EASTMAN CHEMICAL CO

Eastman's objective is to be a global specialty materials company that enhances the quality of life in a material way with consistent, sustainable earnings growth and strong cash flow. Integral to the Company's strategy for growth is leveraging its heritage expertise and innovation within its cellulosic biopolymer and acetyl, olefins, polyester, and alkylamine chemistries. For each of these "streams", the Company has developed and acquired a combination of assets and technologies that combine scale and integration across multiple manufacturing units and sites as a competitive advantage. Management uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development, and relentlessly engaging the market. The Company sells differentiated products into diverse markets and geographic regions and engages the market by collaborating and co-innovating with customers and downstream users in existing and new niche markets to creatively solve problems. Management believes that this innovation-driven growth model will enable the Company to leverage its proven technology capabilities to improve product mix, increasing emphasis on specialty businesses, and sustaining and expanding market share through leadership in attractive niche markets. The Company's strategy will also focus on organic growth initiatives and targeted bolt-on acquisitions.

Innovation

Management is pursuing specific opportunities to leverage Eastman's innovation-driven growth model with the goal of greater than end-market growth by both sustaining the Company's leadership in existing markets and expanding into new markets. Recently developed, introduced, or commercialized innovation products, applications, and technologies include the following:

•Molecular recycling technologies, including carbon renewal technology and polyester renewal technology, which are being used for production and commercial sales of multiple products, described below under "Sustainability and Circular Economy";

•Eastman Tritan™ Renew copolyester based on polyester renewal technology which transforms single-use polyester waste into basic building blocks that are then used to make durable, high performance materials;

•Naia™ Renew, a fiber product for the apparel market developed from proprietary cellulosic materials that are approximately 60 percent biopolymer derived and approximately 40 percent waste plastics derived;

•Saflex™ Horizon, a next generation polyvinyl butyral ("PVB") interlayer product, supports the longer virtual image distance, expanded field of view, and augmented reality features of advanced Head-up Displays ("HUD") systems;

•Saflex™ FlySafe™ 3D PVB interlayers innovative design for architectural glass helps comply with evolving wildlife protection regulations while preserving the aesthetic integrity of architectural products;

•Tetrashield™ performance polyester resins based on proprietary monomer technology with improved health, safety, and performance features for food and beverage packaging and industrial powder coatings;

•Eastapure™, an ultra high purity solvent portfolio for electronic and semiconductor customers requiring products with extremely low organic and inorganic impurities, and particulates;

•Performance films innovations in automotive and architectural window films and paint protection films and expanded adoption of Eastman CORE (trademark and patent pending), a software platform that provides automotive dealership groups and professional installers access to shop management and automotive film patterns to improve installation quality and customer experience;

•Cellulosic biopolymers including addition of new microbeads for personal care applications including color cosmetics, sunscreens, and facial lotions; and

•Aventa™, a biodegradable and compostable cellulosic biopolymer that is approximately 60 percent bio-content derived, and Aventa™ Renew, approximately 60 percent bio-derived and 40 percent recycled plastic derived, used in food service and food packaging applications.

Sustainability and Circular Economy

Central to Eastman's innovation-driven growth model is management's dedication to enhance the quality of life in a material way with an ongoing commitment to sustainability.

The Company's long history of technical expertise in chemical processes and polymer science positions it to provide innovative solutions to some of the world's most complex problems. One example is Eastman's contribution to the development of a more "circular economy". A circular economy focuses on making the most of the world's resources - minimizing waste and maximizing value - by providing end-of-life solutions to reduce, reuse, and recycle products and materials. This keeps materials in use and decouples growth from scarce resource consumption, while allowing economic development and improvement in quality of life. The Company's sustainable innovation initiatives include biodegradation, molecular recycling, and strategic collaborations with end-user markets. In 2019, the Company announced the use of its unique platform of solutions to address the challenges of plastic waste in the environment with advanced circular recycling, or molecular recycling, including carbon renewal and polyester renewal technologies. Together, these technologies allow the Company to use plastic waste, such as polyester carpet and textiles, as feedstock to lower greenhouse gas ("GHG") emissions compared to traditional processes. Eastman's scale and integration provide a unique opportunity to accelerate the use of these molecular recycling technologies and make a meaningful positive impact on the environment.

Management approaches sustainability as a source of competitive strength by focusing its innovation strategy on opportunities where disruptive macro trends align with the Company's differentiated technology platforms and applications development capabilities to develop innovative products, applications, and technologies that enable customers' development and sale of sustainable products. Eastman's sustainability-related growth initiatives include targeted product and process innovation that focuses on enhancing product health and safety, end-use product durability, recyclability, and reducing material usage, while lowering GHG emissions associated with climate change. Eastman has focused on communication and collaboration with stakeholders, including policymakers and other interested parties, to build support for the concepts of molecular recycling and mass balance accounting (an accepted and certified protocol by International Sustainability & Carbon Certification ("ISCC") that documents and tracks recycled content through complex manufacturing systems). Eastman has committed to reduce its absolute scope 1 (direct GHG emissions occurring from sources that are owned by Eastman) and scope 2 (indirect GHG associated with the purchase of electricity, steam, heat, or cooling and are a result of Eastman's energy use) emissions by approximately one-third by 2030, measured from the Company's 2017 baseline year, in order to achieve carbon neutrality by 2050, and to innovate to provide products that enable energy savings and GHG emissions reductions to customers and end-users.

Eastman focuses on the triple challenge of Climate, Circularity, and Caring for Society. Examples of Eastman sustainable solutions within identified disruptive macro trends include:

•Climate:

•Eastman's molecular recycling processes are expected to reduce GHG emissions by 20 percent to 50 percent, depending on primary energy inputs and technology deployed, when compared to processes using fossil fuels for intermediates used in various Renew products;

•Saflex™ Q series advanced acoustic interlayers enables weight reduction of vehicles;

•Solar-absorbing Saflex™ PVB interlayer solutions, such as the Saflex™ S series, Saflex™ Solar Connect, and XIR™ Solar Control Technology, are ideal for electric vehicle ("EV") glass in cabin-forward designs and for larger sunroofs, as they reduce loads on air-conditioning systems and help maximize EV driving range;

•LLumar™ and SunTek™ performance films, in the building and construction market, provide energy savings of 5 percent to 15 percent, depending on glass and film type; and

•Eastman specialty solvents reduce volatile organic compounds ("VOC").

•Circularity:

•Eastman's molecular recycling technology, including carbon renewal and polyester renewal technologies, utilizes plastic waste as a feedstock. Products made with ISCC-certified recycled content include:

•Tritan™ Renew copolyesters

•Acetate Renew cellulosic biopolymers

•Trēva™ Renew cellulosic biopolymers

•Cristal™ Renew copolyesters

•Naia™ Renew cellulosic yarn

•Aventa™ Renew cellulosic biopolymers

•Eastman began commissioning and startup activities of one of the world's largest polyester recycling facilities at its Kingsport manufacturing site in 2023 and introduced plastic waste into its Kingsport methanolysis facility in early 2024;

•Eastman achieved significant milestones in 2023 on a material-to-material molecular recycling facility in Port-Jérôme-sur-Seine, France. This facility is expected to use Eastman's polyester renewal technology to initially recycle up to 110,000 metric tons annually of hard-to-recycle plastic waste. Approximately 70 percent of the required feedstock for the facility is being procured today, under contract, or in active negotiation. The Company continues to work with customers to transition from letters of intent to definitive supply agreements and is making progress on engineering, permitting, and finalizing incentives for this investment; and

•Eastman made progress on engineering, designing, permitting, and finalizing incentives for its third molecular recycling facility that is expected to be located in the United States.

•Caring for Society:

•Tetrashield™ performance polyester resins provide Bisphenol A-non intent ("BPA-NI") for food and beverage can coatings and Tetrashield™ resins for industrial powder coating applications providing ultra durable, long weathering alternative to traditional fluoropolymers in building and construction applications.

•Agriculture solutions, including Eastman organic acids and proprietary additives, protect farmer's crops, maximize yields, and feed the world;

•Care additives provide safe and sustainable solutions for home and personal care applications including cellulosic microbeads which offers a higher performance, biodegradable alternative to traditional microplastic alternatives;

•Saflex™ PVB and HUD acoustic interlayers in the automotive sector are essential to ensure passenger safety. Eastman's materials enable the adoption of digital technologies within the cabin and further advance improvements in solar, heat, and ultraviolet management;

•Saflex™ PVB laminated glass windows, doors and skylights made with specialty interlayers offer complete protection for educational, industrial and commercial building applications from hurricanes, cyclones, and violent storms, as well as acting as a critical first line of defense from potential attackers; and

•Eastman medical polymers provide quality and durability to healthcare providers while ensuring safety for their patients.