Eastman Announces Fourth-Quarter and Full-Year 2012 Financial Results
(Thomson Reuters ONE) -
FOR IMMEDIATE RELEASE
KINGSPORT, Tenn., Jan. 31, 2013 - Eastman Chemical Company (NYSE:EMN) today
announced earnings from continuing operations, excluding the items described in
the "Non-GAAP Items and Pro Forma Combined Results" section and Tables 3 and 4,
of $1.19 per diluted share for fourth quarter 2012 versus $0.78 per diluted
share for fourth quarter 2011. Reported results from continuing operations were
a loss of $0.35 per diluted share in fourth quarter 2012 and earnings of $0.09
per diluted share in fourth quarter 2011.
"Eastman delivered another year of consistently strong earnings, with fourth-
quarter results providing an outstanding way to end 2012," said Jim Rogers,
Chairman and CEO. "This high level of performance was driven by our market-
leading businesses and the significant strategic actions we have taken to
improve our portfolio. We are well positioned for continued growth in 2013 and
beyond, supported by strong cash generation."
(In millions, except 4Q12 4Q11 FY12 FY11
per share amounts)
Sales revenue $2,169 $1,723 $8,102 $7,178
Pro forma combined $2,169 $2,250 $9,120 $9,275
sales revenue*
Earnings (loss) per ($0.35) $0.09 $2.92 $4.24
diluted share from
continuing operations
Earnings per diluted $1.19 $0.78 $5.38 $4.81
share from
continuing operations
excluding MTM
pension and OPEB
losses and gains,
Solutia
acquisition-related
costs, and asset
impairments
and restructuring
charges and gains**
Net cash provided by $440 $352 $1,128 $625
operating activities
*See "Non-GAAP Items and Pro Forma Combined Results" below and Table 2.
**For reconciliation to reported company and segment earnings, see Tables 3 and
4.
Corporate 4Q 2012 versus 4Q 2011
Sales revenue for fourth quarter 2012 was $2.2 billion, a 26 percent increase
compared with fourth quarter 2011. Fourth quarter 2012 included sales revenue
from the acquired Solutia businesses. Pro forma combined sales revenue declined
4 percent due primarily to lower selling prices. The lower selling prices were
primarily due to lower raw material and energy costs.
Operating results in fourth quarter 2012 were a loss of $44 million compared to
operating earnings of $19 million in fourth quarter 2011. Excluding mark-to-
market pension and other post-retirement benefits (MTM) losses in both periods
and asset impairments and restructuring charges and Solutia acquisition-related
costs in fourth quarter 2012, operating earnings were $326 million in fourth
quarter 2012 and $178 million in fourth quarter 2011. Fourth quarter 2012
included operating earnings from the acquired Solutia businesses. Pro forma
combined operating earnings, excluding MTM losses, asset impairments and
restructuring charges, and Solutia acquisition-related costs, were $326 million
in fourth quarter 2012 compared with $255 million in fourth quarter 2011. Pro
forma combined operating earnings increased primarily due to lower raw material
and energy costs more than offsetting lower selling prices. Operating results
and pro forma combined operating earnings included the "Other" operating losses
detailed in Table 3.
Segment Results 4Q 2012 versus 4Q 2011
Additives & Functional Products - Fourth quarter 2012 included sales revenue and
operating earnings from the acquired Solutia rubber materials product lines.
Pro forma combined sales revenue declined due to lower selling prices in
solvents product lines in response to lower raw material and energy costs and
lower selling prices in rubber materials anti-degradant product lines attributed
to competitive conditions in a relatively weak tire market, primarily in Europe.
Excluding fourth-quarter 2012 asset impairments and restructuring charges and
additional costs of acquired Solutia inventories, pro forma combined operating
earnings increased to $89 million in fourth quarter 2012 compared with $68
million in fourth quarter 2011. The increase was primarily due to lower raw
material and energy costs partially offset by lower selling prices, primarily in
solvents product lines.
Adhesives & Plasticizers - Sales revenue increased due to higher sales volume
attributed to the continued substitution of phthalate plasticizers with non-
phthalate plasticizers. Excluding fourth-quarter 2012 asset impairments and
restructuring charges, operating earnings in fourth quarter 2012 increased to
$52 million compared with $49 million in fourth quarter 2011 primarily due to
lower raw material and energy costs and higher sales volume, which more than
offset lower selling prices.
Advanced Materials - Fourth quarter 2012 included sales revenue and operating
earnings from the acquired Solutia PVB sheet and resins and performance films
product lines. The pro forma combined sales revenue decrease was attributed
primarily to weakened demand in specialty copolyester end markets, particularly
durable goods and consumables. Excluding fourth-quarter 2012 asset impairments
and restructuring charges and additional costs of acquired Solutia inventories,
pro forma combined operating earnings declined to $29 million in fourth quarter
2012 compared with $37 million in fourth quarter 2011. The decline in operating
earnings was due to lower capacity utilization, which was primarily the result
of efforts to reduce inventory in PVB sheet and specialty materials product
lines and weakened demand for specialty copolyester product lines.
Fibers - Sales revenue was unchanged as higher selling prices in response to
higher raw material and energy costs, particularly for wood pulp, were offset by
lower sales volume for the acetate yarn product line attributed to weakened
demand in the apparel market. Excluding asset impairments and restructuring
charges in 2012, operating earnings increased to $93 million in fourth quarter
2012 compared with $84 million in fourth quarter 2011 due to higher selling
prices.
Specialty Fluids & Intermediates - Fourth quarter 2012 included sales revenue
and operating earnings from the acquired Solutia specialty fluids product lines.
Pro forma combined sales revenue declined primarily due to lower selling prices
for intermediates product lines in response to lower raw material and energy
costs and lower sales volume due primarily to maintenance at a Longview, Texas,
olefins cracking unit. Excluding fourth-quarter 2012 asset impairments and
restructuring charges, pro forma combined operating earnings increased to $93
million in fourth quarter 2012 compared with $47 million in fourth quarter
2011. The increase was primarily due to lower raw material and energy costs,
which more than offset lower selling prices.
Corporate FY 2012 versus FY 2011
Earnings from continuing operations, excluding the items described in the "Non-
GAAP Items and Pro Forma Combined Results" section and Tables 3 and 4, were
$5.38 per diluted share for full year 2012 versus $4.81 per diluted share for
full year 2011. Reported earnings from continuing operations were $2.92 per
diluted share in full year 2012 and $4.24 per diluted share in full year 2011.
Eastman's full-year 2012 sales revenue was $8.1 billion, an increase of 13
percent year over year. Full year 2012 included sales revenue from the acquired
Solutia businesses. Pro forma combined sales revenue declined 2 percent.
Operating earnings for full year 2012 were $800 million compared to $937 million
for full year 2011. Excluding MTM losses and asset impairments and
restructuring charges and gains for both periods, and Solutia acquisition-
related costs for 2012, operating earnings were $1.3 billion for full year 2012
and $1.1 billion for full year 2011. Full year 2012 included operating earnings
from the acquired Solutia businesses. Pro forma combined operating earnings,
excluding MTM losses and asset impairments and restructuring charges and gains
for both periods and Solutia acquisition-related costs for 2012, were $1.5
billion for full year 2012 compared with $1.4 billion for full year 2011.
Operating earnings and pro forma combined operating earnings included the
"Other" operating losses detailed in Table 3.
Segment Results FY 2012 versus FY 2011
Additives & Functional Products - Full year 2012 included sales revenue and
operating earnings from the acquired Solutia rubber materials product lines.
Pro forma combined sales revenue declined due to lower selling prices in
solvents product lines in response to lower raw material and energy costs and
lower selling prices in rubber materials anti-degradant product lines attributed
to competitive conditions in a relatively weak tire market, primarily in Europe.
Excluding full-year 2012 additional costs of acquired Solutia inventories and
asset impairments and restructuring charges, pro forma combined operating
earnings increased to $395 million in full year 2012 compared with $365 million
in full year 2011. The increase was primarily due to lower raw material and
energy costs partially offset by lower selling prices, particularly in solvents
product lines, and higher operating costs including labor and maintenance.
Adhesives & Plasticizers - Sales revenue increased due to higher sales volume
attributed to the continued substitution of phthalate plasticizers with non-
phthalate plasticizers. Excluding full-year 2012 asset impairments and
restructuring charges, operating earnings for full year 2012 increased to $263
million compared with $250 million for full year 2011. The increase was
primarily due to higher sales volume, partially offset by higher operating costs
including labor and maintenance and costs associated with the startup of non-
phthalate plasticizers manufacturing assets at the Texas City, Texas, facility.
Advanced Materials - Full year 2012 included sales revenue and operating
earnings from the acquired Solutia PVB sheet and resins and performance films
product lines. The pro forma combined sales revenue decrease was attributed
primarily to weakened demand in PVB sheet end markets, particularly the
transportation market in Europe, and specialty copolyester end markets,
particularly durable goods and consumables, partially offset by increased sales
revenue in performance films. Full-year 2012 operating earnings included
additional costs of acquired Solutia inventories and asset impairments and
restructuring charges. Excluding these costs and charges, pro forma combined
operating earnings for full year 2012 declined to $210 million compared with
$251 million for full year 2011. The decline in operating earnings was due to
lower capacity utilization, which was primarily the result of weakened demand in
PVB sheet and specialty materials end markets, efforts to reduce inventory in
specialty materials and PVB sheet and resins product lines, and additional costs
related to capacity expansions.
Fibers - Sales revenue increased as higher selling prices in response to higher
raw material and energy costs, particularly for wood pulp, were partially offset
by lower sales volume for the acetate yarn product line attributed to weakened
demand in the apparel market. Excluding asset impairments and restructuring
charges in 2012, operating earnings increased to $388 million in full year 2012
compared with $365 million in full year 2011 due to higher selling prices which
more than offset higher raw material and energy costs and higher operating costs
including labor and maintenance.
Specialty Fluids & Intermediates - Full year 2012 included sales revenue and
operating earnings from the acquired Solutia specialty fluids product lines.
Pro forma combined sales revenue declined due to lower selling prices in
intermediates product lines in response to lower raw material and energy costs.
Excluding full-year 2012 additional costs of acquired Solutia inventories and
asset impairments and restructuring charges in both periods, pro forma combined
operating earnings increased to $359 million in full-year 2012 compared with
$278 million in full year 2011. The increase was primarily due to lower raw
material and energy costs which more than offset lower selling prices and higher
operating costs including labor and maintenance.
Cash Flow
Eastman generated $1.1 billion in cash from operating activities in 2012. The
company contributed approximately $125 million to its U.S. defined benefit
pension plans. The company generated strong free cash flow, defined as cash
from operating activities minus capital expenditures and dividends, of $471
million in 2012, which included the accelerated payment of the fourth-quarter
dividend in December of $45 million. In addition, during the second half of
2012 the company repaid $250 million of the $1.2 billion Solutia acquisition
term loan. See Table 5B for reconciliation of cash provided by operating
activities to free cash flow.
Outlook
Commenting on the outlook for full year 2013, Rogers said: "With our world-
class technology platforms and leading positions in attractive end markets, we
are well positioned to generate strong earnings growth in 2013. We expect the
continued integration of Solutia, capacity expansions serving customers in
growing end-markets, and the increased benefit of producing versus purchasing
olefins will positively impact results. However, there continues to be global
economic uncertainty, particularly the timing of a recovery in Europe. Taking
all these factors into consideration, we are increasing our expectation for
2013 earnings per share from continuing operations to between $6.30 and $6.40."
Solutia integration costs, any asset impairments and restructuring charges, and
mark-to-market pension and OPEB gains or losses are excluded from the earnings
per share projection.
Non-GAAP Items and Pro Forma Combined Results
Solutia Acquisition -- On July 2, 2012, the company completed the acquisition of
Solutia Inc. This news release includes a comparison of fourth-quarter and
full-year 2012 and 2011 results on a pro forma combined basis assuming the
acquisition of Solutia on January 1, 2011. For other selected pro forma
combined information, see the company's Current Report on Form 8-K furnished
with the Securities and Exchange Commission on October 15, 2012 and Tables 2 and
3.
As required by purchase accounting, the acquired Solutia inventories were marked
to fair value. These inventories were subsequently sold resulting in a $79
million increase in cost of sales ($4 million in fourth quarter and $79 million
for the full year), net of the LIFO impact of these inventories. Fourth-quarter
and full-year 2012 results of operations also included $7 million and $69
million, respectively, of Solutia transaction, integration, and financing costs
and $4 million and $32 million, respectively, of Solutia-related restructuring
charges on a pro forma combined basis. These restructuring charges were
primarily for severance associated with the acquisition and integration of
Solutia.
MTM Pension and OPEB Losses and Gain - As previously reported, in 2012 Eastman
changed its method of accounting for actuarial gains and losses for its pension
and other postretirement benefits plans so that these gains and losses are
measured annually and recognized as a MTM adjustment during the fourth quarter
of each year. In addition, any interim remeasurements triggered by certain plan
actions or changes are recognized as a MTM adjustment in the quarter in which
such remeasurement occurs. This new accounting method has been applied
retrospectively to all periods. During fourth quarter 2012, Eastman recognized a
pre-tax MTM loss of $276 million, compared with a $224 million loss in fourth
quarter 2011 on a pro forma combined basis. At December 31, 2012, the Company's
weighted-average assumed discount rate was 3.84 percent, down significantly from
the prior year, resulting in an actuarial loss of approximately $380 million.
Partially offsetting the impact of the lower discount rate was an increase in
pension asset value of approximately $105 million due to asset values
appreciating in excess of the assumed weighted-average rate of return of 7.27
percent. In addition, in first quarter 2011 the Company recognized a $15 million
MTM gain due to the interim remeasurement of the OPEB plan obligation.
Other Asset Impairments and Restructuring Charges -- During fourth quarter and
full year, the Company also recognized other asset impairments and restructuring
charges of $79 million and $93 million, respectively, on a pro forma combined
basis. These charges were primarily for costs to shut down plant sites
(including the fourth quarter termination of the operating agreement at the
newly acquired Sao Jose dos Campos, Brazil, Solutia site), costs resulting from
a strategy change for the Perennial Wood(TM) developing business initiative
(including losses on take-or-pay contracts with third parties and reserves for
inventory costs in excess of recoverable value), costs of discontinuance of an
environmental project, and, in full-year an impairment charge on land retained
from the industrial gasification project.
For reconciliation of Non-GAAP to GAAP financial measures, see Tables 3 and 4.
Forward-Looking Statements: This news release includes forward-looking
statements concerning current expectations for future economic, business, and
competitive conditions, the financial impact of recent capacity additions and
acquisitions, raw material and energy costs, and earnings for full year 2013.
Such expectations are based upon certain preliminary information, internal
estimates, and management assumptions, expectations, and plans, and are subject
to a number of risks and uncertainties inherent in projecting future conditions,
events, and results. Actual results could differ materially from expectations
expressed in the forward-looking statements if one or more of the underlying
assumptions or expectations prove to be inaccurate or are unrealized. Important
factors that could cause actual results to differ materially from such
expectations are and will be detailed in the company's filings with the
Securities and Exchange Commission, including the Form 10-Q filed for third
quarter 2012 available, and the Form 10-K to be filed for 2012 and to be
available, on the Eastman web site at www.eastman.com in the Investors, SEC
filings section.
Eastman will host a conference call with industry analysts on February 1, 2013
at 8:00 a.m. Eastern Time. To listen to the live webcast of the conference call
and view the accompanying slides, go to www.investors.eastman.com,
Presentations. To listen via telephone, the dial-in number is (913) 312-1295,
passcode number 6467816. A web and telephone replay will be available
continuously from 11:00 a.m. Eastern Time, February 1, to 11:00 a.m. Eastern
Time, February 15, 2013, at (888) 203-1112 or (719) 457-0820, passcode 6467816.
Eastman is a global specialty chemicals company that produces a broad range of
products found in items people use every day. With a portfolio of specialty
businesses, Eastman works with customers to deliver innovative products and
solutions while maintaining a commitment to safety and sustainability. Its
market-driven approaches take advantage of world-class technology platforms and
leading positions in attractive end-markets such as transportation, building and
construction, and consumables. Eastman focuses on creating consistent, superior
value for all stakeholders. As a globally diverse company, Eastman serves
customers in approximately 100 countries and had 2012 pro forma combined
revenues, giving effect to the Solutia acquisition, of approximately $9 billion.
The company is headquartered in Kingsport, Tennessee, USA and employs
approximately 13,500 people around the world. For more information, visit
www.eastman.com.
###
Contacts:
Media: Tracy Kilgore Broadwater
423-224-0498 / tkbroadwater(at)eastman.com
Investors: Greg Riddle
212-835-1620 / griddle(at)eastman.com
Financial Tables:
http://hugin.info/150386/R/1674813/545446.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Eastman Chemical Company via Thomson Reuters ONE
[HUG#1674813]
Unternehmensinformation / Kurzprofil:
Datum: 31.01.2013 - 23:34 Uhr
Sprache: Deutsch
News-ID 225291
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contact information:
Town:
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Kategorie:
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