Eastman
A Singular Focus on Quality and Reliability

KINGSPORT - Eastman, a global specialty materials company, and Food City, a leading regional grocery retailer, today unveiled the first (Eastman Road Food City) of three plastic recycling collection bins that will be located at the retailer’s stores in Kingsport, Tennessee. The partnership program – Shop, Recycle, Repeat, announced last November – will enable customers to drop off their plastic waste in the area since curbside pickup is no longer available. The collected plastic will be sorted and processed by Eastman's new mixed plastics processing facility, a part of the new molecular recycling plant which is the largest material-to-material recycling facility in the world.

“We’re excited to unveil the first recycling bins and are so proud that they were designed and created by talented Eastman craftspeople who work at our facility in Kingsport,” said Brad Lich, Eastman executive vice president and chief commercial officer. “This partnership is an important step in our region to bring additional plastics recycling options to our community and demonstrates our shared vision for a more sustainable future, where plastic waste is seen as a valuable resource that can be transformed into new products.”

The partnership is part of Eastman and Food City’s commitment to advancing the circular economy and reducing the environmental impact of plastic waste. By offering convenient and accessible recycling options to drop off plastics for the public, Shop, Recycle, Repeat will help divert plastic waste from landfills or incineration to create valuable new materials that can be used in a variety of applications again and again. Eastman’s molecular recycling technology breaks down plastic waste into its molecular building blocks, which are then used to create new high-performance plastics that are indistinguishable from virgin materials. This technology can recycle plastics that are typically difficult to recycle, such as colored laundry detergent bottles, clamshell fruit packaging, polyester fabrics, shampoo bottles, and much more.

“Food City is excited to partner with Eastman, a world-class company and a long-time leader in our community, to bring plastics recycling to our customers,” said Steven C. Smith, Food City president and chief executive officer. “The bin at our Eastman Road location is the first of three that will be available within the next month at our Kingsport stores, and we look forward to expanding the partnership at additional Food City locations later this year. By working together, we can make a lasting impact across our region.”

Shop, Recycle, Repeat is launching at three Food City stores in Kingsport and will expand to other Food City locations in the region throughout the year. Customers can drop off their plastic waste, such as water bottles, colored laundry and shampoo bottles, trays and fruit containers, among many other plastic items. Additional information about how to recycle plastic waste can be found here.

KINGSPORT, Tennessee: Eastman Chemical Company (NYSE:EMN) announced its second-quarter 2024 financial results.

• Delivered strong year-over-year sales volume/mix growth driven by Advanced Materials.

• Drove a 300-basis-point sequential margin improvement through volume/mix growth and operating leverage.

• Demonstrated continued commercial excellence by focusing on specialty product offerings and managing price-cost across the company.

• Continued to ramp up sales to our customers from the Kingsport methanolysis facility, while demonstrating higher operating rates and broadening the range of hard-to-recycle feedstocks.

• Delivered solid 1H24 operating cash flow and repurchased $100 million of shares in second quarter 2024.

*For non-core and unusual items excluded from adjusted earnings and for adjusted provision for income taxes, segment adjusted EBIT margins, and net debt, reconciliations to reported company and segment earnings and total borrowings for all periods presented in this release, see Tables 3A, 3B, 4A, and 6.

“We delivered strong second-quarter results driven by topline growth and strong sequential margin improvement,” said Mark Costa, Board Chair and CEO. “We saw modest seasonal increases in our sales volume led by durables and automotive end markets. Underlying primary demand trends remained weak. Against this backdrop, the Eastman team remains focused on commercial and operational excellence. With customer inventory destocking largely complete and end-market demand stabilizing at lower levels, we will continue to focus on controllable items and leveraging our innovation-driven growth model to deliver growth above our underlying end markets. We also continue to advance our circular platform and demonstrate our leadership position in the circular economy. We continued to successfully serve our customers, demonstrated higher operating rates, and achieved an important milestone by introducing hard-to-recycle feedstocks into the Kingsport methanolysis facility, while we also worked through start-up issues.”

Corporate results 2Q 2024 versus 2Q 2023

Sales revenue increased 2 percent primarily due to 6 percent higher sales volume/mix partially offset by 4 percent lower selling prices.

Higher sales volume/mix was driven by the end of customer inventory destocking across most end markets. This improvement was partially offset by weakness in the building and construction end market. Lower selling prices were due to lower raw material prices across all segments.

EBIT increased primarily due to higher sales volume/mix in Advanced Materials, partially offset by lower price-cost in Chemical Intermediates.

Segment Results 2Q 2024 versus 2Q 2023

Advanced Materials – Sales revenue increased 8 percent due to 12 percent higher sales volume/mix partially offset by 4 percent lower selling prices.

Higher sales volume/mix was the result of the end of customer inventory destocking especially in the durables and packaging end markets as well as premium interlayers product growth in the automotive end market. This growth was partially offset by lower selling prices.

EBIT increased due to higher sales volume/mix, partially offset by unfavorable price-cost.

Additives & Functional Products – Sales revenue decreased 4 percent due to 4 percent lower selling prices.

Lower selling prices were primarily due to lower raw material prices, including the impact of cost-pass-through contracts in care additives and functional amines. Sales volume/mix was unchanged as growth in coatings additives and care additives was offset by a decline in specialty fluids due to lower heat transfer fluid project fulfillments.

EBIT decreased due to lower heat transfer fluid project fulfillments.

Fibers – Sales revenue increased 2 percent due to 1 percent higher sales volume/mix and 1 percent higher selling prices.

Higher selling prices were driven by acetate tow price increases. Sales volume/mix increased primarily due to growth in the textiles product line.

EBIT increased due to favorable price-cost and higher sales volume/mix.

Chemical Intermediates – Sales revenue was flat due to 6 percent higher sales volume/mix, fully offset by 6 percent lower selling prices.

Higher sales volume/mix across the segment was driven by the end of customer inventory destocking. Higher sales volume/mix was offset by lower selling prices due to lower raw material and energy prices, particularly for acetyls and intermediates products.

EBIT decreased due to lower spreads more than offsetting higher sales volume/mix.

Cash Flow

In second quarter 2024, cash provided by operating activities was $367 million. The company returned $195 million to stockholders through share repurchases and dividends. See Table 5. Priorities for uses of available cash for 2024 include organic growth investments, payment of the quarterly dividend, bolt-on acquisitions, and share repurchases.

2024 Outlook

Commenting on the outlook for full-year 2024, Costa said, “We delivered solid results in the first half of the year despite a weak global economic environment. Through this year, we are benefiting from the end of destocking, as our volumes have reconnected to underlying demand. Consistent with our previous end-market expectations, we continue to see little evidence for end-market demand improvement in the second half of the year. In this context, we remain focused on leveraging our innovation-driven growth model to deliver growth above our end markets, especially in the circular economy. We also expect to benefit from continued pricing discipline, improved asset utilization, and disciplined cost management. We expect the benefit of earnings generated by our Kingsport methanolysis facility to be around a $50 million incremental EBITDA contribution. Taking these factors together, we expect 2024 EPS to be between $7.40 and $7.85 and for 2024 cash from operations to be approximately $1.4 billion. I remain confident in our ability to deliver earnings growth and strong cash flow going forward.”

The full-year 2024 projected adjusted diluted EPS and Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) exclude any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss, and asset impairments and restructuring charges) or any unusual or non-recurring items because we are unable to predict with reasonable certainty the financial impact of such items. These items are uncertain and depend on various factors, and we are unable to reconcile projected adjusted diluted EPS and EBITDA excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS or net earnings without unreasonable efforts.

Forward-Looking Statements

This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, volumes, pricing, margins, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, statements of management’s plans, strategies and objectives for future operations, and statements regarding future economic, industry or market conditions or performance. Such projections and estimates are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans. Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company’s filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the company’s website at www.eastman.com.

Conference Call and Webcast Information

Eastman will host a conference call with industry analysts on July 26, 2024, at 8:00 a.m. ET. To listen to the live webcast of the conference call and view the accompanying slides and prepared remarks, go to investors.eastman.com, Events & Presentations. The slides and prepared remarks to be discussed during the call and webcast will be available at investors.eastman.com at approximately 4:30 p.m. ET on July 25, 2024. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 696395. A web replay, a replay in downloadable MP3 format, and the accompanying slides and prepared remarks will be available at investors.eastman.com, Events & Presentations. A telephone replay will be available continuously beginning at approximately 1:00 p.m. Eastern Time, July 26, 2024, through 11:59 p.m. Eastern Time, Aug. 5, 2024, Toll Free at +1 (866) 813-9403, passcode 643135.