Kodak 2014 Annual Report Download - page 5

Graphics, Entertainment and Commercial Films (“GECF”) Segment
The GECF segment provides digital and traditional product and service offerings to a variety of commercial industries, including commercial print, direct mail, book
publishing, newspapers and magazines, offset packaging (which is packaging printed using offset printing plates), motion picture entertainment, printed electronics, and
industrial film markets.
Graphics: Kodak’s Graphics portfolio, covering the pre-press component of the offset printing market, includes digital plates, production workflow software, computer-to-
plate equipment and digital front-end controllers. Kodak also provides services and support related to its Graphics products. Graphics products and services are sold
globally to customers both directly by Kodak and indirectly through dealers.
Net sales for Graphic
s accounted for 54%, 52%, 49% and 49% of total net revenue for the year ended December 31, 2014, four months ended December 31, 2013, eight
months ended August 31, 2013 and year ended December 31, 2012, respectively.
Entertainment Imaging & Commercial Films
: Kodak’s Entertainment Imaging & Commercial Films group includes its motion picture film business serving the
entertainment and advertising industries. Motion picture products are sold directly to studios, laboratories and independent filmmakers. The group also offers industrial films,
including films used by the electronics industry to produce printed circuit boards. Entertainment Imaging & Commercial Films also includes related component businesses:
Polyester Film, Specialty Chemicals, Inks & Dispersions, and Solvent Recovery.
In January 2015 Kodak finalized new film supply agreements with major Hollywood studios. Despite significant sales volume declines, the agreements make it possible for
Kodak to continue to manufacture motion picture film while also pursuing new opportunities to leverage film production technologies in growth applications, such as
touchscreens for smartphones and tablet computers.
Net sales of Entertainment Imaging and Commercial Films accounted for 10%, 11%, 13% and 14% of total net revenue for the year ended December 31, 2014, four months
ended December 31, 2013, eight months ended August 31, 2013 and year ended December 31, 2012, respectively.
Intellectual Property and Brand Licensing
: Intellectual Property and Brand Licensing includes licensing activities related to Kodak’
s patents, proprietary technology and
brand. With respect to Brand Licensing, Kodak currently licenses its brand for use with a range of consumer products, including batteries, cameras and camera accessories
and recordable media. Kodak intends to continue efforts to grow its portfolio of consumer product licensees in order to generate both ongoing royalty streams and upfront
payments. Additionally, Kodak actively seeks opportunities to leverage its patents and associated technology in licensing and/or cross-
licensing deals to support both revenue
growth and ongoing businesses.
Marketing and Competition: The key imperatives and marketing focus for the Graphics business are: investing in process-free technology; driving a total, optimized
prepress solution; delivering the next-generation print software portfolio; expanding in emerging markets; and driving operational excellence and profitability. Kodak faces
competition from other companies that offer commercial offset and digital printing equipment, production software, consumables and service. Competitiveness is generally
focused on a broad range of technology, solutions and price. The motion picture business faces competition from electronic substitution with digital capture and digital
cinema theater display.
Digital Printing and Enterprise (“DP&E”) Segment
DP&E serves a variety of customers in the commercial printing, packaging, newspaper, digital service bureau market, in-plant, and consumer printing market segments with
a range of software, media and hardware products. DP&E products and services are sold both directly by Kodak and indirectly through dealers .
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Kodak’
s digital offset plate offerings include traditional digital offset plates and KODAK SONORA Process Free Plates. KODAK SONORA Process Free Plates are
offset plates that are able to be prepared directly with a computer-to-
plate thermal output device and do not require subsequent processing chemistry, processing
equipment or chemical disposal. As a result, SONORA Process Free Plates deliver cost savings and efficiency for customers and promote environmental
sustainability practices.
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Production workflow software is used by customers to manage digital and conventional print content from file creation to output. Kodak’
s production workflow
software includes KODAK PRINERGY Workflow Software, KODAK PREPS Imposition Software, KODAK COLORFLOW Software and the KODAK INSITE
Software family of products. The production workflow software manages content and color, reduces manual errors and helps customers manage the collaborative
creative process.
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Computer-to-
plate thermal output devices are used by customers to transfer images onto aluminum offset printing plates, and provide a consistent and high quality
image carrier for offset press applications. Kodak’s computer-to-
plate products include the KODAK MAGNUS Platesetter and TRENDSETTER Platesetter with
SQUARESPOT Imaging Technology, which provides high resolution, consistency and stability in thermal imaging. Kodak also offers the ACHIEVE Platesetter with
TH5 imaging technology, which provides a highly efficient and cost
-
effective imaging solution at a lower price point.
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Digital front-
end controllers, which are branded as KODAK CREO Servers, are used by customers to drive personalized content to digital presses while controlling
color and print consistency.
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