Expects 1Q20 EPS to Exceed 1Q19 EPS

KINGSPORT, Tennessee

Eastman Chemical Company (NYSE:EMN) today detailed the company's solid financial position, which provides a strong foundation during the current COVID-19 pandemic. The company highlighted the strength of Eastman's cash flow, balance sheet, and sources of liquidity. 

"We remain confident that Eastman is well positioned financially thanks to the resilience of our cash flow, our solid balance sheet, and our significant sources of liquidity," said Board Chair and Chief Executive Officer Mark Costa. "While we continue to assess the impact of COVID-19, we are focusing on cash generation by taking aggressive actions on what we can control in working capital and cost management. In this environment, we remain committed to maintaining our disciplined approach to capital allocation with a focus on funding our dividend and meaningful debt reduction."

With a strong start to the year in January and resilience in February and early March, first-quarter 2020 earnings per share is expected to be above the prior year period, higher than previous expectations. Additionally, free cash flow (cash from operations less net capital expenditures) is expected to be approximately break-even in the first quarter, which is well above typical first-quarter free cash flow in prior years.

The company is also taking additional actions to further support free cash flow in 2020, including reducing capital expenditures to between $325 and $375 million from the previous expectation of between $450 and $475 million. In addition, working capital is expected to be a source of more than $250 million of cash flow beyond previous expectations for full-year 2020, assuming raw material prices remain similar to current levels and that COVID-19 negatively impacts demand. Also, we are aggressively managing all of our costs in this environment.

Eastman's balance sheet remains solid with no long-term debt maturities in 2020 and a manageable amount of debt due in 2021. Eastman expects to reduce debt by greater than $400 million in 2020, reducing net debt (total borrowing less cash and cash equivalents) by retiring certain existing borrowings.

Significant and multiple liquidity sources are an important part of Eastman's financial strength, including a $1.5 billion revolving credit facility. In the current environment, in an abundance of caution, the company plans to access $400 million of available borrowings under the revolving credit facility and is exploring additional liquidity sources as needed. At the beginning of the second quarter, the company expects to have greater than $600 million of cash and cash equivalents and remains committed to maintaining a solid investment-grade credit rating.

"I want to thank the Eastman team for their many extraordinary efforts to keep our company moving forward in this difficult time," continued Costa. "Eastman materials are essential to a variety of markets such as healthcare, consumables and feeding the world, and I'm grateful to the men and women of Eastman for their commitment to our customers and to the millions of people who depend upon our products."

Forward-Looking Statements

This news release includes forward-looking statements concerning current expectations and assumptions for future global economic, market, and business conditions, including the impact of the COVID-19 pandemic, and earnings, cash flow, and liquidity for first quarter and full-year 2020. Such expectations and assumptions are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations and assumptions expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company's public disclosures, including this press release and filings with the Securities and Exchange Commission (including the Form 10-K filed for 2019) and Eastman press releases and pre-noticed public investor presentations available on the Eastman web site at www.eastman.com in the Investors section.

About Eastman

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 and diverse company, Eastman employs approximately 14,500 people around the world and serves customers in more than 100 countries. The company had 2019 revenues of approximately $9.3 billion and is headquartered in Kingsport, Tennessee, USA.

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