EMN 12.31.2013 11-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 11-K


(Mark
One)
 
[X]
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2013
 
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

 
 
Basic Financial Statements:
 
 
 
 
 
Additional Information (Note A):
 
 
 
 
 
 
 

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 Participants and Administrator of
Eastman Investment and Employee Stock Ownership Plan

In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Eastman Investment and Employee Stock Ownership Plan (the "Plan") at December 31, 2013 and 2012, 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. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.



/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
June 27, 2014



1

Eastman Investment and Employee Stock Ownership Plan
Statements of Net Assets Available for Benefits
December 31, 2013 and 2012
(in thousands)

 
 
 
 
2013
 
 
 
 
 
2012
 
 
 
 
 
 
Non-
 
 
 
 
 
Non-
 
 
 
 
Participant
 
participant
 
 
 
Participant
 
participant
 
 
 
 
Directed
 
Directed
 
Total
 
Directed
 
Directed
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments at fair value
 
$
2,671,715

 
$
186,493

 
$
2,858,208

 
$
1,795,212

 
$
165,660

 
$
1,960,872

 
 
 
 
 
 
 
 
 
 
 
 
 
Receivables:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plan sponsor contributions
 
31,999

 
10,396

 
42,395

 
30,721

 
5,332

 
36,053

 
 
 
 
 
 
 
 
 
 
 
 
 
Notes receivable from participants
 
51,782

 
—

 
51,782

 
41,633

 
—

 
41,633

 
 
 
 
 
 
 
 
 
 
 
 
 
Other receivables
 
12,802

 
801

 
13,603

 
2,258

 
—

 
2,258

 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
2,768,298

 
197,690

 
2,965,988

 
1,869,824

 
170,992

 
2,040,816

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued expenses
 
19

 
19

 
38

 
15

 
14

 
29

 
 
 
 
 
 
 
 
 
 
 
 
 
Other liabilities
 
9,037

 
1,442

 
10,479

 
2,109

 
416

 
2,525

 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
 
9,056

 
1,461

 
10,517

 
2,124

 
430

 
2,554

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustment from fair value to contract value for fully benefit-responsive investment contracts
 
(20,516
)
 
—

 
(20,516
)
 
(24,824
)
 
—

 
(24,824
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets available for benefits
 
$
2,738,726

 
$
196,229

 
$
2,934,955

 
$
1,842,876

 
$
170,562

 
$
2,013,438

 
 
 
 
 
 
 
 
 
 
 
 
 

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, 2013 and 2012
(in thousands)

 
 
 
 
2013
 
 
 
 
 
2012
 
 
 
 
 
 
Non-
 
 
 
 
 
Non-
 
 
 
 
Participant
 
participant
 
 
 
Participant
 
participant
 
 
 
 
Directed
 
Directed
 
Total
 
Directed
 
Directed
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Additions to net assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment income
 
 
 
 
 
 
 
 
 
 
 
 
Interest
 
$
14,187

 
$
—

 
$
14,187

 
$
13,148

 
$
—

 
$
13,148

Dividends
 
70,208

 
2,945

 
73,153

 
32,293

 
2,680

 
34,973

Net appreciation in fair value of investments
 
206,547

 
29,798

 
236,345

 
166,951

 
71,530

 
238,481

Net investment gain
 
290,942

 
32,743

 
323,685

 
212,392

 
74,210

 
286,602

Interest income from notes receivable
 
2,171

 
—

 
2,171

 
1,810

 
—

 
1,810

Participant contributions
 
83,243

 
—

 
83,243

 
63,958

 
—

 
63,958

Plan sponsor contributions
 
40,969

 
10,396

 
51,365

 
34,620

 
5,332

 
39,952

Total additions
 
417,325

 
43,139

 
460,464

 
312,780

 
79,542

 
392,322

 
 
 
 
 
 
 
 
 
 
 
 
 
Deductions from net assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions to and withdrawals by participants
 
207,630

 
7,776

 
215,406

 
107,107

 
5,417

 
112,524

Administrative expenses
 
(263
)
 
—

 
(263
)
 
220

 
—

 
220

Total deductions
 
207,367

 
7,776

 
215,143

 
107,327

 
5,417

 
112,744

Net increase in net assets
 
209,958

 
35,363

 
245,321

 
205,453

 
74,125

 
279,578

Transfers from non-participant directed
 
9,696

 
(9,696
)
 
—

 
6,997

 
(6,997
)
 
—

Plan transfers
 
676,196

 
—

 
676,196

 
42,327

 
—

 
42,327

Net assets available for benefits at beginning of year
 
1,842,876

 
170,562

 
2,013,438

 
1,588,099

 
103,434

 
1,691,533

Net assets available for benefits at end of year
 
$
2,738,726

 
$
196,229

 
$
2,934,955

 
$
1,842,876

 
$
170,562

 
$
2,013,438


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


3
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


1.
DESCRIPTION OF PLAN    

The Eastman Investment and Employee Stock Ownership Plan (the "Plan") is a defined contribution plan of a controlled group of corporations consisting of Eastman Chemical Company and certain of its wholly-owned subsidiaries operating in the United States ("Eastman", the "Company" or the "Plan Sponsor"). The Plan is organized pursuant to Sections 401(a) and (k) and Section 4975(e) (7) of the Internal Revenue Code ("IRC"). All United States employees of Eastman, with the exception of certain limited service and special program employees, and employees covered by a collective bargaining agreement with the Company, unless the collective bargaining agreement or the Plan specifically provides for participation, are eligible to participate in the Plan on their first day of employment with Eastman. The Plan was adopted by Eastman, the Plan Sponsor, on January 1, 1994 and is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan is administered by the Investment Plan Committee ("IPCO"), which is the Plan Administrator and is comprised of Eastman employees. The Plan has trusts which are administered by the Fidelity Management Trust Company (the "Trustee"). The trusts include the Eastman Chemical Trust and the Eastman Stock Ownership Plan ("ESOP") Trust.

Money in the forfeiture account of the Plan is available to be used both to offset future Company contributions and for various administrative expenses of the Plan. The balance of the forfeiture account at December 31, 2013 and 2012 was $57,621 and $41,191, respectively. Forfeitures used in 2013 and 2012 were $8,101 and $39,402, respectively.

On or after January 1, 2007, each eligible employee hired by the Company will, in addition to the Retirement Savings Contribution ("RSC"), be automatically enrolled as a participant in the Eastman Investment Plan ("EIP") portion of the Plan. The participants will be deemed to have elected to defer 7% of their qualifying compensation each pay period to the EIP portion of the Plan, unless they affirmatively decline or they elect to contribute a percentage other than 7%. Each participant will also be eligible to receive a matching contribution from the Company equal to 50% of the first 7% of their pay that they contribute to the Plan each pay period. Plan participants may elect to enroll in an automatic annual increase program with an increase to deferral rates each year until the participant's deferral reaches 40%. Their contributions will be invested in Fidelity Freedom K® Fund that has a target retirement date closest to the year in which the participant reaches age 65 until changed by the participant.

Effective January 1, 2011, Eastman will make a "true-up" contribution for those participants who are eligible to receive a matching contribution under the Plan. Matching contributions made during the plan year will go through a year-end "true-up" to ensure that the matching contribution is based on the employee's total deferrals made to the Plan during the year. The true-up match ensures that the employee will receive 50% for each pre-tax dollar contributed on the first 7% of pay on qualified compensation up to the 401(a)(17) limit in effect.

For additional information regarding the Plan, see the complete Plan documents.

4
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


Contributions and vesting

Contributions to the Plan are made through two separate provisions: (1) deferral of qualifying compensation and (2) contributions by the Plan Sponsor of cash or its common stock to the participants' accounts as determined by the Compensation and Management Development Committee of the Board of Directors of Eastman.

The Plan includes a salary deferral provision allowing eligible employees to defer up to 40% of qualifying compensation, as defined in the Plan, up to the statutory limit of $17,500 for 2013 and $17,000 for 2012 as permitted by the IRC. For the catch-up salary deferral, an eligible employee who attained age 50 before the close of the calendar year was allowed to defer up to an additional 35% of qualifying compensation, as defined in the Plan, for 2013 and 2012 up to certain IRC limitations. Plan Sponsor contributions are also subject to certain other limitations. Participants' salary deferrals are contributed to the Plan by Eastman on behalf of the participants. The Plan's Trustee invests amounts contributed to the Plan, as designated by the participant, in common stock of Eastman, various growth and income mutual funds, and/or interest in a guaranteed investment contract fund (see Notes 6 and 7). Generally, participants may transfer amounts among the funds on any business day. Additionally, participants may diversify amounts from their ESOP Fund account within the Plan (see Note 10). Each participant is at all times 100% vested in their account, with the exception of amounts transferred from other plans, which continue to be subject to the former plans' vesting requirements.

The Plan requires for the RSC to be contributed either to the employees' ESOP Fund accounts for employees' first five RSC contributions or into other Plan funds, as directed by the participant, for participants with more than five RSC contributions. For participants with more than five RSC contributions, the RSC is allocated to participant-directed funds in accordance with each participant's investment elections at such time as the RSC is made.

Plan Sponsor contributions may be paid at any time during the plan year and subsequent to such plan year through the due date for filing the Company's federal income tax return, including any extensions. Contributions may be paid to the ESOP Trust in cash or shares of Eastman common stock and are deposited in the Company contribution account. Allocations to the participants' accounts from the Company contribution account will be made each plan year to participants who are eligible employees on the date designated by the Company. Participants are not permitted to make contributions to the ESOP Trust.

Employees may elect to transfer, into any of the Plan's fund options, balances received from (1) lump sum payouts from the Eastman Retirement Assistance Plan, a qualified defined benefit plan also sponsored by Eastman Chemical Company, (2) a former employer's 401(a) and 401(k) plan, or (3) an employee's individual retirement account containing amounts received from a qualified defined contribution plan under Section 401(a) and 401(k) of the IRC. All rollover contributions into the Plan must meet the applicable IRC requirements.



5
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


Notes receivable from participants

The IPCO may grant a note receivable (loan) of at least $1,000 to a participant provided that the aggregate of the participant's notes receivable does not exceed the lesser of (1) $50,000 reduced by the excess, if any, of (a) the participant's highest notes receivable balance from the preceding 12 months over (b) the outstanding total notes receivable balance from the Plan on the date on which the notes receivable was made, or (2) 50% of the non-forfeitable portion of the participant's account. In accordance with the Plan provisions, the rate of interest on new participant notes receivable approximates current market rates. The term of any notes receivable from participants is determined by IPCO and shall not exceed five years. Notes receivable from participants transferred to the Plan from acquisitions carry terms applicable under that plan. Notes receivable from participants are valued at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2013 or 2012. If a participant ceases to make loan repayments and the Plan Administrator deems the participant loan to be in default, the participant loan is reduced and a benefit payment is recorded. At December 31, 2013, $51.8 million in notes receivable from participants were outstanding for terms of 1 to 61 months and interest rates ranging from 3.25% to 7.75%. At December 31, 2012, $41.6 million in notes receivable from participants were outstanding for terms from 1 to 64 months and interest rates ranging from 4.25% to 7.00%.

Distributions

Distributions from the Plan require the approval of IPCO or its designee and are made under the following circumstances:

•
Upon attaining age 59½, a participant may elect to receive a lump sum cash distribution of their total or partial account value while still actively employed.

•
Upon separation of service from Eastman for any reason except death, the full value of a participant's account is distributed in a lump sum payment for those participants whose account value is less than or equal to $1,000. Separated participants with accounts in excess of $1,000 may elect either (1) to defer distribution until a later date but, in no event, later than April 1 of the calendar year following the year a participant attains age 70½ or (2) an immediate lump-sum distribution of the participant's account or, at the election of the participant, distributions in monthly or annual installments. Participants in the Eastman Stock Fund or ESOP Fund may elect a lump sum distribution in Eastman common stock.

•
In the event of death, the value of a participant's account is paid in a lump sum if the designated beneficiary is not the surviving spouse or if the account value is less than or equal to $1,000. If the beneficiary is a surviving spouse and the participant account value exceeds $1,000, payment will be made in either a lump-sum amount or, at the election of the surviving spouse, in monthly or annual installments.

•
Distributions to participants shall commence in the year following the year a participant attains age 70½, unless the participant is still actively employed with the Company.

6
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


•
Approval of hardship withdrawals will only be granted in order to meet obligations relating to the payment of substantial out-of-pocket medical expenses, the purchase of a primary residence, the payment of tuition or other post-secondary educational expenses, or payments to prevent eviction or foreclosure. They are also granted for payment of funeral expenses for a deceased parent, spouse or child of the participant, or payment of expenses for repair or damage to the participants' principal residence. Hardship withdrawals may not exceed the value of the participant's accounts in the Plan on the date of withdrawal.

•
The Trustee is authorized to honor qualified domestic relation orders issued and served in accordance with Section 414(p) of the IRC.

Investment of ESOP Fund Assets

ESOP Fund assets are invested primarily in Eastman common stock. However, at IPCO's discretion, funds may also be invested in other securities or held in cash.

Investment assets can be acquired by the ESOP Fund in three ways:

•
The Company may make a direct contribution of cash to the ESOP Fund, which would then be used to purchase Eastman common stock or other securities.

•
The Company may contribute shares of Eastman common stock directly to the ESOP Fund.

•
The Company may direct the Trustee to obtain a loan to purchase securities (i.e., leveraged ESOP). Until the loan is repaid, securities acquired with the respective loan proceeds are not available to be allocated to participants' accounts and are maintained in a "Loan Suspense Account". On the last day of each plan year, a proportionate share of securities relating to loan amounts which have been repaid will be transferred out of the Loan Suspense Account and allocated to the accounts of ESOP Fund participants. The ESOP Fund currently is not a leveraged ESOP.

Dividends attributable to the ESOP Fund

IPCO may direct that Eastman common stock dividends attributable to the non-participant directed ESOP Fund be (a) allocated to the accounts of participants, (b) paid in cash to the participants on a nondiscriminatory basis, or (c) paid by the Company directly to participants. Alternatively, dividends received from Eastman common stock maintained in the Loan Suspense Account may be applied to reduce the related loan balance.

Allocations to participants' ESOP Fund accounts

Separate participant accounts are established to reflect each participant's interest in the ESOP Fund and are maintained under the unit value method of accounting. The ESOP Fund account maintained for each participant consists of:

•
Plan Sponsor contributions made or invested in shares of Eastman common stock.

•
Shares of Eastman common stock purchased with assets transferred to the ESOP Fund pursuant to the spin-off from Eastman Kodak Company and/or acquired with the proceeds of a loan released from the Loan Suspense Account.

7
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


•
An allocable share of short-term interest and money market funds held in the ESOP Fund for purposes of payment of expenses and similar purposes.

•
After-tax contributions transferred to the ESOP Fund pursuant to the spin-off from Eastman Kodak Company (such after-tax contributions are no longer permitted under the ESOP provisions).

The number of units allocated to a participant's account in any year is based on the ratio of the participant's compensation to the total compensation of all eligible employees entitled to share in the allocation for that plan year. In any year in which a Company contribution is made, a participant's allocation will not be less than one share of stock.

Federal law limits the total annual contributions that may be made on a participant's behalf to all defined contribution and defined benefit plans offered by the Company. Participants will be notified if their total annual contribution is limited by this legal maximum.

2.
SUMMARY OF ACCOUNTING POLICIES

The following accounting policies, which conform to accounting principles generally accepted in the United States of America ("USGAAP"), have been used consistently in the preparation of the Plan's financial statements.

Basis of accounting

The Plan's financial statements are prepared on the accrual basis of accounting.

As described by USGAAP, investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by USGAAP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.

Use of estimates

The preparation of financial statements in conformity with USGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

8
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


Investment policy and valuation

The Plan's investments are stated at fair value. If available, quoted market prices are used to value investments. IPCO determines the Plan's valuation policies utilizing information provided by Fidelity Investments and the Director of Benefits Finance and Investments. See Note 8 for discussion of fair value measurements.

For investments in the ESOP Fund and the Eastman Stock Fund, the Trustee may keep any portion of participant and Plan Sponsor contributions temporarily in cash or liquid investments as it may deem advisable. All dividends, interest or gains derived from investment in each fund are reinvested in the respective fund by the Trustee.

The Managed Income Fund is reported at fair value based on valuation policies as determined by IPCO utilizing information provided by the contract issuers. The Managed Income Fund is comprised of synthetic investment contracts that include interests in individual fixed income securities that are held in trust for the Plan. The Plan then enters into a benefit responsive wrapper contract with a third party such as a financial institution or an insurance company which guarantees the Plan a specific value and rate of return. The underlying securities are valued at quoted market prices. The wrap contracts are valued using the market value method (see Note 7).

Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded at the ex-dividend date.

The Plan presents in the Statements of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments.

Payments to participants

Benefit payments to participants are recorded when paid.

3.
RISKS AND UNCERTAINTIES

Investment securities are exposed to various risks, such as interest rate risk, market risk, and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participant account balances and the amounts reported in the financial statements. Included in investments at December 31, 2013 and 2012 are shares of the sponsor's common stock amounting to $407 million and $312 million, respectively. This investment represents 14.2% and 15.9% of total investments at December 31, 2013 and 2012, respectively. A significant decline in the market value of the sponsor's stock would significantly affect the net assets available for benefits.

9
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


4.
CONTRIBUTIONS

Participant contributions represent qualifying compensation and other qualifying employee bonuses withheld from participating employees by Eastman and contributed to the Plan. Contributions are invested in the Plan's funds as directed by the participants, with the exception of the ESOP Fund, subject to ERISA funding limitations. The Plan has accrued Company contributions for participant-directed funds of $32 million and $30.7 million and for the non-participant-directed ESOP Fund of $10.4 million and $5.3 million at December 31, 2013 and 2012, respectively.

5.
NOTES RECEIVABLE FROM PARTICIPANTS

The Plan Trustee makes loans to participants in accordance with Plan provisions. The loans are reflected as notes receivable from participants. Notes receivable from participants are accounted for as a transfer from the fund directed by the participant to the Notes Receivable from Participants Fund. The principal portion of participant repayments reduces the Notes Receivable from Participants Fund receivable. The principal and interest repaid are directed to funds to which the participant's current contributions are directed; the principal is accounted for as a transfer and the interest accounted for as income in the fund to which the participant's current contributions are directed. The Notes Receivable from Participants Fund's net assets and other changes in net assets are included in the participant-directed funds in the Statements of Net Assets and Changes in Net Assets Available for Benefits, respectively. Notes receivable from participants are valued at their unpaid principal balance plus any accrued but unpaid interest.

Unless otherwise specified by the participant, the proceeds of new notes receivable will be withdrawn from the investment funds on a pro-rata basis. Outstanding notes receivable from participants at December 31, 2013 and 2012 were approximately $51.8 million and $41.6 million, respectively. Interest income earned on notes receivable from participants is credited directly to the participants' accounts and was approximately $2.2 million and $1.8 million for 2013 and 2012, respectively.

6.
INVESTMENTS

At December 31, 2013 and 2012, the Plan's assets were invested in Eastman Chemical Company common stock, mutual funds, and synthetic investment contracts (see Note 7). Subject to certain limitations, participants are provided the option of directing their contributions among the investment options. The Plan also holds an interest in the non-participant directed Eastman ESOP Fund, which invests in Eastman Chemical Company common stock and short-term interest funds. The following table presents the fair value of investments by type at December 31, 2013 and 2012, respectively.
 
 
 
 
 
(in thousands)
 
2013
 
2012
 
 
 
 
 
Cash
 
$
1,721

 
$
4,307

Eastman Chemical Company common stock
 
407,148

 
311,966

Mutual funds
 
1,373,081

 
842,613

Managed income fund
 
1,049,235

 
781,360

Self-directed brokerage account
 
27,023

 
20,626

 
 
 
 
 
Total
 
$
2,858,208

 
$
1,960,872



10
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


The following investment options, which invest primarily in common stock of the Plan Sponsor, were available to participants in 2013 and 2012:

Eastman Stock Fund
This participant-directed fund consists primarily of Eastman Class A common stock. Purchases and sales of Eastman common stock are generally made on the open market on behalf of and as elected by Plan participants. During 2013, the Trustee purchased 1,924,300 shares of Eastman common stock for the fund at an average price of $72.49 per share, and sold 1,290,900 shares of Eastman common stock for the fund at an average price of $75.48 per share. During 2012, the Trustee purchased 1,402,500 shares of Eastman common stock for the fund at an average price of $49.51 per share and sold 3,319,200 shares at an average price of $52.54 per share. Dividends paid from the Eastman Stock Fund totaled $3.2 million and $3.1 million in 2013 and 2012, respectively.

Eastman ESOP Fund
This non-participant directed fund consists primarily of Eastman Class A common stock. Purchases and sales of Eastman common stock are generally made on the open market, on behalf of its participants and as directed by the Plan's guidelines. During 2013, the Trustee purchased 85,300 shares of Eastman common stock for the fund at an average price of $73.77 per share, and sold 181,200 shares of Eastman common stock for the fund at an average price of $74.40 per share. During 2012, the Trustee purchased 107,800 shares of Eastman common stock for the fund at an average price of $54.39 per share, and sold 200,300 shares at an average price of $53.91 per share. Participants can elect to have the dividends paid in cash or reinvested back into the Eastman ESOP fund.

At December 31, 2013 and 2012, the following investments represented 5% or greater of ending net assets:

(in thousands)
 
 
December 31, 2013
 
 
 
Shares
 
Fair value
 
 
 
 
 
 
Eastman Chemical Company Common Stock, Participant Directed
 
 
2,756

 
$
222,376

Eastman Chemical Company Common Stock, Non-Participant Directed
 
 
2,290

 
184,772

Fidelity Contrafund K
 
 
1,695

 
162,796

 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
 
 
December 31, 2012
 
 
 
Shares
 
Fair value
 
 
 
 
 
 
Eastman Chemical Company Common Stock, Participant Directed
 
 
2,174

 
$
147,911

Eastman Chemical Company Common Stock, Non-Participant Directed
 
 
2,411

 
164,055

Fidelity Contrafund K
 
 
1,564

 
121,194

PIMCO Total Return Institutional Class
 
 
12,605

 
141,677

USTN 1.75% 7/31/15
 
 
—

 
106,692



11
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements

During 2013 and 2012, the Plan's investments appreciated as follows:

(in thousands)
 
 
 
 
 
 
2013
 
2012
 
 
 
 
 
Eastman Chemical Company Common Stock, Participant Directed
 
$
29,798

 
$
71,530

Eastman Chemical Company Common Stock, Participant Directed
 
36,256

 
93,309

Mutual Funds
 
170,291

 
73,642

Total
 
$
236,345

 
$
238,481


7.
INSURANCE CONTRACTS

The Plan invests in the Managed Income Fund (the "Fund"), which invests in synthetic investment contracts. The term "synthetic" investment contract is used to describe a variety of investment contracts under which a Plan retains ownership of the invested assets, or owns units of an account or trust which holds the invested assets. A "synthetic" investment contract, also referred to as a "wrap" contract, is negotiated with an independent financial institution. Under the terms of these investment contracts, the contract issuer ensures the Plan's ability to pay eligible employee benefits at book value. The investment performance of a synthetic investment contract may be a function of the investment performance of the invested assets.

A wrap contract is an agreement by another party, such as a bank or insurer, to make payments to the Fund in certain circumstances. Wrap contracts are designed to allow a stable value fund, such as the Fund, to maintain a constant net asset value ("NAV") and to protect the Fund in extreme circumstances. In a typical wrap contract, the wrap issuer agrees to pay the Fund the difference between the contract value and the market value of the covered assets once the market value has been totally exhausted. Though relatively unlikely, this could happen if the Fund experiences significant redemptions (redemption of most of the Fund's shares) during a time when the market value of the Fund's covered assets are below their contract value, and market value is ultimately reduced to zero. If that occurs, the wrap issuer agrees to pay the Fund an amount sufficient to cover shareholder redemptions and certain other payments (such as fund expenses), provided all the terms of the wrap contract have been met. Purchasing wrap contracts is similar to buying insurance, in that the Fund pays a relatively small amount to protect against a relatively unlikely event (the redemption of most of the shares of the Fund). Fees paid by the Fund for wrap contracts are a component of the Fund's expenses.

Wrap contracts accrue interest using a formula called the "crediting rate". Wrap contracts use the crediting rate formula to convert market value changes in the covered assets into income distributions in order to minimize the difference between the market and contract value of the covered assets over time. Using the crediting rate formula, an estimated future market value is calculated by compounding the Fund's current market value at the Fund's current yield to maturity for a period equal to the Fund's duration. The crediting rate is the discount rate that equates the estimated future market value with the Fund's current contract value. Crediting rates are reset quarterly. The wrap contracts provide a guarantee that the crediting rate will not fall below zero percent.

12
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


The crediting rate, and hence the Fund's return, may be affected by many factors, including purchases and redemptions by shareholders. The precise impact on the Fund depends on whether the market value of the covered assets is higher or lower than the contract value of those assets. If the market value of the covered assets is higher than their contract value, the crediting rate will ordinarily be higher than the yield of the covered assets. Under these circumstances, cash from new investors will tend to lower the crediting rate and the Fund's return, and redemptions by existing shareholders will tend to increase the crediting rate and the Fund's return.

The Fund and the wrap contracts purchased by the Fund are designed to pay all participant-initiated transactions at contract value. Participant-initiated transactions are those transactions allowed by the underlying defined contribution plan (typically this would include withdrawals for benefits, loans, or transfers to non-competing funds within the Plan). However, the wrap contracts limit the ability of the Fund to transact at contract value upon the occurrence of certain events. These events include:
•
The Plan's failure to qualify under Section 401(a) or Section 401(k) of the IRC.
•
The establishment of a defined contribution plan that competes with the Plan for employee contributions.
•
Any substantive modification of the Plan or the administration of the Plan that is not consented to by the wrap issuer.
•
Complete or partial termination of the Plan.
•
Any change in law, regulation or administrative ruling applicable to the Plan that could have a material adverse effect on the Fund's cash flow.
•
Merger or consolidation of the Plan with another plan, the transfer of Plan assets to another plan, or the sale, spin-off or merger of a subsidiary or division of the Plan Sponsor.
•
Any communication given to participants by the Plan Sponsor or any other Plan fiduciary that is designed to induce or influence participants not to invest in the Fund or to transfer assets out of the Fund.
•
Exclusion of a group of previously eligible employees from eligibility in the Plan.
•
Any early retirement program, group termination, group layoff, facility closing, or similar program.
•
Any transfer of assets from the Fund directly to a competing option.

At this time, the occurrence of any of these events is not considered probable by IPCO.

The average yields for the Fund for the years ended December 31, 2013 and 2012 are as follows:

Average yields:
 
2013
 
2012
 
 
 
 
 
Based on actual earnings
 
1.51%
 
1.57
%
Based on interest rate credited to participants
 
1.44%
 
1.71
%

The weighted average crediting interest rate for the Fund was 1.47% and 1.77% at December 31, 2013 and 2012, respectively.

13
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


The value of the Fund reflected in these financial statements is based upon the principal invested and the interest credited. The fair value of the Fund, by investment type, as of December 31, 2013 and 2012 was as follows:

(in thousands)
 
2013
 
2012
 
 
 
 
 
Security backed investments:
 
 
 
 
Underlying assets at fair value
 
$
1,049,235

 
$
781,360

Adjustment to contract value
 
(20,516
)
 
(24,824
)
Total contract value
 
$
1,028,719

 
$
756,536


8.
FAIR VALUE MEASUREMENT

Following is a description of the valuation methodologies used for assets measured at fair value.

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

Mutual funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value ("NAV") and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

Synthetic guaranteed investment contract ("GIC"): Valued at fair value by discounting the related cash flows based on the current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer.

Corporate securities: Valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.

Government securities: Valued using pricing models maximizing the use of observable inputs for similar securities.

Mortgage-backed securities: Mortgage-backed securities are valued on the basis of valuations furnished by Trustee-approved independent pricing services. These services determine valuations for normal institutional-size trading units of such securities using models or matrix pricing, which incorporates yield and/or price with respect to bonds that are considered comparable in characteristics such as rating, interest rate and maturity date, and quotations from bond dealers to determine current value. If these valuations are deemed to be either not reliable or not readily available, the fair value will be determined in good faith by the Trustee.

Self-directed brokerage account: Unit valuation based on the underlying NAV of the mutual funds.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

14
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


USGAAP provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under USGAAP are described below:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Unobservable inputs based on the Plan's assumptions used to measure assets and liabilities at fair value.

A financial instrument's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

15
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


The following table sets forth by level, within the fair value hierarchy, the Plan's assets at fair value as of December 31, 2013 and 2012:
(in thousands)
 
Description
 
December 31, 2013
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
Cash
 
$
1,721

 
$
1,721

 
$
—

Eastman common stock
 
407,148

 
407,148

 
—

Mutual funds:
 
 
 
 
 
 
    Balanced/hybrid
 
132,548

 
132,548

 
—

    Bond funds
 
101,897

 
101,897

 
—

    International
 
105,607

 
105,607

 
—

    Large blend
 
204,488

 
204,488

 
—

    Large growth
 
275,334

 
275,334

 
—

    Mid blend
 
43,728

 
43,728

 
—

    Mid growth
 
58,783

 
58,783

 
—

    Money market
 
457

 
457

 
—

    Small blend
 
127,266

 
127,266

 
—

    Target date funds
 
322,973

 
322,973

 
—

Managed income fund:
 
 
 
 
 
 
    Corporate securities
 
223,876

 
—

 
223,876

    Fidelity short-term investment fund
 
25,047

 
—

 
25,047

    Government securities
 
621,058

 
—

 
621,058

    Mortgage-backed securities
 
164,477

 
—

 
164,477

    Other
 
14,590

 
—

 
14,590

    Synthetic GIC
 
187

 
—

 
187

Self-directed brokerage account - mutual funds
 
27,023

 
27,023

 
—

Total
 
$
2,858,208

 
$
1,808,973

 
$
1,049,235

 
 
 
 
 
 
 
(in thousands)
 
Description
 
December 31, 2012
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
Cash
 
$
4,307

 
$
4,307

 
$
—

Eastman common stock
 
311,966

 
311,966

 
—

Mutual funds:
 
 
 
 
 
 
    Balanced/hybrid
 
58,637

 
58,637

 
—

    Bond funds
 
141,677

 
141,677

 
—

    International
 
65,634

 
65,634

 
—

    Large blend
 
96,368

 
96,368

 
—

    Large growth
 
201,794

 
201,794

 
—

    Mid blend
 
19,539

 
19,539

 
—

    Mid growth
 
25,114

 
25,114

 
—

    Money market
 
1

 
1

 
—

    Small blend
 
87,051

 
87,051

 
—

    Target date funds
 
146,798

 
146,798

 
—

Managed income fund:
 
 
 
 
 
 
    Corporate securities
 
164,051

 
—

 
164,051

    Fidelity short-term investment fund
 
43,189

 
—

 
43,189

    Government securities
 
468,949

 
—

 
468,949

    Mortgage-backed securities
 
93,842

 
—

 
93,842

    Other
 
10,429

 
—

 
10,429

    Synthetic GIC
 
900

 
—

 
900

Self-directed brokerage account - mutual funds
 
20,626

 
20,626

 
—

Total
 
$
1,960,872

 
$
1,179,512

 
$
781,360


16
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


There are no redemption restrictions on the mutual fund investments. They are fully liquid and can be redeemed on a daily basis. There were no transfers between levels during 2013 and 2012. Also, there are no Level 3 investments at December 31, 2013 and 2012.

9.
OTHER RECEIVABLES AND OTHER LIABILITIES

Other receivables in the amount of $13.6 million and $2.3 million at December 31, 2013 and 2012, respectively, represent interest and dividends receivable, as well as receivables from the sale of investments. Other liabilities in the amount of $10.5 million and $2.5 million at December 31, 2013 and 2012, respectively, represent liabilities from the purchase of investments.

10.
DIVERSIFICATION FROM ESOP FUND

A participant may direct that all or any portion of his ESOP Fund account be transferred to other funds in the Plan without restrictions. During 2013 and 2012, $9.7 million and $7.0 million, respectively, were transferred from the ESOP Fund within the Plan in connection with this program.

11.
PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination, participant accounts will be distributed to individual participants in accordance with the Plan document and ERISA provisions.

12.
FEDERAL INCOME TAX STATUS

The Plan obtained its latest determination letter in April 2014, in which the IRS stated that the Plan is in compliance with the applicable requirements of the IRC. No provision for income taxes has been included in the Plan's financial statements.

USGAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions by the Plan, and has concluded that as of December 31, 2013 and 2012, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2010.

13.
PLAN EXPENSES

Reasonable expenses of administering the Plan, unless paid by the Company, shall be paid by the Plan. For both 2013 and 2012, trustee fees associated with the Eastman Stock Fund and the Eastman ESOP Fund were paid with assets of those individual funds. Brokerage fees, transfer taxes, investment fees and other expenses incidental to the purchase and sale of securities and investments shall be included in the cost of such securities or investments or deducted from the sales proceeds. Administration fees for notes receivable from participants are deducted quarterly from the accounts of participants with outstanding notes receivable balances. Origination fees from notes receivable from participants are deducted from the participant's account at the inception of the note receivable. For 2013 and 2012, the Company paid all other expenses of the Plan related to plan oversight and administration, including audit fees.

17
Eastman Investment and Employee Stock Ownership Plan
Notes to Financial Statements


14.
RELATED PARTIES

Certain Plan investments are shares of mutual funds managed by the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions, which are exempt from prohibited transaction rules. The Plan also invests in the common stock of the Plan Sponsor as well as notes receivable from Plan participants, both of which qualify as parties-in-interest to the Plan and are exempt from prohibited transaction rules (see Note 6).

15.
PLAN TRANSFERS

Effective July 2, 2012, Eastman acquired Solutia, Inc. The Solutia, Inc. Savings and Investment Plan (the "Solutia Plan") was originally established effective September 1, 1997 and effective April 1, 2013, the Non-Union portion was merged with and into the Plan with the remaining account balances merged with and into the Plan effective June 3, 2013.

Effective August 9, 2011, Eastman acquired Eastman Chemical Texas City, Inc., formerly Sterling Chemicals, Inc. The Sterling Chemicals, Inc. Savings and Investment Plan was originally established effective August 1, 1986 and effective April 2, 2012, was merged with and into the Plan.

16.
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

(in thousands)
 
December 31,
2013
 
December 31,
2012
 
 
 
 
 
Investments at fair value
 
$
2,858,208

 
$
1,960,872

Notes receivable from participants
 
51,782

 
41,633

Adjustment from fair value to contract value for fully benefit-responsive investment contracts
 
(20,516
)
 
(24,824
)
Total investments per Form 5500
 
$
2,889,474

 
$
1,977,681


17.
SUBSEQUENT EVENTS

The Plan Administrator has evaluated events occurring between December 31, 2013 and June 27, 2014 for proper recording and disclosure in these financial statements.





18



















Supplemental Schedule


19
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)


(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
*
Eastman Chemical Company
Common Stock, Participant directed, 2,756 shares
**
$222,376
*
Eastman Chemical Company
Common Stock, Non-Participant directed, 2,290 shares
165,717
184,772
 
Subtotal - Common Stock
 
 
407,148
*
Fidelity Management Trust Company
Interest Bearing Cash, Non-Participant directed
1,721
1,721
 
Subtotal - Cash
 
 
1,721
*
Fidelity FUND K
Registered Investment Company, 1,424 shares
**
60,700
*
Fidelity PURITAN K
Registered Investment Company, 6,246 shares
**
132,548
*
Fidelity MAGELLAN K
Registered Investment Company, 608 shares
**
56,096
*
Fidelity CONTRAFUND K
Registered Investment Company, 1,695 shares
**
162,796
*
Fidelity Spartan 500 INDEX INST
Registered Investment Company, 1,350 shares
**
88,394
*
FID INTL DISCOVERY K
Registered Investment Company, 1,662 shares
**
67,148
*
Fidelity BLUE CHIP GR K
Registered Investment Company, 709 shares
**
44,961
*
FID RETIRE MMKT
Registered Investment Company, 457 shares
**
457
*
Fidelity Freedom K INCOME
Registered Investment Company, 535 shares
**
6,395
*
Fidelity Freedom K 2000
Registered Investment Company, 217 shares
**
2,654
*
Fidelity Freedom K 2005
Registered Investment Company, 485 shares
**
6,521
*
Fidelity Freedom K 2010
Registered Investment Company, 1,423 shares
**
19,964
*
Fidelity Freedom K 2015
Registered Investment Company, 2.291 shares
**
32,627
*
Fidelity Freedom K 2020
Registered Investment Company, 4,804 shares
**
71,485
*
Fidelity Freedom K 2025
Registered Investment Company, 2,754 shares
**
42,715
*
Fidelity Freedom K 2030
Registered Investment Company, 3,614 shares
**
57,321
*
Fidelity Freedom K 2035
Registered Investment Company, 1,504 shares
**
24,640
*
Fidelity Freedom K 2040
Registered Investment Company, 1,618 shares
**
26,643
*
Fidelity Freedom K 2045
Registered Investment Company, 703 shares
**
11,803
*
Fidelity Freedom K 2050
Registered Investment Company, 1,198 shares
**
20,205
 
CLIPPER FUND
Registered Investment Company, 201 shares
**
18,511
 
FKLN SMMIDCP GRTH R6
Registered Investment Company, 1,365 shares
**
58,783
 
JPM EQUITY INCOME R5
Registered Investment Company, 2,826 shares
**
36,883
 
NB GENESIS - INST CL
Registered Investment Company, 1,414 shares
**
87,513
 
PIM TOTAL RT INST
Registered Investment Company, 9,532 shares
**
101,897
*
SPTN EXT MKT IDX ADV
Registered Investment Company, 819 shares
**
43,728
*
SPTN INTL INDEX INS
Registered Investment Company, 350 shares
**
14,240
 
TCW SELECT EQUITY I
Registered Investment Company, 454 shares
**
11,481
 
TEMPLETON FOREIGN R6
Registered Investment Company, 2,590 shares
**
21,237
 
TIFI TEMPL EMG MKTS
Registered Investment Company, 408 shares
**
2,982
 
WFA SM CAP VAL INST
Registered Investment Company, 1,182 shares
**
39,753
 
Sub-total Mutual Funds
 
 
1,373,081

20
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
*
Fidelity
Cash
**
13,529
 
NISA
Cash
**
1,061
 
ABB FIN USA INC 1.625% 5/08/17
Corporate Bond 1.625% 5/8/17
**
285
 
ABBEY NATL 3.875 11/10/14 144A
Corporate Bond 3.875% 11/10/14 144A
**
1,580
 
ABBVIE INC
Corporate Bond 1.2% 11/6/15
**
263
 
ABBVIE INC 1.75% 11/06/17 WI
Corporate Bond 1.75% 11/06/17
**
2,810
 
ACE INA HOLDINGS
Corporate Bond 5.7% 2/15/17
**
797
 
AETNA INC 1.5% 11/15/17
Corporate Bond 1.5% 11/15/17
**
94
 
ALLYA 2013-1 A3 .63% 5/15/17
Mortgage backed security .63% 5/15/17
**
2,626
 
ALLYL 2012-SN1 A3 .57% 8/20/15
Mortgage backed security .57% 8/20/15
**
2,194
 
AMAZON.COM INC
Corporate Bond 1.2% 11/29/17
**
314
 
AMEREN CORPORATION
Corporate Bond 8.875% 5/15/14
**
109
 
AMERICAN EX MTN 1.3% 07/29/16
Corporate Bond 1.3% 7/29/16
**
931
 
AMERICAN EX MTN 2.8% 9/19/16
Corporate Bond 2.8% 9/19/16
**
379
 
AMERICAN EXP .875% 11/13/15
Corporate Bond .875% 11/13/15
**
773
 
AMERICAN EXPRESS 1.55% 5/22/18
Corporate Bond 1.55% 5/22/18
**
753
 
American General Life
Synthetic GIC - 1.598%
**
37
 
AMERICAN HONDA 1.5% 9/17 144A
Corporate Bond 1.5% 9/17 144A
**
759
 
AMERICAN HONDA FIN 2.125 10/18
Corporate Bond 2.125% 10/18
**
883
 
AMERICAN INTL GRP 3% 3/20/15
Corporate Bond 3% 3/20/15
**
1,130
 
AMERICAN INTL GRP 3.8% 3/22/17
Corporate Bond 3.8% 3/22/17
**
1,691
 
AMXCA 2012-2 A .68% 3/18
Mortgage backed security .68% 3/18
**
5,121
 
AMXCA 2012-5 A 0.59% 5/18
Mortgage backed security .59% 5/18
**
6,274
 
AMXCA 2013-3 A .98% 05/19
Mortgage backed security .98% 5/19
**
860
 
APACHE CORP 1.75% 4/15/17
Corporate Bond 1.75% 4/15/17
**
205
 
APPLE INC 1% 5/3/18
Corporate Bond 1% 5/3/18
**
2,810
 
ASIAN DEVELOPMENT BANK
Corporate Bond 5.593% 7/16/18
**
89
 
AT&T INC 1.4% 12/01/17
Corporate Bond 1.4% 12/01/17
**
765
 
AT&T INC 2.4% 8/15/16
Corporate Bond 2.4% 8/15/16
**
691
 
AT&T INC 2.95% 5/15/16
Corporate Bond 2.95% 5/15/16
**
727
 
AUSTRALIA & NZ 1.45% 5/15/18
Corporate Bond 1.45% 5/15/18
**
2,200
 
AUSTRALIA & NZ 1.875% 10/06/17
Corporate Bond 1.875% 10/6/17
**
770
 
AUSTRALIA & NZ BK .9% 2/12/16
Corporate Bond .9% 2/12/16
**
1,145
 
AVALONBAY COMM 3.625% 10/1/20
Corporate Bond 3.625% 10/1/20
**
412
 
BACM 2006-4 A1A CSTR 7/46
Mortgage backed security 7/46
**
2,069
 
BANK AMER FDG CRP 2.6% 1/15/19
Corporate Bond 2.6% 1/15/19
**
1,339
 
BANK MONTREAL MTN 2.5% 1/11/17
Corporate Bond 2.5% 1/11/17
**
698
 
BANK OF AMERICA CORP
Corporate Bond 3.7% 9/1/15
**
138
 
BANK OF AMERICA CORP
Corporate Bond 6.5% 8/1/16
**
456
 
BANK OF AMERICA CORP
Corporate Bond 5.625% 10/14/16
**
152
 
BANK OF AMERICA CORP
Corporate Bond 5.75% 12/1/17
**
735
 
BANK OF AMERICA CORP
Corporate Bond 2% 1/11/18
**
376
 
BANK OF AMERICA CRP MTN 2 1/18
Corporate Bond 2% 1/18
**
1,511
 
BANK OF AMERICA NA
Corporate Bond 1.125% 11/14/16
**
604
 
BANK OF NOVA SCOTIA
Corporate Bond 1.1% 12/13/16
**
310
 
BANK OF NY MTN 2.4% 1/17/17
Corporate Bond 2.4% 1/17/17
**
1,034
 
Bank of Tokyo - Mitsubushi
Synthetic GIC - 1.598%
**
37
 
BANK T-M UFJ 1.65% 2/26/18 144
Corporate Bond 1.65% 2/28/18 144
**
744
 
BAPTIST HEALTH SO FLOR INC
Corporate Bond 4.59% 8/15/21
**
245
 
BARCLAYS MTN 3.9% 4/7/15
Corporate Bond 3.9% 4/7/15
**
1,575

21
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
BB&T CORP MTN B/E 3.2% 3/15/16
Corporate Bond 3.2% 3/15/16
**
707
 
BB&T CORPORATION
Corporate Bond 2.05% 6/19/18
**
357
 
BEAM INC 1.75% 06/15/18
Corporate Bond 1.75% 06/15/18
**
1,322
 
BEAR STEARNS COS LLC
Corporate Bond 6.4% 10/2/17
**
147
 
BERK HATH INC 1.9% 1/31/17
Corporate Bond 1.9% 1/31/17
**
701
 
BERKSHIRE HATH FIN 1.6 5/15/17
Corporate Bond 1.6% 5/15/17
**
943
 
BG ENERGY 2.875% 10/16 144A
Corporate Bond 2.875% 10/16 144A
**
682
 
BK NOVA SCOTIA 1.375 12/18/17
Corporate Bond 1.375% 12/18/17
**
1,144
 
BK NOVA SCOTIA 1.375% 7/15/16
Corporate Bond 1.375% 7/15/16
**
1,526
 
BMWLT 2013-1 A3 .54% 09/15
Mortgage backed security .54% 09/15
**
773
 
BP CAPITAL MARKET 3.2% 3/11/16
Corporate Bond 3.2% 3/11/16
**
731
 
BP CAPITAL MARKETS PLC
Corporate Bond 2.248% 11/1/16
**
653
 
BPCM 1.375% 5/10/18
Corporate Bond 1.375% 5/10/18
**
748
 
BRIT COLMB PROV 2.1% 5/18/16
Corporate Bond 2.1% 5/18/16
**
2,208
 
BRITISH COLMB PRO 1.2% 4/25/17
Corporate Bond 1.2% 4/25/17
**
2,940
 
BSCMS 05-PWR8 A4 4.674 6/41
Mortgage backed security 4.674% 6/41
**
750
 
BSCMS 05-T18 A4 4.933% 2/42
Mortgage backed security 4.933% 2/42
**
1,035
 
BSCMS 06-PW11 AAB CSTR 3/39
Mortgage backed security 3/39
**
218
 
BSCMS 06-PW12 A1A CSTR 9/38
Mortgage backed security 9/38
**
1,086
 
BSCMS 2006-PW13 A1A 5.533 9/41
Mortgage backed security 5.533% 9/41
**
1,528
 
BSCMS 2006-T22 A1A CSTR 4/38
Mortgage backed security 4/38
**
1,664
 
BTEL 1.625% 06/28/16
Corporate Bond 1.625% 6/28/16
**
534
 
CANADA GOVT .875% 2/14/17
Foreign Bond .875% 2/14/17
**
773
 
CAPITAL ONE FIN CO 1% 11/06/15
Corporate Bond 1% 11/6/15
**
1,617
 
CAPITAL ONE NAT 1.5% 03/22/18
Corporate Bond 1.5% 3/22/18
**
732
 
CARMX 2012-3 A3 0.52% 7/17
Mortgage backed security .52% 7/17
**
580
 
CARMX 2013-3 A3 .97% 11/15/16
Mortgage backed security .97% 11/15/16
**
1,659
 
CAROLINA POWER & LIGHT
Corporate Bond 5.3% 1/15/19
**
209
 
CATERPILLAR FINANCIAL SE
Corporate Bond 1.35% 9/6/16
**
523
 
CATERPILLAR FINANCIAL SE
Corporate Bond 5.85% 9/1/17
**
324
 
CATHOLIC HEALTH INITIATIVES
Corporate Bond 1.6% 11/1/17
**
452
 
CATHOLIC HEALTH INITIATIVES
Corporate Bond 2.95% 11/1/22
**
277
 
CCCIT 13-A3 A3 1.11% 7/23/18
Mortgage backed security 1.11% 7/23/18
**
1,482
 
CCCIT 2012-A1 A1 0.55% 10/17
Mortgage backed security .55% 10/17
**
2,120
 
CCCIT 2013-A6 A6 1.32% 09/18
Mortgage backed security 1.32% 9/18
**
1,772
 
CD 06-CD2 A1B CSTR 1/46
Mortgage backed security 1/46
**
2,510
 
CD 2005-CD1 A4 CSTR 7/44
Mortgage backed security 7/44
**
468
 
CD 2007-CD5 A1A 5.8% 11/44
Mortgage backed security 5.8% 11/44
**
1,740
 
CELLCO PART/VERIZON WIRELESS
Corporate Bond 8.5% 11/15/18
**
891
 
CFGNR 2011-150 D 3% 4/37
Mortgage backed security 3% 4/37
**
201
 
CGCMT 13-GC11 A1 0.672% 12/17
Mortgage backed security .672% 12/17
**
544
 
CGCMT 2006-C5 A4 5.431 10/49
Mortgage backed security 5.431% 10/49
**
679
 
CHAIT 2012-A3 A3 0 6/17
Mortgage backed security 6/17
**
3,423
 
CHAIT 2012-A5 A5 .59% 8/17
Mortgage backed security 8/17
**
5,712
 
CHAIT 2012-A8 A8 0.54% 10/17
Mortgage backed security 10/17
**
4,454
 
CHAIT 2013-A8 A8 1.01% 10/18
Mortgage backed security 10/18
**
1,773
 
CHARLES SCHWAB CORP
Corporate Bond 2.2% 7/25/18
**
638
 
CHEVRON CORP
Corporate Bond 1.718% 6/24/18
**
1,105
 
CHEVRON CORP 0.889% 06/24/16
Corporate Bond .889% 6/24/16
**
396
 
CHEVRON CORP NE 1.104% 12/5/17
Corporate Bond 1.104% 12/5/17
**
1,397

22
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
CINTAS CORPORATION NO 2
Corporate Bond 2.85% 6/1/16
**
166
 
CITIGROUP 1.25% 1/15/16
Corporate Bond 1.25% 1/15/16
**
3,390
 
CITIGROUP 3.953% 6/15/16
Corporate Bond 3.953% 6/15/16
**
362
 
CITIGROUP INC
Corporate Bond 4.45% 1/10/17
**
1,634
 
CITIGROUP INC
Corporate Bond 2.5% 9/26/18
**
324
 
CITIGROUP INC 1.3% 11/15/16
Corporate Bond 1.3% 11/15/16
**
853
 
CITIGROUP INC 1.7% 7/25/16
Corporate Bond 1.7% 7/25/16
**
923
 
COCA COLA FEMSA SAB CV
Corporate Bond 2.375% 11/26/18
**
290
 
COLGATE-PALMOLIVE 0.9% 5/1/18
Corporate Bond .9% 5/1/18
**
966
 
COMCAST CABLE COMMUNICATIONS
Corporate Bond 8.875% 5/1/17
**
325
 
COMERICA INC 3% 9/16/15
Corporate Bond 3% 9/16/15
**
79
 
COMET 2013-A1 A1 .63% 11/18
Mortgage backed security .63% 11/18
**
4,678
 
COMET 2013-A3 A3 .96% 9/19
Mortgage backed security .96% 9/19
**
1,691
 
COMM 2006-C7 A1A CSTR 6/46
Mortgage backed security 6/46
**
1,815
 
COMM 2006-C8 A4 0 12/46
Mortgage backed security 12/46
**
1,050
 
COMM 2012-CR1 A1 1.116% 5/45
Mortgage backed security 1.116% 5/45
**
211
 
COMM 2012-CR1 A2 2.35% 5/45
Mortgage backed security 2.35% 5/45
**
601
 
COMM 2012-CR2 A1 .824% 08/45
Mortgage backed security .824% 08/45
**
262
 
COMM 2012-CR5 A1 0.673% 12/45
Mortgage backed security .673% 12/45
**
474
 
COMM 2012-LC4 A1 1.156% 12/44
Mortgage backed security 1.156% 12/44
**
778
 
COMM 2013-CR9 A1 1.3440% 7/45
Mortgage backed security 1.3440% 7/45
**
371
 
COMM 2013-LC6 A1 .7240% 1/46
Mortgage backed security .7240% 1/46
**
396
 
COMMONWEALTH NY 1.95% 3/16/15
Corporate Bond 1.95% 3/16/15
**
1,114
 
CONSOLIDATED NATURAL GAS
Corporate Bond 5% 12/1/14
**
68
 
CORNING INC
Corporate Bond 1.45% 11/15/17
**
98
 
CVS CAREMARK 2.25% 12/5/18
Corporate Bond 2.25% 12/5/18
**
654
 
DAIMLER FIN 1.875% 9/15/14144A
Corporate Bond 1.875% 9/15/14 144A
**
669
 
DAIMLER FIN 2.375% 8/18 144A
Corporate Bond 2.375% 8/18 144A
**
1,007
 
DAIMLER FIN NOR 1.3% 7/15 144A
Corporate Bond 1.3% 7/15 144A
**
733
 
DAIMLER FINA NA 1.65% 4/15 144
Corporate Bond 1.65% 4/15 144
**
728
 
DAYTON POWER & LIGHT CO
Corporate Bond 1.875% 9/15/16
**
377
 
DBUBS 2011-LC3A A1 2.238 8/44
Mortgage backed security 2.238% 8/44
**
112
 
DCENT 2012-A1 A1 0.81% 8/17
Mortgage backed security .81% 8/17
**
1,556
 
DCENT 2012-A3 A 0.86% 11/15/17
Mortgage backed security .86% 11/15/17
**
3,013
 
DCENT 2013-A2 A2 .69% 07/18
Mortgage backed security .69% 7/18
**
3,865
 
DCENT 2013-A5 A5 1.04% 04/19
Mortgage backed security 1.04% 4/19
**
1,756
 
DEVON ENERGY CO 2.25% 12/15/18
Corporate Bond 2.25% 12/15/18
**
827
 
DIAGEO CAPITAL PLC
Corporate Bond 1.125% 4/29/18
**
705
 
DIAGEO CPTL PLC 1.5% 5/11/17
Corporate Bond 1.5% 5/11/17
**
1,100
 
DISCOVER BANK
Corporate Bond 2% 2/21/18
**
598
 
DOMINION GAS HLDGS LLC
Corporate Bond 1.05% 11/1/16
**
395
 
DOMINION RESOUR 2.25% 9/1/15
Corporate Bond 2.25% 9/1/15
**
435
 
DR PEPPER SNAPPLE GROUP
Corporate Bond 2.9% 1/15/16
**
147
 
DUKE ENERGY COR 1.625% 8/15/17
Corporate Bond 1.625% 8/15/17
**
499
 
DUKE ENERGY COR 2.1% 06/15/18
Corporate Bond 2.1% 6/15/18
**
470
 
FED HOME LOAN MORTGAGE CORP
Government Bonds 1.25% 5/12/17
**
8,064
 
FED HOME LOAN MORTGAGE CORP
Government Bonds 1.25% 10/2/19
**
567
 
FED NATIONAL MORTGAGE ASSOC
Government Bonds 0.875% 8/28/17
**
2,477
 
FED NATIONAL MORTGAGE ASSOC
Government Bonds 0.875% 2/8/18
**
3,558
 
FHLG 5.50% 3/34 #G01665
Government Bonds 5.50% 3/34 #G01665
**
341

23
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
FHLG 5.50% 5/34 #Z40042
Government Bonds 5.50% 5/34 #Z40042
**
2,555
 
FHLG 10YR 3.00% 8/21 #J16393
Government Bonds 10YR 3.00% 8/21 #J16393
**
431
 
FHLG 10YR 3.00% 8/21 #J16442
Government Bonds 10YR 3.00% 8/21 #J16442
**
384
 
FHLG 15YR 3.50% 1/26 #G14312
Government Bonds 15YR 3.50% 1/26 #G14312
**
466
 
FHLG 15YR 3.50% 4/27 #G14449
Government Bonds 15YR 3.50% 4/27 #G14449
**
1,210
 
FHLG 15YR 3.50% 10/26 #G14450
Government Bonds 15YR 3.50% 10/26 #G14450
**
14
 
FHLG 15YR 4.00% 4/26 #E02867
Government Bonds 15YR 4.00% 4/26 #E02867
**
317
 
FHLG 15YR 4.00% 6/24 #G18312
Government Bonds 15YR 4.00% 6/24 #G18312
**
2
 
FHLG 15YR 4.00% 7/24 #G13596
Government Bonds 15YR 4.00% 7/24 #G13596
**
2
 
FHLG 15YR 4.00% 9/25 #E02787
Government Bonds 15YR 4.00% 9/25 #E02787
**
591
 
FHLG 15YR 4.00% 9/25 #G14376
Government Bonds 15YR 4.00% 9/25 #G14376
**
2
 
FHLG 15YR 4.50% 8/18 #E98688
Government Bonds 15YR 4.50% 8/18 #E98688
**
277
 
FHLG 15YR 4.50% 9/18 #E99205
Government Bonds 15YR 4.50% 9/18 #E99205
**
102
 
FHLG 15YR 4.50% 10/18 #E99833
Government Bonds 15YR 4.50% 10/18 #E99833
**
139
 
FHLG 15YR 4.50% 11/18 #B10931
Government Bonds 15YR 4.50% 11/18 #B10931
**
85
 
FHLG 15YR 5.00% 4/20 #G13598
Government Bonds 15YR 5.00% 4/20 #G13598
**
473
 
FHLG 15YR 5.00% 6/14 #E77224
Government Bonds 15YR 5.00% 6/14 #E77224
**
2
 
FHLG 25YR 5.50% 7/35 #G05815
Government Bonds 25YR 5.50% 7/35 #G05815
**
230
 
FHLM ARM 2.98% 8/41 #1B8533
Government Bonds 2.98% 8/41 #1B8533
**
317
 
FHLM ARM 3.07% 9/41 #1B8608
Government Bonds 3.07% 9/41 #1B8608
**
172
 
FHLM ARM 3.53% 4/40 #1B4657
Government Bonds 3.53% 4/40 #1B4657
**
187
 
FHLM ARM 3.58% 4/40 #1B4702
Government Bonds 3.58% 4/40 #1B4702
**
141
 
FHLM ARM 3.88% 1/35 #848084
Government Bonds 3.88% 1/35 #848084
**
31
 
FHLM ARM 4.68% 1/36 #847584
Government Bonds 4.68% 1/36 #847584
**
51
 
FHLM ARM 5.78% 10/35 #1N0063
Government Bonds 5.78% 10/35 #1N0063
**
23
 
FHLM ARM 4.199% 8/36 #848185
Government Bonds 4.199% 8/36 #848185
**
181
 
FHLM ARM 4.889% 3/33 #847126
Government Bonds 4.889% 3/33 #847126
**
2
 
FHLM ARM 4.941% 11/35 #1J1228
Government Bonds 4.941% 11/35 #1J1228
**
167
 
FHLM ARM 5.084% 8/35 #1J0005
Government Bonds 5.084% 8/35 #1J0005
**
41
 
FHLM ARM 3.224% 4/41#1B8179
Government Bonds 3.224% 4/41#1B8179
**
120
 
FHLM ARM 3.242% 9/1/41#1B8659
Government Bonds 3.242% 9/1/41#1B8659
**
103
 
FHLM ARM 3.283 6/1/41
Government Bonds 3.283% 6/1/41
**
139
 
FHLM ARM 3.464% 5/1/41#1B8304
Government Bonds 3.464% 5/1/41 #1B8304
**
127
 
FHLM ARM 3.627% 6/1/41#1B8372
Government Bonds 3.627% 6/1/41 #1B8372
**
191
 
FHLM ARM 3.717% 05/41#1B8124
Government Bonds 3.717% 05/41 #1B8124
**
186
 
FHLMC .75% 1/12/18
Government Bonds .75% 1/12/18
**
1,091
 
FHLMC 1.25% 5/12/17
Government Bonds 1.25% 5/12/17
**
1,855
 
FHR 2011-3938 BE 2% 10/21
Government Bonds 2011-3938 BE 2% 10/21
**
1,091
 
FHR 2866 XE 4 12/18
Government Bonds 2866 XE 4% 12/18
**
121
 
FHR 3102 FD 1ML+30 1/36
Government Bonds 3102 FD 1ML+30 1/36
**
1,013
 
FHR 3117 JF 1ML+30 2/36
Government Bonds 3117 JF 1ML+30 2/36
**
399
 
FHR 3415 PC 5% 12/37
Government Bonds 3415 PC 5% 12/37
**
284
 
FHR 3659 EJ 3% 6/18
Government Bonds 3659 EJ 3% 6/18
**
512
 
FHR 3741 HD 3% 11/15/39
Government Bonds 3741 HD 3% 11/15/39
**
464
 
FHR 3763 QA 4% 4/34
Government Bonds 3763 QA 4% 4/34
**
596
 
FHR 3820 DA 4% 11/35
Government Bonds 3820 DA 4% 11/35
**
558
 
FHR 3943 EF 1ML+25 2/26
Government Bonds 3943 EF 1ML+25 2/26
**
563
 
FHR 4046 LA 3% 11/2026
Government Bonds 4046 LA 3% 11/2026
**
1,406
 
FHR 4176 BA 3% 2/33
Government Bonds 4176 BA 3% 2/33
**
782
 
FHR 4181 LA 3% 3/37
Government Bonds 4181 LA 3% 3/37
**
1,063

24
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
FHR SER 4221 CLS GA 1.4% 7/23
Government Bonds 4221 CLS GA 1.4% 7/23
**
2,516
*
Fidelity short term cash fund
FID INST CASH PORT: MM FUND CLASS I SHS F/N/A
**
25,047
 
FIFTH THIRD BAN 3.625% 1/25/16
Corporate Bond 3.625%1/25/16
**
412
 
FIFTH THRD BANC 1.45% 02/28/18
Corporate Bond 1.45% 2/28/18
**
748
 
FISCAL YR 2005 SECURITIZATION CORP NY
Corporate Bond 4.93% 4/1/20
**
150
 
FNMA 5.50% 11/34 #310105
Government Bonds 5.50% 11/34 #310105
**
1,861
 
FNMA 6.50% 7/32 #545759
Government Bonds 6.50% 7/32 #545759
**
86
 
FNMA 6.50% 7/32 #545762
Government Bonds 6.50% 7/32 #545762
**
22
 
FNMA 6.50% 7/35 #745092
Government Bonds 6.50% 7/35 #745092
**
35
 
FNMA 6.50% 8/36 #888034
Government Bonds 6.50% 8/36 #888034
**
58
 
FNMA 6.50% 8/36 #888544
Government Bonds 6.50% 8/36 #888544
**
269
 
FNMA 6.50% 8/36 #AE0746
Government Bonds 6.50% 8/36 #AE0746
**
226
 
FNMA 6.50% 12/32 #735415
Government Bonds 6.50% 12/32 #735415
**
33
 
FNMA 6.50% 12/35 #AD0723
Government Bonds 6.50% 12/35 #AD0723
**
315
 
FNMA .5% 9/28/15
Government Bonds .5% 9/28/15
**
22,546
 
FNMA .875% 2/8/18
Government Bonds .875% 2/8/18
**
2,715
 
FNMA 0.5% 7/02/15
Government Bonds 0.5% 7/02/15
**
6,138
 
FNMA 0.625% 8/26/16
Government Bonds 0.625% 8/26/16
**
4,422
 
FNMA 1.625% 10/26/15
Government Bonds 1.625% 10/26/15
**
1,306
 
FNMA 1.625% 11/27/18
Government Bonds 1.625% 11/27/18
**
14,831
 
FNMA 1.875% 09/18/18
Government Bonds 1.875% 9/18/18
**
15,782
 
FNMA 15YR 3.50% 1/26 #AL1168
Government Bonds 15YR 3.50% 1/26 #AL1168
**
487
 
FNMA 15YR 3.50% 3/27 #AL1746
Government Bonds 15YR 3.50% 3/27 #AL1746
**
1,887
 
FNMA 15YR 3.50% 5/27 #AL1741
Government Bonds 15YR 3.50% 5/27 #AL1741
**
3
 
FNMA 15YR 3.50% 5/27 #AL1751
Government Bonds 15YR 3.50% 5/27 #AL1751
**
1
 
FNMA 15YR 4.00% #AL2088
Government Bonds 15YR 4.00% #AL2088
**
2,828
 
FNMA 15YR 4.00% 8/18 #727438
Government Bonds 15YR 4.00% 8/18 #727438
**
159
 
FNMA 15YR 4.50% 6/19 #745278
Government Bonds 15YR 4.50% 6/19 #745278
**
163
 
FNMA 15YR 4.50% 7/20 #888653
Government Bonds 15YR 4.50% 7/20 #888653
**
72
 
FNMA 15YR 6.00% 2/18 #684153
Government Bonds 15YR 6.00% 2/18 #684153
**
3
 
FNMA 15YR 6.00% 10/16 #589129
Government Bonds 15YR 6.00% 10/16 #589129
**
8
 
FNMA 15YR 6.00% 11/17 #671380
Government Bonds 15YR 6.00% 11/17 #671380
**
33
 
FNMA 15YR 6.00% 11/17 #672789
Government Bonds 15YR 6.00% 11/17 #672789
**
6
 
FNMA 15YR 6.00% 12/17 #673965
Government Bonds 15YR 6.00% 12/17 #673965
**
13
 
FNMA 15YR 6.50% 4/17 #637244
Government Bonds 15YR 6.50% 4/17 #637244
**
33
 
FNMA 15YR 7.00% 2/16 #569915
Government Bonds 15YR 7.00% 2/16 #569915
**
5
 
FNMA 15YR 7.00% 2/18 #693327
Government Bonds 15YR 7.00% 2/18 #693327
**
42
 
FNMA 15YR 7.00% 4/17 #636135
Government Bonds 15YR 7.00% 4/17 #636135
**
33
 
FNMA 15YR 7.00% 6/16 #545122
Government Bonds 15YR 7.00% 6/16 #545122
**
2
 
FNMA 15YR 7.00% 8/14 #323877
Government Bonds 15YR 7.00% 8/14 #323877
**
1
 
FNMA 15YR 7.00% 8/16 #599602
Government Bonds 15YR 7.00% 8/16 #599602
**
30
 
FNMA ARM 2.42% 11/36 #AD0710
Government Bonds 2.42% 11/36 #AD0710
**
41
 
FNMA ARM 2.61% 4/35 #995609
Government Bonds 2.61% 4/35 #995609
**
81
 
FNMA ARM 2.74% 8/41 #AH5259
Government Bonds 2.74% 8/41 #AH5259
**
612
 
FNMA ARM 3.01% 8/41 #AI4358
Government Bonds 3.01% 8/41 #AI4358
**
111
 
FNMA ARM 3.20% 1/40 #AC0599
Government Bonds 3.20% 1/40 #AC0599
**
257
 
FNMA ARM 3.37% 9/41 #AI8935
Government Bonds 3.37% 9/41 #AI8935
**
156
 
FNMA ARM 3.47% 3/40 #AD0820
Government Bonds 3.47% 3/40 #AD0820
**
214
 
FNMA ARM 3.60% 3/40 #AD1555
Government Bonds 3.60% 3/40 #AD1555
**
248

25
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
FNMA ARM 4.21% 5/35 #889946
Government Bonds 4.21% 5/35 #889946
**
200
 
FNMA ARM 4.285% 7/33#AD0066
Government Bonds 4.285% 7/33 #AD0066
**
332
 
FNMA ARM 4.30% 2/35 #995017
Government Bonds 4.30% 2/35 #995017
**
226
 
FNMA ARM 4.53% 12/34 #802852
Government Bonds 4.53% 12/34 #802852
**
114
 
FNMA ARM 4.58% 7/35 #826362
Government Bonds 4.58% 7/35 #826362
**
221
 
FNMA ARM 4.68% 11/34 #735011
Government Bonds 4.68% 11/34 #735011
**
117
 
FNMA ARM 5.12% 6/35 #823810
Government Bonds 5.12% 6/35 #823810
**
37
 
FNMA ARM 5.280% 3/35 #843014
Government Bonds 5.280% 3/35 #843014
**
13
 
FNMA ARM 6.25% 6/36 #886983
Government Bonds 6.25% 6/36 #886983
**
16
 
FNMA ARM 4.198% 11/34 #841068
Government Bonds 4.198% 11/34 #841068
**
754
 
FNMA ARM 4.58% 7/35 #995273
Government Bonds 4.58% 7/35 #995273
**
81
 
FNMA ARM 4.893% 10/35 #847787
Government Bonds 4.893% 10/35 #847787
**
17
 
FNMA ARM 4.898% 5/35 #995272
Government Bonds 4.898% 5/35 #995272
**
19
 
FNMA ARM 5.344% 7/35 #834917
Government Bonds 5.344% 7/35 #834917
**
7
 
FNMA ARM 5.349% 12/34 #843013
Government Bonds 5.349% 12/34 #843013
**
19
 
FNMA ARM 06/42#AO2244
Government Bonds 06/42 #AO2244
**
159
 
FNMA ARM 09/41#AI9813
Government Bonds 09/41 #AI9813
**
115
 
FNMA ARM 10/41#AJ3399
Government Bonds 10/41 #AJ3399
**
60
 
FNMA ARM 11/40#AE6806
Government Bonds 11/40 #AE6806
**
100
 
FNMA ARM 3.228% 7/41#AI3469
Government Bonds 3.228% 7/41 #AI3469
**
186
 
FNMA ARM 3.365% 10/41#AI6819
Government Bonds 3.365% 10/41 #AI6819
**
100
 
FNMA ARM 3.545% 07/41#AI6050
Government Bonds 3.545% 07/41 #AI6050
**
201
 
FNMA ARM 3.752% 10/33 #755148
Government Bonds 3.752% 10/33 #755148
**
23
 
FNMA ARM 3.753% 10/33 #746320
Government Bonds 3.753% 10/33 #746320
**
25
 
FNMA ARM 3.984% 5/33 #703915
Government Bonds 3.984% 5/33 #703915
**
4
 
FNMA ARM 4.293% 3/35 #815586
Government Bonds 4.293% 3/35 #815586
**
11
 
FNMA ARM 4.358% 10/33 #754672
Government Bonds 4.358% 10/33 #754672
**
10
 
FNMA ARM 4.512% 12/36 #995606
Government Bonds 4.512% 12/36 #995606
**
223
 
FNMA ARM 4.53% 10/35 #995414
Government Bonds 4.53% 10/35 #995414
**
205
 
FNMA ARM 4.55% 10/35 #995415
Government Bonds 4.55% 10/35 #995415
**
561
 
FNMA ARM 4.801% 2/33 #695019
Government Bonds 4.801% 2/33 #695019
**
19
 
FNMA ARM 5.05% 7/34 #801635
Government Bonds 5.05% 7/34 #801635
**
11
 
FNR 2003-74 PG 4.5% 8/18
Government Bonds 2003-74 PG 4.5% 8/18
**
252
 
FNR 2005-106 UF 1ML+30 11/35
Government Bonds 2005-106 UF 1ML+30 11/35
**
361
 
FNR 2005-90 FC 1ML+25 10/35
Government Bonds 2005-90 FC 1ML+25 10/35
**
361
 
FNR 2008-29 BG 4.7% 12/35
Government Bonds 2008-29 BG 4.7% 12/35
**
175
 
FNR 2008-95 AD 4.5% 12/23
Government Bonds 2008-95 AD 4.5% 12/23
**
468
 
FNR 2010-123 DL 3.5% 11/25
Government Bonds 2010-123 DL 3.5% 11/25
**
216
 
FNR 2010-135 DE 2.25% 4/24
Government Bonds 2010-135 DE 2.25% 4/24
**
398
 
FNR 2010-143 B 3.5% 12/25
Government Bonds 2010-143 B 3.5% 12/25
**
350
 
FNR 2011-23 AB 2.75% 6/25/20
Government Bonds 2011-23 AB 2.75% 6/25/20
**
260
 
FNR 2011-88 AB 2.5% 9/26
Government Bonds 2011-88 AB 2.5% 9/26
**
338
 
FNR 2012-15 FP 1ML+38 6/40
Government Bonds 2012-15 FP 1ML+38 6/40
**
1,108
 
FNR 2012-94 E 3% 6/22
Government Bonds 2012-94 E 3% 6/22
**
450
 
FNR 2013-16 GP 3% 03/33
Government Bonds 2013-16 GP 3% 03/33
**
1,542
 
FNR 2013-9 FA 1ML+35 03/42
Government Bonds 2013-9 FA 1ML+35 03/42
**
1,832
 
FORD MTR CR 2.875% 10/01/18
Corporate Bond 2.875% 10/01/18
**
1,813
 
FORDL 2012-A A4 1.03% 4/15
Mortgage backed security 1.03% 4/15
**
1,504
 
FORDL 2012-B A3 0.57% 9/15
Mortgage backed security .57% 9/15
**
881
 
FORDL 2013-A A3 0.60% 3/16
Mortgage backed security .60% 3/16
**
1,301
 
FORDL 2013-B A3 .76% 09/16
Mortgage backed security .76% 9/16
**
680

26
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
FORDO 2012-D A3 0.51% 4/17
Mortgage backed security .51% 4/17
**
920
 
FORDO 2013-A A3 .55% 07/17
Mortgage backed security .55% 7/17
**
1,120
 
FORDO 2013-B A3 .57% 6/16
Mortgage backed security .57% 6/16
**
989
 
FRANCE TELECOM 2.125% 9/16/15
Corporate Bond 2.125% 9/16/15
**
220
 
FREEPORT MC 2.375 3/15/18 WI
Corporate Bond 2.375% 3/15/18 WI
**
254
 
G2SF 12-149 LF 1ML+25 12/42
Mortgage backed security 1ML+25 12/42
**
732
 
GE CAP CORP 2.25% 11/9/15
Corporate Bond 2.25% 11/9/15
**
536
 
GE CAP CORP 2.9% 1/09/17
Corporate Bond 2.9% 1/09/17
**
1,903
 
GE CAP MTN 3.5% 6/29/15
Corporate Bond 3.5% 6/29/15
**
508
 
GECMC 2005-C2 A4 CSTR 5/43
Mortgage backed security 5/43
**
1,787
 
GECMC 2006-C1 A1A CSTR 3/44
Mortgage backed security 3/44
**
1,199
 
GECMC 2006-C1 A4 CSTR 3/44
Mortgage backed security 3/44
**
1,065
 
GE-CORP .85% 10/09/15
Corporate Bond .85% 10/09/15
**
812
 
GEMNT 2009-4 A 3.8% 11/17
Mortgage backed security 3.8% 11/17
**
3,333
 
GEMNT 2012-1 A 1.03% 1/18
Mortgage backed security 1.03% 1/18
**
2,819
 
GENERAL ELE CAP CR 1.5 7/12/16
Corporate Bond 1.5% 7/12/16
**
916
 
GENERAL ELEC 2.95% 5/09/16
Corporate Bond 2.95% 5/09/16
**
161
 
GENERAL ELEC CAP 1.0% 1/8/16
Corporate Bond 1.0% 1/8/16
**
931
 
GENERAL ELEC CAP CORP
Corporate Bond 2.9% 1/9/17
**
2,598
 
GENERAL ELEC MTN3.35% 10/17/16
Corporate Bond 3.35% 10/17/16
**
684
 
GENZYME CORP
Corporate Bond 3.625% 6/15/15
**
178
 
GMACC 2004-C2 A4 5.301% 8/38
Mortgage backed security 5.301% 8/38
**
633
 
GNMA 30YR 5.5% 06/35#783800
Government Bonds 30YR 5.5% 06/35 #783800
**
411
 
GNMA 30YR 5.5% 11/35#783799
Government Bonds 30YR 5.5% 11/35 #783799
**
855
 
GNR 13-41 PA 2.5% 04/40
Mortgage backed security 2.5% 4/40
**
942
 
GNR 2010-112 PM 3.25% 9/33
Mortgage backed security 3.25% 9/33
**
136
 
GNR 2010-120 FB 1ML+30 9/35
Mortgage backed security 1ML+30 9/35
**
449
 
GNR 2010-99 PT 3.5% 8/33
Mortgage backed security 3.5% 8/33
**
174
 
GNR 2012-149 MF 1ML+25 12/42
Mortgage backed security 1ML+25 12/42
**
1,766
 
GNR 2013-37 F 0.4712% 3/20/43
Mortgage backed security .4712% 3/20/43
**
484
 
GNR 2013-9 F VAR 1ML+25 1/43
Mortgage backed security 1ML+25 1/43
**
1,279
 
GOLDCORP INC
Corporate Bond 2.125% 3/15/18
**
123
 
GOLDMAN SAC GRP 3.625% 2/07/16
Corporate Bond 3.625% 2/07/16
**
1,458
 
GOLDMAN SACH GRP 3.3% 5/03/15
Corporate Bond 3.3% 5/03/15
**
1,522
 
GOLDMAN SACH MTN 1.6% 11/23/15
Corporate Bond 1.6% 11/23/15
**
709
 
GOLDMAN SACHS GROUP INC
Corporate Bond 7.5% 2/15/19
**
864
 
GOLDMAN SACHS MTN 3.7% 8/1/15
Corporate Bond 3.7% 8/1/15
**
2,080
 
GSINC 2.375% 1/22/18
Corporate Bond 2.375% 1/22/18
**
780
 
GSMS 04-GG2 A6 CSTR 8/38
Mortgage backed security 8/38
**
550
 
GSMS 2006-GG6 A1A CSTR 4/38
Mortgage backed security 4/38
**
820
 
GSMS 2006-GG6 A2 5.506% 4/38
Mortgage backed security 5.506% 4/38
**
27
 
GSMS 2006-GG8 A1A 5.547 11/39
Mortgage backed security 5.547% 11/39
**
1,039
 
GSMS 2011-GC5 A1 CSTR 8/44
Mortgage backed security 8/44
**
320
 
GSMS 2012-GC6 A1 1.282% 1/45
Mortgage backed security 1.282% 1/45
**
157
 
GSMS 2013-GC10 A1 .696% 2/46
Mortgage backed security .696% 2/46
**
109
 
GSMS 2013-GC10 A2 1.84% 2/46
Mortgage backed security 1.84% 2/46
**
309
 
GSMS 2013-GC12 A1 VAR 06/46
Mortgage backed security 6/46
**
513
 
HAROT 2012-2 A3 0.7% 2/16
Mortgage backed security .7% 2/16
**
892
 
HAROT 2013-1 A3 .48% 12/15
Mortgage backed security .48% 12/15
**
1,869
 
HAROT 2013-2 A3 .53% 2/17
Mortgage backed security .53% 2/17
**
560


27
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
HAROT 2013-3 A3 0.77% 05/17
Mortgage backed security .77% 05/17
**
1,093
 
HART 2013-A A3 0.56% 7/17
Mortgage backed security .56% 7/17
**
740
 
HART 2013-B A3 .71% 09/17
Mortgage backed security .71% 9/17
**
1,593
 
HART 2013-C A3 1.01% 02/18
Mortgage backed security 1.01% 2/18
**
482
 
HEWLETT-PACKARD 2.625% 12/9/14
Corporate Bond 2.625% 12/9/14
**
672
 
HSBC 1.5% 05/15/18 144A
Corporate Bond 1.5% 5/15/18 144A
**
2,983
 
HSBC BANK 3.1% 5/24/16 144A
Corporate Bond 3.1% 5/24/16 144A
**
1,460
 
HSBC USA INC 1.625% 1/16/18
Corporate Bond 1.625% 1/16/18
**
672
 
HUNTINGTON NATL BK 1.35% 8/16
Corporate Bond 1.35% 8/16
**
426
 
HYUNDAI CAP 1.875% 8/9/16 144A
Corporate Bond 1.875% 8/9/16 144A
**
241
 
HYUNDAI CAP AM 1.625 10/15 144
Corporate Bond 1.625% 10/15 144
**
436
 
INTEL CORP
Corporate Bond 1.35% 12/15/17
**
792
 
INTEL CORP 1.35% 12/15/17
Corporate Bond 1.35% 12/15/17
**
765
 
INTERCONT EXCH 2.5% 10/15/18
Corporate Bond 2.5% 10/15/18
**
619
 
JERSEY CENTRAL PWR & LT
Corporate Bond 7.35% 2/1/19
**
79
 
JP Morgan Chase
Synthetic GIC - 1.598%
**
37
 
JP MORGAN CHASE & CO
Corporate Bond 3.45% 3/1/16
**
292
 
JP MORGAN CHASE & CO
Corporate Bond 6% 1/15/18
**
88
 
JP MORGAN CHASE & CO
Corporate Bond 1.625% 5/15/18
**
956
 
JP MORGAN CHASE 1.125% 2/26/16
Corporate Bond 1.125% 2/26/16
**
3,359
 
JPMC CO MTN 3.7% 1/20/15
Corporate Bond 3.7% 1/20/15
**
492
 
JPMCC 13-C13 A1 1.3029% 01/46
Mortgage backed security 1.3029% 01/46
**
2,051
 
JPMCC 13-LC11 A1 .7664% 04/46
Mortgage backed security .7664% 04/46
**
864
 
JPMCC 2005-LDP2 A3 4.697 7/42
Mortgage backed security 4.697% 7/42
**
210
 
JPMCC 2006-CB16 A1A 5.546 5/45
Mortgage backed security 5.546% 5/45
**
2,380
 
JPMCC 2006-LDP7 A1A CSTR 4/45
Mortgage backed security 4/45
**
1,939
 
JPMCC 2007-LD11 A2 CSTR 6/49
Mortgage backed security 6/49
**
256
 
JPMCC 2012-C6 A2 2.2058% 5/45
Mortgage backed security 2.2058% 5/45
**
714
 
JPMCC 2012-LC9 A1 .6698% 12/47
Mortgage backed security .6698% 12/47
**
1,008
 
JPMCC 2013-C10 .7302% 12/15/47
Mortgage backed security .7302% 12/15/47
**
378
 
JPMORGAN CHASE 3.15% 7/05/16
Corporate Bond 3.15% 7/05/16
**
972
 
JPMORGAN CHASE 1.1% 10/15/15
Corporate Bond 1.1% 5 10/15/15
**
1,610
 
KEYBANK NATL 1.65% 2/1/18
Corporate Bond 1.65% 2/1/18
**
497
 
KEYCORP
Corporate Bond 2.3% 12/13/18
**
500
 
KINDER MORGAN EN 2.65 2/1/19
Corporate Bond 2.65% 2/1/19
**
409
 
LBUBS 05-C1 A1A 4.581% 2/15/30
Mortgage backed security 4.581% 2/15/30
**
1,105
 
LBUBS 2004-C8 4.799% 12/29
Mortgage backed security 4.799% 12/29
**
605
 
LBUBS 2005-C1 AAB CSTR 2/30
Mortgage backed security 2/30
**
59
 
LBUBS 2006-C6 A4 5.372% 9/39
Mortgage backed security 5.372% 9/39
**
273
 
M&I MARSH&ILSLEY 4.85 6/16/15
Corporate Bond 4.85% 6/16/15
**
1,045
 
MANITOBA (PROV) 1.125% 6/1/18
Corporate Bond 1.125% 6/1/18
**
1,953
 
MARSHMCLEN 2.55% 10/15/18
Corporate Bond 2.55% 10/15/18
**
214
 
MASSMUTUAL GBL 2.1 8/2/18 144A
Corporate Bond 2.1% 8/2/18 144A
**
1,808
 
MASSMUTUAL GLBL 2% 4/5/17 144A
Corporate Bond 2% 4/5/17 144A
**
725
 
MBALT 2013-A A3 .59% 02/16
Mortgage backed security .59% 02/16
**
1,411
 
MBALT 2013-B A3 0.62% 07/16
Mortgage backed security .62% 7/16
**
1,308
 
MBART 2013-1 A3 0.78% 08/17
Mortgage backed security .78% 08/17
**
1,133
 
MCKESSON CORP 0.95% 12/04/15
Corporate Bond .95% 12/4/15
**
148
 
MDAMERICAN ENR 2 11/15/18 144A
Corporate Bond 2% 11/15/18 144A
**
935
 
MEDTRONIC INC
Corporate Bond 1.375% 4/1/18
**
236

28
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
MET LIFE GLBL 1.5 1/18 144A
Corporate Bond 1.5% 1/18 144A
**
3,486
 
MET LIFE GLBL 2.5 9/29/15 144A
Corporate Bond 2.5% 9/29/15 144A
**
1,948
 
MET LIFE GLBL FD 2% 1/9/15 144
Corporate Bond 2% 1/9/15 144
**
1,167
 
METLIFE INC
Corporate Bond 6.75% 6/1/16
**
604
 
METLIFE INC STEP 12/15/17
Corporate Bond 12/15/17
**
250
 
MICROSOFT CORP
Corporate Bond 1.625% 9/25/15
**
706
 
MICROSOFT CORP .875% 11/15/17
Corporate Bond .875% 11/15/17
**
225
 
MIDAMERICAN ENERGY HLDGS
Corporate Bond 5.75% 4/1/18
**
289
 
MIZUHO CORP 1.85% 3/21/18 144A
Corporate Bond 1.85% 3/21/18 144A
**
979
 
MIZUHO CORP BK 1.55 10/17 144A
Corporate Bond 1.55% 10/17 144A
**
1,127
 
MLCFC 2006-3 A4 CSTR 7/46
Mortgage backed security 7/46
**
2,925
 
MLMT 05-CKI1 A1A CSTR 11/37
Mortgage backed security 11/37
**
429
 
MLMT 2006-C2 A1A CSTR 8/43
Mortgage backed security 8/43
**
1,415
 
Monumental Life Insurance Company
Synthetic GIC - 1.628%
**
38
 
MORGAN STANL MTN 4.2% 11/20/14
Corporate Bond 4.2% 11/20/14
**
207
 
MORGAN STANLEY
Corporate Bond 6% 04/28/15
**
440
 
MORGAN STANLEY 2.125% 4/25/18
Corporate Bond 2.125% 4/25/18
**
785
 
MORGAN STANLEY 3.45% 11/2/15
Corporate Bond 3.45% 11/2/15
**
193
 
MORGAN STANLEY 4.1% 1/26/15
Corporate Bond 4.1% 1/26/15
**
1,155
 
MSBAM 2012-C5 A1 .916% 8/45
Mortgage backed security .916% 8/45
**
573
 
MSC 2006-HQ9 A4 CSTR 7/44
Mortgage backed security 7/44
**
737
 
MSC 2006-IQ11 A1A CSTR 10/42
Mortgage backed security 10/42
**
1,757
 
MSTDW 1.75% 2/25/16
Corporate Bond 1.75% 2/25/16
**
2,515
 
MYLAN INC
Corporate Bond 2.55% 3/28/19
**
645
 
NABISCO INC
Corporate Bond 7.55% 6/15/15
**
209
 
NALT 2012-B A4 0.74% 9/18
Mortgage backed security .74% 9/18
**
479
 
NALT 2013-A A3 .61% 04/16
Mortgage backed security .61% 4/16
**
1,540
 
NAROT 2013-A A3 .50% 5/17
Mortgage backed security .50% 5/17
**
1,380
 
NAROT 2013-B A3 0.84% 11/17
Mortgage backed security .84% 11/17
**
1,595
 
NATIONAL AUSTR 1.6% 8/07/15
Corporate Bond 1.6% 8/7/15
**
1,482
 
NATIONAL AUSTR NY BR 2% 3/9/15
Corporate Bond 2% 3/9/15
**
737
 
NATIONAL CITY BANK OF OHIO
Corporate Bond 5.8% 6/7/17
**
362
 
NCUA GTD NTS MA 1.4% 6/12/15
Government Bonds 1.4% 6/12/15
**
945
 
NEF 2005-1 A5 4.74% 10/45
Mortgage backed security 4.74% 10/45
**
217
 
NETAPP INC
Corporate Bond 2% 12/15/17
**
173
 
NEW YORK LIFE 1.3% 10/17 144A
Corporate Bond 1.3% 10/17 144A
**
1,940
 
NORDEA BK AG .875% 5/16 144A
Corporate Bond .875% 5/16 144A
**
2,271
 
NORTHROP GRUMMA 1.75% 06/01/18
Corporate Bond 1.75% 06/01/18
**
977
 
ORACLE CORP
Corporate Bond 1.2% 10/15/17
**
692
 
PACIFICORP
Corporate Bond 5.65% 7/15/18
**
235
 
PACIFICORP
Corporate Bond 5.55 1/15/19
**
175
 
PEPSICO INC 7.9% 11/01/18
Corporate Bond 7.9% 11/1/18
**
823
 
PERRIGO CO LTD
Corporate Bond 1.3% 11/8/16
**
490
 
PERRIGO CO LTD
Corporate Bond 2.3% 11/8/18
**
373
 
PHILIP MORS INT 1.875% 1/15/19
Corporate Bond 1.875% 1/15/19
**
844
 
PNC BANK NA
Corporate Bond 1.3% 10/3/16
**
1,110
 
PNC BANK NA
Corporate Bond 6% 12/7/17
**
69
 
PNC BK NA 1.3% 10/3/16
Corporate Bond 1.3% 10/3/16
**
909
 
PNC FUNDING CORP
Corporate Bond 5.625% 2/1/17
**
181
 
PRICOA GLBL F 1.6% 5/18 144A
Corporate Bond 1.6% 5/18 144A
**
1,145

29
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
PRINCIPAL FINANCIAL GROUP
Corporate Bond 1.85% 11/15/17
**
74
 
PROCTER & GAMBLE - ESOP
Corporate Bond 9.36% 1/1/21
**
176
 
PROCTER & GAMBLE 1.6% 11/15/18
Corporate Bond 1.6% 11/15/18
**
1,551
 
PROCTER & GAMBLE 1.8% 11/15/15
Corporate Bond 1.8% 11/15/15
**
687
 
RABOBANK NDL 1.7% 3/19/18
Corporate Bond 1.7% 3/19/18
**
1,498
 
RABOBNK NEDRLD MTN 2.125 10/15
Corporate Bond 2.125% 10/15
**
393
 
REPUBLIC SERVICES INC
Corporate Bond 5.5% 9/15/19
**
549
 
REYNOLDS AMERN 6.75% 6/15/17
Corporate Bond 6.75% 6/15/17
**
564
 
RIO TINTO FIN 1.375% 06/17/16
Corporate Bond 1.375% 6/17/16
**
1,488
 
RIO TINTO FIN 1.625% 8/21/17
Corporate Bond 1.625% 8/21/17
**
1,144
 
RIO TINTO FIN USA PLC
Corporate Bond 1.375% 6/17/16
**
458
 
ROPER INDUSTRIES 2.05% 10/1/18
Corporate Bond 2.05% 10/1/18
**
1,465
 
ROWAN COS INC
Corporate Bond 7.875% 8/1/19
**
130
 
ROYAL BANK CAN 1.45% 09/09/16
Corporate Bond 1.45% 9/9/16
**
644
 
ROYAL BK CAN GL .85% 03/08/16
Corporate Bond .85% 3/8/16
**
296
 
ROYAL BK CAN GL 1.5% 01/14/18
Corporate Bond 1.5% 1/14/18
**
1,149
 
ROYAL BK CANADA 2.3% 7/20/16
Corporate Bond 2.3% 7/20/16
**
360
 
ROYAL BK CDA 2.2% 7/27/18
Corporate Bond 2.2% 7/27/18
**
1,265
 
ROYAL BK CDA GBL .8% 10/30/15
Corporate Bond .8% 10/30/15
**
871
 
ROYAL BK SCOTLND 2.55% 9/18/15
Corporate Bond 2.55% 9/18/15
**
3,724
 
SABMILLER HLDG 2.2 8/1/18 144A
Corporate Bond 2.2% 8/1/18 144A
**
1,811
 
SHELL INTL FIN 1.125% 8/21/17
Corporate Bond 1.125% 8/21/17
**
1,128
 
SHERWIN WILLIAM 1.35% 12/15/17
Corporate Bond 1.35% 12/15/17
**
760
 
SIMON PROPERTY 2.15% 9/15/17
Corporate Bond 2.15% 9/15/17
**
734
 
SIMON PROPERTY 2.8% 1/30/17
Corporate Bond 2.8% 1/30/17
**
157
 
SLMA 2004-A B 3ML+58 6/33
Mortgage backed security 3ML+58 6/33
**
103
 
SLMA 2012-7 A2 1ML+28 9/19
Mortgage backed security 1ML+28 9/19
**
738
 
State Street Bank & Trust Company
Synthetic GIC - 1.628%
**
38
 
STRYKER CORP
Corporate Bond 1.3% 4/1/18
**
410
 
SUMITOMO MITSUI BKG 1.8% 7/17
Corporate Bond 1.8% 7/17
**
1,086
 
SUMITOMO MITSUI BKG 2.5% 7/18
Corporate Bond 2.5% 7/18
**
254
 
SUNTRUST 2.35% 11/01/18
Corporate Bond 2.35% 11/1/18
**
875
 
TAOT 2013-A A3 .55% 01/17
Mortgage backed security .55% 01/17
**
890
 
TCI COMMUNICATIONS INC
Corporate Bond 8.75% 8/1/15
**
209
 
TENN VLY AUTH 1.75% 10/15/18
Government Bonds 1.75% 10/15/18
**
1,316
 
THERMO FISHER 1.3% 02/01/17
Corporate Bond 1.3% 2/1/17
**
237
 
THERMO FISHER 2.4% 02/01/19
Corporate Bond 2.4% 2/1/19
**
149
 
THOMSON CORP .875% 5/23/16
Corporate Bond .875% 5/23/16
**
372
 
THOMSON REUTER CRP 1.3 2/23/17
Corporate Bond 1.3% 2/23/17
**
285
 
THOMSON REUTERS CORP
Corporate Bond 0.875% 5/23/16
**
238
 
TIME WARNER CABLE INC
Corporate Bond 6.75% 7/1/18
**
235
 
TORONTO DOM 1.4% 4/30/18
Corporate Bond 1.4% 4/30/18
**
1,540
 
TORONTO DOM BK 2.5% 7/14/16
Corporate Bond 2.5% 7/14/16
**
1,467
 
TORONTO DOMINI 2.375% 10/19/16
Corporate Bond 2.375% 10/19/16
**
1,408
 
TORONTO DOMINI 2.625% 09/10/18
Corporate Bond 2.625% 9/10/18
**
1,514
 
TORONTO DOMINION BANK
Corporate Bond 2.625% 9/10/18
**
381
 
TOTAL CAP CDA L 1.45% 01/15/18
Corporate Bond 1.45% 1/15/18
**
805
 
TOTAL CAP INTL 1.55% 6/28/17
Corporate Bond 1.55% 6/28/17
**
700
 
TOTAL CAPITAL INTL SA
Corporate Bond 1.5% 2/17/17
**
308
 
TOTAL CAPITAL SA 1.5% 2/17/17
Corporate Bond 1.5% 2/17/17
**
715

30
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
TOYOTA MOTOR CRD 1.25% 10/5/17
Corporate Bond 1.25% 10/5/17
**
1,132
 
TOYOTA MOTOR CREDIT CORP
Corporate Bond 3.2% 6/17/15
**
78
 
TRANSCAPIT 5.67% 3/5/14 144A
Corporate Bond 5.67% 3/5/14 144A
**
1,077
 
TRANSOCEAN INC
Corporate Bond 2.5% 10/15/17
**
209
 
TYCO ELECTR 6.55% 10/1/17
Corporate Bond 6.55% 10/1/17
**
861
 
TYCO ELECTR GR 2.375% 12/17/18
Corporate Bond 2.375% 12/17/18
**
170
 
UBSBB 2012-C2 A1 1.006% 5/63
Mortgage backed security 1.006% 5/63
**
516
 
UBSBB 2012-C4 A1 .6728 12/45
Mortgage backed security .6728% 12/45
**
412
 
UBSBB 2013-C6 A1 .805% 4/46
Mortgage backed security.805% 4/46
**
452
 
UBSCM 2012-C1 A1 1.032% 5/45
Mortgage backed security 1.032% 5/45
**
318
 
UBSCM 2012-C1 A2 2.180% 5/45
Mortgage backed security 2.180% 5/45
**
622
 
UNION BANK NA
Corporate Bond 1.5% 9/26/16
**
1,313
 
UNION BK NA 3% 6/6/16
Corporate Bond 3% 6/6/16
**
2,106
 
UNITEDHEALTH GROUP INC
Corporate Bond 1.875% 11/15/16
**
297
 
UNITEDHEALTH GRP 1.875% 11/16
Corporate Bond 1.875% 11/16
**
512
 
UNIVERSITY OF CALIFORNIA REVS
Corporate Bond 1.796% 7/1/19
**
344
 
US BANCORP
Corporate Bond 1.95% 11/15/18
**
119
 
USAA CAP CO 2.25% 12/13/16 144
Corporate Bond 2.25% 12/13/16 144
**
680
 
USAA CAPITAL 1.05% 9/14 144A
Corporate Bond 1.05% 9/14 144A
**
766
 
UST NOTE
Government Bonds 2.375% 8/31/14
**
1,749
 
UST NOTE
Government Bonds 2.125% 11/30/14
**
4,497
 
UST NOTE
Government Bonds 2.25% 01/31/15
**
4,240
 
UST NOTE
Government Bonds 0.25% 2/15/15
**
957
 
UST NOTE
Government Bonds 0.375% 3/15/15
**
15,549
 
UST NOTE
Government Bonds 0.25% 3/31/15
**
85
 
UST NOTE
Government Bonds 0.375% 4/15/15
**
2,738
 
UST NOTE
Government Bonds 0.25% 5/31/15
**
19,959
 
UST NOTE
Government Bonds 0.375% 6/15/15
**
3,764
 
UST NOTE
Government Bonds 0.375% 6/30/15
**
336
 
UST NOTE
Government Bonds 0.25% 7/15/15
**
3,904
 
UST NOTE
Government Bonds 0.25% 7/31/15
**
516
 
UST NOTE
Government Bonds 0.375% 8/31/15
**
105
 
UST NOTE
Government Bonds 0.25% 10/31/15
**
115
 
UST NOTE
Government Bonds 1.25% 10/31/15
**
5,736
 
UST NOTE
Government Bonds 1.375% 11/30/15
**
3,220
 
UST NOTE
Government Bonds 0.375% 2/15/16
**
4,543
 
UST NOTE
Government Bonds 2.375% 3/31/16
**
1,999
 
UST NOTE
Government Bonds 2% 4/30/16
**
4,754
 
UST NOTE
Government Bonds 0.5% 6/15/16
**
6,375
 
UST NOTE
Government Bonds 1.5% 6/30/16
**
11,818
 
UST NOTE
Government Bonds 0.625% 7/15/16
**
7,264
 
UST NOTE
Government Bonds 0.625% 8/15/16
**
221
 
UST NOTE
Government Bonds 1% 9/30/16
**
1,643
 
UST NOTE
Government Bonds 1% 10/31/16
**
11,269
 
UST NOTE
Government Bonds 0.625% 11/15/16
**
1,117
 
UST NOTE
Government Bonds 0.875% 1/31/17
**
4,521
 
UST NOTE
Government Bonds 0.625% 5/31/17
**
6,004
 
UST NOTE
Government Bonds 0.75% 6/30/17
**
3,063
 
UST NOTE
Government Bonds 0.5% 7/31/17
**
4,905
 
UST NOTE
Government Bonds 0.625% 9/30/17
**
5,903

31
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
UST NOTE
Government Bonds 0.75% 10/31/17
**
5,122
 
UST NOTE
Government Bonds 0.875% 1/31/18
**
340
 
UST NOTE
Government Bonds 0.75% 2/28/18
**
9,835
 
UST NOTE
Government Bonds 0.75% 3/31/18
**
1,509
 
UST NOTE
Government Bonds 1% 5/31/18
**
4,235
 
UST NOTE
Government Bonds 1.5% 8/31/18
**
380
 
UST NOTE
Government Bonds 1.25% 11/30/18
**
1,749
 
UST NOTE .875% 1/31/18
Government Bonds .875% 1/31/18
**
25,025
 
UST NOTES 0.25% 10/31/15
Government Bonds 0.25% 10/31/15
**
14,579
 
UST NOTES 0.625% 12/15/16
Government Bonds 0.625% 12/15/16
**
44,031
 
UST NOTES 1.25% 10/31/18
Government Bonds 1.25% 10/31/18
**
2,118
 
USTN .750% 6/30/17
Government Bonds .750% 6/30/17
**
18,302
 
USTN .875% 11/30/16
Government Bonds .875% 11/30/16
**
47,838
 
USTN .875% 4/30/17
Government Bonds .875% 4/30/17
**
45,549
 
USTN 1% 9/30/16
Government Bonds 1% 9/30/16
**
32,030
 
USTN 1.5% 12/31/18
Government Bonds 1.5% 12/31/18
**
13,032
 
USTN 1.75% 7/31/15
Government Bonds 1.75% 7/31/15
**
69,667
 
USTN 2.5% 4/30/15
Government Bonds 2.5% 4/30/15
**
9,295
 
VALET 2013-1 A3 .56% 8/17
Mortgage backed security .56% 8/17
**
1,498
 
VALET 2013-2 A3 0.7% 04/18
Mortgage backed security .7% 4/18
**
1,700
 
VENTAS RLTY 1.55% 09/26/16
Corporate Bond 1.55% 09/26/16
**
225
 
VERIZON COM 2% 11/1/16
Corporate Bond 2% 11/1/16
**
1,372
 
VERIZON COM 3.65% 09/14/18
Corporate Bond 3.65% 9/14/18
**
2,281
 
VERIZON COMMUNICATIONS
Corporate Bond 2% 11/1/16
**
1,128
 
VIACOM INC
Corporate Bond 2.5% 9/1/18
**
207
 
VIACOM INC 2.5% 09/01/18
Corporate Bond 2.5% 9/1/18
**
121
 
VIRGINIA ELECTRIC & POWER CO
Corporate Bond 5.95% 9/15/17
**
257
 
VODAFONE GRP PLC 4.15% 6/10/14
Corporate Bond 4.15% 6/10/14
**
344
 
VODAFONE GRUP PLC 1.5% 2/19/18
Corporate Bond 1.5% 2/19/18
**
745
 
VOLKSWAGEN 1.6% 11/20/17 144A
Corporate Bond 1.6% 11/20/17 144A
**
742
 
VOLKSWAGEN 2.125% 11/18 144A
Corporate Bond 2.125% 11/18 144A
**
1,691
 
VOLKSWAGEN 2.375% 3/22/17 144A
Corporate Bond 2.375% 3/22/17 144A
**
764
 
VWALT 2013-A A3 0.84% 07/16
Mortgage backed security .84% 7/16
**
1,175
 
WAL MART STORES 2.25% 7/08/15
Corporate Bond 2.25% 7/8/15
**
791
 
WAL MART STORES 2.8% 4/15/16
Corporate Bond 2.8% 4/15/16
**
1,095
 
WALGREEN CO 1.8% 9/15/17
Corporate Bond 1.8% 9/15/17
**
569
 
WAL-MART STORES 1.125% 4/18
Corporate Bond 1.125% 4/18
**
2,352
 
WBCMT 06-C23 A1A CSTR 1/45
Mortgage backed security 1/45
**
1,642
 
WBCMT 06-C24 A1A CSTR 3/45
Mortgage backed security 3/45
**
982
 
WBCMT 2006-C23 A5 CSTR 1/45
Mortgage backed security 1/45
**
1,363
 
WBCMT 2006-C25 A5 CSTR 5/43
Mortgage backed security 5/43
**
384
 
WBCMT 2006-C26 A1A CSTR 6/45
Mortgage backed security 6/45
**
1,103
 
WBCMT 2006-C29 A1A 5.297 11/48
Mortgage backed security 5.297% 11/48
**
792
 
WBCMT 2007-C30 XP CSTR 12/43
Mortgage backed security 12/43
**
18
 
WBCMT 2007-C31A A2 5.421% 4/47
Mortgage backed security 5.421% 4/47
**
324
 
WELLPOINT INC 1.875% 1/15/18
Corporate Bond 1.875% 1/15/18
**
397
 
WELLPOINT INC 2.3% 07/15/18
Corporate Bond 2.3% 7/15/18
**
646
 
WELLS FARGO 1.5% 01/18
Corporate Bond 1.5% 1/18
**
1,130
 
WELLS FARGO&COM 3.676% 6/15/16
Corporate Bond 3.676% 6/15/16
**
1,542
 
WESTERN UNION CO 2.875 12/17
Corporate Bond 2.875% 12/17
**
859

32
Eastman Investment and Employee Stock Ownership Plan
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
December 31, 2013
(in thousands)

(a)
(b)
 Identity of issue, borrower, lessor, or similar party
(c)
 Description of investment, including maturity date, rate of interest, collateral, par or maturity value
(d)
Historical Cost
(e)
Current Value
 
WESTPAC BANKING CRP 2% 8/14/17
Corporate Bond 2% 8/14/17
**
1,343
 
WFCM 2013-LC12 A1 1.676% 7/46
Mortgage backed security 1.676% 7/46
**
1,483
 
WFRBS 13-C13 A1 0.778% 5/45
Mortgage backed security.778% 5/45
**
317
 
WFRBS 13-C14 A1 .836% 6/15/46
Mortgage backed security.836% 6/15/46
**
323
 
WFRBS 2011-C5 A1 1.456 11/44
Mortgage backed security 1.456% 11/44
**
137
 
WFRBS 2012-C8 A1 .864% 8/45
Mortgage backed security.864% 8/45
**
337
 
WFRBS 2012-C8 A2 1.881% 8/45
Mortgage backed security 1.881% 8/45
**
671
 
WFRBS 2013-C11 A1 .799% 03/45
Mortgage backed security.799% 3/45
**
219
 
WFRBS 2013-C14 A2 2.133% 6/46
Mortgage backed security 2.133% 6/46
**
310
 
WOART 2012-A A3 0.64% 2/17
Mortgage backed security .64% 2/17
**
1,391
 
WOART 2013-A A3 .64% 4/16/18
Mortgage backed security .64% 4/16/18
**
679
 
WOLS 2013-A A3 1.10% 12/16
Mortgage backed security 1.1% 12/16
**
1,627
 
WPACBKG 0.95% 01/12/16
Corporate Bond .95% 1/12/16
**
781
 
WPACBKG 1.6% 1/12/18
Corporate Bond 1.6% 1/12/18
**
770
 
XEROX CORP 2.75% 03/15/19
Corporate Bond 2.75% 3/15/19
**
1,012
 
Sub-total Managed Income Funds
 
 
1,049,235
 
Self-Directed Brokerage Account
27,023 Shares
**
27,023
 
Total Assets
 
 
$2,858,208
*
Participant Loans
Interest rates ranging 3.25% - 7.75% Maturities ranging 1 to 61 months
 
$51,782

* Represents a party-in-interest to the Plan.
** Historical cost is omitted because the investment is participant-directed.


33







SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Eastman Investment and Employee
Stock Ownership Plan






Date: June 27, 2014
By:  /s/ Scott V. King
 
Scott V. King
 
Vice President, Controller and Chief Accounting Officer


34

Eastman Investment and Employee Stock Ownership Plan
Exhibit Index

Exhibit
Number
Description
Sequential
Page Number
 
 
 
23.01
Consent of Independent Registered Public Accounting Firm
36

 
 
 


35