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Eastman Chemical Company Data Book Financial and Operations Information Contents

Eastman Worldwide ...... 3

Stock Performance ...... 4

Financial Information ...... 5

Product Information ...... 6

Capacities ...... 7

Recent Accomplishments ...... 8

Segment Information Segment Information (2000-1997) ...... 9-12 Estimated Segment Information (1996) ...... 13

Shareowner Information ...... 14

2 Eastman Worldwide

CORPORATE OFFICES TECHNICAL SERVICE Forest Park, Georgia EUROPE, MIDDLE EAST, ASIA PACIFIC KINGSPORT, CENTERS Kingsport, AND AFRICA Dazhou, Fujian, People’s TENNESSEE NORTH AMERICA LaVergne, Tennessee Bury, England Republic of Kingsport, Tennessee Lynwood, Cola DiLazise, Italy Hong Kong, People’s Longview, Dusseldorf, Republic of China CUSTOMER SERVICE EUROPE, MIDDLE EAST, Moundville, Hamburg, Germany Kuantan, CENTERS AND AFRICA Philadelphia, Hartlepool, England NORTH AMERICA Kirkby, England Pleasant Prairie, Kallo, Singapore (Jurong Town) Kingsport, Tennessee Portland, Oregon Llangefni, Wales Tanggu, People’s Republic ASIA PACIFIC Rexdale, Ontario, Canada Molndal, Sweden of China EUROPE, MIDDLE EAST, Singapore Roebuck, Rotterdam, Tianjin, People’s Republic AND AFRICA South Holland, The of China Rotterdam, SITES Toronto, Ontario, Canada San Roque, The Netherlands NORTH AMERICA Sant’ Albano, Italy JOINT VENTURES Batesville, Arkansas LATIN AMERICA Sokolov, Czech Republic NORTH AMERICA ASIA PACIFIC Carpentersville, Illinois Cosoleacaque, Waterford, Ireland Primester with Singapore Columbia, South Carolina Zarate (Buenos Aires), Workington, England Rhodia, Inc. Columbus, Georgia Argentina Kingsport, Tennessee Ennis, Texas (cellulose flake)

SALES\ EUROPE, MIDDLE EAST, Kallo, Belgium Tel Aviv, Israel Saitama, REPRESENTATIVE AND AFRICA Lyon, France The Hague, Seoul, South OFFICES Athens, Greece Madrid, Spain The Netherlands* Shanghai, People’s NORTH AMERICA Budapest, Hungary Matosinhos, Portugal Warsaw, Poland Republic of China Kingsport, Tennessee* Cologne, Germany Milan, Italy Winchester, England Singapore* Bell, California Deerlijk, Belgium Milano, Italy Zug, Switzerland Surabaya, Indonesia LaVergne, Tennessee Dubai, United Arab Oslo, Norway Sydney, Australia Newark, Emirates Oxon, England ASIA PACIFIC Taipei, Taiwan Pleasant Prairie, Wisconsin Frechen, Germany Paris, France Bangkok, Thailand Tianjin, People’s Republic Sante Fe Springs, Hamburg, Germany Prague, Czech Republic Beijing, People’s Republic of China California Heliopolis, Egypt Ra’anana, Israel of China Tokyo, Japan Hemel Hempstead, Rotterdam, Bombay, India LATIN AMERICA England The Netherlands Guangzhou, People’s Buenos Aires, Argentina Istanbul, Turkey Schwechat (Vienna), Republic of China *Regional Headquarters Coral Gables, * Izmir, Turkey Austria Hong Kong, People’s Listings as of Mexico City, Mexico Johannesburg, Sidi Fathallah Ben Arous, Republic of China December 31, 2000 Quito, Ecuador South Africa Tunisia Jakarta, Indonesia São Paulo, Kuala Lumpur, Malaysia 3 Stock Performance

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–30 94 95 96 97 98 99 00 Yearly Total Return Eastman 2001 Chemical Peers S&P

1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.

1996 7 3 1 Close 69 60 ⁄8 58 ⁄8 55 ⁄4

1997 Close 53 3⁄4 63 1⁄2 62 59 9⁄16

1998 Close 67 7⁄16 62 1⁄4 50 7⁄16 44 3⁄4

1999 Close 42 1⁄16 51 3⁄4 39 7⁄8 47 11⁄16

2000 Close 45 1⁄2 47 3⁄4 36 15⁄16 48 3⁄4

4 Financial Information

(Dollars in millions, except per share amounts) 2000 1999 1998 1997

OPERATING RESULTS Sales $5,292 $4,590 $4,481 $4,678 Operating earnings 562(4) 202 434 506(7) Net earnings 303(4) 48(5) 249(6) 286(7) Earnings per share Basic 3.95(4) 0.61(5) 3.15(6) 3.66(7) Diluted 3.94(4) 0.61(5) 3.13(6) 3.63(7) Cash dividends per share 1.76 1.76 1.76 1.76 Economic Value Created(1) 52(4) (240)(5) (41)(6) 10 Earnings before interest, taxes, depreciation and amortization (EBITDA) 1,012(4) 581(5) 807(6) 860(7) Net cash provided by operating activities 831 744 731 698 Capital expenditures 226 292 500 749 Depreciation 382 368 351 327 Research and development costs 149 187 185 191

FINANCIAL POSITION Working capital $265 $(119) $439 $536 Total assets 6,550 6,303 5,850 5,778 Long-term borrowings 1,914 1,506 1,649 1,714 Shareowners’ equity 1,812 1,759 1,934 1,753

KEY RATIOS Return on invested capital(2) 10.4%(4) 3.6%(5) 8.8%(6) 10.3%(7) Return on equity(3) 17.0%(4) 2.6%(5) 13.5%(6) 16.9%(7) Total borrowings to total capital 53.0% 54.0% 46.0% 49.0% Interest coverage 3.6x(4) 1.5x(5) 3.2x(6) 3.7x(7) Working capital to sales 5.0% (2.6)% 9.6% 11.5%

AT END OF YEAR Market price per share $48.75 $47.69 $44.75 $59.56 Book value per share 23.56 22.49 24.39 22.36 Common shares outstanding (millions) 76.9 78.2 79.3 78.4 Number of employees 14,592 14,736 15,950 16,076

(1)Earnings from continuing operations plus after-tax interest less a computed capital charge for average capital employed (borrowings plus equity). (2)Earnings from continuing operations plus after-tax interest divided by average capital employed (borrowings plus equity). (3)Net earnings divided by average equity. (4)Figures include certain nonrecurring items (net gain of $5 million to net earnings, or $0.06 per diluted share). (5)Figures include certain nonrecurring items (net charge of $73 million to net earnings, or $0.93 per diluted share). (6)Figures include certain nonrecurring charges and a tax settlement (net charge of $24 million to net earnings, or $0.30 per share). (7)Figures include certain nonrecurring charges and a patent infringement gain (net charge of $31 million to net earnings, or $0.40 per share).

5 Product Information

Due to its manufacturing integration, Eastman ethane, propane, and paraxylene. From those raw utilizes only five primary raw materials for materials, Eastman manufactures hundreds of production of its chemicals, , and fibers. products used either internally as chemical building Those raw materials include wood pulp, coal, blocks or sold to external customers.

How Material Flows Through the Eastman Pipeline

Other Wood Coal/ Natural Paraxylene/ Purchased Pulp Oxygen Gas/ Oxygen Materials Liquids

Multiple Cellulose Syngas Terephthalic Acid Step Esters Methyl Acetate Dimethyl Terephthalate Organic Acetic Anhydride Olefins Synthesis

Photographic Acetate Tow Acids Polyethylene Polyethylene Chemical Dyes Terephthalate Acetate Yarn Anhydrides Waxes/Resins (PET) Hydroquinone/ Derivatives Arylides Ketones Specialty Polyesters Butyrates Additives Propionates Esters Aldehydes

Sucrose Acetate Excipients Alcohols Isobutyrate Cellulose Esters Glycols

Esters

Plasticizers

6 Capacities

ANNUAL CAPACITIES 2000 1999 Capacity Additional Capacity Capacity (in millions) (in millions) (in millions)

KEY PRODUCTS Lbs Kgs Lbs Kgs Lbs Kgs

CHEMICALS ACETYL CHEMICALS * 410 186 410 186 Acetic Anhydride* 1,800 816 1,800 816 Cellulose Esters 120 54 120 54 Methanol 460 208 460 208 Propionic Acid 146 66 146 66

ETHYLENE 1,500 680 1,500 680

ETHYLENE DERIVATIVES Acetaldehyde 404 183 4 2 400 181 Diethyl Ether 0 0 (2.6) (gal) (9.8) (ltr) 2.6 (gal) 9.8 (ltr) Ethyl Alcohol 0 0 (27) (gal) (102) (ltr) 27 (gal) 102 (ltr) Ethylene Glycol 231 105 1 1 230 104 Other Ethylene Derivatives 240 109 240 109

PROPYLENE 660 300 (30) (13) 690 313

OXO PRODUCTS Oxo Aldehydes 1,925 873 (5) (3) 1,930 876 Oxo Alcohols 1,091 495 73 33 1,018 462 Plasticizers 525 238 (2) (1) 527 239 NPG Glycol 185 84 185 84 Ester Solvents 380 170 380 170 Other 495 224 495 224

FIBERS Acetate Yarn 53 24 (2) (1) 55 25 Acetate Tow 394 179 (2) (1) 396 180

PLASTICS Cellulosics 100 45 100 45 PET (solid-stated) 3,100 1,405 3,100 1,405 LDPE 670 304 670 304 LLDPE/HDPE 430 195 430 195

*Varies

7 Recent Accomplishments

Year Business Principal Products Location

1996 Acquired ABCO Industries, Ltd. Waterborne polymers Roebuck, South Carolina Withdrew from Eastek inks business Pigmented inks Kingsport, Tennessee Sold EVTECH Powder coatings Charlotte, North Carolina Sold Eastman Adhesives Adhesives Charlotte, North Carolina Sold monoglycerides business Food emulsifiers Kingsport, Tennessee Selangor, Malaysia

1997 Sold Thanol polyols Polyols Conroe, Texas

1998 Purchased Ernst Jäger, Fabrik Chemischer Rohstoffe GmbH & Co. Specialty polymers Düsseldorf, Germany Purchased Rhodia Inc.’s North American textile chemicals business Textile chemicals Roebuck, South Carolina Holston Defense Corp. contract expired on December 31, 1998 Ammunition plant Kingsport, Tennessee

1999 Licensed Energx polyethylene technology to Chevron Polyethylene Kingsport, Tennessee Acquired Lawter International, Inc. Inks intermediates Pleasant Prairie, Wisconsin Broke ground on small-scale cGMP plant Pharmaceutical intermediates Batesville, Arkansas Phased out operations at Distillation Food and Pharmaceutical Rochester, Products Industries additives

2000 Discontinued Sorbates business Sorbates Chocolate Bayou, Texas Founded ShipChem, Inc. Logistics Atlanta, Georgia Acquired Chemicke Zavody Acrylic Monomers Sokolov, Czech Republic Sokolov Joint venture to establish Marketplace to serve Horsham, Pennsylvania PaintandCoatings.com Inc. Paint and Coatings Industry Acquired McWhorter Liquid resins, powder resins, Carpentersville, Illinois Technologies, Inc. composites, colorants, non-coating amino resins Genencor International, Inc. IPO Industrial enzymes and Palo Alto, California biotechnology Discontinued propylene glycol Propylene glycol South Charleston, production West

RESOURCE EFFECTIVENESS Completed goal to remove $500 million cumulative from the cost structure by the end of 2000. Removed over $200 million in labor and non-labor costs by year-end 2000.

RECOGNITION Received several ACC energy awards American Chemistry Council (ACC) Among top companies for working mothers Working Mother Magazine CEO Awarded 1999 International Palladium Award Société de Chimie Industrielle

8 Segment Information

2000 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year (5)

CHEMICALS Sales $ 556 $ 591 $ 702 $ 658 $2,506 Operating Earnings Before Nonrecurring Charges 55 73(1) 77(2) 48 253(1) (2) Operating Earnings After Nonrecurring Charges 55 64 64 48 232 Total Assets(4) 2,945 2,955 3,254 3,260 3,260 Depreciation Expense(4) na na na na 162 Capital Expenditures(4) na na na na 114

POLYMERS Sales $ 661 $ 725 $ 685 $ 714 $2,786 Operating Earnings Before Nonrecurring Charges 77 108(3) 90 55 329(3) Operating Earnings After Nonrecurring Charges 77 109 90 55 330 Total Assets(4) 3,293 3,292 3,313 3,290 3,290 Depreciation Expense(4) na na na na 220 Capital Expenditures(4) na na na na 112

TOTAL COMPANY Sales $1,217 $1,316 $1,387 $1,372 $5,292 Operating Earnings Before Nonrecurring Charges 132 181(1) (3) 167(2) 103 583(1) (2) (3) Operating Earnings After Nonrecurring Charges 132 173 154 103 562 Total Assets(4) 6,238 6,247 6,567 6,550 6,550 Depreciation Expense 90 94 97 101 382 Capital Expenditures 34 44 55 93 226

WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 77.5 76.5 76.6 76.6 76.8 Diluted 77.6 76.9 76.7 76.7 77.0 na—Information presented for segments on annual basis only.

(1)Figures are before charges related to phase-out of operations at Chocolate Bayou, Texas, and Distillation Products Industries in Rochester, New York, and certain litigation costs. (2)Figures are before a nonrecurring gain related to the initial public offering of shares of Genencor International, Inc., and additional nonrecurring charges related to phase-out of operations at Chocolate Bayou, Texas, and the write-off of in-process research and development related to the McWhorter acquisition. (3)Figures are before a nonrecurring gain related to the sale of certain assets. (4)Quarterly data provided on a cumulative basis; quarterly data for segments are not available. (5)Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the full-year amount.

9 Segment Information

1999999 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year(5)

CHEMICALS Sales $ 460 $ 521 $ 556 $ 569 $2,106 Operating Earnings Before Nonrecurring Charges 66(1) 64 43 23(2) 196(1) (2) Operating Earnings (Loss) After Nonrecurring Charges 51 64 43 (26) 132 Total Assets(4) na na na na 2,938 Depreciation Expense(4) na na na na 139 Capital Expenditures(4) na na na na 156

POLYMERS Sales $ 563 $ 601 $ 634 $ 686 $2,484 Operating Earnings Before Nonrecurring Charges 20 32 32 39(3) 123(3) Operating Earnings (Loss) After Nonrecurring Charges 20 32 32 (14) 70 Total Assets(4) na na na na 3,365 Depreciation Expense(4) na na na na 229 Capital Expenditures(4) na na na na 136

TOTAL COMPANY Sales $1,023 $1,122 $1,190 $1,255 $4,590 Operating Earnings Before Nonrecurring Charges 86(1) 96 75 62(2) (3) 319(1) (2) (3) Operating Earnings (Loss) After Nonrecurring Charges 71 96 75 (40) 202 Total Assets(4) 5,891 6,161 6,210 6,303 6,303 Depreciation Expense 87 90 96 95 368 Capital Expenditures 76 58 56 102 292

WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 78.7 78.0 78.0 78.0 78.2 Diluted 78.8 78.4 78.4 78.1 78.4 na—Information presented for segments on annual basis only.

((1)Figures are before charges related to a discontinued capital project and phase-out of operations at Distillation Products Industries in Rochester, New York. (2)Figures are before charges related to employee separations, write-off of acquired in-process research and development related to Lawter International, Inc., charges related to discontinued capital projects, underperforming assets, and other items, partially offset by a gain recognized on the reimbursement of previously expensed pension costs and a gain on pension settlement. (3)Figures are before charges related to employee separations, charges related to discontinued capital projects, underperforming assets, partially offset by a gain recognized on pension settlement. (4)Quarterly data provided on a cumulative basis; quarterly data for segments are not available. (5)Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the full-year amount.

10 Segment Information

1998 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year(5)

CHEMICALS Sales $ 515 $ 509 $ 495 $ 461 $1,980 Operating Earnings Before Nonrecurring Charges 93 77 88(1) 41(2) 299(1) (2) Operating Earnings After Nonrecurring Charges 93 77 77 5 252 Total Assets(4) na na na na 2,333 Depreciation Expense(4) na na na na 124 Capital Expenditures(4) na na na na 255

POLYMERS Sales $ 633 $ 656 $ 636 $ 576 $2,501 Operating Earnings (Loss) Before Nonrecurring Charges 40 87 64 (5)(3) 186(3) Operating Earnings (Loss) After Nonrecurring Charges 40 87 64 (9) 182 Total Assets(4) na na na na 3,517 Depreciation Expense(4) na na na na 227 Capital Expenditures(4) na na na na 245

TOTAL COMPANY Sales $1,148 $1,165 $1,131 $1,037 $4,481 Operating Earnings Before Nonrecurring Charges 133 164 152(1) 36(2) (3) 485(1) (2) (3) Operating Earnings (Loss) After Nonrecurring Charges 133 164 141 (4) 434 Total Assets(4) 5,910 5,982 6,139 5,850 5,850 Depreciation Expense 82 86 90 93 351 Capital Expenditures 135 133 100 132 500

WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 78.4 79.0 79.1 79.1 78.9 Diluted 79.2 79.9 79.5 79.5 79.5 na—Information presented for segments on annual basis only.

(1)Figures are before a fine paid for violation of the Sherman Act. (2)Figures are before charges related to certain under performing assets, discontinued projects, a power outage at the Kingsport, Tennessee, manufacturing site, and other items. (3)Figures are before charges related to a power outage at the Kingsport, Tennessee, manufacturing site. (4)Quarterly data provided on a cumulative basis; quarterly data for segments are not available. (5)Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the full-year amount.

11 Segment Information

1997 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year(3)

CHEMICALS Sales $ 537 $ 541 $ 518 $ 523 $2,119 Operating Earnings Before Nonrecurring Charges 87 98 110 92(1) 387(1) Operating Earnings After Nonrecurring Charges 87 98 110 64 359 Total Assets(2) na na na na 2,211 Depreciation Expense(2) na na na na 112 Capital Expenditures(2) na na na na 239

POLYMERS Sales $ 634 $ 667 $ 627 $ 631 $2,559 Operating Earnings Before Nonrecurring Charges 47 59 38 37(1) 181(1) Operating Earnings After Nonrecurring Charges 47 59 38 3 147 Total Assets(2) na na na na 3,567 Depreciation Expense(2) na na na na 215 Capital Expenditures(2) na na na na 510

TOTAL COMPANY Sales $1,171 $1,208 $1,145 $1,154 $4,678 Operating Earnings Before Nonrecurring Charges 134 157 148 129(1) 568(1) Operating Earnings After Nonrecurring Charges 134 157 148 67 506 Total Assets(2) 5,466 5,633 5,698 5,778 5,778 Depreciation Expense 79 80 83 85 327 Capital Expenditures 168 226 173 182 749

WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 77.6 78.2 78.2 78.2 78.1 Diluted 78.2 78.8 78.9 79.0 78.8 na—Information presented for segments on annual basis only.

(1)Figures are before a charge for partial settlement and curtailment of pension and other postemployment benefit liabilities due to a large number of employee retirements. (2)Quarterly data provided on a cumulative basis; quarterly data for segments are not available. (3)Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the full-year amount.

12 Estimated Segment Information

ESTIMATED SEGMENT INFORMATION 1996 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year(3)

CHEMICALS(1) Sales $ 516 $ 535 $ 519 $ 506 $2,076 Operating Earnings 89 116 109 74 388 Total Assets(2) na na na na 1,991 Depreciation Expense(2) na na na na 117 Capital Expenditures(2) na na na na 255

POLYMERS(1) Sales $ 745 $ 706 $ 648 $ 607 $2,706 Operating Earnings 102 74 60 39 275 Total Assets(2) na na na na 3,275 Depreciation Expense(2) na na na na 197 Capital Expenditures(2) na na na na 534

TOTAL COMPANY Sales $1,261 $1,241 $1,167 $1,113 $4,782 Operating Earnings 191 190 169 113 663 Total Assets(2) 4,904 5,015 5,105 5,266 5,266 Depreciation Expense 76 76 80 82 314 Capital Expenditures 125 185 206 273 789

WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 79.7 78.7 77.9 77.7 78.5 Diluted 80.7 79.6 78.5 78.3 79.3 na—Information presented for segments on annual basis only.

(1)Sales, operating earnings, assets, depreciation expense, and capital expenditures for 1996 are approximations representing management’s estimate of amounts attributable to segments which were reported effective with the Company’s 2000 financial reporting. (2)Quarterly data provided on a cumulative basis; quarterly data for segments are not available. (3)Each quarter is calculated as a discrete period; the sum of the four quarters may not equal the full-year amount.

13 Shareowner Information

EASTMAN INVESTOR RELATIONS EASTMAN DATA BOOK

Stock Exchange Listing Eastman Chemical Company’s data book has been Eastman Chemical Company common stock is developed to assist investors in understanding and listed and traded on the New York Stock Exchange evaluating Eastman. It provides financial and opera- under the ticker symbol EMN. Most newspaper tions data and other information about the stock tables list the Company’s stock as “EastChm.” Company and its operating segments.

The notes to the financial statements are not Annual Report and Form 10-K included. Complete financial statements and Management’s Discussion and Analysis of Financial Eastman’s Annual Report to Shareowners and Condition and Results of Operations appear in Annual Report on Form 10-K for the year ended Eastman’s Annual Report on Form 10-K and December 31, 2000, filed with the Securities and Annual Report to Shareowners, both of which are Exchange Commission, is available on available on http://www.eastman.com. http://www.eastman.com.

Corporate Profile Dividends Eastman Chemical Company, a global chemical Quarterly dividends on common stock, if declared company with headquarters in Kingsport, Tennessee, by the Board of Directors, are usually paid on or produces a wide range of chemicals, plastics, and about the first business day of the month following fibers. Eastman is a world leader in the manufacture the end of each quarter. Dividends declared were of polyethylene terephthalate (PET) and a leading $1.76 in 2000, 1999, and 1998. supplier of ingredients for coatings, adhesives, spe- cialty polymers, and inks, as well as fibers. Corporate Offices Eastman Chemical Company 100 North Eastman Road Spin-off P.O. Box 511 Eastman reported on February 5, 2001, that its Kingsport, TN 37662-5075 U.S.A. Board of Directors has authorized management http://www.eastman.com to pursue a plan that would result in Eastman becoming two independent companies—a specialty chemicals and plastics company and a PET plastics Stock Transfer Agent and Registrar and acetate fibers company. The new companies are Inquiries and changes to shareowner accounts expected to be launched through a spin-off in the should be directed to our transfer agent: form of a tax-free stock dividend to be effective American Stock Transfer & Trust Company by the end of the fourth quarter 2001, subject to 59 Maiden Lane a favorable Internal Revenue Service ruling that New York, NY 10038 the distribution of shares will be tax-free to In the United States: 800-937-5449 shareowners, final approval by the Board of Outside the United States: Directors, and other customary conditions. For (1) 212-936-5100 or (1) 718-921-8200 additional information concerning the spin-off, see http://www.amstock.com Eastman’s Annual Report on Form 10-K for the year ending December 31, 2000, the 2000 Annual Report to Shareowners, and news releases and presentations available on http://www.eastman.com.

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