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48479567 kodak-history

  1. 1. Eastman Kodak Company Company Profile Publication Date: 13 Sep 2010www.datamonitor.comEurope, Middle East & Africa Americas Asia Pacific119 Farringdon Road 245 5th Avenue Level 46London 4th Floor 2 Park StreetEC1R 3DA New York, NY 10016 Sydney, NSW 2000United Kingdom USA Australiat: +44 20 7551 9000 t: +1 212 686 7400 t: +61 2 8705 6900f: +44 20 7551 9090 f: +1 212 686 2626 f: +61 2 8088 7405e: euroinfo@datamonitor.com e: usinfo@datamonitor.com e: apinfo@datamonitor.com
  2. 2. Eastman Kodak CompanyABOUT DATAMONITORDatamonitor is a leading business information company specializing in industry analysis.Through its proprietary databases and wealth of expertise, Datamonitor provides clients with unbiasedexpert analysis and in depth forecasts for six industry sectors: Healthcare, Technology, Automotive,Energy, Consumer Markets, and Financial Services.The company also advises clients on the impact that new technology and eCommerce will have ontheir businesses. Datamonitor maintains its headquarters in London, and regional offices in NewYork, Frankfurt, and Hong Kong. The company serves the worlds largest 5000 companies.Datamonitors premium reports are based on primary research with industry panels and consumers.We gather information on market segmentation, market growth and pricing, competitors and products.Our experts then interpret this data to produce detailed forecasts and actionable recommendations,helping you create new business opportunities and ideas.Our series of company, industry and country profiles complements our premium products, providingtop-level information on 10,000 companies, 2,500 industries and 50 countries. While they do notcontain the highly detailed breakdowns found in premium reports, profiles give you the most importantqualitative and quantitative summary information you need - including predictions and forecasts.All Rights Reserved.No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic,mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc.The facts of this profile are believed to be correct at the time of publication but cannot be guaranteed. Please note that thefindings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faithfrom both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitorcan accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.Eastman Kodak Company Page 2© Datamonitor
  3. 3. Eastman Kodak CompanyTABLE OF CONTENTSTABLE OF CONTENTSCompany Overview..............................................................................................4Key Facts...............................................................................................................4Business Description...........................................................................................5History...................................................................................................................7Key Employees...................................................................................................11Key Employee Biographies................................................................................14Major Products and Services............................................................................22Revenue Analysis...............................................................................................23SWOT Analysis...................................................................................................24Top Competitors.................................................................................................29Company View.....................................................................................................30Locations and Subsidiaries...............................................................................33Eastman Kodak Company Page 3© Datamonitor
  4. 4. Eastman Kodak CompanyCompany OverviewCOMPANY OVERVIEWEastman Kodak Company (Kodak or “the company”) provides imaging technology products andrelated services to the photographic and graphic communications markets. The company primarilyoperates in the US. It is headquartered in Rochester, New York and employs about 20,250 people.The company recorded revenues of $7,606 million during the financial year ended December 2009(FY2009), a decrease of 19.2% over 2008. The net sales decreased as compared with 2008 primarilydue to volume declines within all three segments driven by lower demand for company’s products.The operating loss of the company was $28 million in FY2009, as compared to the operating lossof $821 million in 2008. The net loss was $210 million in FY2009, as compared to the net loss of$442 million in 2008.KEY FACTSHead Office Eastman Kodak Company 343 State Street Rochester New York 14650 USAPhone 1 585 724 4000Fax 1 585 724 0663Web Address http://www.kodak.comRevenue / turnover 7,606.0(USD Mn)Financial Year End DecemberEmployees 20,250New York Ticker EKEastman Kodak Company Page 4© Datamonitor
  5. 5. Eastman Kodak CompanyBusiness DescriptionBUSINESS DESCRIPTIONEastman Kodak Company (Kodak) manufactures and markets a range of consumer and professionalimaging products. Kodaks products include digital cameras and accessories, inkjet printers, prepressequipment and consumables, scanners, and photographic films. The company also offers onlineimaging and wholesale photofinishing services. Kodak operates in the Americas, Europe, MiddleEast, Africa and Asia pacific. The products of the company are marketed under the umbrella brandname of Kodak.The company reports its operations primarily under three segments: graphic communications group(GCG); consumer digital imaging group (CDG); and film, photofinishing and entertainment group(FPEG). Besides, the company reports its other activities under the all other segment.The CDG segment includes products and services such as digital capture and devices, retail systemssolutions, consumer inkjet systems, online imaging services, and imaging sensors.The GCG segment offers a range of software, media, and hardware products that provide customerswith solutions for prepress equipment, workflow software, digital and traditional printing, and documentscanning. The products of the segment consists of digital and traditional prepress equipment andconsumables including plates, chemistry, and media; workflow software and digital controllerdevelopment; color and black-and-white electrophotographic equipment and consumables; commercialinkjet printing systems; inkjet inks and media; document scanners; and micrographic peripheralsand media. It also provides maintenance and professional services for Kodak and other manufacturersproducts, and imaging services to customers.Kodaks consumer digital capture and devices business unit offers products like digital still and videocameras, digital picture frames, imaging accessory products, and snapshot printers and printermedia. The unit also includes the licensing activities related to the company’s intellectual propertyin digital imaging products.The retail systems solutions offerings include services like retail kiosks and consumables, consumerand retailer software workflows, remote business monitoring, retail store merchandising and identityprograms, besides offering after sale services and support.The consumer inkjet systems business unit offers commercial printers.The company offers online imaging services through the Kodakgallery.com website. It also offerspersonalized photo cards with original designs by popular designers.Kodaks imaging sensors offerings includes a range of CCD sensors.The FPEG segment manufactures and markets films including motion, consumer, professional,industrial and aerial pictures; one-time-use cameras; and entertainment imaging products andEastman Kodak Company Page 5© Datamonitor
  6. 6. Eastman Kodak CompanyBusiness Descriptionservices. In addition, this segment also provides paper and output systems, and photofinishingservices.The all other segment consists of the companys display business and other small, miscellaneousbusinesses.Eastman Kodak Company Page 6© Datamonitor
  7. 7. Eastman Kodak CompanyHistoryHISTORYEastman Kodak Company (Kodak) started with the manufacture of dry plates in 1879. In the followingyear, George Eastman obtained an American patent on his plate-coating machine. In 1880, Mr.Eastman began the commercial manufacture of dry plates.Mr. Eastman and Henry A. Strong formed a partnership company, the Eastman Dry Plate Company,in 1881. In 1883, the company launched film in rolls, with the roll holder adaptable to nearly everyplate camera on the market. The partnership company later was renamed as the Eastman Dry Plateand Film Company in 1884, with additional joining of 14 shareowners. Subsequently, the EastmanCompany was formed in 1889. The company has been called Eastman Kodak Company since 1892.In 1901, the present firm, Eastman Kodak Company of New Jersey, was formed under the laws ofthat state.Kodaks non-curling film was introduced in 1903 and became the standard for amateur photographyfor nearly 30 years. In 1908, Kodak produced the worlds first commercially practical safety film usingcellulose acetate base instead of the highly flammable cellulose nitrate base. The same year, Kodakopened a manufacturing plant in Australia.In 1923, Kodak made amateur motion pictures practical with the introduction of 16 mm reversal filmon cellulose acetate (safety) base, the first 16 mm CINE-KODAK Motion Picture Camera, and theKodascope Projector. The company launched the 16 mm Kodacolor Film in 1928. The next year,the company introduced its first motion picture film designed especially for making new sound motionpictures. Kodak formed the Eastman Gelatin Corporation in 1930. During 1934, Kodak and GeneralMills entered into a joint research program on molecular distillation. Kodak acquired General Millsinterest in the joint venture company in 1948.The company entered into health-care business in 1986, with the establishment of its EastmanPharmaceuticals division. During 1988, the company acquired Sterling Drug. The company sold itsnon-imaging health-related businesses, Sterling Winthrop, L&F Products and Clinical Diagnostics,in 1994. During the same year, Kodak established a joint venture with Fuqua Industries, Qualex. In1995, Kodak launched its internet website, kodak.com. During 1997, Kodak sold the sales, marketing,and equipment service operations of its office imaging business and facilities management business(formerly Kodak Imaging Services) to Danka Business Systems.Kodak and Heidelberger Druckmaschinen entered into a joint venture, NexPress, in 1998. In thefollowing year, the company sold its digital printer, copier/duplicator, and roller assembly operationsto Heidelberger Druckmaschinen.Kodaks entertainment imaging unit, along with Qualcomm launched an initiative to collaborate ontesting core technologies for the creation of a high-quality digital cinema system during 2000. At theend of the year, Kodak completed the acquisition of Lumisys, a provider of desktop computedradiography systems and X-ray film digitizers.Eastman Kodak Company Page 7© Datamonitor
  8. 8. Eastman Kodak CompanyHistoryThe company acquired Encad, a wholly owned subsidiary of Kodak, focused exclusively on thewide-format inkjet printing industry, during 2002. Kodak launched its US mobile imaging services in2003. During the same year, Kodak made several acquisitions including PracticeWorks (a providerof dental practice management software); a stake in Lucky Film (the largest maker of photo filmheadquartered in China); Laser-Pacific Media Corporation (a provider of post-production servicesfor filmmakers); Algotec Systems (developer of picture archiving and communications systems); andApplied Science Fictions Digital (rapid film processing technology). Also in 2003, Kodak enteredinto an agreement with Cingular Wireless and Nokia to develop services for mobile phones withcameras as part of its shift away from conventional film products to digital technology. By the endof the year, the company acquired Algotec Systems. The company also undertook a majorrestructuring as a part of a four-year turnaround plan in 2003. The turnaround plan focused onreducing administrative overhead and the shift to a digital business model.The company acquired Scitex Digital Printing, a producer of commercial inkjet printers, in 2004. Inthe same year, the company sold its remote sensing systems to ITT Industries. Kodak and VerizonWireless formed a strategic partnership in 2004, wherein Kodak Mobile Service would be availableto Verizon Wireless Get it Now customers. Also in the same year, Kodak completed the acquisitionof two business units from Heidelberger Druckmaschinen, with a 50% stake in Nexpress Solutions,and a certain stake in Heidelberg Digital. Subsequently, in 2004, Kodak acquired image sensorbusiness of National Semiconductor. The company closed its plant in Australia in the same year.During 2005, Kodak launched NexPress digital printing solutions (a range of digital printing solutions)in India. In 2005, Kodak acquired Orex Radiography (provider of compact computed radiographysystems). The company acquired Kodak Polychrome Graphics, in 2005, through the redemption ofSun Chemical Corporations interest in the joint venture. Kodak also signed a co-marketing agreementwith SSI, to promote the companys medical imaging, information and software products.The companylicensed its organic light emitting diode (OLED) to Fuji Electric Holdings in 2005.In 2005, Kodak acquired Creo, a supplier of prepress systems used by printers to manage themovement of text, graphics and images from the computer screen to the printing press.Motorola and Kodak announced a 10-year global product, cross licensing and marketing alliance in2006. In the same year, Kodak Company and Bibble Labs entered into a cross-licensing andco-marketing agreement allowing both companies to offer new, improved products to imagingprofessionals. Kodak introduced the Kodak Easyshare V610 dual lens digital camera, the worldssmallest camera, which was less than an inch thick with 10X optical zoom in 2006. Kodak signed amulti-source agreement with Novation in the same year. Also in 2006, Kodak introduced an integratedportable X-ray/computed radiography system for mobile medical imaging applications. Later, in 2006,Kodak signed an agreement with Flextronics for design, production and distribution of its consumerdigital cameras. In the same year, Kodak launched the worlds smallest ultra-wide-angle zoom digitalcamera and additions to its C-series line of digital cameras.In 2007, Kodak entered into a technology cross-license agreement with Sony allowing each of thembroad access to the others patent portfolio. During the same period, Kodak sold its Health Groupto Onex Healthcare Holdings, a subsidiary of Onex. Kodak entered the consumer inkjet industry withEastman Kodak Company Page 8© Datamonitor
  9. 9. Eastman Kodak CompanyHistorya new product line, Kodak Easyshare all-in-one printers, in 2007. During the same year, the companybecame the exclusive supplier of dental x-ray films to SmileCare Family Dentistry.The company formed a partnership with electronics retailing company DSG international in 2007,to supply exclusively the new Kodak all-in-one inkjet printers in the UK market through DSGis PCWorld, Currys and Currys.digital outlets. The year also saw the partnership with Target Corporationfor the launch of Kodak Gallery for Target, a co-branded site for Targets guests. Further in 2007,Kodak entered into a cross licensing agreement with Chi Mei Optoelectronics and Chi Mei EL (CMEL)of Taiwan.Later in 2007, Kodak signed a five-year agreement with Lexar for development and marketing ofbranded flash memory products worldwide. The company signed a reseller agreement with RicohAmericas and Pitman Company, during the same period. Further in 2007, the company entered into an OEM agreement with Isilon systems for integrating Isilons clustered storage systems with itsunified workflow solutions. During the end of 2007, the company partnered with data managementgroup, Pearson, to develop an industry first desktop model scanner combining OMR (Optical MarkRecognition) and document capture. The company also released the first product in a new generationof color motion picture films in 2007.Kodak entered into a cross-License agreement with Japan based Matsushita Electric IndustrialCompany (MEI) and Victor Company, in 2008. During the same period, Kodak released new workflow solutions for digital production printing. In the same year, Kodak signed an intellectual propertycross-licensing agreement with LG Display, a flat- panel display industry leader. Also in 2008, thecompany acquired Design2Launch (D2L) and Intermate. Further, in the same year, the companycollaborated with Lasergraphics to develop Kodak Digital ICE technology.The company launched CCD image sensor, KODAK KAI-02150 image sensor, in 2008. Kodaksubsequently launched organic light emitting diode (OLED) wireless picture frame technology in thesame year. During the same period, the company signed a partnership agreement with JV ImagingSolutions, a distributor of flexographic equipment, as the authorized reseller of the integrated KODAKFLEXCEL NX Digital Flexographic System.The company entered into a patent license agreement with Nokia in 2008. Kodak launched theJapanese version of the CREO color server solutions addressing the needs of the Japanese printmarket in the same year. During the same period, Kodaks Graphic Communications Group (GCG)entered into a partnership with Aprimo, offering enterprise marketing solutions from their combinedproduct portfolio. Later in 2008, the company acquired certain assets of NuPro Technologies, aprovider of processing chemistries and solvent reclamation equipment for flexographic printing.In January 2009, Kodak signed an agreement to acquire the scanner division of BOWE BELL +HOWELL, the supplier of document scanners. During the same period, the company expanded itsmarketing partnership with the PGA TOUR, making Kodak as the official imaging provider of thePGA TOUR, as well as the Champions Tour and Nationwide Tour.Eastman Kodak Company Page 9© Datamonitor
  10. 10. Eastman Kodak CompanyHistoryKodak signed an agreement with Canon in April 2009 for the development of a new CREO colorserver for the CANON imagePRESS C7000VP, C6000VP and C6000 Digital Presses.During June 2009, the company announced the closure of KODACHROME Color Film from 2009onwards. The decision was taken since the company was facing steep decline in the demand of itstraditional film products.Kodak entered into a technology cross-license agreement with LG Electronics, in December 2009,which allowed both the companies broad access to the other’s patent portfolio. The same month,Kodak announced the sale of its OLED business to a group of LG companies.In July 2010, the company selected xpedx as the company’s primary US national authorized resellerfor Kodak’s suite of commercial prepress products.Eastman Kodak Company Page 10© Datamonitor
  11. 11. Eastman Kodak CompanyKey EmployeesKEY EMPLOYEESName Job Title Board CompensationAntonio M. Perez Chairman and Chief Executive Executive Board 12625319 USD OfficerRichard S. Braddock Director Non Executive Board 284851 USDHerald Y. Chen Director Non Executive Board 130246 USDAdam H. Clammer Director Non Executive Board 130246 USDTimothy M. Donahue Director Non Executive Board 189526 USDMichael Hawley Director Non Executive Board 180026 USDWilliam H. Hernandez Director Non Executive Board 190026 USDDouglas R. Lebda Director Non Executive Board 180051 USDDebra L. Lee Director Non Executive Board 180066 USDDelano E. Lewis Director Non Executive Board 180076 USDWilliam G. Parrett Director Non Executive Board 189149 USDJoel Seligman Director Non Executive Board 146256 USDDennis F. Strigl Director Non Executive Board 180026 USDLaura DAndrea Tyson Director Non Executive Board 185384 USDRobert L. Berman Chief Human Resources Officer and Senior Management 1955074 USD Senior Vice PresidentPhilip J. Faraci President and Chief Operating Senior Management 4599518 USD OfficerJoyce P. Haag General Counsel and Senior Vice Senior Management 1984008 USD PresidentBrad W. Kruchten President, Film, Photofinishing and Senior Management Entertainment Group and Senior Vice PresidentFrank S. Sklarsky Chief Financial Officer and Senior Management 2910501 USD Executive Vice PresidentEssie L. Calhoun Chief Diversity Officer and Director, Senior Management Community Affairs and Vice PresidentDouglas J. Edwards General Manager and Vice Senior Management President, Prepress Solutions, Graphic Communications Group and Vice PresidentMichael Korizno Managing Director, Americas Senior Management Region and Vice PresidentEastman Kodak Company Page 11© Datamonitor
  12. 12. Eastman Kodak CompanyKey EmployeesName Job Title Board CompensationDolores K. Kruchten General Manager, Business Senior Management Solutions and Services and Vice PresidentSteven B. Decker General Manager, Film Capture, Senior Management Paper and Output Systems, Film, Photofinishing and Entertainment Group; and Vice PresidentKimberly A. Snyder President and General Manager, Senior Management Entertainment Imaging, Film, Photofinishing & Entertainment Group and Vice PresidentGustavo Oviedo General Manager, Worldwide Sales Senior Management and Customer Operations, Consumer Digital Imaging and Graphic Communications Group and Vice PresidentSusan H. Tousi General Manager, Consumer Inkjet Senior Management Systems and Vice PresidentJohn Blake General Manager, Digital Capture Senior Management and Imaging Devices and Vice PresidentVictor Cho General Manager, Internet and Senior Management Software Services, Consumer Digital Imaging Group and Vice PresidentMichael L. Marsh General Manager, Inkjet Printing Senior Management Solutions, Graphic Communications Group and Vice PresidentDiane McCue General Manager, Printing Plates, Senior Management Graphic Communications Group and Vice PresidentIsidre Rosello General Manager, Digital Printing Senior Management Solutions and Vice PresidentNicoletta A. Zongrone General Manager, Retail Systems Senior Management Solutions, Consumer Digital Imaging Group and Vice PresidentStephen Green Regional Managing Director, Sales Senior Management and Customer Operations, Asia Pacific Region, and Vice PresidentJohn OGrady Regional Managing Director, Senior Management Europe, Africa and Middle East Region, Chairman Eastman Kodak Sàrl and Vice PresidentAntoinette P. McCorvey Director, Investor Relations and Vice Senior Management PresidentGerard K. Meuchner Director, Communications and Senior Management Public Affairs and Vice PresidentEastman Kodak Company Page 12© Datamonitor
  13. 13. Eastman Kodak CompanyKey EmployeesName Job Title Board CompensationLaura G. Quatela Chief Intellectual Property Officer Senior Management and Vice PresidentTerry R. Taber Chief Technical Officer and Vice Senior Management PresidentKim VanGelder Chief Information Officer and Vice Senior Management PresidentEastman Kodak Company Page 13© Datamonitor
  14. 14. Eastman Kodak CompanyKey Employee BiographiesKEY EMPLOYEE BIOGRAPHIESAntonio M. PerezBoard: Executive BoardJob Title: Chairman and Chief Executive OfficerSince: 2005Age: 64Mr. Perez has been the Chairman and Chief Executive Officer at Kodak since 2005. He joined Kodakas the President and Chief Operating Officer in 2003. Prior to that, Mr. Perez served as the Presidentand Chief Executive Officer of Hewlett-Packards inkjet imaging business. Just prior to joining Kodak,he served as an independent Consultant for large investment firms, providing counsel on the effectof technology shifts on financial markets. From 2000 to 2001, Mr. Perez was the President and ChiefExecutive Officer at Gemplus International.Richard S. BraddockBoard: Non Executive BoardJob Title: DirectorSince: 1987Age: 68Mr. Braddock has been a Director at Kodak since 1987. He is the Chairman and Chief ExecutiveOfficer of Fresh Direct. Mr. Braddock began his business career in 1965 spending a number of yearsin product management at General Foods. He joined Citicorp in 1973, and was elected Presidentand Chief operating officer of Citicorp and its principal subsidiary, Citibank in 1990. Mr. Braddockresigned from Citicorp in 1992, and subsequently served as the Chief Executive Officer of MedcoContainment Services until its acquisition by Merck & Co., and then spent a year as a Principal atClayton, Dubilier & Rice. He served as the Chairman (non-executive) of True North Communicationsfrom 1997 to 1999. Mr. Braddock served as the Chairman and Chief Executive Officer of priceline.comfrom 1998 to 2004.Herald Y. ChenBoard: Non Executive BoardJob Title: DirectorSince: 2009Age: 40Mr. Chen has been a Director at Kodak since 2009. He is also a Director at KKR. Mr. Chen previouslyserved on several other boards, including United American Energy, American Ref-fuel, WJEastman Kodak Company Page 14© Datamonitor
  15. 15. Eastman Kodak CompanyKey Employee BiographiesCommunications, VCST NV and Byram Healthcare. Prior to joining KKR, he was a Managing Directorwith Fox Paine & Company. Before joining Fox Paine, Mr. Chen was the Chief Financial Officer andco-founder of Jamcracker.Adam H. ClammerBoard: Non Executive BoardJob Title: DirectorSince: 2009Age: 39Mr. Clammer has been a Director at Kodak since 2009. He is also a member of KKR Management.Mr. Clammer began his career at KKR in 1995. From 1992 to 1995, he was working at MorganStanley. Currently, Mr. Clammer serves as a Director at Aricent, NXP, Avago Technologies, andTASC.Timothy M. DonahueBoard: Non Executive BoardJob Title: DirectorSince: 2001Age: 61Mr. Donahue has been a Director at Kodak since 2001. He is the retired Executive Chairman ofSprint Nextel Corporation. Prior to this, Mr. Donahue was the President and Chief Executive Officerof Nextel Communications. He joined Nextel in 1996 as the President and Chief Operating Officer.Before joining Nextel, Mr. Donahue served as the Northeast Regional President for AT&T WirelessServices Operations from 1991 to 1996. Earlier, he served as the Chairman of the CellularTelecommunications and Internet Association. Mr. Donahue is currently a Director at NVR, Covidien,and Tyco International.Michael HawleyBoard: Non Executive BoardJob Title: DirectorSince: 2004Age: 48Dr. Hawley has been a Director at Kodak since 2004. He is the former Director of Special Projectsat Massachusetts Institute of Technology. Prior to assuming this position, Dr. Hawley served as theAlex W. Dreyfoos Assistant Professor of Media Technology at the MIT Media Lab. He is a co-founderof Things That Think and Friendly Planet.William H. HernandezEastman Kodak Company Page 15© Datamonitor
  16. 16. Eastman Kodak CompanyKey Employee BiographiesBoard: Non Executive BoardJob Title: DirectorSince: 2003Age: 62Mr. Hernandez has been a Director at Kodak since 2003. He is the retired ice President, Financeand Chief Financial Officer of PPG Industries. Prior to this, Mr. Hernandez served as PPGs CorporateController, from 1990 to 1994; and as the Vice President and Controller, in 1994. From 1974 until1990, he held a number of positions at Borg-Warner Corporation. Earlier in his career, Mr. Hernandezwas a Financial Analyst for Ford Motor Company.Douglas R. LebdaBoard: Non Executive BoardJob Title: DirectorSince: 2007Age: 40Mr. Lebda has been a Director at Kodak since 2007. He is the Chairman, Chief Executive Officerand Director at Tree.com. Prior to this, Mr. Lebda served as the President and Chief OperatingOfficer at IAC/InterActiveCorp, from 2005 to 2008. Prior to assuming these roles, he served as theChief Executive Officer atLendingTree, which he founded, since 1998. Before this, Mr. Lebda workedas an Auditor and Consultant for PriceWaterhouseCoopers.Debra L. LeeBoard: Non Executive BoardJob Title: DirectorSince: 1999Age: 55Ms. Lee has been a Director at Kodak since 1999. She is the Chairman and Chief Executive Officerof BET Holdings (BET). Ms. Lee joined BET in 1986 as the Vice President and General Counsel.She is also a Director at WGL Holdings, Marriott International and Revlon.Delano E. LewisBoard: Non Executive BoardJob Title: DirectorSince: 2001Age: 71Mr. Lewis has been a Director at Kodak since 2001. He is a Senior Fellow at New Mexico StateUniversity. Mr. Lewis is the former US Ambassador to South Africa, a position he held from 1999 toEastman Kodak Company Page 16© Datamonitor
  17. 17. Eastman Kodak CompanyKey Employee Biographies2001. Prior to his ambassadorship, he was the President and Chief Executive Officer of NationalPublic Radio, a position he held from 1994 until 1998. Mr. Lewis was the President and ChiefExecutive Officer of C&P Telephone Company, from 1988 to 1993, after having served as the VicePresident since 1983. He held several positions in the public sector prior to joining C&P TelephoneCompany. Currently, Mr. Lewis is a Director of Colgate-Palmolive.William G. ParrettBoard: Non Executive BoardJob Title: DirectorSince: 2007Age: 64Mr. Parrett has been a Director at Kodak since 2007. Recently, he retired from Deloitte as the ChiefExecutive Officer of Deloitte & Touche USA. From 2003 to 2007, Mr. Parrett served as the ChiefExecutive Officer of Deloitte Touche Tohmatsu (DDT). Prior to serving as the Chief Executive Officerof DDT, he was the Managing Partner of Deloitte & Touche USA since 1999. Mr. Parrett joinedDeloitte in 1967 and served in a series of roles of increasing responsibility. He presently serves asa Director at The Blackstone Group, Thermo Fisher Scientific and UBS.Joel SeligmanBoard: Non Executive BoardJob Title: DirectorSince: 2009Age: 60Mr. Seligman has been a Director at Kodak since 2009. He is serving as the President of the Universityof Rochester, since 2004. Prior to that, Mr. Seligman served as the Ethan A. H. Shepley UniversityProfessor and Dean of the School of Law at Washington University in St. Louis. Earlier, he hadserved on the law faculty of Northeastern University, George Washington University, and the Universityof Michigan. Mr. Seligman also had served as reporter for the National Conference of Commissionerson Uniform State Laws, Revision of Uniform Securities Act; as Chairman of the Securities andExchange Commission Advisory Committee on Market Information; and as a member of the AmericanInstitute of Certified Public Accountants Professional Ethics Executive Committee. Currently, he isa member of the board of the Financial Industry Regulatory Authority.Dennis F. StriglBoard: Non Executive BoardJob Title: DirectorSince: 2008Age: 63Eastman Kodak Company Page 17© Datamonitor
  18. 18. Eastman Kodak CompanyKey Employee BiographiesMr. Strigl has been a Director at Kodak since 2008. He had served as the President and ChiefOperating Officer at Verizon Communications. Prior to this position, Mr. Strigl was the President andChief Executive Officer of Verizon Wireless since its formation in 2000. Earlier, he served as thePresident and Chief Executive Officer of Bell Atlantic Mobile; the Group President and Chief ExecutiveOfficer of the Global Wireless Group of Bell Atlantic; and the Vice President, Operations and ChiefOperating Office of Bell Atlantic New Jersey. Mr. Strigl began his career in 1968 with New YorkTelephone and held positions at AT&T and Wisconsin Telephone before becoming the Vice Presidentof American Bell. He also served as the President and Chief Executive Officer of Applied DataResearch. Currently, Mr. Strigl also serves on the boards of PNC Financial Services Group.Laura DAndrea TysonBoard: Non Executive BoardJob Title: DirectorSince: 1997Age: 62Ms. Tyson has been a Director at Kodak since 1997. She has been a Professor at the Walter A.Haas School of Business at the University of California, Berkeley, since 2007. From 2002 to 2006,Ms. Tyson was the Dean of London Business School. She was formerly the Dean of the Walter A.Haas School of Business at the University of California, Berkeley, a position she held since 1998.Previously, Ms. Tyson was Professor and holder of the Class of 1939 Chair, in Economics andBusiness Administration at the University of California, Berkeley, a position she held from 1997 to1998. Prior to this position, she served in the first Clinton Administration as Chairman of the PresidentsNational Economic Council and 16th Chairman of the White House Council of Economic Advisers.Prior to joining the Administration, Ms. Tyson was Professor of Economics and BusinessAdministration, Director of the Institute of International Studies and Research Director of the BerkeleyRoundtable on the International Economy at the University of California, Berkeley. She is also aDirector at Morgan Stanley and AT&T, Silver Spring Networks, and CB Richard Ellis.Robert L. BermanBoard: Senior ManagementJob Title: Chief Human Resources Officer and Senior Vice PresidentSince: 2005Age: 52Mr. Berman has been the Chief Human Resources Officer and Senior Vice President at Kodak since2005. He has held a variety of key human resources positions for Kodak over his 24 year career,including that of Director and Divisional Vice President of Human Resources for the ConsumerImaging business and the Human Resources Director for Kodak Colorado Division.Philip J. FaraciEastman Kodak Company Page 18© Datamonitor
  19. 19. Eastman Kodak CompanyKey Employee BiographiesBoard: Senior ManagementJob Title: President and Chief Operating OfficerSince: 2007Age: 54Mr. Faraci has been the President and Chief Operating Officer at Kodak since 2007. He joined Kodakas Director, Inkjet Systems Program in December 2004. Prior to Kodak, Mr. Faraci served as theChief Operating Officer at Phogenix Imaging and; President and General Manager at GemplusCorporation’s Telecom Business Unit. Prior to these roles, he spent 22 years at Hewlett-Packard,where he served as the Vice President and General Manager of the Consumer Business Organizationand; Senior Vice President and General Manager for the Inkjet Imaging Solutions Group.Joyce P. HaagBoard: Senior ManagementJob Title: General Counsel and Senior Vice PresidentSince: 2005Age: 59Ms. Haag has been the General Counsel and Senior Vice President at Kodak since 2005. She beganher Kodak career in 1981, as a lawyer on the Legal Staff. Prior to joining the Kodak Legal staff, Ms.Haag was an Associate with Boylan, Brown, Code, Fowler Vigdor & Wilson in Rochester. She iscurrently a member of the Association of General Counsel, Presidents Council of Cornell Women,Board of Trustees of Susan B. Anthony House, Rochester General Health System Board, memberof the New York State Bar Association, and a Fellow of the New York State Bar Foundation.Brad W. KruchtenBoard: Senior ManagementJob Title: President, Film, Photofinishing and Entertainment Group and Senior Vice PresidentSince: 2009Age: 49Mr. Kruchten has been the President, Film, Photofinishing and Entertainment Group and SeniorVice President at Kodak since 2009. He joined Kodak as a Quality Engineer in 1982. Prior to Kodak,Mr. Kruchten worked as a Project Engineer at Inland Steel and as a tool designer for General MotorsCorp.Frank S. SklarskyBoard: Senior ManagementJob Title: Chief Financial Officer and Executive Vice PresidentSince: 2003Age: 53Eastman Kodak Company Page 19© Datamonitor
  20. 20. Eastman Kodak CompanyKey Employee BiographiesMr. Sklarsky has been the Chief Financial Officer and Executive Vice President at Kodak since 2006.Prior to joining Kodak, he was the Executive Vice President and Chief Financial Officer at ConAgraFoods. Prior to joining ConAgra in 2004, Mr. Sklarsky served as the Vice President, Product Financeat DaimlerChrysler. He first joined DaimlerChrysler in 1983 and held a series of increasinglyresponsible finance positions before leaving for Dell in 2000. Prior to DaimlerChrysler, Mr. Sklarskyserved as a Senior Accountant at Ernst & Young International from 1978 to 1981.Essie L. CalhounBoard: Senior ManagementJob Title: Chief Diversity Officer and Director, Community Affairs and Vice PresidentSince: 2003Ms. Calhoun has been the Chief Diversity Officer and Director of Community Affairs at Kodak since2003. She began her Kodak Company career as a sales representative in 1982 and has held positionsin marketing, sales and public affairs.Douglas J. EdwardsBoard: Senior ManagementJob Title: General Manager and Vice President, Prepress Solutions, Graphic Communications Groupand Vice PresidentSince: 2006Mr. Edwards has been the General Manager and Vice President, Prepress Solutions, GraphicCommunications Group and Vice President at Kodak since 2006. Previously he worked with KodakPolychrome Graphics as the Vice President of Research, Business and Strategy Development. Mr.Edwards joined Kodak Polychrome Graphics in 1998 from International Papers Imaging ProductsDivision. Before joining International Paper, he spent eight years with Zeneca Specialties and ICIColors and Fine Chemicals. Mr. Edwards started his industrial career with Ilford, Ciba-Geigy in 1985.Michael KoriznoBoard: Senior ManagementJob Title: Managing Director, Americas Region and Vice PresidentMr. Korizno is currently the Managing Director, Americas Region and Vice President at Kodak. Hejoined Kodak in 1997 serving as the Worldwide Sales Manager for the Storage business. Beforejoining Kodak, Mr. Korizno was a Vice President, Sales at Verbatim Corporation. He also served asthe Vice President, Sales and Marketing at Sony Corporation.Dolores K. KruchtenEastman Kodak Company Page 20© Datamonitor
  21. 21. Eastman Kodak CompanyKey Employee BiographiesBoard: Senior ManagementJob Title: General Manager, Business Solutions and Services and Vice PresidentMs. Kruchten is currently the General Manager, Business Solutions and Services and Vice Presidentat Kodak. Her career at Kodak began in 1981.Steven B. DeckerBoard: Senior ManagementJob Title: General Manager, Film Capture, Paper and Output Systems, Film, Photofinishing andEntertainment Group; and Vice PresidentSince: 2009Mr. Decker has been the General Manager, Film Capture, Paper and Output Systems, Film,Photofinishing and Entertainment Group; and Vice President at Kodak since 2009. She joined Kodakin 1996 and has subsequently held a variety of increasingly responsible positions in operations,marketing, and general management in Kodak’s consumer digital and traditional businesses. Priorto joining Kodak, Mr. Decker held a variety of management, operations, engineering, and financepositions with Thomson Consumer Electronics and Rockwell International.Eastman Kodak Company Page 21© Datamonitor
  22. 22. Eastman Kodak CompanyMajor Products and ServicesMAJOR PRODUCTS AND SERVICESKodak offers imaging technology products and related services to the photographic and graphiccommunications markets. The companys key products and services include the following:Products:Digital cameras and accessoriesConsumer inkjet printers and mediaDigital picture framesRetail printing kiosksAPEX drylab systems and related mediaPrepress equipment and consumablesWorkflow softwareElectrophotographic equipment and consumablesCommercial inkjet printing systemsDocument scannersOrigination and print filmsConsumer and professional photographic filmPhotographic paper and processing chemicalsWholesale photofinishing servicesServices:Online imaging servicesRetail kiosksBrand:KodakEastman Kodak Company Page 22© Datamonitor
  23. 23. Eastman Kodak CompanyRevenue AnalysisREVENUE ANALYSISThe company recorded revenues of $7,606 million during the financial year ended December 2009(FY2009), a decrease of 19.2% over 2008. For FY2009, United States, the companys largestgeographic market, accounted for 40.5% of the total revenues.Kodak generates revenues through four business divisions: graphic communications group (35.8%of the total revenues during fiscal year 2009), consumer digital imaging group (34.4%), film,photofinishing and entertainment group (29.7%) and all other (0.1%).Revenues by Division*In FY2009, the graphic communications group division recorded revenues of $2,726 million inFY2009, a decrease of 18.2% over 2008.The consumer digital imaging group division recorded revenues of $2,619 million, a decrease of15.2% over 2008.The film, photofinishing and entertainment group division recorded revenues of $2,257 million inFY2009, a decrease of 24.4% over 2008.The all other division recorded revenues of $4 million in FY2009, a decrease of 42.9% over 2008.*Percentages are rounded-off.Revenues by Geography**The United States, Kodaks largest geographical market, accounted for 40.5% of the total revenuesin FY2009. Revenues from the United States reached $3,083 million in 2009, a decrease of 19.6%over 2008.Europe, Middle East and Africa accounted for 31% of the total revenues in FY2009. Revenues fromEurope, Middle East and Africa reached $2,358 million in 2009, a decrease of 23.7% over 2008.Asia Pacific accounted for 17.1% of the total revenues in FY2009. Revenues from Asia Pacificreached $1,298 million in 2009, a decrease of 13.5% over 2008.Canada and Latin America accounted for 11.4% of the total revenues in FY2009. Revenues fromCanada and Latin America reached $867 million in 2009, a decrease of 12.7% over 2008.**Percentages are rounded-off.Eastman Kodak Company Page 23© Datamonitor
  24. 24. Eastman Kodak CompanySWOT AnalysisSWOT ANALYSISKodak offers imaging technology products and related services to the photographic and graphiccommunications markets. The company’s strong brand name and recognition has enabled it toexpand its operations across the globe. However, the intense competition at multiple levels couldkeep the market share under check. Strengths Weaknesses Brand name synonymous with photography Sluggish financial performance over the and filming technology years Worldwide manufacturing and distribution Lack of product diversification network established diversified sources of revenue Cross licensing agreements opens additional channel for revenue earnings Opportunities Threats Growth prospects in the Asia-Pacific region Intense competition at multiple levels of business Competition with black market, parallel import and smuggled goodsStrengthsBrand name synonymous with photography and filming technologyKodak has been one of the pioneers in the photography and filming technology and is recognizedworldwide for its earlier innovations in theses two fields. It is one of the oldest and most establishedglobal brands, since its establishment in 1889. The branding has been built on some of the mosteffective marketing campaigns and catchy taglines.The company’s famous tagline “Kodak Moments”have ingrained in the consumer mindscape and imparts much needed recognition and trust essentialfor a consumer goods company. Moreover, the company has initiated several marketing campaignsto connect with the consumers through popular online social forums, in recent years. The marketingcampaign with the tagline “The real Kodak moment happens when you share”, launched under the2009 campaign umbrella theme of “It’s time to smile”, is aimed at encouraging people to share theirmoments through social networking sites. Kodak is projecting its digital cameras, digital pictureframes and video cameras as “emotional technology” to forge brand loyalty. The company’s brandrecognition has helped it in capturing nearly 13.9% of the global market share in photography productsamid stiff competition. The company’s strong brand association with consumers imparts significantEastman Kodak Company Page 24© Datamonitor
  25. 25. Eastman Kodak CompanySWOT Analysiscompetitive advantage to the company and enables it to combat adverse business and technologyenvironment.Worldwide manufacturing and distribution network established diversified sources of revenueKodak has the manufacturing and research facilities across the globe. Its manufacturing facilitiesare located in Brazil, Bulgaria, Japan, Canada, China, England, Germany, India, Israel, Japan,Mexico, Russia, the UK, and the US.The research and development of the company is headquarteredin Rochester, New York. The US manufacturing facilities are located in Boston, Massachusetts;Dallas, Texas; Oakdale, Minnesota; New Haven, Connecticut; and San Jose and San Diego,California. Furthermore, the companys products reach customers around the world through asignificant network of retailers, distributors, and online platforms including the companys onlinestore. Kodaks regional distribution centers are located in various places within and outside of theUS.The company diversified its revenue base supported by its operations spanning the North America,Europe, Middle East, Africa, Asia Pacific, and Latin America. During FY2009, Kodak derived 40.5%of revenues from the US, 31.0% from the Europe, Middle East and Africa, 17.1% from the Asia-Pacific,and 11.4% from the Canada and Latin American regions. The worldwide operations guard thecompany from country-specific demand-trends and business environment. It also enables Kodak tocapitalize the opportunities emanating from the emerging countries like India, where the companyis the number two in terms of market share.Cross licensing agreements opens additional channel for revenue earningsKodak holds portfolios of patents in several areas, including digital cameras and image sensors;network photo sharing and fulfillment; flexographic and lithographic printing plates and systems;digital printing workflow and color management proofing systems; color and black-and-whiteelectrophotographic printing systems; commercial, and consumer inkjet printers; inkjet inks andmedia; thermal dye transfer and dye sublimation printing systems; digital cinema; and color negativefilms, processing and papers. The company leverages the strength of these patents and has enteredinto cross licensing agreements with many companies over the years. Recently, in 2010, the companysigned an agreement with Samsung Electronics which allows both the companies access to theeach other’s patent portfolio. The agreement is expected to add nearly $450 million to the Kodak’srevenues. The company already has existing agreements with other leading technology companiesincluding Nokia, Motorola, Sony Corp, and Panasonic Corp. Kodak also filed infringement casesagainst Apple and RIM in 2010, for alleged patent violations. The case is still under jurisdiction andfavorable judgment would further boost the company’s earnings from patent rights. Earlier in 2009,the company entered into an OLED intellectual property cross-licensing agreement with LG Display,and Nokia. On an average, the company estimates the revenues from license agreements in therange of $250-$350 million annually for the next several years. For FY2009, these licensingagreements contributed approximately 5.7% of the consolidated revenues, as against 2.4% in 2008.The cross-licensing agreements have been one of the key strategies of the company to generateadditional revenues from the owned patent applications. In addition, these agreements also provideEastman Kodak Company Page 25© Datamonitor
  26. 26. Eastman Kodak CompanySWOT Analysisbroad access to the technologies of other players enabling improvements in Kodak’s own productofferings.WeaknessesSluggish financial performance over the yearsKodaks transition from traditional film to digital products has contributed to a poor financialperformance. The company’s last profitable year was way back in 2004. Since 2004, the company’sfinancial performance has deteriorated gradually. From the revenues perspective, the companygenerated a total turnover of $7,606 million in 2009, a gradual decline from $13,517 million turnoverof 2004. Kodak has also been in continued operating and net loss since 2004 onwards.Furthermore, the company has lost considerable market share in all its business segments, indicatingtroubled business environment. The revenues from the consumer digital imaging group declinedfrom $3,247 million in 2007 to $2,619 million by 2009. The 19.3% decline is primarily attributable toaggressive marketing and innovative technological offerings by the competitors. The company’shighest operating margin contributing segment; film, photofinishing and entertainment; has beenone of the worst hit due to the markets substitution of traditional films with digital products. Thesegment contributed nearly 81.9% of operating profits (excluding restructuring charges) in 2007,and more than 100% during 2008 and 2009. However, the segment has continuously lost marketshare reflected in its revenues; revenues declined by 37.9% from $3,632 million in 2007 to $2,257million by 2009. The graphic communications segment has also faced 20.1% revenue losses since2007, besides gradually moving in the operating losses.The company’s cash position is another alarming component. During the 2007-09 period, Kodak’scash from operations declined from $328 million in 2007 to $168 million in 2008 and further to -$136million in 2009. The decline is stark when compared with $1,168 million of cash generated fromoperations in 2004. Furthermore, the company holds $1,129 million of long-term debt on its balancesheet as of 2009. However, the sustained losses and consequently the negative interest coverageratio, besides the declining operating cash flow, positions the company’s debt repayment capacityin a disadvantageous state.The continued sluggish financial performance has put the company in a very difficult phase. Theseproblems, if unaddressed, could lead to operational inflexibility for Kodak considering toughcompetition from bigger peers like Sony and Canon.Lack of product diversificationKodak lacks diversification in its product portfolio. The company focuses only on digital cameras,photographic equipment, films, printers and other related accessories, whereas its competitors suchas Xerox and Canon, have a more diversified and broad product portfolio.Eastman Kodak Company Page 26© Datamonitor
  27. 27. Eastman Kodak CompanySWOT AnalysisFor instance, the company lacks any significant services, compared to Xerox, which has significantportfolio of services including document management, finance and administration services, productlifecycle services and consulting services. Canon also offers network system solutions such as PCsand servers; optical and measuring equipment; logistics services, in addition to its core portfolio ofcopiers, printers and scanners.Lack of product diversification has made the company vulnerable to demand and technology risks.Products concentration, hence, could affect the growth prospects of the company in future.OpportunitiesGrowth prospects in the Asia-Pacific regionThe company has been expanding its presence in the Asia-Pacific region, where it enjoys strongbrand equity. As per Datamonitor estimates, the region contributes approximately 26.8% to the globalphotographic products sales value. Considering the buoyant GDP growth rate and rising per capitaincome of the Asian countries, the market has immense growth potential for Kodak. The companyalready has a strong foothold in India, where it replaced Canon as the second-largest player in thedigital camera space in 2009. The Indian market, where the company reported 48% volume growthin 2009, provides the strong platform to further target growing Indian middle-group. Besides, thecompany has taken numerous steps to augment its service facilities for the Asian market. During2009, the company set up the digital camera service facility at Noida, India. This service facility haslatest calibration and setup equipments for digital cameras and can handle complex servicing andrepairs for Kodak customers in India. Similar measures in other Asian countries would enable thecompany to address the problem of sustained loss in revenues.ThreatsIntense competition at multiple levels of businessThe markets in which the company does business are highly competitive. Kodak faces aggressiveprice competition for all products and services from numerous companies globally, particularly fromCanon, Fujifilm, Nikon and Sony. Over the past several years, price competition in the market forfilm and digital cameras and related products and services has been particularly intense as competitorshave aggressively cut prices and lowered their profit margins for these products. Besides, thecompany faces competition from other online service companies, consumer electronics and printermanufacturers in the markets in which it competes. The industry is prone to rapid price declines postintroduction of technologically advanced products. There is a continual introduction of new modelswith enhanced capabilities, such as improved resolution and/or optical systems in cameras. Moreover,the digital camera market is facing intense competition from mobile phones capable of capturingand sending pictures of high quality. Consumers are expected to move away from low-end camerasas mobile phone makers introduce products with comparable resolutions. According to industryEastman Kodak Company Page 27© Datamonitor
  28. 28. Eastman Kodak CompanySWOT Analysisestimates, the average resolution for handset cameras’ sensors in 2008 was 1.5 megapixels. By2009, that average increased to 2.1 megapixels and as per forecasts it will rise to 5.7 megapixelsby 2013.The advancement in cell phones technology would erode the market share of leading digitalcamera companies like Kodak. Since the company is already facing troubles in sustaining its marketshare in most of its core markets, competition at multiple levels makes the financial turnaround adifficult task for Kodak.Competition with black market, parallel import and smuggled goodsThe electronics manufacturing industry is struggling to compete with black market, parallel importand smuggled goods. Over time, experts believe, counterfeiting will get worse. On the global level,all counterfeit goods, including electronics, are expected to double to 18% of total world trade by2010. Further, the experts also believe that counterfeiting will get worse as Chinas share of globalelectronics production rises from 15% in 2008 to 35% by 2010. With an increase in the number ofcounterfeit products being manufactured in China, the company faces serious threats in most of itsmarket segments. Low quality counterfeits reduce consumer confidence in branded products. Nikonsimaging products segment which manufactures digital cameras and film cameras will be adverselyaffected due to the widespread counterfeits.Eastman Kodak Company Page 28© Datamonitor
  29. 29. Eastman Kodak CompanyTop CompetitorsTOP COMPETITORSThe following companies are the major competitors of Eastman Kodak CompanyCanon Inc.Fuji Photo Film Co., Ltd.Ricoh Company, Ltd.Sony CorporationXerox CorporationSeiko Epson CorporationOlympus CorporationAgfa-Gevaert N.V.Konica Minolta Holdings, Inc.Power Interactive Media IncKoninklijke Philips Electronics N.V.Nikon CorporationEastman Kodak Company Page 29© Datamonitor
  30. 30. Eastman Kodak CompanyCompany ViewCOMPANY VIEWAn excerpt from the Managements Discussion and Analysis of Financial Condition and Results ofOperations sections is given below. The statement has been taken from the companys 10-K filingfor financial year 2009.RevenuesFor the year ended December 31, 2009, net sales decreased compared with 2008 primarily due tovolume declines within all three segments driven by lower demand likely as a result of the globaleconomic slowdown which began in the fourth quarter of 2008, particularly within Digital Captureand Devices in the CDG segment and Prepress Solutions in the GCG segment, as well as continuedsecular declines in Traditional Photofinishing and Film Capture in the FPEG segment. Foreignexchange negatively impacted sales across all three segments, due to a stronger U.S. dollar.Unfavorable price/mix was primarily driven by Digital Capture and Devices within CDG, EntertainmentImaging within FPEG, and Prepress Solutions within GCG.Gross ProfitGross profit dollars declined in 2009, primarily due to unfavorable price/mix, which impacted allsegments but was most prominent in CDG, lower sales volumes as discussed above, and unfavorableforeign exchange. These items were partially offset by cost improvements, largely driven by ongoingcost reduction efforts within CDG and FPEG, and lower benefit costs as a result of amendmentsmade in the third quarter of 2008 to certain of the Company’s U.S. postemployment benefit plans.Gross profit margin as a percentage of sales increased slightly from prior year, as unfavorableprice/mix (primarily within CDG) and unfavorable foreign exchange impacts (across all segments)were more than offset by lower manufacturing and other costs for the Company.Included in gross profit for the current year were non-recurring intellectual property licensingagreements within Digital Capture and Devices in the CDG segment. These licensing agreementscontributed approximately 5.7% of consolidated revenue to consolidated gross profit dollars in 2009,as compared with 2.4% of consolidated revenue to consolidated gross profit dollars for non-recurringagreements in 2008.The Company expects to secure other new licensing agreements, the timing and amounts of whichare difficult to predict. These types of arrangements provide the Company with a return on portionsof its R&D investments, and new licensing opportunities are expected to have a continuing impacton the results of operations.Selling, General and Administrative ExpensesThe decrease in consolidated selling, general and administrative expenses (SG&A) was a result ofcompany-wide cost reduction actions implemented in 2009 in response to current economic conditions.Eastman Kodak Company Page 30© Datamonitor
  31. 31. Eastman Kodak CompanyCompany ViewResearch and Development CostsThe decrease in consolidated research and development (R&D) costs was a result of focused costreduction efforts.Other Operating (Income) Expenses, NetThe other operating (income) expenses, net category includes gains and losses on sales of assetsand businesses and certain impairment charges. The current year amount primarily reflects a gainof approximately $100 million on the sale of assets of the Company’s organic light emitting diodes(OLED) group.The prior year amount primarily reflects a $785 million goodwill impairment charge related to theGCG business.In November 2009, the Company agreed to terminate its patent infringement litigation with LGElectronics, Inc., LG Electronics USA, Inc., and LG Electronics Mobilecomm USA, Inc., entered intoa technology cross license agreement with LG Electronics, Inc. and agreed to sell assets of its OLEDgroup to Global OLED Technology LLC, an entity established by LG Electronics, Inc., LG DisplayCo., Ltd. and LG Chem, Ltd. As the transactions were entered into in contemplation of one another,in order to reflect the asset sale separately from the licensing transaction, the total considerationwas allocated between the asset sale and the licensing transaction based on the estimated fair valueof the assets sold. Fair value of the assets sold was estimated using other competitive bids receivedby the Company. Accordingly, $100 million of the proceeds was allocated to the asset sale. Theremaining gross proceeds of $414 million were allocated to the licensing transaction and reportedin net sales of the CDG segment.Interest ExpenseThe increase in interest expense in 2009 compared with 2008 was primarily due to the issuancesin the third quarter of 2009 of $300 million aggregate principal amount of 10.5% Senior SecuredNotes due 2017 and $400 million aggregate principal amount of 7% Convertible Senior Notes due2017.Other Income (Charges), NetThe other income (charges), net category primarily includes interest income, income and lossesfrom equity investments, and foreign exchange gains and losses. The decrease in other income(charges), net was primarily attributable to a decrease in interest income due to lower interest ratesand lower cash balances in the year 2009 as compared with 2008, partially offset by the favorableimpact of legal settlements in the current year.Income Tax Provision (Benefit)Eastman Kodak Company Page 31© Datamonitor
  32. 32. Eastman Kodak CompanyCompany ViewThe change in the Company’s effective tax rate from continuing operations is primarily attributableto: (1) a benefit recognized upon the receipt in 2008 of the interest portion on an IRS tax refund, (2)a pre-tax goodwill impairment charge of $785 million that resulted in a tax benefit of only $4 milliondue to a full valuation allowance in the U.S. and limited amount of tax deductible goodwill that existedas of December 31, 2008, (3) losses generated in the U.S. and in certain jurisdictions outside theU.S. that were not benefited due to management’s conclusion that it was not more likely than notthat the tax benefits would be realized, (4) the impact of previously established valuation allowancesin jurisdictions with current earnings, (5) the mix of earnings from operations outside the U.S., (6)withholding taxes related to a non-recurring licensing agreement entered into in 2009; and (7) changesin audit reserves and settlements.Eastman Kodak Company Page 32© Datamonitor
  33. 33. Eastman Kodak CompanyLocations and SubsidiariesLOCATIONS AND SUBSIDIARIESHead OfficeEastman Kodak Company343 State StreetRochesterNew York 14650USAP:1 585 724 4000F:1 585 724 0663http://www.kodak.comOther Locations and Subsidiaries Eastman Kodak Company Eastman Kodak Company Image Sensor Solutions Kodak Colorado Division 1999 Lake Avenue 9952 Eastman Park Drive Rochester Windsor New York 14650 2010 Colorado 80551 USA USA Eastman Kodak Company Eastman Gelatine Corporation One Polychrome Park 227 Washington Street Columbus Peabody Georgia 31906 Massachusetts 01960 USA USA Eastman Kodak Company Inkjet Printing Kodak da Amazonia Industria e Comercio Solutions Ltda. 3000 Research Blvd Av. dos Oitis 760 Dayton Distrito Industrial 69075 842 Ohio 45420 4099 Manaus USA BRA Kodak Limited Kodak Limited Headstone Drive Howley Park Road Harrow Morley Middlesex HA1 4TY Leeds LS27 0QT GBR GBREastman Kodak Company Page 33© Datamonitor