Growing With Confidence

Presenter’s Name

Presenter’s Title

Name of Conference

Date

Rich Lorraine

Senior Vice President & CFO

Bank of America BASics/Industrials Conference

May 7, 2008

2

Forward-Looking Statements

• During this presentation, we make certain forward-looking statements concerning plans and expectations for Eastman Chemical Company. We caution you that actual events or results may differ materially from our plans and expectations. Please see our Form 10-Q for first quarter 2007 and our 10-K for 2006 filed with the Securities and Exchange Commission for risks and uncertainties which could cause actual results to differ materially from current expectations.

During this presentation, we make certain forward-looking statements concerning plans and expectations for Eastman Chemical Company. We caution you that actual events or results may differ materially from our plans and expectations. Please see our Form 10-Q for first quarter 2008 filed with the Securities and Exchange Commission for risks and uncertainties which could cause actual results to differ materially from current expectations.

Agenda

• We’re a More Profitable Company

• Positioned to Remain Strong

Through the Cycle

• Doubling EPS by 2012

• Summary

3

More Than Doubled

Operating Margins & Earnings ’03–’07

Operating Margins Operating Earnings

In M

illi

on

s

4Note: Excludes contract ethylene sales resulting from the divestiture of the polyethylene business, contract polymer intermediate sales resulting from divestiture of PET business, asset impairments and restructuring charges, accelerated depreciation costs and other operating (income) charges, discontinued

operations; for reconciliation to GAAP operating earnings and margins, see slide 31.

Performance Chemicals & Intermediates

Significantly Improved Profitability

• Long-term supply arrangements

with key customers

• Targeted technology licensing in acetyls

• Industry restructuring and cyclical

upturn in end markets

• Continues to benefit from coal as a raw

material

• 2006 – divested Arkansas manufacturing

facility

Op

era

tin

g E

arn

ing

s (

$M

)O

pe

rati

ng

Ma

rgin

(%

)

Actions Resulting in 5% - 10% Operating Margin

5Note: Excludes contract ethylene sales resulting from the divestiture of the polyethylene business, asset impairments and restructuring charges,

accelerated depreciation costs and other operating (income) charges; for reconciliation to GAAP operating earnings and margins, see slide 31

Coatings, Adhesives, Specialty

Polymers & Inks –

Focused on Profitability

Actions Resulting in Consistent 15% - 20% Operating Margins

Op

era

tin

g

Marg

ins (

%)

• 2004 – Divested ~$700M in sales

revenue of underperforming

commodity product lines and

restructured assets

• Re-focused on strengthening

uniquely positioned specialty

coatings products

• Leading innovator and second

largest global supplier of

adhesives productsO

pera

tin

g

Earn

ing

s ($M

)

Continuing Product Lines

With Divested Product Lines

6Note: Excludes asset impairments and restructuring charges and other operating (income) charges; for reconciliation to GAAP operating

earnings and margins, see slide 32.

1Q08

Fibers – Positioned for

Strong Profitability

• Increase in demand for

acetate tow – particularly in

Asia and Eastern Europe

• 2004 – Competitor exited

acetate yarn market

• Continues to benefit from

coal as a raw material

$128$155

$216$228 $238

Op

era

tin

g E

arn

ing

s (

$M

)O

pe

rati

ng

Ma

rgin

(%

)Delivering Consistent 20% - 25% Operating Margins

7Note: Excludes asset impairments and restructuring charges; for reconciliation to GAAP operating earnings and margins, see slide 32.

Best 3 Years of Earnings in History

• Fibers: FY 2007 operating earnings best in history, surpassing 2006

• PCI: FY 2007 operating earnings best in a decade

• CASPI: 2006 operating earnings best in history, 2007 second best

8Note: Excludes asset impairments and restructuring charges, accelerated depreciation costs and other operating (income) charges; for reconciliation to GAAP operating earnings and margins, see slide 33. 2007 earnings per share are for continuing operations.

Strongest Financial Position in

Eastman’s History

$0

$500

$1,000

$1,500

$2,000

$2,500

2003 2004 2005 2006 2007 1Q08

Stockholder's Equity

Cash from Operating Activities

$0

$200

$400

$600

$800

$1,000

2003 2004 2005 2006 2007

66%59%

41%

24% 26%31%

0%

20%

40%

60%

80%

2003 2004 2005 2006 2007 1Q08

Net Debt as a Percent of Total Capital

Well Positioned to Weather Storms and Fund Profitable Growth Initiatives

(In

Millio

ns)

(In

Millio

ns)

9Note: Net debt is defined as total debt less cash and cash equivalents

1Q2008

1Q2008

Agenda

• We’re a More Profitable Company

• Positioned to Remain Strong

Through the Cycle

• Doubling EPS by 2012

• Summary

10

EPS Projected to Improve Every Year

Between 2008 and 2012Doubling EPS in 5 Years

$5

2008 projected

EPS

$3

Growth Initiatives in

Existing Businesses

$2

Industrial Gasification

$10 EPS by 2012

Supported by Solid Financial Position and Share Repurchase Program11

EPS Projected to Improve Every Year

Between 2008 and 20122009 To Increase 10-15% Over 2008

$5

2008 projected

EPS

$3Growth

Initiatives in Existing

Businesses

$2

Industrial Gasification

$10 EPS by 2012

• Diverse geographic and end markets

• >$125M operating earnings improvement in PET

• Divestitures lead to reduced cyclicality and improved profitability

• Building on the core – Specialty Plastics and Fibers

• Improvements more than offset the risk of cyclicality in

PCI and CASPI

2008

to

2010

12

60%

Revenue

50%

Operating

Earnings

20%

Revenue

25%

Operating

Earnings

15%

Revenue

20%

Operating

Earnings

5% Revenue

5%

Operating

Earnings

Geographic Diversity Makes

Eastman Stronger~50% of ‘07 Operating Earnings Outside U.S.

13Note: Sales revenue for continuing operations excludes contract ethylene sales resulting from the divestiture of the polyethylene business, and PET sales from

Argentina and Mexico manufacturing facilities; for reconciliation to GAAP sales revenue, see slide 34. Operating earnings for continuing operations exclude asset

impairments and restructuring charges and accelerated depreciation costs.

2007 Sales Revenue And Operating Earnings

~70% of Revenue Less Sensitive to GDP Variability

~30% of Revenue More

Sensitive to GDP Variability

6% Durable

Goods

14% Building &

Construction

23%

Packaging

15%

Tobacco8%

Consumables

8%

Graphic

Imaging

6% Healthcare

3%

Agriculture

2%

Electronics

4%

Distributed

Resources

2007 Sales Revenue*

11%

Transportation

*2007 Sales revenue from continuing operations excludes contract ethylene sales and PET sales from Mexico and Argentina manufacturing facilities

14

End-Market Diversity Makes

Eastman Stronger

Divestitures Lead to Reduced

Cyclicality and Improved Profitability

2003 2007

Strategic Actions Result in Less

CyclicalityN.A.

PET

Divested

% o

f S

ale

s R

eve

nu

e

fro

m c

yc

lic

al

bu

sin

esse

s 2

2004 – Divested underperforming product lines in CASPI ~$700M sales revenue

2006 – Divested PE, Epolenes, Arkansas manufacturing facility ~$800M sales revenue

2007 – Divested Spain, Argentina, Mexico PET facilities

1Q08 – On track to complete divestiture of Rotterdam and UK PET & PTA facilities

Combined ~$1B sales

revenue

~$2.5 Billion in Sales Revenue with Low Single Digit Operating Margins Divested 2003 – 2008

2007

Sales

Revenue

Sales

Revenue

2003 -

20071

2 Includes olefin derivative product lines, PET product lines, and divested CASPI businesses

60%

40%

151 Divested sales revenue includes results from discontinued operations

Reducing Olefins ExposureImproves Product Mix, Limits Cyclicality

Divested Polyethylene and Epolene Polymer Businesses and

Shutting Down Older Crackers

Longview Derivatives

Older, Smaller Crackers Polyethylene and Epolene

Polymer Businesses

Ethylene

Propylene

Newer Cracker

Olefins

PurchasedPropylene

16

• Divested ~$1 billion in sales revenue (over 50% of PET capacity)

– All 5 PET sites outside the U.S.

• Divested in 2007: Spain, Argentina and Mexico sites

• Divested in 1Q08: Rotterdam and UK sites

Performance Polymers

Getting Better by Getting Smaller

2006 Corporate Sales Revenue 2008 Corporate Sales Revenue

Performance Polymers = 17% of

corporate sales revenue

Performance Polymers = 35% of

corporate sales revenue

17Note: 2006 corporate sales revenue includes discontinued operations; 2008 corporate sales revenue projected

Significantly Improving PET Profitability>$125M Operating Earnings Improvement Projected ‘07-’09

• IntegRex – Best PET technology in the

industry

New 350KMT facility

Conversion costs <½ of conventional

facility

Debottlenecking facility by 50% begins

second half 2008

• Rationalization of higher cost assets

100 KMT PET shutdown in ‘07

300 KMT PET shutdown in 1Q08

DMT assets shutdown in 1Q08

• Remove ~$30M of annual costs at

South Carolina site by mid-’08 2006 2007 2008

IntegRex-Based PET Assets

Conventional PET Assets

40%

65%

675KMT

925 KMT800 KMT

525 KMT New IntegRex Capacity

400 KMT Rationalized

125 KMT Net Capacity Increase

Aggressively Pursuing Licensing Strategy for IntegRex PET and PTA

18

Specialty Plastics and Fibers

Building on the Core

Specialty Plastics: Projected ~$100M in operating earnings in '09

• Core growth

– 6-8% volume growth

– Converting PET assets to copolyesters

• Cellulose esters in LCDs

– Doubling ‘07 revenue to $100M in ‘09 and it gets better from there

– Proprietary technology and manufacturing position

Fibers:

• 9 KMT acetate tow expansion in U.K.

– ~5% addition to Eastman's capacity

– Will be completed by year-end 2008

19

Agenda

• We’re a More Profitable Company

• Positioned to Remain Strong

Through the Cycle

• Doubling EPS by 2012

• Summary

20

EPS Projected to Improve Every Year

Between 2008 and 2012Growth Initiatives Deliver Significant Value

$5

2008 projected

EPS

$3Growth

Initiatives in Existing

Businesses

$2

Industrial Gasification

$10 EPS by 2012

• Eastman Tritan™ copolyester

• Acetate tow Asia manufacturing option

• Industrial gasification

• More growth initiatives in the pipeline

2011

to

2012

21

Growing the BaseProfitable Growth Initiatives

Specialty Plastics:

• Eastman Tritan™ copolyester

– Launched in November ‘07

– High temperature and chemical resistant, durable

– 1.5B lbs addressable market opportunity

Fibers:

• Asia option for acetate tow growth

– ~25-30 KMT facility

– Details to be announced in ‘08

Other:

• There are more growth initiatives in

the pipeline22

Exploiting the SpreadKey to Attractive Industrial Gasification Projects

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$0

$2

$4

$6

$8

$10

$12

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Coal/Petcoke Prices vs. Comparable Raw Materials

Natural

Gas, Coal

and Pet

Coke

$ / MMBTU

Crude

$ / bbl

Note: All prices are in constant 2007 dollars

Source: Eastman, Global Energy Decisions

Note: Data through March 31, 2008

Crude (West Texas Intermediate) Natural Gas (Houston Ship Channel)

Coal (Illinois Basin) Petroleum Coke

The spread

is large and

expected to

increase …

23

Eastman’s Strategy for Growth

Through Industrial Gasification

Coal

Petroleum Coke

Gasification

Removal of: Sulfur,

Mercury, Arsenic &

Other Components

Carbon Dioxide

Ultra-Clean

Syngas

Methanol

Enhanced Oil Recovery (EOR)

or other sequestration options

EMN Strategic Chemicals

Hydrogen

Baseload

Hydrogen

Ammonia

24

Two Announced Industrial

Gasification ProjectsWe’ve Made Progress, More to Come

Milestones

Agreement with preferred equity partners

Land and all key technology licenses secured

Exercised option to buy Terra Industries methanol and ammonia assets and scheduled to close on the sale by year end 2008

Front-end engineering design (FEED) to be completed by mid-2008

Complete contracts for inputs and outputs of projects by mid-2008

Obtain non-recourse project financing by end of 2008

Construction to begin early 2009

Facilities to be online by 2011 25

Making the Future Better Than the PastStrategic Actions and Growth Initiatives Are

Improving Profitability

Ea

rnin

gs

Pe

r S

ha

re

$10

$5

Actual Projected$0

26Note: Excludes asset impairments and restructuring charges, accelerated depreciation costs and other operating (income) charges; for reconciliation to GAAP earnings per share, see slide 33. 2007 earnings per share are for continuing operations.

Doubling EPS by 2012Aggressive and Achievable Goals

$5

2008 projected

EPS

$3

Growth Initiatives in Existing

Businesses

$2

Industrial Gasification

$10 EPS by 2012

27

Summary

• We have strengthened our portfolio

• We are positioned for

growth…through the cycle

• We will double EPS by 2012

28

Growing With Confidence

Presenter’s Name

Presenter’s Title

Name of Conference

Date

Rich Lorraine

Senior Vice President & CFO

Bank of America BASics/Industrials Conference

May 7, 2008

Questions?

Reconciliation of Non-GAAP Financial Measures to

GAAP Measures

Eastman Chemical and PCI Segment

Revenue

Contract

Ethylene &

Polymer

Intermediate

Sales

Revenue

Excluding

Contract

Sales

Reported

Operating

Earnings

Asset impairments

and restructuring

charges, accelerated

depreciation, and

other operating

(income) charges

Operating

Earnings

Excluding

Items

Operating Margin

Excluding Items

and Excluding

Contract Sales

YTD 03/08 $1,727 $148 $1,579 $168 $19 $187 12%

2007 $6,830 $337 $6,493 $504 $161 $665 10%

2006 $6,779 $0 $6,779 $654 $43 $697 10%

2005 $6,460 $0 $6,460 $740 $31 $771 12%

2004 $6,019 $0 $6,019 $146 $199 $345 6%

2003 $5,377 $0 $5,377 ($275) $490 $215 4%

Note: Excludes results from discontinued operations from European PET facilities

Eastman Chemical Company

Revenue

Contract

Ethylene

Sales

Revenue

Excluding

Contract

Ethylene Sales

Reported

Operating

Earnings

Asset impairments and

restructuring charges,

accelerated

depreciation, and other

operating (income)

charges

Operating

Earnings

Excluding

Items

Operating Margin

Excluding Items

and Excluding

Contract Ethylene

sales

YTD 03/08 $556 $92 $464 $44 $17 $61 13%

2007 $2,095 $314 $1,781 $220 $18 $238 13%

2006 $1,659 $0 $1,659 $132 $29 $161 10%

2005 $1,560 $0 $1,560 $143 $11 $154 10%

2004 $1,304 $0 $1,304 $4 $38 $42 3%

2003 $1,062 $0 $1,062 -$44 $57 $13 1%

Performance Chemicals and Intermediates

Reconciliation of Non-GAAP Financial Measures to

GAAP Measures

CASPI and Fibers Segments

Revenue

Operating

Earnings

Asset

impairments

and

restructuring

charges and

other operating

(income)

charges

Operating

Earnings

Excluding

Items

Operating

Margin

Excluding

Items Revenue

Operating

Earnings

Asset

impairments

and

restructuring

charges and

other operating

(income)

charges Revenue

Operating

Earnings

Asset

impairments

and

restructuring

charges and

other operating

(income)

charges

Operating

Earnings

Excluding

Items

Operating

Margin

Excluding

Items

YTD 03/08 $389 $59 $0 $59 15% $389 $59 $0 $59 15%

2007 $1,451 $235 ($1) $234 16% $1,451 $235 ($1) $234 16%

2006 $1,421 $229 $13 $242 17% $1,421 $229 $13 $242 17%

2005 $1,299 $228 $0 $228 18% $0 $0 $2 $1,299 $228 $2 $230 18%

2004 $1,113 $152 $9 $161 14% $441 ($85) $72 $1,554 $67 $81 $148 10%

2003 $964 $136 $26 $162 17% $719 ($538) $423 $1,683 ($402) $449 $47 3%

Coatings, Adhesives, Inks and Specialty Polymers & Inks

Continuing product lines Divested product lines Total Segment

Revenue

Reported

Operating

Earnings

Asset impairments and

restructuring charges,

accelerated depreciation, and

other operating (income)

charges

Operating

Earnings

Excluding

Items

Operating Margin

Excluding Items

YTD 03/08 $254 $68 $0 $68 27%

2007 $999 $238 $0 $238 24%

2006 $910 $226 $2 $228 25%

2005 $869 $216 $0 $216 25%

2004 $731 $155 $0 $155 21%

2003 $635 $127 $1 $128 20%

Fibers

Reconciliation of Non-GAAP Financial Measures to

GAAP Measures

Earnings Per Share

*2007 earnings per share from continuing operations

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

Earnings (Loss) per Diluted Share 4.04$ 6.78$ 4.79$ 3.63$ 3.13$ 0.61$ 3.94$ (2.28)$ 0.79$ (3.50)$ 2.18$ 6.81$ 4.91$ 3.84$

Asset impairment and restructuring charges -$ -$ -$ 0.52$ 0.68$ 0.93$ 0.25$ 3.47$ 0.03$ 4.88$ 0.78$ 0.13$ 0.84$ 0.85$

Other operating (income) expense -$ -$ -$ -$ -$ -$ -$ -$ -$ (0.26)$ (0.14)$ (0.01)$ (0.82)$ -$

Accelerated depreciation included in cost of goods sold -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 0.07$ 0.37$

Early extinguishment of debt costs -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 0.35$ -$ -$

Gain on sale of Genencor -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (1.35)$ -$ -$

Cumulative effect of change in accounting principle -$ -$ -$ -$ -$ -$ -$ -$ 0.23$ (0.04)$ -$ -$ -$ -$

Earnings per share excluding certain items 4.04$ 6.78$ 4.79$ 4.15$ 3.81$ 1.54$ 4.19$ 1.19$ 1.05$ 1.08$ 2.82$ 5.93$ 5.00$ 5.06$

Earnings Per Share Reconciliation

33

Reconciliation of Non-GAAP Financial

Measures to GAAP Measures

Sales Revenue by Region

Sales

Revenue

as

Reported

Contract

Ethylene

Sales

PET Sales from

Argentina and

Mexico

manufacturing

facilities

Sales revenue

excluding

listed Items

Sales revenue

excluding

listed Items

as a percent

of total

United States and Canada 4,043$ 314$ -$ 3,729$ 61%

Europe, Middle East, and Africa 932$ -$ -$ 932$ 15%

Asia Pacific 1,103$ -$ -$ 1,103$ 18%

Latin America 752$ -$ 413$ 339$ 6%

6,830$ 314$ 413$ 6,103$

2007 Sales Revenue by Region

Sales from continuing operations