Kodak 2006 Annual Report Download - page 6

There is one additional key to growth and to renewing Kodak’s
leadership, and it’s an important one: our corporate culture and
our people—how we view the world, what we focus on, how
we make decisions and work with our customers, partners and
amongst ourselves.
As we make all these changes and our culture evolves, I want to
emphasize just how important an asset we have in our people.
Kodak people are intelligent and creative. They are steady and
strong and resilient. They are proud of this company, proud of their
own contributions, and their commitment to success is unwavering.
We, all of us at Kodak, have a lot of work, and more rebuilding left
to do to complete our transformation. But, together with that, we
have new high value-creating opportunities to be developed this
year. The year 2007 will be pivotal. But with a new Kodak coming
into view, we feel optimistic about the year ahead.
Antonio M. Perez
Chairman and Chief Executive O cer
Internally, much of the Global Manufacturing & Logistics organization
moved into FPG during the year, integrating the total supply chain
into this unit’s structure. We’ve always worked closely with our
manufacturing partners; now we are together in one organization with
common goals and leadership, forging an even stronger and more
e ective partnership.
FPG is focused more than ever on Kodak’s historic business of fi lm and
related services. Our mission remains very straightforward: to build a
sustainable business, serving customers who use fi lm and paper.
Health Group
As this Annual Report goes to print, we have announced that Onex
Corporation has agreed to purchase our Health business for up to
$2.55 billion.
Despite the inherent uncertainty that went with such a process, the
Health Group maintained double-digit operating profi ts and remained
a worldwide leader in health imaging, including digital x-ray capture,
medical printers, and x-ray fi lm.
Outlook
We have two key strategic objectives for 2007:
• Achieve market success with our new products—In CDG, this
includes CMOS and our game-changing all-in-one consumer
inkjet printers; In GCG, this includes important product line
extensions and exciting new market segment opportunities.
• Aggressively reduce our SG&A expenses, and complete our
traditional restructuring.
By achieving those objectives we will have made the necessary
progress toward the new digital business model envisioned in our
turnaround plan announced in September 2003. That will allow
Kodak to become a strong competitor in the digital world, with
the brand, intellectual property, products, and people to achieve
sustainable, profi table growth and high return on invested capital
for our shareholders.
emerge.
Technology Review
This has been an exceptional year for research at Kodak. The Kodak
Easyshare printers, announced in early 2007, derived their existence
from early work in our research laboratories. The ground-breaking
work on MEMS (Micro-Electro-Mechanical Systems) allowed us
to design and manufacture long-life microscopic nozzles on the
same silicon wafer as the rest of the printhead. This means that the
printhead can stay where it belongs, namely in the printer, enabling
us to o er consumers replacement ink cartridges at signifi cantly
lower prices. Another product of Kodak research is the advanced
nanoparticle pigment ink, which yields images that will hold their
color for more than a century. This is a great example of how Kodak’s
investment in research enables the design, production and marketing
of state-of-the-art products.
Another success story has been the Shanghai Product Development
Center. What began as a small software development center
nine years ago has grown into an integral player in product
development serving Kodak’s di erent businesses. Several of
Kodak’s award-winning products have been developed, at least in
part, in the Shanghai Center, working together with the other Kodak
development centers in the U.S. and Europe. These products include
the Kodak picture kiosk, Kodak Professional digital printing software
(DP1), Document Imaging’s Smart Touch, and Entertainment
Imaging’s Kodak look management system (KLMS).
Lastly, our intellectual property position remains strong, as attested
by major licensing agreements concluded during the year. Our
research focus has been entirely digital for several years now, and
we are clearly picking up momentum.