EASTMAN CHEMICAL CO

Table of Contents

OVERVIEW

Eastman's products and operations are managed and reported in four operating segments: Advanced Materials ("AM"), Additives & Functional Products ("AFP"), Chemical Intermediates ("CI"), and Fibers. Eastman uses an innovation-driven growth model which consists of leveraging world class scalable technology platforms, delivering differentiated application development capabilities, and relentlessly engaging the market. The Company's world class technology platforms, scale advantage, and sustainability macrotrends form the foundation of the Company's research and development ("R&D") and innovation initiatives. Molecular recycling technologies continue to be an area of investment focus for the Company and extends the level of differentiation afforded by our world class technology platforms. Eastman began operating the world's largest polyester molecular recycling facility in 2024. Differentiated application development converts market complexity into opportunities for growth and accelerates innovation by enabling a deeper understanding of the value of Eastman's products and how they perform within customers' and end-user products. Key areas of application development include thermoplastic conversion, functional films, coatings formulations, textiles, and personal and home care formulations. The Company engages the market by working directly with customers and downstream users, targeting attractive markets, and leveraging disruptive macro trends. Management believes that these elements of the Company's innovation-driven growth model, combined with disciplined portfolio management and balanced capital deployment, will result in consistent, sustainable earnings growth and strong cash flow from operations.

Sales, EBIT, and EBIT excluding non-core items were as follows:

Sales revenue decreased in first quarter 2026 compared to first quarter 2025 due to lower sales volume and lower selling prices partially offset by favorable foreign currency exchange impact. Lower sale volume was primarily driven by customer inventory destocking in the acetate tow product line as well as continued weakness across consumer discretionary end markets. Lower selling prices were due to lower raw material prices and continued weak commodity market conditions in the CI segment.

EBIT excluding non-core items decreased in first quarter 2026 compared to first quarter 2025 primarily due to lower selling prices, lower sales volume, lower asset utilization, and increased energy costs across our businesses resulting from Winter Storm Fern. These factors were partially offset by the benefit of continued cost reduction initiatives and recognition of an expected refund of U.S. tariffs paid in 2025 and 2026 under the International Emergency Economic Powers Act ("IEEPA").

Further discussion of sales revenue and EBIT changes is presented in "Results of Operations" and "Summary by Operating Segment" in this MD&A.

Net earnings and EPS and adjusted net earnings and EPS were as follows:

Cash used in operating activities was $137 million in first three months 2026 compared to $167 million in first three months 2025.