Delaware | 1-12626 | 62-1539359 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
200 South Wilcox Drive, Kingsport, TN | 37662 | |
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EASTMAN CHEMICAL COMPANY - EMN |
EASTMAN CHEMICAL COMPANY - EMN |
EASTMAN CHEMICAL COMPANY - EMN |
Eastman Chemical Company | ||
By: | /s/ Scott V. King | |
Scott V. King | ||
Vice President, Corporate Controller and Chief Accounting Officer | ||
Date: February 1, 2018 |
(In millions, except per share amounts) | 4Q2017 | 4Q2016 | FY2017 | FY2016 |
Sales revenue | $2,362 | $2,188 | $9,549 | $9,008 |
Operating earnings | $268 | $252 | $1,545 | $1,383 |
Adjusted operating earnings* | $354 | $336 | $1,631 | $1,534 |
Earnings per diluted share | $4.01 | $0.79 | $10.09 | $5.75 |
Adjusted earnings per diluted share* | $1.62 | $1.51 | $7.61 | $6.76 |
Net cash provided by operating activities | $646 | $390 | $1,657 | $1,385 |
Adjusted net cash provided by operating activities* | $646 | $540 | $1,657 | $1,535 |
Adjusted free cash flow* | $435 | $289 | $1,008 | $909 |
Item | Page | |
Table 1 – Statements of Earnings | |||||||||||||||
Fourth Quarter | Twelve Months | ||||||||||||||
(Dollars in millions, except per share amounts; unaudited) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Sales | $ | 2,362 | $ | 2,188 | $ | 9,549 | $ | 9,008 | |||||||
Cost of sales (1)(2) | 1,866 | 1,698 | 7,086 | 6,658 | |||||||||||
Gross profit | 496 | 490 | 2,463 | 2,350 | |||||||||||
Selling, general and administrative expenses (1) | 171 | 165 | 696 | 703 | |||||||||||
Research and development expenses (1) | 49 | 56 | 214 | 219 | |||||||||||
Asset impairments and restructuring charges, net | 8 | 17 | 8 | 45 | |||||||||||
Operating earnings | 268 | 252 | 1,545 | 1,383 | |||||||||||
Net interest expense | 59 | 64 | 241 | 255 | |||||||||||
Early debt extinguishment and other related costs | — | 76 | — | 85 | |||||||||||
Other (income) charges, net | 10 | (1 | ) | 2 | (6 | ) | |||||||||
Earnings before income taxes | 199 | 113 | 1,302 | 1,049 | |||||||||||
(Benefit from) provision for income taxes (3) | (383 | ) | (5 | ) | (177 | ) | 190 | ||||||||
Net earnings | 582 | 118 | 1,479 | 859 | |||||||||||
Less: net earnings attributable to noncontrolling interest | 1 | 2 | 5 | 5 | |||||||||||
Net earnings attributable to Eastman | $ | 581 | $ | 116 | $ | 1,474 | $ | 854 | |||||||
Basic earnings per share attributable to Eastman | $ | 4.05 | $ | 0.79 | $ | 10.18 | $ | 5.80 | |||||||
Diluted earnings per share attributable to Eastman | $ | 4.01 | $ | 0.79 | $ | 10.09 | $ | 5.75 | |||||||
Shares (in millions) outstanding at end of period | 143.0 | 146.5 | 143.0 | 146.5 | |||||||||||
Shares (in millions) used for earnings per share calculation | |||||||||||||||
Basic | 143.3 | 146.5 | 144.8 | 147.3 | |||||||||||
Diluted | 144.8 | 147.5 | 146.1 | 148.4 |
(1) | Fourth quarter and twelve months 2017 and 2016 included an annual mark-to-market pension and other postretirement benefit plans valuation gain or loss. See Tables 3A and 4. |
(2) | Fourth quarter and twelve months 2017 includes $112 million net costs of the disruption, repairs and reconstruction of the coal gasification facility and restart of operations resulting from the October 4, 2017 incident. See "Coal Gasification Incident" and Tables 3A and 4. |
(3) | Fourth quarter and twelve months 2017 includes a $421 million net tax benefit as a result of recent tax law changes, primarily from the Tax Cuts and Jobs Act of 2017, subject to adjustment in future periods for final assessment. See "Cash Flow and Tax Items" and Table 4. |
Table 2A – Segment Sales Information | ||||||||||||||||
Fourth Quarter | Twelve Months | |||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales by Segment | ||||||||||||||||
Additives & Functional Products | $ | 854 | $ | 720 | $ | 3,343 | $ | 2,979 | ||||||||
Advanced Materials | 635 | 584 | 2,572 | 2,457 | ||||||||||||
Chemical Intermediates | 659 | 643 | 2,728 | 2,534 | ||||||||||||
Fibers | 200 | 230 | 852 | 992 | ||||||||||||
Total Sales by Segment | 2,348 | 2,177 | 9,495 | 8,962 | ||||||||||||
Other | 14 | 11 | 54 | 46 | ||||||||||||
Total Eastman Chemical Company | $ | 2,362 | $ | 2,188 | $ | 9,549 | $ | 9,008 |
Table 2B – Sales Revenue Change | ||||||||
Fourth Quarter 2017 Compared to Fourth Quarter 2016 | ||||||||
Change in Sales Revenue Due To | ||||||||
(Unaudited) | Revenue % Change | Volume / Product Mix Effect | Price Effect | Exchange Rate Effect | ||||
Additives & Functional Products | 19 | % | 14 | % | 2 | % | 3 | % |
Advanced Materials | 9 | % | 6 | % | 1 | % | 2 | % |
Chemical Intermediates | 2 | % | (8) | % | 10 | % | — | % |
Fibers | (13) | % | (6) | % | (7) | % | — | % |
Total Eastman Chemical Company | 8 | % | 4 | % | 3 | % | 1 | % |
Twelve Months 2017 Compared to Twelve Months 2016 | ||||||||
Change in Sales Revenue Due To | ||||||||
(Unaudited) | Revenue % Change | Volume / Product Mix Effect | Price Effect | Exchange Rate Effect | ||||
Additives & Functional Products | 12 | % | 10 | % | 2 | % | — | % |
Advanced Materials | 5 | % | 5 | % | — | % | — | % |
Chemical Intermediates | 8 | % | (2) | % | 10 | % | — | % |
Fibers | (14) | % | (5) | % | (9) | % | — | % |
Total Eastman Chemical Company | 6 | % | 4 | % | 2 | % | — | % |
Table 2C – Sales by Customer Location | ||||||||||||||||
Fourth Quarter | Twelve Months | |||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales by Customer Location | ||||||||||||||||
United States and Canada | $ | 978 | $ | 961 | $ | 4,189 | $ | 4,025 | ||||||||
Asia Pacific | 601 | 562 | 2,306 | 2,163 | ||||||||||||
Europe, Middle East, and Africa | 657 | 545 | 2,539 | 2,305 | ||||||||||||
Latin America | 126 | 120 | 515 | 515 | ||||||||||||
Total Eastman Chemical Company | $ | 2,362 | $ | 2,188 | $ | 9,549 | $ | 9,008 |
Table 3A - Segment, Other, and Company Non-GAAP Operating Earnings (Loss) Reconciliations(1) | ||||||||||||||||
Fourth Quarter | Twelve Months | |||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Additives & Functional Products | ||||||||||||||||
Operating earnings | $ | 149 | $ | 120 | $ | 646 | $ | 601 | ||||||||
Asset impairments and restructuring charges, net(2) | 3 | 12 | 3 | 10 | ||||||||||||
Net costs resulting from coal gasification incident(3) | 8 | — | 8 | — | ||||||||||||
Excluding non-core and unusual items | 160 | 132 | 657 | 611 | ||||||||||||
Advanced Materials | ||||||||||||||||
Operating earnings | 83 | 90 | 482 | 471 | ||||||||||||
Net costs resulting from coal gasification incident(3) | 11 | — | 11 | — | ||||||||||||
Excluding unusual item | 94 | 90 | 493 | 471 | ||||||||||||
Chemical Intermediates | ||||||||||||||||
Operating earnings | 9 | 50 | 255 | 171 | ||||||||||||
Net costs resulting from coal gasification incident(3) | 44 | — | 44 | — | ||||||||||||
Excluding unusual item | 53 | 50 | 299 | 171 | ||||||||||||
Fibers | ||||||||||||||||
Operating earnings | 2 | 73 | 175 | 310 | ||||||||||||
Net costs resulting from coal gasification incident(3) | 49 | — | 49 | — | ||||||||||||
Excluding unusual item | 51 | 73 | 224 | 310 | ||||||||||||
Other | ||||||||||||||||
Operating earnings (loss) | 25 | (81 | ) | (13 | ) | (170 | ) | |||||||||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net | (34 | ) | 67 | (34 | ) | 97 | ||||||||||
Asset impairments and restructuring charges, net(4) | 5 | 5 | 5 | 35 | ||||||||||||
Acquisition integration and transaction costs | — | — | — | 9 | ||||||||||||
Excluding non-core items | (4 | ) | (9 | ) | (42 | ) | (29 | ) | ||||||||
Total Eastman Chemical Company | ||||||||||||||||
Operating earnings | 268 | 252 | 1,545 | 1,383 | ||||||||||||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net | (34 | ) | 67 | (34 | ) | 97 | ||||||||||
Acquisition integration and transaction costs | — | — | — | 9 | ||||||||||||
Asset impairments and restructuring charges, net | 8 | 17 | 8 | 45 | ||||||||||||
Net costs resulting from coal gasification incident | 112 | — | 112 | — | ||||||||||||
Total operating earnings excluding non-core and unusual items | $ | 354 | $ | 336 | $ | 1,631 | $ | 1,534 | ||||||||
Company Non-GAAP Operating Earnings Reconciliations by Line Items | ||||||||||||||||
Operating earnings | $ | 268 | $ | 252 | $ | 1,545 | $ | 1,383 | ||||||||
Costs of sales | 92 | 60 | 92 | 78 | ||||||||||||
Selling, general and administrative expenses | (11 | ) | 2 | (11 | ) | 23 | ||||||||||
Research and development expenses | (3 | ) | 5 | (3 | ) | 5 | ||||||||||
Asset impairments and restructuring charges, net | 8 | 17 | 8 | 45 | ||||||||||||
Total operating earnings excluding non-core and unusual items | $ | 354 | $ | 336 | $ | 1,631 | $ | 1,534 |
(1) | See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for 2016 for description of non-core items. |
(2) | Fourth quarter and twelve months 2017 is $3 million asset impairments and restructuring charges, including severance, in the Additives and Functional Products ("AFP") segment for the closure of a facility in China. |
(3) | Fourth quarter and twelve months 2017 is net costs of disruption, repairs and reconstruction of the coal gasification facility and restart of operations resulting from the October 4, 2017 incident. See "Coal Gasification Incident". |
(4) | Fourth quarter and twelve months 2017 is restructuring charges of approximately $5 million for severance. |
Table 3B - Segment, Other, and Company Non-GAAP Operating Earnings (Loss) (1) | ||||||||||||||||
Fourth Quarter | Twelve Months | |||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Additives & Functional Products | $ | 160 | $ | 132 | $ | 657 | $ | 611 | ||||||||
Advanced Materials | 94 | 90 | 493 | 471 | ||||||||||||
Chemical Intermediates | 53 | 50 | 299 | 171 | ||||||||||||
Fibers | 51 | 73 | 224 | 310 | ||||||||||||
Total segment operating earnings excluding non-core and unusual items | 358 | 345 | 1,673 | 1,563 | ||||||||||||
Total Other | (4 | ) | (9 | ) | (42 | ) | (29 | ) | ||||||||
Total operating earnings excluding non-core and unusual items | $ | 354 | $ | 336 | $ | 1,631 | $ | 1,534 |
(1) | For identification of excluded non-core and unusual items and reconciliations to GAAP operating earnings, see Table 3A. |
Fourth Quarter 2017 | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts, unaudited) | As Reported (GAAP) | Mark-to-Market Pension and Other Postretirement Benefit Plans (Gain) Loss | Asset Impairments and Restructuring Charges, Net (2) | Other Non-core Items (3) | Costs Resulting from Coal Gasification Incident (4) | Reconciliation to Effective Tax Rate and Provision for Income Taxes (5) | Net Impact of Tax Law Changes (6) | Non-GAAP (Excluding Non-core and Unusual Items) | |||||||||||||||||
Operating earnings | $ | 268 | (34 | ) | 8 | — | 112 | — | — | $ | 354 | ||||||||||||||
Other (income) charges, net | $ | 10 | — | — | (9 | ) | — | — | — | $ | 1 | ||||||||||||||
Earnings before income taxes | $ | 199 | (34 | ) | 8 | 9 | 112 | — | — | $ | 294 | ||||||||||||||
(Benefit from) provision for income taxes (1) | $ | (383 | ) | (12 | ) | 11 | 4 | 32 | (15 | ) | 421 | $ | 58 | ||||||||||||
Effective tax rate | (193 | )% | — | — | — | — | — | — | 20 | % | |||||||||||||||
Net earnings attributable to Eastman | $ | 581 | (22 | ) | (3 | ) | 5 | 80 | 15 | (421 | ) | $ | 235 | ||||||||||||
Net earnings attributable to Eastman, per diluted share | $ | 4.01 | (0.15 | ) | (0.01 | ) | 0.03 | 0.55 | 0.10 | (2.91 | ) | $ | 1.62 |
Fourth Quarter 2016 | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts, unaudited) | As Reported (GAAP) | Mark-to-Market Pension and Other Postretirement Benefit Plans (Gain) Loss (7) | Asset Impairments and Restructuring Charges, Net (7) | Other Non-core Items (7) | Costs Resulting from Coal Gasification Incident | Reconciliation to Effective Tax Rate and Provision for Income Taxes | Net Impact of Tax Law Changes | Non-GAAP (Excluding Non-core Items) | |||||||||||||||||
Operating earnings | $ | 252 | 67 | 17 | — | — | — | — | $ | 336 | |||||||||||||||
Early debt extinguishment and other related costs | $ | 76 | — | — | (76 | ) | — | — | — | $ | — | ||||||||||||||
Earnings before income taxes | $ | 113 | 67 | 17 | 76 | — | — | — | $ | 273 | |||||||||||||||
(Benefit from) provision for income taxes (1) | $ | (5 | ) | 23 | 4 | 26 | — | — | $ | 48 | |||||||||||||||
Effective tax rate | (4 | )% | — | — | — | — | — | — | 18 | % | |||||||||||||||
Net earnings attributable to Eastman | $ | 116 | 44 | 13 | 50 | — | — | — | $ | 223 | |||||||||||||||
Net earnings attributable to Eastman, per diluted share | $ | 0.79 | 0.29 | 0.09 | 0.34 | — | — | — | $ | 1.51 |
(1) | (Benefit from) provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible. |
(2) | Fourth quarter 2017 consists of $5 million corporate severance costs and $3 million asset impairments and restructuring charges, including severance, in the AFP segment for the closure of a facility in China. Also includes an $8 million realization of tax benefit associated with previously impaired site. |
(3) | Fourth quarter 2017 is cost of disposition of claims against operations that were discontinued by a subsidiary prior to its acquisition by the Company. |
(4) | See "Coal Gasification Incident" and Note (2) to Table 1. |
(5) | Fourth quarter 2017 is a reconciliation of the adjustments made in interim quarters to reflect the previously forecasted full year effective tax rate. |
(6) | See "Cash Flow and Tax Items" and Note (3) to Table 1. |
(7) | See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for for description of 2016 non-core items. |
Twelve Months 2017 | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts, unaudited) | As Reported (GAAP) | Mark-to-Market Pension and Other Postretirement Benefit Plans (Gain) Loss | Asset Impairments and Restructuring Charges, Net (2) | Acquisition Integration and Transaction Costs | Other Non-core Items (3) | Costs Resulting from Coal Gasification Incident (4) | Net Impact of Tax Law Changes (5) | Non-GAAP (Excluding Non-core and Unusual Items) | |||||||||||||||||
Operating earnings | $ | 1,545 | (34 | ) | 8 | — | — | 112 | — | $ | 1,631 | ||||||||||||||
Other (income) charges, net | $ | 2 | — | — | — | (6 | ) | — | — | $ | (4 | ) | |||||||||||||
Earnings before income taxes | $ | 1,302 | (34 | ) | 8 | — | 6 | 112 | — | $ | 1,394 | ||||||||||||||
(Benefit from) provision for income taxes (1) | $ | (177 | ) | (12 | ) | 11 | — | 2 | 32 | 421 | $ | 277 | |||||||||||||
Effective tax rate | (14 | )% | — | — | — | — | — | — | 20 | % | |||||||||||||||
Net earnings attributable to Eastman | $ | 1,474 | (22 | ) | (3 | ) | — | 4 | 80 | (421 | ) | $ | 1,112 | ||||||||||||
Net earnings attributable to Eastman, per diluted share | $ | 10.09 | (0.15 | ) | (0.02 | ) | — | 0.02 | 0.55 | (2.88 | ) | $ | 7.61 |
Twelve Months 2016 | |||||||||||||||||||||||||
(Dollars in millions, except per share amounts, unaudited) | As Reported (GAAP) | Mark-to-Market Pension and Other Postretirement Benefit Plans (Gain) Loss (6) | Asset Impairments and Restructuring Charges, Net (6) | Acquisition Integration and Transaction Costs (6) | Other Non-core Items (6) | Costs Resulting from Coal Gasification Incident | Net Impact of Tax Law Changes | Non-GAAP (Excluding Non-core Items) | |||||||||||||||||
Operating earnings | $ | 1,383 | 97 | 45 | 9 | — | — | — | $ | 1,534 | |||||||||||||||
Early debt extinguishment and other related costs | $ | 85 | — | — | — | (85 | ) | — | — | $ | — | ||||||||||||||
Other (income) charges, net | $ | (6 | ) | — | — | — | 12 | — | — | $ | 6 | ||||||||||||||
Earnings before income taxes | $ | 1,049 | 97 | 45 | 9 | 73 | — | — | $ | 1,273 | |||||||||||||||
(Benefit from) provision for income taxes (1) | $ | 190 | 29 | 17 | 4 | 25 | — | — | $ | 265 | |||||||||||||||
Effective tax rate | 18 | % | — | — | — | — | — | — | 21 | % | |||||||||||||||
Net earnings attributable to Eastman | $ | 854 | 68 | 28 | 5 | 48 | — | — | $ | 1,003 | |||||||||||||||
Net earnings attributable to Eastman, per diluted share | $ | 5.75 | 0.46 | 0.19 | 0.04 | 0.32 | — | — | $ | 6.76 |
(1) | (Benefit from) provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible. |
(2) | Twelve months 2017 consists of $5 million corporate severance costs and $3 million asset impairments and restructuring charges, including severance, in the AFP segment for the closure of a facility in China. Also includes an $8 million realization of tax benefit associated with previously impaired site. |
(3) | Twelve months 2017 is cost of disposition of claims against operations that were discontinued by a subsidiary prior to its acquisition by the Company partially offset by a $3 million gain from sale of the formulated electronics cleaning solutions business. |
(4) | See "Coal Gasification Incident" and Note (2) to Table 1. |
(5) | See "Cash Flow and Tax Items" and Note (3) to Table 1. |
(6) | See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for description of 2016 non-core items. |
Table 5A – Statements of Cash Flows | |||||||||||||||
Fourth Quarter | Twelve Months | ||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Operating activities | |||||||||||||||
Net earnings | $ | 582 | $ | 118 | $ | 1,479 | $ | 859 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 147 | 144 | 587 | 580 | |||||||||||
Mark-to-market pension and other postretirement benefit plans (gain) loss, net | (34 | ) | 67 | (34 | ) | 97 | |||||||||
Asset impairment charges | 1 | 9 | 1 | 9 | |||||||||||
Early debt extinguishment and other related costs | — | 76 | — | 85 | |||||||||||
Gains from sale of businesses | — | — | (3 | ) | (17 | ) | |||||||||
(Benefit from) provision for deferred income taxes (1) | (466 | ) | 88 | (396 | ) | 177 | |||||||||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||||||||||
(Increase) decrease in trade receivables | 135 | 76 | (53 | ) | (29 | ) | |||||||||
(Increase) decrease in inventories | 72 | 42 | (71 | ) | 54 | ||||||||||
Increase (decrease) in trade payables | 143 | 73 | 123 | 7 | |||||||||||
Pension and other postretirement contributions (in excess of) less than expenses (2) | (34 | ) | (195 | ) | (115 | ) | (329 | ) | |||||||
Variable compensation (in excess of) less than expenses | 53 | 36 | 71 | 17 | |||||||||||
Other items, net | 47 | (144 | ) | 68 | (125 | ) | |||||||||
Net cash provided by operating activities | 646 | 390 | 1,657 | 1,385 | |||||||||||
Investing activities | |||||||||||||||
Additions to properties and equipment | (211 | ) | (251 | ) | (649 | ) | (626 | ) | |||||||
Proceeds from sale of businesses and assets | — | — | 14 | 41 | |||||||||||
Acquisitions, net of cash acquired | — | — | (4 | ) | (26 | ) | |||||||||
Other items, net | (2 | ) | (45 | ) | (4 | ) | (44 | ) | |||||||
Net cash used in investing activities | (213 | ) | (296 | ) | (643 | ) | (655 | ) | |||||||
Financing activities | |||||||||||||||
Net increase (decrease) in commercial paper and other borrowings | (90 | ) | 105 | (19 | ) | (150 | ) | ||||||||
Proceeds from borrowings | 75 | 1,041 | 675 | 1,848 | |||||||||||
Repayment of borrowings | (275 | ) | (1,169 | ) | (1,025 | ) | (2,126 | ) | |||||||
Dividends paid to stockholders | (73 | ) | (68 | ) | (296 | ) | (272 | ) | |||||||
Treasury stock purchases | (75 | ) | (25 | ) | (350 | ) | (145 | ) | |||||||
Dividends paid to noncontrolling interest | (2 | ) | — | (7 | ) | (8 | ) | ||||||||
Proceeds from stock option exercises and other items, net | 2 | (1 | ) | 16 | 15 | ||||||||||
Net cash used in financing activities | (438 | ) | (117 | ) | (1,006 | ) | (838 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 1 | (3 | ) | 2 | (4 | ) | |||||||||
Net change in cash and cash equivalents | (4 | ) | (26 | ) | 10 | (112 | ) | ||||||||
Cash and cash equivalents at beginning of period | 195 | 207 | 181 | 293 | |||||||||||
Cash and cash equivalents at end of period | $ | 191 | $ | 181 | $ | 191 | $ | 181 |
(1) | Fourth quarter and twelve months 2017 includes impact from recent tax law changes. See "Cash Flow and Tax Items" and Note (3) on Table 1. |
(2) | Changes in pension and other postretirement benefit plans assets, liabilities, and accumulated other comprehensive income resulting primarily from net periodic benefit credits and costs, contributions, and currency remeasurement. Fourth quarter and twelve months 2016 included contributions of $150 million and $200 million, respectively, to the Company's U.S. defined benefit pension plans. There were no contributions made in 2017. |
Table 5B – Net Cash Provided By Operating Activities to Free Cash Flow Reconciliations | ||||||||||||||||
Fourth Quarter | Twelve Months | |||||||||||||||
(Dollars in millions, unaudited) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net cash provided by operating activities | $ | 646 | $ | 390 | $ | 1,657 | $ | 1,385 | ||||||||
Add: Accelerated pension contribution | — | 150 | — | 150 | ||||||||||||
Adjusted net cash provided by operating activities | 646 | 540 | 1,657 | 1,535 | ||||||||||||
Less: Additions to properties and equipment | 211 | 251 | 649 | 626 | ||||||||||||
Adjusted free cash flow | $ | 435 | $ | 289 | $ | 1,008 | $ | 909 |
Table 6A – Selected Balance Sheet Items | ||||||||
December 31, | December 31, | |||||||
(Dollars in millions, unaudited) | 2017 | 2016 | ||||||
Cash and cash equivalents | $ | 191 | $ | 181 | ||||
Total borrowings | 6,431 | 6,594 | ||||||
Total Eastman stockholders' equity | 5,494 | 4,532 |
Table 6B – Total Borrowings to Net Debt Reconciliations | ||||||||
December 31, | December 31, | |||||||
(Dollars in millions, unaudited) | 2017 | 2016 | ||||||
Total borrowings | $ | 6,431 | $ | 6,594 | ||||
Less: Cash and cash equivalents | 191 | 181 | ||||||
Net debt | $ | 6,240 | $ | 6,413 |