8-K

PAGE 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 7, 2008

Eastman Kodak Company
(Exact name of registrant as specified in its charter)

New Jersey	1-87	16-0417150
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

343 State Street,
Rochester, New York 14650
(Address of Principal Executive Office) (Zip Code)

Registrant's telephone number, including area code     (585) 724-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[     ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[     ]	Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)
[     ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[     ]	Pre-commencement communications pursuant to Rule 13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c))

PAGE 2

ITEM 8.01 Other Events

On February 7, 2008, Eastman Kodak Company issued a press release regarding its annual strategy review meeting in New York City. The press release is attached as exhibit (99.1). In addition, the presentation materials that will be distributed at the meeting are also attached as exhibit (99.2) and exhibit (99.3).

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits

(99.1)	Eastman Kodak Company press release dated February 7, 2008, announcing the Company’s annual strategy review meeting held in New York City.
(99.2)	Eastman Kodak Company annual strategy review meeting presentation materials.
(99.3)	Eastman Kodak Company annual strategy review meeting Non-GAAP measures reconciliations.

PAGE 3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EASTMAN KODAK COMPANY
By:	/s/ Laurence L. Hickey
	Laurence L. Hickey
	Corporate Secretary

Date: February 7, 2008

PAGE 4

EASTMAN KODAK COMPANY
INDEX TO EXHIBITS

Exhibit No.

(99.1)	Eastman Kodak Company press release dated February 7, 2008, announcing the Company’s annual strategy review meeting held in New York City.
(99.2)	Eastman Kodak Company annual strategy review meeting presentation materials.
(99.3)	Eastman Kodak Company annual strategy review meeting Non-GAAP measures reconciliations.

EX-99.1

Exhibit (99.1)

Media Contacts:
David Lanzillo	585-781-5481	david.lanzillo@kodak.com
Barbara Pierce	585-724-5036	barbara.pierce@kodak.com
Investor Relations Contacts:
Ann McCorvey	585-724-5096	antoinette.mccorvey@kodak.com
Angela Nash	585-724-0982	angela.nash@kodak.com

Kodak Poised to Accelerate Profitable Growth

Company Forecasts Continued Digital Revenue Expansion, Strong Earnings Growth and Cash Flow in 2008 and Beyond

Traditional Business Offers Sustainable Source of Cash

Continued Product Innovation Focused on Kodak’s Strength -- the Intersection of Materials Science and Digital Image Science

NEW YORK CITY, Feb. 7 – Eastman Kodak Company (NYSE:EK) today will unveil to investors a new company that is poised to accelerate profitable growth on the strength of its unmatched expertise in materials science and digital image science.

     Over the next four years, this new Kodak will leverage its leading portfolio of digital businesses, a highly profitable traditional business, and a relentless focus on operational effectiveness to deliver increased revenue, along with strong earnings growth and cash flow.

For 2008, on a continuing operations basis, Kodak expects:

• Earnings from operations of 4% to 5% of revenue on total company revenue growth of 0% to 2%;
   
• Digital revenue growth of 7% to 10%, with 60% of revenues generated by output businesses and 40% from capture businesses;
   
• 2008 GAAP earnings from continuing operations of $250 million to $275 million, including pre-tax charges of $60 million to $80 million for rationalization and carryover restructuring costs;
   
• On a GAAP basis, cash provided by operating activities from continuing operations of $575 million to $625 million;
   
• Cash generation of $400 million to $500 million before dividend payments and after taking into account payments for carryover restructuring and other rationalization costs of approximately $150 million.

“It is with great pride that I introduce the new Kodak, a company with a new spirit and winning attitude,” said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. “While completing a difficult and unprecedented business transformation, we also created breakthrough products and services that feature Kodak’s hallmark innovation, winning customer acceptance and critical praise for a brand renowned for its smart use of technology. In 2008 and beyond, we will leverage the innovative thinking of Kodak people to deliver on our commitments to shareholders and increase the value of this great company.”

     At today’s annual strategy meeting in New York City, Perez and his management team will detail why Kodak is well positioned to excel in every market in which it competes.

Kodak’s Traditional Business: A Sustainable Model

     Starting this year, the company has consolidated all of its silver-halide products within the newly created Film, Photofinishing and Entertainment Group (FPEG) in order to maximize the performance of the business. In addition to consumer, professional, entertainment and industrial films, the business unit now includes responsibility for graphics films, silver-halide photographic paper and chemistry, and traditional retail and wholesale photofinishing product lines.

     In the wake of the four-year restructuring, FPEG now enjoys a sustainable business model and is well positioned to weather additional declines while maintaining a strong market position in all of its key product categories. For 2008, the company expects FPEG to deliver another year of strong cash generation, reflecting earnings from operations of 6% to 8% of revenue on a revenue decline of 12% to 14%.

2

Kodak’s Digital Business: Built to Grow

Both of the company’s digital business units – the Consumer Digital Imaging Group (CDG) and the Graphic Communications Group (GCG) – are poised to outpace the market by bringing to customers groundbreaking advances in imaging technology.

     For 2008, the company expects revenues from its digital portfolio to grow by 7% to 10%, resulting in earnings from operations of 3% to 4% of revenue. This growth will be driven on the consumer side (CDG) by two to three times the unit sales of the company’s revolutionary consumer inkjet printers as compared to 2007, retail deployment of the innovative KODAK APEX thermal dry lab photofinishing system, global expansion of its photo kiosks, and new product introductions in digital cameras, digital frames, and next-generation image sensors. On the commercial side, GCG growth will be fueled by increased sales of workflow software, document scanners, digital plates and presses, and new product introductions, including the KODAK VERSAMARK VL2000 Printing System, a drop-on-demand digital production press. At drupa 2008, the company will introduce KODAK STREAM technology, a next-generation approach to continuous inkjet printing that provides offset-class quality.

     GCG’s success reflects the hybrid nature of the commercial printing industry as it shifts from traditional to digital technology. Kodak is uniquely positioned because the company offers the broadest range of digital and traditional solutions to assist printers through each stage of their transition.

The Growth Model

     Kodak enters 2008 with a strong balance sheet and the financial flexibility to make the necessary investments to achieve greater scale in its growing digital businesses.

On average, the company expects to grow total revenue by a compound annual growth rate of 5% per year from 2008 to 2011, with a compound annual growth rate of digital revenues of 10% to 12% per year during that period.

Kodak is targeting gross profit margins of 28% to 30% and earnings from operations of 8% to 10% of revenues by 2011. The company is also targeting cash generation before dividends to surpass $1.0 billion annually by the end of the planning period.

3

     “Kodak is now a company with a broad portfolio of digital businesses with diverse sources of revenue, and earnings powered by an unmatched intellectual property position and a sustainable traditional business model,” Perez said. “I am confident that we will continue to achieve success in digital markets and create value for our shareholders in 2008 and beyond.”

Webcast of Today’s Meeting

For those unable to attend in person, today’s meeting will be available via a live webcast. To access the webcast please go to: http://www.kodak.com/go/invest

     The meeting will also be teleconferenced in listen-only mode. To listen please call 913-312-1386, access code 1981483or ask for the Kodak Investor Meeting.

An audio replay of the meeting will be available beginning Friday, February 8^th at 8:00 a.m. Eastern Time and will run until 5:00 p.m. Eastern Time on Friday, February 15^th. The replay phone number is 719-457-0820,and the access code is 1981483.

#

Reconciliation of non-GAAP measures

Within this press releaseKodak references certain non-GAAP financial measures, such as: Digital revenue growth and cash generation.

Kodak has prepared a reconciliation of these non-GAAP measures to the comparable GAAP measures. This additional information is posted in the Investor Center of Kodak’s web site at: http://www.kodak.com.

4

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this press release 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 the Company's expectations regarding its revenue, revenue growth, revenue mix, rate of change in revenue, gross profit margin, earnings, cash, cash plan, target business model, rationalization and carryover restructuring costs, new product introductions, and inkjet unit growth 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 its products against the intellectual property challenges of others;
   
• execution of intellectual property licensing programs and other strategies;
   
• integration of the Company's businesses to SAP, the Company's enterprise system software;
   
• completion of various portfolio actions;
   
• reduction of inventories;
   
• integration of acquired businesses and consolidation of the Company's subsidiary structure;
   
• improvement in manufacturing productivity and techniques;
   
• improvement in working capital management and cash conversion cycle;
   
• continued availability of essential components and services from concentrated sources of supply;
   
• improvement in supply chain efficiency and dependability;and
   
• implementation of the strategies designed to address the decline in the Company's traditional businesses.

5

The forward-looking statements contained in this press release are subject to the following additional risk factors:

• inherent unpredictability of currency fluctuations, commodity prices and raw material costs;
   
• competitive actions, including pricing;
   
• the Company's 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;
   
• pension and other postretirement benefit cost factors such as actuarial assumptions, market performance, and employee retirement decisions;
   
• general economic, business, geo-political and regulatory conditions or unanticipated environmental liabilities or costs;
   
• changes in market growth;
   
• 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.

#

6

EX-99.2

TheNewKodak

February 7, 2008

1 

 

The New Kodak  2 

The New Kodak  3 

The New Kodak

Antonio Perez

Chairman and CEO

4 

Program of Events

The New Kodak  5 

Key Messages of the New Kodak

The New Kodak  6 

2007: Every Metric Met or Exceeded

The New Kodak  7 

SuccessfullyDelivered 2007 StrategicImperatives

The New Kodak  8 

New ReportingStructure: LeverageTraditionalAssets

The New Kodak  10 

2008 DigitalPortfolio: Built to Grow

The New Kodak  11 

2011DigitalPortfolio

Corporateaverage gross profit improves over the planning period

The New Kodak  12 

2011TraditionalPortfolio:Viable Mid-Term

#1 marketpositions,smaller size, good cash generation

The New Kodak  13 

The New Kodak: 2008 Revenue

The New Kodak  14 

DigitalBusiness:Critical Mass and HealthyGrowth

The New Kodak  15 

GeographicBalance:GlobalStability and Growth

The New Kodak  16 

Balancing the Returns from IP Remains a Priority

The New Kodak  17 

Surplus Cash Allocation 2008-2011

The New Kodak  18 

2008 Key StrategicImperatives

The New Kodak  19 

This is the New Kodak: 2008 FinancialTargets

The New Kodak  20

2008-2011: TargetBusiness Model

The New Kodak  Excludes restructuring/rationalization 21

A Shift TowardsAnnuitiesEnhances Gross Profit

The New Kodak  22

The Future of the New Kodak

The New Kodak  23

Traditional’s Staying Power

Mary Jane Hellyar

President, Film, Photofinishing & Entertainment Group
Executive Vice President, Eastman Kodak Company

24

FPEG Key Messages

The New Kodak  25

FPEG Key Accomplishments

The New Kodak  26

The FPEG Portfolio

The New Kodak  27

RevenueDecline Rate Stabilizes,
Driven by Shift in Portfolio Mix

The New Kodak  28

FPEG TargetBusiness Model

The New Kodak  29

TraditionalPhotofinishing:
Focus on MarginExpansion

The New Kodak  30

     EntertainmentImaging:
A Year of Solid Results for Kodak

The New Kodak  31

CinemaScreens are BroadlyDistributed & Growing

The New Kodak  2007 Estimated WW First-Run Screens = 88,000 32

D-CinemaAdoption Still in Early Stages

The New Kodak  SOURCE: Screen Digest 2007 Forecast 33

Origination Film Transitioning at Measured Pace

The New Kodak  34

FPEG 2008 Operational Goals

The New Kodak  35

FPEG Key Messages

The New Kodak  36

Digital Growth

Phil Faraci

President & Chief Operating Officer

37

Progress to Date with the Digital Businesses

The New Kodak  38

Graphic Communications
Group

Growth to Outpace the Market

39 

The New Kodak  40 

2007 Performance: GCG

The New Kodak  41 

Kodak Participates in Strong & GrowingMarkets

The New Kodak  42 

The New Kodak  43 

MarketDriversFuelingKodak’sProfitableGrowth

The New Kodak  44 

GCGPortfolio
Large, profitableposition in Capture & Prepress, growth in Digital Print & EnterpriseSolutions

The New Kodak  45 

KODAKSTREAMBreakthroughTechnology

Introduction at Drupa ‘08

The New Kodak  46 

KODAKSTREAMBreakthroughTechnology

Introduction at Drupa ‘08

The New Kodak  47 

KODAKSTREAMContinuous Inkjet Printing

The New Kodak  48 

MakingProgressToward Target Model

The New Kodak  49 

Solid Business Model

The New Kodak  50 

The New Kodak  51 

Consumer Digital Group

Growth to Outpace the Market

52 

Key Messages

Strong performance in 2007

The New Kodak  53 

2007 Performance: CDG

The New Kodak  54 

Well Positioned in Higher Growth Digital Markets

The New Kodak  55 

MarketDrivers of Kodak’sGrowth

The New Kodak  56 

WellPositioned in “ConnectedImaging”
Connectingpersonalcontent to the TV, mobile device, PC and retail commercial hubs

The New Kodak  57 

CDG Portfolio
Broad footprint with Cameras & Kiosks, high growth with CMOS, Inkjet printers & Connected Imaging

The New Kodak  58

Kodak CMOS Redefines Mobile Quality
5 mp, ¼” CMOS Sensor

The New Kodak  59

Inkjet’s Breakthrough Value Broadly Accepted

The New Kodak	* SOURCE: NPD, does not include Mass, Direct	60
	channels

Making Progress Toward Target Model

The New Kodak  61

Solid Business Model

The New Kodak  62

The New Kodak  63

The Growth Model

Frank Sklarsky

Chief Financial Officer

64

Agenda

The New Kodak  65

2007 Financial Results

66

“Mission Accomplished”

The New Kodak  67

Achieved All 2007 Key Metrics

The New Kodak  68

Our Corporate Restructuring is Complete

The New Kodak  69

Exceeded Cash Goals

The New Kodak  70

Bridging the Change

71

Building Transparency into our Digital Businesses
The New Reporting Structure (effective 1/1/08)

The New Kodak  72

New Operating Structure – 2007 Breakdown

The New Kodak  73

2008 Priorities & Financial Model

74

2008 Priorities

The New Kodak  75

Review of Key Trends Under New Structure

The New Kodak  76

2008 Business Model

The New Kodak  77 

2008 Financial Targets

The New Kodak  78 

How Should We Think About
Net Earnings for 2008?

The New Kodak  79 

2008 Cash Generation

The New Kodak  80 

Significant Improvement in Operating Cash Flow
2008 Cash Flow Plan

The New Kodak  81 

Outlook for 2008 Taxes

The New Kodak  82 

Ample Liquidity Provides Significant Flexibility

The New Kodak  83 

The New Kodak  84 

Looking Forward …
Target Business
Model

85 

Driving Digital Businesses Drives
Overall Revenue Growth

The New Kodak  86 

2011 Business Model

The New Kodak  87 

Target Business Model

The New Kodak  88 

Ramping Cash Flow

The New Kodak  89 

Capital Allocation and
Value Creation

90 

Capital Allocation Philosophy

The New Kodak  91 

The New Kodak  92 

Key Criteria for Inorganic Investments

The New Kodak  93 

Key Takeaways

The New Kodak  94 

95 

EX-99.3

APPENDIX
Reconciliation of Non-GAAP Financial Measures
to the Most Directly Comparable GAAP Measures

In its February 7, 2008 Investor Meeting presentation, Eastman Kodak Company (“The Company”) referenced certain non-GAAP financial measures, "Digital Revenue Growth", “Digital Earnings”, “Digital EFO", “Digital EFO Improvement”, “Gross Profit excluding Restructuring”, “ Pro Forma Revenue Change”, “EFO excluding Restructuring”, “EBITDA”, Total Company and Segment: “Pro Forma Revenue”, “Pro Forma Gross Profit”, “Pro Forma SG&A” as a percent of sales, “Pro Forma R&D” as a percent of sales, and “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", “CDG Pro Forma EFO Improvement”, “GCG Pro Forma EFO”, “Pro Forma Digital EFO”, “Pro Forma Digital Revenue”, “Net Cash Generation”, “Cash Generation before Dividends”, and "Cash Generation Excluding Carryover Restructuring/Rationalization".

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 February 7, 2008 presentations of Kodak’s Chief Executive Officer Antonio Perez, Chief Financial Officer Frank Sklarsky and other Company Officers.

1. The following table reconciles 2007 net cash generation to the most directly comparable GAAP measure of net cash provided by continuing operations from operating activities (amounts in millions):

	2007	2007
	Goal	Actual
Net cash generation, as presented	~$100	$	333
Additions to properties, net proceeds from the sales of
businesses/assets, distributions from (investments in)
unconsolidated affiliates and dividends, net	150-300		19
Net cash provided by continuing operations from
operating activities (GAAP basis)	$250-$400	$	352

2. The following table reconciles the 2007 digital revenue growth for CDG, GCG and Total Company to the most directly comparable GAAP measure of consolidated total revenue decline:

	2007	2007
	Goal	Actuals
CDG Digital revenue growth, as presented	2%-4%	8%
GCG Digital revenue growth, as presented	6%-9%	7%
Total Digital revenue growth, as presented	3%-5%	8%
Total Traditional and New Technologies revenue decline	(18)%	(15)%
Total Company revenue decline (GAAP basis)	(7)%-(4)%	(3)%

1

3. The following table reconciles 2007 digital earnings to the most directly comparable GAAP measure of loss from continuing operations before interest, other income (charges), net and income taxes (amounts in millions):

	2007	2007
	Goal	Actual
Digital earnings, as presented	$150-$250	$	176
Traditional earnings and New Technologies loss	~$150		167
Total EFO, as presented	$300-$400	$	343
Restructuring and items of comparability	$(725)-$(925)		(573	)
Loss from continuing operations before interest, other
income (charges), net and income taxes (GAAP basis)	$(425)-$(525)	$	(230	)

4. The following table reconciles 2006 and 2007 digital earnings from operations to the most directly comparable GAAP measure of loss from continuing operations before interest, other income (charges), net and income taxes (amounts in millions):

	2007			2006			Increase
	Actual			Actual			(Decrease)
Digital Earnings from Operations, as presented	$	176		$	(13	)	$	189
Traditional earnings, New Technologies loss, restructuring
costs and items of comparability		(406	)		(463	)	$	57
Loss from continuing operations before interest, other
income (charges), net and income taxes (GAAP basis)	$	(230	)	$	(476	)	$	246

5. The following table reconciles 2008 EBITDA goal to the most directly comparable GAAP measure of earnings from continuing operations before interest, other income (charges), net and income taxes (amounts in millions):

	2008
	Goal
EBITDA, as presented	$1,000-$1,100
Depreciation and Amortization	~$(675)
Earnings from continuing operations before interest, other income
(charges), net and income taxes (GAAP basis)	$360-$400

2

6. The following table reconciles 2008 cash generation excluding carryover restructuring/rationalization to the most directly comparable GAAP measure of net cash provided by continuing operations from operating activities (amounts in millions):

	2008
	Goal
Cash generation excluding carryover restructuring/rationalization, as
presented	$550-$650
Projected restructuring payments	~$150
Cash generation before dividend payments	$400-$500
Additions to properties, net proceeds from the sales of businesses/assets,
distributions from (investments in) unconsolidated affiliates and dividends	$125-$175
Net cash provided by continuing operations from operating activities
(GAAP basis), as presented	$575-$625

3

7. The following table reconciles 2006 and 2007 Pro Forma Revenue, Gross Profit and SG&A, R&D, and EFO segment as a percent of sales for CDG, GCG and FPEG to the most directly comparable GAAP measures based on previously reported 2006 and 2007 actual segment results:

($ in millions)				Impact of 2008			GAAP basis						Impact of 2008			GAAP basis
	2006			structure realignment			2006			2007			structure realignment			2007
FPEG (previously FPG)	Pro Forma			and cost reallocations			Actual			Pro Forma			and cost reallocations			Actual
Revenue	$	4,271		$	(1,959	)	$	2,312		$	3,638		$	(1,670	)	$	1,968
Gross Profit		25	%		12	%		37	%		24	%		13	%		37	%
SG&A		15	%		5	%		20	%		14	%		3	%		17	%
R&D		2	%		(1	)%		1	%		2	%		(1	)%		1	%
EFO		8	%		8	%		16	%		8	%		11	%		19	%
				Impact of 2008			GAAP basis						Impact of 2008			GAAP basis
	2006			structure realignment			2006			2007			structure realignment			2007
CDG	Pro Forma			and cost reallocations			Actual			Pro Forma			and cost reallocations			Actual
Revenue	$	2,995		$	1,716		$	4,711		$	3,241		$	1,390		$	4,631
Gross Profit		21	%		(3	)%		18	%		26	%		(6	)%		20	%
SG&A		19	%		(2	)%		17	%		18	%		(1	)%		17	%
R&D		10	%		(4	)%		6	%		8	%		(3	)%		5	%
EFO		(7	)%		2	%		(5	)%		0	%		(2	)%		(2	)%
				Impact of 2008			GAAP basis						Impact of 2008			GAAP basis
	2006			structure realignment			2006			2007			structure realignment			2007
GCG	Pro Forma			and cost reallocations			Actual			Pro Forma			and cost reallocations			Actual
Revenue	$	3,287		$	190		$	3,477		$	3,413		$	177		$	3,590
Gross Profit		31	%		(2	)%		29	%		28	%		(1	)%		27	%
SG&A		23	%		(3	)%		20	%		19	%		(1	)%		18	%
R&D		6	%		0	%		6	%		6	%		0	%		6	%
EFO		2	%		1	%		3	%		3	%		0	%		3	%

8. The following table reconciles 2006 and 2007 total company Pro Forma Gross Profit excluding restructuring and SG&A, R&D, and EFO excluding restructuring as a percent of sales to the most directly comparable GAAP measures of Gross Profit, SG&A as a percent of sales, R&D as a percent of sales, and loss from continuing operations before interest, other income (charges), net and income taxes as a percent of sales (“GAAP basis”), as previously reported:

				Impacts of 2008									Impacts of 2008
($ in millions)				structure realignment									structure realignment
				cost reallocations,			GAAP basis						cost reallocations,			GAAP basis
	2006			restructuring and items			2006			2007			restructuring and items			2007
Total Company	Pro Forma			of comparability			Actual			Pro Forma			of comparability			Actual
Revenue	$	10,568		$	-		$	10,568		$	10,301		$	-		$	10,301
Gross Profit		26	%*		(3	)%		23	%		26	%*		(2	)%		24	%
SG&A		19	%		(1	)%		18	%		17	%		0	%		17	%
R&D		6	%		(1	)%		5	%		5	%		0	%		5	%
EFO		2	%*		(7	)%		(5	)%		3	%*		(5	)%		(2	)%

* excluding restructuring and items of comparability

4

9. The following table reconciles 2007 CDG Pro Forma EFO improvement to the most directly comparable GAAP measure of CDG improvement in loss from continuing operations before interest, other income (charges), net and income taxes:

	2007
(in millions)	Actual
CDG Pro Forma EFO improvement, as presented	$	198
Impact of 2008 structure realignment and cost
reallocations	$	(50	)
CDG improvement in loss from continuing
operations before interest, other income
(charges), net and income taxes (GAAP basis)	$	148

10. The following table reconciles 2006 and 2007 Pro Forma digital revenue to the most directly comparable GAAP measures of total revenue:

	2007			2006			Growth/
($ in billions)	Actual			Actual			(Decline)
Pro Forma digital revenue, as presented	$	6.6		$	6.3		6	%
Impact of 2008 structure realignment		(0.2	)		(0.4	)	-50	%
Digital Revenue as previously reported	$	6.4		$	5.9		8	%
Traditional and New Technologies revenue		3.9			4.7		-17	%
Total revenue (GAAP basis), as presented	$	10.3		$	10.6		-3	%

11. The following table reconciles 2006 and 2007 Pro Forma digital EFO to the most directly comparable GAAP measures of loss from continuing operations before interest, other income (charges), net and income taxes:

	2007			2006			Growth/
($ in millions)	Actual			Actual			(Decline)
Pro Forma digital EFO, as presented	$	83		$	(152	)	-155	%
Impact of 2008 structure realignment		93			139		-33	%
Digital EFO as previously reported	$	176		$	(13	)	100	%
Traditional and New Technologies earnings, restructuring
costs and items of comparability		(406	)		(463	)	-12	%
Loss from continuing operations before interest, other
income (charges), net and income taxes (GAAP basis)	$	(230	)	$	(476	)	-52	%

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12. The following table reconciles 2006 and 2007 GCG Pro Forma EFO to the most directly comparable GAAP measure of GCG earnings from continuing operations before interest, other income (charges), net and income taxes:

	2007		2006
	Actual		Actual		Improvement
GCG Pro Forma EFO, as presented	$	100	$	64	$	36
Impact of 2008 structure realignment and cost reallocations		16		36		(20	)
2007 GCG earnings from continuing operations before
interest, other income (charges), net and income taxes
(GAAP basis)	$	116	$	100	$	16

13. The following table reconciles 2007 total company Gross Profit excluding restructuring costs to total company Gross Profit on a GAAP basis:

	2007	2007
	Goal	Actual
Gross Profit excluding restructuring, as presented	25%-26%	26%
Restructuring and items of comparability	(1)%	(2)%
Gross Profit (GAAP basis)	24%-25%	24%

14. The following table reconciles 2007 earnings from operations excluding restructuring as a percent of sales to the most directly comparable GAAP measure of loss from continuing operations before interest, other income (charges), net and income taxes as a percent of sales:

	2007	2007
	Goal	Actual
Earnings from operations excluding restructuring as a percent of sales, as presented	3%-4%	3%
Restructuring costs and items of comparability	(7)%-(9)%	(5)%
Loss from continuing operations before interest, other income (charges), net and
income taxes as a percent of sales (GAAP basis)	(4)%-(5)%	(2)%

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