Eastman Chemical Company (NYSE:EMN) Q4 2022 Earnings Conference Call January 26, 2023 8:00 AM ET Company Participants Greg Riddle - Investor Relations Mark Costa - Board Chair & Chief Executive Officer Willie McLain - Senior Vice President & Chief Financial Officer Jake LaRoe - Manager, Investor Relations Conference Call Participants Joshua Spector - UBS David Begleiter - Deutsche Bank Aleksey Yefremov - KeyBanc Capital Markets Michael Leithead - Barclays Vincent Andrews - Morgan Stanley Jeff Zekauskas ...

Eastman Chemical Company (NYSE:EMN) Q3 2022 Earnings Conference Call October 28, 2022 8:00 AM ET Company Participants Greg Riddle - Investor Relations Mark Costa - Board Chair & Chief Executive Officer Willie McLain - Senior Vice President & Chief Financial Officer Jake LaRoe - Manager, Investor Relations Conference Call Participants Vincent Andrews - Morgan Stanley David Begleiter - Deutsche Bank Jeff Zekauskas - JPMorgan Chase Duffy Fischer - Goldman Sachs Frank Mitsch - Fermium Research Matthew DeYoe - B ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its cha ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements and management's analysis of performance [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company presents unaudited consolidated statements of earnings, financial position, and cash flows Consolidated Statements of Earnings (Unaudited) | (In millions, except per share) | Second Quarter 2022 | Second Quarter 2021 | First Six Months 2022 | First Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | **$2,784** | **$2,653** | **$5,498** | **$5,062** | | Gross profit | $670 | $681 | $1,220 | $1,279 | | Earnings (loss) before interest and taxes | $426 | $(56) | $759 | $333 | | **Net earnings (loss) attributable to Eastman** | **$256** | **$(146)** | **$491** | **$128** | | **Diluted earnings (loss) per share** | **$2.03** | **$(1.07)** | **$3.82** | **$0.93** | Consolidated Statements of Financial Position (Unaudited) | (In millions) | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | **$4,003** | **$4,646** | | **Total assets** | **$14,875** | **$15,519** | | Total current liabilities | $3,148 | $2,971 | | **Total liabilities** | **$9,468** | **$9,731** | | **Total Eastman stockholders' equity** | **$5,323** | **$5,704** | Consolidated Statements of Cash Flows (Unaudited) | (In millions) | First Six Months 2022 | First Six Months 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$262** | **$642** | | Net cash provided by (used in) investing activities | $756 | $(277) | | Net cash used in financing activities | $(1,010) | $(315) | | **Net change in cash and cash equivalents** | **$(3)** | **$45** | [Note 2. Divestitures](index=9&type=section&id=Note%202.%20Divestitures) The company details the financial impact of selling its adhesives resins and rubber additives businesses - On April 1, 2022, the company completed the sale of its adhesives resins business for total estimated consideration of **$957 million**, resulting in a **$5 million gain**[37](index=37&type=chunk)[38](index=38&type=chunk) - The company previously completed the sale of its rubber additives business on November 1, 2021, for an estimated consideration of **$687 million**, which resulted in a **$552 million loss**[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 6. Borrowings](index=13&type=section&id=Note%206.%20Borrowings) This note outlines changes in total borrowings, recent debt refinancing, and available credit facilities - Total borrowings decreased to **$4.99 billion** at June 30, 2022, from $5.16 billion at December 31, 2021[50](index=50&type=chunk) - In Q2 2022, the company borrowed **$500 million** under a new five-year term loan agreement and used the proceeds along with available cash to repay **$550 million** of its 3.6% notes due August 2022[52](index=52&type=chunk) - The company has a **$1.50 billion** revolving credit facility expiring in December 2026, with no outstanding borrowings as of June 30, 2022[51](index=51&type=chunk) [Note 12. Stockholders' Equity](index=25&type=section&id=Note%2012.%20Stockholders'%20Equity) This note details the company's share repurchase programs and cash dividend declarations - In Q2 2022, the company entered into a **$500 million accelerated share repurchase (ASR) program**; for the first six months of 2022, total share repurchases amounted to **$752 million**[118](index=118&type=chunk)[132](index=132&type=chunk) - Cash dividends declared were **$0.76 per share** in Q2 2022, up from $0.69 per share in Q2 2021[131](index=131&type=chunk) [Note 17. Segment and Regional Sales Information](index=31&type=section&id=Note%2017.%20Segment%20and%20Regional%20Sales%20Information) This note provides a breakdown of sales and EBIT by operating segment and customer location Sales by Segment (First Six Months) | (In millions) | H1 2022 | H1 2021 | | :--- | :--- | :--- | | Additives & Functional Products | $1,640 | $1,264 | | Advanced Materials | $1,583 | $1,485 | | Chemical Intermediates | $1,660 | $1,341 | | Fibers | $455 | $440 | EBIT by Segment (First Six Months) | (In millions) | H1 2022 | H1 2021 | | :--- | :--- | :--- | | Additives & Functional Products | $293 | $216 | | Advanced Materials | $202 | $296 | | Chemical Intermediates | $288 | $206 | | Fibers | $61 | $82 | Sales by Customer Location (First Six Months) | (In millions) | H1 2022 | H1 2021 | | :--- | :--- | :--- | | United States and Canada | $2,502 | $2,201 | | Europe, Middle East, and Africa | $1,426 | $1,344 | | Asia Pacific | $1,250 | $1,219 | | Latin America | $320 | $298 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2022 performance drivers, segment results, liquidity, and the full-year outlook [Overview](index=40&type=section&id=Overview) This section reviews key financial results and operational events for the second quarter of 2022 - Q2 2022 sales revenue increased to **$2.8 billion** from $2.7 billion in Q2 2021, driven by higher selling prices which were partially offset by lower sales volume[182](index=182&type=chunk) - **Adjusted EBIT increased to $469 million** in Q2 2022 from $454 million in Q2 2021, as higher selling prices more than offset increased raw material, energy, and distribution costs[182](index=182&type=chunk) - A steam line failure incident on January 31, 2022, at the Kingsport site impacted operations, primarily affecting the Advanced Materials (AM) and Fibers segments; incremental costs, net of insurance, were **$17 million in Q2** and **$42 million in H1 2022**[183](index=183&type=chunk)[184](index=184&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the key drivers of change in sales revenue and profitability Sales Revenue Change Analysis (Q2 2022 vs Q2 2021) | (In millions) | Change | % Change | | :--- | :--- | :--- | | **Total Sales Change** | **$131** | **5%** | | Volume / product mix effect | $53 | 2% | | Price effect | $405 | 15% | | Exchange rate effect | $(57) | (2)% | | Divested business effect | $(270) | (10)% | - **Adjusted gross profit** (excluding non-core and unusual items) **increased 1%** in Q2 2022 YoY, as higher selling prices were largely offset by increased costs[197](index=197&type=chunk) - **Adjusted SG&A expenses decreased 9%** in Q2 2022 YoY, primarily due to lower variable compensation costs[198](index=198&type=chunk) [Summary by Operating Segment](index=46&type=section&id=Summary%20by%20Operating%20Segment) This section details the financial performance and key drivers for each of the company's operating segments - **Additives & Functional Products (AFP):** Q2 2022 sales grew **27% YoY to $835 million**, driven by a 20% price increase and 11% volume/mix growth; **Adjusted EBIT rose 33% to $148 million** due to higher sales volume and pricing power[224](index=224&type=chunk)[226](index=226&type=chunk) - **Advanced Materials (AM):** Q2 2022 sales increased **10% YoY to $846 million**, mainly from a 13% price increase; **Adjusted EBIT grew 3% to $158 million**, as higher pricing and lower manufacturing costs offset higher raw material/energy costs[230](index=230&type=chunk)[232](index=232&type=chunk) - **Chemical Intermediates (CI):** Q2 2022 sales rose **17% YoY to $861 million**, driven by a 19% price increase due to higher input costs and constrained markets; **Adjusted EBIT increased 8% to $155 million** as higher selling prices offset cost inflation[237](index=237&type=chunk)[239](index=239&type=chunk) - **Fibers:** Q2 2022 sales increased **9% YoY to $242 million**, with a 12% price increase offsetting a 2% volume decline; **EBIT was flat at $37 million**, as higher pricing was offset by lower volume and higher manufacturing costs from the steam line incident and Russia/Ukraine conflict[240](index=240&type=chunk)[241](index=241&type=chunk) [Liquidity and Other Financial Information](index=50&type=section&id=Liquidity%20and%20Other%20Financial%20Information) This section discusses cash flow, debt management, capital expenditures, and off-balance sheet arrangements - Cash from operations for H1 2022 was **$262 million**, a decrease of $380 million from H1 2021, due to higher working capital needs and lower net earnings (excluding divestiture gains/losses)[255](index=255&type=chunk) - The company utilizes an off-balance sheet accounts receivable factoring program, selling **$637 million in receivables in Q2 2022**, up from $298 million in Q2 2021[262](index=262&type=chunk) - **Net debt decreased to $4.54 billion** at June 30, 2022, from $4.70 billion at year-end 2021[271](index=271&type=chunk) - Capital expenditures for H1 2022 were **$247 million**, with the full-year 2022 forecast at approximately **$700 million**, primarily for growth initiatives like the methanolysis recycling facility[272](index=272&type=chunk) [Outlook](index=55&type=section&id=Outlook) The company provides its financial forecast for the full year 2022 and discusses key macroeconomic uncertainties 2022 Full-Year Outlook | Metric | Forecast | | :--- | :--- | | Adjusted EPS | $9.50 - $10.00 | | Operating Cash Flow | ~$1.5 billion | | Capital Expenditures | ~$700 million | | Share Repurchases | > $1 billion | - The company expects earnings to be negatively impacted by moderated demand in durables and building/construction, slower auto market recovery, high energy costs, and a strong U.S. dollar[280](index=280&type=chunk) - Key macroeconomic uncertainties include high global inflation, the Russia/Ukraine conflict, COVID-related lockdowns in China, and global supply chain constraints[281](index=281&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company outlines its exposure to market risks and its corresponding hedging strategies - A **10% adverse change** in the U.S. dollar against hedged foreign currencies would result in a potential loss of **$58 million** in the fair value of derivative instruments[313](index=313&type=chunk) - A **10% fluctuation** in the euro exchange rate would impact the value of designated net investments by **$191 million**, but this is generally offset by corresponding changes in euro-denominated borrowings and swaps designated as hedges[314](index=314&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures as of the quarter-end - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[316](index=316&type=chunk) - There were **no material changes** in the company's internal control over financial reporting during Q2 2022[317](index=317&type=chunk) [PART II. OTHER INFORMATION](index=59&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, share repurchases, and filed exhibits [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company discloses ongoing legal matters, including a potential environmental penalty and legacy tort claims - The company faces a potential civil penalty **exceeding $1 million** from the EPA and PADEP for alleged environmental violations at its former Jefferson Hills, PA facility, with liability retained after the facility's sale[320](index=320&type=chunk) - Through its acquisition of Solutia, Eastman is named in legacy tort claims, but these are **largely indemnified by Monsanto (Bayer AG)** under a settlement agreement[321](index=321&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) The company highlights material risks related to economic conditions, supply chain, global operations, and regulations - Key risks include **uncertain global economic conditions**, volatility in raw material and energy costs, and supply chain disruptions, particularly those exacerbated by the COVID-19 pandemic and geopolitical conflicts[288](index=288&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) - Substantial global operations expose the company to risks from **trade policy changes, tariffs, currency fluctuations**, and differing legal and regulatory environments[295](index=295&type=chunk)[296](index=296&type=chunk) - Operating risks include **manufacturing disruptions** from equipment failure, natural disasters, and cybersecurity attacks; growth initiatives, including acquisitions and circular economy projects, face execution and financial return risks[297](index=297&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Q2 2022 share repurchase activities and remaining authorization Issuer Purchases of Equity Securities (Q2 2022) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | April 1-30, 2022 | 1,834,664 | $109.01 | $2.667 billion | | May 1-31, 2022 | 4,283,370 | $105.63 | $2.215 billion | | June 1-30, 2022 | — | $— | $2.215 billion | | **Total** | **6,118,034** | **$106.65** | **$2.215 billion** | - The company initiated a **$500 million Accelerated Share Repurchase (ASR) program** in Q2 2022, with final settlement expected in Q3 2022[326](index=326&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including governance documents and certifications - The Exhibit Index lists key corporate governance documents, financing agreements, and required SEC certifications[332](index=332&type=chunk)

Financial Data and Key Metrics Changes - The company reported solid second-quarter results with earnings per share (EPS) of $2.83, up from $2.45 in the same quarter last year, indicating a year-over-year growth of approximately 15% [41][110] - The company experienced a negative impact of approximately $0.5 billion due to higher raw material and energy costs, which affected working capital [107][108] Business Line Data and Key Metrics Changes - Advanced Materials (AM) segment is forecasted to see a sequential increase of 10% in the third quarter, although the fourth quarter is expected to be flattish due to various market dynamics [17][22] - The company noted that approximately 40% of demand in advanced materials is stable, particularly in medical, consumer packaging, and cosmetics, which are expected to continue growing [23][69] Market Data and Key Metrics Changes - The automotive market is showing signs of recovery, although it is not as strong as previously expected, with some softness noted in consumer durables and construction-related end markets [76][101] - The company is experiencing a significant increase in demand for sustainable products, particularly in the textile fibers market, despite a general downturn in the textile market [10][56] Company Strategy and Development Direction - The company is focusing on sustainability and innovation, with plans to ramp up production of recycled content and biodegradable products [10][52] - The company is strategically aligning with long-term customers to enhance contract structures and improve market positioning [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to recover spreads and improve pricing in the second half of the year, despite facing challenges from inflation and logistics constraints [22][86] - The company is cautious about the economic outlook for next year, acknowledging potential risks but also highlighting multiple growth vectors [31][105] Other Important Information - The company is committed to returning cash to shareholders, with a buyback program targeting over $1 billion for the year [87] - The company is experiencing a significant backlog in production due to logistics challenges, which is expected to improve in the second half of the year [86][108] Q&A Session Summary Question: Can you discuss the reduction in freight costs? - Management acknowledged improvements in logistics but noted ongoing challenges due to inflation and high demand [86] Question: Are you still ramping up mixed waste plastic into the gasifier? - Management confirmed that the ramp-up is ongoing and expressed confidence in meeting future demand [8][9] Question: What is the outlook for automotive production? - Management indicated that while there is a sequential improvement expected, it is not as strong as previously anticipated [76][78] Question: How is the company managing pricing amid supply chain issues? - Management stated that a combination of contract terms and surcharges is being used to manage pricing effectively [90] Question: What is the expected impact of the Tennessee methanolysis facility? - Management indicated that commercial production will ramp up gradually, with significant benefits expected in 2024 [59] Question: Can you elaborate on the cash flow situation? - Management explained that higher working capital consumption due to inflation has impacted cash flow, but they expect a stronger performance in the second half of the year [107][110]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its charter ...

Eastman Chemical Company (NYSE:EMN) Q1 2022 Earnings Conference Call April 29, 2022 8:00 AM ET Company Participants Greg Riddle - Investor Relations Mark Costa - Board Chair and Chief Executive Officer Willie McLain - Senior Vice President and Chief Financial Officer Jake LaRoe - Manager, Investor Relations Conference Call Participants Vincent Andrews - Morgan Stanley Kevin McCarthy - Vertical Research Partners Josh Spector - UBS Mike Leithead - Barclays Aleksey Yefremov - KeyBanc David Begleiter - Deutsche ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its charter) Delaware 62-1539359 ( ...

Eastman Chemical Company (NYSE:EMN) Q4 2021 Earnings Conference Call January 28, 2022 8:00 AM ET Company Participants Mark Costa - Board Chair and CEO Greg Riddle - Investor Relations William Mc Lain - Senior Vice President and CFO Conference Call Participants David Begleiter - Deutsche Bank Vincent Andrews - Morgan Stanley Jeff Zekauskas - JP Morgan P.J. Juvekar - Citi Kevin McCarthy - Vertical Research Partners Michael Sison - Wells Fargo Securities John Roberts - UBS Frank Mitsch - Fermium Research Bob K ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-12626 EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its cha ...