Eastman Chemical (EMN) 10-Q 26 Apr 10 2010 Q1 Quarterly report Financial data

UNAUDITED CONSOLIDATED STATEMEN

UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED EARNINGS (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED EARNINGS
Sales	$1,564	$1,129
Cost of sales	1,243	950
Gross profit	321	179
Selling, general and administrative expenses	103	94
Research and development expenses	36	34
Asset impairments and restructuring charges, net	0	26
Operating earnings	182	25
Net interest expense	25	19
Other charges (income), net	6	4
Earnings before income taxes	151	2
Provision for income taxes	50	0
Net earnings	101	2
Basic earnings per share
Basic earnings per share	1.39	0.03
Diluted earnings per share
Diluted earnings per share	1.37	0.03
Comprehensive Income
Net Earnings	101	2
Other comprehensive income (loss), net of tax
Change in cumulative translation adjustment	(12)	(10)
Change in unrecognized losses and prior service credits for benefit plans	3	0
Change in unrealized gains on derivative instruments	6	9
Total other comprehensive loss, net of tax	(3)	(1)
Comprehensive income	98	1
Retained Earnings
Retained earnings at beginning of period	2,571	2,563
Net Earnings	101	2
Cash dividends declared	(32)	(32)
Retained Earnings at End of Period	$2,640	$2,533

CONSOLIDATED STATEMENTS OF FINA

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current Assets
Cash and cash equivalents	$483	$793
Trade receivables, net	687	277
Miscellaneous receivables	87	102
Inventories	588	531
Other current assets	32	32
Total current assets	1,877	1,735
Properties
Properties and equipment at cost	8,626	8,525
Less: Accumulated depreciation	5,459	5,415
Net properties	3,167	3,110
Goodwill	314	315
Other noncurrent assets	290	355
Total assets	5,648	5,515
Current liabilities
Payables and other current liabilities	866	800
Borrowings due within one year	4	0
Total current liabilities	870	800
Long-term borrowings	1,603	1,604
Deferred income tax liabilities	261	258
Post-employment obligations	1,225	1,221
Other long-term liabilities	120	119
Total liabilities	4,079	4,002
Stockholders' equity
Common stock	1	1
Additional paid-in capital	671	661
Retained earnings	2,640	2,571
Accumulated other comprehensive loss	(388)	(385)
Treasury stock, at cost	(1,355)	(1,335)
Total stockholders' equity	1,569	1,513
Total liabilities and stockholders' equity	$5,648	$5,515

PARENTHETICAL DATA TO THE CONSO

PARENTHETICAL DATA TO THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
	Mar. 31, 2010	Dec. 31, 2009
Stockholders' equity
Common Stock, Par or Stated Value Per Share	0.01	0.01
Common Stock, Shares Authorized	350,000,000	350,000,000
Common Stock, Shares Issued	95,048,707	94,775,064
Treasury Stock, Shares	22,738,054	22,389,696

1_UNAUDITED CONSOLIDATED STATEM

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities
Net Earnings	$101	$2
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	69	67
Provision (benefit) for deferred income taxes	16	(13)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables	(414)	5
(Increase) decrease in inventories	(58)	70
Increase (decrease) in trade payables	94	(17)
Increase (decrease) in liabilities for employee benefits and incentive pay	(45)	(55)
Other items, net	12	23
Net cash provided by (used in) operating activities	(225)	82
Cash flows from investing activities
Additions to properties and equipment	(31)	(110)
Proceeds from sale of assets and investments	4	24
Acquisitions of and investments in joint ventures	(18)	(20)
Additions to capitalized software	(2)	(2)
Net cash used in investing activities	(47)	(108)
Cash flows from financing activities
Net increase in commercial paper, credit facility, and other borrowings	2	6
Dividends paid to stockholders	(32)	(32)
Treasury stock purchases	(20)	0
Proceeds from stock option exercises and other items	12	5
Net cash used in financing activities	(38)	(21)
Net change in cash and cash equivalents	(310)	(47)
Cash and cash equivalents at beginning of period	793	387
Cash and cash equivalents at end of period	$483	$340

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY (USD $)
In Millions	3 Months Ended Mar. 31, 2010
Balance	$1,513
Net Earnings	101
Cash dividends declared	(32)
Other Comprehensive Income (Loss)	(3)
Share-based Compensation Costs	5	[1]
Stock Option Exercises, Value	7
Other Items	(2)	[2]
Stock Repurchases	(20)
Ending Balance	1,569
Common Stock [Member]
Balance	1
Net Earnings	0
Cash dividends declared	0	[3]
Other Comprehensive Income (Loss)	0
Share-based Compensation Costs	0	[1]
Stock Option Exercises, Value	0
Other Items	0	[2]
Stock Repurchases	0
Ending Balance	1
Additional Paid In Capital [Member]
Balance	661
Net Earnings	0
Cash dividends declared	0	[3]
Other Comprehensive Income (Loss)	0
Share-based Compensation Costs	5	[1]
Stock Option Exercises, Value	7
Other Items	(2)
Stock Repurchases	0
Ending Balance	671
Retained Earnings [Member]
Balance	2,571
Net Earnings	101
Cash dividends declared	(32)	[3]
Other Comprehensive Income (Loss)	0
Share-based Compensation Costs	0	[1]
Stock Option Exercises, Value	0
Other Items	0	[2]
Stock Repurchases	0
Ending Balance	2,640
Accumulated Other Comprehensive Income [Member]
Balance	(385)
Net Earnings	0
Cash dividends declared	0	[3]
Other Comprehensive Income (Loss)	(3)
Share-based Compensation Costs	0	[1]
Stock Option Exercises, Value	0
Other Items	0	[2]
Stock Repurchases	0
Ending Balance	(388)
Treasury Stock [Member]
Balance	(1,335)
Net Earnings	0
Cash dividends declared	0	[3]
Other Comprehensive Income (Loss)	0
Share-based Compensation Costs	0	[1]
Stock Option Exercises, Value	0
Other Items	0	[2]
Stock Repurchases	(20)
Ending Balance	($1,355)
[1]Includes fair value of equity share-based awards recognized for share-based compensation.
[2]Includes tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items.
[3]Includes cash dividends declared, but unpaid.

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Basis of Presentation	1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared by Eastman Chemical Company (the "Company" or "Eastman") in accordance and consistent with the accounting policies stated in the Company's 2009 Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of the Company's 2009 Annual Report on Form 10-K.The unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States ("GAAP") and, of necessity, include some amounts that are based upon management estimates and judgments.Future actual results could differ from such current estimates.The unaudited consolidated financial statements include assets, liabilities, revenues, and expenses of all majority-owned subsidiaries and joint ventures.Eastman accounts for other joint ventures and investments where it exercises significant influence, but does not have control, on the equity basis.Intercompany transactions and balances are eliminated in consolidation.Certain prior period data has been reclassified in the Consolidated Financial Statements and accompanying footnotes to conform to current period presentation. Effective January 1, 2010, the Company adopted accounting guidance on transfers of financial assets.The impact of this guidance is prospective with changes in first quarter Statements of Consolidated Financial Position and the Statements of Cash Flows.For additional information, refer to Notes 7, "Borrowings," and 10, "Commitments."

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Acquisition	2. ACQUISITION On March 22, 2010, Eastman Fibers Korea Limited ("EFKL") completed the purchase of the acetate tow facility in Ulsan, Korea from SK Chemicals Co., Ltd. ("SK"), which has been accounted for as a business combination.EFKL is a venture between the Company and SK, in which the Company has controlling ownership and operates the facility.This acquisition establishes acetate tow manufacturing capacity for the Company in Asia, which supports the projected long term market growth for acetate tow in the region. The fair value of total consideration is $111 million, which waspaid in installments beginning in first quarter 2009.Of the total consideration, $17 million remains unpaid and is primarily contingent upon achievement of an operational milestone in a future period.The Company has determined the preliminary fair value of the acquired assets to be as follows: property, plant, and equipment of $101 million, inventory of $5 million, and technology of $5 million, which is equal to the fair value of the total consideration.

Asset Impairments and Restructu

Asset Impairments and Restructuring Charges, Net
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Asset Impairments and Restructuring Charges Net	3. ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET There were no asset impairments or restructuring charges in first quarter 2010.In first quarter 2009, restructuring charges totaled $26 million primarily for severance charges resulting from a reduction in force. Changes in Reserves for Asset Impairments, Restructuring Charges, and Severance Charges The following table summarizes the beginning reserves, charges to and changes in estimates to the reserves as described above, and the cash and non-cash reductions to the reserves attributable to asset impairments and the cash payments for severance and site closure costs for full year 2009 and first quarter 2010: (Dollars in millions) Balance at January 1, 2009 Provision/ Adjustments Non-cash Reductions Cash Reductions Balance at December 31, 2009 Non-cash charges $ -- $ 179 $ (179) $ -- $ -- Severance costs 5 23 -- (23) 5 Site closure and other restructuring costs 25 (2) -- (18) 5 Total $ 30 $ 200 $ (179) $ (41) $ 10 Balance at January 1, 2010 Provision/ Adjustments Non-cash Reductions Cash Reductions Balance at March 31, 2010 Non-cash charges $ -- $ -- $ -- $ -- $ -- Severance costs 5 -- -- (5) -- Site closure and other restructuring costs 5 -- -- -- 5 Total $ 10 $ -- $ -- $ (5) $ 5

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Inventories	4. INVENTORIES March 31, December 31, (Dollars in millions) 2010 2009 At FIFO or average cost (approximates current cost) Finished goods $ 580 $ 547 Work in process 179 168 Raw materials and supplies 286 262 Total inventories 1,045 977 LIFO Reserve (457) (446) Total inventories $ 588 $ 531 Inventories valued on the LIFO method were approximately 75 percent of total inventories as of March 31, 2010 and December 31, 2009, respectively.

Payables and Other Current Liab

Payables and Other Current Liabilities
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Payable and Other Current Liabilities	5. PAYABLES AND OTHER CURRENT LIABILITIES March 31, December 31, (Dollars in millions) 2010 2009 Trade creditors $ 530 $ 433 Accrued payrolls, vacation, and variable-incentive compensation 74 125 Accrued taxes 45 33 Post-employment obligations 62 61 Interest payable 30 32 Other 125 116 Total payables and other current liabilities $ 866 $ 800 The current portion of post-employment obligations is an estimate of current year payments in excess of plan assets.

Provision for Income Taxes

Provision for Income Taxes
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Provision for Income Taxes	6. PROVISION FOR INCOME TAXES First Quarter (Dollars in millions) 2010 2009 Change Provision for income taxes $ 50 $ -- N/A Effective tax rate 33 % N/A First quarter 2010 effective tax rate reflects the Company's expected full year tax rate on reported operating earnings before income tax of approximately 33 percent. The Company or one of its subsidiaries files tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions.With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2005.It is reasonably possible that within the next 12 months the Company will recognize approximately $2 million of unrecognized tax benefits as a result of the expiration of the relevant statute of limitations.

Borrowings

Borrowings
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Borrowings	7. BORROWINGS March 31, December 31, (Dollars in millions) 2010 2009 Borrowings consisted of: 7% notes due 2012 $ 151 $ 152 6.30% notes due 2018 204 205 5.5% notes due 2019 250 250 7 1/4% debentures due 2024 498 497 7 5/8% debentures due 2024 200 200 7.60% debentures due 2027 298 298 Other 6 2 Total borrowings 1,607 1,604 Borrowings due within one year (4) -- Long-term borrowings $ 1,603 $ 1,604 At March 31, 2010, the Company had a $700 million revolving credit facility ("Credit Facility") in two tranches, with $125 million expiring in 2012 and $575 million expiring in 2013.Borrowings under the Credit Facility are subject to interest at varying spreads above quoted market rates and a facility fee is paid on the total 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 March 31, 2010 and December 31, 2009, the Company had no outstanding borrowings under the Credit Facility. The Credit Facility provides liquidity support for commercial paper borrowings and general corporate purposes.Accordingly, any outstanding commercial paper borrowings reduce borrowings available under the Credit Facility.Given the expiration dates of the Credit Facility, any commercial paper borrowings supported by the Credit Facility are classified as long-term borrowings because the Company has the ability and intent to refinance such borrowings on a long-term basis. At March 31, 2010, the Company also had a $200 million line of credit under its annually renewable accounts receivable securitization agreement ("A/R Facility") which expires in July 2010.Borrowings under its A/R Facility are subject to interest rates based on a spread over lenders' 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, including the maintenance of certain financial ratios.The Company was in compliance with all such covenants for all periods presented.At March 31, 2010, the Company had no outstanding borrowings under the A/R Facility.Refer to Note 10, "Commitments" for further details regarding the A/R Facility.

Retirement Plans

Retirement Plans
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Retirement Plans	8. RETIREMENT PLANS DEFINED BENFIT PENSION PLANS Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits.Costs recognized for these benefits are recorded using estimated amounts, which may change as actual costs derived for the year are determined. Below is a summary of the components of net periodic benefit cost recognized for Eastman's significant defined benefit pension plans: Summary of Components of Net Periodic Benefit Costs First Quarter (Dollars in millions) 2010 2009 Service cost $ 11 $ 11 Interest cost 21 21 Expected return on assets (27) (24) Amortization of: Prior service credit (4) (4) Actuarial loss 11 7 Net periodic benefit cost $ 12 $ 11 POSTRETIREMENT WELFARE PLANS Eastman provides a subsidy toward life insurance and health care and dental benefits for eligible retirees hired prior to January 1, 2007, and a subsidy toward health care benefits for retirees' eligible survivors.In general, Eastman provides those benefits to retirees eligible under the Company's U.S. plans.Similar benefits are also made available to retirees of Holston Defense Corporation, a wholly-owned subsidiary of the Company that, prior to January 1, 1999, operated a government-owned ammunitions plant. Eligible employees hired on or after January 1, 2007 have access to postretirement health care benefits, but Eastman does not provide a subsidy toward the premium cost of postretirement benefits for those employees. A few of the Company's non-U.S. operations have supplemental health benefit plans for certain retirees, the cost of which is not significant to the Company. Costs recognized for benefits for eligible retirees hired prior to January 1, 2007 are recorded using estimated amounts, which may change as actual costs derived for the year are determined.Below is a summary of the components of net periodic benefit cost recognized for the Company's U.S. plans: Summary of Components of Net Periodic Benefit Costs First Quarter (Dollars in millions) 2010 2009 Service cost $ 3 $ 2 Interest cost 11 11 Expected return on assets (1) (1) Amortization of: Prior service credit (6) (6) Actuarial loss 3 3 Net periodic benefit cost $ 10 $ 9

Environmental Matters

Environmental Matters
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Environmental Matters	9. ENVIRONMENTAL MATTERS Certain Eastman manufacturing sites generate hazardous and nonhazardous wastes, the treatment, storage, transportation, and disposal of which are regulated by various governmental agencies.In connection with the cleanup of various hazardous waste sites, the Company, along with many other entities, has been designated a potentially responsible party ("PRP"), by the U.S. Environmental Protection Agency under the Comprehensive Environmental Response, Compensation and Liability Act, which potentially subjects PRPs to joint and several liability for such cleanup costs.In addition, the Company will be required to incur costs for environmental remediation and closure and postclosure under the federal Resource Conservation and Recovery Act.Reserves for environmental contingencies have been established in accordance with Eastman's policies described in Note 1, "Significant Accounting Policies", to the consolidated financial statements in Part II, Item 8 of the Company's 2009 Annual Report on Form 10-K.Because of expected sharing of costs, the availability of legal defenses, and the Company's preliminary assessment of actions that may be required, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results of operations or cash flows.The Company's total reserve for environmental contingencies was $39 million and $42 million at March 31, 2010 and December 31, 2009, respectively.Estimated future environmental expenditures for remediation costs range from the minimum or best estimate of $9 million to the maximum of $20 million at March 31, 2010, and $10 million to the maximum of $20 million at December 31, 2009.The best estimate accrued to date over the facilities' estimated useful lives for asset retirement obligation costs is $30 million and $32 million at March 31, 2010 and December 31, 2009, respectively.

Commitments

Commitments
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Commitments Disclosure	10. COMMITMENTS Purchasing Obligations and Lease Commitments At March 31, 2010, the Company had various purchase obligations totaling approximately $1 billion over a period of approximately 15 years for materials, supplies, and energy incident to the ordinary conduct of business.The Company also had various lease commitments for property and equipment under cancelable, noncancelable, and month-to-month operating leases totaling $91 million over a period of several years.Of the total lease commitments, approximately 15 percent relates to machinery and equipment, including computer and communications equipment and production equipment; approximately 45 percent relates to real property, including office space, storage facilities and land; and approximately 40 percent relates to railcars. Accounts Receivable Securitization Program Effective January 1, 2010, the Company adopted amended accounting guidance for transfers of financial assets which impacts the financial statement presentation for activity under the Companys $200 million accounts receivable securitization program.Beginning for periods after December 31, 2009, transfers of receivables interests that were previously treated as sold and removed from the balance sheet will be included in trade receivables, net and reflected as secured borrowings on the balance sheet.The Companys Statement of Financial Position at March 31, 2010, reflects an increase in trade receivables of $200 million, the amount transferred at December 31, 2009 under the securitization program, which reduced cash flows from operating activities by that amount for first quarter 2010.As a result of the adoption of this accounting guidance, any amounts drawn on this accounts receivable securitization program would now be reflected as secured borrowings and disclosed in Note 7, "Borrowings."At December 31, 2009 and March 31, 2009 the accounts receivable securitization program was fully drawn. Guarantees The Company has operating leases with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease.These residual value guarantees at March 31, 2010totaled $160 million and consisted primarily of leases for railcars and company aircraft.Leases with guarantee amounts totaling $11 million, $139 million, and $10 million will expire in 2011, 2012, and 2014 and beyond, respectively.The Company believes, based on current facts and circumstances, that the likelihood of a material payment pursuant to such guarantees is remote. Variable Interest Entities In June 2009, new accounting guidance on the consolidation of Variable Interest Entities ("VIEs") was issued.This guidance is effective for all VIEs or potential VIEs the Company is involved with on or after January 1, 2010.This guidance amends the evaluation criteria to identify which entity has a controlling financial interest of a variable interest entity and requires ongoing reassessments.The Company has evaluated its material contractual relationships under the new guidance and concluded that the entities involved in these relationships are not VIEs or, in the case of Primester, a joint venture

Fair Value of Financial Instrum

Fair Value of Financial Instruments
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Fair Value Financial Instruments	11. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair Value of Borrowings The fair value for fixed-rate borrowings is based on current interest rates for comparable securities.The Company's floating-rate borrowings approximate fair value. March 31, 2010 December 31, 2009 (Dollars in millions) Recorded Amount Fair Value Recorded Amount Fair Value Long-term borrowings $ 1,603 $ 1,734 $ 1,604 $ 1,656 Fair Value Measurements The following chart shows the financial assets and liabilities valued on a recurring basis. (Dollars in millions) Fair Value Measurements at March 31, 2010 Description March 31, 2010 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative Assets $ 41 $ -- $ 41 $ -- Derivative Liabilities -- -- -- -- $ 41 $ -- $ 41 $ -- (Dollars in millions) Fair Value Measurements at December 31, 2009 Description December 31, 2009 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative Assets $ 52 $ -- $ 52 $ -- Derivative Liabilities (21) -- (21) -- $ 31 $ -- $ 31 $ -- Hedging Programs The Company is exposed to market risk, such as changes in currency exchange rates, raw material and energy costs and interest rates.The Company uses various derivative financial instruments pursuant to the Company's hedging policies to mitigate these market risk factors and their effect on the cash flows of the underlying transactions.Designation is performed on a specific exposure basis to support hedge accounting.The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the cash flows of the underlying exposures being hedged.The Company does not hold or issue derivative financial instruments for trading purposes.For further information, see Note 9, "Fair Value of Financial Instruments", to the consolidated financial statements in Part II, Item 8 of the Company's 2009 Annual Report on Form 10-K. Fair Value Hedges Fair value hedges are defined by GAAP as derivative or non-derivative instruments designated as and used to hedge the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk.For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. As of March 31, 2010, the total notional amount of the Companys interest rate swaps was $146 million. Cash Flow Hedges Cash flow hedges are defined by GAAP as derivative instruments designated as and used to hedge the exposure to variability in expected future cash flows that is attributable to a particular risk.For derivative instruments that are designated and qualify as a cash flow hedge, t

2_Stockholders' Equity

Stockholders' Equity
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Stockholders' Equity	12. STOCKHOLDERS' EQUITY A reconciliation of the changes in stockholders' equity for first three months 2010 is provided below: (Dollars in millions) Common Stock at Par Value $ Paid-in Capital $ Retained Earnings $ Accumulated Other Comprehensive Income (Loss) $ Treasury Stock at Cost $ Total Stockholders' Equity $ Balance at December 31, 2009 1 661 2,571 (385) (1,335) 1,513 Net Earnings -- -- 101 -- -- 101 Cash Dividends Declared (1) -- -- (32) -- -- (32) Other Comprehensive Income (Loss) -- -- -- (3) -- (3) Share-Based Compensation Expense (2) -- 5 -- -- -- 5 Stock Option Exercises -- 7 -- -- -- 7 Other (3) -- (2) -- -- -- (2) Stock Repurchases -- -- -- -- (20) (20) Balance at March 31, 2010 1 671 2,640 (388) (1,355) 1,569 (1) Includes cash dividends declared, but unpaid. (2) Includes the fair value of equity share-based awards recognized for share-based compensation. (3) Includes tax benefits relating to the difference between the amounts deductible for federal income taxes over the amounts charged to income for book value purposes credited to paid-in capital and other items. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX (Dollars in millions) Cumulative Translation Adjustment $ Unrecognized Losses and Prior Service Credits for Benefit Plans $ Unrealized Gains on Derivative Instruments $ Unrealized Losses on Investments $ Accumulated Other Comprehensive Income (Loss) $ Balance at December 31, 2008 60 (414) 20 (1) (335) Period change 17 (74) 7 -- (50) Balance at December 31, 2009 77 (488) 27 (1) (385) Period change (12) 3 6 -- (3) Balance at March 31, 2010 65 (485) 33 (1) (388) Amounts of other comprehensive income (loss) are presented net of applicable taxes.The Company records deferred income taxes on the cumulative translation adjustment related to branch operations and other entities included in the Company's consolidated U.S. tax return.No deferred income taxes are provided on the cumulative translation adjustment of subsidiaries outside the United States, as such cumulative translation adjustment is considered to be a component of permanently invested, unremitted earnings of these foreign subsidiaries.

Earnings and Dividends per Shar

Earnings and Dividends per Share
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Earnings and Dividends Per Share	13. EARNINGS AND DIVIDENDS PER SHARE First Quarter 2010 2009 Shares used for earnings per share calculation (in millions): Basic 72.2 72.5 Diluted 73.3 72.9 In first quarter 2010 and 2009, common shares underlying options to purchase 1,902,310 shares of common stock and 4,181,434 shares of common stock, respectively, were excluded from the computation of diluted earnings per share, because the total market value of option exercises for these awards was less than the total proceeds that would be received for these exercises.First quarter 2010 reflects the impact of 340,000 shares repurchased in the quarter.There were no repurchases in first quarter 2009. The Company declared cash dividends of $0.44 per share in first quarter 2010 and 2009.

Share-Based Compensation Awards

Share-Based Compensation Awards
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Share Based Compensation Awards	14. SHARE-BASED COMPENSATION AWARDS The Company utilizes share-based awards under employee and non-employee director compensation programs.These share-based awards may include restricted and unrestricted stock, restricted stock units, stock options, and performance shares.In first quarter 2010 and 2009, approximately $5 million and $4 million, respectively, of compensation expense before tax were recognized in selling, general and administrative expense in the earnings statement for all share-based awards.The impact of approximately $3 million in both first quarter 2010 and 2009 net earnings is net of deferred tax expense related to share-based award compensation for each period. Additional information regarding share-based compensation plans and awards may be found in Note 15, "Share-Based Compensation Plans and Awards", to the consolidated financial statements in Part II, Item 8 of the Company's 2009 Annual Report on Form 10-K.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Supplemental Cash Flow Information	15. SUPPLEMENTAL CASH FLOW INFORMATION Included in the line item "Other items, net" of the "Cash flows from operating activities" section of the Consolidated Statements of Cash Flows are specific changes to certain balance sheet accounts as follows: (Dollars in millions) First Quarter 2010 2009 Current assets $ 1 $ (8) Other assets (2) 13 Current liabilities 14 20 Long-term liabilities and equity (1) (2) Total $ 12 $ 23 The above changes included transactions such as monetized positions from raw material and energy, currency, and certain interest rate hedges, prepaid insurance, miscellaneous deferrals, accrued taxes, value-added taxes, and other miscellaneous accruals.

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Segment Information	16. SEGMENT INFORMATION The Company's products and operations are managed and reported in five reportable operating segments, consisting of the Coatings, Adhesives, Specialty Polymers, and Inks ("CASPI") segment, the Fibers segment, the Performance Chemicals and Intermediates ("PCI") segment, the Performance Polymers segment, and the Specialty Plastics segment.For additional information concerning the Company's segments' businesses and products, see Note 22, "Segment Information", to the consolidated financial statements in Part II, Item 8 of the Company's 2009 Annual Report on Form 10-K. Research and development and other expenses not identifiable to an operating segment are not included in segment operating results for either of the periods presented and are shown in the tables below as "other" operating losses. In first quarter 2010, the Company transferred certain intermediates product lines from the Performance Polymers segment to the PCI segment to improve optimization of manufacturing assets supporting the three raw material streams that supply the Companys downstream businesses.The revised segment composition reflects how management views and evaluates operations.Accordingly, the amounts for sales, operating earnings, and assets have been adjusted to retrospectively apply these changes to all periods presented. First Quarter (Dollars in millions) 2010 2009 Sales by Segment CASPI $ 373 $ 250 Fibers 267 259 PCI 482 304 Performance Polymers 194 159 Specialty Plastics 248 157 Total Sales by Segment 1,564 1,129 Other -- -- Total Sales $ 1,564 $ 1,129 First Quarter (Dollars in millions) 2010 2009 Operating Earnings (Loss) CASPI (1) $ 66 $ 14 Fibers (1) 79 69 PCI (1) 37 (10) Performance Polymers (1) (13) (18) Specialty Plastics (1) 21 (18) Total Operating Earnings by Segment 190 37 Other (8) (12) Total Operating Earnings $ 182 $ 25 (1) First quarter 2009 includes a restructuring charge primarily for a severance program of $7 million, $4 million, $6 million, $4 million, and $5 million in the CASPI, Fibers, PCI, Performance Polymers, and Specialty Plastics segments, respectively. March 31, December 31, (Dollars in millions) 2010 2009 Assets by Segment (1) CASPI $ 1,216 $ 1,113 Fibers 859 726 PCI 998 844 Performance Polymers 624 575 Specialty Plastics 999 910 Total Assets by Segment 4,696 4,168 Corporate Assets 952 1,347 Total Assets $ 5,648 $ 5,515 (1) The chief operating decision maker holds segment management accountable for accounts receivable, inventory, fixed assets, and goodwill.

Legal Matters

Legal Matters
	3 Months Ended Mar. 31, 2010
Notes To Financial Statements [Abstract]
Legal Matters	17. LEGAL MATTERS From time to time, the Company and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are being handled and defended in the ordinary course of business.While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations or cash flows.However, adverse developments could negatively impact earnings or cash flows in a particular future period.

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Dec. 31, 2009
Entity [Text Block]	EASTMAN CHEMICAL CO
Entity Registrant Name	EASTMAN CHEMICAL CO
Entity Central Index Key	0000915389
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$2,728,058,714
Entity Common Stock, Shares Outstanding	72,393,327
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1