EFTA01461998

29July 2014 Chemicals / Specialty Eastman Chemical (Figure 1: Eastman O2 20 i 1 lie,tult:T. Segment 0214 02'13 % change Sales 82.403 $2,440 1% Additives & Functional Products $452 $430 5% Adhesives & Plasticizers $358 $339 13% Advanced Materials $831 $625 1% Fibers $388 $363 0% Specialty Fluids & Intermediates $033 $677 (0%) Operating profit $441 (3$ Additives & Functional Products $103 $105 (2%) Adhesives & Plasticizers $56 $50 12% Advanced Materials SSD $81 (1%) Fibers $123 $116 6% Specialty Fluids & Intermediates $96 $118 (19%) Operating margin 179% 10.0% -70bps Additives & Functional Products 22.8% 24.4% -100bps Adhesives & Plasticizers 15.0% 14.7% +80bps Advanced Materials 12.7% 13.0% -30bps Fibers 31 ass 32.0% -10bps Specialty Fluids & Intermediates 15.2% 17.4% -230bps Inane Bps ($40) ($40) (2%) Other Incans/Expsnes $0 Pretax walla $404 $408 (1%) Texas 0 1121 ($124) Tax rate 28% 30% Non-controlling IM Earnings from ops One time Items Page 2 121 $290 $0 en> $282 ($18) 0% 3% Comment Vols: flat, Price: flat, FX: +1%. Marginal sales growth as higher demand in Additives & functional, Adhesives & plasticizers and Fibers offset by lower demand in Specialty fluids & intermediates. Acquired BP's aviation turbine oil business for $283MM. Outlook FY'14 Expects sales to grow at global GDP growth rate in H2'14. Vole: +4%, Price: flat, FX: +1%. Upside driven by higher demands for coating product lines partially offset by continues destocking in China (primarily for commercial tires). Outlook: Expects vols to be better in H274. Vols: +9%, Price: .4%. FX: +1%. Upside led by higher sales vols for adhesives resins and plasticizers more than offsetting lower selling prices due to cont'd competitive pressure as increased supply of adhesive resins and weak plasticizers demand in APac and Europe regions. Vols: flat, Price: flat, FX: +1%. Lower sales growth as higher vets for premium products like interlayers with acoustic properties and Eastman Tritan"' copolyestei offset by weak demand for Flexvue coated films. Outlook: Expects sales growth to be in the range of 4%-5% in H2'14 on higher demand for premium Products Vols: +2%, Price: +4%, FX: flat. Higher growth driven by improved selling prices and sales of acetate flake to EMN's China acetate tow joint venture more than offsetting by lower vols of acetate tow due to additional industry capacity. Outlook: Expects lower sales vols 17 H2'74 Vols: -13%%, Price: +2%, FX: Ilat. Downside due to the unplanned shutdown of the plant (due to power disruption) and lower sales vols for intermediates product line partially offset by improved yob of acetyl-based products. Downside primarily due to higher raw material costs. outage costs alongside competitive pressure in core products partially offset by better product mix. Weakness due to higher raw mat. & energy costs (elm propane) partially offset by higher vols. Outlook: FY'14 EBIT: -$410-$430MM. Higher earnings due to improved vols. better productivity and lower operating costs partially offset by lower prices. Qudook. FY'14 ENT Expects to be more than $175MM Relatively flat as lower raw material & energy costs offset by costs of the unplanned shutdown. Outlook: FY'74 EBIT: -$280-5300MM Upside led by higher prices coupled with increased sales of acetate flake to JV and lower raw material costs more than offsetting lower tow acetate vols and higher operating costs. Outlook:_FY74 ENT -$490MM Downside due to lower vols, higher raw material. & energy costs (asp propane) alongside costs of the unplanned shutdown at the Kingsport site. Outlook: FY'14 EBIT: -5300-S320MM Outlook• FY'14• -280% Deutsche Bank Securities Inc. CONFIDENTIAL — PURSUANT TO FED. R CRIM. P. 6(e) DB-SDNY-0124331 CONFIDENTIAL SDNY_GM_00270515 EFTA01461998