Kodak 2007 Annual Report Download - page 5

4
P A R T I
ITEM 1. BUSINESS
Eastman Kodak Company (the Company or Kodak) is the world’s foremost imaging innovator, providing imaging technology products and services to the
photographic and graphic communications markets. When used in this report, unless otherwise indicated, “we,” “our,” “us,” the “Company” and “Kodak”
refer to Eastman Kodak Company. The Company’s products span:
• Digital cameras and accessories
• Consumer inkjet printers and media
• Digital picture frames
• Retail printing kiosks and related media
• On-line imaging services
• Prepress equipment and consumables
• Workflow software for commercial printing
• Electrophotographic equipment and consumables
• Inkjet printing systems
• Document scanners
• Origination and print films for the entertainment industry
• Consumer and professional photographic film
• Photographic paper and processing chemicals
• Wholesale photofinishing services
Kodak was founded by George Eastman in 1880 and incorporated in 1901 in the State of New Jersey. The Company is headquartered in Rochester, New
York.
This year Kodak substantially completed a four-year corporate restructuring and our 2007 results begin to reflect the benefits. We have a traditional busi-
ness with a sustainable business model as a result of taking costs out ahead of the market decline. We have a strong digital portfolio with differentiated
products in growing markets where our unique technology and brand allows us to have leading market positions.
Going forward, we are poised to achieve sustainable, profitable growth through portfolio expansion in our digital capture businesses and significant growth
in our output businesses. These businesses will be built by continuing to create competitive solutions from a unique intellectual property portfolio combin-
ing materials science and digital image science.
During 2007, all key digital businesses grew and our digital profitability grew faster than total company revenue. We made significant improvement in our
digital earnings from operations, and continue to see strong cash flow and earnings from our traditional businesses. We achieved market success with the
new product launch of consumer inkjet printers, made great progress on the introduction of CMOS technology and products and drove top-line growth in
the Graphic Communications Group through product line extension and entering new markets. We made significant progress toward installing our target
cost model by substantially completing the corporate restructuring, reducing costs ahead of the decline in our traditional businesses, improving our go-to-
market structure while taking out more than one percentage point of selling, general and administrative expenses (“SG&A”) costs as a percent of sales,
and significantly improving our digital portfolio profitability. To ensure our future, we continued to make significant research and development (“R&D”)
investments in key focus areas. We completed the sale of the Health Group and ended the year with a strong balance sheet.
For 2008, the Company will focus on the following key metrics:
• Cash generation before dividends
• Growth in revenue from the Consumer Digital Imaging Group and the Graphic Communications Group
• Growth in earnings from operations
In addition, the 2008 Strategic Imperatives include:
• Driving unit growth in digital output businesses for future annuities
• Margin enhancement in our digital capture businesses
• Cash generation from our traditional businesses, utilizing cost efficiencies to address industry demand declines
• Execution excellence to drive productivity gains