Eastman Kodak Company Strategy Review And Outlook February 8, 2007 1 Don Flick Director & VP Investor Relations 2 Certain statements in this presentation may be forward-looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to expectations for the Company’s and its segments’ revenue, earnings, earnings dilution, digital earnings, digital revenue growth, profit, margin and margin expansion, growth, price, portfolio shifts and expansion, market growth, film decline, digital transition in the entertainment imaging market, product launches, debt, cash, net cash generation, liquidity, business model, operating model, stranded costs and restructuring, including asset, SG&A and headcount reductions are forward-looking statements. Actual results may differ from those expressed or implied in forward-looking statements. In addition, any forward-looking statements represent the Company's estimates only as of the date they are made, and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its estimates change. The forward-looking statements contained in this report are subject to a number of factors and uncertainties, including the successful: • execution of the digital growth and profitability strategies, business model and cash plan; • implementation of the cost reduction programs; • transition of certain financial processes and administrative functions to a global shared services model and the outsourcing of certain functions to third parties; • implementation of, and performance under, the debt management program, including compliance with the Company's debt covenants; • development and implementation of product go-to-market and e-commerce strategies; • protection, enforcement and defense of the Company's intellectual property, including defense of our products against the intellectual property challenges of others; • implementation of intellectual property licensing and other strategies; • completion of information systems upgrades, including SAP, the Company's enterprise system software; • completion of various portfolio actions; • reduction of inventories; • integration of acquired businesses; • improvement in manufacturing productivity and techniques; • improvement in receivables performance; • improvement in supply chain efficiency; and • implementation of the strategies designed to address the decline in the Company's traditional businesses. Forward-looking statements contained in this report are subject to the following additional risk factors: • inherent unpredictability of currency fluctuations, commodity prices and raw material costs; • competitive actions, including pricing; • changes in the Company's debt credit ratings and its ability to access capital markets; • the nature and pace of technology evolution; • changes to accounting rules and tax laws, as well as other factors which could impact the Company’s reported financial position or effective tax rate; • general economic, business, geo-political, regulatory conditions; • market growth predictions; • continued effectiveness of internal controls; and • other factors and uncertainties disclosed from time to time in the Company’s filings with the Securities and Exchange Commission. Any forward-looking statements in this report should be evaluated in light of these important factors and uncertainties. 3 In this presentation Kodak references non-GAAP financial measures, such as: "Digital Revenue Growth", "Digital EFO", “Gross Profit without Restructuring”, “Pro Forma Revenue”, “Restructuring Charges” and “Actual EFO excluding Restructuring”, “Pro Forma Gross Margin”, “Pro Forma Research and Development”, “Pro Forma SG&A”, “Pro Forma Earnings from Operations excluding restructuring” as a percent of sales. Additional non-GAAP financial measures presented include “CDG and GCG Segment Digital Revenue Growth", “GCG Segment Digital EFO Growth”, “GCG Digital Gross Profit as a percent of sales”, “GCG Digital Operating Margin”, “CDG Inventory” and "Net Cash Generation (formerly Investable Cash Flow)". Kodak has prepared a reconciliation of these non-GAAP measures to the comparable GAAP measures. This additional information is attached as an appendix to the copy of this morning’s presentation material which is posted in the Investor Center of Kodak’s web site, Kodak.com. To access this material, go to Kodak.com. From Kodak’s home page click on “Corporate,” and then on “Investor Center-Investor and Shareholder Information”. The presentation materials and appendix are listed on that page under “Featured Documents.” 4 Antonio Perez Chairman & CEO 5 Agenda Introduction / Strategy Overview Antonio Perez Film Products Group Mary Jane Hellyar Graphic Communications Group Jim Langley Consumer Digital Group Phil Faraci Financial Summary Frank Sklarsky Questions & Answers 6 2006: Creates Momentum For 2007 Strong cash flow, debt reduced, excellent liquidity Digital earnings increased nearly five fold Successful intellectual property program Graphic Communications earnings improved $182 Million year over year Consumer Digital earnings improved $132 Million; reaches breakeven Health Group divestiture announced Film Products Group effectively managed: achieved margin & cash targets 7 EK Enters 2007 With Strong Worldwide Share Positions Category Share FPG Film Capture #1 Entertainment Films #1 CDG Digital Cameras Top 3 Snapshot Printing #1 Gallery Top 3 Kiosks & Media #1 Color Negative Paper #1 Inkjet Share Of Prints CMOS GCG Digital Plates #1 Unified Workflow Software #1 Transactional Production Inkjet Top 3 Color Digital Printing Systems – EP Top 3 Document Scanning – Production #1 Document Scanning – Distributed Top 3 8 2007 Goal: Complete Transformation 2 Key Achieve market success with new products Strategic • CDG: Successful launch of Consumer Inkjet Program Objectives • Ramping up momentum in CMOS volumes For 2007 • Current portfolio profit improvement funds inkjet launch • GCG: Focus moves from integration to growth and continued margin expansion • Product line extensions • Focus on new market opportunities Significant progress toward installation of Target Cost Model • Assault on SG&A • Complete traditional restructuring Positioned For Profitable Growth In 2008 9 Target Business Model 2006 Pro Forma* 2008 Target* 2009 Target* Gross 25.5% ~27% 28% – 29% Profit SG&A 17.6% 15% – 16% 14% – 15% R&D 5.3% 5% – 6% 5% – 6% EFO 2.6% ~6% 8% – 9% *Adjusted to exclude Health Group 10 SG&A Reduction Changes to corporate structure drives additional restructuring • “Stranded” cost from Health Group Divestiture • Consumer Digital shift from “Traditional” logistics model • Film Products Group movement to Indirect Sales model • Actions rescheduled to 2007 Budget Last major focus of restructuring program • 2007 Restructuring charges ~$.9 to $1 Billion • 2007 Cash required (Net of Special Termination Benefit) of ~$600 Million • Cumulative positions eliminated increases to 28,000 – 30,000 (Total through YE2006 ~23,400) Achieve 16% SG&A level on Run Rate Basis, en route to 14% - 15% target Create Highly Competitive Cost Structure For 28%-29% Gross Profit Margin Model 11 CDG Product Portfolio Consumer Inkjet • Breakthrough value creation opportunity • Carefully managed entry costs – ”asset light” strategy – Highly effective use of existing subcontractor infrastructure • Large market and margin opportunity • Breakthrough consumer value proposition • Superb document quality and durability for all applications • Value priced consumables • Photo quality • Ease of use • Breakthrough Kodacolor Technology • MEMS (Micro-Electro-Mechanical-Systems) • Pigment-based inks • Micro-porous papers • Color and Image Science 12 CDG Product Portfolio CMOS • Attractive market opportunity, including automotive, industrial • Leading sensor architecture • Significant patent position • “Asset Light” Manufacturing strategy • Build “Design Win Funnel” of new orders • Ramp revenues upward in 2007 13 GCG New Product Portfolio GCG Focus on profitable growth • Extend Commercial Printing strength into Packaging and In-Plant Markets • Extend leading position in prepress consumables • Broaden digital press portfolio • Leverage workflow strengths into new markets • Capitalize on large customer base from acquired businesses Deliver higher levels of revenue growth and expanded earnings 14 Intellectual Property Program Integral part of business model Affects all areas of Kodak Creates opportunity for: • Business partnerships • Access to new markets and new products • Access to additional intellectual property • Earnings and cash generation Strategic and royalty-bearing deals already in place with more than 20 companies Terms range typically 3 to 5 Years; staggered over time Meaningful opportunities for additional business agreements & new technology areas Current deals will generate 2007 revenue & earnings contributions in excess of $250 million Strong investments resulting in significant new patent filings in focused fields of interest 15 2007 Key Metrics Net Cash Generation Digital EFO Digital Revenue Growth EK $100 to $200 Million $200 to $300 Million 3% to 5% CDG GCG 2% to 4% 6% to 9% 16 Visible Success Measures Cost Structure Coming Down Portfolio populated with value creating opportunities Strong Share position