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Eastman announces fourth-quarter, year-end 2003 financial results.

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M2 PRESSWIRE-30 January 2004-EASTMAN CHEMICAL: Eastman announces fourth-quarter, year-end 2003 financial results(C)1994-2004 M2 COMMUNICATIONS LTD

RDATE:01292004

KINGSPORT, Tenn. - Eastman Chemical Company (NYSE:EMN) today announced earnings of $0.13 per diluted share for fourth quarter 2003 versus a loss of $0.16 per diluted share for fourth quarter 2002.

Included in the results for fourth quarter 2003 is a gain of $13 million ($8 million net of tax) from the previously announced sale of the colorant product lines and related assets in the company's coatings, adhesives, specialty polymers and inks (CASPI) segment. Also included in fourth-quarter 2003 results are asset impairments and restructuring charges of $9 million ($8 million net of tax).

Fourth-quarter 2002 results included asset impairments and restructuring charges of $6 million ($4 million net of tax).

Excluding these items for both periods, fourth-quarter 2003 earnings per diluted share were $0.13, while the fourth-quarter 2002 loss per diluted share was $0.12. For reconciliation to reported earnings (loss) per diluted share, see Table 6 in the accompanying fourth-quarter and full-year 2003 financial tables.

"While encouraged by the year-over-year improvement in our bottom line results, we remain focused on executing the plans we have in place to further improve our profitability in 2004," said Brian Ferguson, chairman and CEO. "We expect to benefit both from the actions we are taking internally and from an improving economic environment." _________________________________________________________

(In millions, except per share amounts) 4Q2003 4Q2002 FY2003 FY2002 Revenue $1,434 $1,315 $5,800 $5,320 Earnings (Loss) per diluted share $0.13 $(0.16) $(3.50) $0.79 Earnings (Loss) per diluted share

excluding certain items*

$0.13 $(0.12) $1.08 $1.05 Net cash provided by operating

activities

$198 $260 $244 $801 _________________________________________________________

*Certain items are asset impairments and restructuring charges, goodwill impairments, other operating income from the sale of certain assets and the cumulative effect of changes in accounting principle. For reconciliation to reported earnings (loss) per diluted share, see Table 6 in the accompanying fourth-quarter and full-year 2003 financial tables.

Operating earnings for fourth quarter 2003 were $39 million compared with an operating loss of $11 million for fourth quarter 2002. Fourth-quarter 2003 results included asset impairments and restructuring charges and a gain from the sale of the colorant product lines and related assets, while fourth-quarter 2002 results included asset impairments and restructuring charges. Operating results increased year-over-year due primarily to higher selling prices, the continuing impact of the company's 2003 cost reduction measures and the favorable effect of foreign currency exchange rates, particularly for the euro, that were partially offset by higher raw material and energy costs.

Sales revenue for fourth quarter 2003 was $1.43 billion, an increase of 9 percent compared with fourth quarter 2002. The increase was primarily the result of higher selling prices, favorable foreign currency exchange rates and increased sales volume.

Division and Segment Results 4Q 2003 versus 4Q 2002

Eastman Division's fourth-quarter 2003 external sales revenue increased 5 percent compared with fourth quarter 2002, primarily due to favorable foreign currency exchange rates and slightly higher selling prices. The division's fourth-quarter 2003 operating earnings were $16 million compared with an operating loss of $8 million in fourth quarter 2002. Fourth-...

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