Eastman Chemical Co.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 1 lowered, 1 new, 2 kept. The quarter’s numbers.

Key takeaways

Q2 sequential sales jumped 15 percent: Sales revenue increased to $2,513 million in Q2 from $2,177 million in Q1, driven by 8 percent higher sales volume and mix plus 7 percent higher selling prices sequentially across the company. Source
Adjusted EBIT margin expanded 350 basis points: Adjusted EBIT margin improved to 12.7 percent in Q2 from 9.2 percent in Q1, driven by volume and mix improvement, price-cost management in specialties, and spread expansion in Chemical Intermediates. Source
Adjusted EPS grew 81 percent sequentially: Adjusted earnings per diluted share reached $1.97 in Q2 versus $1.09 in Q1, up 23 percent year-over-year from $1.60 in Q2 2025, reflecting strong operational execution. Source
Chemical Intermediates revenue surged 39 percent: Chemical Intermediates sales jumped to $643 million from $463 million year-over-year on 24 percent higher volume and 14 percent higher prices, driven by olefin and derivative products benefiting from Middle East supply disruptions. Source
Volume and mix contributed 5 percent growth: Sales volume and mix accounted for 5 percent of 10 percent year-over-year growth, with Advanced Materials up 4 percent, Chemical Intermediates up 24 percent, and Fibers down 10 percent. Source
Kingsport methanolysis facility building momentum: Kingsport facility continues commercial ramp-up with strategic momentum as key contributor to innovation-driven growth, expected to be primary driver of specialty growth for full year 2026. Source
Operating cash flow guidance reduced to $900 million: Company lowered full-year operating cash flow expectation to approach $900 million from prior guidance of approaching 2025 levels, attributed to inflationary pressure on accounts receivable. Source

“We also delivered strong spread expansion and volume/mix improvement in Chemical Intermediates. These actions resulted in a 350-basis-point sequential increase in our EBIT margin.”
Mark Costa, Board Chair and CEO

Guidance

Area	Period	Figure	Against last quarter
Operating cash flow Source	full year 2026	approach $900 million	Lowered from approaching 2025 levels
Cost reduction savings Source	full year 2026	$125 million to $150 million, net of inflation	Kept
Capital expenditures Source	full year 2026	approximately $400 million	Kept
Third-quarter adjusted EPS Source	third quarter 2026	approach $1.97	New

What changed from last quarter

Guidance lowered: Operating cash flow guidance reduced to approach $900 million from prior expectation of approaching 2025 levels, attributed to inflationary pressure on accounts receivable. Source
New guidance: Company initiated specific third-quarter 2026 adjusted EPS guidance to approach $1.97, projecting flat sequential performance from Q2. Source

Sequential growth and margin expansion

Q2 sequential sales jumped 15 percent: Sales revenue increased to $2,513 million in Q2 from $2,177 million in Q1, driven by 8 percent higher sales volume and mix plus 7 percent higher selling prices sequentially across the company. Source
Adjusted EBIT margin expanded 350 basis points: Adjusted EBIT margin improved to 12.7 percent in Q2 from 9.2 percent in Q1, driven by volume and mix improvement, price-cost management in specialties, and spread expansion in Chemical Intermediates. Source
Adjusted EPS grew 81 percent sequentially: Adjusted earnings per diluted share reached $1.97 in Q2 versus $1.09 in Q1, up 23 percent year-over-year from $1.60 in Q2 2025, reflecting strong operational execution. Source

Segment performance and dynamics

Chemical Intermediates revenue surged 39 percent: Chemical Intermediates sales jumped to $643 million from $463 million year-over-year on 24 percent higher volume and 14 percent higher prices, driven by olefin and derivative products benefiting from Middle East supply disruptions. Source
Fibers contracted 11 percent on inventory destocking: Fibers sales fell to $243 million from $274 million year-over-year as 10 percent lower volume from customer acetate tow destocking and weak textiles offset modest 8 percent sequential volume recovery. Source
Additives & Functional Products maintained stability: Additives sales increased 5 percent on 4 percent higher prices from cost-pass-through contracts, with adjusted EBIT unchanged as improved price-cost offset higher planned maintenance expense. Source

“Our team has demonstrated agility in the first half and is focused on building on the momentum and solid results delivered in the first half of 2026, despite the constantly changing impact of the Middle East conflict and continued weak demand in key discretionary end markets.”
Mark Costa, Board Chair and CEO

Price-cost execution and volume

Volume and mix contributed 5 percent growth: Sales volume and mix accounted for 5 percent of 10 percent year-over-year growth, with Advanced Materials up 4 percent, Chemical Intermediates up 24 percent, and Fibers down 10 percent. Source
Second-half pricing momentum expected to continue: Management expects modest tailwind from specialty price increases in second half of 2026 as increases continue offsetting raw material and distribution cost pressures through year-end. Source

Cost reduction and operational execution

Cost reduction initiatives delivering substantial progress: Company reported substantial progress toward $125 million to $150 million cost savings target net of inflation, with benefits evident through favorable currency rates and operational improvements across segments. Source
Supply chain reliability maintained amid disruptions: Company leveraged integrated U.S.-based assets to maintain supply reliability for customers amid Middle East conflict, securing key raw materials and managing logistics to support customer operations. Source

“we remain confident we can significantly improve earnings in 2026 versus 2025”
Mark Costa, Board Chair and CEO

Strategic initiatives and circular growth

Kingsport methanolysis facility building momentum: Kingsport facility continues commercial ramp-up with strategic momentum as key contributor to innovation-driven growth, expected to be primary driver of specialty growth for full year 2026. Source
Circular platform doubled first-half revenue: Circular product platform achieved doubled revenue in first half of 2026 compared to prior year with continued operational performance supporting strategic momentum building. Source
Capital-efficient packaging market options advancing: Company made substantial progress on capital-efficient set of options to serve packaging market, indicating disciplined approach to growth while maintaining capital efficiency standards. Source

Cash flow and capital allocation

Operating cash flow guidance reduced to $900 million: Company lowered full-year operating cash flow expectation to approach $900 million from prior guidance of approaching 2025 levels, attributed to inflationary pressure on accounts receivable. Source
Working capital expected to release in H2: Management expects to release working capital in second half of 2026, helping offset inflationary pressure on accounts receivable from elevated costs. Source
Capital priorities unchanged with balance sheet discipline: Company maintains quarterly dividend payments, disciplined capital expenditures of approximately $400 million, and opportunistic share repurchases while preserving investment-grade balance sheet. Source

Coming up, as management said on 30 July 2026

Kingsport facility commercial ramp-up continuing: Company will continue commercial ramp-up of Kingsport methanolysis facility, expecting it to be primary driver of specialty growth through innovation-driven growth model in 2026. Source
Q3 adjusted EPS expected to approach $1.97: Third-quarter 2026 adjusted EPS projected to approach Q2 level of $1.97 based on improved Advanced Materials pricing and utilization, higher Fibers volume, seasonal Additives decline, and moderating Chemical Intermediates spreads. Source
Second-half working capital release expected: Management expects to release working capital in second half of 2026 to support operating cash flow toward full-year target of approaching $900 million. Source
Cost reduction delivery through second half: Company remains on track to deliver full $125 million to $150 million of cost savings net of inflation through remainder of 2026. Source

Risks management discussed

External: Middle East conflict duration and impact remain uncertain, with potential to dampen consumer demand despite current favorable effect on Chemical Intermediates margins and supply availability.
Demand: Weak demand in consumer discretionary end markets continues, with textiles market weakness and automotive expected to decline low-single-digits limiting specialty segment growth. Source
Operational: Customer inventory destocking in acetate tow continues to reduce Fibers volume and profitability, though expected to moderate as customers meet annual contracts in Q3. Source
Financial: Inflationary environment creating pressure on accounts receivable and working capital, narrowing pathway to achieve historical cash flow levels and requiring H2 working capital release. Source
Operational: Elevated logistics costs from Middle East conflict serve customers and manage supply chains, pressuring Fibers segment profitability. Source

Earlier plans management reported on

On track: Management reported substantial progress toward cost reduction goal and remains committed to full-year delivery of stated savings target. Source
On track: Company maintaining disciplined capital spending commitment of approximately $400 million for full year 2026. Source
On track: Management reported continued solid progress on commercial ramp-up with operational and financial goals for facility on track.
On track: Management remains confident in ability to significantly improve full-year 2026 earnings relative to 2025 based on current momentum, innovation growth, and cost initiatives. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Eastman Announces Second-Quarter 2026 Financial Results

KINGSPORT, Tenn., July 30, 2026 - Eastman Chemical Company (NYSE:EMN) announced its second-quarter 2026 financial results.

Delivered strong sequential EPS growth and solid cash flow in a dynamic environment through commercial and operational excellence
Drove a 350-basis-point sequential adjusted EBIT margin improvement through 8% higher sales volume/mix and disciplined price-cost management in Advanced Materials and Additives & Functional Products and spread expansion in Chemical Intermediates
Continued to leverage our significant and advantaged integrated U.S.-based assets to be a reliable supplier to our customers amid an uncertain global environment
Building strategic momentum in the circular platform, doubled revenue in the first half of the year and continued great operational performance
Made substantial progress toward delivering $125 million to $150 million of cost savings, net of inflation
Remained focused on delivering solid operating cash flow and expect to release working capital in the second half of 2026

(In millions, except per share amounts; unaudited)	2Q2026	2Q2025
Sales revenue	$2,513	$2,287
Earnings before interest and taxes ("EBIT")	311	222
Adjusted EBIT*	320	275
Earnings per diluted share	1.59	1.20
Adjusted earnings per diluted share*	1.97	1.60
Net cash provided by operating activities	224	233

*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.

"The Eastman team delivered a strong second quarter despite continued dynamic macroeconomic conditions," said Mark Costa, Board Chair and CEO. "Sales revenue increased 15 percent sequentially driven by strong volume growth across the company and disciplined price-cost management in our specialty businesses. We also delivered strong spread expansion and volume/mix improvement in Chemical Intermediates. These actions resulted in a 350-basis-point sequential increase in our EBIT margin. We also continued to successfully manage the impact of the conflict in the Middle East and secured supply of key raw materials to help customers navigate the uncertainty. Additionally, we built momentum with the commercial ramp up of the Kingsport methanolysis facility and are making progress on a capital-efficient set of options to serve the packaging market."

Corporate Results 2Q 2026 versus 2Q 2025

Sales revenue increased 10 percent primarily due to 5 percent higher sales volume/mix and 4 percent higher selling prices.

Higher sales volume/mix in Advanced Materials and Chemical Intermediates was partially offset by Fibers. Higher selling prices in Chemical Intermediates were primarily driven by tightening market conditions due to the ongoing Middle East conflict. Higher selling prices in specialty businesses offset higher raw material and distribution costs.

EBIT increased due to favorable price-cost, the benefit from cost-reduction initiatives, favorable foreign currency exchange rates and higher sales volume/mix. These factors were partially offset by higher variable compensation expense, higher planned maintenance expense and unfavorable asset utilization.

Segment Results 2Q 2026 versus 2Q 2025

Advanced Materials - Sales revenue increased 5 percent due to 4 percent higher sales volume/mix and 1 percent favorable foreign currency exchange rates.

Higher sales volume/mix was driven by growth across the segment. Price-cost was stable as increases in specialty plastics to mitigate higher raw material and distribution costs were offset by modestly lower price-cost in advanced interlayers.

EBIT decreased as higher sales volume/mix, favorable foreign currency exchange rates and cost reduction initiatives were more than offset by lower asset utilization and higher variable compensation expense.

Additives & Functional Products - Sales revenue increased 5 percent primarily due to 4 percent higher selling prices. Higher selling prices were primarily driven by cost-pass-through contracts.

EBIT was relatively unchanged as improved price-cost, favorable foreign currency exchange rates and cost reduction initiatives were offset by higher planned maintenance expense.

Fibers - Sales revenue decreased 11 percent primarily due to 10 percent lower sales volume/mix and 2 percent lower selling prices.

Lower sales volume/mix was driven by customer buying patterns to continue with inventory destocking in acetate tow and continued weakness in the textiles end market relative to tariff-driven volume strength last year.

EBIT decreased due to lower sales volume/mix, modestly lower acetate tow contract pricing, higher operating costs including lower asset utilization, and elevated costs associated with logistics to serve customers in connection with the Middle East conflict. These were partially offset by the benefit of cost reduction initiatives.

Chemical Intermediates - Sales revenue increased by 39 percent primarily due to 24 percent higher sales volume/mix and 14 percent higher selling prices.

Higher sales volume/mix and selling prices, particularly for olefin and derivative products, were driven by increased volume availability compared to the prior year period and supply disruptions.

EBIT increased due to higher spreads, improved volume/mix and cost-reduction initiatives.

Cash Flow

In second quarter 2026, cash provided by operating activities was $224 million versus $233 million in second quarter 2025. The company returned $96 million to stockholders through dividends. See Table 5. Priorities for uses of available cash for 2026 include payment of the quarterly dividend, capital expenditures, and share repurchases while maintaining our solid investment-grade balance sheet.

2026 Outlook

Commenting on the outlook for full-year 2026, Costa said: "Our team has demonstrated agility in the first half and is focused on building on the momentum and solid results delivered in the first half of 2026, despite the constantly changing impact of the Middle East conflict and continued weak demand in key discretionary end markets. We remain focused on driving growth through innovation, which is expected to be the primary driver of our specialty growth for the year. A key contributor to our innovation-driven growth is our Kingsport methanolysis facility, which continues to build strategic momentum. We also delivered solid growth through our innovation across weak discretionary end markets. We continue to see modest growth across stable end markets. Our commercial teams demonstrated excellence in successfully implementing price increases in our specialties to offset higher raw material and distribution costs and expect a modest tailwind from these actions in the back half. In our Chemical Intermediates segment, we have benefited from significant spread expansion due to the impact on supply chains of the Middle East conflict and substantially more volume to sell this year. We also remain on track to reduce costs between $125 million and $150 million, net of inflation, and are maintaining disciplined capital expenditures by spending approximately $400 million this year. When putting all of these factors together, we remain confident we can significantly improve earnings in 2026 versus 2025. On cash, the inflationary environment is putting pressure on accounts receivable. As a result, we now expect operating cash flow to approach $900 million, which is modestly below our previous expectation of approaching 2025 levels.

"Looking specifically at the sequential third-quarter 2026 outlook, we start with Advanced Materials, where we expect EBIT to be higher driven by improved price-cost and improved asset utilization. We also expect higher earnings in Fibers as acetate tow volume increases, with customers increasing purchases to meet their annual contracts. Additives & Functional Products earnings are expected to decline modestly due to seasonally lower volume, particularly in the agriculture market. Chemical Intermediates earnings are expected to modestly decline as the impact of supply chain disruptions lessens. When putting these factors together, we project third-quarter adjusted EPS to approach second-quarter 2026 EPS of $1.97."

The third-quarter 2026 projected adjusted diluted EPS excludes 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 post-retirement 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 excluding non-core and any unusual or non-recurring items to reported GAAP diluted EPS without unreasonable efforts.

Forward-Looking Statements

Forward-looking statements notice

The information in this release 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, sales, cost reductions, expenses, taxes, liquidity, capital expenditures, cash flow, dividends, share repurchases or other financial items, supply and demand, capacity and utilization, growth opportunities, 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 sections entitled "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and as updated 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.

Financial Measures (Non-GAAP)

In addition to the financial information presented in accordance with Generally Accepted Accounting Principles ("GAAP"), this press release includes the following non-GAAP financial measures: adjusted EBIT, adjusted EBIT margin, and adjusted earnings per diluted share. We define adjusted EBIT as the GAAP measure EBIT adjusted for non-core, unusual, or non-recurring items. Adjusted earnings per diluted share is defined as the GAAP measure earnings per diluted share adjusted for non-core, unusual, or non-recurring items. Adjusted EBIT margin is defined as adjusted EBIT divided by the GAAP measure sales revenue in the Company's Unaudited Consolidated Statement of Earnings, Comprehensive Income and Retained Earnings for the same periods. See the reconciliation tables presented in this release for a detailed reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.

We believe that in addition to our results determined in accordance with GAAP, these non-GAAP financial measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP measures. These non-GAAP financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. Non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as comparative measures.

Conference Call and Webcast Information

Eastman will host a conference call with industry analysts on July 31, 2026, 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 4:15 p.m. ET on July 30, 2026. To listen via telephone, the dial-in number is +1 (833) 470-1428, passcode: 385739. 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 31, through 11:59 p.m. Eastern Time, August 10, 2026, Toll Free at +1 (866) 813-9403, passcode 129897.

Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive company, Eastman employs approximately 13,000 people around the world and serves customers in more than 100 countries. The company had 2025 revenue of approximately $8.8 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.

FINANCIAL INFORMATION

July 30, 2026

For Eastman Chemical Company Second Quarter and Full Year 2026 Financial Results Release

Table of Contents

Item		Page
Table 1	Statements of Earnings	1
Table 2A	Segment Sales Information	2
Table 2B	Sales Revenue Change	3
Table 2C	Sales by Customer Location	3
Table 3A	Segment, Other, and Company Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations	4
Table 3B	Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins	6
Table 4A	Non-GAAP Earnings Before Interest and Taxes, Net Earnings, and Earnings Per Share Reconciliations	7
Table 4B	Adjusted Effective Tax Rate Calculation	9
Table 5	Statements of Cash Flows	10
Table 6	Total Borrowings to Net Debt Reconciliations	10

Table 1 - Statements of Earnings

	Second Quarter				First Six Months
(Dollars in millions, except per share amounts; unaudited)		2026		2025		2026		2025
Sales	$2,513		$2,287		$4,690		$4,577
Cost of sales	1,953		1,781		3,699		3,504
Gross profit	560		506		991		1,073
Selling, general and administrative expenses	185		157		363		339
Research and development expenses	65		67		125		134
Asset impairments, restructuring, and other charges, net	1		13		10		22
Other components of post-employment (benefit) cost, net	(16)		(2)		(33)		(3)
Other (income) charges, net	14		49		27		57
Earnings before interest and taxes	311		222		499		524
Net interest expense	55		53		107		102
Earnings before income taxes	256		169		392		422
Provision for income taxes	72		29		101		99
Net earnings	184		140		291		323
Less: Net earnings attributable to noncontrolling interest	1		-		1		1
Net earnings attributable to Eastman	$183		$140		$290		$322
Basic earnings per share attributable to Eastman	$1.60		$1.22		$2.54		$2.80
Diluted earnings per share attributable to Eastman	$1.59		$1.20		$2.51		$2.77
Shares (in millions) outstanding at end of period	114.4		114.8		114.4		114.8
Shares (in millions) used for earnings per share calculation
Basic	114.3		115.0		114.2		115.1
Diluted	115.3		116.2		115.2		116.4

First six months 2026 included inventory adjustment charges of $3 million related to the closure of a production line at a German performance films facility in the Advanced Materials ("AM") segment.

Table 2A - Segment Sales Information

	Second Quarter				First Six Months
(Dollars in millions, unaudited)		2026		2025		2026		2025
Sales by Segment
Advanced Materials	$817		$777		$1,532		$1,496
Additives & Functional Products	807		769		1,546		1,502
Chemical Intermediates	643		463		1,138		1,008
Fibers	243		274		468		562
Total Sales by Segment	2,510		2,283		4,684		4,568
Other	3		4		6		9
Total Eastman Chemical Company	$2,513		$2,287		$4,690		$4,577

	First Quarter
(Dollars in millions, unaudited)		2026
Sales by Segment
Advanced Materials	$715
Additives & Functional Products	739
Chemical Intermediates	495
Fibers	225
Total Sales by Segment	2,174
Other	3
Total Eastman Chemical Company	$2,177

Table 2B - Sales Revenue Change

	Second Quarter 2026 Compared to Second Quarter 2025
		Change in Sales Revenue Due To
(Unaudited)	Revenue % Change	Volume / Product Mix Effect	Price Effect	Exchange Rate Effect
Advanced Materials	5%	4%	- %	1%
Additives & Functional Products	5%	- %	4%	1%
Chemical Intermediates	39%	24%	14%	1%
Fibers	(11)%	(10)%	(2)%	1%
Total Eastman Chemical Company	10%	5%	4%	1%

	First Six Months 2026 Compared to First Six Months 2025
		Change in Sales Revenue Due To
(Unaudited)	Revenue % Change	Volume / Product Mix Effect	Price Effect	Exchange Rate Effect
Advanced Materials	2%	2%	(2)%	2%
Additives & Functional Products	3%	- %	1%	2%
Chemical Intermediates	13%	10%	2%	1%
Fibers	(17)%	(14)%	(3)%	- %
Total Eastman Chemical Company	2%	- %	- %	2%

	Second Quarter 2026 Compared to First Quarter 2026
		Change in Sales Revenue Due To
(Unaudited)	Revenue % Change	Volume / Product Mix Effect	Price Effect	Exchange Rate Effect
Advanced Materials	14%	11%	3%	- %
Additives & Functional Products	9%	4%	5%	- %
Chemical Intermediates	30%	11%	19%	- %
Fibers	8%	8%	- %	- %
Total Eastman Chemical Company	15%	8%	7%	- %

Table 2C - Sales by Customer Location

	Second Quarter				First Six Months
(Dollars in millions, unaudited)		2026		2025		2026		2025
Sales by Customer Location
United States and Canada	$1,158		$963		$2,137		$1,983
Europe, Middle East, and Africa	628		610		1,202		1,220
Asia Pacific	578		583		1,078		1,122
Latin America	149		131		273		252
Total Eastman Chemical Company	$2,513		$2,287		$4,690		$4,577

Table 3A - Segment, Other, and Company

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations

	Second Quarter				First Six Months
(Dollars in millions, unaudited)		2026		2025		2026		2025
Advanced Materials
Earnings before interest and taxes	$109		$121		$169		$237
Cost of sales impact from restructuring activities	-		-		3		-
Asset impairments, restructuring, and other charges, net	-		-		6		-
Excluding non-core items	109		121		178		237
Additives & Functional Products
Earnings before interest and taxes	151		153		293		290
Asset impairments, restructuring, and other charges, net	-		-		-		4
Excluding non-core items	151		153		293		294
Chemical Intermediates
Earnings (loss) before interest and taxes	58		(30)		40		(11)
Fibers
Earnings before interest and taxes	36		81		81		169
Other
Loss before interest and taxes	(43)		(103)		(84)		(161)
Asset impairments, restructuring, and other charges net	1		13		4		18
Environmental and other costs	8		40		8		40
Excluding non-core items	(34)		(50)		(72)		(103)
Total Eastman Chemical Company
Earnings before interest and taxes	311		222		499		524
Cost of sales impact from restructuring activities	-		-		3		-
Asset impairments, restructuring, and other charges, net	1		13		10		22
Environmental and other costs	8		40		8		40
Total earnings before interest and taxes excluding non-core items	$320		$275		$520		$586
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items
Earnings before interest and taxes	$311		$222		$499		$524
Cost of sales impact from restructuring activities	-		-		3		-
Asset impairments, restructuring, and other charges, net	1		13		10		22
Other (income) charges, net	8		40		8		40
Total earnings before interest and taxes excluding non-core items	$320		$275		$520		$586

See "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Quarterly Report on Form 10-Q for second quarter 2025 for description of second quarter and first six months 2025 non-core items.

First six months 2026 included inventory adjustment charges of $3 million, severance charges of $3 million, and restructuring charges of $3 million related to the closure of a production line at a German performance films facility in the AM segment.

Second quarter and first six months 2026 included severance charges related to corporate cost reduction initiatives reported in "Other."

Second quarter and first six months 2026 included environmental and other costs from previously divested or non-operational sites and product lines, which included associated gains and losses.

Table 3A - Segment, Other, and Company

Non-GAAP Earnings (Loss) Before Interest and Taxes Reconciliations (continued)

	First Quarter
(Dollars in millions, unaudited)		2026
Advanced Materials
Earnings before interest and taxes	$60
Cost of sales impact from restructuring activities	3
Asset impairments, restructuring, and other charges, net	6
Excluding non-core items	69
Additives & Functional Products
Earnings before interest and taxes	142
Chemical Intermediates
Loss before interest and taxes	(18)
Fibers
Earnings before interest and taxes	45
Other
Loss before interest and taxes	(41)
Asset impairments, restructuring, and other charges net	3
Excluding non-core items	(38)
Total Eastman Chemical Company
Earnings before interest and taxes	188
Cost of sales impact from restructuring activities	3
Asset impairments, restructuring, and other charges, net	9
Total earnings before interest and taxes excluding non-core items	$200
Company Non-GAAP Earnings Before Interest and Taxes Reconciliations by Line Items
Earnings before interest and taxes	$188
Cost of sales impact from restructuring activities	3
Asset impairments, restructuring, and other charges, net	9
Total earnings before interest and taxes excluding non-core items	$200

For the description of first quarter 2026 non-core items, see Table 3A of the Quarterly Report on Form 8-K for first quarter 2026.

Table 3B - Segment Non-GAAP Earnings (Loss) Before Interest and Taxes Margins (1)(2)

	Second Quarter				First Six Months
	2026		2025		2026		2025
(Dollars in millions, unaudited)	Adjusted EBIT	Adjusted EBIT Margin	Adjusted EBIT	Adjusted EBIT Margin	Adjusted EBIT	Adjusted EBIT Margin	Adjusted EBIT	Adjusted EBIT Margin
Advanced Materials	$109	13.3%	$121	15.6%	$178	11.6%	$237	15.8%
Additives & Functional Products	151	18.7%	153	19.9%	293	19.0%	294	19.6%
Chemical Intermediates	58	9.0%	(30)	(6.5)%	40	3.5%	(11)	(1.1)%
Fibers	36	14.8%	81	29.6%	81	17.3%	169	30.1%
Total segment EBIT excluding non-core items	354	14.1%	325	14.2%	592	12.6%	689	15.1%
Other	(34)		(50)		(72)		(103)
Total EBIT excluding non-core items	$320	12.7%	$275	12.0%	$520	11.1%	$586	12.8%

	First Quarter
	2026
(Dollars in millions, unaudited)	Adjusted EBIT	Adjusted EBIT Margin
Advanced Materials	$69	9.7%
Additives & Functional Products	142	19.2%
Chemical Intermediates	(18)	(3.6)%
Fibers	45	20.0%
Total segment EBIT excluding non-core items	238	10.9%
Other	(38)
Total EBIT excluding non-core items	$200	9.2%

For identification of excluded non-core items and reconciliations to GAAP EBIT, see Table 3A.

Adjusted EBIT margin is non-GAAP EBIT divided by GAAP sales. See Table 2A for sales.

Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,

and Earnings Per Share Reconciliations

	Second Quarter 2026
	Earnings Before Interest and Taxes	Earnings Before Income Taxes	Provision for Income Taxes	Effective Income Tax Rate	Net Earnings Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited)	After Tax	Per Diluted Share
As reported (GAAP)	$311	$256	$72	28%	$183	$1.59
Non-Core or Unusual Items:
Asset impairments, restructuring, and other charges, net	1	1	-		1	0.01
Environmental and other costs	8	8	(1)		9	0.08
Income tax related item	-	-	(8)		8	0.07
Interim adjustment to tax provision	-	-	(26)		26	0.22
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes)	$320	$265	$37	15%	$227	$1.97

	Second Quarter 2025
	Earnings Before Interest and Taxes	Earnings Before Income Taxes	Provision for Income Taxes	Effective Income Tax Rate	Net Earnings Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited)	After Tax	Per Diluted Share
As reported (GAAP)	$222	$169	$29	17%	$140	$1.20
Non-Core Items:
Asset impairments, restructuring, and other charges, net	13	13	5		8	0.08
Environmental and other costs	40	40	9		31	0.26
Interim adjustment to tax provision	-	-	(7)		7	0.06
Non-GAAP (Excluding non-core items and with adjusted provision for income taxes)	$275	$222	$36	16%	$186	$1.60

See Table 3A for description of second quarter 2026 and 2025 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.

Second quarter 2026 included expense related to a prior tax law change.

The adjusted provision for income taxes for second quarter 2026 and 2025 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.

	First Six Months 2026
	Earnings Before Interest and Taxes	Earnings Before Income Taxes	Provision for Income Taxes	Effective Income Tax Rate	Net Earnings Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited)	After Tax	Per Diluted Share
As reported (GAAP)	$499	$392	$101	26%	$290	$2.51
Non-Core or Unusual Items:
Cost of sales impact from restructuring activities	3	3	1		2	0.02
Asset impairments, restructuring, and other charges, net	10	10	3		7	0.06
Environmental and other costs	8	8	(1)		9	0.08
Income tax related item	-	-	(13)		13	0.11
Interim adjustment to tax provision	-	-	(31)		31	0.28
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes)	$520	$413	$60	15%	$352	$3.06

	First Six Months 2025
	Earnings Before Interest and Taxes	Earnings Before Income Taxes	Provision for Income Taxes	Effective Income Tax Rate	Net Earnings Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited)	After Tax	Per Diluted Share
As reported (GAAP)	$524	$422	$99	23%	$322	$2.77
Non-Core Items:
Asset impairments, restructuring, and other charges, net	22	22	6		16	0.14
Environmental and other costs	40	40	9		31	0.26
Interim adjustment to tax provision	-	-	(39)		39	0.34
Non-GAAP (Excluding non-core items and with adjusted provision for income taxes)	$586	$484	$75	16%	$408	$3.51

See Table 3A for description of first six months 2026 and 2025 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.

First six months 2026 included expense related to a prior tax law change.

The adjusted provision for income taxes for first six months 2026 and 2025 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.

Table 4A - Non-GAAP Earnings Before Interest and Taxes, Net Earnings,

and Earnings Per Share Reconciliations (continued)

	First Quarter 2026
	Earnings Before Interest and Taxes	Earnings Before Income Taxes	Provision for Income Taxes	Effective Income Tax Rate	Net Earnings Attributable to Eastman
(Dollars in millions, except per share amounts, unaudited)	After Tax	Per Diluted Share
As reported (GAAP)	$188	$136	$29	21%	$107	$0.93
Non-Core or Unusual Items:
Cost of sales impact from restructuring activities	3	3	1		2	0.02
Asset impairments, restructuring, and other charges, net	9	9	3		6	0.05
Income tax related item	-	-	(5)		5	0.04
Interim adjustment to tax provision	-	-	(5)		5	0.05
Non-GAAP (Excluding non-core and unusual items and with adjusted provision for income taxes)	$200	$148	$23	15%	$125	$1.09

See Table 3A for description of first quarter 2026 non-core items excluded from non-GAAP EBIT. Provision for income taxes for non-core items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.

First quarter 2026 included expense related to a prior tax law change.

The adjusted provision for income taxes for first quarter 2026 is calculated applying the forecasted full year effective tax rate as shown in Table 4B.

Table 4B - Adjusted Effective Tax Rate Calculation

	First Six Months
(Unaudited)		2026		2025
Effective tax rate	26%		23%
Discrete tax items	(1)%		(1)%
Tax impact of current year non-core and unusual items	(2)%		4%
Changes in tax contingencies and valuation allowances	- %		(2)%
Forecasted full year impact of expected tax events	(8)%		(8)%
Forecasted full year adjusted effective tax rate	15%		16%

Effective tax rate percentages are rounded to the nearest whole percent. The forecasted full year effective tax rates are 14.5 percent and 15.5 percent in first six months 2026 and 2025.

"Discrete tax items" are items that are excluded from the Company's estimated annual effective tax rate and recognized entirely in the quarter in which the item occurs. Discrete tax items for first six months 2026 and 2025 are related to share based compensation expense and adjustments to certain prior year tax returns.

Provision for income taxes for non-core and unusual items is calculated using the tax rate for the jurisdiction where the gains are taxable and the expenses are deductible.

Expected future tax events may include finalization of tax returns; federal, state, and foreign examinations or the expiration of statutes of limitation; and corporate restructurings.

Table 5 - Statements of Cash Flows

	Second Quarter				First Six Months
(Dollars in millions, unaudited)		2026		2025		2026		2025
Operating activities
Net earnings	$184		$140		$291		$323
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization	132		127		263		253
Provision (benefit) from deferred income taxes	15		(45)		10		(48)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables	(147)		(91)		(369)		(183)
(Increase) decrease in inventories	(27)		(11)		(146)		(131)
Increase (decrease) in trade payables	18		(83)		85		(155)
Pension and other postretirement contributions (in excess of) less than expenses	(22)		(3)		(48)		(17)
Variable compensation payments (in excess of) less than expenses	71		23		22		(86)
Other items, net	-		176		(21)		110
Net cash provided by operating activities	224		233		87		66
Investing activities
Additions to properties and equipment	(100)		(150)		(203)		(297)
Government incentives	-		3		3		14
Other items, net	1		-		(3)		5
Net cash used in investing activities	(99)		(147)		(203)		(278)
Financing activities
Net increase in commercial paper and other borrowings	-		59		-		344
Proceeds from borrowings	-		-		594		246
Repayment of borrowings	-		-		(150)		(550)
Dividends paid to stockholders	(96)		(95)		(192)		(191)
Treasury stock purchases	-		(50)		-		(50)
Other items, net	(4)		(4)		(11)		(13)
Net cash (used in) provided by financing activities	(100)		(90)		241		(214)
Effect of exchange rate changes on cash and cash equivalents	1		9		-		12
Net change in cash and cash equivalents	26		5		125		(414)
Cash and cash equivalents at beginning of period	665		418		566		837
Cash and cash equivalents at end of period	$691		$423		$691		$423

Table 6 - Total Borrowings to Net Debt Reconciliations

	June 30,		December 31,
(Dollars in millions, unaudited)		2026		2025
Total borrowings	$5,217		$4,787
Less: Cash and cash equivalents	691		566
Net debt	$4,526		$4,221

Included a non-cash decrease of $17 million in 2026 and a non-cash increase of $68 million in 2025 resulting from foreign currency exchange rates.

Contacts
Media: Tracy Kilgore Addington
423-224-0498 / tracy@eastman.com
Investors: Greg Riddle
212-835-1620 / griddle@eastman.com