APPENDIX

                      Reconciliation of Non-GAAP Financial Measures
                     to the Most Directly Co...
Projected Digital Revenue Growth:
                                                                          Previous      ...
Consolidated Second Quarter Digital Earnings from Operations:
(amounts in millions)
                                      ...
Second Quarter Investable Cash Flow:

(amounts in millions)                          2006    2005
Net cash provided by (us...
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eastman kodak q2 06 non gaap1

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eastman kodak q2 06 non gaap1

  1. 1. APPENDIX Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Measures In Kodak’s August 1, 2006 earnings call, the Company’s Chief Executive Officer, Antonio Perez, and Chief Financial Officer, Bob Brust, referenced certain financial measures that are deemed to be non-GAAP financial measures, including: (1) Projected Investable Cash Flow, (2) Projected Digital Earnings, (3) Projected Digital Revenue Growth, (4) Digital Revenue Growth, (5) Traditional Revenue Decline, (6) R&D Decline Excluding Prior Year In-Process R&D and Acquisition-Related R&D Costs (7) GCG Digital Revenue Growth, (8) Health Digital Revenue Decline, (9) Consolidated Second Quarter Digital Earnings from Operations, (10) Health Group Digital Earnings, (11) G CG Digital Earnings, (12) GCG Digital Operating Margins (13) Traditional Earnings and (14) Second Quarter Investable Cash Flow. Kodak has prepared the following Appendix in order to provide investors with a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in accordance with Regulation G. The Company believes that these non-GAAP measures represent important internal measures of performance. Accordingly, where they are provided, it is to give investors the same financial data management uses with the belief that this information will assist the investment community in properly assessing the underlying performance of the Company, its financial condition, results of operations and cash flow on a year-over-year basis. The following reconciliations are provided with respect to terms used in the presentations of Kodak’s Chief Executive Officer, Antonio Perez, and Chief Financial Officer, Bob Brust. Projected Investable Cash Flow: (amounts in millions) 2006 Plan Projected investable cash flow, as presented $400-$600 Additions to properties, net proceeds from sales of businesses/assets, distributions from/(investments in) unconsolidated affiliates and dividends 400 Net cash provided by continuing operations (GAAP basis) $800-$1,000 Projected Digital Earnings: (amounts in millions) 2006 Plan Projected digital earnings, as presented $350-$450 Traditional earnings, new technologies earnings, restructuring costs and other discrete items (1,200)-(950) Total consolidated loss from continuing operations before interest, other income(charges), net and income statements (GAAP basis) $(850)-$(500)
  2. 2. Projected Digital Revenue Growth: Previous Revised Forecast Forecast Projected digital revenue growth (including New Technologies), as presented 16%-22% 10% Traditional revenue decline (22)%-(16)% (22)% Total Company revenue (decline) growth (GAAP basis) (2)%-4% (3)% Digital Revenue Growth: Year over Q2 2006 Q2 2005 Year Change Digital revenue growth, as presented $1,829 $1,720 6% Traditional revenue decline, as presented 1,522 1,950 (22)% New Technologies revenue decline 9 16 (44)% Total consolidated net sales decline (GAAP basis) $3,360 $3,686 (9)% R&D Decline Excluding Prior Year In-Process R&D and Acquisition-Related R&D Costs: (amounts in millions) Q2 2006 vs. Q2 2005 R&D Decline Excluding Prior Year In-Process R&D and Acquisition-Related R&D Costs, as presented $(32) Acquisition-Related R&D Costs, as presented 11 Prior Year In-Process R&D, as presented (64) R&D Expense Decline (GAAP basis) $(85) GCG Digital Revenue Growth: Year over Year Change GCG digital revenue growth, as presented 26% GCG traditional revenue decline (24)% Total GCG revenue growth (GAAP basis) 14% Health Digital Revenue Decline: Year over Year Change Health digital revenue decline, as presented (2)% Health traditional revenue decline (13)% Total Health revenue decline (GAAP basis) (6)%
  3. 3. Consolidated Second Quarter Digital Earnings from Operations: (amounts in millions) Q2 2006 Q2 2005 Consolidated second quarter digital earnings (loss) from operations, as presented $4 $ (25) Traditional earnings, as presented 131 283 New Technologies loss (52) (56) Legal settlement (4) - Restructuring costs and other (246) (339) Loss from continuing operations before interest, other income (charges), net and income taxes (GAAP basis) $(167) $(137) Health Group Digital Earnings: (amounts in millions) Q2 2006 Q2 2005 Health group digital earnings, as presented $ 42 $ 53 Health group traditional earnings 36 56 Total Health group earnings from continuing operations before interest, other income(charges), net and income taxes (GAAP basis) $ 78 $109 GCG Digital Earnings: (amounts in millions) Q2 2006 Q2 2005 GCG digital earnings (loss), as presented $ 39 $(26) GCG traditional loss (17) (16) Total GCG earnings (loss) from continuing operations before interest, other income/(charges), net and income taxes (GAAP basis) $22 $(42) GCG Digital Operating Margins: Q2 2006 GCG digital operating margins, as presented 5.1% GCG traditional operating margins (10.5) Total GCG operating margins (GAAP basis) 2.6%
  4. 4. Second Quarter Investable Cash Flow: (amounts in millions) 2006 2005 Net cash provided by (used in) continuing operations relating to operating activities: $80 ($207) Additions to properties (91) (111) Free Cash Flow (continuing operations) (11) (318) Net proceeds from sales of businesses/assets 27 21 Investments in unconsolidated affiliates (1) 0 Acquisitions, net of cash acquired 0 (940) Debt assumed through acquisitions 0 (541) Dividends 0 0 Operating Cash Flow (continuing operations) 15 (1,778) Acquisitions, net of cash acquired 0 940 Debt assumed through acquisitions 0 541 Investable Cash Flow (continuing operations) $15 ($297)

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