2017 Q4 Form 10-K Financial Statement

#000091538918000016 Filed on March 01, 2018

View on sec.gov

Income Statement

Concept 2017 Q4 2017 2016 Q4
Revenue $2.362B $9.549B $2.188B
YoY Change 7.95% 6.01% -1.66%
Cost Of Revenue $1.905B $7.186B $1.698B
YoY Change 12.19% 8.04% -1.05%
Gross Profit $457.0M $2.363B $490.0M
YoY Change -6.73% 0.25% -3.73%
Gross Profit Margin 19.35% 24.75% 22.39%
Selling, General & Admin $189.0M $729.0M $165.0M
YoY Change 14.55% 3.11% -24.66%
% of Gross Profit 41.36% 30.85% 33.67%
Research & Development $53.00M $227.0M $56.00M
YoY Change -5.36% 1.79% -13.85%
% of Gross Profit 11.6% 9.61% 11.43%
Depreciation & Amortization $147.0M $587.0M $144.0M
YoY Change 2.08% 1.21% 1.41%
% of Gross Profit 32.17% 24.84% 29.39%
Operating Expenses $195.0M $956.0M $221.0M
YoY Change -11.76% 2.8% -22.18%
Operating Profit $262.0M $1.532B $269.0M
YoY Change -2.6% 10.77% 19.56%
Interest Expense -$59.00M -$234.0M -$67.00M
YoY Change -11.94% -13.01% 3.08%
% of Operating Profit -22.52% -15.27% -24.91%
Other Income/Expense, Net -$4.000M $4.000M
YoY Change -200.0% -60.0%
Pretax Income $186.0M $1.289B $113.0M
YoY Change 64.6% 22.88% -3.42%
Income Tax $34.00M -$99.00M -$5.000M
% Of Pretax Income 18.28% -7.68% -4.42%
Net Earnings $491.0M $1.384B $116.0M
YoY Change 323.28% 62.06% -6.45%
Net Earnings / Revenue 20.79% 14.49% 5.3%
Basic Earnings Per Share $3.42 $9.56 $0.79
Diluted Earnings Per Share $3.39 $9.47 $0.79
COMMON SHARES
Basic Shares Outstanding 143.0M shares 144.8M shares 146.5M shares
Diluted Shares Outstanding 146.1M shares

Balance Sheet

Concept 2017 Q4 2017 2016 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $191.0M $191.0M $181.0M
YoY Change 5.52% 5.52% -38.23%
Cash & Equivalents $191.0M $191.0M $181.0M
Short-Term Investments
Other Short-Term Assets $57.00M $57.00M $70.00M
YoY Change -18.57% -18.57% 2.94%
Inventory $1.509B $1.509B $1.404B
Prepaid Expenses
Receivables $1.026B $1.026B $812.0M
Other Receivables $360.0M $360.0M $399.0M
Total Short-Term Assets $3.143B $3.143B $2.866B
YoY Change 9.67% 9.67% -0.42%
LONG-TERM ASSETS
Property, Plant & Equipment $5.607B $5.607B $5.276B
YoY Change 6.27% 6.27% 2.85%
Goodwill $4.527B $4.461B
YoY Change 1.48% -1.26%
Intangibles $2.373B $2.479B
YoY Change -4.28% -6.45%
Long-Term Investments $95.00M $18.00M
YoY Change 427.78%
Other Assets $349.0M $254.0M $375.0M
YoY Change -6.93% -30.79% -7.18%
Total Long-Term Assets $12.86B $12.86B $12.59B
YoY Change 2.1% 2.1% -0.87%
TOTAL ASSETS
Total Short-Term Assets $3.143B $3.143B $2.866B
Total Long-Term Assets $12.86B $12.86B $12.59B
Total Assets $16.00B $16.00B $15.46B
YoY Change 3.51% 3.51% -0.79%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $842.0M $842.0M $704.0M
YoY Change 19.6% 19.6% 0.72%
Accrued Expenses $199.0M $199.0M $196.0M
YoY Change 1.53% 1.53% -13.66%
Deferred Revenue
YoY Change
Short-Term Debt $393.0M $0.00 $283.0M
YoY Change 38.87% -34.34%
Long-Term Debt Due $393.0M $393.0M $283.0M
YoY Change 38.87% 38.87% -34.34%
Total Short-Term Liabilities $1.982B $1.982B $1.795B
YoY Change 10.42% 10.42% -12.69%
LONG-TERM LIABILITIES
Long-Term Debt $6.147B $6.147B $6.311B
YoY Change -2.6% -2.6% -4.04%
Other Long-Term Liabilities $534.0M $1.497B $519.0M
YoY Change 2.89% -2.6% -25.96%
Total Long-Term Liabilities $6.681B $7.644B $6.830B
YoY Change -2.18% -2.6% -6.16%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.982B $1.982B $1.795B
Total Long-Term Liabilities $6.681B $7.644B $6.830B
Total Liabilities $10.52B $10.60B $10.85B
YoY Change -3.04% -3.01% -6.14%
SHAREHOLDERS EQUITY
Retained Earnings $6.802B $5.721B
YoY Change 18.9% 11.17%
Common Stock $2.000M $2.000M
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $3.175B $2.825B
YoY Change 12.39% 5.41%
Treasury Stock Shares 75.45M shares 71.27M shares
Shareholders Equity $5.403B $5.403B $4.532B
YoY Change
Total Liabilities & Shareholders Equity $16.00B $16.00B $15.46B
YoY Change 3.51% 3.51% -0.79%

Cashflow Statement

Concept 2017 Q4 2017 2016 Q4
OPERATING ACTIVITIES
Net Income $491.0M $1.384B $116.0M
YoY Change 323.28% 62.06% -6.45%
Depreciation, Depletion And Amortization $147.0M $587.0M $144.0M
YoY Change 2.08% 1.21% 1.41%
Cash From Operating Activities $646.0M $1.657B $390.0M
YoY Change 65.64% 19.64% -32.06%
INVESTING ACTIVITIES
Capital Expenditures -$211.0M $649.0M -$251.0M
YoY Change -15.94% 3.67% 12.05%
Acquisitions $4.000M
YoY Change -84.62%
Other Investing Activities -$2.000M $4.000M -$45.00M
YoY Change -95.56% -90.91% 2150.0%
Cash From Investing Activities -$213.0M -$643.0M -$296.0M
YoY Change -28.04% -1.83% 30.97%
FINANCING ACTIVITIES
Cash Dividend Paid $296.0M
YoY Change 8.82%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $1.025B
YoY Change -51.79%
Cash From Financing Activities -438.0M -$1.006B -117.0M
YoY Change 274.36% 20.05% -67.77%
NET CHANGE
Cash From Operating Activities 646.0M $1.657B 390.0M
Cash From Investing Activities -213.0M -$643.0M -296.0M
Cash From Financing Activities -438.0M -$1.006B -117.0M
Net Change In Cash -5.000M $8.000M -23.00M
YoY Change -78.26% -107.41% 53.33%
FREE CASH FLOW
Cash From Operating Activities $646.0M $1.657B $390.0M
Capital Expenditures -$211.0M $649.0M -$251.0M
Free Cash Flow $857.0M $1.008B $641.0M
YoY Change 33.7% 32.81% -19.67%

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125000000 USD
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1129000000 USD
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1049000000 USD
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1289000000 USD
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5.80
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9.56
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63000000 USD
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126000000 USD
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190000000 USD
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338000000 USD
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316000000 USD
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123000000 USD
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533000000 USD
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20000000 USD
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12000000 USD
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7000000 USD
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18000000 USD
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393000000 USD
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366000000 USD
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450000000 USD
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14000000 USD
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4000000 USD
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7000000 USD
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25000000 USD
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29000000 USD
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9000000 USD
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30000000 USD
CY2017 us-gaap Income Tax Reconciliation Repatriation Of Foreign Earnings
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71000000 USD
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CY2016 us-gaap Income Tax Reconciliation Tax Contingencies
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CY2017 us-gaap Income Tax Reconciliation Tax Contingencies
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20000000 USD
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15000000 USD
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20000000 USD
CY2017 us-gaap Income Tax Reconciliation Tax Credits
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65000000 USD
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9000000 USD
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10000000 USD
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26000000 USD
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16000000 USD
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124000000 USD
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120000000 USD
CY2017 us-gaap Income Taxes Paid Net
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97000000 USD
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235000000 USD
CY2017Q4 us-gaap Income Taxes Receivable
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26000000 USD
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71000000 USD
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35000000 USD
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22000000 USD
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59000000 USD
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280000000 USD
CY2017 us-gaap Interest Paid Net
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264000000 USD
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288000000 USD
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473000000 USD
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470000000 USD
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198000000 USD
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213000000 USD
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P40Y
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1795000000 USD
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1982000000 USD
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6000000 USD
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8000000 USD
CY2017 us-gaap Minority Interest Decrease From Distributions To Noncontrolling Interest Holders
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4000000 USD
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1624000000 USD
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1385000000 USD
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1657000000 USD
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5000000 USD
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4000000 USD
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3000000 USD
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135000000 USD
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4
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79000000 USD
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90000000 USD
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8730000000 USD
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0 USD
CY2017 us-gaap Other Comprehensive Income Availableforsale Securities Adjustment Net Of Tax Portion Attributable To Parent
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0 USD
CY2015 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Net Of Tax
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CY2016 us-gaap Other Comprehensive Income Defined Benefit Plan Net Prior Service Cost Credit Arising During Period Before Tax
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0 USD
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0 USD
CY2015 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Before Tax
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64000000 USD
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22000000 USD
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43000000 USD
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27000000 USD
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16000000 USD
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150000000 USD
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11000000 USD
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93000000 USD
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7000000 USD
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21000000 USD
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105000000 USD
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8000000 USD
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30000000 USD
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144000000 USD
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399000000 USD
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360000000 USD
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44000000 USD
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4000000 USD
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103000000 USD
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145000000 USD
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350000000 USD
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42000000 USD
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48000000 USD
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34000000 USD
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238000000 USD
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272000000 USD
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6000000 USD
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8000000 USD
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7000000 USD
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45000000 USD
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26000000 USD
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4000000 USD
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652000000 USD
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626000000 USD
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649000000 USD
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110000000 USD
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89000000 USD
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963000000 USD
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0.01
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50000000 shares
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250000000 USD
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1848000000 USD
CY2017 us-gaap Proceeds From Issuance Of Long Term Debt
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675000000 USD
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8000000 USD
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15000000 USD
CY2017 us-gaap Proceeds From Issuance Or Sale Of Equity
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16000000 USD
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195000000 USD
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CY2017 us-gaap Proceeds From Repayments Of Short Term Debt
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4000000 USD
CY2016 us-gaap Proceeds From Sales Of Assets Investing Activities
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41000000 USD
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14000000 USD
CY2015 us-gaap Profit Loss
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854000000 USD
CY2016 us-gaap Profit Loss
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859000000 USD
CY2017 us-gaap Profit Loss
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P30Y
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CY2015Q4 us-gaap Valuation Allowances And Reserves Balance
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CY2017Q4 us-gaap Valuation Allowances And Reserves Balance
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27000000 USD
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30000000 USD
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1200000 shares
CY2016 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
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1100000 shares
CY2017 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
1300000 shares
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149800000 shares
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
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148400000 shares
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WeightedAverageNumberOfDilutedSharesOutstanding
146100000 shares
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148600000 shares
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WeightedAverageNumberOfSharesOutstandingBasic
147300000 shares
CY2017 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
144800000 shares
CY2017 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">RECENTLY ISSUED ACCOUNTING STANDARDS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board ("FASB") and International Accounting Standards Board jointly issued new principles-based accounting guidance for revenue recognition that provides a five-step process to the principles-based guidance. In August 2015, the FASB issued new guidance to delay the effective date of the new revenue standard by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted under the original effective date of fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. In April 2016, the FASB issued clarifying guidance to the 2014 revenue standard in regard to the identification of performance obligations and licensing. In May 2016, the FASB issued narrow-scope improvements and practical expedients to the new revenue standard that include clarification of the collectability criterion, specification for the measurement of noncash considerations, clarification of a completed contract for transition purposes and clarification in regards to the retrospective application, as well as, policy elections, and other practical expedients. In December 2016, the FASB issued additional corrections and improvements that affect various narrow aspects of the guidance. The effective date for all amendments is the same as that of the revenue standard stated above. Management does not expect that changes in its accounting required by this new guidance will materially impact the Company's financial statements and related disclosures. The Company adopted the standard under the modified-retrospective approach on January 1, 2018.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued guidance on lease accounting. The new guidance establishes two types of leases for lessees: finance and operating. Both finance and operating leases will have associated right-of-use assets and liabilities initially measured at the present value of the lease payments. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and early adoption is permitted. The new guidance is to be applied under a modified retrospective approach wherein practical expedients have been allowed that will not require reassessment of current leases at the effective date. Management is currently evaluating implementation options and impact on the Company's financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued guidance relating to credit losses. The amendments require a financial asset (including trade receivables) to be presented at the net amount expected to be collected through the use of allowances for credit losses valuation account. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period and early adoption is permitted, including adoption in an interim period, beginning after December 15, 2018. The new guidance application is mixed among the various elements that include modified retrospective and prospective transition methods. Management does not expect that changes in its accounting required by the new guidance will materially impact the Company's financial position or results of operations and related disclosures. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In October 2016, the FASB issued guidance as a part of its simplification initiative in regard to income tax of intra-entity asset transfers. The release requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments eliminate the exception for an intra-entity transfer of an asset other than inventory that prohibited recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset or assets have been sold to an outside party. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods and early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The new guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Management does not expect that changes in its accounting required by this new guidance will materially impact the Company's financial statements and related disclosures.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued guidance clarifying the definition of a business that provides a two-step analysis in the determination of whether an acquisition or derecognition is a business or an asset. The update removes the evaluation of whether a market participant could replace any missing elements and provides a framework to assist entities in evaluating whether both an input and a substantive process are present. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods and early adoption is permitted for transactions that meet specified criteria. This guidance is to be applied on a prospective basis for transactions that occur after the effective date.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued guidance as a part of its simplification initiative that bases the impairment of goodwill on any difference for which the carrying value is greater than the fair value of the reporting unit. This guidance is effective for annual reporting periods, or interim period testing performed, beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment testing performed after January 1, 2017. This guidance is to be applied on a prospective basis for goodwill testing that occur after the effective date. Management does not expect that changes in its accounting required by the new guidance will materially impact the Company's financial position or results of operations and related disclosures. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2017, the FASB issued guidance that clarifies the scope of nonfinancial asset derecognition and the accounting for partial sales of nonfinancial assets. This guidance is effective at the same time as the amendments in the revenue recognition standard stated above, for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and must be applied in conjunction with that standard. Adoption can be applied either on a retrospective or modified retrospective approach. Management does not expect that changes in its accounting required by the new guidance will materially impact the Company's financial position or results of operations and related disclosures. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2017, the FASB issued guidance to improve the presentation of net periodic pension and postretirement benefit costs that will require the reporting of the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost (interest cost, expected return on plan assets, curtailment gains or losses, amortization of prior service costs or credits, and MTM gains or losses) are to be presented in the income statement separately from the service cost component and outside the subtotal of income from operations, if presented. In addition, the new requirement prescribes only the service cost component to be eligible for capitalization. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The new guidance is to be applied retrospectively for income statement effect and prospectively for balance sheet effects. The total of other components of net benefit cost for 2017, 2016, and 2015 were </font><font style="font-family:inherit;font-size:10pt;">$135 million</font><font style="font-family:inherit;font-size:10pt;"> credit, </font><font style="font-family:inherit;font-size:10pt;">$3 million</font><font style="font-family:inherit;font-size:10pt;"> credit, and </font><font style="font-family:inherit;font-size:10pt;">$40 million</font><font style="font-family:inherit;font-size:10pt;"> cost, respectively.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2017, the FASB issued guidance to clarify when changes to the terms or conditions of a share-based payment award would require an entity to apply modification accounting. This guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. The new guidance is to be applied prospectively to an award modified on or after the adoption date. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2017, the FASB issued guidance to simplify the application of the current hedge accounting guidance and improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in the financial statements. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the guidance. Income statement impacts are to be adopted on a retrospective basis as of the beginning of the fiscal year of adoption. The amended presentation and disclosure guidance is required only prospectively. Management is currently evaluating the impact on the Company's financial statements and related disclosures.</font></div></div>
CY2017 us-gaap Revenue Recognition Accounting Policy Gross And Net Revenue Disclosure
RevenueRecognitionAccountingPolicyGrossAndNetRevenueDisclosure
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Revenue Recognition and Customer Incentives</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Eastman recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectability is reasonably assured.&#160;Revenue for products is recognized when title and risk of loss transfer to the customer.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company records estimated obligations for customer programs and incentive offerings, which consist primarily of revenue or volume-based amounts that a customer must achieve over a specified period of time, as a reduction of revenue from each underlying revenue transaction as the customer progresses toward goals specified in incentive agreements.&#160;These estimates are based on a combination of forecasts of customer sales and actual sales volume and revenues against established goals, the customer's current level of purchases, Eastman's knowledge of customer purchasing habits, and industry pricing practice.&#160;The incentive payment rate may be variable, based upon the customer reaching higher purchasing levels over a specified period of time in order to receive an agreed upon incentive payment.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>

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