Eastman Chemical : An annual report of employee stock purchase, savings and similar plans

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 11-K

(Mark

One)

1. ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018
   OR

• ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________

Commission file number 1-12626

A. Full Title of the plan and the address of the plan, if different from that of the issuer named below:

EASTMAN INVESTMENT AND EMPLOYEE STOCK OWNERSHIP PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

EASTMAN CHEMICAL COMPANY

200 S. Wilcox Drive

Kingsport, Tennessee 37662

Eastman Investment and Employee Stock Ownership Plan

Table of Contents

Report of Independent Registered Public Accounting Firm

	1
Basic Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2018 and 2017	2
Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2018 and 2017	3
Notes to Financial Statements	4-15
Additional Information (Note A):
Schedule of Assets (Held at End of Year) at December 31, 2018	17-28
Signatures	29
Exhibits	30

Note A: Other supplemental schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Plan Participants, Investment Plan Committee, and Plan Administrator of the

Eastman Investment and Employee Stock Ownership Plan

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Eastman Investment and Employee Stock Ownership Plan (the "Plan") as of December 31, 2018 and 2017, and the related statements of changes in net assets available for benefits for the years then ended, and the related notes and schedule (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Eastman Investment and Employee Stock Ownership Plan as of December 31, 2018 and 2017, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental Information

The supplemental information contained in the schedule of assets (held at end of year) as of December 31, 2018 has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ Brown Smith Wallace, LLP

We have served as the Plan's auditor since 2014.

St. Louis, Missouri

June 14, 2019

1

Eastman Investment and Employee Stock Ownership Plan

Statements of Net Assets Available for Benefits

December 31, 2018 and 2017

(in thousands)

					2018									2017
					Non-								Non-
		Participant		participant					Participant		participant
		Directed		Directed		Total		Directed		Directed		Total
Assets
Investments at fair value	$	1,970,658		$	156,323		$	2,126,981		$	2,077,072		$	199,046		$	2,276,118
Investments at contract value		750,607			-		750,607			836,262			-		836,262
Total investments		2,721,265			156,323			2,877,588			2,913,334			199,046			3,112,380
Receivables:
Plan sponsor contributions		37,204			12,470			49,674			32,251			15,336			47,587
Notes receivable from participants		52,672			-		52,672			52,277			-		52,277
Other receivables		3,245			1,320			4,565			4,248			1,197			5,445
Total assets		2,814,386			170,113			2,984,499			3,002,110			215,579			3,217,689
Liabilities
Accrued expenses		-		-		-		-		16			16
Other liabilities		1,507			1,308			2,815			2,202			1,238			3,440
Total liabilities		1,507			1,308			2,815			2,202			1,254			3,456
Net assets available for benefits	$	2,812,879		$	168,805		$	2,981,684		$	2,999,908		$	214,325		$	3,214,233

The accompanying notes are an integral part of these financial statements.

2

Eastman Investment and Employee Stock Ownership Plan Statements of Changes in Net Assets Available for Benefits For the Years Ended December 31, 2018 and 2017

(in thousands)

					2018									2017
					Non-								Non-
		Participant		participant					Participant		participant
		Directed		Directed		Total		Directed		Directed		Total
Additions to net assets:
Investment income
Interest	$	16,841		$	-	$	16,841		$	16,346		$	-	$	16,346
Dividends		60,861			4,990			65,851			45,042			4,661			49,703
Net (depreciation) appreciation in		(202,527)			(42,011)			(244,538)			314,102			38,518			352,620
fair value of investments
Net investment (loss) gain		(124,825)			(37,021)			(161,846)			375,490			43,179			418,669
Interest income from notes receivable		2,631			-		2,631			2,382			-		2,382
Participant contributions		107,874			-		107,874			100,752			-		100,752
Plan sponsor contributions		54,517			12,470			66,987			47,541			15,336			62,877
Total additions (deductions)		40,197			(24,551)			15,646			526,165			58,515			584,680
Deductions from net assets:
Distributions to and withdrawals by
participants		237,239			10,505			247,744			280,891			10,810			291,701
Administrative expenses		451			-		451			576			-		576
Total deductions		237,690			10,505			248,195			281,467			10,810			292,277
Net (decrease) increase in net assets		(197,493)			(35,056)			(232,549)			244,698			47,705			292,403
Transfers from non-participant
directed		10,464			(10,464)			-		14,069			(14,069)			-
Net assets available for benefits at		2,999,908			214,325			3,214,233			2,741,141			180,689			2,921,830
beginning of year
Net assets available for benefits at end	$	2,812,879		$	168,805		$	2,981,684		$	2,999,908		$	214,325		$	3,214,233
of year

The accompanying notes are an integral part of these financial statements.

3