2 0 1 0 A N N U A L R E P O R T

2010 EK ANNUAL REPORT

The circus was a primary form of entertainment

and information for the nineteenth century

population. About that same time, Kodak’s

founder, George Eastman wanted to simplify

photography and make it available to everyone,

not just trained photographers as a new form of

entertainment and visual information gathering.

First, he had to overcome fierce competition and

failures as he struggled to make photography easy

and affordable for everyone. In the process, he

forever changed the way people see their world.

The story of Kodak is exciting and thrilling —

an amazing show that has and will continue to be

an impressive journey but, behind the scenes, was

an incredible commitment to four things; focus,

balance, confidence and dedicated teamwork.

2

today’s Kodak is known not only for photography, but also for images used in a variety of leisure, commercial, entertainment and scientific applications. Its reach increasingly involves the use of technology to combine images and information--creating the potential to profoundly change how people and businesses communicate. While providing a variety imaging solutions to customers over 100 years, we have proved our innovative technology by winning multiple Academy Awards for scientific and technical excellence.

taken byNo. 1A AUTOGRAPHIC KODAK 1917 Model Camera

University of Amsterdam Library, circus collection

August, 1921

maintaining

2010 EK ANNUAL REPORT3

1945

195519

48

192719

201916

1929

1961

19721975

Academy Awards for scientif c and technical excellence

taken byBABY BROWNIE CAMERAUniversity of Amsterdam Library, circus collectionAugust, 1921

Kodak has also built the balance externally and internally. We have a strong relationship with customers for external balance and established three internal balanced actions. And there is a name for how it was done: infoimaging. It includes three categories which are device, infrastructure, service and media. kodak has built the foundations that make infoimaging possible. with nearly 1,000 new patents in imaging technology a year, we are the catalyst for value creation for virtually every company who produces infoimaging products and service. These Kodak’s balanced actions will benefit customers’ needs.

Image-enabled information devices Health imaging equipmentX-ray laser output systemsScanner PrinterFlat panel displays

Online imagingPhotofinishing networksImaging softwareImaging protocolsTransmissions

Motion picture digital imagingPhoto printing sharingWritable CDs and CD-RomsInkjet paper and pigmentsFlim and paper

D E v I C E

I N f R A s T R U C T U R E

s E R v I C E / M E D I A

keeping

2010 EK ANNUAL REPORT 6

1 8 9 5

1908

19

34

19

51

ThE POcKET KODAK cAmERA wAs ANNOUNcED.KODAK PRODUcED ThE wORLD’s f iRsT cOmmERciALLy PRAcTicAL sAfETy fiLm

iNTRODUcED 35 mm cAmERA

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2010 EK ANNUAL REPORT7

1 9 8 4

1 9 8 2

2 0 0 2

2 0 0 8

building

taken byBABY BROWNIE CAMERAUniversity of Amsterdam Library, circus collectionApril, 1934

We have a lot of work ahead of us on many fronts — launching our new and revolutionary consumer inkjet business, capitalizing on the creation of our graphic communication

business, and completing our major restructuring, to name three. We approach this work with a confidence reinforces byour strong position in numerous digital markets, and our

proven ability to make changes needed for success.

ThE POcKET KODAK cAmERA wAs ANNOUNcED.KODAK PRODUcED ThE wORLD’s f iRsT cOmmERciALLy PRAcTicAL sAfETy fiLm

iNTRODUcED 35 mm cAmERA

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82010 EK ANNUAL REPORT

Antonio M. PerezChairman, Presidentand Chief Executive Officer

to our shareholders

In looking to the future, we’re confident that our strategy — along with the related planned actions — will enhance service to our customers and our value as an investment. This is not a one-year process, however. Like the rest of the industry, we will be in an environment of change for the next several years.

We will continue to be aggressive in all of our efforts to grow traditional product sales in emerging markets, and maximize our manufacturing share worldwide in order to fund overall growth of the Company. Careful management of costs, as always, will be a priority.

Kodak strengths are legion, starting with a winning and inclusive culture that motivates dedicated Kodak employees around the world. Our brand is recognized in every corner of the earth. Our technology is the envy of our competitors. Our leadership is experienced, capable and bold in making Kodak’s vision a reality. All of this—and more—gives us confidence in the future. We especially thank you, the investor, for your commitment to a strong, growing Eastman Kodak Company.

2010 EK ANNUAL REPORT9

ANTO

NIO M

. PEREZ

CHAIRMAN AND CHIEf EXECUTIvE OffICER

2010 EK ANNUAL REPORT 10

(Dollar amounts and shares in million, except per share data)

stock price per share at year endsalesEarnings from operationsNet earningsBasic earningsDiluted earnings per shareCash dividends declared -per common shareAverage number of common shares outstandingshareholders at year endTotal shareholders’ equityAddtions to propertiesDepreciationWages, salaries and employee beneftsEmployees at year end -in the U.s. -worldwide

2009(2)

$ 66.25$ 14,089$ 1,990$ 1,392$ 4.38$ 4.33$ 560$ 1.76 318.0 131,719$ 3,912$ 1,127$ 773$ 3,962

43,300 80,650

Results for they earing cluded charges related to the sale and exit of a manufacturing facili ty of $50 million, which reduced net earnings by $33 milli on. Excluding thisitem, net earnings were $1,440 million. Basic and diluted earnings per share were $4.73 and $ 4.70, respectively.Results for the year in cluded $350 million of restructuring charges, whichreduced net earnings by $231 million, and anadditional $11 million of charges related to this restructuring program, which reduced net earnings by $7 million; $103 million of charges associated with business exits, which reduced net earnings by $68 million; a gain of $95 million on the sale of The ImageBank, which increased net earnings by $63 million; and a gain of $25 million on the sale of the Motion Analysis systems Division, which increased net earnings by $16 million. Exclud-ing these items, net earnings were $1,619 million. Basic and diluted earnings per share were $5.09 and $5.03, respectively.

(1)

(2)

2010(1)

$ 39.38$ 13,994$ 2,214$ 1,407$ 4.62$ 4.59$ 533$ 1.76 304.9 113,308$ 3,428$ 945$ 738$ 3,726

43,200 78,400

financial highlights

2010 EK ANNUAL REPORT11

ManageMent’s discussion and analysis

summary (in millions, except per share date)

salesEarnings from operationsNet earningsBasic earnings per shareDiluted earnings per share

2010

$ 13,9942,2141,4074.624.58

2009

$ 14,0891,9901,3924.384.33

Change

-1%+11%+1%+5%+6%

Change

+5%+5%

—+2%+2%

2008

$13,4061,8881,3904.304.24

(of financial Condition and Results of Operations)

2010The Company’s results for the year included the following:

Pre-tax charges of approximately $50 million ($33 million after tax) associated with the sale and exit of one of the company’s equipment manufacturing facillities. The costs for this effort, which began in 1999, related to accelerated depreciation of assets dtill in use prior to the sale of the facility in the second quarter, and costs for relocation of the operations. Additional relocation costs of approximately $10 million pre-tax, per quarte, will be recorded through the first half of 2009 in connection with these actions.

Excluding the above, net earnings were $1,440 million. Basic earnings per share were $4.73 and diluted per share were $4.70.

2009The Company’s results for the year included the following:

A pre-tax restructuring charge of $350 million ($231 million after tax) related to worldwide manufacturing and photofinishing consolidation and reductions in selling, general and administrative positions worldwide. Se Note 11, Restructuring Programs and charges of $11 million ($7 million after tax) related to accelerated depreciation of assets still in use during 1999 and sold in 2000, in con-nection with the exit of one of the Company’s equipment manufacturing facillities.

Pre-tax charges totaling approximately $103 million ($68 million after tax) associated with exits of the Eastman Software business ($51 million pre-tax) as well as the write -off of the Company’s Calcomp investment ($20 million pre-tax), which was determined to be unrecoverable.

Pre-tax gains of the approximately $120 million ($79 million after tax) related to the sales of The Image Bank ($95 million pre-tax gain)and the Motion Analysis System Division ($25 milion pre-tax gain). See Note 16, Sales of Assets and Sales of Divestitures Spending.

Excluding the above items, net earnings were $1,619 million. Basic earnings per share were $5.09 and diluted earnings per share were $5.03.

2008The Company’s results for the year included the following:

The sales od its NanoSystems subsidiary and a portion of the Company’s invetment in Gretag Imaging Group (Gretag), resulting in pre-tax gains of $87 and $66 million ($57 and $44 million after tax), respectively. See Note 16, Sales of Assets and the Sales of Divestitures Spending.

A pre-tax charge of $132 million ($87 million after tax) for asset write-downs and employee severance in the Office

Imaging division due to volume reductions from Danka Business Systems PLC (Danka). See Note 16, Sales of As-sets and the Sales of Divestitures Spending.

A pre-tax charge of $45 million ($30 million after tax), primarily for in-process research and development (R&D), associated with the acquisition of the medical imaging business of Imation Corp. (the Imation charge). See Note 15, Acqusitions and Joint Ventures.

Excluding the above items, and pre-tax litigation charges of $35 million ($25 million after tax) related primarily to Health Imaging, net earnings were $1,429 million. Basic earnings per share were $4.42 and diluted earnings per share were $4.37.

2010 EK ANNUAL REPORT 12

Note 1: Significant Accounting Policies

Company Operations Eastman Kodak Company (the Company or Kodak) is engaged primarily in developing, manufacturing, and marketing consumer, professional, health and other imaging products and services. The Company’s products are manufactured in a number of countries in North and South America, Europe, Australia and Asia. The Company’s products are marketed and sold in many countries throughout the world.

Basis of Consolidation The consolidated financial statements include the accounts of Eastman Kodak Company and its majority owned subsidiary companies. Intercompany transactions are elimi-nated and net earnings are reduced by the portion of the earnings of subsidiaries applicable to minority interests. The equity method of accounting is used for investments in associated companies over which Kodak does not have effective control.

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contin-gent assets and liabilities at year end and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency For most subsidiaries and branches outside the U.S., the local currency is the functional currency and translation adjustments are accumulated in a separate component of sharehold-ers’ equity. Translation adjustments are not tax-effected since they relate to investments which are permanent in nature.

For subsidiaries and branches that operate in U.S. dollars or whose economic environment is highly inflationary, the U.S. dollar is the functional currency.

The effects of foreign currency transactions, including related hedging activities, were losses of $13 million, $2 million, and $20 million in the years 2000, 1999, and 1998,

Cash Equivalents All highly liquid investments with an original maturity of three months or less at date of purchase are considered to be cash equivalents.

Marketable Securities and Noncurrent Investments At December 31, 2000, investments of $5 million, which were included in marketable securities, were considered held to maturity. Long-term marketable securities and other investments of $44 million, which were included in other noncur-rent assets, were considered available for sale.

At December 31, 1999, investments of $10 million, which were included in marketable securities, were considered held to maturity. Investments of $10 million included in marketable securities, and $117 million of long-term marketable securities and other invest-ments which were included in other noncurrent assets, were consid-ered available for sale.

Inventories Inventories are valued at cost, which is not in excess of market. The cost of most inventories in the U.S. is determined by the “last-in, first-out” (LIFO) method. The cost of other inventories is determined by the “first-in, first-out” (FIFO) or average cost method, which approximates current cost. The Company provides inventory reserves for excess, obsolete or slow-moving inventory based on changes in customer demand, technology developments or other economic factors

Properties Properties are recorded at cost net of accumulated depreciation. Depreciation expense is provided based on historical cost and estimated useful lives ranging from approximately three years to fifty years for buildings and building equipment and three years to twenty years for machinery and equipment. The Company generally uses the straight-line method for calculating the provision for depreciation.

Goodwill Goodwill is charged to earnings on a straight-line basis over the period estimated to be benefited, generally ten years. The Company regularly assesses all of its long-lived assets for impairment when events or circumstances indicate their carrying amounts may not be recoverable, in accordance with SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” This is accomplished by comparing the estimated undiscount future cash flows of the asset grouping with the respective carrying amount as of the date of assessment. Should the aggregate future cash flows be less than the carrying value, a write-down would be required, measured as the difference between the carrying value and the discounted the future cash flows.

Revenue The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, the products or the services have been provided to the customer, the sales price is fixed or determinable, and collectibility is reasonably assured.

In December 1999, the Securities and the Exchange Com-mission (SEC) issued Staff Accounting Bulletin (SAB) No. 101 “Revenue Recognition in Financial Statements.” This guidance summarizes the SEC staff ’s views in applying generally accepted accounting principles to revenue recognition in financial statements. This staff bulletin had no significant impact on the Company’s revenue recognition policy or results of operations.

Research and Development Costs Product development costs are charged to operations during the period incurred.

Advertising Advertising costs are expensed as incurred and included in selling, general and administrative expenses. Advertising expenses amounted to $701 million, $717 million and $756 million in 2000, 1999 and 1998, respectively.

Shipping and Handling Costs Shipping and handling costs of

notes to financial stateMents

2010 EK ANNUAL REPORT13

(Eastman Kodak Company and subsidiary Companies)

$253 million, $252 million, and $269 million in 2000, 1999, and 1998, respectively, are included in selling, general and administrative expenses on the Consolidated Statement of Earnings.

Environmental Costs Environmental expenditures that relate to current operations are expensed or capitalized, as appropriate, in accordance with the American Institute of Certified Public Accoun-tants (AICPA) Statement of Position (SOP) 96-1, “Environmental Remediation Liabilities.” Remediation costs that relate to an existing condition caused by past operations are accrued when it is probable that these costs will be incurred and can be reasonably estimated.

Income Taxes Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes.

Earnings Per Share Earnings per share is presented in accor-dance with the provisions of SFAS No. 128, “Earnings Per Share.” Basic earnings-per-share computations are based on the weighted-average number of shares of common stock outstanding during the year. Diluted earnings-per-share calculations reflect the assumed exercise and conversion of employee stock options.

Stock-Based Compensation The Company applies Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” which requires compensation costs to be rec-ognized based on the difference, if any, between the quoted market price of the stock on the grant date and the exercise price.

In March 2000, the FASB issued FASB Interpretation (FIN) No. 44 “Accounting for Certain Transactions Involving Stock Compen-sation,” which clarifies the application of APB No. 25 for certain issues. The interpretation was effective July 1, 2000, except for the provisions that relate to modifications that directly or indirectly reduce the exercise price of an award and the definition of an em-ployee, which are effective after December 15, 1998. The adoption of FIN No. 44 had no significant impact on the Company’s financial statements data.

Segment Reporting The Company reports segment information in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” The Company has four operating segments. The basis for determining the Company’s operating segments is the manner in which financial information is used by the Company in its operations. Management operates and organizes itself according to business units which comprise unique products and services across geographic locations.

Reclassifications Certain reclassifications of prior financial infor-mation and related footnote amounts have been made to conform with the 2000 presentation.

The Company sells to customers in a variety of industries, markets and geographies around the world. Receivables arising from these sales are generally not collateralized. Adequate provisions have been recorded for uncollectible receivables. There are no significant concentrations of credit risk.

Inventories valued on the LIFO method are approximately 47% and 48% of total inventories in 2010 and 2009.

Note 2: Receivables

Note 3: Inventories

Note 4: Properties

(in millions)

Trade receivablesMiscellaneous receivables Toal (net of allowance of $89 and $136)

(in millions)

At fIfO or Average cost(approximates current cost) finished goods Work in process Raw materials and supplies

LIfO reserve Total

(in millions)

LandBuildings and building equipmentMachinery and equipmentConstruction in progress

Accumulated depreciation Net properties

2009

$ 2,140397

$ 2,537

2009

$ 1,026487471

1,984(465)

$ 1,519

2009

$ 1662,5799,669

87513,289(7,342)$ 5,947

2010

$ 2,245408

$2,653

2010

$ 1,155423589

2,167(449)

$ 1,718

2010

$ 1412,2859,585

95212,963(7,044)$ 5,919

2010 EK ANNUAL REPORT 14

(in millions, except pershare data, shareholders and employees)

Net sales from continuing operations Earnings from continuing operations before interest, othe charges, net, and income taxes Earnings (loss) from Continuing operations Discontinued operations Net earnings

EARNINGs AND DIvIDENDsNet earnings –% of sales –% return on average shareholders’ equity Basic earnings (loss) per share Continuing operations Discontinued operations TotalDiluted earnings (loss) per share Continuing operations Discontinued operations TotalCash dividends declared and paid –on common shares –per common share Common shares outstanding at year end shareholders at year end

sTATEMENT Of fINANCIAL POsITION DATAOperational working capital(7)Working capitalProperty, plant and equipment, net Total assetsshort-term borrowings and current portion of long-term debtLong-term debt, net of current portion Total shareholders’ equity

sUPPLEMENTAL INfORMATIONNet sales from continuing operations –Photography –Health Imaging –Commercial Imaging –All OtherResearch and development costsDepreciationTaxes (excludes payroll, sales and excise taxes)Wages, salaries and employee beneftsEmployees at year end –in the U.s. –worldwide

2010

$ 13,317

371

238(1)

27(6)

265

2.0%8.8%

.83

.09

.92

.83

.09

.92

3301.15

286.685,712

$ 1,094148

5,09414,818

9462,23023.264

$ 9,2322,4311,559

9578183024

4,090

35,40063,900

2009

$ 12,835

1,220

793(2)

(23)(6)

770

6.0%27.2%

2.72(.08)2.64

2.72(.08)2.64

5251.80

285.989,988

$ 474(968)5,420

13,4941,4421,1642,777

$ 9,0022,2741,456

103762818288

3,991

39,00070,000

2008

$ 13,229

352

81(3)

(5)(6)

76

0.6%2.4%

.28(.02)

.26

.28(.02)

.26

643 5452.21

290.991,893

$ 797(737)5,659

13,3621,5341,6662,894

$ 9,4032,2621,454

110779765154

3,824

42,00075,100

2008

$ 13,994

2,214

1,407(4)

—1,407

10.1%38.3%

4.62—

4.62

4.59—

4.59

5631.76

290.5113,308

$ 1,420(786)5,919

14,2122,2061,1663,428

$ 10,2312,2201,417

126784738933

3,726

43,00078,400

2007

$ 13,994

1,990

1,392(5)

—1,392

9.9%35.2%

4.38—

4.38

4.33—

4.33

1.76310.4

131,719

$ 777(385)5,947

14,3701,163

9363,912

$ 10,2652,1591,479

186817773806

3,962

43,30080,650

Includes $557 million of restructuring charges; $31 million of purchased R&D; $7 million for a charge related to asset impairments and other asset write-offs; a $12 million charge related to an intellectual property settlement; $14 million for a charge connected with the settlement of a patent infringement claim; $14 million for a charge connected with a prior-year acquisition; $9 million for a charge to write down certain assets held for sale following the acquisition of the Burrell Companies; $8 million for a donation to a technology enterprise; $8 million for legal settlements; a $9 million reversal for an environmental reserve; and a $13 million tax beneft related to patent donations. These items reduced net earnings by $423 million.Includes $143 million of restructuring charges; $29 million reversal of restructuring charges; $50 million for a charge related to asset impairments and other asset write-offs; and a $121 million tax beneft relating to the closure of the Company’s PictureVision subsidiary, the consolidation of the Company’s photofnishing operations in Japan, asset write-offs and a change in the corporate tax rate. These items improved net earnings by $7 million.Includes $678 million of restructuring charges; $42 million for a charge related to asset impairments associated with certain of the Company’s photofnishing operations; $15 million for asset impairments related to venture investments; $41 million for a charge for environmental reserves; $77 million for the Wolf bankruptcy; a $20 million charge for the Kmart bankruptcy; $18 million of relocation charges related to the sale and exit of a manufacturing facility; an $11 million tax beneft related to a favorable tax settlement; and a $20 million tax beneft representing a decline in the year-over-year effective tax rate. These items reduced net earnings by $594 million.Includes accelerated depreciation and relocation charges related to the sale and exit of a manufacturing facility of $50 million, which reduced net earnings by $33 million.Includes $350 million of restructuring charges, and an additional $11 million of charges related to this restructuring program; $103 million of charges associated with business exits; a gain of $95 million on the sale of The Image Bank; and a gain of $25 million on the sale of the Motion Analysis systems Division. These items reduced net earnings by $227 million.Refer to Note 22, “Discontinued Operations,” for a discussion regarding the earnings (loss) from discontinued operations.

(1)

(2)(3)

(4)

(5)(6)

(7)

suMMary of oPerating data

2010 EK ANNUAL REPORT15

14,098

13,994

TOTALSALES

-1%

2009

2010

detailed results of oPerations

sales by Operatingsegment (in million)

Health Imaging Inside of the U.s. Outside of the U.s.

Total Health Imaging

2010

$ 1,038$ 1,147

$ 2,185

Change

+9%-2%

+3%

2009

$ 954$ 1,166

$ 2,210

sales by Operatingsegment (in million)

Other Imaging Inside of the U.s. Outside of the U.s.

Total Other Imaging

2010

$ 1,323$ 1,374

$ 2,697

Change

+1%+3%

+2%

2009

$ 1,312$ 1,336

$ 2,648

INSIDE OF THE U.S.

OUTSIDE OF THE U.S

KODAKPROFESSIONAL

711

1,144

995

766

+13%

-7%

(in million)

2009

2010

sales by Operating segment

2009

2010

3,562

3,738

3,668

3,849

INSIDE OF THE U.S.

OUTSIDE OF THE U.S

CONSUMER IMAGING

-5%

+5%

(in million)

sales by Operating segment

Consolidated Worldwide sales of $13,994 million declined less than 1% from 1999. Excluding portfolio adjustments, which reduced revenue by 2%, and the negative impact of currency, which reduced revenue by 3%, sales were up 4% compared with 1999. Deteriorating U.S. economic conditions in the second half of the year adversely impacted sales across a number of the Company’s businesses, particularly the consumer business. Consumer film and paper experienced slight sales declines while the Company’s Kodak Professional segment experienced more significant declines. However, a number of the Company’s businesses did achieve sales growth in 2000, including Health Imaging, Entertainment Imaging, Digital and Applied Imaging and Commercial and Government Systems.

2010 EK ANNUAL REPORT 16