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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING ESTIMATES

In preparing the consolidated financial statements in conformity with GAAP, management must make decisions which impact the reported amounts and the related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and assumptions on which to base estimates and judgments that affect the reported amounts of assets, liabilities, sales revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, Eastman evaluates its estimates, including those related to impairment of long-lived assets, environmental costs, pension and other postretirement benefits, litigation and contingent liabilities, and income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the critical accounting estimates described in Part II, Item 7 of the Company's ~~2019~~2020 Annual Report on Form 10-K are the most important to the fair presentation of the Company's financial condition and results. These estimates require management's most significant judgments in the preparation of the Company's consolidated financial statements.

~~Impairment of Long-Lived Assets~~

~~Goodwill~~

Goodwill is an asset determined as the residual of the purchase price over the fair value of identified assets and liabilities acquired in a business combination. As of March 31, 2020, the goodwill balance as reported on the Unaudited Consolidated Statements of Financial Position is $4.4 billion. In accordance with GAAP, Eastman conducts testing of goodwill annually in the fourth quarter of each year or more frequently when events and circumstances indicate an impairment may have occurred. As a result of impact on the Company of market deterioration resulting from COVID-19, the Company considered whether these conditions indicated that it was more likely than not that goodwill was impaired for each of its reporting units. As of March 31, 2020, the Company's market capitalization based on its stock price was above the book value of equity. Management does not believe it is more likely than not that goodwill was impaired for each of its reporting units as of March 31, 2020.


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~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL~~

~~CONDITION AND RESULTS OF OPERATIONS~~

However, the decrease in forecasted revenue and EBIT for the tire additives reporting unit (part of the Additives & Functional Products operating segment as described in Part I, Item 1, "Business", of the Company's 2019 ~~Annual Report on Form 10-K~~) reduced the fair value such that the estimated fair value only slightly exceeded the carrying value. The decrease in forecasted revenue and EBIT for the tire additives reporting unit is primarily a result of decreased demand in automotive markets due to COVID-19. Additional declines in the market conditions or forecasted revenue and EBIT could result in an impairment of indefinite-lived intangible assets or goodwill, especially for the tire additives reporting unit. The Company will continue to monitor goodwill for any indication of events, including the continued impact of COVID-19, which might require additional testing before the next annual impairment test and could result in material impairment charges.

RECENTLY ISSUED ACCOUNTING STANDARDS

For information regarding the impact of recently issued accounting standards, see Note 1, "Significant Accounting Policies", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

OUTLOOK

~~The negative impact of COVID-19 remains uncertain, including on overall business~~In 2021, management expects adjusted EPS to be between $8.25 and ~~market conditions; Eastman manufacturing sites~~$8.75 and ~~distribution, sales, and service facilities closure or reduced availability; and Eastman products market demand weakness and supply chain disruption. The extent of~~free cash flow to approach $1.1 billion. These expectations assume:

•continued economic activity recovery from the impact of ~~these~~COVID-19;

•increased sales volume and ~~other consequences is uncertain. Accordingly, management has withdrawn~~ improved product mix due to innovation-driven growth model and continued recovery in key end-markets, including auto, textiles, and consumer durables;

•lower costs of approximately $100 million from improved capacity utilization in 2021 due to aggressive inventory actions in 2020;

•cost structure similar to 2020 due to structural cost savings from transformation of businesses and operations;

•timing of price increases in response to higher raw material and energy costs and higher distribution costs to negatively impact financial results;

•interest expense of approximately $200 million;

•the ~~previous 2020~~full-year effective tax rate on adjusted earnings before income tax to be between 15 and ~~cash flow forecasts~~16 percent;

•depreciation and ~~underlying expectations disclosed in Part II, Item 7, "Management's Discussion~~amortization of approximately $570 million; and ~~Analysis of Financial Condition~~

•capital expenditures between $500 million and ~~Results of Operations - Outlook" in the Company's 2019~~ ~~Annual Report on Form 10-K~~.$525 million.

In addition, ~~to the business and financial actions taken in first quarter and April 2020,~~ the Company ~~plans to take the following actions to mitigate the impact~~expects net debt reduction of ~~COVID-19 on its markets, business, and financial position and results:~~

•~~increasing cost reduction targets to~~ approximately ~~$150 million of net savings;~~

•~~significantly reducing discretionary spending and deferring some planned manufacturing asset maintenance;~~

•~~reducing capital expenditures by approximately $100 million to between $325~~$300 million and ~~$375 million;~~

•~~leveraging working capital to be a source of more than $250 million of cash flow beyond previous expectations;~~

•~~reducing debt substantially more than the original target of $400 million; and~~

•~~limiting~~ share repurchases of approximately $350 million.

The Company's 2021 financial results forecasts do not include non-core, unusual, or non-recurring items. Accordingly, management is unable to ~~offset dilution.~~reconcile projected earnings excluding non-core, unusual, or non-recurring items to project reported GAAP earnings without unreasonable efforts.

See "Risk Factors" below.


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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

RISK FACTORS

In addition to factors described elsewhere in this Quarterly Report, the following are the ~~most significant~~material known factors, risks, and uncertainties that could cause actual results to differ materially from those under "Outlook" and in the forward-looking statements made in this Quarterly Report and elsewhere from time to time. See "Forward-Looking Statements". The following risk factors are not necessarily presented in the order of importance. In addition, there may be other factors, not currently known to the Company, which could, in the future, materially adversely affect the Company, its business, financial condition, or results of operations. This and other related disclosures made by the Company in this Quarterly Report and elsewhere from time to time, represents management's best judgment as of the date the information is given. The Company does not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public Company disclosures (such as in filings with the Securities and Exchange Commission or in Company press releases) on related subjects.

Risks Related to Global Economy and Industry Conditions

Continued uncertain conditions in the global economy and the financial markets could negatively impact the Company.

The Company's business and operating results were impacted by the last global recession, and its related impacts, such as the credit market crisis, declining consumer and business confidence, fluctuating commodity prices, volatile exchange rates, and other challenges that impacted the global economy. Similarly, as a company which operates and sells products worldwide, continued uncertainty in the global economy and global capital markets resulting from the current global COVID-19 ~~coronavirus global~~ pandemic have adversely impacted and are expected to continue to adversely impact demand for certain Eastman products and, accordingly results of operations, and may adversely impact the Company's financial condition and cash flows and ability to access the credit and capital markets under attractive rates and terms and negatively impact the Company's liquidity or ability to pursue certain growth initiatives.


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~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL~~

~~CONDITION AND RESULTS OF OPERATIONS~~

Volatility in costs for strategic raw material and energy commodities or disruption in the supply of these commodities could adversely impact the Company's financial results.

Eastman is reliant on certain strategic raw material and energy commodities for its operations and utilizes risk management tools, including hedging, as appropriate, to mitigate market fluctuations in raw material and energy costs. These risk mitigation measures do not eliminate all exposure to market fluctuations and may limit the Company from fully benefiting from lower raw material costs and, conversely, offset the impact of higher raw material costs. In addition, the ongoing global COVID-19 ~~coronavirus global~~ pandemic, which has adversely impacted cost and ~~is expected to continue to impact, and~~availability of commodities, natural disasters, plant interruptions, supply chain disruptions, changes in laws or regulations, war or other outbreak of hostilities or terrorism, and breakdown or degradation of transportation and supply chain infrastructure used for delivery of strategic raw material and energy commodities could adversely impact, both the cost and availability of these commodities.

~~Loss or financial weakness of any of the Company's largest customers could adversely impact the Company's financial results.~~

Although Eastman has an extensive customer base, loss of, or material financial weakness of, certain of the Company's largest customers could adversely impact the Company's financial condition and results of operations until such business is replaced. No assurances can be made that the Company would be able to regain or replace any lost customers.

The Company's business is subject to operating risks common to chemical manufacturing businesses, including cyber security risks, any of which could disrupt manufacturing operations or related infrastructure and adversely impact results of operations.

As a global specialty chemicals manufacturing company, Eastman's business is subject to operating risks common to chemical manufacturing, storage, handling, and transportation, including explosions, fires, inclement weather, natural disasters, mechanical failure, unscheduled downtime, transportation and supply chain interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or gases. Significant limitation on the Company's ability to manufacture products due to disruption of manufacturing operations or related infrastructure could have a material adverse impact on the Company's sales revenue, costs, results of operations, credit ratings, and financial condition. Disruptions could occur due to internal factors such as computer or equipment malfunction (accidental or intentional), operator error, or process failures; or external factors such as supply chain disruption due to the ongoing COVID-19 coronavirus global pandemic, computer or equipment malfunction at third-party service providers, natural disasters, changes in laws or regulations, war or other outbreak of hostilities or terrorism, cyber attacks, or breakdown or degradation of transportation and supply chain infrastructure used for delivery of supplies to the Company or for delivery of products to customers. The Company has in the past experienced cyber attacks and breaches of its computer information systems, although none of these have had a material adverse impact on the Company's operations. While the Company remains committed to managing cyber related risk, no assurances can be provided that any future disruptions due to these, or other, circumstances will not have a material impact on operations. Unplanned disruptions of manufacturing operations or related infrastructure could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on the Company's results of operations. As previously reported, manufacturing operations and earnings have been negatively impacted by the second quarter 2018 third-party supplier operational disruptions at the Texas City and Longview, Texas manufacturing facilities.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Growth initiatives may not achieve desired business or financial objectives and may require significant resources in addition to or different from those available or in excess of those estimated or budgeted for such initiatives.

Eastman continues to identify and pursue growth opportunities through both organic and inorganic initiatives. These growth opportunities include development and commercialization or licensing of innovative new products and technologies and related employee leadership, expertise, skill development and retention, expansion into new markets and geographic regions, alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities. Such initiatives are necessarily constrained by available and development of additional resources, including development, attraction, and retention of employee leadership, application development, and sales and marketing talent and capabilities. There can be no assurance that such innovation, development and commercialization or licensing efforts, investments, or acquisitions and alliances (including integration of acquired businesses) will result in financially successful commercialization of products, or acceptance by existing or new customers, or successful entry into new markets or otherwise achieve their underlying strategic business objectives or that they will be beneficial to the Company's results of operations. There also can be no assurance that capital projects for growth efforts can be completed within the time or at the costs projected due, among other things, to demand for and availability of construction materials and labor and obtaining regulatory approvals and operating permits and reaching agreement on terms of key agreements and arrangements with potential suppliers and customers. Any such delays or cost overruns or the inability to obtain such approvals or to reach such agreements on acceptable terms could negatively impact the returns from any proposed or current investments and projects.

The Company's substantial global operations subject it to risks of doing business in other countries, including U.S. and non-U.S. trade relations, which could adversely impact its business, financial condition, and results of operations.

More than half of Eastman's sales for ~~2019~~2020 were to customers outside of North America. The Company expects sales from international markets to continue to represent a significant portion of its sales. Also, a significant portion of the Company's manufacturing capacity is located outside of the United States. Accordingly, the Company's business is subject to risks related to the differing legal, political, cultural, social and regulatory requirements, and economic conditions of many ~~jurisdictions.~~jurisdictions including the unique geographic impacts of the global COVID-19 pandemic. Fluctuations in exchange rates may impact product demand and may adversely impact the profitability in U.S. dollars of products and services provided in foreign countries. In addition, the U.S. orand foreign countries have imposed and may impose additional taxes or otherwise tax Eastman's foreign income (see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Income Taxes" in Part II, Item 7 of the Company's 2020 Annual Report on Form 10-K), or 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 have recently reduced and 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). Certain legal and political risks are also inherent in the operation of a company with Eastman's global scope. For example, it may be more difficult for Eastman to enforce its agreements or collect receivables through foreign legal systems, and the laws of some countries may not protect the Company's intellectual property rights to the same extent as the laws of the U.S. Failure of foreign countries to have laws to protect Eastman's intellectual property rights or an inability to effectively enforce such rights in foreign countries could result in loss of valuable proprietary information. There is also risk that foreign governments may nationalize private enterprises in certain countries where Eastman operates. Social and cultural norms in certain countries may not support compliance with Eastman's corporate policies including those that require compliance with substantive laws and regulations. Also, changes in general economic and political conditions ~~(including the U.K. departure from the European Union, also known as "Brexit")~~ in countries where Eastman operates are a risk to the Company's financial performance. As Eastman continues to operate its business globally, its success will depend, in part, on its ability to anticipate and effectively manage these and other related risks. There can be no assurance that the consequences of these and other factors relating to its multinational operations will not have an adverse impact on Eastman's business, financial condition, or results of operations.

Risks Related to the Company's Business and Strategy

The Company's business is subject to operating risks common to chemical manufacturing businesses, including cybersecurity risks, any of which could disrupt manufacturing operations or related infrastructure and adversely impact results of operations.

As a global specialty materials company, Eastman's business is subject to operating risks common to chemical manufacturing, storage, handling, and transportation, including explosions, fires, inclement weather, natural disasters, mechanical failure, unscheduled downtime, transportation and supply chain interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or gases. Significant limitation on the Company's ability to manufacture products due to disruption of manufacturing operations or related infrastructure could have a material adverse impact on the Company's sales revenue, costs, results of operations, credit ratings, and financial condition. Disruptions could occur due to internal factors such as computer or equipment malfunction (accidental or intentional), operator error, or process failures; or external factors such as supply chain disruption, computer or equipment malfunction at third-party service providers, natural disasters, changes in laws or regulations, war or other outbreak of hostilities or terrorism, cyber attacks, or breakdown or degradation of transportation and supply chain infrastructure used for delivery of supplies to the Company or for delivery of products to customers. The Company has in the past experienced cyber attacks and breaches of its computer information systems, although none of these have had a material adverse impact on the Company's operations and financial results. While the Company remains committed to managing cyber related risk, no assurances can be provided that any future disruptions due to these, or other, circumstances will not have a material impact on operations (see "Business - Eastman Chemical Company General Information - Information Security" in Part I, Item 1 of the Company's 2020 Annual Report o n Form 10-K). Unplanned disruptions of manufacturing operations or related infrastructure could be significant in scale and could negatively impact operations, neighbors, and the environment, and could have a negative impact on the Company's results of operations. As previously reported, manufacturing operations and earnings were previously negatively impacted by the second quarter 2018 third-party supplier operational disruptions at the Texas City and Longview, Texas manufacturing facilities.


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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Eastman continues to identify and pursue growth opportunities through both organic and inorganic initiatives. These growth opportunities include development and commercialization or licensing of innovative new products and technologies and related employee leadership, expertise, skill development and retention, expansion into new markets and geographic regions, alliances, ventures, and acquisitions that complement and extend the Company's portfolio of businesses and capabilities. Such initiatives are necessarily constrained by availability and development of additional resources, including development, attraction, and retention of employee leadership, application development, and sales and marketing talent and capabilities. There can be no assurance that such innovation, development and commercialization or licensing efforts, investments, or acquisitions and alliances (including integration of acquired businesses) will receive necessary governmental or regulatory approvals, or result in financially successful commercialization of products, or acceptance by existing or new customers, or successful entry into new markets or otherwise achieve their underlying strategic business objectives or that they will be beneficial to the Company's results of operations. There also can be no assurance that capital projects for growth efforts can be completed within the time or at the costs projected due, among other things, to demand for and availability of construction materials and labor and obtaining regulatory approvals and operating permits and reaching agreement on terms of key agreements and arrangements with potential suppliers and customers. Any such delays or cost overruns or the inability to obtain such approvals or to reach such agreements on acceptable terms could negatively impact the returns from any proposed or current investments and projects.

Significant acquisitions expose the Company to risks and uncertainties, the occurrence of any of which could materially adversely affect the Company's business, financial condition, and results of operations.

While acquisitions have been and continue to be a part of Eastman's growth strategy, acquisitions of large companies and businesses (such as the previous acquisitions of Taminco Corporation and Solutia, Inc.) subject the Company to a number of risks and uncertainties, the occurrence of any of which could have a material adverse effect on Eastman. These include, but are not limited to, the possibilities that the actual and projected future financial performance of the acquired business may be significantly worse than expected and that, as reported in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Impairment of Long-Lived Assets - Goodwill" in Part II, Item 7 of the Company's 2020 Annual Report on Form 10-K, the carrying values of certain assets from acquisitions may, as has been the case for certain acquired assets primarily in the AFP segment, be impaired resulting in charges to future earnings; that significant additional indebtedness may constrain the Company's ability to access the credit and capital markets at attractive interest rates and favorable terms, which may negatively impact the Company's liquidity or ability to pursue certain growth initiatives; that the Company may not be able to achieve the cost, revenue, tax, or other "synergies" expected from any acquisition, or that there may be delays in achieving any such synergies; that management's time and effort may be dedicated to the new business resulting in a loss of focus on the successful operation of the Company's existing businesses; and that the Company may be required to expend significant additional resources in order to integrate any acquired business into Eastman or that the integration efforts will not achieve the expected benefits.


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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Risks Related to Regulatory Changes and Compliance

Legislative, regulatory, or voluntary actions could increase the Company's future health, safety, and environmental compliance costs.

Eastman, ~~and~~ its facilities, and its businesses are subject to complex health, safety, and environmental laws, regulations, and related voluntary actions, both in the U.S. and internationally, which require and will continue to require significant expenditures to remain in compliance with such laws, regulations, and voluntary actions. The Company's accruals for such costs and associated liabilities are subject to changes in estimates on which the accruals are based. For example, any amount accrued for environmental matters reflects the Company's assumptions about remediation requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potentially responsible parties at multi-party sites, and the number of and financial viability of other potentially responsible parties. Changes in the estimates on which the accruals are based, unanticipated government enforcement action, or changes in health, safety, environmental, chemical control regulations and actions, and testing requirements could result in higher costs. Specifically, future changes in legislation and regulation and related voluntary actions associated with physical impacts of climate change may increase the likelihood that the Company's manufacturing facilities will in the future be impacted by carbon requirements, regulation of greenhouse gas emissions, and energy policy, and may result in capital expenditures, increases in costs for raw materials and energy, limitations on raw material and energy source and supply choices, and other direct compliance costs.

~~Significant acquisitions expose the~~ See "Business - Eastman Chemical Company ~~to risks~~General Information - Compliance With Environmental and ~~uncertainties, the occurrence of any of which could materially adversely impact the Company's business, financial condition, and results of operations.~~

While acquisitions have been and continue to be a part of Eastman's growth strategy, acquisitions of large companies and businesses (such as the previous acquisitions of Taminco Corporation and Solutia, Inc.) subject the Company to a number of risks and uncertainties, the occurrence of any of which could have a material adverse impact on Eastman. These include, but are not limited to, the possibilities that the actual and projected future financial performance of the acquired business may be significantly worse than expected and that, as reported in "Critical Accounting Estimates - Impairment of Long-Lived Assets - Goodwill"Other Government Regulations" in Part I, Item 2 of this Quarterly Report, the carrying values of certain assets from acquisitions may be impaired resulting in charges to future earnings; that significant additional indebtedness may constrain the Company's ability to access the credit and capital markets at attractive interest rates and favorable terms, which may negatively impact the Company's liquidity or ability to pursue certain growth initiatives; that the Company may not be able to achieve the cost, revenue, tax, or other "synergies" expected from any acquisition, or that there may be delays in achieving any such synergies; that management's time and effort may be dedicated to the new business resulting in a loss of focus on the successful operation1 of the Company's existing businesses; and that the Company may be required to expend significant additional resources in order to integrate any acquired business into Eastman or that the integration efforts will not achieve the expected benefits.

2020

In addition to the foregoing most significant known risk factors to the Company, there may be other factors, not currently known to the Company, which could, in the future, materially adversely impact the Company, its business, financial condition, or results of operations. The foregoing discussion of the most significant risk factors to the Company does not necessarily present them in order of importance. This disclosure, including information under "Outlook" and other forward-looking statements and related disclosures made by the Company in this QuarterlyAnnual Report and elsewhere from time to time, represents management's best judgment as of the date the information is given. The Company does not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public Company disclosures (such as in filings with the Securities and Exchange Commission or in Company press releases) on ~~related subjects.~~

Form 10-K
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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Eastman has exposure to various market risks principally due to changes in foreign currency exchange rates, the pricing of various commodities, and interest rates. In an effort to manage these risks, the Company employs various strategies, including pricing, inventory management, and hedging. The Company enters into derivative contracts which are governed by policies, procedures, and internal processes set forth by its Board of Directors.

The Company determines its exposures to market risk by utilizing sensitivity analyses, which measure the potential losses in fair value resulting from one or more selected hypothetical changes in foreign currency exchange rates, commodity prices, or interest rates. For more information regarding exposures, refer to Part II, Item 7A of the Company's ~~2019~~2020 Annual Report on Form 10-K.

The Company had variable interest rate borrowings (including credit facility borrowings and commercial paper borrowings) of $710 million and $171 million at March 31, 2020 and December 31, 2019, respectively. The borrowings represented approximately 11 percent and 3 percent of total outstanding debt with weighted average interest rates of 2.59 percent and 2.03 percent at March 31, 2020 and December 31, 2019, respectively. A hypothetical 10 percent increase in the average interest rate applicable to these borrowings would change annualized interest expense by approximately $2 million as of March 31, 2020 compared to an immaterial impact on the annualized interest expense as of December 31, 2019.

~~Other than the interest rate risk related to variable interest rate borrowings discussed above, there~~There have been no material changes to the Company's market risks from those disclosed in Part II, Item 7A of the Company's ~~2019~~2020 Annual Report on Form 10-K.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Eastman maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that as of March 31, ~~2020,~~2021, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed was accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting that occurred during the first quarter of ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.


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PART II.OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

General

From time to time, Eastman and its operations are parties to, or targets of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are handled and defended in the ordinary course of business. While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial condition, results of operations, or cash flows. Consistent with the requirements of Securities and Exchange Commission Regulation S-K, Item 103, the Company’s threshold for disclosing any environmental legal proceeding involving a governmental authority is potential monetary sanctions that management believes will exceed $1 million.

Solutia Legacy Torts Claims Litigation

Pursuant to an Amended and Restated Settlement Agreement effective February 28, 2008 between Solutia, Inc. ("Solutia") and Monsanto Company ("Monsanto") in connection with Solutia's emergence from Chapter 11 bankruptcy proceedings (the "Monsanto Settlement Agreement"), Monsanto is responsible for the defense and indemnification of Solutia against any Legacy Tort Claims (as defined in the Monsanto Settlement Agreement) and Solutia has agreed to retain responsibility for certain tort claims, if any, that may arise from Solutia's conduct after its spinoff from Pharmacia Corporation (f/k/a Monsanto), which occurred on September 1, 1997. Solutia, which became a wholly-owned subsidiary of Eastman upon Eastman's acquisition of Solutia in July 2012, has been named as a defendant in several such proceedings, and has submitted the matters to Monsanto, which was acquired by Bayer AG in June 2018, as Legacy Tort Claims. To the extent these matters are not within the meaning of Legacy Tort Claims, Solutia could potentially be liable thereunder. In connection with the completion of its acquisition of Solutia, Eastman guaranteed the obligations of Solutia and Eastman was added as an indemnified party under the Monsanto Settlement Agreement.

~~Trenton, Michigan Environmental Proceeding~~

In December 2018, Solutia, a wholly-owned subsidiary of the Company, received a Notice and Finding of Violations from the United States Environmental Protection Agency's Region 5 Office ("EPA") alleging that Solutia's Trenton, Michigan manufacturing operation violated certain federal air quality regulations and certain provisions in the site's Clean Air Act Title V permit. Company representatives recently met with EPA and have determined that it is not reasonably likely that any civil penalty assessed by EPA will be less than $100,000. While the Company intends to vigorously defend against these allegations, this disclosure is made pursuant to Securities and Exchange Commission Regulation S-K, Item 103, Instruction 5.C., which requires disclosure of administrative proceedings commenced under environmental laws that involve governmental authorities as parties and potential monetary sanctions in excess of $100,000. The Company believes that the ultimate resolution of this proceeding will not have a material impact on the Company's financial condition, results of operations, or cash flows.

ITEM 1A.RISK FACTORS

For identification and discussion of the ~~most significant~~material risks applicable to the Company and its business, see "Risk Factors" in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this Quarterly Report on Form 10-Q.


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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In February 2018, the Company's Board of Directors authorized the repurchase of up to ~~an additional~~ $2 billion of Company's outstanding common stock at such times, in such amounts, and on such terms, as determined by management to be in the best interest of the Company. As of March 31, ~~2020,~~2021, a total of ~~7,263,465~~8,242,011 shares have been repurchased under this authorization for a total amount of ~~$603~~$673 million. During first three months ~~2020,~~2021, the Company repurchased ~~510,301~~354,795 shares of common stock for a cost of ~~$30~~$40 million. For additional information, see Note 11, "Stockholders' Equity", to the Company's unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Period Total Number
of Shares
Purchased
Average Price Paid Per Share ⁽¹⁾
Total Number of Shares Purchased as Part of Publicly Announced Plan
or Program Approximate Dollar
Value that May Yet Be Purchased Under the Plan or Program
January 1 - 31, 2020 — $ — — $ 1.427 billion
February 1 - 29, 2020 — $ — — $ 1.427 billion
March 1 - 31, 2020 510,301 $ 58.79 510,301 $ 1.397 billion
Total 510,301 $ 58.79 510,301



Period	Total Number of Shares Purchased	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Approximate Dollar Value that May Yet Be Purchased Under the Plan or Program
January 1 - 31, 2021	—	$	—	—	$	1.367	billion
February 1 - 28, 2021	—	$	—	—	$	1.367	billion
March 1 - 31, 2021	354,795	$	112.74	354,795	$	1.327	billion
Total	354,795	$	112.74	354,795

⁽¹⁾Average price paid per share reflects the weighted average purchase price paid for shares.

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ITEM 6.EXHIBITS

Exhibits filed as part of this report are listed in the Exhibit Index.


						EXHIBIT INDEX
Exhibit Number						Description

3.01						Amended and Restated Certificate of Incorporation of Eastman Chemical Company (incorporated herein by reference to Exhibit 3.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012)

3.02						Amended and Restated Bylaws of Eastman Chemical Company (incorporated herein by reference to Exhibit 3.02 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017)

4.01						Form of Eastman Chemical Company common stock certificate as amended February 1, 2001 (incorporated herein by reference to Exhibit 4.01 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)

4.02						Indenture, dated as of January 10, 1994, between Eastman Chemical Company and The Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated January 10, 1994)

4.03						Indenture, dated as of June 5, 2012, between Eastman Chemical Company and Wells Fargo Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated June 5, 2012)

4.04						Form of 7 1/4% Debentures due January 15, 2024 (incorporated herein by reference to Exhibit 4(d) to the Company's Current Report on Form 8-K dated January 10, 1994)

4.05						Officers' Certificate pursuant to Sections 201 and 301 of the Indenture related to 7 5/8% Debentures due 2024 (incorporated herein by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated June 8, 1994)

4.06						Form of 7 5/8% Debentures due June 15, 2024 (incorporated herein by reference to Exhibit 4(b) to the Company's Current Report on Form 8-K dated June 8, 1994)

4.07						Form of 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.08 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)

4.08						Officer's Certificate pursuant to Sections 201 and 301 of the Indenture related to 7.60% Debentures due February 1, 2027 (incorporated herein by reference to Exhibit 4.09 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996)

~~4.09~~						~~Form of 4.5% Note due 2021 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 10, 2010)~~

~~4.10~~4.09						Form of 3.6% Note due 2022 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K dated June 5, 2012)

~~4.11~~4.10						Form of 4.8% Note due 2042 (incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K dated June 5, 2012)

~~4.12~~4.11						Form of 4.65% Note due 2044 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated May 15, 2014)

~~4.13~~4.12						Form of 3.80% Note due 2025 (incorporated herein by reference to Exhibit 4.18 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014)

4.13						Form of 1.50% Note due 2023 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated May 26, 2016 and Exhibit 1.1 to the Company's Current Report on Form 8-K dated November 21, 2016)

5251


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						EXHIBIT INDEX
Exhibit Number						Description
4.14						Form of 1.50% Note due 2023 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated May 26, 2016 and Exhibit 1.1 to the Company's Current Report on Form 8-K dated November 21, 2016)

~~4.15~~						~~Form of~~ 1.875% Note due 2026 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K dated November 21, 2016)

~~4.16~~4.15						Form of 3.5% Note due 2021 (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated November 6, 2018)

~~4.17~~4.16						Form of 4.5% Note due 2028 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K dated November 6, 2018)

~~4.18~~4.17						Description of Securities (incorporated herein by reference to Exhibit 4.18 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)

10.01 *						~~$250,000,000 364-Day Term Loan Credit Agreement dated as~~Form of ~~April 9, 2020 (incorporated herein by reference~~Restricted Stock Unit Award to ~~Exhibit 10.01 to the Company's Current Report on Form 8-K dated April 9, 2020)~~Executive Officer Kellye L. Walker **

10.02 *						~~Amendment dated April 30, 2020~~Form of Restricted Stock Unit Award to ~~the Amended and Restated Five-Year Credit Agreement dated as of October 25, 2018 (incorporated herein by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K dated April 30, 2020)~~

~~10.03~~						Amendment dated April 30, 2020 to the $250,000,000 364-Day Term Loan Credit Agreement dated as of April 9, 2020 (incorporated herein by reference to Exhibit 10.02 to the Company's Current Report on Form 8-K dated April 30, 2020)Executive Officer Brad A. Lich **

31.01 *						Rule 13a – 14(a) Certification by Mark J. Costa, Chief Executive Officer, for the quarter ended March 31, ~~2020~~2021

31.02 *						Rule 13a – 14(a) Certification by William T. McLain, Jr., Senior Vice President and Chief Financial Officer, for the quarter ended March 31, ~~2020~~2021

32.01 *						Section 1350 Certification by Mark J. Costa, Chief Executive Officer, for the quarter ended March 31, ~~2020~~2021

32.02 *						Section 1350 Certification by William T. McLain, Jr., Senior Vice President and Chief Financial Officer, for the quarter ended March 31, ~~2020~~2021

101.INS						Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH *						Inline XBRL Taxonomy Extension Schema Document

101.CAL *						Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF *						Inline XBRL Definition Linkbase Document

101.LAB *						Inline XBRL Taxonomy Label Linkbase Document

101.PRE *						Inline XBRL Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Denotes exhibit filed or furnished herewith.

** Management contract or compensatory plan or arrangement filed pursuant to Item 601(b) (10) (iii) of Regulation S-K.

5352


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Eastman Chemical Company



Date:	May ~~11, 2020~~3, 2021	By:	/s/ William T. McLain, Jr.
			William T. McLain, Jr.
			Senior Vice President and Chief Financial Officer

5453


Delaware			62-1539359
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification no.)

200 South Wilcox Drive
Kingsport	Tennessee	37662
(Address of principal executive offices)			(Zip Code)


Class			Number of Shares Outstanding at March 31, ~~2020~~2021
Common Stock, par value $0.01 per share			~~135,894,258~~136,323,522


		First Quarter							First Quarter
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	2020		2019		(Dollars in millions, except per share amounts)	2021		2020
Sales	Sales	$	2,241	$	2,380	Sales	$	2,409	$	2,241
Cost of sales	Cost of sales	1,664		1,806		Cost of sales	1,811		1,664
Gross profit	Gross profit	577		574		Gross profit	598		577
Selling, general and administrative expenses	Selling, general and administrative expenses	160		187		Selling, general and administrative expenses	184		160
Research and development expenses	Research and development expenses	61		58		Research and development expenses	58		61
Asset impairments and restructuring charges, net	Asset impairments and restructuring charges, net	14		32		Asset impairments and restructuring charges, net	7		14
Other components of post-employment (benefit) cost, net	Other components of post-employment (benefit) cost, net	(30)		(21)		Other components of post-employment (benefit) cost, net	(36)		(30)
Other (income) charges, net	Other (income) charges, net	4		(2)		Other (income) charges, net	(4)		4
Earnings before interest and taxes	Earnings before interest and taxes	368		320		Earnings before interest and taxes	389		368
Net interest expense	Net interest expense	52		56		Net interest expense	50		52

Earnings before income taxes	Earnings before income taxes	316		264		Earnings before income taxes	339		316
Provision for income taxes	Provision for income taxes	56		55		Provision for income taxes	62		56
Net earnings	Net earnings	260		209		Net earnings	277		260
Less: Net earnings attributable to noncontrolling interest	Less: Net earnings attributable to noncontrolling interest	2		—		Less: Net earnings attributable to noncontrolling interest	3		2
Net earnings attributable to Eastman	Net earnings attributable to Eastman	$	258	$	209	Net earnings attributable to Eastman	$	274	$	258

Basic earnings per share attributable to Eastman	Basic earnings per share attributable to Eastman	$	1.90	$	1.50	Basic earnings per share attributable to Eastman	$	2.01	$	1.90
Diluted earnings per share attributable to Eastman	Diluted earnings per share attributable to Eastman	$	1.89	$	1.49	Diluted earnings per share attributable to Eastman	$	1.99	$	1.89


Comprehensive Income	Comprehensive Income					Comprehensive Income
Net earnings including noncontrolling interest	Net earnings including noncontrolling interest	$	260	$	209	Net earnings including noncontrolling interest	$	277	$	260
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:					Other comprehensive income (loss), net of tax:
Change in cumulative translation adjustment	Change in cumulative translation adjustment	19		30		Change in cumulative translation adjustment	2		19
Defined benefit pension and other postretirement benefit plans:	Defined benefit pension and other postretirement benefit plans:					Defined benefit pension and other postretirement benefit plans:

Amortization of unrecognized prior service credits	Amortization of unrecognized prior service credits	(7)		(7)		Amortization of unrecognized prior service credits	(7)		(7)
Derivatives and hedging:	Derivatives and hedging:					Derivatives and hedging:
Unrealized gain (loss) during period	Unrealized gain (loss) during period	7		10		Unrealized gain (loss) during period	25		7
Reclassification adjustment for (gains) losses included in net income, net	Reclassification adjustment for (gains) losses included in net income, net	(2)		(2)		Reclassification adjustment for (gains) losses included in net income, net	5		(2)
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	17		31		Total other comprehensive income (loss), net of tax	25		17
Comprehensive income including noncontrolling interest	Comprehensive income including noncontrolling interest	277		240		Comprehensive income including noncontrolling interest	302		277
Less: Comprehensive income attributable to noncontrolling interest	Less: Comprehensive income attributable to noncontrolling interest	2		—		Less: Comprehensive income attributable to noncontrolling interest	3		2
Comprehensive income attributable to Eastman	Comprehensive income attributable to Eastman	$	275	$	240	Comprehensive income attributable to Eastman	$	299	$	275
Retained Earnings	Retained Earnings					Retained Earnings
Retained earnings at beginning of period	Retained earnings at beginning of period	$	7,965	$	7,573	Retained earnings at beginning of period	$	8,080	$	7,965
Cumulative effect adjustment resulting from adoption of new accounting standards		—		(20)

Net earnings attributable to Eastman	Net earnings attributable to Eastman	258		209		Net earnings attributable to Eastman	274		258
Cash dividends declared	Cash dividends declared	(90)		(87)		Cash dividends declared	(94)		(90)
Retained earnings at end of period	Retained earnings at end of period	$	8,133	$	7,675	Retained earnings at end of period	$	8,260	$	8,133


		March 31,		December 31,			March 31,		December 31,
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	2020		2019		(Dollars in millions, except per share amounts)	2021		2020
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	680	$	204	Cash and cash equivalents	$	540	$	564
Trade receivables, net of allowance for doubtful accounts	Trade receivables, net of allowance for doubtful accounts	1,045		980		Trade receivables, net of allowance for doubtful accounts	1,229		1,033
Miscellaneous receivables	Miscellaneous receivables	391		395		Miscellaneous receivables	440		482
Inventories	Inventories	1,659		1,662		Inventories	1,505		1,379
Other current assets	Other current assets	76		80		Other current assets	83		83
Total current assets	Total current assets	3,851		3,321		Total current assets	3,797		3,541
Properties	Properties					Properties
Properties and equipment at cost	Properties and equipment at cost	13,082		12,904		Properties and equipment at cost	13,527		13,531
Less: Accumulated depreciation	Less: Accumulated depreciation	7,584		7,333		Less: Accumulated depreciation	8,061		7,982
Net properties	Net properties	5,498		5,571		Net properties	5,466		5,549
Goodwill	Goodwill	4,417		4,431		Goodwill	4,446		4,465
Intangible assets, net of accumulated amortization	Intangible assets, net of accumulated amortization	1,962		2,011		Intangible assets, net of accumulated amortization	1,741		1,792
Other noncurrent assets	Other noncurrent assets	737		674		Other noncurrent assets	745		736
Total assets	Total assets	$	16,465	$	16,008	Total assets	$	16,195	$	16,083

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities	Current liabilities					Current liabilities
Payables and other current liabilities	Payables and other current liabilities	$	1,420	$	1,618	Payables and other current liabilities	$	1,692	$	1,689
Borrowings due within one year	Borrowings due within one year	895		171		Borrowings due within one year	324		349
Total current liabilities	Total current liabilities	2,315		1,789		Total current liabilities	2,016		2,038
Long-term borrowings	Long-term borrowings	5,399		5,611		Long-term borrowings	5,200		5,269
Deferred income tax liabilities	Deferred income tax liabilities	924		915		Deferred income tax liabilities	855		848
Post-employment obligations	Post-employment obligations	968		1,016		Post-employment obligations	1,116		1,143
Other long-term liabilities	Other long-term liabilities	667		645		Other long-term liabilities	689		677
Total liabilities	Total liabilities	10,273		9,976		Total liabilities	9,876		9,975
Stockholders' equity	Stockholders' equity					Stockholders' equity
Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 220,050,159 and 219,638,646 for 2020 and 2019, respectively)		2		2
Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 221,457,969 and 220,641,506 for 2021 and 2020, respectively)						Common stock ($0.01 par value – 350,000,000 shares authorized; shares issued – 221,457,969 and 220,641,506 for 2021 and 2020, respectively)	2		2
Additional paid-in capital	Additional paid-in capital	2,109		2,105		Additional paid-in capital	2,219		2,174
Retained earnings	Retained earnings	8,133		7,965		Retained earnings	8,260		8,080
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(197)		(214)		Accumulated other comprehensive income (loss)	(248)		(273)
		10,047		9,858			10,233		9,983
Less: Treasury stock at cost (84,206,699 shares for 2020 and 83,696,398 shares for 2019)		3,930		3,900
Less: Treasury stock at cost (85,185,245 shares for 2021 and 84,830,450 shares for 2020)						Less: Treasury stock at cost (85,185,245 shares for 2021 and 84,830,450 shares for 2020)	4,000		3,960
Total Eastman stockholders' equity	Total Eastman stockholders' equity	6,117		5,958		Total Eastman stockholders' equity	6,233		6,023
Noncontrolling interest	Noncontrolling interest	75		74		Noncontrolling interest	86		85
Total equity	Total equity	6,192		6,032		Total equity	6,319		6,108
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	16,465	$	16,008	Total liabilities and stockholders' equity	$	16,195	$	16,083


1.	Financial Statements

	Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings	4
	Unaudited Consolidated Statements of Financial Position	5
	Unaudited Consolidated Statements of Cash Flows	6
	Notes to the Unaudited Consolidated Financial Statements	7

2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29

3.	Quantitative and Qualitative Disclosures About Market Risk	49

4.	Controls and Procedures	49


1.	1.	Legal Proceedings	50	1.	Legal Proceedings	50

1A.	1A.	Risk Factors	50	1A.	Risk Factors	50

2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	51	2.	Unregistered Sales of Equity Securities and Use of Proceeds	50

6.	6.	Exhibits	52	6.	Exhibits	51


		First Three Months							First Three Months
(Dollars in millions)	(Dollars in millions)	2020		2019		(Dollars in millions)	2021		2020
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	260	$	209	Net earnings	$	277	$	260
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:					Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	139		155		Depreciation and amortization	149		139

Asset impairment charges	Asset impairment charges	9		—		Asset impairment charges	0		9

Provision for deferred income taxes		12		4
Provision for (benefit from) deferred income taxes						Provision for (benefit from) deferred income taxes	2		12
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:	Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:					Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
(Increase) decrease in trade receivables	(Increase) decrease in trade receivables	(72)		(149)		(Increase) decrease in trade receivables	(211)		(72)
(Increase) decrease in inventories	(Increase) decrease in inventories	(18)		(122)		(Increase) decrease in inventories	(144)		(18)
Increase (decrease) in trade payables	Increase (decrease) in trade payables	(104)		(42)		Increase (decrease) in trade payables	197		(104)
Pension and other postretirement contributions (in excess of) less than expenses	Pension and other postretirement contributions (in excess of) less than expenses	(52)		(36)		Pension and other postretirement contributions (in excess of) less than expenses	(53)		(52)
Variable compensation (in excess of) less than expenses	Variable compensation (in excess of) less than expenses	(74)		(77)		Variable compensation (in excess of) less than expenses	(78)		(74)
Other items, net	Other items, net	71		53		Other items, net	77		71
Net cash provided by (used in) operating activities		171		(5)
Net cash provided by operating activities						Net cash provided by operating activities	216		171
Investing activities	Investing activities					Investing activities
Additions to properties and equipment	Additions to properties and equipment	(99)		(106)		Additions to properties and equipment	(91)		(99)

Acquisitions, net of cash acquired		—		(19)

Additions to capitalized software						Additions to capitalized software	(6)		(2)
Other items, net	Other items, net	(2)		—		Other items, net	(2)		0
Net cash used in investing activities	Net cash used in investing activities	(101)		(125)		Net cash used in investing activities	(99)		(101)
Financing activities	Financing activities					Financing activities
Net increase (decrease) in commercial paper and other borrowings	Net increase (decrease) in commercial paper and other borrowings	539		370		Net increase (decrease) in commercial paper and other borrowings	(25)		539
Proceeds from borrowings		—		125
Repayment of borrowings		—		(175)

Dividends paid to stockholders	Dividends paid to stockholders	(90)		(87)		Dividends paid to stockholders	(94)		(90)
Treasury stock purchases	Treasury stock purchases	(30)		(125)		Treasury stock purchases	(40)		(30)

Other items, net	Other items, net	(11)		(6)		Other items, net	22		(11)
Net cash provided by financing activities		408		102
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(137)		408
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(2)		(3)		Effect of exchange rate changes on cash and cash equivalents	(4)		(2)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	476		(31)		Net change in cash and cash equivalents	(24)		476
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	204		226		Cash and cash equivalents at beginning of period	564		204
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	680	$	195	Cash and cash equivalents at end of period	$	540	$	680


		Page

Note 1.	Significant Accounting Policies	8
Note 2.	Inventories	109
Note 3.	Payables and Other Current Liabilities	109
Note 4.	Income Taxes	109
Note 5.	Borrowings	1110
Note 6.	Derivative and Non-Derivative Financial Instruments	1211
Note 7.	Retirement Plans	1716
Note 8.	Leases and Other Commitments	1817
Note 9.	Environmental Matters and Asset Retirement Obligations	2019
Note 10.	Legal Matters	2220
Note 11.	Stockholders' Equity	2221
Note 12.	Earnings and Dividends Per Share	2423
Note 13.	Asset Impairments and Restructuring Charges, Net	24
Note 14.	Share-Based Compensation Awards	25
Note 15.	Supplemental Cash Flow Information	26
Note 16.	Segment and Regional Sales Information	27


Notional Outstanding		March 31, 2021	December 31, 2020

Derivatives designated as cash flow hedges:
Foreign Exchange Forward and Option Contracts (in millions)
	EUR/USD (in EUR)	€483	€521



Commodity Forward and Collar Contracts

	Energy (in million british thermal units)	9	17
Interest rate swaps for the future issuance of debt (in millions)		$75	$75

Derivatives designated as fair value hedges:
Fixed-for-floating interest rate swaps (in millions)		$75	$75

Derivatives designated as net investment hedges:
Cross-currency interest rate swaps (in millions)
	EUR/USD (in EUR)	€853	€853

Non-derivatives designated as net investment hedges:
Foreign Currency Net Investment Hedges (in millions)
	EUR/USD (in EUR)	€1,245	€1,245


Notional Outstanding			March 31, 2020		December 31, 2019

Derivatives designated as cash flow hedges:
Foreign Exchange Forward and Option Contracts (in millions)
	EUR/USD (in EUR)	€585		€630



Commodity Forward and Collar Contracts
	Feedstock (in million barrels)	1		1
	Energy (in million british thermal units)	21		27
Interest rate swaps for the future issuance of debt (in millions)			$25		—

Derivatives designated as fair value hedges:
Fixed-for-floating interest rate swaps (in millions)			$75		$75

Derivatives designated as net investment hedges:
Cross-currency interest rate swaps (in millions)
	EUR/USD (in EUR)	€851		€851

Non-derivatives designated as net investment hedges:
Foreign Currency Net Investment Hedges (in millions)
	EUR/USD (in EUR)	€1,243		€1,243


The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis	The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis											The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis
(Dollars in millions)	(Dollars in millions)						(Dollars in millions)
Derivative Type	Derivative Type	Statements of Financial Position Classification	March 31, 2020 Level 2		December 31, 2019 Level 2		Derivative Type	Statements of Financial Position Classification	March 31, 2021 Level 2		December 31, 2020 Level 2
Derivatives designated as cash flow hedges:	Derivatives designated as cash flow hedges:						Derivatives designated as cash flow hedges:
Commodity contracts							Commodity contracts	Other current assets	$	1	$	1

Foreign exchange contracts		Other current assets	$	18	$	13
Foreign exchange contracts		Other noncurrent assets	11		2

Derivatives designated as fair value hedges:

Fixed-for-floating interest rate swap		Other noncurrent assets	4		1

Derivatives designated as net investment hedges:
Cross-currency interest rate swaps		Other current assets	17		—
Cross-currency interest rate swaps		Other noncurrent assets	110		68
Total Derivative Assets			$	160	$	84

Derivatives designated as cash flow hedges:
Commodity contracts		Payables and other current liabilities	$	22	$	26
Commodity contracts		Other long-term liabilities	1		2
Foreign exchange contracts	Foreign exchange contracts	Payables and other current liabilities	—		1		Foreign exchange contracts	Other current assets	3		0
Foreign exchange contracts	Foreign exchange contracts	Other long-term liabilities	—		2		Foreign exchange contracts	Other noncurrent assets	2		0
Forward starting interest rate swap contracts	Forward starting interest rate swap contracts	Other long-term liabilities	1		—		Forward starting interest rate swap contracts	Other noncurrent assets	8		1

Derivatives designated as fair value hedges:	Derivatives designated as fair value hedges:						Derivatives designated as fair value hedges:
Fixed-for-floating interest rate swap	Fixed-for-floating interest rate swap	Long-term borrowings	—		1		Fixed-for-floating interest rate swap	Other current assets	0		1
Fixed-for-floating interest rate swap							Fixed-for-floating interest rate swap	Other noncurrent assets	2		4

Derivatives designated as net investment hedges:							Derivatives designated as net investment hedges:

Cross-currency interest rate swaps							Cross-currency interest rate swaps	Other noncurrent assets	43		40
Total Derivative Assets							Total Derivative Assets		$	59	$	47

Derivatives designated as cash flow hedges:							Derivatives designated as cash flow hedges:
Commodity contracts							Commodity contracts	Payables and other current liabilities	$	0	$	6

Foreign exchange contracts							Foreign exchange contracts	Payables and other current liabilities	6		21
Foreign exchange contracts							Foreign exchange contracts	Other long-term liabilities	3		14

Derivatives designated as net investment hedges:							Derivatives designated as net investment hedges:
Cross-currency interest rate swaps							Cross-currency interest rate swaps	Other long-term liabilities	23		51
Total Derivative Liabilities	Total Derivative Liabilities		$	24	$	32	Total Derivative Liabilities		$	32	$	92
Total Net Derivative Assets (Liabilities)	Total Net Derivative Assets (Liabilities)		$	136	$	52	Total Net Derivative Assets (Liabilities)		$	27	$	(45)


(Dollars in millions)	(Dollars in millions)	Carrying amount of the hedged liabilities						Cumulative amount of fair value hedging loss adjustment included in the carrying amount of the hedged liability						(Dollars in millions)	Carrying amount of the hedged liabilities				Cumulative amount of fair value hedging loss adjustment included in the carrying amount of the hedged liability
Line item in the Unaudited Consolidated Statements of Financial Position in which the hedged item is included	Line item in the Unaudited Consolidated Statements of Financial Position in which the hedged item is included	March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019		Line item in the Unaudited Consolidated Statements of Financial Position in which the hedged item is included	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Long-term borrowings ⁽¹⁾	Long-term borrowings ⁽¹⁾	$	770	$	763	$	(2)	$	(7)	Long-term borrowings (1)	$	771	$	772	$	(2)	$	(1)


		Change in amount of after tax gain (loss) recognized in OCI on derivatives						Pre-tax amount of gain (loss) reclassified from OCI into earnings							Change in amount of after tax gain (loss) recognized in OCI on derivatives	Pre-tax amount of gain (loss) reclassified from OCI into earnings
(Dollars in millions)	(Dollars in millions)	First Quarter						First Quarter						(Dollars in millions)	First Quarter			First Quarter
Hedging Relationships	Hedging Relationships	2020		2019		2020		2019		Hedging Relationships	2021		2020			2021		2020
Derivatives in cash flow hedging relationships:	Derivatives in cash flow hedging relationships:									Derivatives in cash flow hedging relationships:
Commodity contracts	Commodity contracts	$	(9)	$	7	$	(1)	$	(3)	Commodity contracts	$	1	$	(9)		$	0	$	(1)
Foreign exchange contracts	Foreign exchange contracts	13		1		6		6		Foreign exchange contracts	23		13			(5)		6
Forward starting interest rate and treasury lock swap contracts	Forward starting interest rate and treasury lock swap contracts	1		1		(2)		(1)		Forward starting interest rate and treasury lock swap contracts	7		1			(2)		(2)
Non-derivatives in net investment hedging relationships (pre-tax):	Non-derivatives in net investment hedging relationships (pre-tax):									Non-derivatives in net investment hedging relationships (pre-tax):
Net investment hedges	Net investment hedges	33		26		—		—		Net investment hedges	69		33			—		—
Derivatives in net investment hedging relationships (pre-tax):	Derivatives in net investment hedging relationships (pre-tax):									Derivatives in net investment hedging relationships (pre-tax):
Cross-currency interest rate swaps	Cross-currency interest rate swaps	18		19		—		—		Cross-currency interest rate swaps	42		18			—		—
Cross-currency interest rate swaps excluded component	Cross-currency interest rate swaps excluded component	41		6		—		—		Cross-currency interest rate swaps excluded component	(11)		41			—		—


Location and Amount of Gain or (Loss) Recognized in Earnings on Fair Value and Cash Flow Hedging Relationships
Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships														Location and Amount of Gain or (Loss) Recognized in Earnings from Fair Value and Cash Flow Hedging Relationships
		First Quarter																							First Quarter
		2020										2019											2021				2020
(Dollars in millions)	(Dollars in millions)	Sales		Cost of Sales		Net Interest Expense		Sales		Cost of Sales		Net Interest Expense		(Dollars in millions)	Sales		Cost of Sales		Net Interest Expense		Sales		Cost of Sales		Net Interest Expense
Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized	Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized	$	2,241	$	1,664	$	52	$	2,380	$	1,806	$	56	Total amounts of income and expense line items presented in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings in which the effects of fair value or cash flow hedges are recognized	$	2,409	$	1,811	$	50	$	2,241	$	1,664	$	52

The effects of fair value and cash flow hedging:	The effects of fair value and cash flow hedging:													The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships:														Gain or (loss) on fair value hedging relationships:
Interest contracts (fixed-for-floating interest rate swaps):														Interest contracts (fixed-for-floating interest rate swaps):
Hedged items														Hedged items					0						0
Derivatives designated as hedging instruments														Derivatives designated as hedging instruments					0						0
Gain or (loss) on cash flow hedging relationships:	Gain or (loss) on cash flow hedging relationships:													Gain or (loss) on cash flow hedging relationships:
Interest contracts (forward starting interest rate and treasury lock swap contracts):	Interest contracts (forward starting interest rate and treasury lock swap contracts):													Interest contracts (forward starting interest rate and treasury lock swap contracts):
Amount reclassified from AOCI into earnings	Amount reclassified from AOCI into earnings					(2)						(1)		Amount reclassified from AOCI into earnings					(2)						(2)
Commodity Contracts:	Commodity Contracts:													Commodity Contracts:
Amount reclassified from AOCI into earnings	Amount reclassified from AOCI into earnings			(1)						(3)				Amount reclassified from AOCI into earnings			0						(1)
Foreign Exchange Contracts:	Foreign Exchange Contracts:													Foreign Exchange Contracts:
Amount reclassified from AOCI into earnings	Amount reclassified from AOCI into earnings	6						6						Amount reclassified from AOCI into earnings	(5)						6


ITEM						PAGE


		First Quarter																								First Quarter
		Pension Plans																	Other Postretirement Benefit Plans					Pension Plans						Other Postretirement Benefit Plans
		2020						2019									2020		2019	2021				2020				2021	2020
(Dollars in millions)	(Dollars in millions)	U.S.		Non-U.S.		U.S.		Non-U.S.							(Dollars in millions)	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	7	$	4	$	7	$	3		$	—	$	—	Service cost	$	7	$	4	$	7	$	4	$	0	$	0
Interest cost	Interest cost	14		4		19		5			5		6		Interest cost	9		3		14		4		3		5
Expected return on assets	Expected return on assets	(34)		(8)		(32)		(8)			(1)		(1)		Expected return on assets	(32)		(9)		(34)		(8)		(1)		(1)

Amortization of:	Amortization of:														Amortization of:
Prior service credit, net	Prior service credit, net	—		—		—		—		��	(10)		(10)		Prior service credit, net	0		0		0		0		(9)		(10)

Net periodic benefit (credit) cost	Net periodic benefit (credit) cost	$	(13)	$	—	$	(6)	$	—		$	(6)	$	(5)	Net periodic benefit (credit) cost	$	(16)	$	(2)	$	(13)	$	0	$	(7)	$	(6)


(Dollars in millions)	Operating lease liabilities
Remainder of 2020	$	47
2021	51
2022	40
2023	27
2024	16
2025 and beyond	33
Total lease payments	214
Less: amounts of lease payments representing interest	28
Present value of future lease payments	186
Less: current obligations under leases	41
Long-term lease obligations	$	145


(Dollars in millions)	Operating lease liabilities
Remainder of 2021	$	46
2022	47
2023	33
2024	19
2025	12
2026 and beyond	28
Total lease payments	185
Less: amounts of lease payments representing interest	16
Present value of future lease payments	169
Less: current obligations under leases	55
Long-term lease obligations	$	114


(Dollars in millions)	Payments Due for
Period	Debt Securities		Credit Facilities and Other		Interest Payable		Purchase Obligations		Operating Leases		Other Liabilities		Total
2020	$	—	$	710	$	154	$	131	$	47	$	144	$	1,186
2021	483		—		185		151		51		74		944
2022	741		—		173		100		40		83		1,137
2023	821		—		153		89		27		88		1,178
2024	241		—		136		98		16		89		580
2025 and beyond	3,298		—		1,413		1,958		33		1,111		7,813
Total	$	5,584	$	710	$	2,214	$	2,527	$	214	$	1,589	$	12,838


(Dollars in millions)	Environmental Remediation Liabilities
Balance at December 31, ~~2018~~2019	$	~~271~~260
Changes in estimates recognized in earnings and other	47
Cash reductions	~~(15)~~(10)
Balance at December 31, ~~2019~~2020	~~260~~257
Changes in estimates recognized in earnings and other	21
Cash reductions	~~(4)~~(3)
Balance at March 31, ~~2020~~2021	$	~~258~~255


(Dollars in millions, except per share amount)	(Dollars in millions, except per share amount)	Common Stock at Par Value		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock at Cost		Total Eastman Stockholders' Equity		Noncontrolling Interest		Total Equity		(Dollars in millions, except per share amount)	Common Stock at Par Value		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock at Cost		Total Eastman Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2019		$	2	$	2,105	$	7,965	$	(214)	$	(3,900)	$	5,958	$	74	$	6,032
Balance at December 31, 2020																		Balance at December 31, 2020	$	2	$	2,174	$	8,080	$	(273)	$	(3,960)	$	6,023	$	85	$	6,108

Net Earnings	Net Earnings	—		—		258		—		—		258		2		260		Net Earnings	0		0		274		0		0		274		3		277
Cash Dividends Declared⁽¹⁾ ($0.66 per share)		—		—		(90)		—		—		(90)		—		(90)
Cash Dividends Declared (1) ($0.69 per share)																		Cash Dividends Declared (1) ($0.69 per share)	0		0		(94)		0		0		(94)		0		(94)
Other Comprehensive Income (Loss)	Other Comprehensive Income (Loss)	—		—		—		17		—		17		—		17		Other Comprehensive Income (Loss)	0		0		0		25		0		25		0		25
Share Based Compensation Expense ⁽²⁾	Share Based Compensation Expense ⁽²⁾	—		15		—		—		—		15		—		15		Share Based Compensation Expense (2)	0		22		0		0		0		22		0		22

Stock Option Exercises																		Stock Option Exercises	0		38		0		0		0		38		0		38

Other ⁽³⁾	Other ⁽³⁾	—		(11)		—		—		—		(11)		(1)		(12)		Other (3)	0		(15)		0		0		0		(15)		(1)		(16)
Share Repurchase	Share Repurchase	—		—		—		—		(30)		(30)		—		(30)		Share Repurchase	0		0		0		0		(40)		(40)		0		(40)

Balance at March 31, 2020		$	2	$	2,109	$	8,133	$	(197)	$	(3,930)	$	6,117	$	75	$	6,192
Distributions to noncontrolling interest																		Distributions to noncontrolling interest	0		0		0		0		0		0		(1)		(1)
Balance at March 31, 2021																		Balance at March 31, 2021	$	2	$	2,219	$	8,260	$	(248)	$	(4,000)	$	6,233	$	86	$	6,319


(Dollars in millions)	Cumulative Translation Adjustment		Benefit Plans Unrecognized Prior Service Credits		Unrealized Gains (Losses) on Derivative Instruments		Unrealized Losses on Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2018	$	(309)	$	106	$	(41)	$	(1)	$	(245)
Period change ⁽¹⁾	45		—		(14)		—		31
Balance at December 31, 2019	(264)		106		(55)		(1)		(214)
Period change	19		(7)		5		—		17
Balance at March 31, 2020	$	(245)	$	99	$	(50)	$	(1)	$	(197)


		First Quarter							First Quarter
(In millions, except per share amounts)	(In millions, except per share amounts)	2020		2019		(In millions, except per share amounts)	2021		2020
Numerator	Numerator					Numerator
Earnings attributable to Eastman, net of tax	Earnings attributable to Eastman, net of tax	$	258	$	209	Earnings attributable to Eastman, net of tax	$	274	$	258

Denominator	Denominator					Denominator
Weighted average shares used for basic EPS	Weighted average shares used for basic EPS	136.0		139.0		Weighted average shares used for basic EPS	136.1		136.0
Dilutive effect of stock options and other awards	Dilutive effect of stock options and other awards	0.5		1.1		Dilutive effect of stock options and other awards	1.5		0.5
Weighted average shares used for diluted EPS	Weighted average shares used for diluted EPS	136.5		140.1		Weighted average shares used for diluted EPS	137.6		136.5

(Calculated using whole dollars and shares)	(Calculated using whole dollars and shares)					(Calculated using whole dollars and shares)
EPS	EPS					EPS
Basic	Basic	$	1.90	$	1.50	Basic	$	2.01	$	1.90
Diluted	Diluted	$	1.89	$	1.49	Diluted	$	1.99	$	1.89


(Dollars in millions)	First Quarter
Fixed Asset Impairments	2021		2020
Site optimizations

AM - Performance films (1)	$	0	$	4
AFP - Animal nutrition (2)	0		3

	0		7
Gain on Sale of Previously Impaired Assets
Site optimizations
AFP - Animal nutrition (2)	(1)		0
	(1)		0
Intangible Asset Impairments

AFP - Customer relationships (3)	0		2
	0		2
Severance Charges

CI & AFP - Singapore (4)	0		1
Site optimizations
AM - Advanced interlayers (5)	1		0

AM - Performance films (1)	0		3
AFP - Animal nutrition (2)	0		1
	1		5
Other Restructuring Costs


CI & AFP - Singapore (4)	5		0
Site optimizations

AFP - Tire additives (6)	2		0



	7		0

Total	$	7	$	14


(Dollars in millions)	(Dollars in millions)	Balance at January 1, 2020		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at March 31, 2020		(Dollars in millions)	Balance at January 1, 2021		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at March 31, 2021
Non-cash charges	Non-cash charges	$	—	$	9	$	(9)	$	—	$	—	Non-cash charges	$	0	$	0	$	0	$	0	$	0
Severance costs	Severance costs	17		5		—		(5)		17		Severance costs	65		1		0		(23)		43
Other restructuring costs	Other restructuring costs	11		—		—		(1)		10		Other restructuring costs	14		6		0		(6)		14
Total	Total	$	28	$	14	$	(9)	$	(6)	$	27	Total	$	79	$	7	$	0	$	(29)	$	57


(Dollars in millions)	(Dollars in millions)	Balance at January 1, 2019		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at December 31, 2019		(Dollars in millions)	Balance at January 1, 2020		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at December 31, 2020
Non-cash charges	Non-cash charges	$	—	$	72	$	(72)	$	—	$	—	Non-cash charges	$	0	$	145	$	(145)	$	0	$	0
Severance costs	Severance costs	6		45		—		(34)		17		Severance costs	17		65		1		(18)		65
Other restructuring costs	Other restructuring costs	8		9		1		(7)		11		Other restructuring costs	11		17		0		(14)		14
Total	Total	$	14	$	126	$	(71)	$	(41)	$	28	Total	$	28	$	227	$	(144)	$	(32)	$	79


		First Quarter				First Quarter
Assumptions	Assumptions	2020	2019	Assumptions	2021	2020
Expected volatility rate	Expected volatility rate	21.56%	19.61%	Expected volatility rate	28.99%	21.56%
Expected dividend yield	Expected dividend yield	3.30%	2.41%	Expected dividend yield	3.58%	3.30%
Average risk-free interest rate	Average risk-free interest rate	0.94%	2.56%	Average risk-free interest rate	0.95%	0.94%
Expected term years	Expected term years	5.9	5.7	Expected term years	6.0	5.9


Non-GAAP Financial Measures			30

Overview			33

Results of Operations			34

Summary by Operating Segment			38

Sales by Customer Location			41

Liquidity and Other Financial Information			41

Critical Accounting Estimates			44

Recently Issued Accounting Standards			4544

Outlook			4544

Risk Factors			45


		First Quarter															First Quarter
						Change											Change
(Dollars in millions)	(Dollars in millions)	2020		2019		$		%		(Dollars in millions)	2021		2020		$		%
Sales	Sales	$	2,241	$	2,380	$	(139)	(6)	%	Sales	$	2,409	$	2,241	$	168	7	%

Volume / product mix effect	Volume / product mix effect					13		1	%	Volume / product mix effect					45		2	%
Price effect	Price effect					(135)		(6)	%	Price effect					78		3	%
Exchange rate effect	Exchange rate effect					(17)		(1)	%	Exchange rate effect					45		2	%


	First Three Months ⁽¹⁾
	2020		2019
Effective tax rate	18	%	21	%
Discrete tax items ⁽²⁾	(1)	%	—	%
Tax impact of non-core and unusual items ⁽³⁾	1	%	(2)	%

Forecasted full year impact of expected tax events	(2)	%	(2)	%

Forecasted full year effective tax rate	16	%	17	%


	First Three Months (1)
	2021		2020
Effective tax rate	18	%	18	%
Discrete tax items (2)	2	%	(1)	%
Tax impact of current year non-core items (3)	1	%	1	%
Changes in tax contingencies and valuation allowances	(1)	%	—	%
Forecasted full year impact of expected tax events	(4)	%	(2)	%

Forecasted full year adjusted effective tax rate	16	%	16	%


		Sales Revenue															Sales Revenue
		First Quarter															First Quarter
						Change											Change
(Dollars in millions)	(Dollars in millions)	2020		2019		$		%		(Dollars in millions)	2021		2020		$		%
United States and Canada	United States and Canada	$	980	$	1,000	$	(20)	(2)	%	United States and Canada	$	1,004	$	980	$	24	2	%
Asia Pacific	Asia Pacific	495		553		(58)		(10)	%	Asia Pacific	608		495		113		23	%
Europe, Middle East, and Africa	Europe, Middle East, and Africa	631		689		(58)		(8)	%	Europe, Middle East, and Africa	656		631		25		4	%
Latin America	Latin America	135		138		(3)		(2)	%	Latin America	141		135		6		4	%
Total Eastman Chemical Company	Total Eastman Chemical Company	$	2,241	$	2,380	$	(139)	(6)	%	Total Eastman Chemical Company	$	2,409	$	2,241	$	168	7	%


Period	Total Number of Shares Purchased	Average Price Paid Per Share ⁽¹⁾		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Approximate Dollar Value that May Yet Be Purchased Under the Plan or Program
January 1 - 31, 2020	—	$	—	—	$	1.427	billion
February 1 - 29, 2020	—	$	—	—	$	1.427	billion
March 1 - 31, 2020	510,301	$	58.79	510,301	$	1.397	billion
Total	510,301	$	58.79	510,301