Eastman Chemical Company is a global specialty materials company that produces a broad range of products found in items people use every day, operating within the chemical and specialty materials industry. The Company began business in 1920 and became a public company, incorporated in Delaware, on December 31, 1993. Eastman has 36 manufacturing facilities and has equity interests in four manufacturing joint ventures in 12 countries that supply products to customers throughout the world. The Company's businesses are managed and reported in four operating segments: Advanced Materials, Additives & Functional Products, Chemical Intermediates, and Fibers. Approximately 55 percent of 2025 sales revenue was generated from outside the United States and Canada region.

The Company's competitive positioning is built on an innovation-driven growth model consisting of leveraging world class scalable technology platforms, delivering differentiated application development capabilities, and relentlessly engaging the market. Management believes that the Company's competitive advantages include long-term customer relationships, vertical integration and scale in manufacturing, and leading market positions. 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. The Company's top 100 customers accounted for approximately 60 percent of the Company's 2025 sales revenue, and no single customer accounted for 10 percent or more of the Company's consolidated sales revenue during 2025.

Eastman generates revenue through the production and sale of a broad range of specialty materials, additives, chemicals, and fibers. The Company's core business model is centered on 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 sells to customers through master sales agreements or standalone purchase orders, with the majority of terms of sale having a single performance obligation to transfer products. Revenue is recognized when control has been transferred to the customer, generally at the time of shipment of products. The Company's customer base is extensive and includes multinational as well as regional companies across various end-markets.

The Advanced Materials segment produces and markets polymers, films, and plastics with differentiated performance properties for value-added end-uses in transportation; durables and electronics; building and construction; medical and pharma; and consumables end-markets. Key technology platforms for this segment include cellulosic biopolymers, copolyesters, and PVB and polyester films. The segment's product lines include advanced interlayers, performance films, and specialty plastics. For the year ended December 31, 2025, the Advanced Materials segment reported sales of $2,880 million ¹ and Adjusted EBIT of $349 million ². The Additives & Functional Products segment manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction; consumables; and durables and electronics end-markets. Key technology platforms are cellulosic biopolymers, polyester polymers, alkylamine derivatives, and propylene derivatives. For the year ended December 31, 2025, the Additives & Functional Products segment reported sales of $2,880 million ³ and Adjusted EBIT of $516 million ⁴.

The Chemical Intermediates segment leverages large scale and vertical integration from the cellulosic biopolymers and acetyl and olefins streams to support the Company's specialty operating segments with advantaged cost positions, selling excess intermediates into end-markets such as industrial chemicals and processing, building and construction, health and wellness, and food and feed. Key technology platforms include acetyls, oxos, and plasticizers. For the year ended December 31, 2025, the Chemical Intermediates segment reported sales of $1,925 million ⁵ and Adjusted EBIT of negative $38 million ⁶. The Fibers segment manufactures and sells acetate tow and triacetin plasticizers for use in filtration media, primarily cigarette filters; cellulosic filament yarn and staple fibers for use in apparel under the brand Naia™, home furnishings, and industrial fabrics; nonwoven media for use in filtration and friction applications; and cellulose acetate flake and acetyl raw materials for other acetate fiber producers. For the year ended December 31, 2025, the Fibers segment reported sales of $1,050 million ⁷ and Adjusted EBIT of $285 million ⁸. The 10 largest Fibers segment customers accounted for approximately 65 percent of the segment's 2025 sales revenue.

In 2025, the Company reported sales revenue of $8.8 billion ⁹, earnings before interest and taxes of $776 million ¹⁰, and net earnings attributable to Eastman of $474 million ¹¹. Diluted earnings per share were $4.10 ¹². Net cash provided by operating activities was $970 million ¹³. Excluding non-core and unusual items, adjusted EBIT was $930 million ¹⁴ and adjusted diluted earnings per share were $5.42 ¹⁵. The Company repurchased 1,420,768 shares of common stock for $100 million ¹⁶ during 2025. The Company began operating the world's largest polyester molecular recycling facility in 2024 and achieved strong improvement in operating rates in 2025. The Company's molecular recycling facility generated approximately 2.5 times greater output than 2024 ¹⁷. In 2025, the Company repaid $100 million ¹⁸ of the remaining $250 million five-year term loan. Capital expenditures were $546 million ¹⁹ in 2025, primarily for the methanolysis plastic-to-plastic molecular recycling manufacturing facilities, other targeted growth initiatives, and site modernization projects.

Sales revenue decreased 7 percent ²⁰ in 2025 compared to 2024, with sales of $8,752 million ²¹ versus $9,382 million ²² in the prior year. Gross profit was $1,844 million ²³ in 2025 compared to $2,290 million ²⁴ in 2024, a decrease of 19 percent ²⁵. EBIT excluding non-core items decreased 28 percent ²⁶ to $930 million ²⁷ from $1,298 million ²⁸ in 2024. Net earnings attributable to Eastman were $474 million ²⁹ compared to $905 million ³⁰ in 2024. Net cash provided by operating activities decreased $317 million ³¹ to $970 million ³² from $1,287 million ³³ in 2024 primarily due to lower net earnings and higher variable compensation payout partially offset by lower working capital driven by inventory consumption.

The Company expects that 2026 capital spending will be approximately $400 million ³⁴, primarily for maintenance capital and limited growth capital for projects already in progress. The Board of Directors has declared a cash dividend of $0.84 per share ³⁵ during the first quarter of 2026, payable on April 8, 2026 to stockholders of record on March 13, 2026.

Molecular recycling technologies continue to be an area of investment focus for the Company and extend the level of differentiation afforded by its world class technology platforms. Eastman began operating the world's largest polyester molecular recycling facility in 2024 and achieved strong improvement in operating rates in 2025, with the facility generating approximately 2.5 times greater output than 2024 ³⁶. The Company's molecular recycling technology also overcomes barriers seen in mechanical recycling such as degradation in color and performance after multiple cycles. These strengths have enabled the Company to achieve significant milestones in 2025 within the Circular Economy platform, including continued adoption of the Company's circular polyester offerings across multiple end-markets including consumer durables and packaging.

The Company is now investing in the conversion of existing assets and utilizing licensed metathesis technology to convert ethylene to propylene ("E2P"). This E2P conversion will align the Company's strategy with business needs by balancing ethylene and propylene across the site structurally, improving feedstock mix, and improving downstream propylene usage. The Company continues to pursue growth opportunities through both organic and inorganic initiatives, such as Eastman's sustainable innovation initiatives, which aim to develop a more "circular economy." These growth opportunities include development and commercialization of innovative new products and technologies, expansion into new markets and geographic regions through, among other means, alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities.

The Company's raw material and energy costs as a percent of total cost of operations were approximately 45 percent in 2025 ³⁷. Management expects the volatility of raw material and energy prices and costs to continue and the Company will continue to pursue pricing and hedging strategies and ongoing cost control initiatives to offset the effects. The Company has undertaken efforts to offset many of these costs through various pricing actions, though these risk mitigation measures do not eliminate all exposure to market fluctuations. The Company continues to focus on cost control, operational efficiency, and capacity utilization across its segments.

The Company expects that 2026 capital spending will be approximately $400 million ³⁸, primarily for maintenance capital and limited growth capital for projects already in progress. The Company had capital expenditures related to environmental protection and improvement of approximately $80 million ³⁹ and $70 million ⁴⁰ in 2025 and 2024, respectively. The Company does not currently expect near term environmental capital expenditures arising from requirements of environmental laws and regulations to materially impact the Company's planned level of annual capital expenditures for environmental control facilities.

The priorities for uses of available cash include paying the quarterly dividend, funding targeted growth opportunities, and repurchasing shares, while maintaining a solid investment-grade balance sheet. In December 2021, the Company's Board of Directors authorized the repurchase of up to $2.5 billion ⁴¹ of the Company's outstanding common stock. As of December 31, 2025, a total of 13,032,926 shares ⁴² have been repurchased under the 2021 authorization for $1.2 billion ⁴³. During 2025, the Company repurchased 1,420,768 shares ⁴⁴ of common stock for $100 million ⁴⁵. The Board of Directors has declared a cash dividend of $0.84 per share ⁴⁶ during the first quarter of 2026.

The Company's business and operating results are impacted by global recessions, and the related impacts, such as the credit market crisis, declining consumer and business confidence, fluctuating commodity prices, volatile exchange rates, increasing interest rates, and other challenges that impacted the global economy. The Federal Reserve in the U.S. and other central banks in various countries have raised interest rates in response to concerns about inflation, which, coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks. Interest rate increases or other government actions taken to reduce inflation could also result in recessionary pressures in many parts of the world.

The U.S. and foreign countries may also adopt or increase restrictions on foreign trade or investment, including currency exchange controls, tariffs or other taxes, or limitations on imports or exports (including recent and proposed changes in U.S. trade policy and resulting retaliatory actions by other countries, including China, which may increasingly reduce demand for and increase costs of impacted products or result in U.S.-based trade counterparties limiting trade with U.S.-based companies or non-U.S. customers limiting their purchases from U.S.-based companies). The Company's substantial global operations subject it to risks of doing business in other countries that could adversely impact its business, financial condition, and results of operations. More than half of Eastman's sales for 2025 were to customers outside of North America.

Management's message emphasizes the Company's transformation into a global specialty materials company through an innovation-driven growth model that leverages world class scalable technology platforms, differentiated application development capabilities, and relentless market engagement. Management believes that these elements, combined with disciplined portfolio management and balanced capital deployment, will result in consistent, sustainable earnings growth and strong cash flow from operations. The Company reported sales revenue of $8.8 billion ⁴⁹, EBIT of $776 million ⁵⁰, and net earnings attributable to Eastman of $474 million ⁵¹ for 2025. Diluted earnings per share were $4.10 ⁵². Excluding non-core and unusual items, adjusted EBIT was $930 million ⁵³ and adjusted diluted earnings per share were $5.42 ⁵⁴. Management expects that the combination of continued stable cash flow generation, a strong balance sheet, and sufficient liquidity will continue to provide flexibility to pursue growth initiatives. The Company expects that 2026 capital spending will be approximately $400 million ⁵⁵, primarily for maintenance capital and limited growth capital for projects already in progress.

For the year ended December 31, 2025, total sales revenue was $8,752 million ⁵⁶ compared to $9,382 million ⁵⁷ in 2024 and $9,210 million ⁵⁸ in 2023. Net earnings attributable to Eastman were $474 million ⁵⁹ in 2025, compared to $905 million ⁶⁰ in 2024 and $894 million ⁶¹ in 2023. Diluted earnings per share attributable to Eastman were $4.10 ⁶² in 2025, compared to $7.67 ⁶³ in 2024 and $7.49 ⁶⁴ in 2023. Gross profit was $1,844 million ⁶⁵ in 2025, compared to $2,290 million ⁶⁶ in 2024 and $2,061 million ⁶⁷ in 2023. Earnings before interest and taxes were $776 million ⁶⁸ in 2025, compared to $1,278 million ⁶⁹ in 2024 and $1,302 million ⁷⁰ in 2023. Net cash provided by operating activities was $970 million ⁷¹ in 2025, compared to $1,287 million ⁷² in 2024 and $1,374 million ⁷³ in 2023. Total borrowings were $4,787 million ⁷⁴ at December 31, 2025, compared to $5,017 million ⁷⁵ at December 31, 2024. Cash and cash equivalents were $566 million ⁷⁶ at December 31, 2025, compared to $837 million ⁷⁷ at December 31, 2024. Net debt was $4,221 million ⁷⁸ at December 31, 2025, compared to $4,180 million ⁷⁹ at December 31, 2024. Capital expenditures were $546 million ⁸⁰ in 2025, compared to $599 million ⁸¹ in 2024 and $828 million ⁸² in 2023. The provision for income taxes was $93 million ⁸³ in 2025, compared to $170 million ⁸⁴ in 2024 and $191 million ⁸⁵ in 2023. The effective tax rate was 16 percent ⁸⁶ in both 2025 and 2024. Non-core items impacting EBIT totaled $154 million ⁸⁷ in 2025, including asset impairments, restructuring, and other charges, net of $96 million ⁸⁸, environmental and other costs of $62 million ⁸⁹, and a mark-to-market pension and other postretirement benefits gain of $6 million ⁹⁰. In the Advanced Materials segment, sales were $2,880 million ⁹¹ and Adjusted EBIT was $349 million ⁹². In the Additives & Functional Products segment, sales were $2,880 million ⁹³ and Adjusted EBIT was $516 million ⁹⁴. In the Chemical Intermediates segment, sales were $1,925 million ⁹⁵ and Adjusted EBIT was negative $38 million ⁹⁶. In the Fibers segment, sales were $1,050 million ⁹⁷ and Adjusted EBIT was $285 million ⁹⁸.

The Company faces material risks from continued uncertain conditions in the global economy, labor market, and financial markets, which could negatively impact demand for and costs of certain Eastman products and accordingly results of operations. Volatility in costs for strategic raw material and energy commodities or disruption in the supply and transportation of these commodities could adversely impact the Company's financial results, with raw material and energy costs as a percent of total cost of operations at approximately 45 percent in 2025 ⁴⁷. The Company's substantial global operations subject it to risks of doing business in other countries, with more than half of Eastman's sales for 2025 to customers outside of North America. The Company is subject to operating risks common to chemical and specialty materials manufacturing businesses, including explosions, fires, inclement weather, natural disasters, mechanical failure, unscheduled downtime, transportation and supply chain interruptions, remediation, chemical spills, and discharges or releases of toxic or hazardous substances or gases. The Company is also subject to risks associated with its information technology infrastructure, including cyber-based attacks, and has been in the past, and likely will be in the future, subject to cyber-attacks related to its information systems. Legislative, regulatory, or voluntary actions could increase the Company's future health, safety, environmental, and other compliance costs, with estimated future environmental expenditures for undiscounted remediation costs ranging from $285 million to $509 million ⁴⁸ at December 31, 2025.