Eastman Kodak Company Strategy Review and Outlook

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 in each of our markets Powerful intellectual property portfolio & brand capital to draw upon

Cost Competitive Structure + New Value Creating Portfolio = Sustainable Profitable Growth

17 Film Products Group

Mary Jane Hellyar President, Film Products Group Senior Vice President, Eastman Kodak Company

18 2006 – FPG Continues to Deliver

($ in Millions) 2005 2006

Revenue $5,325 $4,156

Gross Profit 1,630 1,068

SG&A 1,001 670

R&D 89 40

EFO $540 $358

EFO% 10% 9%

Higher levels of accelerated depreciation permitted EBITDA as a percent of revenue to remain essentially flat YOY maintaining FPG’s cash efficiency

19 Key Enabler: Traditional Manufacturing and Logistics Restructuring On Track*

NBV of Total GM&L* Assets (as s umes no new inves tment except Thermal Do no r; includes impact of change in useful life)

3.5 NBV Reduction: 3 2.5 Reduced ≈ 75% by YE2007** 2 (vs. YE 2004)

Billion $ 1.5

0.5

0 YE 2004 YE 2005 EYE 2006 EYE 2007

Total GM&L* Headcount 2004-2007

25000 Headcount Reduction:

20000 Reduced ≈ 65% by YE2007**

15000 (vs. YE2004)

Headcount 10000

5000

0 *former Global Manufacturing & Logistics (GM&L) YE2004 YE2005 YE2006 EYE2007 **assumes ONEX deal closes 20 The New FPG Entertainment Imaging Film Capture Aerial & Industrial Markets

Effective 1/1/2007, the following units were transferred to CDG Paper & Output Systems Photo Services Service & Support

In 2006, transferred businesses had revenues of approximately $1.8 Billion

21 Entertainment Imaging Portfolio Remains Relatively Stable in 2007 90% of Revenues from Film • 60% of total revenues from Distribution Films, mainly print films for theaters • 30% of total revenues from Origination Films, e.g., camera negative films for feature films, commercials and TV

Remaining 10% from Digital and Other Services • Cinesite visual effects, Laser Pacific and emerging market labs/digitization operations comprise majority of digital revenue • Small Digital Cinema business in position for wider roll-outs

22 Entertainment Imaging – Industry Healthy, In Early Phases of Digital Transition

Digital Cinema – 35mm ECP Substitution Profile Eastman Color Print & D-Cinema 30.0% WW Box office rebounded in 2006: 25.0% – US box office up 5%, admissions up 3% 20.0% EI - Upper Bound Screen Digest Forecast as of 1/12/07 – Global box office up an estimated 15.0% EI Base Case 7%, admissions up 5% 10.0% Screen Digest Forecast* D-Cinema adoption still in early EI Lower Bound 5.0% stages (Approx. 3% of WW 1st run Digital Screen Penetration % Penetration Screen Digital screens at the end of 2006) 0.0% 2004 2005 2006 2007 2008 2009 Fuji and Agfa remain viable competitors

23 Entertainment Imaging – Industry Healthy, In Early Phases of Digital Transition

Digital Capture- 35mm ECN Substitution Profile

35.0% Eastman Color Negative & D-Capture 30.0% EI- Upper Bound Healthy WW movie production volumes in 25.0% 2006 EI Base Case 20.0% Film preferred for feature films, TV dramas 15.0% EI - Lower Bound w/Digital penetration in commercials,TV 10.0% sitcoms continuing per expectations 5.0% Impact from digital cine cameras on 35mm Digital Capture Penetration % Penetration Digital Capture 0.0% not yet significant, but is impacting 16mm 2004 2005 2006 2007 2008 2009

24 Entertainment Imaging Business Stable Short Term, Manage for Cash

Maximize earnings for Print Films by optimizing price/share trade-offs and reducing total cost structure (Mfg, SG&A)

Continue to extend/defend Origination Film as highest quality capture media via targeted innovations and integration of film into digital workflow

Improve Digital Services profits via growth in digital movie mastering and via exploitation of better UK market for Cinesite; continue prudent investment levels into D-Cinema

Another solid year of cash generation expected from EI, with no significant degradation anticipated for several years

25 2007 – Targeted Business Model for the New FPG*

2007

Gross Profit 32% - 35%

R&D 1%

SG&A 16% - 18%

EFO 13% - 16%

Cost reductions, targeted price actions and a portfolio shift towards stable EI business are keys to driving this model

*Excludes Paper & Output Systems, Photo Services, Service & Support

26 Driving Growth in Graphic Communications

Jim Langley President, Graphic Communications Group Senior Vice President, Eastman Kodak Company

27 Agenda

Strategic Overview – Rationale for Growth How We Are Doing Expectations for ’07 and ‘08

28 Kodak’s Graphic Communications Group – Snapshot

Strategic pillar in Kodak's future

Well positioned to grow in a huge and vital market

Now serving 100,000+ customers worldwide

29 Positive Customer Response to Mission & Vision

Our Mission To profitably grow both our customers’ and Kodak’s business by providing leading technology, products and services utilizing our innovative people and capabilities.

Our Vision Kodak is the leading provider of integrated graphic communications solutions.

30 Total Market (WW Retail Value of Print, 2005) - $560 Billion*

Market Segments Regions

Europe, Africa & Middle East Packaging 33% Commercial 28% Print 51% North America Asia Pacific 33% 30%

Newspapers 7%

Data Center / Transaction 2% In-Plant Digital Service Bureau Latin America 4% 8% 4%

*$86 / person on earth

Retail value of print includes prepress, print production, finishing, services and substrates. 31 Sources: Kodak Business Research, Pira, Future of Global Printing to 2010 (2005), NPES Packaging 2005, Pira Future of Global Packaging, 2005 The Productivity Gap

170.0 Nondurable Manufacturing 160.0

Real Sales Per Employee 150.0 Annual Total Average 140.0 Mfg. 65.8% 4.0%

Print 30.1% 1.9% Productivity Gap

130.0 Print

120.0

110.0

100.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

SOURCE: National Association for Printing Leadership, 2005

32 Print Is a Vital Part of the Media Mix Today Digital Print Drives Response Rates in Today’s Multimedia Environment US Ad Spending $263B (2004)

Direct Mail 19.8% Broadcast TV 17.5%

Cable TV 8.2%

Newspaper 17.7% Radio 7.4%

Internet 2.6% Out of Home 2.2% Yellow Pages 5.3% All Other 13.2% Consumer Magazines 4.6% Business Pubs 1.5%

33 Source: Robert J Coen’s Universal McCann U.S. Volume Report as reported in 100 Leading Advertisers (Advertising Age, June 27, 2005). Building the Kodak GCG Business

Kodak Commercial Imaging Group

MORE PRODUCTS, SERVICES & SOLUTIONS MORE CUSTOMERS Digital Printing Digital Prepress Inkjet Inkjet EP Global Service, Plates, Proofing, CTP, Proofing (Wide-format) (Continuous) (Electrophotography) Scanning DI offset Workflow

Sept. 2003 Jan. 2004 April 2004 Jan. 2005 April 2005 June 2005 • Joint Venture • Acquisition of • Acquisition of • Realignment of • Acquisition of • Acquisition KPG Scitex Digital Heidelberg Document Kodak of Creo • Joint Venture Printing Î Digital Imaging Products & Polychrome Heidelberg/ Formation of and full Services Graphics NexPress Kodak ownership of into GCG Versamark NexPress • Encad

34 GCG Has Come Together Well

Integration ahead of plan, nearly complete

Investment in digital beginning to pay off

On track to achieve target model

35 Achieved Profitability in Our First Full Year ‘06

Revenue ($ Millions) Operating Margin ($ Millions)

3632 EFO Rate 3.9% 2990 141

1343

-30 -41 2004 2005 2006 2004 2005 2006

Traditional Digital Traditional Digital

36 Digital Revenue Growth and Operating Margin Improvement

Q3 Q4 ’06 vs. ‘05 ’06 vs. ‘05 Revenue growth +1% +6% Operating margin 6% 7%

Earnings YOY change +137% +41%

37 Delivering Integrated Solutions for Future Growth

Prepress Enterprise Digital Document Solutions Solutions Printing Imaging

Strategic Product Groups

Broadest Integrated Solutions Commercial Data Publications Packaging Printing Centers Go To Market By Segments

Customer Customer Customer Customer

38 Revenue Growth in 2007

Total GCG growth is targeted at 4% - 5% GCG digital growth is targeted at 6% - 9%

+4% - 5% 3632

Focus Digital

Digital growth 6% - 9%

Other Digital

15% - 20% Traditional decline

2006 2007

39 Well Positioned in Higher Growth Digital Markets

2005-2006 WW Performance vs. Market 60% 50% 50%

40% 31% Market 30% EK Rev.

20% 17% 15%15% 15% 12% 9% 10% 5% 3%

0% Digital Plates High Volume Prod. Inkjet Unified Document Color Digital Workflow Scanners 2006 Printing Software Distributed Market Size ($B) $2.6 $1.2 $2.5 $0.7 $0.4

Market Data Sources: Infotrends, VSM, PIV Notary, IDC, IT Strategies, InfoSource, Kodak analysis 40 Focus on Growth: Digital Plates

Market share leader Penetrating small-mid market with integrated system solutions Adding capacity and converting traditional capacity to digital

41 Focus on Growth: Electrophotographic Digital Printing

Dynamic market growth • Total NexPress page volume up 63% in Q4

YOY% Page Volume Growth 53% 41%

2005 2006 Gaining share via cross-selling given 100,000 customers Exciting announcements at On Demand in April

42 Focus on Growth: Inkjet Printing Solutions

Targeting large transaction printers • Replacing multiple B&W EP printers with inkjet • High speed color Creating the TransPromo market Launching new print quality benchmark in Q1 with Kodak Versamark VX5000e Press Kodak Versamark CS600 Controller launched – integrates inkjet engines with commercial print workflows Narrow format printheads establish new price points US&C region grew 9% in ‘06 Drupa 08 – new products and STREAM technology debut

43 Focus on Growth: Workflow Software

Market share leader Kodak Prinergy 4.0 Software introduced last fall, Unified Workflow rolls through our complete product portfolio in ‘07 Leadership position in portal products with Kodak InSite Software Richest color management portfolio Powerful pipeline between enterprises and printers to drive targeted digital print

44 Focus on Growth: Document Imaging

Market share leader in production scanning solutions Growing position in distributed scanning from 0% two years ago to mid-teens today 3 major product launches in 2006 Exciting products tee’d up for 2007 Excellent reseller channel

45 Good Growth & Improved Profitability Expected in ‘07

Revenue ($ Millions) Operating Margin ($ Millions)

+4%-5% 3632 EFO Rate 4%-5% 2990 141

1343

-30 -41 2004 2005 2006 2007 2004 2005 2006 2007

Traditional Digital Traditional Digital

46 Making Progress Toward Digital Target Model

Digital Revenue $3.0B $3.1B 6% - 9% 7% - 10% 31%-33% 30%-32% 32% Gross 31% Profit

Operating Expense 7%-9% 6%-8% 6% EFO 3% 2005 2006 2007 2008 Pro Forma Plan Target

47 Summary

Have delivered on integration plans

Driving growth

On track for digital target model by ‘08

48 Consumer Digital Imaging Group

Phil Faraci President, Consumer Digital Imaging Group, Senior Vice President, Eastman Kodak Company

49 Consumer Digital Imaging

Vision Built upon superior consumer knowledge, brand and intellectual property – and a focus on personal content – will uniquely extend from photography to redefining the digital lifestyle.

Performance Revenue Growth Double Digit Target Gross Profit Margin (GP) ~25% Model Operating Margin (EFO) >5% Low Asset Base

50 Consumer Digital Imaging

Path to Pre-’05 ’06 -’07 ’07+ Target Build Scale, Establish Digital Expand Model Invest in Technology Operating Model Portfolio

Status Scale 2006 Digital Cameras UEFO +$132 M, Digital Printing to breakeven Web Commerce (before inkjet investment)

Technology Cameras Build Operating Model… Image Science …While Creating Printing / Inkjet Future Portfolio

51 2006 in Perspective: Financial Highlights

$3.2 B Revenue $2.9 B ¾ 9% decline due to margin efforts, ‘go to market’ changes

$1 M Earnings Improvement ¾ Gross Profit Margin: 18.6% Î 23.1% 2005 2006

-$131 M

Cash Management: Cash Positive ¾ Cash contribution vs. prior year ¾ Improvement driven by EFO, inventory

52 Consumer Digital Operating Model “Asset Light” Approach

Key Initiatives: drive margin and cash prepare operation for portfolio expansion

1 2 3 4 5 INTEGRATED MARKETING BUSINESS & SUPPLY GO TO P&L NETWORK OPERATING CHAIN MARKET MODEL

SALESSALES MANUFACTUREMANUFACTURE SUPPLYSUPPLY CHAINCHAIN POST-SALEPOST-SALE TECHNOLOGYTECHNOLOGY DESIGNDESIGN && CHANNELCHANNEL && FABRICATIONFABRICATION && LOGISTICSLOGISTICS SUPPORTSUPPORT MANAGEMENTMANAGEMENT

MARKETING and OPERATIONS

53 2006 in Perspective: Operating Highlights

Example: 5 GO TO MARKET: Streamlining EAMER* Operations

Dispersed country businesses Pan-European operation • Local pricing, promotion, sales, • Integrated Marketing Centre, marketing, advertising, accounting sales, communications network systems, warehousing pricing, accounting, supply chain

Total Regional Expense (EAMER CDG+FPG SGA+ Adv)

Â 2007 EFFECT: Continued Benefit 2005 2006 To Expense Rate -32%

*Europe, Africa, Middle East, E. Europe, Russia 54 2006 in Perspective: Operating Highlights

Example: 4 SUPPLY CHAIN: Streamlining EAMER Operations $78 M

14 5,282 13,277

Â 2007 EFFECT: YE YE Continued Benefit 2005 2006 to Expense Rate

$31 M 1 central + 3 forward 578 1,874 361 361

Warehouse Sold-to Ship-to Inventory Network Accounts Locations Value

55 2006 in Perspective: Operating Highlights

Example: 45 SUPPLY CHAIN, GO TO MARKET: Inventory Management

WW Inventory Value WW Inventory Turns

Year-end Worldwide Inventory Annualized, Inventory value entering quarter, total WW CDG (YE’06 vs. YE’05 $) 18

2005 2006 9 6 - 49% 3 0 Q1 Q2 Q3 Q4 Â 2007 EFFECT: Margin, Cash

56 Consumer Digital Imaging

Operational Portfolio Efficiency Improvement

Path to Pre-’05 ’06 -’07 ’07+ Target Build Scale, Establish Digital Expand Model Invest in Technology Operating Model Portfolio

57 Consumer Digital Imaging: Portfolio Roles

Retail Digital Capture Consumer Inkjet Imaging

Unit Printing and Devices Imaging Services Systems Sensors

(film & digital printing) Digital cameras, IP, Web merchandise Desktop inkjet CMOS & Retail Kiosks. Mobile imaging, and services. printers, inks, CCD Color paper, chemistry. Imaging accessories, Consumer software. and papers sensors, Retail stores, service. Snapshot printers, Direct marketing. modules Wholesale finishing. Batteries Products

Scale, Scale, Channel Channel Portfolio Expansion into High Margin, Portfolio Portfolio High Growth Opportunities

Role Enabler Enabler

Cash, Stability, Relevance Direct New New Profitability Channel Kodak Kodak Market Market 58 Consumer Digital Imaging: Portfolio Financial Structure

Retail Digital Capture Consumer Inkjet Imaging

Unit Printing and Devices Imaging Services Systems Sensors

2006: Revenue: >$2 B* >$2 B >$100 M Start up <$100 M EFO: negative appx 2% negative negative negative

Forward: Growth: Flat Flat Strong Strong Strong

Financial Structure EFO: appx 0% appx 5% Target Model: Double Digit EFO (‘07) (‘07) *Proforma for 2007 product structure 59 Recap:

Established digital operating model; Foundation laid for portfolio expansion.

2006 operational benefits will carry into 2007.

2007: Deliver breakeven earnings performance ¾ With inclusion of color paper. ¾ Fully funding inkjet investment and launch. ¾ While returning to digital revenue growth.

60 Highlight: Image Sensors

Market Opportunity Kodak Position Operating Model Financial Expectation

61 Market: Healthy Industry Growth and Concentration

Mobile and DSC dominate revenue CMOS dominates technology

4,000 1000

800 3,000

600 2,000

400 Revenue ($M)

1,000 (M) SHIPMENTS UNIT WW 200 WW SHIPMENTS UNIT (M) WW REVENUES INDUSTRY ($M)

0 0 123 2006 2007 2008 2006 2007 2008 MOBILE DSC & DSLR CMOS CCD

ALL OTHER APPLICATIONS

62 Continuous Kodak Leadership for >30 Years

1975 World’s First 1980 Megapixel Sensor 1985 World’s First Prototype Camera Bayer Pattern Array (Kodak Patent) 1990 1995 First Consumer Camera Mars (Kodak Technology

TG1 T4 Rover In Apple QuickTake) VDD PD1 FD TG2 RG Camera T5 T3 PD2 FD TG3 T6 T2 PD3 FD 2000 TG4 RSEL T7 T1 PD4 FD

4-shared Pixel Schematic 4T-4S Shared 2005 Foundation CIS Technology 4T-Pinned Diode 39 Megapixel 2010 Foundation CIS Sensor Technology

63 Focus: Forward Technology Leadership

SensitivitySensitivity NoiseNoise FeaturesFeatures && PixelPixel ScalingScaling ImprovementImprovement ReductionReduction IntegrationIntegration Initiative

Improve Techniques in Technology to Functions, speed, response to design, image enable smaller and integration enable high-ISO, processing to pixels, higher for camera low-light quality. rival CCD. resolution. performance. Description

1600 ISO 1600 ISO Conventional Kodak Technology Example: Low-Noise, High-ISO Technology Same pixel size Same illumination Both 5 Mp

64 Focus: Expand CMOS Portfolio

Total Available Market CMOS Sensors, Mobile Segment

$1,600

$1,200

$800 KeyKey 20072007 CMOSCMOS RoadmapRoadmap MilestonesMilestones •• 1.3,1.3, 2,2, 3,3, 55 MPMP forfor Mobile,Mobile, DigitalDigital CamerasCameras

Industry Revenue ($M) ($M) Revenue Revenue Industry Industry $400 •• DeviceDevice integrationintegration ofof KodaKodakk Technology,Technology, ImageImage ScienceScience

$0 2007 2008 2009 2010

65 Imaging Sensors Operating Model “Asset Light” Approach

MARKETING and OPERATIONS

TECHNOLOGY OPERATING MARKETING INVESTMENT PARTNERS & SALES

• >370 SENSOR • FAB: • DEDICATED PATENTS OPERATION • INCREASING APPLICATIONS • TEST & ASSEMBLY PARTNERSHIPS

66 Image Sensors Target Business Model

CCD SG&A High Single R&D Digits mid- teens

CMOS EFO

Revenue Mix Objective Operating Expense Structure ~40% Blended Gross Profit Double-Digit EFO

2010 Scale Objective: Top-3 Revenue Share (CMOS)

67 Highlight: Home Inkjet

Market Opportunity, Entry Strategy Target Market, Value Proposition Business Model, Operating Model Financial Expectation

68 Opportunity:

A large-scale market: WW DESKTOP INKJET MARKET SIZE 2008: $55 B 3% CAGR

Ink Cartridges Coated Media Plain Paper Hardware With increasing participation in color imaging…

…offering Kodak opportunity to extend from Great Photos to Great Photos and Great Documents in a larger market.

69 A Late Market Entrant: Opportunities Are Clear

1. Market, Channels and Consumer Satisfaction are Well Defined

2. The Industry Ecosystem is Developed

3. Kodak Brings Unique Technology to Address Market Needs

70 A Late Market Entrant: Opportunities Are Clear

1. Market, Channels and Consumer Satisfaction are Well Defined • Both Satisfiers and Unmet Needs

Why consumers choose not to print Primary mentions of concerns

80% Running Cost Concerns Ease of Use and Quality Concerns 60% 64% 52% 40% 40% 34% 20% 17% 0% Cost of Uses too much Prefer options Too slow Quality of prints ink/supplies ink when printing

Source: Infotrends, 2006

71 A Late Market Entrant: Opportunities Are Clear

1. Market, Channels and Consumer Satisfaction are Well Defined • Both Satisfiers and Unmet Needs

Criteria U.S. Home Printer Users Consider Most Important and Important when deciding to purchase their next printer Lower-cost cartridges Disruption: Print Quality Deliver Value, Ease of use Quality and Copier capability Ease of Use… Built-in scanner Fax capability …as only Two-sided printing Kodak can Six or more colors Automatic document feeder

Faster photo print speed Media slots Direct photo printing Source: Lyra Research 2004, Printer designed for photos US Home Printing Survey Larger output 11"x17" Most Important Printer designed to print 4"x6" Important

0 50 100 150 200 250 72 Target Market: The High Volume Document and Photo Printer

5,500 TARGET 5,000 • Top 20% of users print 10X the median user. 4,500

4,000 • Plain paper color pages 3,500 account for 43% of pages, 3,000 but 64% of ink costs

2,500 • Annual ink costs can exceed 2,000 $600 for the highest burn 1,500 users.* 1,000 Kodak’s ink value proposition

500 represents a $300 savings.

0 Percentile: 0-20% 20-40% 40-60% 60-80% 80-100%

Photo Prints Mixed Text & Color Graphics Black Documents

(Source: Kodak Statistical Analysis based on: Kodak Market research studies, 2004, 2005, 2006 CAP Ventures research studies 2003, 2004, 2005 Lyra Research Studies 2003, 2004, 2005, 2006) * For HP 95/96 system 73 A Late Market Entrant: Opportunities Are Clear

1. Market, Channels and Consumer Satisfaction are Well Defined

2. The Industry Ecosystem is Developed

• Available base of suppliers and operational partners

• Low cost structure; Critical components at scale

• Rationalized channels and channel requirements

• Enabling low asset base, more rapid, market entry

74 A Late Market Entrant: Opportunities Are Clear

1. Market, Channels and Consumer Satisfaction are Well Defined

2. The Industry Ecosystem is Developed

3. Kodak Brings Unique Technology to Address Market Needs • Materials and Imaging Technology

4 Key Components Enable a Breakthrough Market Entry 1 Proprietary High Speed Inkjet Printing System 2 Patented, Pigment-based Inks 3 Instant Dry, Porous Papers 4 100+ Years of Kodak Image Science

Permanent Print Head Design

75 Targeting the High Volume Document and Photo Printer… …with a breakthrough Value Proposition

Micro-precision dot placement

Poorly controlled dot placement Porous Paper Technology REAL EASY • Optimized pigmented inks Proprietary MEMS Print Head • 15 millisecond drop absorption (Micro-Electro-Mechanical-System) • High gloss surface • Dual Cartridge System • Micro-Precision Dot Placement Kodak Image Science • Dual Drop Sizes – 2.7 pL & 6.5 pL • Color science • High drop firing frequency Kodak • Image enhancement Technology • Image restoration • Multi–level half toning/rendering Conventional Patented, Pigment-based Inks Milling KODAK • Dedicated Blacks Ink for Text, Photos EasyShare AiO

Traditional • Polymeric Binders for Durability Lab Prints • Proprietary milling: Uniform Size • Proprietary coating: Uniform Gloss REAL KODAK REAL VALUE QUALITY Permanent Print Head Design • High density – 3,840 nozzle (documents and pictures!) • High reliability

76 Game Changing Claims and Business Model

Unique Breakthrough Consumer Proposition Business Model

Save up to 50% on everything black ink you print $9.99 Premium NICHE MARKET color ink $14.99 10¢ a print

REAL EASY PRICING HARDWARE

Commodity NOT ECONOMIC

REAL KODAK REAL VALUE QUALITY Low High (documents and pictures!) COST OF PRINTING

77 Inkjet Operating Model: Leveraging Kodak Technology Leveraging Industry Efficiency “Asset Light” Approach

MARKETING and OPERATIONS

TECHNOLOGY OPERATING MARKETING INVESTMENT PARTNERS PARTNERS

• 844 INKJET PATENTS • SILICON / PRINTHEAD • LEAD RETAIL PARTNERS • 198 IMAGE SCIENCE PATENTS • ASIC / FIRMWARE • MEDIA • HARDWARE MFG. • LOGISTICS

78 Inkjet Target Business Model

Paper Double SG&A Digits Ink Teens High Hardware Double Digits Single Digits EFO R&D High Single / Low Double Digits

Revenue Mix Objective Operating Expense Structure ~40% Blended Gross Profit Double-Digit EFO

Positive earnings contribution during 3rd year 2010 Scale Objective: 10% of Consumer Pages

79 Inkjet Recap:

Strong focus and value proposition for market entry. ¾ Market needs of Quality, Value, Ease of Use fuel Kodak entry ¾ Photo heritage enables Kodak expansion to document printing

2007: Positive initial launch momentum. Success will be: ¾ Equipment placement on plan ¾ Preference with high volume users

2007 Inkjet investment similar to 2006; Covered by other CDG operating earnings.

80 Closing

81 Target Consolidated Consumer Digital Business Model

Imaging Services . Sensors GP%: GP%: Forty Forty SG&A Teens Printing Hardware PrintingHardware (Cameras, (Retail, Inkjet; Devices, etc.)) EFO Hardware,+ Materials Hardware and Materialsservice) * GP%: R&D Teens GP%: Low *includes Thirties Single Digits Color Paper

Revenue Mix Objective Operating Expense Structure ~25% Blended Gross Profit ~5-6% EFO

Break-even earnings 2006 (before inkjet investment) Break-even earnings 2007 (fully funding inkjet portfolio expansion)

82 Financial Summary

Frank Sklarsky Chief Financial Officer Eastman Kodak Company

83 Key Takeaways

The Company is well-funded Decreasing leverage Healthy liquidity

Will complete major restructuring in 2007

Installing lean cost model

Increasingly focused on building for future growth

84 2006 Financial Results

85 2006 Full Year Results

($ Millions) 2005 2006 YOY∆

Revenue $14,268 $13,274 –7% Gross Profit w/o Restructuring 4,046 3,665 –9% GP% of sales 28% 28% SG&A 2,668 2,389 – 10%

R&D 892 710 – 20%

Restructuring 1,118 768 – $350M

EFO – 632 – 202 +$430M

Below EFO – 167 – 144 +$23M

GAAP EPS – $4.38 – $2.09 +$2.29

86 2006 Key Metrics

Goal Actual

Net Cash Generation* $400M – $600M $592M Digital EFO $350M – $450M $343M (YOY improvement of $271M) Digital Revenue Growth <10% 4%

2006 Focused on Digital Margin Expansion

* Previously “Investable Cash”

87 2006 Restructuring

2004 – 2006 2006 Cumulative Total Restructuring Charges $768M $2.7B

Non-Cash Charges $385M $1.2B

Cash Restructuring Payments $548M* $1.3B

Headcount Reductions ~5,500 ~ 23,400

On track to complete major restructuring in 2007

*Includes cash payments related to pre-2006 restructuring actions for current program

88 2006 Cash / Liquidity Drivers (Including Health Group)

YOY improvement in earnings from continuing operations of $430M Working capital improvements • Inventories reduced by > $270M Prudent CAPEX spend of ~$379M Asset and real estate sales of $178M

89 2007 Financial Outlook

90 2007 Priorities

Complete transformational restructuring • Final stages of manufacturing footprint reduction • Get “lean” SG&A cost model in place Generate fuel for product investment and marketing Launch key new products which “build muscle” for sustainable, profitable growth

91 New Segment Reporting Structure (Effective 1/1/07) FPG CDG GCG Other Film Products Consumer Digital Graphic Group Group Communications Group

Entertainment Inkjet Systems* Enterprise Solutions Display Imaging Digital Capture Digital Print Film Capture and Devices Solutions Aerial and Image Sensor Prepress Solutions Industrial Solutions Document Imaging Markets Retail Printing Solutions** Consumer Imaging Systems

* Formerly part of “Other” ** Paper and Photofinishing formerly part of FPG 92 Health Group Divestiture

Expected Initial Cash Proceeds $2.35B $2.35B Potential Additional Payments $0.20B Maximum Potential Transaction Proceeds $2.55B

Uses of Cash: Payoff Secured Term Debt $1.15B Estimated Tax Payments & Transaction Fees $100M – $200M Net Initial Surplus Proceeds ~$1.0B – $1.1B

93 Health Group Divestiture: Benefits

Kodak now focused on growing businesses in areas of core competence: • Consumer Digital • Graphic Communications Further enhances balance sheet strength • Allows for debt reduction of >40% vs. YE’06 Contributes $45M - $65M toward 2007 interest expense reduction • Also improves interest income near-term Sale of related manufacturing assets

Health Group results reflected in discontinued operations as of 1Q’07

94 Health Group Divestiture: 2007 Earnings Impact

2006 Health Group Reported Earnings ($278M)

Add: Net Interest Benefit $65M – $100M Subtotal ($178M – $213M)

“Stranded Cost” Overhang ($100M – $150M)

Total 2007 Dilution ~($275M – $365M) (prior to cost claw back)

95 2007 Priorities: Significantly Reduce SG&A and address “stranded cost” overhang

Focus on SG&A reductions • Eliminate non-essential spending • Use zero-based approach • Many actions identified in first half ‘07 • Aggressive migration to “Shared Services” model • Significant enabler to SG&A efficiency

FY’07 SG&A: 16% to 17% of revenue • Achieve lower end of range by YE ‘07

96 2007 Priorities: Fund Remaining Restructuring

Payments of $575M – $625M from corporate cash • 2007 cash outlay magnitude similar to 2006 • Special termination benefit covers additional $100M – $150M from overfunded U.S. pension plan • High levels of restructuring driven by: • “Stranded cost” overhang from divestiture • Need to adjust to new margin structure in post Health Group environment – Requires additional rationalization not built into previous estimate • Required progress toward target digital business model demands reduced SG&A • Some actions deferred from ’06 to ’07 for logistical and operational reasons

Total Charges (cash & non-cash) of ~$900M – $1B, including asset write-offs Moving as quickly as possible – last year of major restructuring

97 2007 Restructuring: P&L Charges Directional Estimates

Charges to the P&L Current Year Actions (2007) Includes requirements to eliminate Severance & Exit Costs $500M – $550M divestiture “overhang” Includes ~$300M for asset write-downs Non-Cash Charges $400M – $450M & impairments, primarily non-U.S. Total Current Year $900M – $1.0B Restructuring Actions

98 2007 Restructuring: Cash Payments Directional Estimates

2007 Cash Payments Corporate Cash Special Termination Benefits Total for Restructuring For Pre-2007 Actions $225M $50M $275M For 2007 Current Year $375M $100M $475M Actions Total Cash Payments $600M $150M $750M

Expecting < $100M cash payment flow through to 2008

99 2007 Priorities: Restructuring Program Update

2004-2007 2007 2004-2007 Previous Current Cumulative Estimate Assessment Assessment Cash Payments ~$600M ~$1.9B Special ~$150M ~$150M Termination Benefit $3.0B – Total Charges ~$900M – $1B $3.6B – $3.8B $3.4B Headcount 25,000 – 4,000 – 6,000 28,000 – 30,000 Reductions 27,000

100 2007 Business Model (Excluding Health Group)

2006 Pro forma 2007

Revenue $10.8B $10.0B – $10.4B (As a % of sales): Gross Margin 25.5% 25% – 26%

SG&A 17.6% 16% – 17%

R&D 5.3% 5% – 6%

Earnings from Operations 2.6% 3% – 4%

101 2007: Cash Flow Plan (Excluding Health Group)

($ Millions) Range GAAP Pre-tax Earnings (continuing operations) $(600) – $(500)

Depreciation & Amortization (non-restructuring) ~700

Restructuring Charges (including accelerated depreciation) ~900 Restructuring Payments* (625) – (575) Working Capital ~200 Capital Expenditures (300) – (350)

Proceeds (including asset sales)** 200 – 300 Dividends (150) Other including taxes and changes (325) to other assets and liabilities Net Cash Generation $100 – $200

* Corporate cash portion ** Includes sales of real estate and smaller divestitures

102 2007 Cash Bridge

($ Millions)

2006 Net Cash Generation $592 Less: Health Group Cash Flow ~$400

Adjusted 2006 ~$200

2007 Estimated Net Cash Generation* $100 – $200

* Reflects: • Major product and marketing launch costs for consumer inkjet • Restructuring associated with “stranded cost” elimination from divestiture

103 2007 Net Cash Generation

Final year of transformation Adjusting to new margin structure reflecting Health Group divestiture Completing major restructuring with accompanying significant cash payments Launching new products – “Building Muscle” • Changing Inkjet paradigm • Major product & marketing launch costs Film declines along manageable trajectory

Positive net cash generation!

Does not include $1.0B – $1.1B in divestiture proceeds after tax and debt pay down

104 2007 Priorities: Cash Plan

Beginning ’07 Cash Balance ~$1.5B

Planned Net Cash Generation $0.1B – $0.2B

Proceeds from Health (after tax) $2.2B Sub-Total $3.8B – $3.9B

Capital Allocation: Debt Reduction $1.15B

Target Cash On Hand ~$1.00B Net Cash Avail. For Investment $1.6B – $1.8B

105 2007 Priorities: Comfortable with Remaining Debt Portfolio Debt Maturity Schedule as of December 31, 2006

$1,179*

($ Millions) YE’06 Total ~$2.8B Debt Pymt ~$1.2B ~$1.6B Remaining Debt

$611 $578

$273

$64 $34 $39

2007 2008 2009 2010 2011 2012 2013+ * Includes $1.15B secured term debt to be repaid with proceeds from divestiture

106 2007 Key Metrics (Excluding Health Group)

($ Millions) 2007

Net Cash Generation $100 – $200

Digital EFO $200 – $300

Digital Revenue Growth 3% – 5%

107 2007 Business Model (Excluding Health Group)

2006 Pro forma 2007

Revenue $10.8B $10.0B – $10.4B (As a % of sales): Gross Margin 25.5% 25% – 26%

SG&A 17.6% 16% – 17%

R&D 5.3% 5% – 6%

Earnings from Operations 2.6% 3% – 4%

108 Target Business Model • Achieve run rate for 2009 and beyond • Sale of Health Group defers achievement of target business model by approximately one year 28%-29% Gross 27.6% ~27% Profit 25.5% 25%-26%

SG&A 18% 17.6% 16%-17% 15%-16% 14%-15%

5%-6% 5%-6% R&D 5.3% 5.3% 5%-6% 8%-9% ~6% EFO 4.2% 2.6% 3%-4% 2006 Actual 2006 Pro forma 2007 2008 2009 (excl. restructuring) (excl. Health)

109 2007 Summary

Launch new products

Able to fund and complete major restructuring

Drive significant progress toward achieving target cost model

Maintain liquidity and build muscle for sustainable, profitable growth opportunities

110 11 1 Q&A

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