Eastman Chemical Co. (NYSE:EMN) Q4 2017 Earnings Conference Call - Final Transcript

Feb 02, 2018 • 08:00 am ET

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Eastman Chemical Co. (NYSE:EMN) Q4 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, everyone, and welcome to the Eastman Chemical Company Fourth Quarter Full Year 2017 Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman's website, www.eastman.com.

We will now turn the call over to Mr. Greg Riddle of Eastman Chemical Company, Investor Relations. Please go ahead, sir.

Executive
Greg Riddle

Thank you, Jennifer, and good morning, everyone, and thanks for joining us. On the call with me today are Mark Costa, Board Chair and CEO; Curt Espeland, Executive Vice President and CFO; and Louis Reavis, Manager, Investor Relations.

Before we begin, I'll cover two items. First, during this presentation, you will hear certain forward-looking statements concerning our plans and expectations. Actual events or results could differ materially. Certain factors related to future expectations are or will be detailed in the company's fourth quarter and full year 2017 financial results News Release and in our filings with the Securities and Exchange Commission, including the Form 10-Q filed for the third quarter 2017 and the Form 10-K to be filed for 2017.

Second, earnings referenced in this presentation exclude certain non-GAAP and unusual items. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including the description of the excluded and adjusted items are available in the fourth quarter of full year of 2017 financial results News Release, which can be found on our website, www.eastman.com in the Investors section. Projection of future earnings exclude any non-core or unusual items.

And with that, I'll turn the call over to Mark.

Executive
Mark Costa

Good morning, everyone. I'll start on Slide 3. 2017 was a strong year for Eastman as we made great progress in our strategy to transform towards specialty portfolio and create attractive value for our shareholders. I am pleased to report that we met or exceeded the financial targets that we set last January.

On the EPS front we exceeded our goals to the strength of our performance over innovative specialty businesses. The key driver to the success was our continued strong growth, improving product mix, and cost structure leverage. In 2017 we delivered over 7% volume growth in our two specialty segments combined which is more than double the underlying markets. Strong contributors included many of our premium products such as Triton, Saflex acoustics and heads up display interlayers, Crystex tire additives, tire resins and performance films. In particular growth in premium products has been a key driver for the advanced materials segment and we're seeing this trend accelerate for additives and functional products.

We achieved the highest rate of new product commercializations form our innovation growth portfolio in our history. We also benefited from high reliability suppliers as our Chinese competitors faced stronger environmental enforcement. And we completed the construction of two of our new specially plants in Malaysia to support our future growth.

At the same time we took actions to reduce cost in a disciplined way which has allowed us to strategically invest in long-term growth and further improve our cost structure. As