3rd Quarter - 2021 Presentation

FINANCIAL INFORMATION

October 28, 2021

For Eastman Chemical Company Third Quarter 2021 Financial Results Release

Table of Contents

Item
Table 1	Statements of Earnings
Table 2A	Segment Sales Information
Table 2B	Sales Revenue Change
Table 2C	Sales by Customer Location
Table 3A	Segment, Other, and Company Non-GAAP Earnings (Loss) Before Interest and Taxes
Reconciliations
Table 3B	Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins
Table 4A	Non-GAAP Earnings (Loss) Before Interest and Taxes, Net Earnings, and Earnings Per Share
Reconciliations
Table 4B	Adjusted Effective Tax Rate Calculation
Table 5A	Statements of Cash Flows
Table 5B	Net Cash Provided By Operating Activities to Free Cash Flow Reconciliations
Table 6	Total Borrowings to Net Debt Reconciliations

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Table 1 - Statements of Earnings

(Dollars in millions, except per share amounts; unaudited)

Third Quarter		First Nine Months
2021	2020		2021	2020

Sales	$	2,720		$	2,122		$	7,782		$	6,287
Cost of sales		2,058			1,621			5,841			4,838
Gross profit		662			501			1,941			1,449
Selling, general and administrative expenses		201			165			587			480
Research and development expenses		66			56			187			169
Asset impairments and restructuring charges, net		7			60			29			215
Other components of post-employment (benefit) cost, net		(36)			(30)			(109)			(90)
Other (income) charges, net		(6)			7			(11)			10
Loss on business held for sale (1)		60			-			555			-
Earnings before interest and taxes		370			243			703			665
Net interest expense		49			52			150			159
Early debt extinguishment costs		-			1			-			1
Earnings before income taxes		321			190			553			505
Provision for income taxes		(33)			25			66			50
Net earnings		354			165			487			455
Less: Net earnings attributable to noncontrolling interest		3			4			8			9
Net earnings attributable to Eastman	$	351	$	161	$	479	$	446
Basic earnings per share attributable to Eastman	$	2.60		$	1.19		$	3.53		$	3.29
Diluted earnings per share attributable to Eastman
$	2.57		$	1.18		$	3.49		$	3.27
Shares (in millions) outstanding at end of period		134.4			135.5			134.4			135.5
Shares (in millions) used for earnings per share calculation
Basic		135.3			135.3			135.8			135.5
Diluted		137.0			136.3			137.6			136.4

1. Sale of rubber additives (including Crystex™ insoluble sulfur and Santoflex™ antidegradants) and other product lines and related assets and technology of the global tire additives business of the Additives & Functional Products ("AFP") segment.
   See "Management's Discussion and Analysis of Financial Condition" and "Overview" of the Quarterly Report on Form10-Qfor second quarter 2021. The sale is expected to be completed in fourth quarter 2021.

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	Table 2A - Segment Sales Information
			Third Quarter			First Nine Months
(Dollars in millions, unaudited)			2021				2020			2021			2020
Sales by Segment
Additives & Functional Products	$	997			$	742	$	2,793	$	2,249
Advanced Materials			770				668			2,255			1,850
Chemical Intermediates			731				506			2,072			1,559
Fibers			222				206			662			629
Total Eastman Chemical Company	$	2,720			$	2,122	$	7,782	$	6,287

		Second
		Quarter
(Dollars in millions, unaudited)		2021
Sales by Segment
Additives & Functional Products	$	925
Advanced Materials		769
Chemical Intermediates		736
Fibers		223
Total Eastman Chemical Company	$	2,653

	Table 2B - Sales Revenue Change
		Third Quarter 2021 Compared to Third Quarter 2020
				Change in Sales Revenue Due To
(Unaudited)		Revenue		Volume /				Exchange
			Product Mix	Price Effect		Rate
		% Change		Effect			Effect
Additives & Functional Products	34	%	16	%	18	%	-	%
Advanced Materials	15	%	10	%	4	%	1	%
Chemical Intermediates	44	%	(2) %	46	%	-	%
Fibers	8	%	7	%	1	%	- %
Total Eastman Chemical Company	28	%	9	%	19	%	- %
		First Nine Months 2021 Compared to First Nine Months 2020
				Change in Sales Revenue Due To
(Unaudited)		Revenue		Volume /				Exchange
			Product Mix	Price Effect		Rate
		% Change		Effect			Effect
Additives & Functional Products	24	%	13	%	9	%	2	%
Advanced Materials	22	%	18	%	2	%	2	%
Chemical Intermediates	33	%	(3) %	35	%	1	%
Fibers	5	%	5	%	- %	- %
Total Eastman Chemical Company	24	%	10	%	12	%	2	%

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		Third Quarter 2021 Compared to Second Quarter 2021
						Change in Sales Revenue Due To
		Revenue		Volume /						Exchange
			Product Mix							Rate
(Unaudited)		% Change		Effect	Price Effect		Effect
Additives & Functional Products	8	%				2	%			7	%			(1) %
Advanced Materials			- %			(1) %			1	%			- %
Chemical Intermediates	(1) %				(5) %			4	%			- %
Fibers			- %			(2) %			2	%			- %
Total Eastman Chemical Company	3 %				(1) %			4	%			- %
	Table 2C - Sales by Customer Location
					Third Quarter			First Nine Months
(Dollars in millions, unaudited)				2021			2020			2021			2020
Sales by Customer Location
United States and Canada	$	1,197	$		894	$		3,398	$	2,660
Europe, Middle East, and Africa				698				556				2,042			1,713
Asia Pacific				658				547				1,877			1,565
Latin America				167				125				465			349
Total Eastman Chemical Company	$	2,720	$		2,122	$		7,782	$	6,287

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Table 3A - Segment, Other, and Company

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (1)

			Third Quarter			First Nine Months
(Dollars in millions, unaudited)			2021			2020			2021			2020
Additives & Functional Products
Earnings (loss) before interest and taxes	$	91	$	107	$	(142)	$	194
Asset impairments and restructuring charges, net (2)(3)(4)			2			2			9			136
Loss on business held for sale and related transaction costs (5)			68			-			563			-
Excluding non-core item			161			109			430			330
Advanced Materials
Earnings before interest and taxes			125			129			421			293
Asset impairments and restructuring charges, net (6)			3			3			7			10
Accelerated depreciation (6)			-			7			4			7
Excluding non-core items			128			139			432			310
Chemical Intermediates
Earnings before interest and taxes			130			31			336			131
Asset impairments and restructuring charges, net (4)			2			1			13			4
Excluding non-core item			132			32			349			135
Fibers
Earnings before interest and taxes			32			41			114			140
Other
Loss before interest and taxes			(8)			(65)			(26)			(93)
Asset impairments and restructuring charges, net			-			54			-			65
Excluding non-core items			(8)			(11)			(26)			(28)
Total Eastman Chemical Company
Earnings before interest and taxes			370			243			703			665
Asset impairments and restructuring charges, net			7			60			29			215
Loss on business held for sale and related transaction costs			68			-			563			-
Accelerated depreciation			-			7			4			7
Total earnings before interest and taxes excluding non-core	$	445	$	310	$	1,299	$	887
items

1. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of theQuarterly Report on Form10-Qfor third quarter 2020 for description of third quarter and first nine months 2020 non-core items.
2. Third quarter and first nine months 2021 severance charges of $1 million, and first nine months 2021 asset impairment charges of $4 million and site closure costs of $2 million from the previously reported closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization.
3. First nine months 2021 gain on the sale of previously impaired assets of $1 million from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization.
4. Third quarter and first nine months 2021 site closure costs of $2 million and $1 million in the Chemical Intermediates ("CI") and AFP segments, respectively, and first nine months 2021 site closure costs of $6 million and $2 million in the CI and AFP segments, respectively, and contract termination fees in first nine months 2021 of $7 million and $1 million in the CI segment and AFP segment, respectively.
5. SeeTable 1note (1).
6. Third quarter and first nine months 2021 site closure costs of $2 million from the previously reported closure of a performance films manufacturing facility in North America. Third quarter and first nine months 2021 site closure costs of $1 million and $3 million, respectively, and first nine months 2021 asset impairment charges of $1 million, severance charges of $1 million, and accelerated depreciation related to the previously reported closure of an advanced interlayers manufacturing facility in North America. Both closures were part of ongoing site optimization.

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