Kodak 2001 Annual Report Download - page 28

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Additions to Board of Directors
Kodak’s Board consists of “outside” Directors and only one company-
employed member. In 2001, we welcomed three people to our Board—
two new Directors and a returning member. Former U.S. Senator,
Olympian and Pro Basketball Hall of Famer William W. Bradley joined the
Board in May. Mr. Bradley is a Managing Director of Allen & Company
Incorporated, and Chair of the Advisory Board of McKinsey & Company’s
Institute for Management of Nonprofits. Timothy M. Donahue, elected to
the Board in October, is President & Chief Executive Officer of Nextel
Communications, Inc. We were honored to welcome back Delano E. Lewis,
who was re-elected to the Board in July. Mr. Lewis had served on Kodak’s
Board from May 1998 until he became U.S. Ambassador to South Africa
in December 1999.
Outlook
We expect the balance of 2002 will continue to be challenging. We have
very modest earnings expectations for the first half of the year, with
some improvement in the second half as the cost-reduction efforts and
operational improvements we made in 2001 begin to take hold. We do
not expect to see any real upturn in the economy until 2003, with a very
gradual return to consumer spending habits and behavior that will
positively affect our business growth.
Our actions are consistent with Kodak’s fundamental, long-term
business strategy, and we expect to build on that foundation as the
economy strengthens. We will continue to invest in R&D as a critical path
to our future success—delivering innovative, customer-focused imaging
products, systems and services. Of course, we will work to maintain or
increase share positions in all of our businesses and we will continue to
pay close attention to costs, managing the business for maximum cash.
As we announced in late January, we are confident Kodak is capable of
generating at least $6 billion in cash over the next six years.
Growth Strategy
We will leverage our unparalleled reputation for quality to ALL
infoimaging processes and products, a category with a $225 billion total
market potential. Kodak’s imaging technologies, products and services
position us well for success in this growing category. In 2002, we are
aligning the entire Kodak organization to focus on four related growth
paths for the future. Together, we will:
• Expand the benefits of film. The traditional film business is healthy,
and developing in new markets around the world. Some digital
substitution is happening—as we expected—particularly in the
professional markets, and we are at the forefront of products for the
digital market, as well. One of our key thrusts is to leverage and
extend the benefits of our film-related businesses far into the future.
We are doing this through the application of digital technology in such
areas as wholesale and retail photofinishing and by expanding our
presence in emerging film markets.
• Drive image output in all forms. Ofoto’s capabilities and Health
Imaging’s DryView laser imaging system are examples of how the
company is extracting value from image output. So is our worldwide
population of 35,000 Kodak picture maker kiosks. We will also be
introducing the Kodak I.Lab system, with exceptionally high-quality,
digitally enhanced output on silver-halide paper.
• Facilitate ease of use in digital imaging. Our EasyShare camera line’s
success demonstrates that for the consumer, we are making digital
imaging one-button simple. Look for even better things to come from
this product line.
• Develop new businesses in new markets. We are exploring and
developing new business opportunities that may be higher in risk, but
will position Kodak and its technology to capture a broader share of
the infoimaging category.
While these have been exceptionally challenging times for our industry
and for Kodak, we are working through them and continuing to do what
we do best—provide top-quality products and services, leverage a brand
that is second to none, maintain a strong balance sheet and cash
position, and pursue growth paths that will fulfill our promising future.
We have unique strengths: brand and share leadership, a well-deserved
reputation for innovation, and unparalleled development and production
expertise. We have a strong, diverse management team, talented and
dedicated employees and an active, involved Board of Directors.
On behalf of everyone in the extended Kodak family—customers,
employees, the Board and the communities in which we operate around
the world—I thank you, our investors, for your confidence and support.
Daniel A. Carp
Chairman & Chief Executive Officer,
President & Chief Operating Officer