1. technology and computing
2. hardware
3. computer peripherals
4. printers, copiers and fax
5. printers

Business Plan Review and
Supplemental Financial Information
August 2012
Disclaimer
The enclosed preliminary financial projections have been prepared by Eastman Kodak Company (the "Company"). The Company has prepared these
financial projections on a managerial basis to provide its forecast of business unit profitability based on various assumptions; the projections have not been
prepared on a statutory basis. These projections should not be considered a comprehensive representation of the Company’s cash generation
performance. Certain income statement line items below Earnings Before Interest and Taxes ("EBIT") for 2013 and beyond have not been forecasted as
they are immaterial or require additional information that is not currently available. The following below EBIT line items have not been forecasted: other
operating income/expense
income/expense, tax benefit/expense
benefit/expense, interest expense (beyond June 2013)
2013), other income/charges
income/charges, extraordinary items
items, and earnings/loss from
discontinued operations, net of tax. In addition, the financial projections will be further impacted by restructuring activities related to certain obligations
including but not limited to domestic and foreign pension, other postretirement obligations (“OPEB”), and borrowings. The Company does not make any
representation to how these obligations will be treated as part of the restructuring. In addition, the financial projections do not reflect the cash costs of the
pension and OPEB obligations. The projections have not been compiled, audited, or examined by independent accountants and the Company makes no
representations or warranties regarding the accuracy of the projections or its ability to achieve forecasted results.
This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of the facilities or any of the Company’s
securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, the facilities or any of the Company’s securities in any
jurisdiction. Neither this presentation nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied
upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All
investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate.
The C
Th
Company h
has prepared
d thi
this presentation
t ti b
based
d on iinformation
f
ti available
il bl tto itit, iincluding
l di iinformation
f
ti d
derived
i d ffrom public
bli sources that
th t have
h
nott been
b
independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or
reliability of the information, opinions or conclusions expressed herein.
The 2012 historical financial information included in this presentation is preliminary, unaudited and subject to revision upon completion of the Company's
closing and audit processes.
All references to dollars are to United States currency unless otherwise stated.
All forward–looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this document, and are expressly
qualified in their entirety by the cautionary statements included in this document. The financial projections are preliminary and subject to change; the
Company undertakes no obligation to update or revise these forward–looking statements to reflect events or circumstances that arise after the date made
or to reflect the occurrence of unanticipated events. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may
affect the ultimate financial results. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant
business, economic and competitive risks, and the assumptions underlying the projections may be inaccurate in any material respect. Therefore, the actual
results achieved may vary significantly from the forecasts, and the variations may be material.
2
Cautionary Statement Regarding Forward-Looking
Statements
This presentation includes forward-looking statements, as that term is defined under the Private Securities Litigation Reform Act of 1995. Forward–looking
statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenue or performance, liquidity, cash
flows, capital expenditures, financing needs, plans or business trends, and other information that is not historical information. When used in this
presentation, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as
“will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward–looking statements. All forward–
looking statements
statements, including
including, without limitation
limitation, management’s
management s examination of historical operating trends and data are based upon the Company
Company’s
s
expectations and various assumptions. Future events or results may differ from those anticipated or expressed in these forward-looking statements.
Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others, the risks and
uncertainties described under the heading “Risk Factors” in the Company’s most recent annual report on Form 10–K under Item 1A of Part 1, in the
Company’s most recent quarterly report on Form 10–Q under Item 1A of Part II and those described in filings made by the Company with the U.S.
Bankruptcy Court for the Southern District of New York and in other filings the Company makes with the Securities & Exchange Commission from time to
time,, as well as the following:
g the ability
y of the Company
p y to continue as a g
going
g concern,, the Company’s
p y ability
y to obtain Bankruptcy
p y Court approval
pp
with
respect to motions in the chapter 11 cases, the ability of the Company and its subsidiaries to prosecute, develop, secure approval of and consummate one
or more plans of reorganization with respect to the chapter 11 cases, the Company’s ability to improve its operating structure, balance sheet and
profitability following emergence from chapter 11, Bankruptcy Court rulings in the chapter 11 cases and the outcome of the cases in general, the length of
time the Company will operate under the chapter 11 cases, risks associated with third party motions in the chapter 11 cases, which may interfere with the
Company’s ability to develop and consummate one or more plans of reorganization once such plans are developed, the potential adverse effects of the
chapter 11 proceedings on the Company’s liquidity, results of operations, brand or business prospects, the ability to execute the Company’s business and
restructuring
t t i plan,
l
iincreased
d llegall costs
t related
l t d tto th
the chapter
h t 11 b
bankruptcy
k t fili
filing and
d other
th liti
litigation,
ti
our ability
bilit tto raise
i sufficient
ffi i t proceeds
d ffrom the
th sale
l
of non-core assets and the monetization of our digital imaging patent portfolios within our plan, the Company’s ability to comply with the Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) covenants in its Debtor in Possession Credit Agreement, the Company’s ability to generate or
raise cash and maintain a cash balance sufficient to comply with the minimum liquidity covenants in its Debtor in Possession Credit Agreement and to fund
continued investments, capital needs, restructuring payments and service its debt; the Company’s ability to maintain contracts that are critical to its
operation, to obtain and maintain normal terms with customers, suppliers and service providers, to maintain product reliability and quality, to effectively
anticipate technology trends and develop and market new products, to retain key executives, managers and employees, our ability to successfully license
and enforce our intellectual property rights and the ability of the Company’s non-US subsidiaries to continue to operate their businesses in the normal
course and without court supervision, the uncertainty in commodities and foreign exchange rates, and the impact of the global economic environment on
the Company. There may be other factors that may cause the Company’s actual results to differ materially from the forward–looking statements. All
forward–looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this presentation, and are expressly
qualified in their entirety by the cautionary statements included in this presentation. The Company undertakes no obligation to update or revise forward–
looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
3
Contents
Page
1. Business Plan Review
5
2. Supplemental Financial Information
4
63
Our Strategy
Exploit competitive advantage at the intersection of
materials science, digital imaging science, and deposition processes
 Large analog printing and packaging
markets in need of transformation
offer great growth opportunities
 Higher margins are driven by
expanding consumables and
services
It extends naturally into large and emerging markets such as functional printing and
printed electronics
5
Deposition Based Businesses Include Present Large Printing
Markets and New Large and Fast Growing Applications
Digital Printing &
Document Imaging
Mature with Growing Segments
Commercial Printing
Transform Analog Markets
•Print (Marketing Collateral)
•Publishing
Enterprise Content Services
•Document Imaging
Consumer Inkjet Systems
•Premium Photo
•Consumer & Office Inkjet
Evolving Printing Markets
Large and Growing
Packaging Print
•Packaging
•Sustained Printing
Functional Printing
•Printed Electronics
•Materials
Market Size: $50B - $70B
Market Size: >$70B
6
Consumables & Services
Annuity Based Businesses
(consumables & services)
Business Models that have High
Gross Profit
Ability to Withstand Economic
Cycles
Kodak’s Transformation – Four Key Objectives
1
1.
2
2.
3.
4.
R t
Restructure
t
Fil
Film Business
B i
(2004 tto middle
iddl off 2007)
−
13 film plants closed; only 2 plants remain
−
130 photo labs closed
−
Reduced
educed workforce
o o ce by ~50,000
50,000 e
employees
p oyees worldwide
o d de in a soc
socially
a y acceptab
acceptable
e way
ay a
and
d without
t out
affecting the Kodak Brand perception and value
−
Cost of $3.4B: 50% with cash; 50% through accounting write-offs
−
Managed film business for cash to fund film restructuring
M
Manage
L
Legacy Costs
C t
−
Followed industry practices by increasing employee/retiree contributions to health care coverage
−
Since 2003 reduced OPEB liabilities from $3.5B to $1.2B and cash requirements from $245M/year
to $110M/year
−
Pension plans were overfunded significantly until equity markets collapsed in 2008
Create a New Company
−
Selected the intersection of materials science, digital imaging science and deposition technologies
as our strongest operating space
−
Created product lines at this technology intersection with a differentiated value proposition and
leveraged supply chain experience
IP Strategy
–
Started
St
t d aggressively
i l monetizing
ti i IP portfolio
tf li (Plan:
(Pl
$250-$350M
$250 $350M per year – Actual
A t l ~$400M/year)
$400M/
)
and selling non-strategic assets to provide an additional source of funding for growth businesses
and to pay for legacy costs
7
2008 – 2011 Challenges
• Film
Fil Business
B i
Declined
D li d Faster
F t than
th Expected
E
t d
−
Industry projected decline rate: 10%; EK Plan: 20%; Consumer Film Actual: 40%
• Economic Crisis Negatively Impacted Other Businesses
−
Lack of financing, industry overcapacity and price pressures impacted cash-generating
businesses (Prepress, Digital Cameras, Retail Systems Solutions, Document Imaging,
Entertainment Imaging)
−
Increases in silver and aluminum prices reduced profitability of Entertainment Imaging and
Prepress
−
Market contraction also impacted demand and top-line of growth businesses (Consumer Inkjet,
Workflow Solutions) delaying achievement of profitability objectives
−
Poor equity performance and low interest rates caused our pension funding to reverse from
positive to negative ($2B+ overfunded to $1B underfunded)
−
Current economic climate has created a buyer’s market for asset sales, lowering and delaying
proceeds
• Jan 2011 Setback in ITC Delays Licensing Revenue
−
IP licensing exceeded $250-350M annual plan from 2004-2010, averaging ~$400M per year
−
However, in January 2011 an International Trade Commission (“ITC”) Administrative Law Judge
(“ALJ”) ruled
l d th
thatt a well-tested
ll t t d and
d validated
lid t d Kodak
K d k patent
t t was invalid
i
lid and
d nott infringed
i fi
d in
i the
th
Apple/RIM case
−
In June 2011 the ITC remanded the Apple/RIM case back to an ALJ for further consideration
8
Reductions in Worldwide Employment: 2003 to 2011
• Kodak has Reduced Global Headcount Significantly in the Last Decade
9
Eastman Kodak Company
Chairman &
Chief Executive Officer
Antonio M. Perez
Businesses
President
Eastman Kodak Company
President
Eastman Kodak Company
Senior Vice President
Eastman Kodak Company
Laura Quatela
Phil Faraci
Brad Kruchten
Consumer
Digital Printing & Enterprise
Graphics, Entertainment &
Commercial Films
Consumer Inkjet Systems
Personalized Imaging
Enterprise
Services and Solutions
Digital and Functional
Printing
WW Regional Operations
Functions
Europe, Africa and Middle
Eastern Region
Chief
Financial
Officer
Ann McCorvey
Asia Pacific Region
General Counsel.
Secretary &
Chief Admin. Officer
Patrick Sheller
U.S. & Canada Region
Chief
Technical
Officer
Terry Taber
Entertainment Imaging
Graphics
and Commercial Film
Latin America Region
Intellectual Property
Intellectual
Property
• Flatten Management Structure
• Project Focused R&D
• Overhead Reduction
As of 7/9/12
10
Organization & Cost Structure Actions
 Flatten Management Structure
– Consolidate P&L’s
– Align
Ali b
by b
business
i
model
d l
– Increased accountability
 Project Focused R&D
– Combine research and product line R&D resources
– Drive focus on projects for introduction in next 36 months
 Corporate SG&A Reduction
– Corporate SG&A from today’s 6% to 4% revenue by 2014
– Sized for the simplified organization
11
2011A – 2014E Operating Expense Reduction
($ in millions)
$1,600
$1,400
$1,200
$1,000
5.3%
5.8%
$800
5.0%
4.0%
Exited Business
$600
Corporate SGA
$400
12.7%
10.9%
10.5%
10.0%
Business Unit SGA
Total R&D
$200
4.5%
4.7%
4.3%
$0
2011A
2012E
2013E
4.0%
% of Revenue
2014E
• Cost reduction initiatives are expected to drive a >40% reduction in
operating expense during the period while revenues are expected to
decline ~20%
• More than 2300 positions reduced in the first half 2012
* Excludes DC&D Non Essentials, CIS, ISS, & all IP (incl. corp costs allocated to IP)
12
Reporting the Operations
Retail
Systems
Solutions
Personalized
Imaging
Paper &
Output
Systems
Consumer
Businesses
Consumer
Inkjet
Systems
Event Imaging
Services
Consumer
Film
Plates
Output
Devices
Graphics
Graphics &
Commercial
Films
Workflow
Entertainment
Films
Aerial Films
KODAK
Commercial
C
i l
Films
Mfg. Services
IPS
Packaging
Digital &
Functional
Printing
EPS
Digital Printing
& Enterprise
Functional
Printing
Scanner &
Technical
Service
Enterprise
Services
Professional
Services
Products
Strategic
Product Groups
13
Segments
Company
Business Emergence
g
Plan
Commercial Businesses
14
Commercial Businesses
Digital Printing & Enterprise
Digital and Functional Printing
Digital Printing Solutions
Cut sheet Production Presses
Cut-sheet
Roll-fed Production Presses
Consumables
OEM
Enterprise Services & Solutions
Enterprise
p
Content
Management
Technical
Services
 Document
Imaging
 Content &
Document
Management
 Commercial Print
 Retail Solutions
Graphics, Entertainment
& Commercial Film
Graphics
 Digital Plates
 Optical Devices
 Unified Workflow
 Brand
Management
 Multi-Vendor
Services
 Print
Management
Functional Printing
Flexo Solutions
Display
Entertainment Imaging
& Commercial Films
Winning solutions in the conversion to multi-channel communications
15
Business Emergence
g
Plan
Digital & Functional Printing
16
Digital and Functional Print Business
Functional Print
Digital Print
IImprinting
i ti solutions,
l ti
high-volume
color and B&W presses
Display
Electrophotographic
Solutions
P i t d electronics
Printed
l t i
Color
C
l and
d B&W
production presses
Products
Unit
Inkjet Printing
Solutions
App
plications
Packaging, Direct Mail, Books, Displays
17
Packaging
Flexcell NX S
Fl
System,
t
Flexcel Direct,
Flexo Analog
Commercial Printing: Rapidly Changing
Communications Industry Trends
 Multi-channel communications:
– Personalization
 Emerging markets experiencing rapid growth and expansion
 Developed markets experiencing industry consolidation driving
production efficiencies
 Kodak uniquely positioned to profit from the digitalization of
print
Print Market Growth
Worldwide Printed Pages
$180
Digital Print Revenue
$150
USD (billions)
A4 pp (trillions)
60
40
20
0
$120
$90
$60
$30
$0
2011
2013
Developed
2015
2005
2010
Emerging
Source: Poyry
Source: Pira Worldwide Market for Print
18
2015p
We are Competing in Growth Areas of the Market
Market CAGR 11-14
Key Data Points
Worldwide Developed
Digital Color Page Volume
30%
Digital Plate Volume
3%
Emerging
Source
N/A
InfoTrends & EK
N/A
-1%
10%
VSM
Packaging Substrate Volume** 3%
1%
5%
Poyry
P i t Advertising
Print
Ad
ti i Spend
S
d
-2%
2%
-3%
3%
4%
Zenith Optimedia
Zenith-Optimedia
CM Printing Paper Volume**
1%
-3%
3%
Poyry
Newsprint Volume**
-1%
-4%
2%
Poyry
P i & Document
Print
D
M
Mgmt S
Srvcs* 8%
N/A
N/A
IDC
Document Capture w/Service
N/A
N/A
InfoTrends, H. Spencer
Functional & Specialty Printing 11%
N/A
N/A
NPD Group
Entertainment Imaging
N/A
/
N/A
/
Kodak
4%
-28%
%
** CAGR 2010-2013
** CAGR 2011-2016
19
Print Transforming from Mass to Personalized
G
Game-changing
h
i technology
t h l
in
i the
th transformation
t
f
ti off print
i t
Prosper
Components
Prosper Presses
B&W and Color
OEM systems
Timsons
… Plus a range of WORKFLOW SOFTWARE and INTEGRATION SERVICES
Direct Mail, Inserts
Corrugated, Folding Carton
Packaging - Corrugated,
Folding carton, Flexible
Direct Mail, Books, Photo
20
Digital Print
NexPress
Our Biggest Target is Digital Color Production
Total Worldwide Page Volume
Total Vendor Market = $167B
Total = 68 Trillion A4 Pages*
Production Digital, 0.7
Traditional, 64
Personal, $31.6
Traditional, $33.0
Workgroup, Office, 3.1
Workgroup, Workgroup
Office, $86.0
Personal, 0.3
* excludes 7.7T pages of waste, with waste = 76T A4 pages
Source: InfoTrends, Kodak Internal Analysis, 2010 latest data available
21
Production Digital, $16.4
Kodak participates in a $5B digital production print market
DPS worldwide Addressable market, M$
$6 000
$6,000
CAGR
$5,514
4%
$4,574
Total
ota
Color IJ
Color EP
B&W IJ
B&W EP
B&W EP
12%
$4 000
$4,000
8%
$2 000
$2,000
‐9%
Note: Color IJ includes
Components
‐6%
6%
$
$0
2012
2017
Source: Infotrends, IDC, Kodak internal analysis
22
Kodak has strength across the digital production printing
Cut Sheet
High Volume
((1M+)) Color
Co o
Cut Sheet
Commercial IJ –
Production B&W
HV Print
Packaging &
Labels
KODAK
√√
√
√√
√√
Competitor A
√√
√√
X
X
Competitor B
√
√√
√
X
Competitor C
√√
X
√√
√√
Competitor D
√
√
√
X
C
Competitor
i
E
√
√
X
X
Competitor F
X
X
X
√
Competitor G
√
X
√
√
C
Competitor
tit H
√
X
√
X
Key: √√ = Strong √ = Medium X = None / Limited
 Competitors include: Canon/Oce, Fuji, HP, Konica Minolta, Ricoh, Screen,
Xeikon, Xerox
23
Inkjet is transforming production print
G
Game-changing
h
i technology
t h l
in
i the
th transformation
t
f
ti off print
i t
Prosper
Components
Prosper Presses
Monochrome Press
Color Press
OEM systems
Timsons
… Plus a range of WORKFLOW SOFTWARE and INTEGRATION SERVICES
Direct Mail, Inserts
Corrugated, Folding Carton
Packaging - Corrugated,
Folding carton, Flexible
Direct Mail, Books, Photo
24
Stream is highly differentiated as evidenced by our
customers and partners
Productivity –
Speed and Width
Meets Application Needs
Reliability
Most Robust
Quality
Delivers Offset Quality
Cost
Right Cost
 Up to 3000 fpm with single array
 500+ kHz drop generation
 Width up
p to 49”
 Heavy duty for 24/7 production operation
 Head life independent of coverage
 Most uniform drop formation
 Highest drop momentum for placement
accuracy
 Ink
I k chemistry
h i t for
f glossy
l
paper
• Long head life yields more images per dollar
• Head redundancy not required
• Enables replacement of incumbent
technologies
Kodak delivers the complete package of technology
technology,
hardware, software and services
25
Stream
Others
Packaging is a $250B and growing opportunity
The Packaging Industry
Packaging Market Growth
($ in millions)
 Fastest growing and sustainable
print market
p
$350,000
$307B
300,000
$237B
250,000
 Highly fragmented value chain
$189B
200,000
150,000
 Ripe for technology substitution
100,000
50,000
 Kodak well positioned to lead
digitization and drive integration
 Attractive business case
case, but
need to accelerate to scale
0
2005
Western Europe
2010
North America
2015
Latin America
Asia-Pacific
Other
Packaging Market Breakdown
Gravure
14%
Screen
2% Digital
2%
Others
19%
Offset
24%
Labels
10%
Metal Cans
12%
Corrugated
Corr
gated
34%
Rigid Plastic
8%
Flexography
39%
Flexible
18%
Source: PIRA, PRIMIR, EK internal analysis
26
Cartons
18%
Printed Packaging Ecosystem
Project brief
Brand Owners
Large
CPG,
Pharma
Retail /
Private
Label
Small /
Regional
CPG
Project brief
Design
proofs,
prototypes,
revisions
Package Design and
Development
Design
group
Branding
company
Final
artwork
Ad
agency
Structural
design files
Trade Service
Providers
Flexo / Offset
house
Printer/Converter
Plates,
proofs
Gravure
house
Structural design
Consumer
and supply
chain data
Consumer
Corrugated
Flexible package
Folding carton
Label & tag
Metal can / Rigid plastic
Printing,
extrusion
lamination,
corrugation,
slitting,
die cutting,
folding &
gluing,
pouch
making
Retailer
Fulfillment
Companyowned
Contract
packer
Product/Package
g
Consumer data
Supply chain data
Interactive communications
from QR codes and
UPC codes
Interactive communications
from UPC codes
and RFID
Form, fill and seal
Case erection and fill
Palletization / distribution
27
Roll (flexible package)
Flat box (folding carton / corrugated)
Pouch (flexible package)
Cut-sheet or roll (label)
In-the-round (metal, rigid plastic)
Large Sustained and Growing Market
 Packaging Industry Trends
– Population & urbanization drive growth
– Fragmented value chain
– Ripe for Innovation
– Electronic substitution proof
Printed Packaging Market Growth
($ in millions)
$350,000
$307B
300,000
$237B
250,000
200 000
200,000
$189B
150,000
100,000
50,000
0
2005
Western Europe
North America
2010
Latin America
Sources: Pira, IT Strategies, Info Sys
28
2015
Asia-Pacific
Other
Kodak participates in a $2.3 billion packaging market
Printed
P
i t d
Packaging Market
Kodak’s Packaging Addressable Market
 includes Flexo. Proofing systems,
Letterpress, inkjet, EP, offset and
enterprise solutions & services
 includes Flexo. Proofing
systems and
Letterpress
4%
22%
28%
$2.3B
$257B
$1.1B
12%
%
2%
7%
18%
$237B
1% 6%
Smart Packaging
Commercial Inkjet Systems
Electrophotographic Systems
Offset Plate Systems
y
Workflow, D2L, Security and Services
29
Output Devices Flexo Plates / Sleeves Services Letterpress Plates
Letterpress Plates Proofing Systems Source: PIRA, PRIMIR, EK internal analysis (2012)
Kodak’s Technology Differentiation for Packaging
and Functional Printing
Core Competence in High Resolution Imaging and Printing with Kodak’s Laser Spot Head Technology
 Highest resolution laser thermal imaging device
– Up to 25,600 DPI
– 450 lines per inch versus industry at ~ 200 lines per inch
 Highest resolution flexographic “printing plate” making process
 Specialized coating capability
Printing of Fine Line and Patterns by the Use of Kodak Imaging Device, Media and System
30
Functional Printing
Printing to deliver functionality beyond visual communications
Materials
M
t i l &
Substrates
Printed Electronics
Energy
Packaging
Bio - Tech
Coatings
Display
Fuel cell
Corrugated
Anti-microbial
Conductive inks
Emi
Solar harvesting
Folding carton
Tissue regen film
Substrates
Transistors
Printed batteries
Smart packaging
Disposable sensor
Kodak Confidential
8/13/2012
31
31
Kodak has a highly competitive Packaging portfolio
Workflow
Output
Devices
Flexo
Plates
Proofing/
Approval
√
√√
√√
√√
Competitor A
√√
√√
X
√
Competitor B
X
X
√√
X
Competitor C
X
X
√√
X
Competitor D
X
X
√√
X
Competitor E
X
X
√√
X
Competitor F
X
X
X
X
Competitor G
X
X
X
√
Kodak
Key: √√ = Strong √ = Medium X = None / Limited
 Main competitors include Asahi, DuPont, Esko, Flint, Fuji,
Macdermid, Toray
32
Kodak’s sustainable differentiation in Functional
Print based on our core strengths
 Scalable assets; Formulation to manufacturing
 Squarespot:
q
p Highest
g
resolution laser thermal imaging
g gp
platform
(up to 25,600 DPI)
 Expertise in the deposition of conductive materials (silver) in rollto-roll manufacturing environment
 Customized substrates
 IP and high value know-how
33
Kodak’s Technology Differentiation for Packaging
and Functional Printing
Core Competence in High Resolution Imaging and Printing with Kodak’s Laser Spot Head Technology
 Highest resolution laser thermal imaging device
– Up to 25,600 DPI
– 450 lines per inch versus industry at ~ 200 lines per inch
 Highest resolution flexographic “printing plate” making process
 Specialized coating capability
Printing of Fine Line and Patterns by the Use of Kodak Imaging Device, Media and System
34
Business Emergence
g
Plan
Enterprise Service & Solution
35
Enterprise Services & Solutions Overview
Content & Document
Management
Brand & Security
Management
Offerings
• Scanning & scanner service
• Document protection & authenticity
• System design
Capture
Offerings
• Marketing workflow SW (D2L)
• Anti–counterfeiting / diversion
• Track and trace capabilities
• System design
Manage
36
Enterprise Print
Management
Offerings
• Print network management
• Print aggregation solutions
• Multi-channel communication
workflow
Deliver
Enterprise Services & Solutions - Market Opportunity
Products Addressable Markets
Services Potential Markets
$90.0 $6.0 $5.0 $4.0 CAGR = 8.3%
8 3%
$1.4 $3.4 $0.6 $2.0 $
$1.2 $1.0 $0.7 $0.3 $0.6 $0.9 $0.3 $0.4 2012
2017
$‐
Brand Workflow SW
Capture SW
$3.0 $2.1 $77.1 CAGR = 9.1%
$4 1
$4.1 $70.0 $ Billions
$ Billions
$5 0
$5.0 $80.0 Distributed Scanners
$60.0 $50.0 $50.0 $1.7 $40.0 $20.1 Brand Services
$37.1 Document Services
Print Services
$30 0
$30.0 Production Scanners
Production Scanners
$20.0 Scanner Service (B/F)
$10.0 $28.1 $35.9 $‐
2012
WW Potential Market Revenue ($B)
Brand Services (4)
Print Services (5)
Document Services (5)
Total
2017
$
$
$
$
2012
1.7
28.1
20.1
50.0
$
$
$
$
2017 CAGR 12-17
4.1
18.9%
35.9
5.0%
37.1
13.0%
77.1
9.1%
• Market definitions are inconsistent and evolving
• Services opportunity is large and growing
g y fragmented
g
• Market is highly
Sources: (1) Forrester/Kodak
(2) HSA (3) Infotrends, InfoSource, MTC
(4) Kodak (5) IDC
37
Business Emergence
g
Plan
Graphics & Commercial Films
38
Graphics Products Market Opportunity
WW Graphics Products Market Size ($B)
$7.0 $6.0 $5.8 $0 5
$0.5 $5.0 $4.0 $0.4 $1.2 $6.1 $0.5 $0.5 $1.2 $6.1 $6.2 $6.2 $6.2 $6.3 $0 6
$0.6 $0.6 $0.7 $0.7 $0.8 $0.8 $0.5 $0.4 $0.4 $0.4 $0.4 $0.4 $1.1 $1.1 $1.0 $1.0 $0.9 $0.8 $6.0 Workflow
Output Devices
Analog Plates
$3.0 Digital Plates
$2.0 $3.7 $4.0 $3.8 $4.0 $4.1 $4.1 $4.2 $4.2 2010
2011
2012
2013
2014
2015
2016
2017
$1.0 $
$‐
Source: VSM and InfoTrends
Graphics Will
Industry Objective:
Improve quality, cost & consistency of printed content
Kodak Focus:
Optimize operational efficiencies and control cost
Industry Trend:
Enable environmentally sustainable product practices
Differentiator:
Only industry supplier to develop and manufacture full
pre press solution and process free leader
39
Kodak has a highly competitive Graphics portfolio
Digital Plates
Output Devices
Workflow
Competitors
Kodak
√
√
√
2 Competitors
X
√
√
1 Competitor
√
X
√
6 Competitors
√
X
X
2 Competitors
X
√
X
7 Competitors
X
X
√
Key: √= Presence X = None / Limited
 Main competitors include Agfa, Bitstream, Cron, Dalim Software, ECRM,
EFI, Esko, Founder, Fujifilm,
f
Heidelberg, HP, IBF, ipagsa, Lucky
Huaguang Graphics, Presstek, Screen, Xeikon, Xingraphics
40
Steps of the Offset Print Process
CREATIVE
PRESS
PREPRESS
POSTPRESS
Photography
Production Workflow
Printing Plates
In-line Web Finishing
Photo Retouching
Proofing / Collaboration
Web Printing
Sheet Cutting
Editorial
Color Management
Sheet-fed Printing
Die-Cutting
Graphic Design
Digital Asset Management
Ink
Folding
Page Layout
Print Layout
Paper
Binding
Computer to Plate
Fountain Solution
Fulfillment
Plates / Processing
Press Consumables
Kodak Graphics Participation
41
Kodak’s History of Innovation in Graphics
Industry Leader in Digital Innovation
 First
Fi t thermal
th
l iimager
 First
Fi t no-preheat
h t plate
l t ttechnology
h l
 First thermal plate
 First process-free plate technology
Kodak/Creo launch
industry’s first thermal
platesetter
Analog Plates
Kodak launches
Sword Excel no
preheat/no
post bake plate
Kodak/Creo introduce
SquareSpot Imaging with
launch of Trendsetter
Digital Plates
Output Device
Kodak launches
industry’s first
thermal plate
(Thermal 830)
Kodak launches
industry’s first nonpreheat thermal plate
(Electra Excel)
Kodak/Creo launch
Magnus Platesetter
Kodak/Creo
launch Prinergy
Workflow
42
Kodak launches
Thermal Direct –
industry’s first nonprocess digital plate
2012
2010
2008
2006
2004
2003
2001
1999
1997
Kodak
launches its
first analog
lithographic
plate
1995
1959
Workflow
Kodak launches
Sonora XP & Sonora
News Process Free
Plates
Entertainment & Commercial Films Marketplace Dynamics
 Digital substitution continues for both origination and
distribution segments
 2011 conversion
i ffor di
distribution
t ib ti ahead
h d off fforecasted
t d pace,
driven by stronger international conversion
 2012 box office strong
g through
g May,
y, after weak 2011
 3D titles up in 2011 by 66%, yet 3D Box office down by 9%
 Decline in DVD sales continues it’s
it s double-digit
double digit pace
pace, putting
economic pressure on studios
 Arri Alexa digital camera has had material impact on origination
conversion rates
43
Commercial Films Product Portfolio
The Commercial Films portfolio
consists of the following product families:
Printed Circuit Board Films
 Red and Blue/Green Film & Chemicals for Photoplotters
 Kodak believes 90% of product demand lies in Asia
Aerial and Surveillance Films
 B&W and Color Film, Chemicals
 Kodak leads in product superiority, application & processing
Components
 Film Base – polyester & tri-acetate
 Specialty Chemicals & Inks
44
Commercial
S
Silver
halide films
f
Business Emergence
g
Plan
Consumer Businesses
45
Consumer Businesses Organization
Exited Businesses
Produc
cts
Unit
Continued Operation
Consumer
Inkjet
Systems
Retail
Systems
Solutions
Paper & Output
Systems
Film Capture
Event Imaging
Solutions
Desktop Inkjet Printers
Inks
Papers
Retail Kiosks
Dry Labs
Service
Consumer & Professional Film
Theme Park
Single-Use Cameras
Color Paper
Destination
Kodak
Gallery
Web
Merchandise
M
h di
and Services
Digital
Capture
and
Accessories
Digital Still Cameras
Video Cameras
Chemistry
Souvenir
Sensors
Essentials
Imaging
Frames
Personalized Imaging
46
Personalized Imaging Market Opportunity
WW Images Captured, Shared and Printed
600,000
Consumer Images
500,000
Images
s, M
Photo Market Opportunity (‘12-’17 CAGR)
 Captured
 Mobile Captured
 Shared
400,000
300,000
200,000
100,000
Wet to Dry Conversion
-
2012
DSC Images
 Dry Growth
2017
Cell Cam Images
Shared
Printed
 Photobooks
 Photo Merchandise
$18,000
$18
000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
+7%
+9%
Pathway Shifts
 Online to Home
 Online to Retail
+ 3%
+ 7%
Emerging market growth
 Emerging Asia
 LAR
 Emerging EAMER
2012
Film + prints
+6%
Premium market growth
WW Photo Market Size
$M
+3%
+7%
+6%
Wet
Growth in events photography
2017
Dry
Premium
+ 9%
+4%
+3%
 Growth
Event
>6%
Source: Doug Robinson (Analyst), Infotrends, Kodak estimates
47
Photo Market Size and Trends
 Retail production converting to dry
technology
– Sometimes driven by legislation
Product Revenue ‐ Worldwide
$16,000 $14,000 $12,000 $
,
 Premium Growing
– Photobooks and Photo Merch.
offset declines in prints
$10,000 $8,000 $6,000 $4,000 $2 000
$2,000 $‐
 Online pathways growing
2012
Photo Printing
– Consumer continuing shift to online
ordering pathways
 Growth in Emerging Markets
– Remains more print centric than
developed markets
2014
Enlargements
2015
Photobooks
2016
2017
Photo Merchandise
Product Revenue ‐ Emerging Markets
$6,000
$5,000
$4,000
,
$M
– Online to retail projected to grow at
7% CAGR
2013
$3,000
$2,000
$1,000
$0
2012
Source:EK Photo market forecast based on Robinson/Photographic Consultants, Future
Source, InfoTrends, IDC, Lyra and EK data
Photo Printing
48
2013
2014
Enlargements
2015
Photobooks
2016
2017
Photo Merchandise
Retail Systems Solutions - History
Copy Print
Station
Picture Maker
AGI
KPM
Gen1
KPM
Gen2
KPM
KPM Gen2- KPM
Gen2- Model 5 Gen2Model 4
Model 6
KPM
Gen2Model 7
Picture Kiosk
G4 Portfolio
KPM
G3 Portfolio
‘93
‘94
‘95
Invented
Kiosk
Category
8x10
Print
to
Print
‘07
‘96
‘97
‘98
1st 4x6
Printer
(4700)
‘08
DPS 900
Precursor
(CVS)
APEX
Launch
4/2008
1ST APEX Beta
install in U.K. 11/07
‘99
1st Digital
Media
Input
‘00
‘01
‘02
‘03
1st Digital Kiosk
1st CD output
1st 25sec printer (6400)
1st Credit Card Pay
‘09
APEX v2 – 4/2009:
• New cabinets 30,40,70
• DL2100 Duplex Printer
• Satin
S i Finish
Fi i h Prints
Pi
• 7010 (backprint)
• 7015 (5x7 borderless)
• Epson 7880 Poster
‘04
‘05
‘06
1st 4 sec 4x6
config (6850)
1st 40 sec
8x10 (8800)
‘10
‘07
‘08
‘09
1st Auto Collage
1st Photobook
1st Multi-media DVD
1st Multi-head tech
1st Rapid Scanning
‘11
APEX v4.0 SW – 5/2010:
• Net-to-Retail support
• Add’l Premium Products
• Photo
Ph t ID
• Canvas Prints
• “D” prints (3:4 aspect)
• Workflow Enhancements
• Advanced service diag.
49
G4X
G4XL
G4xe
‘10
‘11
‘12
UI w/swipe
access
Designer
Greet.Cards
APEX v4.1 SW – 9/2010:
• Order Preview/Editing
• Pro Profiles
• System
S t
config.
fi mods
d
‘13
“Blk
Blk Fade”
Fade
1st Facebook
‘12
G5
“WiFi”
Mobile
Connect
‘13
P&OS: Industry Revenue (Vendor M$)
3,000
2,500
,
2,000
1,500
1 000
1,000
500
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
From Film
From Dig
Source: Doug Robinson Annual Color Negative Paper Reports and Kodak Internal Models
50
Pro
Consumer Inkjet Market

Greater than a $40B market

Number of printers declining low single digits
– Home WiFi penetration
– SOHO market
k t growing
i low
l
single
i l digits
di it

Two-thirds of the market comes from ink
– Fewer
Fe er pages printed at home
– Print density increasing due to compounded
documents and photo
Updated third party data will be published in early August.
51
Consumer Inkjet Systems: Kodak’s Competitive
Advantage
CIJ Portfolio
 Dual value proposition for branded
and OEM business model
 Lowest cost of ink replacement in
the industry
 Quality Leadership with pigment
b
based
d iinks
k
Cloud Printing
Leading Ease-of-Use
WiFi setup
Value Prop
Smart Sensors
Innovative Office p
printers +
Advanced Technology
Leading Edge
Micro-precision
dot placement
Precision
EASE OF USE
• Design for the
mobile world
Poorly controlled
dot placement
I
Image
Science
S i
• Smart Sensors
• Simple Connect
KODAK PIGMENT
TECHNOLOGY
Kodak
Technology
INK VALUE
• LOW COST INKS
• #1 Pain Point
• Perfect prints
every time
• Fast, high quality
prints
Patented
Technology
Conventional
Milling
52
IMAGE
LEADERSHIP
• BEST OVERALL
PRINTS
• Speed,
p
,
permanence
• Creative SW/apps
A Value-Creating Portfolio – 2012
Cash
Generation
GrowthMaximize Margins
Rationalize
MaturityMaintain Value
Harvest
Manage
for Cash
Margin
Growth
Invest
GrowthAcquire
Customers
Introduction
 PROSPERPackaging
 Functional
Printing
 Consumer
Inkjet –
Home
 FLEXCELPackaging
 PROSPERC
Commercial
i l
Printing
 Digital Plates
 Retail Systems
Solutions
 Document Imaging
 Industrial Materials
 Workflow
Software &
S i
Services
53
 Entertainment
Imaging
 Paper & Output
Systems
A Value-Creating Portfolio – 2013
Cash
Generation
GrowthMaximize Margins
Rationalize
MaturityMaintain Value
Harvest
Manage
for Cash
Margin
Growth
Invest
GrowthAcquire
Customers
Introduction
 Industrial
Printing
 PROSPERPackaging
 Functional
printing
 Workflow
Software &
Services
 Consumer
InkjetHome
 PROSPERC
Commercial
i l
Printing
 FLEXCELPackaging
54
 Digital Plates
 Retail Systems
Solutions
 Document Imaging
 Industrial Materials
 Entertainment
Imaging
 Paper & Output
Systems
A Value-Creating Portfolio – 2014
Cash
Generation
GrowthMaximize Margins
Rationalize
MaturityMaintain Value
Harvest
Manage
for Cash
Margin
Growth
Invest
GrowthAcquire
Customers
Introduction
 Industrial
Printing
 PROSPERPackaging
 Consumer InkjetHome
 PROSPERCommercial Printing
 FLEXCELPackaging
 Functional printing
 Workflow Software
& Services
55
 Digital Plates
 Retail Systems
Solutions
 Document Imaging
 Industrial Materials
 Entertainment
Imaging
 Paper & Output
Systems
Summary
Kodak has groundbreaking technologies in large and worldwide growing markets
Digital
g
Printing
g and Enterprise
p
Segment
g
has a broad p
portfolio where we lead and
can transform large markets
Our Commercial Printing strategy has been endorsed enthusiastically at Drupa by
partners and customers
Our Graphics and Commercial Film Segment is a strong cash generator
Personalized Imaging & Consumer Inkjet supported by our strong brand platform
drive positive earnings and growth prospects
Our corporate cost, R&D and SGA will be significantly reduced in 2013/14
IP auction proceeding as planned in early August
56
Business Emergence Plan
Corporate
Total Corporate Costs - 2012 Outlook
Region
Function
% of
Spend
Asia,
7%
EAMER, 16%
LAR, 3%
Corporate Finance Group
22%
Chief Administrative Officer
46%
Corporate Research
17%
Other (Bldg
(Bldg. Occupancy,
Occupancy Chief
Marketing Office, CEO)
16%
USC, 74%
Category
Non-People,
40%
People, 60%
2012E Total Spend - $448M
COGS - $77M, R&D - $82M, SGA - $289M
Headcount (as of 6/8/12)
2,329
People Cost $271M
58
Total Corporate Costs Emergence Plan
2011
2012
Actuals Outlook
2013
Plan
2014
Plan
$448
$367
$328
$ Reduction YOY
-$88
-$81
-$39
% Reduction YOY
-16%
-18%
-11%
(In Millions)
Total Corporate Costs
$536
Cost Reduction Actions
 Align with simplification of
 Product
P d t lines
li
exits/changes
it / h
 Sites/Country participation
 Organization structure
 Focus research projects on nearterm road map
 Eliminate centralized corporate
engineering
i
i
Increase span of controls
Consolidate leadership
Expand share services concept
Reduce discretionary spend
Eli i t aviation
Eliminate
i ti d
department
t
t
Renegotiate contracts &
maintenance agreements
 Lower
L
service
i llevels
l






59
Chief Administrative Office – 2012 Outlook
Regions
Functions
EAMER
12%
LAR 2%
% of Spend
Information Systems
58%
Human Resources
15%
Asia 5%
USC 80%
Category
Legal & Comm. & Public Affairs
l&
& bl ff
23%
%
Health, Saftey & Environment
4%
NonN
People
40%
People
60%
2012E Projected Total Spend - $216M
Headcount (as of 6/8/12) 1,040
People Cost $129M
60
Corporate Finance Group – 2012 Outlook
Regions
% of %
of
Spend
Function
Auditing
3%
Business Unit Finance
19%
Financial Planning & Analysis
2%
Controllers
30%
Corporate Tax
10%
Treasury & Corporate Development 18%
Purchasing
18%
Category
2012E Total
T t l Spend
S
d - $104M
Headcount (as of 6/8/12) 626
People Cost $64M
61
Corporate Research – 2012 Outlook
Regions
Asia
5%
Segments
% of Spend
Digital Printing & Enterprise
g
g
p
46%
Graphics, Entertainment, Films
21%
Consumer
33%
US&C
95%
Category
NonPeople
21%
People
79%
2012E Projected Total Spend - $82M
Headcount (as of 6/8/12) 650
People Cost $65M
62
Supplemental Financial Information
August 2012
Contents
Page
1.
Financial Projections – 2012 – 2017
2.
(a) Reconciliation of EBITDA After Corp. Costs (per Financial Projections) to Form
10 K N
10-K
Nett L
Loss
76
(b) Reconciliation of Form 10-Q Net Loss to EBITDA to EBITDA After Corp. Costs
(per Financial Projections)
77
3.
Reconciliation of Consolidated EBITDA After Corp Costs (per Financial Projections)
to Adjusted EBITDA (FY 2012 Estimate)
78
4.
Definition of Cash Generation before Restructuring, Reorganization Costs,
Pension/OPEB and Non-Recurring IP
79
5.
p
g Activities to Cash Generation before
Reconciliation of Net Cash Used in Operating
Restructuring and Reorganization Payments, Pension/OPEB Contributions and
Benefit Payments and Non-Recurring IP for the Six Months Ended June 30, 2012
80
6.
EKC EXCEL Targets
81
7.
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable
GAAP Measures
82
65
64
1.
Financial Projections – 2012 – 2017 – Consolidated
Consolidated Financial Projections
($ in millions)
Revenue
COGS
Gross Profit*
BU R&D
BU R&D
BU SG&A
EBIT Before Corp. Allocation
Depreciation**
Amortization
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
2011A
$ 6,022
1H 2012
$ 2,042
2H 2012E
$ 2,356
2012E
$ 4,398
2013E
$ 4,517
2014E
$ 4,801
2015E
$ 5,061
2016E
$ 5,411
2017E
$ 5,839
5,084
1,786
1,944
3,730
3,597
3,677
3,794
3,954
4,167
$ 938
$ 257
$ 411
$ 668
$ 920
$ 1,124
$ 1,267
$ 1,456
$ 1,672
193
70
64
134
127
127
132
131
137
797
281
278
559
477
481
517
543
574
$ (52)
$ (95)
$ 69
$ (26)
$ 316
$ 516
$ 618
$ 783
$ 961
266
114
121
234
227
206
203
186
196
43
18
9
27
20
17
15
15
14
$ 258
$ 258
$ 37
$ 37
$ 199
$ 199
$ 236
$ 236
$ 563
$ 563
$ 739
$ 739
$ 836
$ 836
$ 983
$ 983
$ 1 171
$ 1,171
Corporate SG&A
357
139
150
289
226
195
199
203
207
Corporate R&D
98
48
34
82
66
66
67
68
70
$ 271
$ 478
$ 570
$ 712
$ 894
EBITDA After Corp. Costs
$ (197)
Plus: Cash provided by/(used by) NWC
(70)
Less: CapEx
Less: CapEx
(128)
Total Operating Cash Flow
$ (394)
$ (150)
$ 14
$ (135)
221
(71)
150
(26)
$ 45
(73)
(99)
$ (130)
$ (84)
* Operational gross profit (i.e., not GAAP)
** Includes amortization of certain RSS Commercial Capital assets
Note: Immaterial rounding differences may exist
Note: Immaterial rounding differences may exist
65
1
(126)
$ 146
15
(144)
$ 350
3
(134)
$ 440
(16)
(10)
(138)
(171)
$ 558
$ 714
1.
Financial Projections – 2012 – 2017 – Consumer Segment
Consumer Segment Financial Information
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU R&D
BU SG&A
EBIT Before Corp. Allocation
Depreciation**
Amortization
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
2011A
$ 1,671
1H 2012
$ 687
2H 2012E
$ 776
2012E
$ 1,463
2013E
$ 1,522
2014E
$ 1,561
1,579
586
660
1,246
1,280
1,292
$ 92
$ 101
$ 116
$ 217
$ 242
$ 270
$ 54
$ 54
$ 62
$ 62
$ 116
$ 116
$ 143
$ 143
$ 177
$ 177
50
233
$ (191)
90
1
$ (99)
$ (99)
Corporate SG&A
61
Corporate R&D
22
EBITDA After Corp. Costs
$ (184)
Plus: Cash provided by/(used by) NWC
12
Less: CapEx
Less: CapEx
(45)
Total Operating Cash Flow
$ (216)
** Includes amortization of certain RSS Commercial Capital assets
Note: Immaterial rounding differences may exist
66
1.
Financial Projections – 2012 – 2017 – Digital Printing & Enterprise Segment
Digital Printing & Enterprise Segment Financial Information
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 1,139
1H 2012
$ 463
2H 2012E
$ 632
2012E
$ 1,095
2013E
$ 1,226
2014E
$ 1,503
927
370
483
853
884
1,021
$ 212
$ 93
$ 149
$ 242
$ 342
$ 483
$ (4)
$ (4)
$ 49
$ 49
$ 45
$ 45
$ 121
$ 121
$ 244
$ 244
67
201
$ (57)
Depreciation
22
Amortization
3
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
$ (31)
$ (31)
Corporate SG&A
96
Corporate R&D
28
EBITDA After Corp. Costs
$ (156)
Plus: Cash provided by/(used by) NWC
(30)
Less: CapEx
Less: CapEx
(24)
Total Operating Cash Flow
$ (210)
Note: Immaterial rounding differences may exist
67
1.
Financial Projections – 2012 – 2017 – Graphics & Commercial Films Segment
Graphics & Commercial Films Segment Financial Information
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 2,296
1H 2012
$ 894
2H 2012E
$ 944
2012E
$ 1,838
2013E
$ 1,756
2014E
$ 1,718
1,887
765
798
1,563
1,466
1,405
$ 409
$ 129
$ 146
$ 275
$ 291
$ 313
$ 83
$ 83
$ 102
$ 102
$ 186
$ 186
$ 206
$ 206
$ 232
$ 232
38
225
$ 145
Depreciation
103
Amortization
39
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
$ 288
$ 288
Corporate SG&A
106
Corporate R&D
22
EBITDA After Corp. Costs
$ 159
Plus: Cash provided by/(used by) NWC
29
Less: CapEx
Less: CapEx
(35)
Total Operating Cash Flow
$ 155
Note: Immaterial rounding differences may exist
68
1.
Financial Projections – 2012 – 2017 – Exited and Other Business Units
Exited and Other Business Units*
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 916
3
68
(33)
(41)
$ (66)
$ 46
$ 58
$ (111)
$ (111)
$ 93
$ 93
$ 87
$ 87
$ 225
$ (66)
$ ‐ $ (96)
$ (96)
$ (15)
$ (15)
2013E
$ 13
2014E
$ 17
38
137
$ 49
Amortization
‐ $ 100
$ 100
Corporate SG&A
92
Corporate R&D
25
$ (18)
Plus: Cash provided by/(used by) NWC
(81)
Less: CapEx
Less: CapEx
(25)
Total Operating Cash Flow
2012E
$ 2
65
51
EBITDA After Corp. Costs
2H 2012E
$ 3
690
Depreciation
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
1H 2012
$ (1)
$ (122)
* Includes Exited Businesses (DCD ‐ Non‐Essentials, CIS/Gallery and ISS), Consumer and Commercial OPEB, IP, Other Commercial (GCG‐Other,
Other Commercial (GCG
Other, Graphics Films), Other Non
Graphics Films), Other Non‐Operating
Operating Business Units
Business Units
Note: Immaterial rounding differences may exist
69
1.
Financial Projections – 2012 – 2017 – Personalized Imaging
Consumer Segment
Personalized Imaging Strategic Product Group Financial Information*
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU SG&A
EBIT Before Corp. Allocation
Depreciation**
Amortization
EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
2011A
$ 1,309
1H 2012
$ 540
2H 2012E
$ 592
1,136
460
503
963
907
889
$ 173
$ 81
$ 89
$ 169
$ 175
$ 201
$ 54
$ 54
$ 58
$ 58
$ 113
$ 113
$ 119
$ 119
$ 151
$ 151
$ 27
66
1
$ 95
$ 95
38
10
Less: CapEx
Less: CapEx
Total Operating Cash Flow
2014E
$ 1,089
123
Corporate R&D
Plus: Cash provided by/(used by) NWC
2013E
$ 1,082
23
Corporate SG&A
EBITDA After Corp. Costs
2012E
$ 1,133
$ 46
22
(20)
$ 49
* Includes RSS, Film Capture, EIS, P&OS, DCD ‐ Essentials business only, WW‐Managed‐CDG, WW Managed ‐ FPEG
** Includes amortization of certain RSS Commercial Capital assets
Includes amortization of certain RSS Commercial Capital assets
Note: Immaterial rounding differences may exist
70
1.
Financial Projections – 2012 – 2017 – Consumer Inkjet Systems
Consumer Segment
Consumer Inkjet Systems Strategic Product Group Financial Information
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 362
1H 2012
$ 147
2H 2012E
$ 184
2012E
$ 331
2013E
$ 440
2014E
$ 472
443
126
157
283
373
403
$ (81)
$ 21
$ 27
$ 48
$ 67
$ 69
$ (1)
$ (1)
$4
$ 4
$3
$ 3
$ 24
$ 24
$ 26
$ 26
27
110
$ (218)
Depreciation
24
Amortization
‐ EBITDA Before Corp Allocation
EBITDA Before Corp. Allocation
$ (194)
$ (194)
Corporate SG&A
23
Corporate R&D
12
EBITDA After Corp. Costs
Plus: Cash provided by/(used by) NWC
Less: CapEx
Less: CapEx
Total Operating Cash Flow
$ (230)
(10)
(25)
$ (265)
Note: Immaterial rounding differences may exist
71
1.
Financial Projections – 2012 – 2017 – Digital & Functional Printing
Digital Printing and Enterprise Segment
Digital & Functional Printing Strategic Product Group Financial Information*
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 673
1H 2012
$ 267
2H 2012E
$ 382
2012E
$ 649
628
235
321
557
583
698
$ 45
$ 32
$ 60
$ 92
$ 167
$ 288
$ (30)
$ (30)
$3
$ 3
$ (27)
$ (27)
$ 42
$ 42
$ 154
$ 154
138
$ (137)
17
Amortization
2
$ (117)
$ (117)
Corporate SG&A
67
Corporate R&D
20
EBITDA After Corp. Costs
Plus: Cash provided by/(used by) NWC
Less: CapEx
Less: CapEx
Total Operating Cash Flow
2014E
$ 985
43
Depreciation
EBITDA B f
EBITDA Before Corp. Allocation
C
All ti
2013E
$ 750
$ (205)
(36)
(21)
$ (262)
* Includes IPS, Packaging, EPS, Functional Printing
Note: Immaterial rounding differences may exist
72
1.
Financial Projections – 2012 – 2017 – Enterprise Services & Solutions
Digital Printing and Enterprise Segment
Enterprise Services & Solutions Strategic Product GroupFinancial Information*
($ in millions)
Revenue
COGS
Gross Profit
2011A
$ 466
1H 2012
$ 195
2H 2012E
$ 250
299
134
162
296
301
323
$ 167
$ 61
$ 89
$ 150
$ 175
$ 195
$ 26
$ 26
$ 46
$ 46
$ 72
$ 72
$ 79
$ 79
$ 90
$ 90
BU R&D
24
BU SG&A
63
EBIT Before Corp. Allocation
5
Amortization
1
$ 86
$ 86
Corporate SG&A
29
Corporate R&D
8
EBITDA After Corp. Costs
Plus: Cash provided by/(used by) NWC
Less: CapEx
Less: CapEx
Total Operating Cash Flow
2013E
$ 476
2014E
$ 518
$ 80
Depreciation
EBITDA B f
EBITDA Before Corp. Allocation
C
All ti
2012E
$ 446
$ 49
6
(3)
$ 52
* Includes Scanner & Technical Service (DI) and Professional Services (KSB)
Note: Immaterial rounding differences may exist
73
1.
Financial Projections – 2012 - 2017 - Graphics
Graphics & Commercial Films Segment
Graphics Strategic Product Group Financial Information*
($ in millions)
Revenue
COGS
Gross Profit
BU R&D
BU SG&A
EBIT Before Corp. Allocation
2011A
$ 1,597
605
1,159
1,167
1,165
$ 129
$ 241
$ 256
$ 281
$ 68
$ 68
$ 77
$ 77
$ 145
$ 145
$ 156
$ 156
$ 183
$ 183
32
175
$ 84
$ 174
$ 174
Corporate SG&A
81
Corporate R&D
19
Total Operating Cash Flow
2014E
$ 1,446
554
39
Less: CapEx
Less: CapEx
2013E
$ 1,422
$ 113
Amortization
Plus: Cash provided by/(used by) NWC
2012E
$ 1,400
$ 292
50
EBITDA After Corp. Costs
2H 2012E
$ 733
1,305
Depreciation
EBITDA B f
EBITDA Before Corp. Allocation
C
All ti
1H 2012
$ 666
$ 74
25
(30)
$ 70
* Includes Prepress Plates, Prepress Output Devices, and Workflow/UWS
Note: Immaterial rounding differences may exist
74
1.
Financial Projections – 2012 – 2017 – Commercial Films
Graphics & Commercial Films Segment
Commercial Films Strategic Product Group Financial Information*
($ in millions)
Revenue
COGS
Gross Profit
2011A
$ 699
1H 2012
$ 227
2H 2012E
$ 211
2012E
$ 438
2013E
$ 334
2014E
$ 272
582
211
193
404
299
240
$ 117
$ 16
$ 18
$ 34
$ 35
$ 32
$ 15
$ 15
$ 26
$ 26
$ 41
$ 41
$ 50
$ 50
$ 49
$ 49
BU R&D
BU SG&A
EBIT Before Corp. Allocation
6
50
$ 61
Depreciation
53
Amortization
‐ EBITDA B f
EBITDA Before Corp. Allocation
C
All ti
$ 114
$ 114
Corporate SG&A
25
Corporate R&D
3
EBITDA After Corp. Costs
Plus: Cash provided by/(used by) NWC
Less: CapEx
Less: CapEx
Total Operating Cash Flow
$ 85
4
(5)
$ 85
* Includes Entertainment Imaging, Aerial and Industrial Materials, Manufacturing Trade Sales
Note: Immaterial rounding differences may exist
75
2.
(a) Reconciliation of EBITDA After Corp. Costs (per Financial Projections) to
Form 10-K Net Loss ($ in millions)
2011 Operational Gross Profit
2011 Operational Gross Profit
$
$ 938
Less:
(1)
Other COGS ‐ Corporate Pension Costs Restructuring Costs ‐ Acc. Depreciation & Inventory Writedowns
2011 GAAP Gross Profit
39
12
$ 887
2011 EBITDA after corporate costs
$ (197)
Less:
Depreciation and amortization expense (2)
2011 Operational EBIT (Segment loss from continuing Operations before interest expense, other income (charges) net, and income taxes (Note 25 Segment Information)
Less:
Restructuring costs, rationalization and other
(1)
Non‐ops pension (income)/cost Other operating (income) expenses, net
2011 GAA l
2011 GAAP loss from continuing operations before interest expense, other income (charges), f
i i
i
b f
i
h i
( h
)
net and income taxes
Less:
Interest expense
Other (income)/charges, net
2011 Loss from Continuing Operations before Income Taxes
2011 Loss from Continuing Operations before Income Taxes
Provision for income taxes
Extraordinary Items, net of tax
(Earnings)/loss from discontinued operations, net of income tax
2011 Net Income (Loss) Attributable to EKC per 10K filing
309
(506)
133
29
(69)
(600)
156
2
(758)
9
‐
(3)
$ (764)
Notes:
1. During the first quarter of 2011, the Company changed its segment measure of profit and loss to exclude certain components of pension and other postretirement obligations (OPEB). As a result of this change, the operating segment results exclude the interest cost, expected return on plan assets, amortization of actuarial gains and losses, and special termination benefit, curtailment and settlement components of pension and OPEB expense. The service cost and amortization of prior service cost components will continue to be reported as part of operating segment results.
2. Includes amortization of certain RSS Commercial Capital assets
Note: Immaterial rounding differences may exist
76
2.
(b) Reconciliation of Form 10-Q Net Loss to EBITDA to EBITDA After Corp. Costs
(per Financial Projections)
Reconciliation of Form 10‐Q Net Loss to EBITDA to EBITDA After Reconciliation
of Form 10 Q Net Loss to EBITDA to EBITDA After
Corp. Costs per Financial Projections
($ in millions)
Net loss, as reported in the June 30, 2012 Form 10‐Q
Interest expense
(Benefit) for income taxes
Depreciation
Amortization
EBITDA
Restructuring costs and other Corporate Components of Pension and OPEB Expense
(Gains) on asset sales
Loss on early extinguishment of debt
Other (income) charges, net
Other (income) charges, net
June 2012
YTD
$ (665)
77 (111)
106 18 $ (575)
$ (575)
116 65 (20)
7 2
2 Reorganization items, net
EBITDA After Corp. Costs
Amortization of RSS Commercial Capital Assets
EBITDA After Corp. Costs per Financial Exhibits
Note: Immaterial rounding differences may exist
77
248 $ (157)
7 $ (150)
3.
Reconciliation of Consolidated EBITDA After Corp Costs (per Financial
Projections) to Adjusted EBITDA (FY 2012 Estimate)
Reconciliation of EBITDA After Corp. Costs to Adjusted EBITDA:
R
ili i
f EBITDA Af C
C
Adj
d EBITDA
FY 2012 Estimate ($millions)
EBITDA After Corp. Costs
$ (135)
Gains on asset sales
Gains on asset sales
20
20 Other Non‐Cash charges that will not result in cash payment (Except non‐cash Restructuring Chgs) plus IP SG&A
Non‐Recurring IP Revenue
82 61 Pension & OPEB Income ‐ (Ops)
(12)
Other non‐cash income that will not result in cash receipts
j
Adjusted EBITDA
(9)
6 Note: Immaterial rounding differences may exist
78
4.
Definition of Cash Generation before Restructuring, Reorganization Costs,
Pension/OPEB and Non-Recurring IP
Cash Generation before Restructuring, Reorganization Costs, Pension/OPEB and NonRecurring IP:
Net cash flow provided by (used in) operating activities from continuing operations as determined
under US GAAP, excluding:
• Restructuring/rationalization payments;
• Payments of reorganization costs related to the Chapter 11 filing;
• Net cash flow from the operating results of acquisitions or new strategic alliances having an
annualized revenue of greater than $100M;
• Share issuance, share repurchases, including associated costs, expenses and fees;
• Debt actions, including costs, expenses and fees associated with amendments, revisions or
other actions related to the company’s debt portfolio, including revolving credit agreements;
• Cash consideration paid for acquisitions or new strategic alliances along with the associated
deal and integration costs;
• Investments in unconsolidated entities;
• Movements or transfers of cash to marketable securities or other interest-bearing
investments or accounts;
• Dividend payments;
• Pension/OPEB cash contributions and benefit payments;
• IP assett sale
l proceeds
d and
d lilicensing
i ttransactions;
ti
Including:
• Net cash flow generated by any business divested in the year, through the date of divestiture,
including
g business divestitures categorized
g
as continuing
g operations
p
or discontinued
operations;
• Proceeds from asset sales, agreements, settlements and divestitures;
• Capital expenditures.
79
5.
Reconciliation of Net Cash Used in Operating Activities to Cash Generation before
Restructuring and Reorganization Payments, Pension/OPEB Contributions and Benefit
Payments and Non-Recurring IP for the Six Months Ended June 30, 2012
Reconciliation of Net Cash Used in Operating Activities to Cash Generation Reconciliation
of Net Cash Used in Operating Activities to Cash Generation
Before Restructuring and Reorganization Payments, Pension/OPEB Contributions and Benefit Payments, and Non‐Recurring IP
($ in millions)
Net Cash Used in Operating Activities, as reported
Capital Expenditures
Proceeds from sales of businesses/assets
Proceeds from sale and leaseback transaction
Restructuring payments
Reorganization payments
Pension contributions/OPEB benefit payments
Cash Generation Before Restructuring and Reorganization Payments, Pension/OPEB Contributions and Benefit Payments, and Non‐Recurring IP
and Non‐Recurring IP
Note: Immaterial rounding differences may exist
80
June 2012
YTD
$ (152)
(26)
26 41 50 43 78 $ 60 6.
EKC EXCEL Targets ($ in millions)
81
7.
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable
GAAP Measures
In its August 13, 2012 Form 8-K filing, Eastman Kodak Company (“The Company”) referenced certain non-GAAP
financial measures including “operational gross profit” and “operating cash flow”.
The Company believes that these non-GAAP measures represent important internal measures of performance.
A
Accordingly,
di l where
h they
h are provided,
id d it
i is
i to give
i investors
i
the
h same financial
fi
i l data
d management uses with
i h the
h
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 and quartersequential basis.
The following reconciliations are provided with respect to terms used in the August 13
13, 2012 Form 8-K
8 K filing
filing.
The following table reconciles operational gross profit to the most directly comparable GAAP measures of
consolidated gross profit (amounts in millions):
Six Months Ended
June 30, 2012
$
Operational gross profit, as presented
Corporate pension costs
R t t i costs
Restructuring
t andd other
th
Other items
Consolidated gross profit (GAAP basis)
$
Note: Immaterial rounding differences may exist
82
257
(40)
(3)
(1)
213
7.
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable
GAAP Measures
The following table reconciles operating cash flow to the most directly comparable GAAP measure of net cash used
in operating activities (amounts in millions):
Six Months Ended
June 30
30, 2012
2011
Operating cash flow, as presented
Cash (provided by) used by net working capital
Capital expenditures
Interest expense
(P i i ) benefit
(Provision)
b
fit for
f income
i
taxes
t
Restructuring costs and other
Corporate components of pension and OPEB expense
Other operating income (expenses), net
Other (income) charges, net
Reorganization items, net
Amortization of RSS commercial capital assets
Loss from disontinued operations, net of income taxes
Gains on sales of businesses/assets
Non-cash restructuring costs , asset impairments and other charges
Non-cash and financing related reorganization items, net
Provision for deferred income taxes
Decrease in receivables
Decrease (increase) in inventories
Decrease in liabilities excluding borrowings
Other items, net
Net cash used in discontinued operations
$
(394)
70
128
(156)
(9)
(133)
(28)
67
2
(15)
(3)
(80)
17
12
96
131
(729)
36
(10)
$
45
(221)
26
(77)
111
(116)
(65)
20
1
(248)
(7)
(20)
5
205
16
269
(38)
(92)
34
-
Net cash used in operating activities (GAAP basis)
$
(998)
$
(152)
Note: Immaterial rounding differences may exist
83