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Eastman announces fourth-quarter, year-end 2002 financial results.

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M2 PRESSWIRE-31 January 2003-EASTMAN CHEMICAL: Eastman announces fourth-quarter, year-end 2002 financial results(C)1994-2003 M2 COMMUNICATIONS LTD

RDATE:01302003

KINGSPORT, Tenn. -- Eastman Chemical Company (NYSE:EMN) today announced a loss of $0.16 per diluted share for fourth quarter 2002 versus a loss of $1.20 per diluted share for fourth quarter 2001. Excluding asset impairments and restructuring charges, other nonrecurring items and the impacts of adopting SFAS No. 142 (see Adoption of SFAS No. 142 section below), the fourth-quarter 2002 loss per share was $0.12 compared with a loss per share of $0.10 in fourth quarter 2001. Table 5 of the accompanying financial tables shows the impact of asset impairments and restructuring charges, other nonrecurring items and adopting SFAS No. 142 on earnings (loss) per diluted share for fourth quarter 2002 and fourth quarter 2001.

"Fourth quarter proved to be even more difficult than we had anticipated as pricing pressures and weaker than expected sales volume were the primary contributors to our disappointing results," said Brian Ferguson, chairman and CEO.

Eastman had a fourth-quarter 2002 operating loss of $11 million compared with an operating loss of $86 million for the same period in 2001. Fourth-quarter 2002 results included the impact of the previously announced operational disruption at the company's plant in Columbia, S.C., which negatively impacted operating results by approximately $11 million. In addition, fourth-quarter 2002 operating results included asset impairments and restructuring charges totaling $6 million as listed in Table 4 of the accompanying financial tables.

Fourth-quarter 2002 operating results were also negatively impacted by lower selling prices and by approximately $17 million of previously announced asset charges relating primarily to equipment dismantlements and other write-offs, approximately $7 million of additional costs related to post-employment benefits, and slightly higher operating costs and selling and general administrative expenses.

Fourth-quarter 2002 net results were favorably impacted by approximately $15 million as a result of the resolution of certain income tax contingencies. Fourth-quarter 2001 operating results included asset impairments and restructuring charges and other nonrecurring charges totaling approximately $111 million as listed in Table 4 and the effect of amortization of goodwill and indefinite-lived intangible assets totaling approximately $5 million.

Fourth-quarter 2002 revenue was $1.32 billion, an increase of 4 percent compared with fourth quarter 2001. The increase is primarily the result of improved sales volume, particularly for the polymers, the specialty plastics, and the performance chemicals and intermediates segments, that was partially offset by lower selling prices in most of the company's segments.

(In millions, except per share amounts)

4Q2002

4Q2001 FY2002 FY2001 Revenue

$1,315

$1,271 $5,320 $5,390 Earnings (Loss) per Share

$(0.16)

$(1.20) $0.79 $(2.28)...

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