior service credit
|
(13 | ) | (16 | ) | (16 | ) | (21 | ) | (23 | ) | (23 | ) | ||||||||||||
Actuarial loss
|
55 | 43 | 32 | 14 | 13 | 13 | ||||||||||||||||||
Net periodic benefit cost
|
$ | 66 | $ | 56 | $ | 45 | $ | 39 | $ | 40 | $ | 40 | ||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
|
||||||||||||||||||||||||
Curtailments and settlements (1)
|
$ | 3 | $ | 4 | $ | -- | ||||||||||||||||||
Current year actuarial loss
|
(123 | ) | (52 | ) | (96 | ) | ||||||||||||||||||
Current year prior service credit
|
2 | -- | -- | |||||||||||||||||||||
Amortization of:
|
||||||||||||||||||||||||
Prior service credit
|
(13 | ) | (16 | ) | (16 | ) | ||||||||||||||||||
Actuarial loss
|
55 | 43 | 32 | |||||||||||||||||||||
Effect of currency exchange
|
(1 | ) | 2 | (3 | ) | |||||||||||||||||||
Total
|
$ | (77 | ) | $ | (19 | ) | $ | (83 | ) | |||||||||||||||
(1)
|
Includes $2 million in 2010 for the Performance Polymers segment that was sold January 31, 2011 and is included in discontinued operations. For more information, see Note 3, "Discontinued Operations and Assets Held for Sale."
|
Pension Plans
|
Postretirement Welfare Plans
|
|||||||||||||||||||||||
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
|||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations for years ended
December 31:
|
||||||||||||||||||||||||
Discount rate
|
4.59 | % | 5.33 | % | 5.73 | % | 4.96 | % | 5.33 | % | 5.76 | % | ||||||||||||
Rate of compensation increase
|
3.55 | % | 3.60 | % | 3.53 | % | 3.50 | % | 3.50 | % | 3.50 | % | ||||||||||||
Health care cost trend
|
||||||||||||||||||||||||
Initial
|
8.00 | % | 8.00 | % | 8.00 | % | ||||||||||||||||||
Decreasing to ultimate trend of
|
5.00 | % | 5.00 | % | 5.00 | % | ||||||||||||||||||
in year
|
2018 | 2017 | 2016 | |||||||||||||||||||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | ||||||||||||||||||
Discount rate
|
5.33 | % | 5.73 | % | 6.05 | % | 5.33 | % | 5.76 | % | 6.08 | % | ||||||||||||
Expected return on assets
|
8.24 | % | 8.25 | % | 8.47 | % | -- | -- | -- | |||||||||||||||
Rate of compensation increase
|
3.60 | % | 3.53 | % | 3.57 | % | 3.50 | % | 3.50 | % | 3.50 | % | ||||||||||||
Health care cost trend
|
||||||||||||||||||||||||
Initial
|
8.00 | % | 8.00 | % | 8.00 | % | ||||||||||||||||||
Decreasing to ultimate trend of
|
5.00 | % | 5.00 | % | 5.00 | % | ||||||||||||||||||
in year
|
2017 | 2016 | 2015 | |||||||||||||||||||||
(Dollars in millions)
|
Fair Value Measurements at December 31, 2011
|
|||||||||||||||
Description
|
December 31, 2011
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||||||||||
Cash
|
$ | 9 | $ | 9 | $ | -- | $ | -- | ||||||||
Debt:
|
||||||||||||||||
Fixed Income (US)
|
80 | 50 | 30 | -- | ||||||||||||
Fixed Income (International)
|
155 | -- | 155 | -- | ||||||||||||
US Treasury Securities
|
36 | -- | 36 | -- | ||||||||||||
Public Equity Funds:
|
||||||||||||||||
Domestic
|
407 | 32 | 375 | -- | ||||||||||||
International
|
199 | 12 | 187 | -- | ||||||||||||
International Commodities Funds
|
6 | 5 | 1 | -- | ||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
387 | -- | 11 | 376 | ||||||||||||
Total
|
$ | 1,279 | $ | 108 | $ | 795 | $ | 376 |
(Dollars in millions)
|
Fair Value Measurements at December 31, 2010
|
|||||||||||||||
Description
|
December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||||||||||
Cash
|
$ | 16 | $ | 16 | $ | -- | $ | -- | ||||||||
Debt:
|
||||||||||||||||
Fixed Income (US)
|
28 | -- | 28 | -- | ||||||||||||
Fixed Income (International)
|
125 | -- | 125 | -- | ||||||||||||
US Treasury Securities
|
32 | -- | 32 | -- | ||||||||||||
Public Equity Funds:
|
||||||||||||||||
Domestic
|
408 | -- | 408 | -- | ||||||||||||
International
|
216 | -- | 216 | -- | ||||||||||||
Private Equity, Real Estate Funds, and Other Alternative Investments
|
353 | -- | 9 | 344 | ||||||||||||
Total
|
$ | 1,178 | $ | 16 | $ | 818 | $ | 344 |
(Dollars in millions)
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
|||||||||||||||
Private Equity
|
Real Estate
|
Other Alternative Investments(1)
|
Total
|
|||||||||||||
Balance at December 31, 2009
|
$ | 107 | $ | 92 | $ | 105 | $ | 304 | ||||||||
Distributions
|
(20 | ) | (2 | ) | (19 | ) | (41 | ) | ||||||||
Unrealized gains/(losses)
|
19 | (9 | ) | 14 | 24 | |||||||||||
Purchases, contributions, and other
|
23 | 25 | 9 | 57 | ||||||||||||
Balance at December 31, 2010
|
129 | 106 | 109 | 344 | ||||||||||||
Distributions
|
(30 | ) | (7 | ) | (25 | ) | (62 | ) | ||||||||
Unrealized gains/(losses)
|
23 | 9 | 15 | 47 | ||||||||||||
Purchases, contributions, and other
|
28 | 10 | 9 | 47 | ||||||||||||
Balance at December 31, 2011
|
$ | 150 | $ | 118 | $ | 108 | $ | 376 |
Target Allocation
|
Plan Assets at
December 31, 2011
|
Plan Assets at
December 31, 2010
|
|
Asset category
|
|||
Equity securities
|
57 %
|
52 %
|
57 %
|
Debt securities
|
17 %
|
13 %
|
8 %
|
Real estate
|
8 %
|
11 %
|
11 %
|
Other investments(1)
|
18 %
|
24 %
|
24 %
|
Total
|
100 %
|
100 %
|
100 %
|
Target Allocation
|
Plan Assets at
December 31, 2011
|
Plan Assets at
December 31, 2010
|
|
Asset category
|
|||
Equity securities
|
32 %
|
32 %
|
38 %
|
Debt securities
|
52 %
|
57 %
|
49 %
|
Other investments(1)
|
16 %
|
11 %
|
13 %
|
Total
|
100 %
|
100 %
|
100 %
|
(Dollars in millions)
|
Pension Plans
|
Postretirement Welfare Plans
|
||||||||||
U.S.
|
Non U.S.
|
|||||||||||
2012
|
$ | 130 | $ | 9 | $ | 47 | ||||||
2013
|
136 | 9 | 48 | |||||||||
2014
|
137 | 10 | 49 | |||||||||
2015
|
141 | 10 | 51 | |||||||||
2016
|
140 | 11 | 53 | |||||||||
2017-2021
|
688 | 57 | 290 |
14.
|
(Dollars in millions)
|
Payments Due For
|
|||||||||||||||||||||||
Period
|
Notes and Debentures
|
Credit Facility Borrowings and Other
|
Interest Payable
|
Purchase Obligations
|
Operating Leases
|
Total
|
||||||||||||||||||
2012
|
$ | 147 | $ | 6 | $ | 87 | $ | 276 | $ | 27 | $ | 543 | ||||||||||||
2013
|
-- | -- | 81 | 264 | 20 | 365 | ||||||||||||||||||
2014
|
-- | -- | 81 | 143 | 11 | 235 | ||||||||||||||||||
2015
|
250 | -- | 82 | 137 | 8 | 477 | ||||||||||||||||||
2016
|
-- | -- | 74 | 137 | 7 | 218 | ||||||||||||||||||
2017 and beyond
|
1,195 | -- | 454 | 461 | 32 | 2,142 | ||||||||||||||||||
Total
|
$ | 1,592 | $ | 6 | $ | 859 | $ | 1,418 | $ | 105 | $ | 3,980 |
15.
|
ENVIRONMENTAL MATTERS
|
16.
|
LEGAL MATTERS
|
17.
|
STOCKHOLDERS' EQUITY
|
(Dollars in millions)
|
Common Stock at Par Value (1)
$
|
Paid-in Capital
$
|
Retained Earnings (1)
$
|
Accumulated Other Comprehensive Income (Loss)
$
|
Treasury Stock at Cost
$
|
Total Stockholders' Equity
$
|
||||||||||||||||||
Balance at December 31, 2008
|
2 | 638 | 2,562 | (335 | ) | (1,314 | ) | 1,553 | ||||||||||||||||
Net Earnings
|
-- | -- | 136 | -- | -- | 136 | ||||||||||||||||||
Cash Dividends Declared (2)
|
-- | -- | (128 | ) | -- | -- | (128 | ) | ||||||||||||||||
Other Comprehensive Loss
|
-- | -- | -- | (50 | ) | -- | (50 | ) | ||||||||||||||||
Share-based Compensation Costs (3)
|
-- | 19 | -- | -- | -- | 19 | ||||||||||||||||||
Stock Option Exercises
|
-- | 7 | -- | -- | -- | 7 | ||||||||||||||||||
Other (4)
|
-- | (3 | ) | -- | -- | -- | (3 | ) | ||||||||||||||||
Stock Repurchases
|
-- | -- | -- | -- | (21 | ) | (21 | ) | ||||||||||||||||
Balance at December 31, 2009
|
2 | 661 | 2,570 | (385 | ) | (1,335 | ) | 1,513 | ||||||||||||||||
Net Earnings
|
-- | -- | 438 | -- | -- | 438 | ||||||||||||||||||
Cash Dividends Declared (2)
|
-- | -- | (129 | ) | -- | -- | (129 | ) | ||||||||||||||||
Other Comprehensive Loss
|
-- | -- | -- | (47 | ) | -- | (47 | ) | ||||||||||||||||
Share-based Compensation Costs (3)
|
-- | 24 | -- | -- | -- | 24 | ||||||||||||||||||
Stock Option Exercises
|
-- | 102 | -- | -- | -- | 102 | ||||||||||||||||||
Other (4)
|
-- | 6 | -- | -- | -- | 6 | ||||||||||||||||||
Stock Repurchases
|
-- | -- | -- | -- | (280 | ) | (280 | ) | ||||||||||||||||
Balance at December 31, 2010
|
2 | 793 | 2,879 | (432 | ) | (1,615 | ) | 1,627 | ||||||||||||||||
Net Earnings
|
-- | -- | 696 | -- | -- | 696 | ||||||||||||||||||
Cash Dividends Declared (2)
|
-- | -- | (139 | ) | -- | -- | (139 | ) | ||||||||||||||||
Other Comprehensive Loss
|
-- | -- | -- | (106 | ) | -- | (106 | ) | ||||||||||||||||
Share-based Compensation Costs (3)
|
-- | 39 | -- | -- | -- | 39 | ||||||||||||||||||
Stock Option Exercises
|
-- | 59 | -- | -- | -- | 59 | ||||||||||||||||||
Other (4)
|
-- | 9 | -- | -- | 1 | 10 | ||||||||||||||||||
Stock Repurchases
|
-- | -- | -- | -- | (316 | ) | (316 | ) | ||||||||||||||||
Balance at December 31, 2011
|
2 | 900 | 3,436 | (538 | ) | (1,930 | ) | 1,870 |
(1)
|
Common Stock at Par Value and Retained Earnings have been adjusted for the two-for-one stock split on October 3, 2011.
|
(2)
|
Includes cash dividends paid and dividends declared, but unpaid.
|
(3)
|
Includes the fair value of equity share-based awards recognized for share-based compensation.
|
(4)
|
Includes tax benefits/charges relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes have been adjusted to paid-in capital and other items.
|
For years ended December 31,
|
||||||||||||
Shares of common stock issued (1)
|
2011
|
2010
|
2009
|
|||||||||
Balance at beginning of year
|
193,688,890 | 189,550,128 | 188,991,720 | |||||||||
Issued for employee compensation and benefit plans
|
2,766,241 | 4,138,762 | 558,408 | |||||||||
Balance at end of year
|
196,455,131 | 193,688,890 | 189,550,128 | |||||||||
(1) Includes shares held in treasury.
|
(Dollars in millions)
|
Cumulative Translation Adjustment
$
|
Benefit Plans Unrecognized Losses and Prior Service Credits
$
|
Unrealized Gains (Losses) on Cash Flow Hedges
$
|
Unrealized Losses on Investments
$
|
Accumulated Other Comprehensive Income (Loss)
$
|
|||||||||||||||
Balance at December 31, 2009
|
77 | (488 | ) | 27 | (1 | ) | (385 | ) | ||||||||||||
Period change
|
2 | (39 | ) | (10 | ) | -- | (47 | ) | ||||||||||||
Balance at December 31, 2010
|
79 | (527 | ) | 17 | (1 | ) | (432 | ) | ||||||||||||
Period change
|
(15 | ) | (71 | ) | (20 | ) | -- | (106 | ) | |||||||||||
Balance at December 31, 2011
|
64 | (598 | ) | (3 | ) | (1 | ) | (538 | ) |
18.
|
ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES (GAINS), NET
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Fixed asset impairments
|
$ | -- | $ | -- | $ | 133 | ||||||
Gain on sale
|
(15 | ) | -- | -- | ||||||||
Intangible asset and goodwill impairments
|
-- | 8 | 46 | |||||||||
Severance charges
|
7 | 18 | 19 | |||||||||
Site closure and restructuring charges (gains)
|
-- | 3 | (2 | ) | ||||||||
Total
|
$ | (8 | ) | $ | 29 | $ | 196 |
(Dollars in millions)
|
Balance at
January 1,
2009
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash
Reductions
|
Balance at
December 31,
2009
|
|||||||||||||||
Noncash charges
|
$ | -- | $ | 179 | $ | (179 | ) | $ | -- | $ | -- | |||||||||
Severance costs
|
4 | 19 | -- | (20 | ) | 3 | ||||||||||||||
Total
|
$ | 4 | $ | 198 | $ | (179 | ) | $ | (20 | ) | $ | 3 | ||||||||
Balance at
January 1,
2010
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash
Reductions
|
Balance at
December 31,
2010
|
||||||||||||||||
Noncash charges
|
$ | -- | $ | 8 | $ | (8 | ) | $ | -- | $ | -- | |||||||||
Severance costs
|
3 | 18 | -- | (6 | ) | 15 | ||||||||||||||
Total
|
$ | 3 | $ | 26 | $ | (8 | ) | $ | (6 | ) | $ | 15 | ||||||||
Balance at
January 1,
2011
|
Provision/ Adjustments
|
Non-cash Reductions
|
Cash
Reductions
|
Balance at
December 31,
2011
|
||||||||||||||||
Noncash charges
|
$ | -- | $ | (15 | ) | $ | 15 | $ | -- | $ | -- | |||||||||
Severance costs
|
15 | 7 | -- | (20 | ) | 2 | ||||||||||||||
Total
|
$ | 15 | $ | (8 | ) | $ | 15 | $ | (20 | ) | $ | 2 |
19.
|
OTHER CHARGES (INCOME), NET
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Foreign exchange transactions (gains) losses, net
|
$ | (2 | ) | $ | 8 | $ | 5 | |||||
Investments (gains) losses, net
|
(16 | ) | (1 | ) | 5 | |||||||
Other, net
|
(1 | ) | 5 | 3 | ||||||||
Other charges (income), net
|
$ | (19 | ) | $ | 12 | $ | 13 |
20.
|
SHARE-BASED COMPENSATION PLANS AND AWARDS
|
Assumptions
|
2011
|
2010
|
2009
|
Expected volatility rate
|
33.00 %
|
31.8 %
|
31.69 %
|
Expected dividend yield
|
2.23 %
|
2.86 %
|
4.84 %
|
Average risk-free interest rate
|
0.95 %
|
1.23 %
|
2.47 %
|
Expected forfeiture rate
|
0.75 %
|
0.75 %
|
0.75 %
|
Expected term years
|
5.20
|
5.20
|
5.20
|
2011
|
2010
|
2009
|
||||||||||||||||||||||
Options
|
Weighted-Average Exercise Price
|
Options
|
Weighted-Average Exercise Price
|
Options
|
Weighted-Average Exercise Price
|
|||||||||||||||||||
Outstanding at beginning of year
|
5,505,800 | $ | 29 | 8,682,900 | $ | 27 | 8,435,300 | $ | 27 | |||||||||||||||
Granted
|
537,500 | 38 | 597,900 | 40 | 710,600 | 28 | ||||||||||||||||||
Exercised
|
(2,059,900 | ) | 29 | (3,758,200 | ) | 27 | (335,100 | ) | 21 | |||||||||||||||
Cancelled, forfeited, or expired
|
(9,000 | ) | 25 | (16,800 | ) | 22 | (127,900 | ) | 23 | |||||||||||||||
Outstanding at end of year
|
3,974,400 | $ | 30 | 5,505,800 | $ | 29 | 8,682,900 | $ | 27 | |||||||||||||||
Options exercisable at year-end
|
2,796,400 | 4,150,300 | 6,987,500 | |||||||||||||||||||||
Available for grant at end of year
|
1,475,922 | 2,601,160 | 3,798,646 | |||||||||||||||||||||
Options Outstanding
|
Options Exercisable
|
|||||||||
Range of Exercise Prices
|
Number Outstanding at
December 31, 2011
|
Weighted-Average Remaining Contractual Life (Years)
|
Weighted-Average Exercise Price
|
Number Exercisable at
December 31, 2011
|
Weighted-Average Exercise Price
|
|||||
$15-$24
|
688,700
|
4.6
|
$
|
19
|
688,700
|
$
|
19
|
|||
$25-$29
|
1,177,900
|
6.1
|
28
|
941,000
|
28
|
|||||
$30-$32
|
645,700
|
4.3
|
30
|
630,700
|
30
|
|||||
$33-$34
|
305,700
|
5.8
|
33
|
305,700
|
33
|
|||||
$35-$40
|
1,156,400
|
9.2
|
39
|
230,300
|
39
|
|||||
3,974,400
|
6.4
|
$
|
30
|
2,796,400
|
$
|
28
|
Nonvested Options
|
Number of Options
|
Weighted-Average Grant Date Fair Value
|
||
Nonvested at January 1, 2011
|
1,355,500
|
$
|
6.32
|
|
Granted
|
537,500
|
9.27
|
||
Vested
|
(715,000)
|
5.36
|
||
Forfeited
|
--
|
--
|
||
Nonvested Options at December 31, 2011
|
1,178,000
|
$
|
8.25
|
21.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Current assets
|
$ | 15 | $ | (38 | ) | $ | (2 | ) | ||||
Other assets
|
16 | 7 | 27 | |||||||||
Current liabilities
|
39 | 46 | (23 | ) | ||||||||
Long-term liabilities and equity
|
15 | 15 | 13 | |||||||||
Total
|
$ | 85 | $ | 30 | $ | 15 |
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Cash paid for interest and income taxes is as follows:
|
||||||||||||
Interest, net of amounts capitalized
|
$ | 78 | $ | 116 | $ | 82 | ||||||
Income taxes paid (refunded)
|
261 | 165 | (71 | ) |
22.
|
SEGMENT INFORMATION
|
For years ended December 31,
|
|||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
||||
Sales by Segment
|
|||||||
CASPI
|
$
|
1,844
|
$
|
1,574
|
$
|
1,217
|
|
Fibers
|
1,279
|
1,142
|
1,032
|
||||
PCI
|
2,860
|
2,083
|
1,398
|
||||
Specialty Plastics
|
1,195
|
1,043
|
749
|
||||
Total Sales
|
$
|
7,178
|
$
|
5,842
|
$
|
4,396
|
|
For years ended December 31,
|
|||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
||||
Operating Earnings (Loss)
|
|||||||
CASPI (1)
|
$
|
331
|
$
|
293
|
$
|
221
|
|
Fibers (2)
|
346
|
323
|
292
|
||||
PCI (3)
|
289
|
224
|
41
|
||||
Specialty Plastics (4)
|
105
|
88
|
9
|
||||
Total Operating Earnings by Segment
|
1,071
|
928
|
563
|
||||
Other (5)
|
(50)
|
(66)
|
(218)
|
||||
Total Operating Earnings
|
$
|
1,021
|
$
|
862
|
$
|
345
|
(1)
|
CASPI includes $6 million and $3 million in 2010 and 2009, respectively, in restructuring charges related to severance.
|
(2)
|
Fibers includes $3 million and $4 million in 2010 and 2009, respectively, in restructuring charges related to severance.
|
(3)
|
PCI includes $7 million, $7 million, and $6 million in 2011, 2010, and 2009, respectively, in restructuring charges related to severance.
|
(4)
|
Specialty Plastics includes $5 million and $4 million in 2010 and 2009, respectively, in restructuring charges related to severance.
|
(5)
|
Other includes a $15 million gain in 2011 from the sale of the previously impaired methanol and ammonia assets related to the terminated Beaumont, Texas industrial gasification project as well as $8 million and $179 million in 2010 and 2009, respectively, in asset impairments and restructuring charges, net, related to the discontinued industrial gasification project in Beaumont, Texas.
|
December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Assets by Segment (1)
|
||||||||||||
CASPI
|
$ | 1,373 | $ | 1,280 | $ | 1,113 | ||||||
Fibers
|
921 | 874 | 726 | |||||||||
Performance Polymers (2)
|
-- | -- | 575 | |||||||||
PCI
|
1,471 | 1,235 | 844 | |||||||||
Specialty Plastics
|
1,194 | 1,017 | 910 | |||||||||
Total Assets by Segment
|
4,959 | 4,406 | 4,168 | |||||||||
Corporate Assets (3)
|
1,225 | 966 | 1,347 | |||||||||
Assets Held for Sale (2)
|
-- | 614 | -- | |||||||||
Total Assets
|
$ | 6,184 | $ | 5,986 | $ | 5,515 |
(1)
|
The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, goodwill, and intangible assets.
|
(2)
|
The Performance Polymers assets were classified as assets held for sale as of December 31, 2010, as a result of the definitive agreement with DAK Americas, LLC, to sell and subsequent sale in first quarter 2011 of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment. For more information regarding assets held for sale, see Note 3, "Discontinued Operations and Assets Held for Sale".
|
(3)
|
For more information regarding the impairment of Beaumont, Texas industrial gasification project, see Note 18 "Asset Impairments and Restructuring Charges (Gains), Net".
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Depreciation Expense by Segment
|
||||||||||||
CASPI
|
$ | 60 | $ | 56 | $ | 56 | ||||||
Fibers
|
65 | 59 | 59 | |||||||||
PCI
|
72 | 60 | 57 | |||||||||
Specialty Plastics
|
62 | 61 | 53 | |||||||||
Total Depreciation Expense by Segment
|
259 | 236 | 225 | |||||||||
Other
|
2 | 2 | 2 | |||||||||
Total Depreciation Expense
|
$ | 261 | $ | 238 | $ | 227 | ||||||
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Capital Expenditures by Segment
|
||||||||||||
CASPI
|
$ | 74 | $ | 39 | $ | 42 | ||||||
Fibers
|
51 | 39 | 29 | |||||||||
PCI
|
107 | 61 | 49 | |||||||||
Specialty Plastics
|
193 | 73 | 125 | |||||||||
Total Capital Expenditures by Segment
|
425 | 212 | 245 | |||||||||
Other (1)
|
32 | 31 | 65 | |||||||||
Total Capital Expenditures
|
$ | 457 | $ | 243 | $ | 310 |
(1)
|
Other includes $24 million and $27 million, for 2010 and 2009, respectively, of capital expenditures in the discontinued Performance Polymers segment. For more information regarding assets held for sale, see Note 3, "Discontinued Operations and Assets Held for Sale."
|
For years ended December 31,
|
||||||||||||
(Dollars in millions)
|
2011
|
2010
|
2009
|
|||||||||
Geographic Information
|
||||||||||||
Sales
|
||||||||||||
United States
|
$ | 3,662 | $ | 2,826 | $ | 2,189 | ||||||
All foreign countries
|
3,516 | 3,016 | 2,207 | |||||||||
Total
|
$ | 7,178 | $ | 5,842 | $ | 4,396 | ||||||
December 31,
|
||||||||||||
2011 | 2010 | 2009 | ||||||||||
Long-Lived Assets, Net
|
||||||||||||
United States (1)
|
$ | 2,687 | $ | 2,790 | $ | 2,789 | ||||||
All foreign countries
|
420 | 429 | 321 | |||||||||
Total
|
$ | 3,107 | $ | 3,219 | $ | 3,110 | ||||||
(1)
|
The Performance Polymers assets were classified as assets held for sale as of December 31, 2010, as a result of the definitive agreement with DAK Americas, LLC, to sell and subsequent sale in first quarter 2011 of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment. For more information regarding assets held for sale, see Note 3, "Discontinued Operations and Assets Held for Sale".
|
23.
|
QUARTERLY SALES AND EARNINGS DATA – UNAUDITED
|
(Dollars in millions, except per share amounts)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
||||||||||||
2011
|
||||||||||||||||
Sales
|
$ | 1,758 | $ | 1,885 | $ | 1,812 | $ | 1,723 | ||||||||
Gross profit
|
433 | 463 | 420 | 324 | ||||||||||||
Asset impairments and restructuring charges (gains), net
|
-- | (15 | ) | 7 | -- | |||||||||||
Earnings from continuing operations
|
182 | 210 | 165 | 100 | ||||||||||||
Earnings from discontinued operations, net of tax (1)
|
8 | -- | -- | -- | ||||||||||||
Gain from disposal of discontinued operations, net of tax(1)
|
30 | 1 | -- | -- | ||||||||||||
Net earnings
|
220 | 211 | 165 | 100 | ||||||||||||
Earnings from continuing operations per share (2)(3)
|
||||||||||||||||
Basic
|
$ | 1.29 | $ | 1.49 | $ | 1.19 | $ | 0.73 | ||||||||
Diluted
|
$ | 1.26 | $ | 1.45 | $ | 1.16 | $ | 0.71 | ||||||||
Earnings from discontinued operations per share (1)(2)(3)
|
||||||||||||||||
Basic
|
$ | 0.26 | $ | -- | $ | -- | $ | -- | ||||||||
Diluted
|
$ | 0.26 | $ | -- | $ | -- | $ | -- | ||||||||
Net earnings per share (2)(3)
|
||||||||||||||||
Basic
|
$ | 1.55 | $ | 1.49 | $ | 1.19 | $ | 0.73 | ||||||||
Diluted
|
$ | 1.52 | $ | 1.45 | $ | 1.16 | $ | 0.71 |
(1)
|
In first quarter 2011, the Company completed the sale of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment. The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented and are therefore not included in results from continuing operations in accordance with GAAP.
|
(2)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
(3)
|
All per share amounts have been retrospectively adjusted for all periods presented for the two-for-one stock split on October 3, 2011. For additional information, see Note 17, "Stockholders' Equity".
|
(Dollars in millions, except per share amounts)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||
2010
|
|||||||||
Sales
|
$
|
1,370
|
$
|
1,502
|
$
|
1,507
|
$
|
1,463
|
|
Gross profit
|
317
|
384
|
422
|
351
|
|||||
Asset impairments and restructuring charges (gains), net
|
--
|
3
|
--
|
26
|
|||||
Earnings from continuing operations
|
105
|
141
|
162
|
17
|
|||||
Earnings (loss) from discontinued operations, net of tax (1)
|
(4)
|
7
|
8
|
2
|
|||||
Net earnings
|
101
|
148
|
170
|
19
|
|||||
Earnings from continuing operations per share (2)(3)
|
|||||||||
Basic
|
$
|
0.72
|
$
|
0.98
|
$
|
1.13
|
$
|
0.12
|
|
Diluted
|
$
|
0.71
|
$
|
0.96
|
$
|
1.11
|
$
|
0.11
|
|
Earnings (loss) from discontinued operations per share (1)(2)(3)
|
|||||||||
Basic
|
$
|
(0.02)
|
$
|
0.05
|
$
|
0.06
|
$
|
0.01
|
|
Diluted
|
$
|
(0.02)
|
$
|
0.05
|
$
|
0.05
|
$
|
0.01
|
|
Net earnings per share (2)(3)
|
|||||||||
Basic
|
$
|
0.70
|
$
|
1.03
|
$
|
1.19
|
$
|
0.13
|
|
Diluted
|
$
|
0.69
|
$
|
1.01
|
$
|
1.16
|
$
|
0.12
|
(1)
|
In first quarter 2011, the Company completed the sale of the PET business, related assets at the Columbia, South Carolina site, and technology of its Performance Polymers segment. The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented and are therefore not included in results from continuing operations in accordance with GAAP.
|
(2)
|
Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the calculated full year amount.
|
(3)
|
All per share amounts have been retrospectively adjusted for all periods presented for the two-for-one stock split on October 3, 2011. For additional information, see Note 17, "Stockholders' Equity".
|
24.
|
RESERVE ROLLFORWARDS
|
(Dollars in millions)
|
Additions
|
|||||||||||||||||||
Balance at January 1,
2009
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at December 31, 2009
|
||||||||||||||||
Reserve for:
|
||||||||||||||||||||
Doubtful accounts and returns
|
$ | 3 | $ | 3 | $ | -- | $ | 1 | $ | 5 | ||||||||||
LIFO Inventory
|
525 | (79 | ) | -- | -- | 446 | ||||||||||||||
Environmental contingencies
|
41 | 3 | -- | 2 | 42 | |||||||||||||||
Deferred tax valuation allowance
|
131 | -- | -- | 43 | 88 | |||||||||||||||
$ | 700 | $ | (73 | ) | $ | -- | $ | 46 | $ | 581 | ||||||||||
Balance at January 1,
2010
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at December 31, 2010
|
||||||||||||||||
Reserve for:
|
||||||||||||||||||||
Doubtful accounts and returns
|
$ | 5 | $ | -- | $ | -- | $ | -- | $ | 5 | ||||||||||
LIFO Inventory
|
446 | 44 | -- | -- | 490 | |||||||||||||||
Environmental contingencies
|
42 | 4 | (4 | ) | 2 | 40 | ||||||||||||||
Deferred tax valuation allowance
|
88 | -- | -- | 40 | 48 | |||||||||||||||
$ | 581 | $ | 48 | $ | (4 | ) | $ | 42 | $ | 583 | ||||||||||
Balance at January 1,
2011
|
Charged to Cost and Expense
|
Charged to Other Accounts
|
Deductions
|
Balance at December 31, 2011
|
||||||||||||||||
Reserve for:
|
||||||||||||||||||||
Doubtful accounts and returns
|
$ | 5 | $ | 4 | $ | -- | $ | 1 | $ | 8 | ||||||||||
LIFO Inventory
|
490 | 100 | -- | -- | 590 | |||||||||||||||
Environmental contingencies
|
40 | 2 | 3 | 6 | 39 | |||||||||||||||
Deferred tax valuation allowance
|
48 | -- | -- | 6 | 42 | |||||||||||||||
$ | 583 | $ | 106 | $ | 3 | $ | 13 | $ | 679 |
25.
|
RECENTLY ISSUED ACCOUNTING STANDARDS
|
26.
|
SUBSEQUENT EVENT
|
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and acquisitions and dispositions of assets of the Company;
|
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors of the Company; and
|
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements.
|
PART III
|
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options
(a)
|
Weighted-Average Exercise Price of Outstanding Options
(b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities reflected in Column (a))
(c)
|
||||
Equity compensation plans approved by stockholders
|
3,974,400
|
(1)
|
$30
|
1,475,922
|
(2)
|
||
Equity compensation plans not approved by stockholders
|
--
|
--
|
--
|
||||
TOTAL
|
3,974,400
|
$30
|
1,475,922
|
(1)
|
Represents shares of common stock issuable upon exercise of outstanding options granted under Eastman Chemical Company's 1997, 2002, and 2007 Omnibus Long-Term Compensation Plans; the 2002 Director Long-Term Compensation Plan; and the 2007 Director Long Term Compensation Subplan and the 2008 Director Long-Term Compensation Subplan, components of the 2007 Omnibus Long-Term Compensation Plan.
|
(2)
|
Shares of common stock available for future awards under the Company's 2007 Omnibus Long-Term Compensation Plan, including the 2008 Director Long-Term Compensation Subplan, a component of the 2007 Omnibus Long-Term Compensation Plan.
|
Page
|
||||
(a)
|
1.
|
Consolidated Financial Statements:
|
||
67
|
||||
68
|
||||
69
|
||||
70
|
||||
71
|
||||
72
|
||||
2.
|
Exhibits filed as part of this report are listed in the Exhibit Index beginning at page 123
|
123
|
||
(b)
|
The Exhibit Index and required Exhibits to this report are included beginning at page 123
|
|||
Eastman Chemical Company
|
||
By:
|
/s/James P. Rogers | |
James P. Rogers
|
||
Chief Executive Officer
|
||
Date:
|
February 22, 2012
|
SIGNATURE
|
TITLE
|
DATE
|
||
PRINCIPAL EXECUTIVE OFFICER:
|
||||
/s/ James P. Rogers |
Chief Executive Officer and
|
February 22, 2012
|
||
James P. Rogers
|
Director
|
|||
PRINCIPAL FINANCIAL OFFICER:
|
||||
/s/ Curtis E. Espeland |
Senior Vice President and
|
February 22, 2012
|
||
Curtis E. Espeland
|
Chief Financial Officer
|
|||
PRINCIPAL ACCOUNTING OFFICER:
|
||||
/s/ Scott V. King |
Vice President, Controller and
|
February 22, 2012
|
||
Scott V. King
|
Chief Accounting Officer
|
|||
SIGNATURE
|
TITLE
|
DATE
|
||
DIRECTORS (other than Chairman, James P. Rogers, who also signed as Principal Executive Officer):
|
||||
/s/ Humberto P. Alfonso |
Director
|
February 22, 2012
|
||
Humberto P. Alfonso
|
||||
/s/ Gary E. Anderson |
Director
|
February 22, 2012
|
||
Gary E. Anderson
|
||||
/s/ Brett D. Begemann |
Director
|
February 22, 2012
|
||
Brett D. Begemann
|
||||
/s/ Michael P. Connors |
Director
|
February 22, 2012
|
||
Michael P. Connors
|
||||
/s/ Stephen R. Demeritt |
Director
|
February 22, 2012
|
||
Stephen R. Demeritt
|
||||
/s/ Robert M. Hernandez |
Director
|
February 22, 2012
|
||
Robert M. Hernandez
|
||||
/s/ Julie F. Holder |
Director
|
February 22, 2012
|
||
Julie F. Holder
|
||||
/s/ Renée J. Hornbaker |
Director
|
February 22, 2012
|
||
Renée J. Hornbaker
|
||||
/s/ Lewis M. Kling |
Director
|
February 22, 2012
|
||
Lewis M. Kling
|
||||
/s/ Howard L. Lance |
Director
|
February 22, 2012
|
||
Howard L. Lance
|
||||
/s/ David W. Raisbeck |
Director
|
February 22, 2012
|
||
David W. Raisbeck
|
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
2.01*
|
Agreement and Plan of Merger, dated January 26, 2012, by and among Eastman Chemical Company, Solutia Inc. and Eagle Merger Sub Corporation (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated January 26, 2012)
|
|||
3.01
|
Amended and Restated Certificate of Incorporation of Eastman Chemical Company (incorporated herein by reference to Exhibit 3.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011)
|
|||
3.02
|
Amended and Restated Bylaws of Eastman Chemical Company (incorporated herein by referenced to Exhibit 3.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011)
|
|||
4.01
|
Form of Eastman Chemical Company common stock certificate as amended February 1, 2001 (incorporated herein by reference to Exhibit 4.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
|
|||
4.02
|
Indenture, dated as of January 10, 1994, between Eastman Chemical Company and The Bank of New York, as Trustee (the "Indenture") (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated January 10, 1994)
|
|||
4.03
|
Form of 7 1/4% Debentures due January 15, 2024 (incorporated herein by reference to Exhibit 4(d) to the Company's Current Report on Form 8-K dated January 10, 1994)
|
|||
4.04
|
Officers' Certificate pursuant to Sections 201 and 301 of the Indenture (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated June 8, 1994)
|
|||
4.05
|
Form of 7 5/8% Debentures due June 15, 2024 (incorporated herein by reference to Exhibit 4(b) to the Company's Current Report on Form 8-K dated June 8, 1994)
|
|||
4.06
|
Form of 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)
|
|||
4.07
|
Form of 7% Notes due April 15, 2012 (incorporated herein by reference to Exhibit 4.09 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002)
|
|||
4.08
|
Officer's Certificate pursuant to Sections 201 and 301 of the Indenture related to 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)
|
|||
4.09
|
Form of 5.500% Notes due 2019 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 2, 2009)
|
|||
4.10
|
$200,000,000 Accounts Receivable Securitization agreement dated July 9, 2008 (amended February 18, 2009, July 8, 2009, July 7, 2010, January 31, 2011, and July 6, 2011), between the Company and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as agent. (incorporated herein by reference to Exhibit 4.09 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, Exhibit 4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010, and Exhibit 4.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
4.11
|
Five-Year Credit Agreement, dated as of December 7, 2011 (the "New Credit Agreement"), among Eastman Chemical Company, the initial lenders named therein, and Citibank N.A., as administrative agent, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as joint lead arrangers (incorporated herein by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K dated December 6, 2011)
|
|||
4.12
|
Form of 6.30% Notes due 2018 (incorporated herein by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003)
|
|||
4.13
|
Form of 3% Note due 2015 (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 10, 2010)
|
|||
4.14
|
Form of 4.5% Note due 2021 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 10, 2010)
|
|||
10.01**
|
Eastman Excess Retirement Income Plan (incorporated herein by reference to Exhibit 10.02 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.02**
|
Form of Executive Change in Control Severance Agreements (incorporated herein by reference to Exhibit 10.02 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010)
|
|||
10.03**
|
Eastman Unfunded Retirement Income Plan (incorporated herein by reference to Exhibit 10.04 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.04**
|
2002 Omnibus Long-Term Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.05**
|
2002 Director Long-Term Compensation Plan, as amended (incorporated herein by reference to Appendix B to Eastman Chemical Company's 2002 Annual Meeting Proxy Statement)
|
|||
10.06**
|
Eastman Chemical Company Benefit Security Trust dated December 24, 1997, as amended May 1, 1998 and February 1, 2001 and Amendment Number Three to the Eastman Chemical Company Benefit Security Trust dated January 2, 2002 (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and Exhibit 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.07**
|
Amended and Restated Warrant to Purchase Shares of Common Stock of Eastman Chemical Company, dated January 2, 2002 (incorporated herein by reference to Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
10.08**
|
Amended and Restated Registration Rights Agreement, dated January 2, 2002 (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002)
|
|||
10.09**
|
Amended and Restated Eastman Executive Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)
|
|||
10.10**
|
Amended and Restated Eastman Directors' Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)
|
|||
Eastman Unit Performance Plan as amended and restated December 1, 2011
|
128-133
|
|||
10.12**
|
Form of Indemnification Agreements with Directors and Executive Officers (incorporated herein by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003)
|
|||
10.13**
|
Employment Agreement between Eastman Chemical Company and Mark J. Costa dated May 4, 2006 (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006) and amendment dated December 31, 2009 (incorporated herein by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009)
|
|||
10.14**
|
Forms of Award Notice for Stock Options Granted to Executive Officers under the 2002 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006)
|
|||
10.15**
|
Forms of Award Notices for Stock Options Granted to Executive Officers under the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.08 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|||
10.16**
|
1997 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.03 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.17**
|
2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.18**
|
Forms of Performance Share Awards to Executive Officers (2009 – 2011 Performance Period) (incorporated herein by reference to Exhibits 10.03 and 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008)
|
|||
10.19**
|
Forms of Performance Share Awards to Executive Officers (2010 – 2012 Performance Period) (incorporated herein by reference to Exhibits 10.01 and 10.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009)
|
|||
10.20**
|
Forms of Performance Share Awards to Executive Officers (2011 – 2013 Performance Period) (incorporated herein by reference to Exhibits 10.03 and 10.04 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|||
10.21**
|
2007 Director Long-Term Compensation Subplan of the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|
|||
10.22**
|
2008 Director Long-Term Compensation Subplan of the 2007 Omnibus Long-Term Compensation Plan (incorporated herein by reference to Exhibit 10.05 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008)
|
|||
10.23**
|
Unit Performance Plan ("UPP") performance measures and goals, specific target objectives with respect to such performance goals, the method for computing the amount of the UPP award allocated to the award pool if the performance goals are attained, and the eligibility criteria for employee participation in the UPP, for the 2011 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 1, 2010)
|
|||
10.24**
|
Forms of Restricted Stock Unit Awards to James P. Rogers, Mark J. Costa, and Ronald C. Lindsay (incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008)
|
|||
10.25**
|
Form of Restricted Stock Unit Award to Curtis E. Espeland (incorporated herein by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009)
|
|||
10.26**
|
Form of Restricted Stock Unit Awards to Executive Officers Michael H.K. Chung and Godefroy A.F.E. Motte (incorporated herein by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010)
|
|||
EXHIBIT INDEX
|
Sequential
|
|||
Exhibit
|
Page
|
|||
Number
|
Description
|
Number
|
||
10.27**
|
Form of Award Notice for Stock Options Granted to James P. Rogers, Chief Executive Officer, on November 2, 2011 (incorporated herein by reference to Exhibit 10.05 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)
|
|||
Form of Award Notice for Stock Options Granted to Executive Officers on November 1, 2011
|
134-136
|
|||
Forms of Performance Share Awards to Executive Officers (2012 – 2014 Performance Period)
|
137-148
|
|||
10.30**
|
UPP performance measures and goals, specific target objectives with respect to such performance goals, the method for computing the amount of the UPP award allocated to the award pool if the performance goals are attained, and the eligibility criteria for employee participation in the UPP, for the 2012 performance year (incorporated herein by reference to the Company's Current Report on Form 8-K dated November 30, 2011)
|
|||
Statement re: Computation of Ratios of Earnings (Loss) to Fixed Charges
|
149
|
|||
Subsidiaries of the Company
|
150
|
|||
Consent of Independent Registered Public Accounting Firm
|
152
|
|||
Rule 13a – 14(a) Certification by James P. Rogers, Chief Executive Officer, for the year ended December 31, 2011
|
153
|
|||
Rule 13a – 14(a) Certification by Curtis E. Espeland, Senior Vice President and Chief Financial Officer, for the year ended December 31, 2011
|
154
|
|||
Section 1350 Certification by James P. Rogers, Chief Executive Officer, for the year ended December 31, 2011
|
155
|
|||
Section 1350 Certification by Curtis E. Espeland, Senior Vice President and Chief Financial Officer, for the year ended December 31, 2011
|
156
|
|||
101.INS
|
XBRL Instance Document
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema
|
|||
101.CAL
|
XBRL Taxonomy Calculation Linkbase
|
|||
101.LAB
|
XBRL Taxonomy Label Linkbase
|
|||
101.PRE
|
XBRL Definition Linkbase Document
|
|||
101.DEF
|
XBRL Definition Linkbase Document
|
|||
*
|
Schedules and exhibits have been omitted from this exhibit pursuant to Item 601(b)(2) of Regulation S-K and are not filed herewith. The Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.
|
**
|
Management contract or compensatory plan or arrangement filed pursuant to Item 601(b) (10) (iii) of Regulation S-K.
|
1)
|
Each participant’s annual base pay rate on December 31 of the year in which Company and Unit performance is measured (the “Performance Year”), times
|
2)
|
The participant’s “UPP Target Award Percentage”, which is a target award percentage, expressed as a percentage of annual base rate, and determined by the participant’s salary grade, times
|
3)
|
A “Unit Performance Factor”, expressed as a percentage and determined by pre-set corporate and/or specified organizational unit (“Business Group Units”) performance goals. Generally, the Performance Factor can range from 0%, if performance goals are not met, up to the maximum performance factor of 200% for each UPP measure.
|
|
I.
|
The Performance Year will be divided into monthly intervals.
|
|
|
|
II.
|
Anyone promoted into UPP or who changes UPP participation level at any time during the performance year will have a portion of his/her Target UPP Variable Pay allocated to a Unit Award Pool based on the number of participating months during the performance year (participation as of the end of the month will be credited as an entire month).
|
|
|
|
III.
|
Anyone who moves to another variable pay program at any time during the performance year will have a portion of his/her Target UPP Variable Pay allocated to a Unit Award Pool based on the number of participating months during the performance year (participation as of the end of the month will be credited as an entire month).
|
<5.50
(-7 to
-5%)
|
5.51 to
7.50
(-4.99 to
–3%)
|
7.51 to
9.50
(-2.99 to
-1%)
|
9.51 to
10.50
(-.99 to
0%)
|
10.51 to
11.50
(.01 to
1%)
|
11.51 to
13.50 (1.01 to 3%)
|
13.51 to
15.50
(3.01 to
5%)
|
15.51 to
17.50
(5.01 to
7%)
|
>17.51
(7.01 to
10%)
|
|
5Q
|
0.00
|
0.00
|
0.00
|
0.00
|
0.20
|
0.30
|
0.40
|
0.50
|
0.60
|
4Q
|
0.00
|
0.00
|
0.40
|
0.50
|
0.60
|
0.70
|
0.80
|
0.90
|
1.00
|
3Q
<50%
|
0.00
|
0.00
|
0.50
|
0.60
|
0.80
|
1.00
|
1.20
|
1.40
|
1.60
|
3Q
>50%
|
0.00
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2Q
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2.25
|
1Q
|
0.60
|
0.80
|
1.00
|
1.20
|
1.50
|
1.75
|
2.00
|
2.25
|
2.50
|
<5.50
(-7 to
-5%)
|
5.51 to
7.50
(-4.99 to
–3%)
|
7.51 to
9.50
(-2.99 to
-1%)
|
9.51 to
10.50
(-.99 to
0%)
|
10.51 to
11.50
(.01 to
1%)
|
11.51 to
13.50 (1.01 to 3%)
|
13.51 to
15.50
(3.01 to
5%)
|
15.51 to
17.50
(5.01 to
7%)
|
>17.51
(7.01 to
10%)
|
|
5Q
|
0.00
|
0.00
|
0.00
|
0.00
|
0.20
|
0.30
|
0.40
|
0.50
|
0.60
|
4Q
|
0.00
|
0.00
|
0.40
|
0.50
|
0.60
|
0.70
|
0.80
|
0.90
|
1.00
|
3Q
<50%
|
0.00
|
0.00
|
0.50
|
0.60
|
0.80
|
1.00
|
1.20
|
1.40
|
1.60
|
3Q
>50%
|
0.00
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2Q
|
0.40
|
0.60
|
0.80
|
1.00
|
1.25
|
1.50
|
1.75
|
2.00
|
2.25
|
1Q
|
0.60
|
0.80
|
1.00
|
1.20
|
1.50
|
1.75
|
2.00
|
2.25
|
2.50
|
(Dollars in millions)
|
2011
|
2010
|
2009
|
2008
|
2007
|
|||||||||||||||
Earnings from continuing operations before income taxes
|
$ | 964 | $ | 636 | $ | 254 | $ | 461 | $ | 649 | ||||||||||
Add:
|
||||||||||||||||||||
Interest expense
|
83 | 105 | 85 | 95 | 107 | |||||||||||||||
Appropriate portion of rental expense (2)
|
17 | 14 | 12 | 14 | 17 | |||||||||||||||
Amortization of capitalized interest
|
7 | 7 | 8 | 7 | 8 | |||||||||||||||
Earnings (loss) as adjusted
|
$ | 1,071 | $ | 762 | $ | 359 | $ | 577 | $ | 781 | ||||||||||
Fixed charges:
|
||||||||||||||||||||
Interest expense
|
$ | 83 | $ | 105 | $ | 85 | $ | 95 | $ | 107 | ||||||||||
Appropriate portion of rental expense (2)
|
17 | 14 | 12 | 14 | 17 | |||||||||||||||
Capitalized interest
|
9 | 3 | 14 | 9 | 8 | |||||||||||||||
Total fixed charges
|
$ | 109 | $ | 122 | $ | 111 | $ | 118 | $ | 132 | ||||||||||
Ratio of earnings to fixed charges
|
9.8x | 6.2x | 3.2x | 4.9x | 5.9x | |||||||||||||||
(1)
|
The Company completed the sale of the polyethylene terephthalate ("PET") business, related assets at the Columbia, South Carolina, site, and technology of its Performance Polymers segment on January 31, 2011. The PET business, assets, and technology sold were substantially all of the Performance Polymers segment. Performance Polymers segment operating results are presented as discontinued operations for all periods presented. For additional information, see Note 3, "Discontinued Operations and Assets Held for Sale" to the Company's consolidated financial statements in Part II, Item 8 of this 2011 Annual Report on Form 10-K.
|
(2)
|
For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense.
|
Exhibit 21.01
|
||
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
||
NAME OF SUBSIDIARY
|
JURISDICTION OF INCORPORATION OR ORGANIZATION
|
|
Dynaloy, LLC
|
Delaware
|
|
Eastman Administración, S.A. de C.V.
|
Mexico
|
|
Eastman Belgium B.V.B.A.
|
Belgium
|
|
Eastman Benelux B.V.B.A.
|
Belgium
|
|
Eastman Cayman Financial Services Limited
|
Cayman Islands
|
|
Eastman Chemical Argentina S.R.L.
|
Argentina
|
|
Eastman Chemical, Asia Pacific Pte. Ltd.
|
Singapore
|
|
Eastman Chemical (Malaysia) Sdn. Bhd.
|
Malaysia
|
|
Eastman Chemical B.V.
|
Netherlands
|
|
Eastman Chemical Canada, Inc.
|
Canada
|
|
Eastman Chemical Company Foundation, Inc.
|
Delaware
|
|
Eastman Chemical Company Investments, Inc.
|
Delaware
|
|
Eastman Chemical do Brasil Ltda
|
Brazil - partnership
|
|
Eastman Chemical EMEA B.V.
|
Netherlands
|
|
Eastman Chemical, Europe, Middle East, and Africa, Ltd
|
Delaware
|
|
Eastman Chemical Financial Corporation
|
Delaware
|
|
Eastman Chemical GmbH
|
Germany
|
|
Eastman Chemical HK Limited
|
Hong Kong
|
|
Eastman Chemical Holdings, S.A. de C.V.
|
Mexico
|
|
Eastman Chemical Holdings do Brasil Ltda.
|
Brazil
|
|
Eastman Chemical Holdings Spain, S.L.
|
Spain
|
|
Eastman Chemical India Private Limited
|
India
|
|
Eastman Chemical International AG
|
Switzerland
|
|
Eastman Chemical Japan Limited
|
Japan
|
|
Eastman Chemical Korea Ltd.
|
Korea
|
|
Eastman Chemical Latin America, Inc.
|
Delaware
|
|
Eastman Chemical Ltd.
|
New York
|
|
Eastman Chemical Luxembourg S.a.r.l.
|
Luxembourg
|
|
Eastman Chemical Middelburg, B.V.
|
Netherlands
|
|
Eastman Chemical Pioneer, LLC
|
Delaware
|
|
Eastman Chemical Regional UK
|
United Kingdom
|
|
Eastman Chemical Resins, Inc.
|
Delaware
|
|
Eastman Chemical Singapore Pte. Ltd.
|
Singapore
|
|
Eastman Chemical Texas City, Inc.
|
Delaware
|
|
Eastman Chemical Uruapan, S.A. de C.V.
|
Mexico
|
|
Eastman Chemical Workington Limited
|
United Kingdom
|
|
Exhibit 21.01
|
||
EASTMAN CHEMICAL COMPANY
SUBSIDIARIES
|
||
NAME OF SUBSIDIARY
|
JURISDICTION OF
INCORPORATION
OR ORGANIZATION
|
|
Eastman Cogen Management L.L.C.
|
Texas
|
|
Eastman Cogeneration L.P.
|
Texas
|
|
Eastman Company UK Limited
|
United Kingdom
|
|
Eastman Espana S. L.
|
Spain
|
|
Eastman Fibers Korea, Ltd.
|
Korea
|
|
Eastman Gasification Services Company
|
Delaware
|
|
Eastman International Management Company
|
Tennessee
|
|
Eastman Kimyasal Ürünleri Kayit Hizmetleri Limited Sirketi
|
Turkey
|
|
Eastman Malta Limited
|
Malta
|
|
Eastman Mazzucchelli Hong Kong Limited
|
Hong Kong
|
|
Eastman Mazzucchelli Plastics (Shenzhen) Company Limited
|
China
|
|
Eastman Renewable Materials, LLC
|
Delaware
|
|
Eastman Servicios Corporativos, S.A. de C.V.
|
Mexico
|
|
Eastman (Shanghai) Chemical Commercial Co., Ltd.
|
China
|
|
Eastman Shuangwei Fibers Company Limited
|
China
|
|
Eastman Spain L.L.C.
|
Delaware
|
|
Eastman Specialties AS
|
Estonia
|
|
Eastman Specialties Corporation
|
Delaware
|
|
Eastman Specialties Holdings Corporation
|
Delaware
|
|
EGSC Beaumont, Inc.
|
Delaware
|
|
Enterprise Genetics, Inc.
|
Nevada
|
|
GLC Associates
|
Nevada
|
|
Genovique Specialties Wuhan Youji Chemical Co., Ltd.
|
China
|
|
Tongxiang Xinglong Fine Chemical Company Limited
|
China
|
|
Holston Defense Corporation
|
Virginia
|
|
Jaeger Chimie France S.A.R.L.
|
France
|
|
Kingsport Hotel, L.L.C.
|
Tennessee
|
|
Mustang Pipeline Company
|
Texas
|
|
Nanjing Yangzi Eastman Chemical Ltd.
|
China
|
|
Primester
|
New York
|
|
Qilu Eastman Specialty Chemicals, Ltd
|
China
|
|
Scandiflex do Brasil S.A. Indústrias Químicas
|
Brazil
|
|
Sterling Chemicals JV Holdings, Inc.
|
Delaware
|
|
Sterling Methanol Company
|
Delaware
|
|
Sterling Oxo Alcohols Company
|
Delaware
|
|
Texas City Gasification, LLC
|
Delaware
|
|
TX Energy, LLC
|
Delaware
|
/s/ PricewaterhouseCoopers LLP |
1. | I have reviewed this annual report on Form 10-K of Eastman Chemical Company; |
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ James P. Rogers |
1. | I have reviewed this annual report on Form 10-K of Eastman Chemical Company; |
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Curtis E. Espeland |
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
/s/ James P. Rogers |
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
/s/ Curtis E. Espeland |
PROVISION FOR INCOME TAXES (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of earnings (loss) from continuing operations and provisions for income taxes | Components of earnings from continuing operations before income taxes and the provision (benefit) for U.S. and other income taxes from continuing operations follow:
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Deferred tax charge (benefit) recorded as a component of accumulated other comprehensive loss | The following represents the deferred tax charge (benefit) recorded as a component of accumulated other comprehensive loss in stockholders' equity.
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Income tax expense (benefit) included in consolidated financial statement | Total income tax expense (benefit) included in the consolidated financial statements was composed of the following:
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Reconciliation of income taxes on earnings from continuing operations at federal statutory income tax rate | Differences between the provision for income taxes on earnings from continuing operations and income taxes computed using the U.S. federal statutory income tax rate follow:
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Significant components of deferred assets and liabilities | The significant components of deferred tax assets and liabilities follow:
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Schedule of tax receivables and payables | Amounts due to and from tax authorities as recorded in the Consolidated Statements of Financial Position:
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Reconciliation of beginning and ending amounts of unrecognized tax benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
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SHARE-BASED COMPENSATION PLANS AND AWARDS (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions used in the determination of fair value of stock options awarded | The weighted average assumptions used in the determination of fair value for stock options awarded in 2011, 2010, and 2009 are provided in the table below:
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Activity of stock option awards | A summary of the activity of the Company's stock option awards for 2011, 2010, and 2009 is presented below:
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Remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable | The following table provides the remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable at December 31, 2011:
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Summary of status of nonvested options | A summary of the status of the Company's nonvested options as of December 31, 2011 and changes during the year then ended is presented below:
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DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2011
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Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
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Jun. 30, 2010
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Mar. 31, 2010
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
|
Jan. 31, 2011
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||||||||||||
Sales price of polyethylene terephthalate business, the Performance Polymers segment | $ 615 | |||||||||||||||||||||
Contracted period for transition services to supply certain raw materials and services (in years) | 1 | |||||||||||||||||||||
Transition supply agreement revenues | 220 | |||||||||||||||||||||
Income Statement earnings from discontinued operations [Abstract] | ||||||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | [1] | 0 | [1] | 0 | [1] | 8 | [1] | 2 | [1] | 8 | [1] | 7 | [1] | (4) | [1] | 8 | 13 | (18) | |||
Gain from disposal of discontinued operations, net of tax | 0 | [1] | 0 | [1] | 1 | [1] | 30 | [1] | 31 | 0 | 0 | |||||||||||
Assets and Liabilities of the discontinued operations classified as held for sale [Abstract] | ||||||||||||||||||||||
Total current assets held for sale | 0 | 217 | 0 | 217 | ||||||||||||||||||
Non-current assets [Abstract] | ||||||||||||||||||||||
Other noncurrent assets | 0 | 23 | 0 | 23 | ||||||||||||||||||
Current liabilities [Abstract] | ||||||||||||||||||||||
Total current liabilities held for sale | 0 | 52 | 0 | 52 | ||||||||||||||||||
Noncurrent liabilities [Abstract] | ||||||||||||||||||||||
Total noncurrent liabilities | 0 | 3 | 0 | 3 | ||||||||||||||||||
Performance Polymers segment discontinued operations [Member]
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Income Statement earnings from discontinued operations [Abstract] | ||||||||||||||||||||||
Sales | 105 | 849 | 651 | |||||||||||||||||||
Earnings (loss) before income taxes | 15 | 26 | (28) | |||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax | 8 | 13 | (18) | |||||||||||||||||||
Gain from disposal of discontinued operations, net of tax | 31 | 0 | 0 | |||||||||||||||||||
Assets and Liabilities of the discontinued operations classified as held for sale [Abstract] | ||||||||||||||||||||||
Trade receivables, net | 116 | 116 | ||||||||||||||||||||
Inventories | 101 | 101 | ||||||||||||||||||||
Total current assets held for sale | 217 | 217 | ||||||||||||||||||||
Non-current assets [Abstract] | ||||||||||||||||||||||
Properties and equipment, net | 374 | 374 | ||||||||||||||||||||
Goodwill | 1 | 1 | ||||||||||||||||||||
Other noncurrent assets | 22 | 22 | ||||||||||||||||||||
Total noncurrent assets held for sale | 397 | 397 | ||||||||||||||||||||
Total assets | 614 | 614 | ||||||||||||||||||||
Current liabilities [Abstract] | ||||||||||||||||||||||
Payables and other current liabilities | 52 | 52 | ||||||||||||||||||||
Total current liabilities held for sale | 52 | 52 | ||||||||||||||||||||
Noncurrent liabilities [Abstract] | ||||||||||||||||||||||
Other noncurrent liabilities | 3 | 3 | ||||||||||||||||||||
Total noncurrent liabilities | 3 | 3 | ||||||||||||||||||||
Total liabilities | $ 55 | $ 55 | ||||||||||||||||||||
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SUBSEQUENT EVENTS (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2011
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Jan. 26, 2012
|
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Subsequent Event [Line Items] | ||
Agreement Date of Acquisition | 2012/01/26 | |
Number of Shares of Company Stock to be Issued to Acquired Company's Shareholders | 0.12 | |
Cash Amount Per Share to be Paid to Acquired Company's Shareholders | $ 22.00 | |
Business Acquisition Transaction Value At Date Of Agreement | $ 4,700 |
ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring and related charges |
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Changes to restructuring reserve and related activities | The following table summarizes the changes in estimates described above, other asset impairments and restructuring charges and gains, the non-cash reductions attributable to asset impairments, and the cash reductions in shutdown reserves for severance costs and site closure costs paid:
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ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
|
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ACQUISITIONS AND INVESTMENTS IN JOINT VENTURES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value purchase price allocation for business acquired | During third quarter 2011, the Company completed two acquisitions in the Performance Chemicals and Intermediates ("PCI") segment. On August 9, 2011, Eastman acquired Sterling Chemicals, Inc. ("Sterling"), a single site North American petrochemical producer, to produce non-phthalate plasticizers, including Eastman 168™ non-phthalate plasticizers, and acetic acid. On September 1, 2011, Eastman acquired Scandiflex do Brasil S.A. Indústrias Químicas ("Scandiflex"), a manufacturer of plasticizers located in São Paulo, Brazil. The total purchase price for both acquisitions was $133 million, including a post-closure payment of $10 million to the previous shareholders of Scandiflex. Transaction costs of $4 million associated with the acquisitions were expensed as incurred and are included in the "Selling, general and administrative expenses" line item in the Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings. The table below shows the final fair value purchase price allocation for the acquisitions:
The total purchase price was approximately $160 million, including assumed debt of $5 million. Transaction costs associated with the acquisition were expensed as incurred. The table below shows the final fair value purchase price allocation for the Genovique acquisition:
|
SHARE-BASED COMPENSATION PLANS AND AWARDS (Details) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Weighted-Average Remaining Contractual Life (in years) | 6.4 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 30 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 28 | ||
Prices of $15-$24 [Member]
|
|||
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Exercise price of options lower range (in dollars per share) | $ 15 | ||
Exercise prices of options upper range (in dollars per share) | $ 24 | ||
Number Outstanding at end of period (in shares) | 688,700 | ||
Weighted-Average Remaining Contractual Life (in years) | 4.6 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 19 | ||
Number Exercisable at end of period (in shares) | 688,700 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 19 | ||
Prices of $25-$29 [Member]
|
|||
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Exercise price of options lower range (in dollars per share) | $ 25 | ||
Exercise prices of options upper range (in dollars per share) | $ 29 | ||
Number Outstanding at end of period (in shares) | 1,177,900 | ||
Weighted-Average Remaining Contractual Life (in years) | 6.1 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 28 | ||
Number Exercisable at end of period (in shares) | 941,000 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 28 | ||
Prices of $30-$32 [Member]
|
|||
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Exercise price of options lower range (in dollars per share) | $ 30 | ||
Exercise prices of options upper range (in dollars per share) | $ 32 | ||
Number Outstanding at end of period (in shares) | 645,700 | ||
Weighted-Average Remaining Contractual Life (in years) | 4.3 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 30 | ||
Number Exercisable at end of period (in shares) | 630,700 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 30 | ||
Prices of $33-$34 [Member]
|
|||
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Exercise price of options lower range (in dollars per share) | $ 33 | ||
Exercise prices of options upper range (in dollars per share) | $ 34 | ||
Number Outstanding at end of period (in shares) | 305,700 | ||
Weighted-Average Remaining Contractual Life (in years) | 5.8 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 33 | ||
Number Exercisable at end of period (in shares) | 305,700 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 33 | ||
Prices of $35-$40 [Member]
|
|||
Remaining contractual term and weighted average exercise prices of stock options [Abstract] | |||
Exercise price of options lower range (in dollars per share) | $ 35 | ||
Exercise prices of options upper range (in dollars per share) | $ 40 | ||
Number Outstanding at end of period (in shares) | 1,156,400 | ||
Weighted-Average Remaining Contractual Life (in years) | 9.2 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 39 | ||
Number Exercisable at end of period (in shares) | 230,300 | ||
Weighted-Average Exercise Price (in dollars per share) | $ 39 | ||
Omnibus Long-Term Plan [Member]
|
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
2007 Omnibus Long-Term Compensation Plan, term description | Eastman's 2007 Omnibus Long-Term Compensation Plan ("2007 Omnibus Plan") was approved by stockholders at the May 3, 2007 Annual Meeting of Stockholders and shall remain in effect until its fifth anniversary. | ||
Shares reserved and available for issuance (in shares) | 8,200,000 | ||
Grant date exercise price, minimum | exercise price not less than 100 percent of the per share fair market value | ||
Term of service for shares of restricted stock to be granted to a non-employee director | Shares of restricted stock are granted on the first day of a non-employee director's initial term of service and shares of restricted stock are granted each year to each non-employee director on the date of the annual meeting of stockholders. | ||
Share-based compensation expense recognized in selling, general and administrative expense | $ 39,000,000 | $ 25,000,000 | $ 20,000,000 |
Stock Options [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense recognized in selling, general and administrative expense | 4,000,000 | 5,000,000 | 5,000,000 |
Share-based compensation expense, retirement eligibility preceding the requisite vesting period | 3,000,000 | 3,000,000 | 2,000,000 |
Term life of options (in years) | 10 Y | ||
Vesting periods, maximum (in years) | 3 Y | ||
Weighted average assumptions used to determine fair value of stock options awarded [Abstract] | |||
Expected volatility rate (in hundredths) | 33.00% | 31.81% | 31.69% |
Expected dividend yield (in hundredths) | 2.23% | 2.86% | 4.84% |
Average risk-free interest rate (in hundredths) | 0.95% | 1.23% | 2.47% |
Expected forfeiture rate (in hundredths) | 0.75% | 0.75% | 0.75% |
Expected term years (in years) | 5.20 | 5.20 | 5.20 |
Expected dividend yield calculation basis | Company's average of the last four quarterly dividend yields. | ||
Summary of activity of stock option awards [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 5,505,800 | 8,682,900 | 8,435,300 |
Granted (in shares) | 537,500 | 597,900 | 710,600 |
Exercised (in shares) | (2,059,900) | (3,758,200) | (335,100) |
Cancelled forfeited or expired (in shares) | (9,000) | (16,800) | (127,900) |
Outstanding at end of period (in shares) | 3,974,400 | 5,505,800 | 8,682,900 |
Options exercisable at period-end (in shares) | 2,796,400 | 4,150,300 | 6,987,500 |
Available for grant at end of period (in shares) | 1,475,922 | 2,601,160 | 3,798,646 |
Outstanding at beginning of period (in dollars per share) | $ 29 | $ 27 | $ 27 |
Granted (in dollars per share) | $ 38 | $ 40 | $ 28 |
Exercised (in dollars per share) | $ 29 | $ 27 | $ 21 |
Cancelled, forfeited, or expired (in dollars per share) | $ 25 | $ 22 | $ 23 |
Outstanding at end of year (in dollars per share) | $ 30 | $ 29 | $ 27 |
Aggregate intrinsic value of total options outstanding | 35,000,000 | ||
Aggregate intrinsic value of total options exercisable | 32,000,000 | ||
Weighted average remaining contractual life of all exercisable options (in years) | 4.8 | ||
Weighted average fair value of options granted | $ 9.27 | $ 8.69 | $ 5.24 |
Intrinsic value of options exercised | 37,000,000 | 41,000,000 | 2,000,000 |
Cash proceeds received from option exercises | 59,000,000 | 102,000,000 | 7,000,000 |
Tax benefit of options exercised | 10,000,000 | 10,000,000 | 500,000.0 |
Fair value of shares vested | 4,000,000 | 5,000,000 | 8,000,000 |
Nonvested Options [Member]
|
|||
Summary of activity of stock option awards [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 1,355,500 | ||
Granted (in shares) | 537,500 | ||
Vested (in shares) | (715,000) | ||
Cancelled forfeited or expired (in shares) | 0 | ||
Outstanding at end of period (in shares) | 1,178,000 | ||
Outstanding at beginning of period (in dollars per share) | $ 6.32 | ||
Granted (in dollars per share) | $ 9.27 | ||
Vested (in dollars per share) | $ 5.36 | ||
Cancelled, forfeited, or expired (in dollars per share) | $ 0.00 | ||
Outstanding at end of year (in dollars per share) | $ 8.25 | ||
Unrecognized compensation expense before tax for these same type awards | 4,000,000 | ||
Amortization life of unrecognized compensation expense before tax for these same type awards (in years) | 3 | ||
Other Share-Based compensations Awards [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense recognized in selling, general and administrative expense | 35,000,000 | 20,000,000 | 15,000,000 |
Summary of activity of stock option awards [Roll Forward] | |||
Unrecognized compensation expense before tax for these same type awards | $ 40,000,000 | ||
Amortization life of unrecognized compensation expense before tax for these same type awards (in years) | 3 |
PROPERTIES AND ACCUMULATED DEPRECIATION (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Property, Plant and Equipment [Line Items] | |||
Properties and equipment at cost | $ 8,383 | $ 7,908 | |
Less: Accumulated depreciation | 5,276 | 5,063 | |
Net properties | 3,107 | 2,845 | |
Property, Plant, and Equipment, Additional Disclosures [Abstract] | |||
Cumulative construction-period interest | 148 | 177 | |
Accumulated depreciation | 84 | 106 | |
Interest capitalized | 9 | 3 | 14 |
Depreciation expense related to continuing operations | 261 | 238 | 227 |
Land [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Properties and equipment at cost | 113 | 77 | |
Building and Building Improvements [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Properties and equipment at cost | 772 | 743 | |
Machinery and Equipment [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Properties and equipment at cost | 7,176 | 6,851 | |
Asset under Construction [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Properties and equipment at cost | $ 322 | $ 237 |
QUARTERLY SALES AND EARNINGS DATA-UNAUDITED (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|||||||||||||||
QUARTERLY SALES AND EARNINGS DATA-UNAUDITED [Abstract] | |||||||||||||||||||||||||
Sales | $ 1,723 | $ 1,812 | $ 1,885 | $ 1,758 | $ 1,463 | $ 1,507 | $ 1,502 | $ 1,370 | $ 7,178 | $ 5,842 | $ 4,396 | ||||||||||||||
Gross profit | 324 | 420 | 463 | 433 | 351 | 422 | 384 | 317 | 1,640 | 1,474 | 1,032 | ||||||||||||||
Asset impairments and restructuring charges (gains), net | 0 | 7 | (15) | 0 | 26 | 0 | 3 | 0 | (8) | 29 | 196 | ||||||||||||||
Earnings (loss) from continuing operations | 100 | 165 | 210 | 182 | 17 | 162 | 141 | 105 | 657 | 425 | 154 | ||||||||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | [1] | 0 | [1] | 0 | [1] | 8 | [1] | 2 | [1] | 8 | [1] | 7 | [1] | (4) | [1] | 8 | 13 | (18) | ||||||
Gain from disposal of discontinued operations, net of tax | 0 | [1] | 0 | [1] | 1 | [1] | 30 | [1] | 31 | 0 | 0 | ||||||||||||||
Net earnings (loss) | $ 100 | $ 165 | $ 211 | $ 220 | $ 19 | $ 170 | $ 148 | $ 101 | $ 696 | $ 438 | $ 136 | ||||||||||||||
Earnings from continuing operations per share [Abstract] | |||||||||||||||||||||||||
Earnings from continuing operations - Basic (in dollars per share) | $ 0.73 | [2],[3] | $ 1.19 | [2],[3] | $ 1.49 | [2],[3] | $ 1.29 | [2],[3] | $ 0.12 | [2],[3] | $ 1.13 | [2],[3] | $ 0.98 | [2],[3] | $ 0.72 | [2],[3] | $ 4.70 | $ 2.95 | $ 1.06 | ||||||
Earnings from continuing operations - Diluted (in dollars per share) | $ 0.71 | [2],[3] | $ 1.16 | [2],[3] | $ 1.45 | [2],[3] | $ 1.26 | [2],[3] | $ 0.11 | [2],[3] | $ 1.11 | [2],[3] | $ 0.96 | [2],[3] | $ 0.71 | [2],[3] | $ 4.59 | $ 2.88 | $ 1.05 | ||||||
Earnings (loss) from discontinued operations per share [Abstract] | |||||||||||||||||||||||||
Earnings (loss) from discontinued operations - Basic (in dollars per share) | $ 0.00 | [1],[2],[3] | $ 0.00 | [1],[2],[3] | $ 0.00 | [1],[2],[3] | $ 0.26 | [1],[2],[3] | $ 0.01 | [1],[2],[3] | $ 0.06 | [1],[2],[3] | $ 0.05 | [1],[2],[3] | $ (0.02) | [1],[2],[3] | $ 0.28 | $ 0.09 | $ (0.12) | ||||||
Earnings (loss) from discontinued operations - Diluted (in dollars per share) | $ 0.00 | [1],[2],[3] | $ 0.00 | [1],[2],[3] | $ 0.00 | [1],[2],[3] | $ 0.26 | [1],[2],[3] | $ 0.01 | [1],[2],[3] | $ 0.05 | [1],[2],[3] | $ 0.05 | [1],[2],[3] | $ (0.02) | [1],[2],[3] | |||||||||
Net earnings per share [Abstract] | |||||||||||||||||||||||||
Net earnings per share - Basic (in dollars per share) | $ 0.73 | [1],[2],[3] | $ 1.19 | [1],[2],[3] | $ 1.49 | [1],[2],[3] | $ 1.55 | [1],[2],[3] | $ 0.13 | [2],[3] | $ 1.19 | [2],[3] | $ 1.03 | [2],[3] | $ 0.70 | [2],[3] | $ 4.98 | $ 3.04 | $ 0.94 | ||||||
Net earnings per share - Diluted (in dollars per share) | $ 0.71 | [1],[2],[3] | $ 1.16 | [1],[2],[3] | $ 1.45 | [1],[2],[3] | $ 1.52 | [1],[2],[3] | $ 0.12 | [2],[3] | $ 1.16 | [2],[3] | $ 1.01 | [2],[3] | $ 0.69 | [2],[3] | $ 4.86 | $ 2.96 | $ 0.93 | ||||||
|
RESERVE ROLLFORWARDS (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Movement In Valuation Allowances And Reserves Roll Forward | |||
Beginning Balance | $ 583 | $ 581 | $ 700 |
Charged to Cost and Expense | 106 | 48 | (73) |
Charged to Other Accounts | 3 | (4) | 0 |
Deductions | 13 | 42 | 46 |
Ending Balance | 679 | 583 | 581 |
Allowance for Doubtful Accounts [Member]
|
|||
Movement In Valuation Allowances And Reserves Roll Forward | |||
Beginning Balance | 5 | 5 | 3 |
Charged to Cost and Expense | 4 | 0 | 3 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 1 | 0 | 1 |
Ending Balance | 8 | 5 | 5 |
LIFO Inventory [Member]
|
|||
Movement In Valuation Allowances And Reserves Roll Forward | |||
Beginning Balance | 490 | 446 | 525 |
Charged to Cost and Expense | 100 | 44 | (79) |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Ending Balance | 590 | 490 | 446 |
Environmental Contingencies [Member]
|
|||
Movement In Valuation Allowances And Reserves Roll Forward | |||
Beginning Balance | 40 | 42 | 41 |
Charged to Cost and Expense | 2 | 4 | 3 |
Charged to Other Accounts | 3 | (4) | 0 |
Deductions | 6 | 2 | 2 |
Ending Balance | 39 | 40 | 42 |
Valuation Allowance of Deferred Tax Assets [Member]
|
|||
Movement In Valuation Allowances And Reserves Roll Forward | |||
Beginning Balance | 48 | 88 | 131 |
Charged to Cost and Expense | 0 | 0 | 0 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 6 | 40 | 43 |
Ending Balance | $ 42 | $ 48 | $ 88 |
ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Sep. 30, 2010
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
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ASSETS IMPAIRMENTS AND RESTRUCTURING CHARGES, NET [Abstract] | |||||||||||
Portion related to discontinuance of the Beaumont, Texas industrial gasification project | $ 0 | $ 8 | $ 179 | ||||||||
Restructuring charges [Abstract] | |||||||||||
Fixed asset impairments | 0 | 0 | 133 | ||||||||
Gain on sale | (15) | 0 | 0 | ||||||||
Intangible asset and goodwill impairments | 0 | 8 | 46 | ||||||||
Severance charges | 7 | 18 | 19 | ||||||||
Site closure and restructuring charges (gains) | 0 | 3 | (2) | ||||||||
Total Eastman Chemical Company | 0 | 7 | (15) | 0 | 26 | 0 | 3 | 0 | (8) | 29 | 196 |
Asset impairment charges [Abstract] | |||||||||||
Severance charge related to previously announced voluntary separation program | 15 | ||||||||||
Number of employees severed (in headcount) | 175 | 250 | |||||||||
Severance associated with the acquisition and integration | 7 | 3 | |||||||||
Pension curtailment | 2 | ||||||||||
Fair value of certain environmental credits associated with discontinued projects | 8 | ||||||||||
Fair value of land and tangible assets credits associated with discontinued projects | 48 | ||||||||||
Restructuring Charge [Roll Forward] | |||||||||||
Balance at Beginning of Period | 15 | 3 | 15 | 3 | 4 | ||||||
Provision/ Adjustments | (8) | 26 | 198 | ||||||||
Non-cash Reductions | 15 | (8) | (179) | ||||||||
Cash Reductions | (20) | (6) | (20) | ||||||||
Balance at End of Period | 2 | 15 | 2 | 15 | 3 | ||||||
Employee separations accrued for (in headcount) | 225 | 250 | |||||||||
Non-Cash Charges [Member]
|
|||||||||||
Restructuring Charge [Roll Forward] | |||||||||||
Balance at Beginning of Period | 0 | 0 | 0 | 0 | 0 | ||||||
Provision/ Adjustments | (15) | 8 | 179 | ||||||||
Non-cash Reductions | 15 | (8) | (179) | ||||||||
Cash Reductions | 0 | 0 | 0 | ||||||||
Balance at End of Period | 0 | 0 | 0 | 0 | 0 | ||||||
Employee Severance [Member]
|
|||||||||||
Restructuring Charge [Roll Forward] | |||||||||||
Balance at Beginning of Period | 15 | 3 | 15 | 3 | 4 | ||||||
Provision/ Adjustments | 7 | 18 | 19 | ||||||||
Non-cash Reductions | 0 | 0 | 0 | ||||||||
Cash Reductions | (20) | (6) | (20) | ||||||||
Balance at End of Period | $ 2 | $ 15 | $ 2 | $ 15 | $ 3 |
SHARE-BASED COMPENSATION PLANS AND AWARDS
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION PLANS AND AWARDS |
2007 Omnibus Long-Term Compensation Plan Eastman's 2007 Omnibus Long-Term Compensation Plan ("2007 Omnibus Plan") was approved by stockholders at the May 3, 2007 Annual Meeting of Stockholders and shall remain in effect until its fifth anniversary. The 2007 Omnibus Plan authorizes the Compensation and Management Development Committee of the Board of Directors to: grant awards, designate participants, determine the types and numbers of awards, determine the terms and conditions of awards and determine the form of award settlement. Under the 2007 Omnibus Plan, the aggregate number of shares reserved and available for issuance is 8.2 million. Any stock distributed pursuant to an award may consist of, in whole or in part, authorized and unissued stock, treasury stock, or stock purchased on the open market. Under the 2007 Omnibus Plan and previous plans, the forms of awards have included: restricted stock and restricted stock units, stock options, stock appreciation rights ("SARs"), and performance shares. The 2007 Omnibus Plan is flexible as to the number of specific forms of awards, but provides that stock options and SARs are to be granted at an exercise price not less than 100 percent of the per share fair market value on the date of the grant. 2008 Director Long-Term Compensation Subplan Eastman's 2008 Director Long-Term Compensation Subplan ("2008 Directors' Subplan"), a component of the 2007 Omnibus Plan, remains in effect until terminated by the Board of Directors or the earlier termination of the 2007 Omnibus Plan. The 2008 Directors' Subplan provides for structured awards of restricted shares to non-employee members of the Board of Directors. Restricted shares awarded under the 2008 Directors' Subplan are subject to the same terms and conditions of the 2007 Omnibus Plan. The 2008 Directors' Subplan does not constitute a separate source of shares for grant of equity awards and all shares awarded are part of the 8.2 million shares authorized under the 2007 Omnibus Plan. Shares of restricted stock are granted on the first day of a non-employee director's initial term of service and shares of restricted stock are granted each year to each non-employee director on the date of the annual meeting of stockholders. The Company is authorized by the Board of Directors under the 2007 Omnibus Plan and 2008 Directors' Subplan to provide grants to employees and non-employee members of the Board of Directors. It has been the Company's practice to issue new shares rather than treasury shares for equity awards that require settlement by the issuance of common stock and to withhold or accept back shares awarded to cover the related income tax obligations of employee participants. Shares of non-employee directors are not withheld or acquired to satisfy the withholding obligation related to their income taxes. Shares of unrestricted common stock owned by specified senior management level employees are accepted by the Company to pay the exercise price of stock options in accordance with the terms and conditions of their awards. For 2011, 2010, and 2009, total share-based compensation expense (before tax) of approximately $39 million, $25 million, and $20 million, respectively, was recognized in selling, general and administrative expense in the Consolidated Statements of Earnings for all share-based awards of which approximately $4 million, $5 million, and $5 million, respectively, related to stock options. The compensation expense is recognized over the substantive vesting period, which may be a shorter time period than the stated vesting period for retirement-eligible employees. For 2011, 2010, and 2009, approximately $3 million, $3 million and $2 million, respectively, of stock option compensation expense was recognized due to retirement eligibility preceding the requisite vesting period. Stock Option Awards Options have been granted on an annual basis to non-employee directors under predecessor plans to the 2008 Directors' Subplan and by the Compensation and Management Development Committee of the Board of Directors under the 2007 Omnibus Plan and predecessor plans to employees. Option awards have an exercise price equal to the closing price of the Company's stock on the date of grant. The term of options is ten years with vesting periods that vary up to three years. Vesting usually occurs ratably over the vesting period or at the end of the vesting period. The Company utilizes the Black Scholes Merton option valuation model which relies on certain assumptions to estimate an option's fair value. The weighted average assumptions used in the determination of fair value for stock options awarded in 2011, 2010, and 2009 are provided in the table below:
The volatility rate of grants is derived from historical Company common stock price volatility over the same time period as the expected term of each stock option award. The volatility rate is derived by mathematical formula utilizing the weekly high closing stock price data over the expected term. The expected dividend yield is calculated using the Company's average of the last four quarterly dividend yields. The average risk-free interest rate is derived from United States Department of Treasury published interest rates of daily yield curves for the same time period as the expected term. GAAP specifies only share-based awards expected to vest be included in share-based compensation expense. Estimated forfeiture rates are determined using historical forfeiture experience for each type of award and are excluded from the quantity of awards included in share-based compensation expense. The weighted average expected term reflects the analysis of historical share-based award transactions and includes option swap and reload grants which may have much shorter remaining expected terms than new option grants. A summary of the activity of the Company's stock option awards for 2011, 2010, and 2009 is presented below:
The following table provides the remaining contractual term and weighted average exercise prices of stock options outstanding and exercisable at December 31, 2011:
The range of exercise prices of options outstanding at December 31, 2011 is approximately $15 to $40 per share. The aggregate intrinsic value of total options outstanding and total options exercisable at December 31, 2011 is $35 million and $32 million, respectively. Intrinsic value is the amount by which the closing market price of the stock at December 31, 2011 exceeds the exercise price of the option grants. The weighted average remaining contractual life of all exercisable options at December 31, 2011 is 4.8 years. The weighted average fair value of options granted during 2011, 2010, and 2009 was $9.27, $8.69, and $5.24, respectively. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009, was $37 million, $41 million, and $2 million, respectively. Cash proceeds received by the Company from option exercises and the related tax benefit totals $59 million and $10 million, respectively, for 2011, $102 million and $10 million, respectively, for 2010, and $7 million and $0.5 million, respectively, for 2009. The total fair value of shares vested during the years ended December 31, 2011, 2010, and 2009 was $4 million, $5 million, and $8 million, respectively. A summary of the status of the Company's nonvested options as of December 31, 2011 and changes during the year then ended is presented below:
For options unvested at December 31, 2011, approximately $4 million in compensation expense will be recognized over the next three years. Other Share-Based Compensation Awards In addition to stock option awards, the Company has awarded long-term performance stock awards, restricted stock awards, and stock appreciation rights. The long-term performance awards are based upon actual return on capital compared to a target return on capital and total stockholder return compared to a peer group ranking by total stockholder return. The recognized compensation cost before tax for these other share-based awards in the years ended December 31, 2011, 2010, and 2009 was approximately $35 million, $20 million, and $15 million, respectively. The unrecognized compensation expense before tax for these same type awards at December 31, 2011 was approximately $40 million and will be recognized primarily over a period of three years. |
SEGMENT INFORMATION (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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SEGMENT INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information Disclosure |
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Sales and long lived assets geographic information |
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DERIVATIVES (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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DERIVATIVES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Financial Assets and Liabilities Based on Fair Value Level 2 Hierarchy on Recurring Basis and Balance Sheet Location | Fair Value of Derivatives Designated as Hedging Instruments
|
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Derivative Instrument Gain Loss in Statement of Financial Performance | Derivatives' Hedging Relationships
|
SEGMENT INFORMATION (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2011
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Mar. 31, 2011
|
Dec. 31, 2010
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Sep. 30, 2010
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Jun. 30, 2010
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Mar. 31, 2010
|
Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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SEGMENT INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||
Number of reportable operating segments | 4 | |||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | $ 1,723 | $ 1,812 | $ 1,885 | $ 1,758 | $ 1,463 | $ 1,507 | $ 1,502 | $ 1,370 | $ 7,178 | $ 5,842 | $ 4,396 | |||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 1,021 | 862 | 345 | |||||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 6,184 | 5,986 | 6,184 | 5,986 | 5,515 | |||||||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 261 | 238 | 227 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 457 | 243 | 310 | |||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net related to severance charges | 0 | 7 | (15) | 0 | 26 | 0 | 3 | 0 | (8) | 29 | 196 | |||||||||||||||||||||||
Portion related to discontinuance of the Beaumont, Texas industrial gasification project | 0 | 8 | 179 | |||||||||||||||||||||||||||||||
Gain (Loss) on Disposition of Property | 15 | 0 | 0 | |||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,723 | 1,812 | 1,885 | 1,758 | 1,463 | 1,507 | 1,502 | 1,370 | 7,178 | 5,842 | 4,396 | |||||||||||||||||||||||
Long lived assets, net | 3,107 | 3,219 | 3,107 | 3,219 | 3,110 | |||||||||||||||||||||||||||||
United States [Member]
|
||||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 3,662 | 2,826 | 2,189 | |||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 3,662 | 2,826 | 2,189 | |||||||||||||||||||||||||||||||
Long lived assets, net | 2,687 | [1] | 2,790 | [1] | 2,687 | [1] | 2,790 | [1] | 2,789 | [1] | ||||||||||||||||||||||||
All Foreign Countries [Member]
|
||||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 3,516 | 3,016 | 2,207 | |||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 3,516 | 3,016 | 2,207 | |||||||||||||||||||||||||||||||
Long lived assets, net | 420 | 429 | 420 | 429 | 321 | |||||||||||||||||||||||||||||
All Operating Segments [Member]
|
||||||||||||||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 1,071 | 928 | 563 | |||||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 4,959 | 4,406 | 4,959 | 4,406 | 4,168 | |||||||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 259 | 236 | 225 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 425 | 212 | 245 | |||||||||||||||||||||||||||||||
CASPI [Member]
|
||||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,844 | 1,574 | 1,217 | |||||||||||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 331 | [2] | 293 | [2] | 221 | [2] | ||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 1,373 | [3] | 1,280 | [3] | 1,373 | [3] | 1,280 | [3] | 1,113 | [3] | ||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 60 | 56 | 56 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 74 | 39 | 42 | |||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net related to severance charges | 6 | 3 | ||||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,844 | 1,574 | 1,217 | |||||||||||||||||||||||||||||||
Fibers [Member]
|
||||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,279 | 1,142 | 1,032 | |||||||||||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 346 | [4] | 323 | [4] | 292 | [4] | ||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 921 | [3] | 874 | [3] | 921 | [3] | 874 | [3] | 726 | [3] | ||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 65 | 59 | 59 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 51 | 39 | 29 | |||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net related to severance charges | 3 | 4 | ||||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,279 | 1,142 | 1,032 | |||||||||||||||||||||||||||||||
Performance Polymers [Member]
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Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 0 | [1],[3] | 0 | [1],[3] | 0 | [1],[3] | 0 | [1],[3] | 575 | [1],[3] | ||||||||||||||||||||||||
PCI [Member]
|
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Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 2,860 | 2,083 | 1,398 | |||||||||||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 289 | [5] | 224 | [5] | 41 | [5] | ||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 1,471 | [3] | 1,235 | [3] | 1,471 | [3] | 1,235 | [3] | 844 | [3] | ||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 72 | 60 | 57 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 107 | 61 | 49 | |||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net related to severance charges | 7 | 7 | 6 | |||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 2,860 | 2,083 | 1,398 | |||||||||||||||||||||||||||||||
Specialty Plastics [Member]
|
||||||||||||||||||||||||||||||||||
Sales [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,195 | 1,043 | 749 | |||||||||||||||||||||||||||||||
Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | 105 | [6] | 88 | [6] | 9 | [6] | ||||||||||||||||||||||||||||
Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 1,194 | [3] | 1,017 | [3] | 1,194 | [3] | 1,017 | [3] | 910 | [3] | ||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 62 | 61 | 53 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 193 | 73 | 125 | |||||||||||||||||||||||||||||||
Asset impairments and restructuring charges, net related to severance charges | 5 | 4 | ||||||||||||||||||||||||||||||||
Geographic Information [Abstract] | ||||||||||||||||||||||||||||||||||
Sales | 1,195 | 1,043 | 749 | |||||||||||||||||||||||||||||||
Other Segment [Member]
|
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Operating Earnings (loss) [Abstract] | ||||||||||||||||||||||||||||||||||
Operating Earnings (loss) | (50) | [7] | (66) | [7] | (218) | [7] | ||||||||||||||||||||||||||||
Depreciation Expense by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Depreciation expense by Segment | 2 | 2 | 2 | |||||||||||||||||||||||||||||||
Capital Expenditures by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Capital expenditure by Segment | 32 | [8] | 31 | [8] | 65 | [8] | ||||||||||||||||||||||||||||
Corporate Assets [Member]
|
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Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | 1,225 | [1],[9] | 966 | [3],[9] | 1,225 | [1],[9] | 966 | [3],[9] | 1,347 | [3],[9] | ||||||||||||||||||||||||
Assets Held-for-sale [Member]
|
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Assets by Segment [Abstract] | ||||||||||||||||||||||||||||||||||
Assets by Segment | $ 0 | [1],[3] | $ 614 | [1],[3] | $ 0 | [1],[3] | $ 614 | [1],[3] | $ 0 | [1],[3] | ||||||||||||||||||||||||
|
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in carrying amount of goodwill | Changes in the carrying amount of goodwill follow:
|
RESERVE ROLLFORWARDS (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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RESERVE ROLLFORWARDS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts
|
RETIREMENT PLANS (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2010
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Dec. 31, 2011
Defined Contribution Eastman Investment Plan and Employee Stock Ownership Plan [Member]
|
Dec. 31, 2010
Defined Contribution Eastman Investment Plan and Employee Stock Ownership Plan [Member]
|
Dec. 31, 2009
Defined Contribution Eastman Investment Plan and Employee Stock Ownership Plan [Member]
|
Jul. 31, 2006
Defined Contribution Eastman Investment Plan and Employee Stock Ownership Plan [Member]
|
Dec. 31, 2011
Pension Plans [Member]
|
Dec. 31, 2010
Pension Plans [Member]
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Dec. 31, 2009
Pension Plans [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Level 1 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Level 2 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Level 2 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Cash [Member]
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Dec. 31, 2010
Pension Plans [Member]
Cash [Member]
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Dec. 31, 2011
Pension Plans [Member]
Cash [Member]
Level 1 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Cash [Member]
Level 1 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Cash [Member]
Level 2 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Cash [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Cash [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Cash [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
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Dec. 31, 2010
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
|
Dec. 31, 2011
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 1 [Member]
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Dec. 31, 2010
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
US Treasury Securities [Member]
Debt [Member]
Level 3 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Private Equity Securities [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Private Equity Securities [Member]
Level 3 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Real Estate [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Real Estate [Member]
Level 3 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Other Alternative Investments [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Other Alternative Investments [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
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Dec. 31, 2010
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
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Dec. 31, 2011
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 1 [Member]
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Dec. 31, 2010
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 3 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Domestic [Member]
Public Equity Funds [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
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Dec. 31, 2010
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
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Dec. 31, 2011
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 1 [Member]
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Dec. 31, 2010
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 2 [Member]
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Dec. 31, 2011
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 3 [Member]
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Dec. 31, 2010
Pension Plans [Member]
International [Member]
Public Equity Funds [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
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Dec. 31, 2010
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 1 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 3 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income (US) [Member]
Debt [Member]
Level 3 [Member]
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Dec. 31, 2011
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
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Dec. 31, 2010
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 1 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 3 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Fixed Income International [Member]
Debt [Member]
Level 3 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 1 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 3 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
Private Equity, Real Estate Funds, and Other Alternative Investments [Member]
Level 3 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
|
Dec. 31, 2010
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
|
Dec. 31, 2011
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 1 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 1 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 2 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 2 [Member]
|
Dec. 31, 2011
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 3 [Member]
|
Dec. 31, 2010
Pension Plans [Member]
International Commodities Funds [Member]
Public Equity Funds [Member]
Level 3 [Member]
|
Dec. 31, 2012
Pension Plans [Member]
U.S. Plans [Member]
|
Dec. 31, 2011
Pension Plans [Member]
U.S. Plans [Member]
|
Dec. 31, 2010
Pension Plans [Member]
U.S. Plans [Member]
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Dec. 31, 2012
Pension Plans [Member]
Non U.S. Plans [Member]
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Dec. 31, 2011
Pension Plans [Member]
Non U.S. Plans [Member]
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Dec. 31, 2010
Pension Plans [Member]
Non U.S. Plans [Member]
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Dec. 31, 2011
Post Retirement Welfare Plans [Member]
|
Dec. 31, 2010
Post Retirement Welfare Plans [Member]
|
Dec. 31, 2009
Post Retirement Welfare Plans [Member]
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||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anticipated percentage of employer contribution to the plan for all U.S. employees (in hundredths) | 5.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocated shares in the ESOP (in shares) | 2,525,114 | 2,763,982 | 3,017,424 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of company match of the first seven percent of employee's compensation contributed to the plan (in hundredths) | 50.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of an employee's remuneration that is being matched by the employer (in hundredths) | 7.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charges for domestic contributions to the Defined Contribution plans | $ 38 | $ 35 | $ 34 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in projected benefit obligation [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit obligation, beginning of year | 1,621 | 1,508 | 827 | 777 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service cost | 45 | 44 | 42 | 9 | 9 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest cost | 87 | 85 | 87 | 44 | 44 | 45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actuarial loss | 57 | 75 | 36 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Curtailment | 0 | 6 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (7) | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | 142 | 0 | 6 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan amendments and other | (2) | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan participants' contributions | 1 | 0 | 14 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of currency exchange | (2) | (16) | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits paid | (154) | (81) | (55) | (55) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit obligation, end of year | 1,788 | 1,621 | 1,508 | 881 | 827 | 777 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in plan assets [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets, beginning of year | 1,178 | 1,087 | 108 | 16 | 795 | 818 | 9 | 16 | 9 | 16 | 0 | 0 | 0 | 0 | 36 | 32 | 0 | 0 | 36 | 32 | 0 | 0 | 407 | 408 | 32 | 0 | 375 | 408 | 0 | 0 | 199 | 216 | 12 | 0 | 187 | 216 | 0 | 0 | 80 | 28 | 50 | 0 | 30 | 28 | 0 | 0 | 155 | 125 | 0 | 0 | 155 | 125 | 0 | 0 | 387 | 353 | 0 | 0 | 11 | 9 | 376 | 344 | 6 | 0 | 5 | 0 | 1 | 0 | 0 | 0 | 1,003 | 925 | 276 | 253 | 52 | 51 | ||||||||||||||||||||||||||||
Actual return on plan assets | 45 | 133 | 1 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of currency exchange | (3) | (14) | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company contributions | 125 | 53 | 36 | 39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for third party contributions | 0 | 0 | 7 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan participants' contributions | 1 | 0 | 14 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits paid | (154) | (81) | (55) | (55) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan, Purchases, Sales, and Settlements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (7) | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | 94 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets, end of year | 1,279 | 1,178 | 1,087 | 108 | 16 | 795 | 818 | 9 | 16 | 9 | 16 | 0 | 0 | 0 | 0 | 36 | 32 | 0 | 0 | 36 | 32 | 0 | 0 | 407 | 408 | 32 | 0 | 375 | 408 | 0 | 0 | 199 | 216 | 12 | 0 | 187 | 216 | 0 | 0 | 80 | 28 | 50 | 0 | 30 | 28 | 0 | 0 | 155 | 125 | 0 | 0 | 155 | 125 | 0 | 0 | 387 | 353 | 0 | 0 | 11 | 9 | 376 | 344 | 6 | 0 | 5 | 0 | 1 | 0 | 0 | 0 | 1,003 | 925 | 276 | 253 | 55 | 52 | 51 | ||||||||||||||||||||||||||
Defined Benefit Plan, Funded Status Of Plan [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Funded status at end of year | (509) | (443) | (826) | (775) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts recognized in the Consolidated Statements of Financial Position consist of [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other noncurrent asset | 24 | 9 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current liability | 3 | 8 | 42 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent liability | 530 | 444 | 784 | 735 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net amount recognized, end of year | (509) | (443) | (826) | (775) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive income consist of [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net actuarial loss | 847 | 780 | 246 | 229 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior service credit | (26) | (36) | (99) | (125) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | 821 | 744 | 147 | 104 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated benefit obligation basis for all defined benefit pension plans | 1,700 | 1,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension curtailment related to discontinued operations | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated net actuarial loss that will be amortized from accumulated other comprehensive income into net periodic cost in next fiscal year | 67 | 17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic cost in next fiscal year | 4 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service cost | 45 | 44 | 42 | 9 | 9 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest cost | 87 | 85 | 87 | 44 | 44 | 45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected return on assets | (111) | (104) | (100) | (2) | (3) | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Curtailment (gain)/ loss | 0 | 4 | [1] | 0 | (5) | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement charge | 3 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of: [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior service credit | (13) | (16) | (16) | (21) | (23) | (23) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actuarial loss | 55 | 43 | 32 | 14 | 13 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic benefit cost | 66 | 56 | 45 | 39 | 40 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Curtailments and Settlements | 3 | 4 | [1] | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current year actuarial loss | (123) | (52) | (96) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current year prior service credit | 2 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of: [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior service credit | (13) | (16) | (16) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actuarial loss | 55 | 43 | 32 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of currency exchange | (1) | 2 | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | (77) | (19) | (83) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The increase or decrease in health care cost that would have no material impact on health care cost (in hundredths) | 1.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets (in hundredths) | 8.44% | 8.75% | 6.44% | 6.40% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | 1,279 | 1,178 | 1,087 | 108 | 16 | 795 | 818 | 9 | 16 | 9 | 16 | 0 | 0 | 0 | 0 | 36 | 32 | 0 | 0 | 36 | 32 | 0 | 0 | 407 | 408 | 32 | 0 | 375 | 408 | 0 | 0 | 199 | 216 | 12 | 0 | 187 | 216 | 0 | 0 | 80 | 28 | 50 | 0 | 30 | 28 | 0 | 0 | 155 | 125 | 0 | 0 | 155 | 125 | 0 | 0 | 387 | 353 | 0 | 0 | 11 | 9 | 376 | 344 | 6 | 0 | 5 | 0 | 1 | 0 | 0 | 0 | 1,003 | 925 | 276 | 253 | 55 | 52 | 51 | ||||||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations for years ended [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount rate (in hundredths) | 4.59% | 5.33% | 5.73% | 4.96% | 5.33% | 5.76% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rate of compensation increase (in hundredths) | 3.55% | 3.60% | 3.53% | 3.50% | 3.50% | 3.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health care cost trend [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial (in hundredths) | 8.00% | 8.00% | 8.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Decreasing to ultimate trend of (in hundredths) | 5.00% | 5.00% | 5.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In year | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic cost for years ended [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount rate ( in hundredths) | 5.33% | 5.73% | 6.05% | 5.33% | 5.76% | 6.08% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected return on assets (in hundredths) | 8.24% | 8.25% | 8.47% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rate of compensation increase (in hundredths) | 3.60% | 3.53% | 3.57% | 3.50% | 3.50% | 3.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health Care Cost Trend [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial (in hundredths) | 8.00% | 8.00% | 8.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Decreasing to ultimate trend of (in hundredths) | 5.00% | 5.00% | 5.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
in year | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets measured with unobservable input (level 3) [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | 344 | 304 | 129 | 107 | 106 | 92 | 109 | 105 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | 62 | 41 | 30 | 20 | 7 | 2 | 25 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains/(losses) | 47 | 24 | 23 | 19 | 9 | (9) | 15 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases, contributions, and other | 47 | 57 | 28 | 23 | 10 | 25 | 9 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | 376 | 344 | 150 | 129 | 118 | 106 | 108 | 109 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset category [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (in hundredths) | 52.00% | 57.00% | 32.00% | 38.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities (in hundredths) | 13.00% | 8.00% | 57.00% | 49.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate (in hundredths) | 11.00% | 11.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other investments (in hundredths) | 24.00% | [2] | 24.00% | [2] | 11.00% | [2] | 13.00% | [2] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total (in hundredths) | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. and Non-US Pension Plan Target Allocation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (in hundredths) | 57.00% | 32.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities (in hundredths) | 17.00% | 52.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate (in hundredths) | 8.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other investments (in hundredths) | 18.00% | [2] | 16.00% | [2] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total (in hundredths) | 100.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of defined benefit pension plan funded by the company | 102 | 35 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated future benefits payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 130 | 9 | 47 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 136 | 9 | 48 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 137 | 10 | 49 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 141 | 10 | 51 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 140 | 11 | 53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017-2021 | $ 688 | $ 57 | $ 290 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
PROVISION FOR INCOME TAXES (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Earnings from continuing operations before income taxes [Abstract] | |||
United States | $ 816 | $ 507 | $ 193 |
Outside the United States | 148 | 129 | 61 |
Earnings from continuing operations before income taxes | 964 | 636 | 254 |
United States [Abstract] | |||
Current | 165 | 115 | (82) |
Deferred | 100 | 44 | 156 |
Outside United States [Abstract] | |||
Current | 20 | 29 | 17 |
Deferred | 12 | 9 | 1 |
State and other [Abstract] | |||
Current | 16 | 18 | (11) |
Deferred | (6) | (4) | 19 |
Provision for income taxes from continuing operations | 307 | 211 | 100 |
Deferred tax charge (benefit) recorded in stockholders' equity [Abstract] | |||
Unrecognized losses and prior service credits for benefit plans | (48) | (28) | (47) |
Cumulative translation adjustment | 0 | 3 | 2 |
Unrealized gains (losses) on cash flow hedges | (12) | (6) | 4 |
Other comprehensive income | (60) | (31) | (41) |
Income tax expense (benefit) included in consolidated financial statement [Abstract] | |||
Continuing operations | 307 | 211 | 100 |
Discontinued operations | 27 | 13 | (10) |
Other comprehensive income | (60) | (31) | (41) |
Total | 274 | 193 | 49 |
Reconciliation income tax rate [Abstract] | |||
Amount computed using the statutory rate | 337 | 224 | 89 |
State income taxes, net | 5 | 9 | 5 |
Foreign rate variance | (20) | (11) | (2) |
Domestic manufacturing deduction | 17 | 14 | (5) |
Change in reserves for tax contingencies | 0 | 0 | (5) |
General business credits | 5 | 4 | (7) |
Other | 7 | 7 | 1 |
Provision for income taxes from continuing operations | 307 | 211 | 100 |
Effective tax rate for the period (in hundredths) | 32.00% | 33.00% | 39.00% |
Tax charge associated with nondeductible early distribution under the executive deferred compensation plan | 9 | ||
Tax charge (benefit) associated with the investment tax credits | (8) | 11 | |
Tax charge associated with a change in accounting method | 7 | ||
Tax benefit from the reversal of tax reserves due to the expiration of the relevant statute of limitations | 5 | ||
Deferred tax assets [Abstract] | |||
Post-employment obligations | 562 | 512 | |
Net operating loss carry forwards | 87 | 61 | |
Other | 27 | 22 | |
Total deferred tax assets | 676 | 595 | |
Less valuation allowance | (42) | (48) | |
Deferred tax assets less valuation allowance | 634 | 547 | |
Deferred tax liabilities [Abstract] | |||
Depreciation | (793) | (781) | |
Inventory reserves | (44) | (37) | |
Total deferred tax liabilities | 837 | 818 | |
Net deferred tax liabilities | (203) | (271) | |
As recorded in the Consolidated Statements of Financial Position [Abstract] | |||
Other current assets | 2 | 2 | |
Other noncurrent assets | 18 | 24 | |
Payables and other current liabilities | (13) | (13) | |
Deferred income tax liabilities | (210) | (284) | |
Net deferred tax liabilities | (203) | (271) | |
Unremitted earnings of foreign subsidiaries | 436 | ||
Due to and from tax authorities [Abstract] | |||
Miscellaneous receivables | 5 | 45 | |
Payables and other current liabilities | 8 | 7 | |
Other long-term liabilities | 10 | 9 | |
Total income taxes payable | 18 | 16 | |
Reconciliation of beginning and ending amounts of unrecognized tax benefits [Roll Forward] | |||
Lapse of statute of limitations | (5) | ||
Foreign Country [Member]
|
|||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance on deferred tax asset resulting from operating loss carryforward | 26 | ||
Foreign net operating loss carryforwards | 205 | ||
Foreign net operating loss carryforwards with expiration date | 55 | ||
Expiring period of foreign net operating loss carryforwards, minimum (in years) | 3 | ||
Expiring period of foreign net operating loss carryforwards, maximum (in years) | 15 | ||
Foreign net operating loss carryforwards without expiration date | 150 | ||
United States [Member]
|
|||
Reconciliation income tax rate [Abstract] | |||
Tax benefit from the reversal of tax reserves due to the expiration of the relevant statute of limitations | 0 | (2) | (5) |
Reconciliation of beginning and ending amounts of unrecognized tax benefits [Roll Forward] | |||
Beginning Balance | 9 | 6 | 11 |
Additions based on tax positions related to current year | 1 | 5 | 0 |
Lapse of statute of limitations | 0 | 2 | 5 |
Ending Balance | 10 | 9 | 6 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 10 | 9 | 6 |
Accrued interest, net of tax related to unrecognized tax benefits | $ 1 | $ 1 | $ 1 |
OTHER CHARGES (INCOME), NET (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
|
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OTHER CHARGES (INCOME), NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Charges (Income) |
|
INVENTORIES
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
|
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INVENTORIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES |
Inventories valued on the LIFO method were approximately 70 percent of total inventories for both 2011 and 2010. |
BORROWINGS (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Debt Instrument [Line Items] | |||
Borrowings due within one year | $ (153) | $ (6) | |
Long-term borrowings, net of current portion | 1,445 | 1,598 | |
Long-term Debt Issuance [Abstract] | |||
Debt Instrument, Issuance Date | 2010/12/10 | ||
Proceeds from borrowings | 0 | 496 | 248 |
Repayment of outstanding long-term debt | 500 | ||
Fair Value of Borrowings [Abstract] | |||
Long-term Borrowings, Recorded Amount | 1,445 | 1,598 | |
Long-term Borrowings, Fair Value | 1,656 | 1,688 | |
Credit Facility [Member]
|
|||
Credit Facilities [Abstract] | |||
Credit Facility, Description | In December 2011, the Company entered into a $750 million revolving credit agreement (the "Credit Facility") expiring December 2016. The Credit Facility replaces, and has terms substantially similar to, the $700 million revolving credit agreement entered into in April 2006 (the "Prior Credit Facility") which was terminated concurrently with the entry into the Credit Facility. 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. In addition, the Credit Facility contains a number of customary covenants and events of default, including the maintenance of certain financial ratios. The Company was in compliance with all such covenants for all periods presented. At December 31, 2011, the Company had no outstanding borrowings under the Credit Facility, and at December 31, 2010, the Company had no outstanding borrowings under the Prior Credit Facility. | ||
Credit Facility, Borrowing Capacity | 750 | 700 | |
Credit Facility, Expiration | 2016 | ||
Credit Facility Covenant Compliance | The Company was in compliance with all such covenants for all periods presented. | ||
A/R Facility [Member]
|
|||
Credit Facilities [Abstract] | |||
Credit Facility, Description | At December 31, 2011, the Company also had a $200 million line of credit under its annually renewable accounts receivable securitization agreement ("A/R Facility"). The A/R Facility was renewed in July 2011. Borrowings under the A/R Facility are subject to interest rates based on a spread over the lender's borrowing costs, and the Company pays a fee to maintain availability of the A/R Facility. In addition, the A/R Facility contains a number of customary covenants and events of default, as well as the requirement to maintain compliance with certain financial ratios. The Company was in compliance with all such covenants for all periods presented. At December 31, 2011 and December 31, 2010, the Company had no outstanding borrowings under the A/R Facility. Refer to Note 14, "Commitments", for further details regarding the A/R Facility. | ||
Credit Facility, Borrowing Capacity | 200 | ||
7% notes due 2012 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 7.00% | ||
Maturity Date | 2012 | ||
Long-term Debt | 147 | 151 | |
3% debentures due 2015 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 3.00% | ||
Maturity Date | 2015 | ||
Long-term Debt | 250 | 250 | |
6.30% notes due 2018 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 6.30% | ||
Maturity Date | 2018 | ||
Long-term Debt | 176 | 178 | |
5.5% notes due 2019 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 5.50% | ||
Maturity Date | 2019 | ||
Long-term Debt | 250 | 250 | |
4.5% debentures due 2021 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 4.50% | ||
Maturity Date | 2021 | ||
Long-term Debt | 250 | 250 | |
7 1/4% debentures due 2024 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 7.25% | ||
Maturity Date | 2024 | ||
Long-term Debt | 243 | 243 | |
7 5/8% debentures due 2024 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 7.625% | ||
Maturity Date | 2024 | ||
Long-term Debt | 54 | 54 | |
7.60% debentures due 2027 [Member]
|
|||
Debt Instrument [Line Items] | |||
Stated Interest Rate (in hundredths) | 7.60% | ||
Maturity Date | 2027 | ||
Long-term Debt | 222 | 222 | |
Credit Facility Borrowings [Member]
|
|||
Debt Instrument [Line Items] | |||
Long-term Debt | 0 | 0 | |
Other debt [Member]
|
|||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 6 | $ 6 |