Eastman Reviews Strategies for Continued Growth at 2006 Investor Day.

Company Targets Operating Margin of Approximately 10% for PET Business by Second Half of 2008

KINGSPORT, Tenn. -- Eastman Chemical Company (NYSE: EMN) Chairman and CEO Brian Ferguson and other senior executives today reviewed recent accomplishments and strategies for continued growth at Eastman's 2006 Investor Day meeting in New York City.

In discussing the company's track record of value creation, Ferguson noted that through October 2006, Eastman has delivered an 89 percent total return to stockholders since 2002, outperforming the S&P 500 by more than 50 percent.

"Eastman is well-positioned for sustained success in the near-, mid-, and long-term," said Ferguson, who cited the following value drivers for the company:

* Through innovation and strategic actions, Eastman expects to substantially improve the profitability of its PET polymers business and to achieve operating margins of approximately 10 percent by the second half of 2008.

* By leveraging its expertise in coal gasification, Eastman expects to more than double the volume of products derived from coal as a raw material to 50 percent, thereby providing the company with a significant cost advantage.

* Eastman expects continued strong and steady financial performance from its solid base of businesses in the fibers; coatings, adhesives, specialty polymers and inks (CASPI); and specialty plastics segments.

Innovation and Strategic Actions to Improve PET Profitability

Dr. Gregory O. Nelson, executive vice president and head of the polymers business group, announced the company's plan to transform its PET polymers business. In a project that would integrate Eastman's PET resins back to existing refining economics, Nelson announced that the company is in discussions with global petroleum feedstock partners to pursue a world-class facility together. Such a facility would provide Eastman with the "best PET cost position in the world," he said.

Nelson also revealed that Eastman's new 350,000 metric-ton PET facility has begun production and will be fully operational in the first quarter 2007. "Our IntegRex[TM] technology has moved from the piloting stage, through a semiworks plant and is now ramping up at our Columbia, South Carolina, site," Nelson said. "And ParaStar[TM] Next Generation PET, the new family of resins enabled by IntegRex[TM] technology, is receiving excellent reviews from North American converters and brand owners."

Nelson went on to discuss the company's intentions to further transform its PET polymers business. "We will be rationalizing capacity in North America and are pursuing aggressive strategic actions to improve the financial performance of our non-integrated PET facilities outside the United States," he said.

Creating Value through Coal Gasification

Mark Costa, senior vice president for corporate strategy and marketing, stated that gasification technology is advantageous because it is cost competitive and based on an abundant U.S. coal supply. "This technology is also environmentally friendly and commercially proven," he said.

"Coal gasification has provided substantial cost advantages to Eastman for the past 23 years," Costa said. "We now plan to use gasification to attack the largest component of our costs - raw materials. We expect to increase our product volume derived from gasification-based raw materials to 50 percent, which will enable Eastman to achieve low, stable cost positions and capitalize on the crude-to-coal spread." According to Costa, Eastman will maintain a net-buyer position in some key raw materials.

Costa described two potential projects among several that Eastman is currently pursuing to expand its gasification strategy. In both cases, methanol would be the initial chemical produced via gasification. One project would transform the company's Texas site operations by allowing it to convert methanol to olefins, which would then serve as cost-advantaged raw materials for CASPI and performance chemicals and intermediates product lines. The second project would supply methanol to Eastman for conversion into ethylene glycol. This would then become a cost-advantaged raw material to use as feedstock for the company's PET polymers and copolyester product lines. Both projects would be baseloaded with high-value products, such as electricity, hydrogen or ammonia, for third-party customers. Costa said that Eastman has several interested strategic and financial partners.

Solid Base of Businesses Provide Strong, Steady Financial Performance

In discussing the company's fibers, CASPI and specialty plastics segments, Ferguson noted the operating earnings from these three segments accounted for about 75 percent of Eastman's operating earnings through the first nine months of 2006 and about 40 percent of the overall revenue. "These three segments have had very strong performance, and we expect that to continue," said Ferguson.

Jim Rogers, president of Eastman Chemical Company and head of the chemicals and fibers business group, said, "In addition to Eastman's competitive advantage from coal-based raw materials, our fibers business is benefiting from market trends, including longer cigarette filters in China, the European Union and other countries." To meet this market growth, Eastman announced earlier this year a 9,000 metric-ton acetate tow capacity expansion at its Workington, U.K., site and is considering a growth option in the Asia Pacific region. As the world's only acetate yarn manufacturer producing acetate flake raw material, Eastman's acetate yarn business has improved from "contribution to cost of capital margins," according to Rogers.

In Eastman's CASPI segment, Rogers said the company's unique coatings offerings and broad adhesives product portfolio remain key engines for future growth opportunities.

Eastman's specialty plastics segment, which is in the company's polymers business group, has a portfolio of products that participate in high-growth niche markets, such as cosmetics, clear handle-ware containers and encapsulated image layer technology used in architectural applications. Customers have also benefited from Eastman's differentiated plastics that give designers greater flexibility in design specifications in applications such as upscale eye-wear frames and in-store displays.

Nelson said that Eastman's new family of copolyesters technology is enabling the company to expand beyond existing markets of personal care, medical and packaging into new markets of building and construction, improved products for medical goods and heat-resistant durables. These new high-performance copolyesters will be available in commercial quantities in mid-2007. To meet growing customer demand for its traditional specialty plastics products as well as for its new family of copolyesters, Eastman will increase its global copolyester manufacturing capacity by using larger-scale manufacturing assets at its South Carolina plant that will become available as its IntegRex[TM] PET polymers facility comes online.

Financial Strength Enabling Eastman's Growth

In reviewing the company's financial performance, Richard Lorraine, senior vice president and CFO, said, "Eastman's financial discipline has resulted in a substantially improved financial profile. The company has significantly improved its capital structure, has solid operating performance and has more than sufficient cash flow to fund growth initiatives."

Web cast Replay of Eastman's 2006 Investor Day

For an audio replay of today's presentations, go to www.eastman.com, Investors.

About Eastman Chemical Company

Eastman manufactures and markets chemicals, fibers and plastics worldwide. It provides key differentiated coatings, adhesives and specialty plastics products; is the world's largest producer of PET polymers for packaging; and is a major supplier of cellulose acetate fibers. Founded in 1920 and headquartered in Kingsport, Tenn., Eastman is a FORTUNE 500 company with 2005 sales of $7 billion and approximately 12,000 employees. For more information about Eastman and its products, visit www.eastman.com.

Forward Looking Statements: This news release includes forward-looking statements concerning current plans and expectations for: sales and earnings for the company and for certain segments and product lines; strategic actions and decisions; anticipated restructuring, divestiture, and consolidation activities; development, production, commercialization, and acceptance of new products, services, and technologies and discoveries; planned and expected capacity increases and utilization; and strategic investments, alliances, joint ventures, partnerships, and other ventures. Such expectations are based upon certain preliminary information, internal estimates, and management assumptions, expectations and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company's filings with the Securities and Exchange Commission, including the Form 10-Q for third quarter 2006, available on the Eastman web site at www.eastman.com, Investors, SEC Filings.