Eastman Chemical (NYSE: EMN) posts 10% Q2 2026 sales growth and higher EPS
Rhea-AI Filing Summary
Eastman Chemical Company reported second-quarter 2026 sales revenue of $2,513 million, up 10 percent from $2,287 million a year earlier, driven by 5 percent higher volume/mix, 4 percent higher selling prices and a 1 percent favorable currency impact. EBIT was $311 million versus $222 million, and adjusted EBIT was $320 million versus $275 million. Diluted EPS was $1.59 versus $1.20, with adjusted EPS of $1.97 versus $1.60.
Advanced Materials and Additives & Functional Products each grew sales 5 percent, while Chemical Intermediates sales rose 39 percent and Fibers declined 11 percent. Segment EBIT improved sharply in Chemical Intermediates but decreased in Advanced Materials and Fibers. Net cash provided by operating activities was $224 million versus $233 million, and the company returned $96 million to stockholders through dividends. Net debt was $4,526 million at June 30, 2026.
Management highlighted progress toward $125 million to $150 million of cost savings, net of inflation, and expects 2026 capital expenditures of about $400 million. For 2026, operating cash flow is expected to approach $900 million, modestly below the previous outlook, and third-quarter adjusted EPS is projected to approach second-quarter 2026 adjusted EPS of $1.97.
Positive
- Second-quarter 2026 sales revenue rose 10% year over year to $2,513 million, while adjusted EPS increased to $1.97 from $1.60, reflecting stronger pricing, mix and margins.
- Chemical Intermediates rebounded strongly, with sales up 39% year over year and adjusted EBIT margin improving to 9.0% from (6.5)%, driven by higher volume, pricing and spreads.
- The company targets $125–$150 million of cost savings in 2026, net of inflation, and states confidence it can significantly improve full-year 2026 earnings versus 2025.
Negative
- The 2026 operating cash flow outlook was reduced; management now expects cash flow to approach $900 million, described as modestly below the previous expectation of approaching 2025 levels.
- Fibers segment sales declined 11% year over year, with lower volume, weaker textiles demand and customer inventory destocking contributing to a decrease in segment EBIT.
Filing Explained
At June 30, Eastman reported $5,217 million borrowings and $4,526 million net debt, updating its liquidity position.
The
The release presents adjusted EBIT and adjusted diluted EPS as supplemental measures that exclude non-core, unusual, or non-recurring items, rather than replacements for GAAP results.
At June 30, total borrowings were
8-K Event Classification
4 items: 2.02, 9.01, 10.9, 14.1
4 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Item 10.9
Item 10.9
Item 14.1
Item 14.1
Key Figures
Sales revenue Q2 2026: $2,513 million
Adjusted EPS Q2 2026: $1.97
EBIT Q2 2026: $311 million
+5 more
8 metrics
Sales revenue Q2 2026
$2,513 million
Second quarter 2026 sales revenue vs $2,287 million in second quarter 2025
Adjusted EPS Q2 2026
$1.97
Second quarter 2026 adjusted earnings per diluted share vs $1.60 in Q2 2025
EBIT Q2 2026
$311 million
Second quarter 2026 GAAP earnings before interest and taxes vs $222 million in Q2 2025
Net cash from operations Q2 2026
$224 million
Net cash provided by operating activities in second quarter 2026 vs $233 million in Q2 2025
Net debt June 30, 2026
$4,526 million
Net debt at June 30, 2026 compared with $4,221 million at December 31, 2025
Chemical Intermediates sales growth
39 %
Second quarter 2026 sales revenue increase vs second quarter 2025 in Chemical Intermediates
Planned 2026 cost savings
$125–$150 million
Target range of cost savings for 2026, net of inflation
2026 operating cash flow outlook
$900 million
Operating cash flow expected to approach $900 million for full-year 2026
Key Terms
adjusted EBIT, non-GAAP, methanolysis, net debt, +2 more
6 terms
adjusted EBIT financial
"Drove a 350-basis-point sequential adjusted EBIT margin improvement"
Adjusted EBIT is a company’s operating profit before interest and taxes, but cleaned up by removing one-time or unusual items that can obscure ongoing performance. Investors use it like a tidied-up report card — it aims to show the underlying profitability of the business by excluding irregular gains, losses, or costs so comparisons across periods or companies are clearer and more meaningful for valuing operational strength.
non-GAAP financial
"this press release includes the following non-GAAP financial measures"
Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.
methanolysis technical
"commercial ramp up of the Kingsport methanolysis facility"
Methanolysis is a chemical process that breaks larger molecules into smaller pieces by reacting them with methanol, similar to using soapy water to dissolve grease into washable bits. Investors care because it is a core manufacturing or recycling step in industries like fuels, plastics and chemicals; its efficiency, cost, safety and environmental footprint can directly affect production costs, regulatory risk and a company’s profit margins.
net debt financial
"Total Borrowings to Net Debt Reconciliations"
Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.
interim adjustment to tax provision financial
"Interim adjustment to tax provision (3)"
acetate tow technical
"inventory destocking in acetate tow and continued weakness"
Offering Details
earnings_snapshot
Offering
Offering Type
earnings_snapshot
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Eastman Chemical (EMN) perform in Q2 2026?
Eastman reported Q2 2026 sales of $2,513 million, up 10% from $2,287 million a year earlier. Diluted EPS was $1.59 versus $1.20, and adjusted diluted EPS rose to $1.97 from $1.60, supported by higher volume, pricing and margins.
What were Eastman Chemical (EMN) segment trends in Q2 2026?
Advanced Materials and Additives & Functional Products each grew sales 5%, Chemical Intermediates sales increased 39%, and Fibers declined 11%. Chemical Intermediates saw higher spreads and volume, while Fibers was pressured by inventory destocking and weaker textiles demand.
How did Eastman Chemical’s (EMN) cash flow and net debt change?
Net cash provided by operating activities in Q2 2026 was $224 million, slightly below $233 million in Q2 2025. Net debt was $4,526 million at June 30, 2026, compared with $4,221 million at December 31, 2025, reflecting higher total borrowings.
What cost savings and capex plans does Eastman Chemical (EMN) have for 2026?
Eastman plans to deliver $125–$150 million of cost savings in 2026, net of inflation, and expects capital expenditures of approximately $400 million. These actions are intended to support margin improvement while maintaining a solid investment-grade balance sheet.
What is Eastman Chemical’s (EMN) 2026 operating cash flow outlook?
Management now expects 2026 operating cash flow to approach $900 million, described as modestly below its earlier expectation of approaching 2025 levels. The outlook reflects inflationary pressure on receivables and planned working capital release in the second half.
What guidance did Eastman Chemical (EMN) give for Q3 2026 EPS?
The company projects third-quarter 2026 adjusted diluted EPS to approach $1.97, the adjusted EPS achieved in Q2 2026. This guidance excludes non-core, unusual or nonrecurring items, which management does not forecast due to uncertainty.
How did Eastman Chemical’s (EMN) non-GAAP results differ from GAAP in Q2 2026?
In Q2 2026, GAAP EBIT was $311 million and diluted EPS was $1.59. Excluding non-core items and using an adjusted tax provision, adjusted EBIT was $320 million and adjusted diluted EPS was $1.97, reflecting environmental costs and tax adjustments.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
(423 ) 229-2000
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| EASTMAN CHEMICAL COMPANY - EMN | ||||||||
Item 2.02 Results of Operations and Financial Condition
On July 30, 2026, the registrant publicly released its financial results for second quarter 2026. The full text of the release is furnished as Exhibit 99.01 to this Current Report on Form 8-K, and is incorporated herein by reference. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits:
(d) Exhibits
The following exhibits are furnished pursuant to Item 9.01:
99.01 Public release by Eastman on July 30, 2026 of second quarter 2026 financial results
104 Cover Page Interactive Data File
| EASTMAN CHEMICAL COMPANY - EMN | ||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Eastman Chemical Company | ||||||||
| By: | /s/ Michelle R. Stewart | |||||||
| Michelle R. Stewart | ||||||||
| Vice President, Chief Accounting Officer and Corporate Controller | ||||||||
Date: July 30, 2026 | ||||||||
Exhibit 99.01
Eastman Announces Second-Quarter 2026 Financial Results
KINGSPORT, Tenn., July 30, 2026 – Eastman Chemical Company (NYSE:EMN) announced its second-quarter 2026 financial results.
•Delivered strong sequential EPS growth and solid cash flow in a dynamic environment through commercial and operational excellence
•Drove a 350-basis-point sequential adjusted EBIT margin improvement through 8% higher sales volume/mix and disciplined price-cost management in Advanced Materials and Additives & Functional Products and spread expansion in Chemical Intermediates
•Continued to leverage our significant and advantaged integrated U.S.-based assets to be a reliable supplier to our customers amid an uncertain global environment
•Building strategic momentum in the circular platform, doubled revenue in the first half of the year and continued great operational performance
•Made substantial progress toward delivering $125 million to $150 million of cost savings, net of inflation
•Remained focused on delivering solid operating cash flow and expect to release working capital in the second half of 2026
| (In millions, except per share amounts; unaudited) | 2Q2026 | 2Q2025 | ||||||
| Sales revenue | $2,513 | $2,287 | ||||||
| Earnings before interest and taxes ("EBIT") | 311 | 222 | ||||||
| Adjusted EBIT* | 320 | 275 | ||||||
| Earnings per diluted share | 1.59 | 1.20 | ||||||
| Adjusted earnings per diluted share* | 1.97 | 1.60 | ||||||
| Net cash provided by operating activities | 224 | 233 | ||||||
*For non-core and unusual items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4A, and 6.
"The Eastman team delivered a strong second quarter despite continued dynamic macroeconomic conditions," said Mark Costa, Board Chair and CEO. "Sales revenue increased 15 percent sequentially driven by strong volume growth across the company and disciplined price-cost management in our specialty businesses. We also delivered strong spread expansion and volume/mix improvement in Chemical Intermediates. These actions resulted in a 350-basis-point sequential increase in our EBIT margin. We also continued to successfully manage the impact of the conflict in the Middle East and secured supply of key raw materials to help customers navigate the uncertainty. Additionally, we built momentum with the commercial ramp up of the Kingsport methanolysis facility and are making progress on a capital-efficient set of options to serve the packaging market."
Corporate Results 2Q 2026 versus 2Q 2025
Sales revenue increased 10 percent primarily due to 5 percent higher sales volume/mix and 4 percent higher selling prices.
Higher sales volume/mix in Advanced Materials and Chemical Intermediates was partially offset by Fibers. Higher selling prices in Chemical Intermediates were primarily driven by tightening market conditions due to the ongoing Middle East conflict. Higher selling prices in specialty businesses offset higher raw material and distribution costs.
EBIT increased due to favorable price-cost, the benefit from cost-reduction initiatives, favorable foreign currency exchange rates and higher sales volume/mix. These factors were partially offset by higher variable compensation expense, higher planned maintenance expense and unfavorable asset utilization.
Segment Results 2Q 2026 versus 2Q 2025
Advanced Materials – Sales revenue increased 5 percent due to 4 percent higher sales volume/mix and 1 percent favorable foreign currency exchange rates.
Higher sales volume/mix was driven by growth across the segment. Price-cost was stable as increases in specialty plastics to mitigate higher raw material and distribution costs were offset by modestly lower price-cost in advanced interlayers.
EBIT decreased as higher sales volume/mix, favorable foreign currency exchange rates and cost reduction initiatives were more than offset by lower asset utilization and higher variable compensation expense.
Additives & Functional Products – Sales revenue increased 5 percent primarily due to 4 percent higher selling prices. Higher selling prices were primarily driven by cost-pass-through contracts.
EBIT was relatively unchanged as improved price-cost, favorable foreign currency exchange rates and cost reduction initiatives were offset by higher planned maintenance expense.
Fibers – Sales revenue decreased 11 percent primarily due to 10 percent lower sales volume/mix and 2 percent lower selling prices.
Lower sales volume/mix was driven by customer buying patterns to continue with inventory destocking in acetate tow and continued weakness in the textiles end market relative to tariff-driven volume strength last year.
EBIT decreased due to lower sales volume/mix, modestly lower acetate tow contract pricing, higher operating costs including lower asset utilization, and elevated costs associated with logistics to serve customers in connection with the Middle East conflict. These were partially offset by the benefit of cost reduction initiatives.
Chemical Intermediates – Sales revenue increased by 39 percent primarily due to 24 percent higher sales volume/mix and 14 percent higher selling prices.
Higher sales volume/mix and selling prices, particularly for olefin and derivative products, were driven by increased volume availability compared to the prior year period and supply disruptions.
EBIT increased due to higher spreads, improved volume/mix and cost-reduction initiatives.
Cash Flow
In second quarter 2026, cash provided by operating activities was $224 million versus $233 million in second quarter 2025. The company returned $96 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2026 include payment of the quarterly dividend, capital expenditures, and share repurchases while maintaining our solid investment-grade balance sheet.
2026 Outlook
Commenting on the outlook for full-year 2026, Costa said: "Our team has demonstrated agility in the first half and is focused on building on the momentum and solid results delivered in the first half of 2026, despite the constantly changing impact of the Middle East conflict and continued weak demand in key discretionary end markets. We remain focused on driving growth through innovation, which is expected to be the primary driver of our specialty growth for the year. A key contributor to our innovation-driven growth is our Kingsport methanolysis facility, which continues to build strategic momentum. We also delivered solid growth through our innovation across weak discretionary end markets. We continue to see modest growth across stable end markets. Our commercial teams demonstrated excellence in successfully implementing price increases in our specialties to offset higher raw material and distribution costs and expect a modest tailwind from these actions in the back half. In our Chemical Intermediates segment, we have benefited from significant spread expansion due to the impact on supply chains of the Middle East conflict and substantially more volume to sell this year. We also remain on track to reduce costs between $125 million and $150 million, net of inflation, and are maintaining disciplined capital expenditures by spending approximately $400 million this year. When putting all of these factors together, we remain confident we can significantly improve earnings in 2026 versus 2025. On cash, the inflationary environment is putting pressure on accounts receivable. As a result, we now expect operating cash flow to approach $900 million, which is modestly below our previous expectation of approaching 2025 levels.
"Looking specifically at the sequential third-quarter 2026 outlook, we start with Advanced Materials, where we expect EBIT to be higher driven by improved price-cost and improved asset utilization. We also expect higher earnings in Fibers as acetate tow volume increases, with customers increasing purchases to meet their annual contracts. Additives & Functional Products earnings are expected to decline modestly due to seasonally lower volume, particularly in the agriculture market. Chemical Intermediates earnings are expected to modestly decline as the impact of supply chain disruptions lessens. When putting these factors together, we project third-quarter adjusted EPS to approach second-quarter 2026 EPS of $1.97."
The third-quarter 2026 projected adjusted diluted EPS excludes any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other post-retirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts.
Forward-Looking Statements
The information in this release and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, sales, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, supply and demand, capacity and utilization, growth opportunities, statements of management’s plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the sections entitled "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and as updated in the company’s filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the company’s website at www.eastman.com.
Financial Measures (Non-GAAP)
In addition to the financial information presented in accordance with Generally Accepted Accounting Principles ("GAAP"), this press release includes the following non-GAAP financial measures: adjusted EBIT, adjusted EBIT margin, and adjusted earnings per diluted share. We define adjusted EBIT as the GAAP measure EBIT adjusted for non-core, unusual, or non-recurring items. Adjusted earnings per diluted share is defined as the GAAP measure earnings per diluted share adjusted for non-core, unusual, or non-recurring items. Adjusted EBIT margin is defined as adjusted EBIT divided by the GAAP measure sales revenue in the Company's Unaudited Consolidated Statement of Earnings, Comprehensive Income and Retained Earnings for the same periods. See the reconciliation tables presented in this release for a detailed reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.
We believe that in addition to our results determined in accordance with GAAP, these non-GAAP financial measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP measures. These non-GAAP financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. Non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as comparative measures.
Conference Call and Webcast Information
Eastman will host a conference call with industry analysts on July 31, 2026, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go to investors.eastman.com, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at investors.eastman.com at approximately 4:15 p.m. ET on July 30, 2026. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 385739. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at investors.eastman.com, Events & Presentations. A telephone replay will be available continuously beginning at approximately 1:00 p.m. Eastern Time, July 31, through 11:59 p.m. Eastern Time, August 10, 2026, Toll Free at +1 (866) 813-9403, passcode 129897.
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive company, Eastman employs approximately 13,000 people around the world and serves customers in more than 100 countries. The company had 2025 revenue of approximately $8.8 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.
# # #
Contacts:
Media: Tracy Kilgore Addington
423-224-0498 / tracy@eastman.com
Investors: Greg Riddle
212-835-1620 / griddle@eastman.com
FINANCIAL INFORMATION
July 30, 2026
For Eastman Chemical Company Second Quarter and Full Year 2026 Financial Results Release
Table of Contents
| Item | Page | |||||||
Table 1 | Statements of Earnings | 1 | ||||||
Table 2A | Segment Sales Information | 2 | ||||||
Table 2B | Sales Revenue Change | 3 | ||||||
Table 2C | Sales by Customer Location | 3 | ||||||
Table 3A | Segment, Other, and Company Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations | 4 | ||||||
Table 3B | Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins | 6 | ||||||
Table 4A | Non-GAAP Earnings Before Interest and Taxes, Net Earnings, and Earnings Per Share Reconciliations | 7 | ||||||
Table 4B | Adjusted Effective Tax Rate Calculation | 9 | ||||||
Table 5 | Statements of Cash Flows | 10 | ||||||
Table 6 | Total Borrowings to Net Debt Reconciliations | 10 | ||||||
Table 1 – Statements of Earnings
| Second Quarter | First Six Months | ||||||||||||||||||||||
| (Dollars in millions, except per share amounts; unaudited) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Sales | $ | 2,513 | $ | 2,287 | $ | 4,690 | $ | 4,577 | |||||||||||||||
Cost of sales (1) | 1,953 | 1,781 | 3,699 | 3,504 | |||||||||||||||||||
| Gross profit | 560 | 506 | 991 | 1,073 | |||||||||||||||||||
| Selling, general and administrative expenses | 185 | 157 | 363 | 339 | |||||||||||||||||||
| Research and development expenses | 65 | 67 | 125 | 134 | |||||||||||||||||||
| Asset impairments, restructuring, and other charges, net | 1 | 13 | 10 | 22 | |||||||||||||||||||
| Other components of post-employment (benefit) cost, net | (16) | (2) | (33) | (3) | |||||||||||||||||||
| Other (income) charges, net | 14 | 49 | 27 | 57 | |||||||||||||||||||
| Earnings before interest and taxes | 311 | 222 | 499 | 524 | |||||||||||||||||||
| Net interest expense | 55 | 53 | 107 | 102 | |||||||||||||||||||
| Earnings before income taxes | 256 | 169 | 392 | 422 | |||||||||||||||||||
| Provision for income taxes | 72 | 29 | 101 | 99 | |||||||||||||||||||
| Net earnings | 184 | 140 | 291 | 323 | |||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interest | 1 | — | 1 | 1 | |||||||||||||||||||
| Net earnings attributable to Eastman | $ | 183 | $ | 140 | $ | 290 | $ | 322 | |||||||||||||||
| Basic earnings per share attributable to Eastman | $ | 1.60 | $ | 1.22 | $ | 2.54 | $ | 2.80 | |||||||||||||||
| Diluted earnings per share attributable to Eastman | $ | 1.59 | $ | 1.20 | $ | 2.51 | $ | 2.77 | |||||||||||||||
| Shares (in millions) outstanding at end of period | 114.4 | 114.8 | 114.4 | 114.8 | |||||||||||||||||||
| Shares (in millions) used for earnings per share calculation | |||||||||||||||||||||||
| Basic | 114.3 | 115.0 | 114.2 | 115.1 | |||||||||||||||||||
| Diluted | 115.3 | 116.2 | 115.2 | 116.4 | |||||||||||||||||||
(1)First six months 2026 included inventory adjustment charges of $3 million related to the closure of a production line at a German performance films facility in the Advanced Materials ("AM") segment.
1
Table 2A – Segment Sales Information
| Second Quarter | First Six Months | ||||||||||||||||||||||
| (Dollars in millions, unaudited) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Sales by Segment | |||||||||||||||||||||||
| Advanced Materials | $ | 817 | $ | 777 | $ | 1,532 | $ | 1,496 | |||||||||||||||
Additives & Functional Products | 807 | 769 | 1,546 | 1,502 | |||||||||||||||||||
Chemical Intermediates | 643 | 463 | 1,138 | 1,008 | |||||||||||||||||||
| Fibers | 243 | 274 | 468 | 562 | |||||||||||||||||||
| Total Sales by Segment | 2,510 | 2,283 | 4,684 | 4,568 | |||||||||||||||||||
Other | 3 | 4 | 6 | 9 | |||||||||||||||||||
| Total Eastman Chemical Company | $ | 2,513 | $ | 2,287 | $ | 4,690 | $ | 4,577 | |||||||||||||||
| First Quarter | |||||
| (Dollars in millions, unaudited) | 2026 | ||||
| Sales by Segment | |||||
| Advanced Materials | $ | 715 | |||
Additives & Functional Products | 739 | ||||
Chemical Intermediates | 495 | ||||
| Fibers | 225 | ||||
| Total Sales by Segment | 2,174 | ||||
Other | 3 | ||||
| Total Eastman Chemical Company | $ | 2,177 | |||
2
Table 2B – Sales Revenue Change
Second Quarter 2026 Compared to Second Quarter 2025 | ||||||||||||||
| Change in Sales Revenue Due To | ||||||||||||||
| (Unaudited) | Revenue % Change | Volume / Product Mix Effect | Price Effect | Exchange Rate Effect | ||||||||||
| Advanced Materials | 5 | % | 4 | % | — | % | 1 | % | ||||||
| Additives & Functional Products | 5 | % | — | % | 4 | % | 1 | % | ||||||
| Chemical Intermediates | 39 | % | 24 | % | 14 | % | 1 | % | ||||||
| Fibers | (11) | % | (10) | % | (2) | % | 1 | % | ||||||
Total Eastman Chemical Company | 10 | % | 5 | % | 4 | % | 1 | % | ||||||
First Six Months 2026 Compared to First Six Months 2025 | ||||||||||||||
| Change in Sales Revenue Due To | ||||||||||||||
| (Unaudited) | Revenue % Change | Volume / Product Mix Effect | Price Effect | Exchange Rate Effect | ||||||||||
| Advanced Materials | 2 | % | 2 | % | (2) | % | 2 | % | ||||||
| Additives & Functional Products | 3 | % | — | % | 1 | % | 2 | % | ||||||
| Chemical Intermediates | 13 | % | 10 | % | 2 | % | 1 | % | ||||||
| Fibers | (17) | % | (14) | % | (3) | % | — | % | ||||||
| Total Eastman Chemical Company | 2 | % | — | % | — | % | 2 | % | ||||||
Second Quarter 2026 Compared to First Quarter 2026 | ||||||||||||||
| Change in Sales Revenue Due To | ||||||||||||||
| (Unaudited) | Revenue % Change | Volume / Product Mix Effect | Price Effect | Exchange Rate Effect | ||||||||||
| Advanced Materials | 14 | % | 11 | % | 3 | % | — | % | ||||||
| Additives & Functional Products | 9 | % | 4 | % | 5 | % | — | % | ||||||
| Chemical Intermediates | 30 | % | 11 | % | 19 | % | — | % | ||||||
| Fibers | 8 | % | 8 | % | — | % | — | % | ||||||
| Total Eastman Chemical Company | 15 | % | 8 | % | 7 | % | — | % | ||||||
Table 2C – Sales by Customer Location
| Second Quarter | First Six Months | ||||||||||||||||||||||
| (Dollars in millions, unaudited) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Sales by Customer Location | |||||||||||||||||||||||
| United States and Canada | $ | 1,158 | $ | 963 | $ | 2,137 | $ | 1,983 | |||||||||||||||
| Europe, Middle East, and Africa | 628 | 610 | 1,202 | 1,220 | |||||||||||||||||||
| Asia Pacific | 578 | 583 | 1,078 | 1,122 | |||||||||||||||||||
| Latin America | 149 | 131 | 273 | 252 | |||||||||||||||||||
| Total Eastman Chemical Company | $ | 2,513 | $ | 2,287 | $ | 4,690 | $ | 4,577 | |||||||||||||||
3
Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)
| Second Quarter | First Six Months | |||||||||||||||||||||||||
| (Dollars in millions, unaudited) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Advanced Materials | ||||||||||||||||||||||||||
| Earnings before interest and taxes | $ | 109 | $ | 121 | $ | 169 | $ | 237 | ||||||||||||||||||
Cost of sales impact from restructuring activities (2) | — | — | 3 | — | ||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net (2) | — | — | 6 | — | ||||||||||||||||||||||
| Excluding non-core items | 109 | 121 | 178 | 237 | ||||||||||||||||||||||
| Additives & Functional Products | ||||||||||||||||||||||||||
| Earnings before interest and taxes | 151 | 153 | 293 | 290 | ||||||||||||||||||||||
| Asset impairments, restructuring, and other charges, net | — | — | — | 4 | ||||||||||||||||||||||
| Excluding non-core items | 151 | 153 | 293 | 294 | ||||||||||||||||||||||
| Chemical Intermediates | ||||||||||||||||||||||||||
| Earnings (loss) before interest and taxes | 58 | (30) | 40 | (11) | ||||||||||||||||||||||
| Fibers | ||||||||||||||||||||||||||
| Earnings before interest and taxes | 36 | 81 | 81 | 169 | ||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Loss before interest and taxes | (43) | (103) | (84) | (161) | ||||||||||||||||||||||
Asset impairments, restructuring, and other charges net (3) | 1 | 13 | 4 | 18 | ||||||||||||||||||||||
Environmental and other costs (4) | 8 | 40 | 8 | 40 | ||||||||||||||||||||||
Excluding non-core items | (34) | (50) | (72) | (103) | ||||||||||||||||||||||
| Total Eastman Chemical Company | ||||||||||||||||||||||||||
| Earnings before interest and taxes | 311 | 222 | 499 | 524 | ||||||||||||||||||||||
Cost of sales impact from restructuring activities | — | — | 3 | — | ||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 1 | 13 | 10 | 22 | ||||||||||||||||||||||
Environmental and other costs | 8 | 40 | 8 | 40 | ||||||||||||||||||||||
Total earnings before interest and taxes excluding non-core items | $ | 320 | $ | 275 | $ | 520 | $ | 586 | ||||||||||||||||||
| Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | ||||||||||||||||||||||||||
| Earnings before interest and taxes | $ | 311 | $ | 222 | $ | 499 | $ | 524 | ||||||||||||||||||
| Cost of sales impact from restructuring activities | — | — | 3 | — | ||||||||||||||||||||||
| Asset impairments, restructuring, and other charges, net | 1 | 13 | 10 | 22 | ||||||||||||||||||||||
| Other (income) charges, net | 8 | 40 | 8 | 40 | ||||||||||||||||||||||
Total earnings before interest and taxes excluding non-core items | $ | 320 | $ | 275 | $ | 520 | $ | 586 | ||||||||||||||||||
(1)See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Quarterly Report on Form 10-Q for second quarter 2025 for description of second quarter and first six months 2025 non-core items.
(2)First six months 2026 included inventory adjustment charges of $3 million, severance charges of $3 million, and restructuring charges of $3 million related to the closure of a production line at a German performance films facility in the AM segment.
(3)Second quarter and first six months 2026 included severance charges related to corporate cost reduction initiatives reported in "Other."
(4)Second quarter and first six months 2026 included environmental and other costs from previously divested or non-operational sites and product lines, which included associated gains and losses.
4
Table 3A - Segment, Other, and Company
Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued) (1)
| First Quarter | ||||||||
| (Dollars in millions, unaudited) | 2026 | |||||||
| Advanced Materials | ||||||||
| Earnings before interest and taxes | $ | 60 | ||||||
| Cost of sales impact from restructuring activities | 3 | |||||||
| Asset impairments, restructuring, and other charges, net | 6 | |||||||
| Excluding non-core items | 69 | |||||||
| Additives & Functional Products | ||||||||
| Earnings before interest and taxes | 142 | |||||||
| Chemical Intermediates | ||||||||
| Loss before interest and taxes | (18) | |||||||
| Fibers | ||||||||
| Earnings before interest and taxes | 45 | |||||||
| Other | ||||||||
| Loss before interest and taxes | (41) | |||||||
| Asset impairments, restructuring, and other charges net | 3 | |||||||
Excluding non-core items | (38) | |||||||
| Total Eastman Chemical Company | ||||||||
| Earnings before interest and taxes | 188 | |||||||
Cost of sales impact from restructuring activities | 3 | |||||||
Asset impairments, restructuring, and other charges, net | 9 | |||||||
Total earnings before interest and taxes excluding non-core items | $ | 200 | ||||||
| Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items | ||||||||
| Earnings before interest and taxes | $ | 188 | ||||||
| Cost of sales impact from restructuring activities | 3 | |||||||
| Asset impairments, restructuring, and other charges, net | 9 | |||||||
Total earnings before interest and taxes excluding non-core items | $ | 200 | ||||||
(1)For the description of first quarter 2026 non-core items, see Table 3A of the Quarterly Report on Form 8-K for first quarter 2026.
5
Table 3B - Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins (1)(2)
| Second Quarter | First Six Months | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (Dollars in millions, unaudited) | Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | Adjusted EBIT | Adjusted EBIT Margin | |||||||||||||||||||||||||||
| Advanced Materials | $ | 109 | 13.3 | % | $ | 121 | 15.6 | % | $ | 178 | 11.6 | % | $ | 237 | 15.8 | % | |||||||||||||||||||
Additives & Functional Products | 151 | 18.7 | % | 153 | 19.9 | % | 293 | 19.0 | % | 294 | 19.6 | % | |||||||||||||||||||||||
Chemical Intermediates | 58 | 9.0 | % | (30) | (6.5) | % | 40 | 3.5 | % | (11) | (1.1) | % | |||||||||||||||||||||||
| Fibers | 36 | 14.8 | % | 81 | 29.6 | % | 81 | 17.3 | % | 169 | 30.1 | % | |||||||||||||||||||||||
Total segment EBIT excluding non-core items | 354 | 14.1 | % | 325 | 14.2 | % | 592 | 12.6 | % | 689 | 15.1 | % | |||||||||||||||||||||||
| Other | (34) | (50) | (72) | (103) | |||||||||||||||||||||||||||||||
Total EBIT excluding non-core items | $ | 320 | 12.7 | % | $ | 275 | 12.0 | % | $ | 520 | 11.1 | % | $ | 586 | 12.8 | % | |||||||||||||||||||
| First Quarter | ||||||||
| 2026 | ||||||||
| (Dollars in millions, unaudited) | Adjusted EBIT | Adjusted EBIT Margin | ||||||
| Advanced Materials | $ | 69 | 9.7 | % | ||||
Additives & Functional Products | 142 | 19.2 | % | |||||
Chemical Intermediates | (18) | (3.6) | % | |||||
| Fibers | 45 | 20.0 | % | |||||
Total segment EBIT excluding non-core items | 238 | 10.9 | % | |||||
Other | (38) | |||||||
Total EBIT excluding non-core items | $ | 200 | 9.2 | % | ||||
(1)For identification of excluded non-core items and reconciliations to GAAP EBIT, see Table 3A.
(2)Adjusted EBIT margin is non-GAAP EBIT divided by GAAP sales. See Table 2A for sales.
6
Table 4A – Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations
| Second Quarter 2026 | ||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Taxes | Earnings Before Income Taxes | Provision for Income Taxes | Effective Income Tax Rate | Net Earnings Attributable to Eastman | ||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts, unaudited) | After Tax | Per Diluted Share | ||||||||||||||||||||||||||||||||||||
| As reported (GAAP) | $ | 311 | $ | 256 | $ | 72 | 28 | % | $ | 183 | $ | 1.59 | ||||||||||||||||||||||||||
Non-Core or Unusual Items: (1) | ||||||||||||||||||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 1 | 1 | — | 1 | 0.01 | |||||||||||||||||||||||||||||||||
| Environmental and other costs | 8 | 8 | (1) | 9 | 0.08 | |||||||||||||||||||||||||||||||||
Income tax related item (2) | — | — | (8) | 8 | 0.07 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) | — | — | (26) | 26 | 0.22 | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 320 | $ | 265 | $ | 37 | 15 | % | $ | 227 | $ | 1.97 | ||||||||||||||||||||||||||
| Second Quarter 2025 | ||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Taxes | Earnings Before Income Taxes | Provision for Income Taxes | Effective Income Tax Rate | Net Earnings Attributable to Eastman | ||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts, unaudited) | After Tax | Per Diluted Share | ||||||||||||||||||||||||||||||||||||
| As reported (GAAP) | $ | 222 | $ | 169 | $ | 29 | 17 | % | $ | 140 | $ | 1.20 | ||||||||||||||||||||||||||
Non-Core Items: (1) | ||||||||||||||||||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 13 | 13 | 5 | 8 | 0.08 | |||||||||||||||||||||||||||||||||
| Environmental and other costs | 40 | 40 | 9 | 31 | 0.26 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) | — | — | (7) | 7 | 0.06 | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core items and with adjusted provision for income taxes) | $ | 275 | $ | 222 | $ | 36 | 16 | % | $ | 186 | $ | 1.60 | ||||||||||||||||||||||||||
(1)See Table 3A for description of second quarter 2026 and 2025 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
(2)Second quarter 2026 included expense related to a prior tax law change.
(3)The adjusted provision for income taxes for second quarter 2026 and 2025 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.
7
| First Six Months 2026 | ||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Taxes | Earnings Before Income Taxes | Provision for Income Taxes | Effective Income Tax Rate | Net Earnings Attributable to Eastman | ||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts, unaudited) | After Tax | Per Diluted Share | ||||||||||||||||||||||||||||||||||||
| As reported (GAAP) | $ | 499 | $ | 392 | $ | 101 | 26 | % | $ | 290 | $ | 2.51 | ||||||||||||||||||||||||||
Non-Core or Unusual Items: (1) | ||||||||||||||||||||||||||||||||||||||
Cost of sales impact from restructuring activities | 3 | 3 | 1 | 2 | 0.02 | |||||||||||||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 10 | 10 | 3 | 7 | 0.06 | |||||||||||||||||||||||||||||||||
| Environmental and other costs | 8 | 8 | (1) | 9 | 0.08 | |||||||||||||||||||||||||||||||||
Income tax related item (2) | — | — | (13) | 13 | 0.11 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) | — | — | (31) | 31 | 0.28 | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 520 | $ | 413 | $ | 60 | 15 | % | $ | 352 | $ | 3.06 | ||||||||||||||||||||||||||
| First Six Months 2025 | ||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Taxes | Earnings Before Income Taxes | Provision for Income Taxes | Effective Income Tax Rate | Net Earnings Attributable to Eastman | ||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts, unaudited) | After Tax | Per Diluted Share | ||||||||||||||||||||||||||||||||||||
| As reported (GAAP) | $ | 524 | $ | 422 | $ | 99 | 23 | % | $ | 322 | $ | 2.77 | ||||||||||||||||||||||||||
Non-Core Items: (1) | ||||||||||||||||||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 22 | 22 | 6 | 16 | 0.14 | |||||||||||||||||||||||||||||||||
| Environmental and other costs | 40 | 40 | 9 | 31 | 0.26 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) | — | — | (39) | 39 | 0.34 | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core items and with adjusted provision for income taxes) | $ | 586 | $ | 484 | $ | 75 | 16 | % | $ | 408 | $ | 3.51 | ||||||||||||||||||||||||||
(1)See Table 3A for description of first six months 2026 and 2025 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
(2)First six months 2026 included expense related to a prior tax law change.
(3)The adjusted provision for income taxes for first six months 2026 and 2025 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.
8
Table 4A – Non-GAAP Earnings Before Interest and Taxes, Net Earnings,
and Earnings Per Share Reconciliations (continued)
| First Quarter 2026 | ||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Taxes | Earnings Before Income Taxes | Provision for Income Taxes | Effective Income Tax Rate | Net Earnings Attributable to Eastman | ||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts, unaudited) | After Tax | Per Diluted Share | ||||||||||||||||||||||||||||||||||||
| As reported (GAAP) | $ | 188 | $ | 136 | $ | 29 | 21 | % | $ | 107 | $ | 0.93 | ||||||||||||||||||||||||||
Non-Core or Unusual Items: (1) | ||||||||||||||||||||||||||||||||||||||
Cost of sales impact from restructuring activities | 3 | 3 | 1 | 2 | 0.02 | |||||||||||||||||||||||||||||||||
Asset impairments, restructuring, and other charges, net | 9 | 9 | 3 | 6 | 0.05 | |||||||||||||||||||||||||||||||||
Income tax related item (2) | — | — | (5) | 5 | 0.04 | |||||||||||||||||||||||||||||||||
Interim adjustment to tax provision (3) | — | — | (5) | 5 | 0.05 | |||||||||||||||||||||||||||||||||
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes) | $ | 200 | $ | 148 | $ | 23 | 15 | % | $ | 125 | $ | 1.09 | ||||||||||||||||||||||||||
(1)See Table 3A for description of first quarter 2026 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.
(2)First quarter 2026 included expense related to a prior tax law change.
(3)The adjusted provision for income taxes for first quarter 2026 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.
Table 4B - Adjusted Effective Tax Rate Calculation
First Six Months (1) | |||||||||||
(Unaudited) | 2026 | 2025 | |||||||||
| Effective tax rate | 26 | % | 23 | % | |||||||
Discrete tax items (2) | (1) | % | (1) | % | |||||||
Tax impact of current year non-core and unusual items (3) | (2) | % | 4 | % | |||||||
| Changes in tax contingencies and valuation allowances | — | % | (2) | % | |||||||
Forecasted full year impact of expected tax events (4) | (8) | % | (8) | % | |||||||
| Forecasted full year adjusted effective tax rate | 15 | % | 16 | % | |||||||
(1)Effective tax rate percentages are rounded to the nearest whole percent. The forecasted full year effective tax rates are 14.5 percent and 15.5 percent in first six months 2026 and 2025.
(2)"Discrete tax items" are items that are excluded from the Company's estimated annual effective tax rate and recognized entirely in the quarter in which the item occurs. Discrete tax items for first six months 2026 and 2025 are related to share based compensation expense and adjustments to certain prior year tax returns.
(3)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.
(4)Expected future tax events may include finalization of tax returns; federal, state, and foreign examinations or the expiration of statutes of limitation; and corporate restructurings.
9
Table 5 – Statements of Cash Flows
| Second Quarter | First Six Months | ||||||||||||||||||||||
| (Dollars in millions, unaudited) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating activities | |||||||||||||||||||||||
| Net earnings | $ | 184 | $ | 140 | $ | 291 | $ | 323 | |||||||||||||||
| Adjustments to reconcile net earnings to net cash used in operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 132 | 127 | 263 | 253 | |||||||||||||||||||
| Provision (benefit) from deferred income taxes | 15 | (45) | 10 | (48) | |||||||||||||||||||
| Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||||||||||||||||||
| (Increase) decrease in trade receivables | (147) | (91) | (369) | (183) | |||||||||||||||||||
| (Increase) decrease in inventories | (27) | (11) | (146) | (131) | |||||||||||||||||||
| Increase (decrease) in trade payables | 18 | (83) | 85 | (155) | |||||||||||||||||||
| Pension and other postretirement contributions (in excess of) less than expenses | (22) | (3) | (48) | (17) | |||||||||||||||||||
| Variable compensation payments (in excess of) less than expenses | 71 | 23 | 22 | (86) | |||||||||||||||||||
| Other items, net | — | 176 | (21) | 110 | |||||||||||||||||||
| Net cash provided by operating activities | 224 | 233 | 87 | 66 | |||||||||||||||||||
| Investing activities | |||||||||||||||||||||||
| Additions to properties and equipment | (100) | (150) | (203) | (297) | |||||||||||||||||||
Government incentives | — | 3 | 3 | 14 | |||||||||||||||||||
| Other items, net | 1 | — | (3) | 5 | |||||||||||||||||||
Net cash used in investing activities | (99) | (147) | (203) | (278) | |||||||||||||||||||
| Financing activities | |||||||||||||||||||||||
Net increase in commercial paper and other borrowings | — | 59 | — | 344 | |||||||||||||||||||
| Proceeds from borrowings | — | — | 594 | 246 | |||||||||||||||||||
| Repayment of borrowings | — | — | (150) | (550) | |||||||||||||||||||
| Dividends paid to stockholders | (96) | (95) | (192) | (191) | |||||||||||||||||||
| Treasury stock purchases | — | (50) | — | (50) | |||||||||||||||||||
| Other items, net | (4) | (4) | (11) | (13) | |||||||||||||||||||
| Net cash (used in) provided by financing activities | (100) | (90) | 241 | (214) | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1 | 9 | — | 12 | |||||||||||||||||||
| Net change in cash and cash equivalents | 26 | 5 | 125 | (414) | |||||||||||||||||||
| Cash and cash equivalents at beginning of period | 665 | 418 | 566 | 837 | |||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 691 | $ | 423 | $ | 691 | $ | 423 | |||||||||||||||
Table 6 – Total Borrowings to Net Debt Reconciliations
| June 30, | December 31, | |||||||||||||
| (Dollars in millions, unaudited) | 2026 | 2025 | ||||||||||||
| Total borrowings | $ | 5,217 | $ | 4,787 | ||||||||||
| Less: Cash and cash equivalents | 691 | 566 | ||||||||||||
Net debt (1) | $ | 4,526 | $ | 4,221 | ||||||||||
(1)Included a non-cash decrease of $17 million in 2026 and a non-cash increase of $68 million in 2025 resulting from foreign currency exchange rates.
10