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Kingsport, Tenn., USA, Jan 30, 2015 - (ACN Newswire) - Eastman Chemical Company (NYSE:EMN) today announced earnings, excluding non-core or non-recurring items, of $1.64 per diluted share for fourth quarter 2014 versus $1.35 per diluted share for fourth quarter 2013. Reported earnings were $0.11 per diluted share in fourth quarter 2014 versus $2.22 per diluted share in fourth quarter 2013. For detail of the excluded items and reconciliation to reported company and segment earnings, see Tables 3 and 4.
"We delivered our fifth consecutive year of strong earnings growth in 2014," said Mark Costa, chairman and CEO. "To achieve these outstanding results, we leveraged our world class technology platforms to drive improved product mix through innovation, sustained and expanded our advantaged market positions, and derived benefit from our advantaged cost positions. We also completed four attractive acquisitions that improve the quality of our portfolio and position us for strong long-term earnings growth." See the second paragraph under "Outlook" for the items excluded from annual earnings comparisons.
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(in millions, except per share amounts) 4Q14 4Q13 FY14 FY13
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Sales revenue $2,349 $2,265 $9,527 $9,350
Earnings per diluted share from continuing operations
$0.11 $2.22 $4.95 $7.44
Earnings per diluted share from continuing operations excluding
non-core or non-recurring items*
$1.64 $1.35 $7.07 $6.44
Net cash provided by operating activities
$455 $503 $1,403 $1,297
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*For reconciliation to reported company and segment earnings, including mark-to-market pension and postretirement benefit plans loss in 2014 and gain in 2013, see Tables 3 and 4.
Corporate Results 4Q 2014 versus 4Q 2013
Sales revenue increased 4 percent compared with fourth quarter 2013. Excluding the items described in Tables 3 and 4, operating earnings for fourth quarter 2014 were $362 million compared with $329 million for fourth quarter 2013 primarily due to higher operating earnings across the company. Reported fourth-quarter 2014 operating earnings were $27 million compared with $562 million for fourth quarter 2013.
In December 2014 Eastman acquired Taminco Corporation, a global specialty chemical company, and Commonwealth Laminating & Coating, Inc., a specialty films business. In June 2014, the Company acquired BP plc's global aviation turbine engine oil business. Results of the acquired Taminco and Commonwealth businesses and of the acquired aviation turbine oil business following the acquisitions are included in the Company's fourth-quarter 2014 financial results.
Segment Results 4Q 2014 versus 4Q 2013
Additives & Functional Products - Sales revenue increased as sales of products of the acquired Taminco specialty amines and crop protection businesses and higher coatings products sales volume were partially offset by lower rubber additives products sales revenue due to an unfavorable shift in foreign currency exchange rates. The higher coatings sales volume was attributed to strengthened demand in key end-markets, particularly building and construction and transportation. Excluding non-core or non-recurring items in fourth quarter 2014, operating earnings increased due to earnings of the acquired Taminco businesses.
Adhesives & Plasticizers - Sales revenue decreased primarily due to lower adhesives resins sales volume which was primarily the result of limited raw material availability and lower plasticizers selling prices partially offset by higher adhesives resins selling prices. Operating earnings increased primarily due to higher adhesives resins selling prices, lower raw material and energy costs, and lower operating costs that included targeted cost reductions, partially offset by costs of the planned shutdown of an olefins cracking unit at the Longview, Texas site.
Advanced Materials - Sales revenue increased slightly as strong volume growth for premium products, including Eastman Tritan(TM) copolyester, interlayers with acoustic properties, and window films, was offset by lower core copolyester products selling prices and an unfavorable shift in foreign currency exchange rates. The premium product sales growth was attributed to continued market adoption. The lower selling prices were primarily due to lower raw material and energy costs, particularly for paraxylene. Excluding non-core or non-recurring items, operating earnings increased primarily due to higher sales volume and improved product mix.
Fibers - Sales revenue increased slightly as higher acetate tow selling prices and higher acetate flake sales volume to Eastman's China acetate tow joint venture were largely offset by lower acetyl chemicals sales volume. Operating earnings increased as higher selling prices more than offset lower sales volume and higher unit costs due to lower acetate tow capacity utilization.
Specialty Fluids & Intermediates - Sales revenue increased due to sales of products of the acquired aviation turbine oil and Taminco functional amines businesses. Sales revenue was negatively impacted by lower selling prices for olefin-based intermediates and heat transfer fluids, and lower volume due to the Longview, Texas olefins cracking unit shutdown. Excluding non-core or non-recurring items in fourth quarter 2014, operating earnings declined primarily due to costs of and lower sales volume resulting from the olefins cracking unit shutdown and lower selling prices, partially offset by lower raw material and energy costs and earnings from acquired businesses.
Corporate Results FY 2014 versus FY 2013
Sales revenue was $9.5 billion, a 2 percent increase compared with full year 2013. Excluding the items described in Tables 3 and 4, operating earnings for full year 2014 were $1.6 billion, a slight increase compared with full year 2013. Reported full-year 2014 operating earnings were $1.2 billion compared with $1.9 billion for full year 2013. Results of the acquired Taminco and Commonwealth businesses and of the acquired aviation turbine oil business following the acquisitions are included in the Company's 2014 financial results.
Segment Results FY 2014 versus FY 2013
Additives & Functional Products - Sales revenue increased primarily due to higher coatings products sales volume and selling prices and the sales of products of the acquired Taminco specialty amines and crop protection businesses more than offsetting lower rubber additives sales volume. The higher coatings sales volume and selling prices were attributed to strengthened demand in key end-markets, particularly building and construction and transportation. The lower rubber additives sales volume was primarily attributed to decreased tire production in Asia. Excluding non-core or non-recurring items, operating earnings declined as higher coatings products sales volume and selling prices and earnings from the acquired Taminco products were more than offset by higher raw material and energy costs, particularly for propane in the first half of the year, and lower rubber additives sales volume.
Adhesives & Plasticizers - Sales revenue increased primarily due to higher sales volume more than offsetting lower selling prices. Higher plasticizers sales volume was primarily attributed to the substitution of phthalate plasticizers with Eastman non-phthalate plasticizers. Higher adhesives resins sales volume was primarily attributed to stronger end-market demand, particularly for packaging and hygiene, and customer inventory management that negatively impacted first half 2013 volume. Lower selling prices were primarily due to competitive pressures resulting from weakened plasticizers demand in Asia Pacific and Europe and increased adhesives resins supply that negatively impacted adhesives pricing in the first half of 2014. Excluding non-core or non-recurring items for full-year 2013, operating earnings were higher primarily due to higher sales volume, higher capacity utilization that resulted in lower unit costs, and lower operating costs that included targeted cost reductions, partially offset by lower selling prices.
Advanced Materials - Sales revenue increased slightly as higher premium products sales volume, including Eastman Tritan(TM) copolyester and interlayers with acoustic properties, was largely offset by lower core copolyesters selling prices primarily due to lower raw material and energy costs. Excluding non-core or non-recurring items, operating earnings increased primarily due to higher sales volume in premium products and improved product mix.
Fibers - Sales revenue increased slightly as higher acetate tow selling prices and higher acetate flake sales volume to Eastman's China acetate tow joint venture more than offset lower acetate tow sales volume. The lower acetate tow sales volume was attributed to additional industry capacity, including Eastman's China acetate tow joint venture. Operating earnings increased due to higher selling prices, lower raw material and energy costs, and higher acetate flake sales volume, partially offset by lower acetate tow sales volume and lower capacity utilization resulting in higher unit costs.
Specialty Fluids & Intermediates - Sales revenue was flat as sales of products of the acquired aviation turbine oil and Taminco functional amines businesses and higher selling prices were offset by lower sales volume. The lower sales volume was due to manufacturing capacity shutdowns, the increased internal use of intermediates in the manufacture of higher-value downstream derivatives in other Eastman business segments, and weakness in the heat transfer fluids market. Excluding non-core or non-recurring items, operating earnings decreased primarily due to higher raw material and energy costs, particularly for propane in the first half of the year, and costs of manufacturing capacity shutdowns, partially offset by higher intermediates selling prices and earnings from acquired businesses.
Provision for Income Taxes
Excluding the tax impact of non-core or non-recurring items, the fourth-quarter 2014 effective tax rate was 22 percent. The fourth-quarter 2014 tax rate was reduced by the one-year extension in December 2014 of favorable U.S. Federal tax provisions, which resulted in a net benefit of $15 million primarily related to research and development credits and deferral of certain earnings of foreign subsidiaries from U.S. income taxes. Excluding the tax impact of non-core or non-recurring items, the full-year 2014 effective tax rate was 26 percent compared to 28 percent for full year 2013 primarily reflecting the continued benefit of the integration of Eastman and Solutia business operations and legal entity structures.
Cash Flow
In 2014 Eastman generated $1.4 billion in cash from operating activities. 2014 free cash flow, defined as cash from operating activities minus capital expenditures, was $810 million. In addition, during 2014 the company contributed $120 million to its U.S. defined benefit pension plans and repurchased shares of $410 million. See Table 5A for reconciliation of cash provided by operating activities to free cash flow.
Outlook
Commenting on the outlook for full year 2015, Costa said: "We enter 2015 well positioned to benefit from our strong portfolio of specialty businesses, including the accretive acquisitions we completed in 2014. We are confident that we will continue to deliver long-term value from our leadership positions in key markets, the diversity of end-markets and geographies we serve, and market adoption of our specialty products. In the short-term, we also face challenges including continued global economic uncertainty, volatile oil prices, and the recent strengthening of the U.S. dollar. Under current business conditions, we expect 2015 earnings per share to be similar to 2014 earnings per share." Non-core and non-recurring items are excluded from the earnings per share projection.
The earnings for 2014, 2013, 2012, 2011, 2010, and 2009 referenced in the second paragraph and in the "Outlook" section of this release are non-GAAP and exclude the non-core or non-recurring items detailed, with reconciliation to GAAP earnings, in Tables 3 and 4 of this release and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's Annual Reports on Form 10-K for 2013, 2012, and 2011.
Eastman will host a conference call with industry analysts on January 30, 2015 at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides, go to www.investors.eastman.com, Events & Presentations. To listen via telephone, the dial-in number is +1-913-312-0690, passcode number 7017625. A web replay, a replay in downloadable MP3 format, and the accompanying slides will be available at www.investors.eastman.com, Events & Presentations. A telephone replay will be available continuously from 11:00 a.m. ET, January 30, to 11:00 a.m. ET, February 9, 2015 at +1-888-203-1112 or +1-719-457-0820, passcode 7017625.
Forward-Looking Statements: This news release includes forward-looking statements concerning current expectations for future global and regional economic conditions; competitive position in key markets; mix of products sold; foreign currency exchange rates; raw material and energy costs and crude oil prices; non-core or non-recurring costs, charges, income, and gains; earnings from acquired businesses; and revenue, earnings, and cash flow for full year 2015. 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 2014 available, and the Form 10-K to be filed for 2014 and to be available, on the Eastman web site at www.eastman.com in the Investors, SEC filings section.
Eastman is a global specialty chemical 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 2014 revenues of approximately $9.5 billion. The company is headquartered in Kingsport, Tennessee, USA and employs approximately 15,000 people around the world. For more information, visit www.eastman.com.
Contacts:
Media: Tracy Kilgore
+1-423-224-0498 / tjkilgore@eastman.com
Investors: Greg Riddle
+1-212-835-1620 / griddle@eastman.com
###
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Eastman Chemical Company via Globenewswire
Topic: Press release summary
Source: Eastman Chemical Company
http://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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