Good day, everyone and welcome to the Eastman Kodak second quarter sales and earnings conference call. Today's conference is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to the Director and Vice President of Investor Relations, Mr. Don Flick. Please go ahead, sir.

Good morning and welcome to this morning's conference call. I am here with Antonio Perez, Kodak's Chairman and CEO; and Bob Brust, our Chief Financial Officer. Antonio will start the call this morning with his comments on the quarter and then Bob will provide a review of the quarterly financial performance. As usual, before we begin I have some housekeeping activities to complete. First, certain statements during this conference call may be forward looking in nature, or forward-looking statements, as defined in the United States' Private Securities Litigation Reform Act of 1995. For example, references to expectations for the Company's earnings, revenue and cash would be such forward-looking statements. Actual results may differ from those expressed or implied in these forward-looking statements and these forward-looking statements are subject to a number of important risk factors and uncertainties, which are fully enumerated in our press release this morning. Listeners are advised to read these cautionary statements in their entirety. Lastly, although Kodak has significantly reduced its references to non-GAAP measures, in those instances where they are used, they are fully reconciled to the nearest GAAP equipment equivalent in the documentation release this morning. Now I would like to turn the conference call over to Antonio Perez.

Thank you, Don. Good morning and thanks for joining the call. I'll start the discussion this morning by reviewing the quarter's results in the context of our overall strategy, followed by Bob providing you with an overview of the financials. Second quarter results demonstrate continued progress in the transformation of the Company in the execution of the digital strategy. A bit ahead in some areas, a bit behind in others, but generally on plan. Specifically I will point to the following areas of progress: We achieved our aggressive cash goals for the quarter which returns us to the previous year's first half cash trajectory and positions us to achieve our full year cash flows. Film photofinishing achieved its targeted 10% operating margins, benefiting from the aggressive cost reduction actions we have been implementing. Their group operating margins recovered during the quarter to be predicted low teens level. Graphic communications continues its drive to build meaningful year-over-year profitability. While perhaps less visible in the numbers, Consumer Digital continued to make progress in implementing its new operating model. I am particularly pleased that we have achieved positive digital earnings in the second quarter. This is two quarters ahead of last year's performance and ahead of my prediction that this would occur in the third quarter. Let me expand on these high level observations. The Film and Photofinishing systems segment performed somewhat better than expected despite higher silver costs and declining revenues, as we continue to benefit from a reduction of manufacturing assets and employment in this area. The ongoing restructuring actions, such as the recent announcement relative to our major facility in France, is an example of this drive to complete the rationalization of this business. These actions enabled the maintenance of gross and operating margins and, most importantly, cash generation .…

Thanks, Antonio. I'd like to spend sometime discussing our second quarter financial results and then Antonio and I will be happy to take your questions. Before we get started I want to bring to your attention the 8-K document we recently filed, which provides comparable quarterly and full year 2005 results, reflecting changes implemented on January 1st, 2006. They include: As Antonio indicated, this quarter's performance was generally in line with our expectations. As a matter of fact, on the basis of GAAP loss before tax, the year-over-year results were essentially flat. The defining driver of the year-over-year decline in GAAP net earnings in EPS occurs on the tax line where we recorded a tax charge of $51 million in the current quarter against a tax credit of $68 million in the year ago quarter, creating a negative earnings swing of $119 million. The tax charge of $51 million is largely attributable to a $29 million charge recorded in connection with the finalization of Creo purchase accounting, and the fact that the Company remains in a valuation allowance position in the U.S. and therefore, is not recording tax benefits on its U.S. losses. Because the initial recording of the valuation allowance occurred in the third quarter of 2005, and due to the fact that the Company remains in a valuation allowance position today, this unfavorable year-over-year comparison will end next quarter. For the third quarter of 2006, the tax line year-over-year comparison will be favorable due to the $900 million charge taken in the third quarter of 2005 to initially establish a valuation allowance against the U.S. deferred tax assets. Starting in the fourth quarter of 2006, the tax line will be stated on a comparable basis. That was a mouthful, but as we will discuss later, the Company absorbed…

(Operator Instructions) Our first question comes from Jay Vleeschhouwer - Merrill Lynch.

Thanks, good morning. Antonio, I would like to ask first about the Consumer Digital business. Can you elaborate on your expectations for the Flex deal, both in terms of timing of its implementation and how much of an improvement or reduction you would expect from your current cost of revenue structure, from the current camera manufacturing arrangements? Secondly, also on CDG your capture unit volume is down year-over-year. However, for the year to date the camera business hasn't been doing too badly overall. The growth rates I think have turned out to be better than most of us might have anticipated at the beginning of the year. So the question is, how willing are you to continue to lose share? Will Flex put you in a better position at some point perhaps to try to regain share as compared to the first half?

Jay, I will try to answer the 16 questions.

Only nine this time.

First, the Flextronics. We have been working on this deal for a long time. First of all, Flextronics is a great company and we want to use what they do the best. Which is, they have a scale in purchasing that we don't have because they made a lot of products, they use similar components and they can have an advantage with that. They have a scale in manufacturing for low-end products that we don't have too; and then that will give us a lot of flexibility and lower costs. Then they have logistics systems that are perfectly designed to deal with this type of products, that we don't have and we don't want to build either. That's what they bring to the party. So they don't bring just only low-cost and efficiency and distribution; but as well they bring their own knowledge about the industry. We would then retreat to the things that we do really well. The things that have to do with system design, human interface, human science, look and feel, things that we do really well that we are good at. I think the combination is great. I wish we would have done this maybe a quarter earlier. As I said before, these things are hard to get an agreement. We have a very good relationship but these things need to be discussed in detail. So we are where we are. I think it is going to have a very significant effect on our product line for the future. Now, it won’t happen in the first month because we are going to be transferring assets slowly to them. Certainly we will get the benefits for the year. I don't have a number to give you. We have obviously all sorts of modelings that we are dealing…

On GCG, one of your objectives has been to increase the level of hybrid or multi-product or cross-selling transactions. Have you in fact continued to see more of that? It would appear that the Creo contribution was somewhat less than the pre-merger run rate. Is that a temporary retrenchment in Creo? Or is there something else going on there? Is that perhaps affecting the value of that acquisition?

I don't see it like that. I don't see it like that at all. Remember it is very hard to track Creo today from what it was before. Creo has been integrated into the Company. There is workflow that goes with pieces of equipment. They are bundled deals that we make. It's very hard to make a point-to-point comparison. Creo is a fundamental part of the whole strategy. It is the glue of this notion under which we created this business which was, this is going to be a hybrid environment for years to come. The only way to deal with that is to create the glue; that is represented by the workflow and the software contributions of Creo. I feel very well with the contributions of Creo and so do our customers. GCG, from my point of view, is doing fine. In fact, I think they are about a quarter ahead of what I thought we were going to be at this point of time. In the same way CDG is about a quarter behind. But GCG is doing fine and our goal to get the 5% operation earnings for the digital part of the GCG - which is about 85% of the group - is very much on track and doing well.

Thanks, Antonio.

Our next question comes from Caroline Sabbagha - Lehman Brothers.

Thanks very much. Antonio, just a couple of follow-ups on the Consumer Digital business. You remain confident that it is going to be breakeven for this year. Can you talk about what are the factors that need to occur in the fourth quarter? I'm guessing that is where it all happens to have such a big swing to bring the business to breakeven for the fourth quarter? Maybe if possible, rank order the importance of those factors?

I will give you a list. You saw what happened last year. Last year as well, there was a huge improvement in the fourth quarter. A lot has to do with volume, which I expected a better improvement from volume because of this deal that we just announced with Flextronics. I think we will be doing better and take more advantage of the higher volumes of the third and the fourth quarter. It is going to be IP, I think it was very good last year. You know that we don't disclose the numbers but we keep saying that it keeps growing and will keep growing it this year too. We know it is going to grow this year. I think as well, the fact that we don't sell so many units at $99. Obviously it is not a pleasant thing to see that your revenue is not growing the same way; but as far as the bottom line, it's very comforting, I can assure you. So that will help with that too. And then the cost actions. I keep saying that we made this group, we put this group together and use DFIS with a very expensive go-to-market structure because that was the only way to get rapidly to the scale that we needed for so many things. We needed it for the brand value, we needed to learn how to commercialize digital products. We learned to take to market all of our imaging technology, all sorts of reasons that we needed to do that for. We did that but we knew as well that it was a very expensive way to do it. This is the time to take care of it. We took the actions this year. We have announced those and that will impact that. You start to add all those things and you get to the breakeven. We are doing better with inventory too, because we're much more efficient in running the business so keep adding and you'll get to the breakeven. If all of these things work well it will be better than breakeven. Just we take the pros and cons in those things and we think breakeven is a very achievable number.

A follow-up, also, on the Flex deal. Looking at longer-term not just for the second half of this year, what does that position you for in terms of margin and consumer digital capture? Sort of when you negotiated, where did you want to end up being in potential margins in that business?

Digital Capture, as you know very well, includes all the things that they are not involved with. It includes the IP and all that. As far as digital camera we don't have a number. I think it is going to take us a few months to have a comfortable business model that we can share about what this has given us. We are going to gain a few points of margin. It's just hard to say, because we are starting with a few models and then we will have a full portfolio so you have to give us a little time.

A quick question on the strategic alternatives for Health. You are three months into the process right now. Has anything changed in your view about what the likely outcomes may be? I think you had mentioned previously that by the beginning or end of August that you wanted to have narrowed down the list of potential buyers to a handful, and then go into more serious negotiations at that time. Are we at that stage yet?

We are right at that stage. We haven't settled exactly. But we are right at that stage. The comments that I can make is as you know, there is a lot of money in private equity -- in case you didn't know, a lot of money out there. This is a very attractive business for many people. Our objective is to do this right for our customers, for our shareholders and for our employees. We will execute in accordance to those goals where there is a lot of interest; there's no lack of interest. So I feel well. It is going to be complex because the carve out is complicated. This Company has been so intertwined and tangled up between factories and shared services and all that, that we have been spending a lot of time trying to untangle all of this. We've done a lot of it as you know. But the carve out is the issue that makes me feel that it is going to be a challenge to finish this before the end of the year. But the team so far has told me that the way things are going, we should be able to finish before the end of the year or right around that time.

Thank you very much.

Our next question comes from Matthew Troy - Citigroup.

When I think about potential uses of cash from the Health Care spin-off, I mean it is not contemplated in your cash book of items currently. I think the conventional wisdom is that you take that money to significantly reduce the debt burden. I was wondering if at the same time you might send a message of confidence and buy back stock given where it is today. Is there any reason to think that you would not be able to do that from a covenant perspective?

No. We can do all of those, all of the above. I think the first objective is debt; the second objective is debt; and the third objective is debt; and then the fourth objective will be to buy stock back. The Board obviously is going to be heavily involved. It is a little too early to make this plan, but it is in our minds that this will be a good use of the proceeds.

If I think about your efforts to monetize assets in the portfolio, one of the things you folks have is a tremendous plug and play into the commercial print end market. If I look at Xerox having scaled the learning curve and figured out how to interact with that market I also look competitively at folks like Canon , which are coming with significant new product introductions. You folks have a relationship with Canon. You've got access, they've got product breadth, which is something which has historically potentially been lacking relative to your concentration with NEXPRESS. Are you exploring your strategic alternatives to expand the digital print offering? Might that be a build versus a partner decision? How do you think about that? That would be helpful.

We are exploring those. We are talking to many companies about it. We are looking for the mid-size and the low mid-size press space; it would probably be a relationship. Obviously we are cutting costs in what we have got, but to go lower than that, I think the logical thing for us is to be a partnership, so we are looking into that. It's in progress. The group is doing well. The other issue that we have to deal with that group before you ask me - because you are going to ask me - is that we have to develop our consultancy business for the in-plan which we said that was after we have been very busy with integration. It is doing well but those two things are the two next things on the horizon that you can see for that group. The mid-end and low mid-end as far as presses and consulting in-plan activities. Further than that we have other plans for growth too, but it will be another time.

Thank you for that. A question on the cash flow. Objective is $400 million to $600 million. You folks are confident those are obtainable? Could you just refresh us on how much of that will be comprised of asset or land sales? Concern being that it is hard to predict the timing and if something slips from November/December into January or February. I'm just trying to sense how that might impact that guidance? Bob Brust: That was the problem we had last year, getting all of this lined up. We have a fairly significant number in there, somewhat similar to last year. Based on the way things are going, when we make a commitment like that to you guys, we try to have it backed up so if we miss something we still can make those numbers. So we do have some back-up plans. We are working hard on inventories. We still have some receivables work to do and we get much more profitable in the second half which helps cash. So I felt pretty confident about it. We have done well in this year after year and in the second quarter. So I think we are in pretty good shape. Many of the deals that we need to do, some of them are going to go in the third quarter, which makes me feel much better. We will discuss those at the third quarter call.

Okay, guys. Thanks for the visibility.

Our next question comes from Jack Kelly - Goldman Sachs.

Good morning. I have a question about the digital earnings. If we take the midpoints of your range, that would give us about $400 million in digital earnings for the year and if I understood you correctly in answer to an earlier question, you thought the Consumer Digital imaging portion of that would be a breakeven for the year, suggesting you earn a total of $400 million from Graphic Communications and Health. If that is the correct way to look at it, it just seems like that is a very healthy number for Graphic Communications to be able to contribute something like $200 million. I guess the issue is, was I wrong in understanding that if Consumer Digital Imaging breaks even or are you just talking about in the fourth quarter and it makes money before that?

Jack, I'm losing you. You said the CDG was breakeven?

Yes. In other words if I look at your total forecast for the year, for the digital earnings for the Company the midpoint would be $400 million.

Yes. So these numbers, they have plus or minus 10%. Breakeven with CDG. Our numbers go slightly below breakeven to a plus something. I don't want to put numbers.

Let's just assume it is breakeven. That means Graphic Communications and Health Care has to earn a total of basically $400 million. That looks like a heavy load for Graphic Communications.

I don't know why, Jack. Last year the Health Group did almost $200 million. So what if it does a little less this year? Maybe a little less. If you take the run rate of GCG I don't know why you wouldn't get close to the $200 million and then a little more that will get here and there. I don't know why you don't get to those numbers.

Fair enough. Secondly, Bob , on the use of proceeds, I think you had answered on the last conference call that the covenants would indicate you'd have to pay $1.5 billion back in terms of any asset sales.

$1.2 billion.

$1.2 billion.

$1.2 billion. So should we interpret that comment in the sense that anything above $1.2 billion is fair game for stock repurchase? Or can we read it that if you pay down the debt of $1.2 billion, because that's what the covenant says, but then you have the ability to maybe borrow that back so to speak and buy stock? Or how are you thinking about that?

First of all we are still evaluating all of these different options. If it should end up that we do sell the business we would have to do the $1.2 billion. We are going to do $800 million out of this year's operating proceeds so that would really get our debt in a pretty good position by the end of the year. What happens after that is up to Antonio and the Board and we can discuss that at some length when that happens. We are not there yet. But clearly if we were to take out $800 million this year, which we were going to do anyway and then --

Yes there are basically three options. One is to continue to pay more debt. We'll have to evaluate what kind of leverage we want in the Company and how the excess of leverage has been costing some of the shorts or the many shorts that we have in the stock. We have to evaluate the benefits from the shareholder point of view of buying back stock. One fair use will be to invest in some of the Company. My feeling right now is we have enough on our plate to do for this year and for next year. If you ask me one year later I would certainly have a lot of thoughts about things that we could do, we would like to do. But for the next two years I don't think the idea of investing in some other company, some other technology should be a priority for us. So we are left with those two options. Decide to pay more debt or buy stock or a combination of those. I don't think that we know any more than what I'm telling you right now.

Thank you.

Our next question comes from Ulysses Yannas - Buckman, Buckman & Reid. Ulysses Yannas - Buckman, Buckman & Reid: Antonio, by year end and looking at three years back, you will have invested over $0.5 billion in new technologies. You are spending currently $50 million a quarter. Does this thing ever end?

We will always have to invest in new technologies. But I do agree that this is a high percentage; but remember we are trying to build a new digital company. You can't package technology and IP know-how without money. So obviously the beginning of the ramp you have to put a lot of money behind a lot of people to be able to come out to package that technology and enhance the products. Of course those products will eventually give us the revenue that we know it's going to give us then, as a percentage of revenue, you won't feel as bad as you feel today. We are investing in very focused programs. If you notice we have CMOS, we have inkjet, we have continuous inkjet for commercial printing and we have a lot of software activities and we have OLED and that is it. We are betting in few things and we are betting big because we believe there are big opportunities. But it is a lot of money. I can't tell you that it's not. It is a lot of money. I think it is well spent and I think we are going to bring very good return to the shareholder. Ulysses Yannas - Buckman, Buckman & Reid: When do you expect some revenue to start flowing through out of these projects?

Next year. I think by the end of next year you will be able to model, do some modeling about what CMOS Sensors will be for this Company. What the mobile co-design will mean for us. What Inkjet is going to mean for this Company. I'm not saying they are going to be huge businesses, but you will see a trajectory. You will see a path. You'll see revenue for sure and, hopefully, as well with Digital Services although it might take a little longer. But, certainly, for those three you'll be able to do a valuation of how much that investment is going to bring back to the shareholders within the next few years. Ulysses Yannas - Buckman, Buckman & Reid: Do you still expect to introduce an inkjet product by year-end?

We will keep working on it. Keep working on it. I am going to continue. I know I am very annoying with this topic but I think I don't have much to gain with disclosing and I'm not going to disclose. We are working very hard on that and when it's time, we will disclose. Ulysses Yannas - Buckman, Buckman & Reid: If I may. Price increases. First time in quite a number of years. Are they holding?

I said in the last conference call that they are going to hold because we are not going to change them. I think for too many years we have seen the increase in the price that we paid for our components and petrochemicals and silver and everything else, transportation. All the things that we haven’t passed back to customers. We can't do that anymore. We don't have that option. So they are going to stick because we are not going to change them. I think it's a fair thing to do. If your question is, would our competitors do the same? I don't know. I really don't know. All I know is there was a public statement by Fuji saying they were going to raise prices but I can't tell you what their plans are. But as far as Kodak is concerned, those price increases are going to stick, because we are not going to change them. Ulysses Yannas - Buckman, Buckman & Reid: Finally, and I hate to take so much of your time, you had expected to reduce costs in Creo and KPG by I believe $140 million, $150 million. Where are you in this plan now?

Ahead of plan. That was a plan for three years. It was by 2007. That included a little bit about, $30 million last year. About I think it was $80 million this year and then the rest in 2007. We are ahead of plan. Ulysses Yannas - Buckman, Buckman & Reid: Thank you, very much. I apologize for taking so much of your time.

Our next question comes from Shannon Cross - Cross Research.

Good morning. Thank you for taking my question. The first one is just on printers and what you are seeing in home printing. Antonio, you don't have talk about specifically what you are going to do -- .

Thank you.

I'm just curious about the trends you are seeing. It sounds like photo printing may be shifting more toward retail. How much do you think the decline in demand for the 4x6 printers is actually a mix shift within home printers to all-in-ones and how much do you think is actually a continuing change in consumer behavior toward retail and online?

I think it is all of the above. It is very hard to read. The industry expected - not just us - the whole industry expected a much higher growth looking back to what happened in the last two years. So we got surprised like the rest of the industry. I think there's a combination of all of those things. I think there are very good choices in all lines and people are choosing that. There are very good choices with multifunction products in the home and, obviously, retail has been gaining share of those prints. I think it is a combination of all those. The fact for us, what's very important for us is to understand the role of the 4x6 appliance kind of printer, which is what this is. There is a role for it. We got surprised first with the growth that we got in the last few years. We couldn't believe it, that it was growing so fast and now I guess reality steps in and this is an appliance. It is behaving more and more like an accessory to the cameras and is going to have very high volumes when the cameras have very high volumes, which tends to be in the third and the fourth quarter and much lower volumes in the rest of the year. I think it's a combination of all those. I think it will settle, maybe in another year, but I can't tell you exactly what percentage is going here and there. Because I think it changes with the population, countries, and everything else.

So basically you think usage on these printers are substantially different from the usage you would get off an inkjet where, maybe, it is more balanced? Is that fair?

No. Inkjet has the advantage that it is flexible. You can print anything you want. You can do photos, you can do text. You can do anything. Obviously, it has much more capability. The advantage of the single-use device like the printer dock is that, first of all, the quality is impeccable and it's much more robust than Inkjet. For many applications, that will always have a role. Mine is in the kitchen and it is the perfect device for the kitchen. But we don't expect everybody to have a multifunction printer and a printer dock in every station in the house. We don't expect that. Still it is going to grow maybe 15%, 18% this year. It is not that it is not growing. It is not growing with the incredible momentum that it was growing before.

And then just a clarification. The level of layoffs that you have announced today, if you could just clarify. Is that still in line with what you had announced prior or is there some incremental headcount in there?

There's a little more. There's a little more. We haven't changed what we're going neither the nature or the timing of it. We announced the 25,000 a couple of years ago. We have been implementing. We have done 20,500 as far as I can count, I think. So we are getting very close to the end; and when you get close to the end you have a better definition of what it is and we think it is going to be between 25,000 and 27,000. There is no change in what we are going to do or the timing. It is just that we have a better definition of it.

Thank you.

Our next question comes from Sam Doctor - JP Morgan.

Thank you. Antonio, I had a question for you on the Flextronics deal. Is there a risk of distraction on your operations as you put the Flextronics near the end of the year? And do you plan to build inventory ahead of the transition?

We are doing it already. We will start before the end of the year. But we did think about that. We did think that we are going to do this in the middle of the high volume, so we have a plan to transfer those things that are easy to transfer without disrupting the flow. We both have a lot of expertise in doing that. They do. We do. So that is why it was hard for me to give Carol a number, what the effect is going to be because it is going to be a process with different steps. We will start to move first certain things and then others, until we are finished with the whole manufacturing.

Great. Does Flextronics actually produce anything for your camera business?

Say again. I didn't hear that.

Does Flextronics produce any cameras for you right now?

No.

What are your plans for your printer docks or CMOS manufacturing strategy going forward?

Our manufacturing strategy in general for the consumer business is asset life is the best way I can define it to you. That is that, from the very beginning, the blueprint of our strategy in 2003 was to consider an asset life strategy for the consumer organization. That means that we are going to concentrate in the higher level part of the supply chain and we are going to look in any business, cameras and otherwise, for partners to do things where they have the scale that we don't have and they have the flexibility that we don't have. You can expect every single business we have, and we have done a lot of that in kiosks already and we are in the same park with every other single thing that we do including CMOS and everything else. It is an asset life strategy. Different than in the commercial business of course. So that's the plan.

Okay. If I may paraphrase your Consumer Digital strategy. Your strategy has been to sell lots of cameras and lots of printers and docks and this growth. You see the margin benefit in ink and media sales. How does that change now that we are seeing that the digital camera volumes are peaking this year? The home printer docks are beginning to slow down.

Yes. I wouldn't define our strategy the way you did. I actually define it in a different way. We want to be the number one supplier of digital capture products and services for the consumer space. Digital camera had a role to play as I described before. I don't want to go through it again but so that the other things we invested in CMOS, we invested in cell phones. We believe that cell phones and other the portable devices are basically going to take away a lot of the pictures taken. We know for a fact that, next year, you are going to see cell phones that will be phenomenal digital cameras. So we are aiming at becoming the number one supplier of components and total solutions in this space that we call Digital Capture and Consumer Digital Imaging. Cameras had a role and we won't abandon digital cameras but we will concentrate in the midsection of the point and shoot where we can make the greatest contribution. We will link that to our product gallery and to our printing and everything else.

Finally, could you give us a sense of how many design wins do you have or are you close to having? Can you give us any kind of guidance on the cell phone side?

Well, we have a few design wins. I think it is too early to disclose. I'm sorry. But you will see CMOS sensors in cell phones soon.

Will it begin this year?

No. Not this year, next year. We will be at the beginning of next year, some time in the first, second quarter, you'll see that. You'll see co-design elements of the handsets along the year as well.

Thank you so much.

Our final question comes from Peter Koegel - Banc of America.

Thank you so much for taking the call. A quick question. Could you tell me when the last time was you met with the rating agencies? Any thoughts there on both your strategy for the rest of the year, as well as thoughts on the impact of potential sale for the Health Care business and the resulting pay down in debt?

We try to meet with the rating agencies every quarter. They are very interested in the outcome of that and they know, as well as everybody else, we are exploring our alternatives there and we don't have a definitive idea. The rating agencies are very interested in two things. The increasing digital profitability to offset the decline of our traditional business and getting the debt levels down. So we are trying to get both. Both of those should work out better this year. Our debt levels will go down by at least $800 million and depending on the resolution of Health could go down another $1.2 billion over that or more. With the midpoint of digital earnings around $400 million that growth would more than offset the decline in traditional. So those are the two things that rating agencies would like to see us sustain over time and get ourselves back on track. So we do meet with them once a quarter. Either Bill Love and I, sometimes Bill, Antonio and I and sometimes Bill. But we see them every quarter.

Just a follow-up. S&P, there's a lot of adjusting to the debt numbers particularly on adjusting the debt to include operating leases, post-retirement benefits, other off-balance sheet items and they adjust EBITDA accordingly, somewhat different than from that which is in your covenants. How do you discuss that methodology with them and your thoughts on that? The number is about eight times EBITDA for instance, that they report in their press release when all those things are considered.

We have so many things going on with the transformation and the restructuring and everything right now that we don't get into in-depth discussions on those things right now. That will be more of the discussion next year. Right now with the enormous amount of restructuring and the enormous amount of cash going out in restructuring, as we say $650 million this year. That's the paramount discussion. I look forward to those days when we start to wind down and we can get into those discussions. But I know it's really not meaningful right now to discuss that in our situation.

Thank you very much.

At this time, I would like to turn the conference over to Antonio Perez for any additional or closing remarks.

Thank you, very much for attending again. I will repeat what I said. I think GCG is better than I thought it would be. FPG, the film business, is slightly better. Health is very much as expected. We are a little behind in CDG. I still believe that we can catch up in CDG for the rest of the year, since there is a large part of the year, the most important by a lot. I feel very well. I feel very positive about cash and digital earnings. The real challenge, the biggest challenge we have for now till the end of the year as you all know is CDG. We are working hard at it. I think we have the momentum on our side. I feel confident that we are going to achieve the breakeven goal. Thank you very much.

That does conclude today's presentation. We thank you for your participation. You may disconnect at this time.