Exhibit (99.1)
EASTMAN KODAK COMPANY
Media Contact:
David Lanzillo 585-781-5481 david.lanzillo@kodak.com
Kodak Streamlines Management Structure for Digital Future
Establishes Chief Operating Office, Led by Faraci and
Langley, Designed to Enhance Operational Effectiveness,
Leverage Opportunities Across Businesses
ROCHESTER, N.Y., March 14 - Eastman Kodak Company announced
today the establishment of a Chief Operating Office, a move
designed to enable the streamlining of its senior management
and enhance operational effectiveness as the necessary next
step in the company's digital transformation.
The Chief Operating Office will be led jointly by Philip
J. Faraci, President, Consumer Digital Imaging Group, and
James T. Langley, President, Graphic Communications Group,
effective immediately. Faraci and Langley, who are Senior
Vice Presidents of the company, will continue to be
responsible for managing the day-to-day operational activity
of their respective businesses.
Most importantly, Faraci and Langley will be jointly
accountable for achieving this year the strategic objective
of significantly reducing administrative costs and
positioning Kodak for profitable growth in 2008. They will
put in place the structures and processes needed to achieve
a greater streamlining of management, deeper cost
reductions, and greater leverage across the digital
businesses to drive revenue growth. In turn, this will help
Faraci and Langley to achieve the goals they outlined for
their businesses at the company's investor meeting in
February.
Consistent with the establishment of the Chief Operating
Office, the company will consolidate much of the corporate
infrastructure that is presently dedicated to the
businesses. With the anticipated sale of its Health Group,
the company can be managed more effectively and economically
by streamlining the organization. The businesses now will
determine the amount of services that they require, thereby
allowing the company to reduce cost and improve efficiency
by pooling resources at the senior-most levels of the
corporate functions.
2
"This move will lead to a leaner management structure
that will speed decision-making, reduce cost, and help
accelerate the company's profitable growth," said Antonio M.
Perez, Kodak's Chairman and Chief Executive Officer. "The
changes represent a vital element of the restructuring that
the company began in 2004 and will conclude this year.
Beginning in 2008, Kodak will have in place the business
model and the management structure required for sustained
success in digital markets."
Under the new structure, Perez, as Chairman and CEO,
retains responsibility for setting strategy, driving the
overall operating performance of the company, and managing
broad issues of corporate governance.
Perez also will retain a direct reporting line with the
Film Products Group (FPG), which is responsible for the
company's consumer and professional films as well as its
Entertainment Imaging business. These businesses are playing
a vital role in the company's portfolio and its
transformation effort. Given the different structural nature
of FPG, and the strategic importance of completing this year
the restructuring of the traditional businesses, this
organization will continue to report directly to Perez
through Mary Jane Hellyar, President, FPG, and a Senior Vice
President of the company.
Faraci, 51, joined Kodak in December 2004. Among his
other accomplishments, he led the development of the
company's recently introduced consumer inkjet printers,
improved the earnings of the digital capture business, and
created a more profitable go-to-market model in the consumer
digital business.
Langley, 56, joined Kodak in August 2003. He guided the
series of acquisitions that resulted in the creation and
integration of what is now Kodak's Graphic Communications
Group, a $3.6 billion business that offers the broadest
portfolio of blended printing solutions in the industry.
"Phil and Jim have demonstrated their ability to lead
large organizations effectively," Perez said. "This shared
operating responsibility is essential at this time to
achieving the correct level of functional resources for the
company we are becoming. Working together, they will improve
Kodak's operational performance and assist me in executing
our digital transformation strategy."
3
The company also announced the following management
changes:
- Carl Gustin, 55, Chief Marketing Officer and Senior
Vice President, Eastman Kodak Company, announced his
intention to retire effective July 1. Gustin's retirement
represents the completion of a plan that he developed in the
past year to operate marketing within the businesses and to
redistribute the responsibilities of the Chief Marketing
Office into the businesses and functional areas. The
announcement of his retirement coincides with the final
implementation of that plan.
- Jeff Jacobson, 46, Chief Operating Officer, Graphic
Communications Group, and Vice President, Eastman Kodak
Company, announced his intention to leave the company
effective April 30, under the terms of a two-year agreement
that took effect when he joined the company in April 2005
upon the acquisition of Kodak Polychrome Graphics. Jacobson
will spend the next six weeks helping to transition his
responsibilities.
"I thank Carl and Jeff for their leadership and the
considerable contributions they made to the transformation
of Kodak," Perez said. "Carl sustained and nurtured the
Kodak brand throughout his 14-year career at the company,
helping us to expand the brand into digital markets. Kodak's
rising stature as a digital company reflects in part the
branding efforts that Carl directed.
"Jeff also deserves credit for our transformation,"
Perez said. "He was instrumental in completing the
integration of the acquired GCG companies, and he identified
and delivered a three-year integration plan in two years.
Under his talented leadership as CEO of KPG, Jeff led its
profit turnaround. He came to Kodak with a two-year
agreement, maximized the value of our acquisitions, and will
now pursue his aspiration of running another company. Both
Jeff and Carl have served the company with distinction, and
I wish them the very best in their future endeavors."
4
The new reporting structure of the company will be as
follows:
- Finance, Legal, the Chief Technical Office, Human
Resources, the Global Diversity Office and the Chief
Information Officer will report to the CEO;
- and Global Shared Services, Worldwide Information
Systems, and all manufacturing and logistics activity of CDG
and GCG will report to the Chief Operating Office.
"These changes represent some of the final stages of our
digital transformation," Perez said. "We are building a
company that will feature growing and profitable businesses
in graphic communications, consumer digital capture, and
consumer inkjet printing, among a number of other
significant product lines. I am more excited than ever to be
leading Kodak through the next phase of our digital
transformation as we work to realize the great promise of
this company. We have the people, the assets, the strategy
and the structure to extend Kodak's presence as the world's
imaging leader."
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CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this press release may be forward-
looking in nature, or "forward-looking statements" as
defined in the United States Private Securities Litigation
Reform Act of 1995. For example, references to expectations
for the Company's and the segments' business model, cost
model, marketing opportunities, greater leverage across the
digital businesses, efficiency by pooling resources, growth,
profits, cost reductions, reduction in SG&A, and
restructuring and restructuring charges.
Actual results may differ from those expressed or implied in
forward-looking statements. In addition, any forward-looking
statements represent the Company's estimates only as of the
date they are made, and should not be relied upon as
representing the Company's estimates as of any subsequent
date. While the Company may elect to update forward-looking
statements at some point in the future, the Company
specifically disclaims any obligation to do so, even if its
estimates change. The forward-looking statements contained
in this report are subject to a number of factors and
uncertainties, including the successful:
- execution of the digital growth and profitability
strategies, business model and cash plan;
- implementation of the cost reduction programs;
- transition of certain financial processes and
administrative functions to a global shared services model
and the outsourcing of certain functions to third parties;
- implementation of, and performance under, the debt
management program, including compliance with the Company's
debt covenants;
- development and implementation of product go-to-market
and e-commerce strategies;
- protection, enforcement and defense of the Company's
intellectual property, including defense of our products
against the intellectual property challenges of others;
- implementation of intellectual property licensing and
other strategies;
- completion of information systems upgrades, including
SAP, the Company's enterprise system software;
- completion of various portfolio actions;
- reduction of inventories;
- integration of acquired businesses;
- improvement in manufacturing productivity and
techniques;
- improvement in receivables performance;
- improvement in supply chain efficiency; and
- implementation of the strategies designed to address
the decline in the Company's traditional businesses.
The forward-looking statements contained in this press
release are subject to the following additional risk
factors:
- inherent unpredictability of currency fluctuations,
commodity prices and raw material costs;
- competitive actions, including pricing;
- changes in the Company's debt credit ratings and its
ability to access capital markets;
- the nature and pace of technology evolution;
- changes to accounting rules and tax laws, as well as
other factors which could impact the Company's reported
financial position or effective tax rate;
- general economic, business, geo-political and
regulatory conditions;
- market growth predictions;
- continued effectiveness of internal controls;
- and other factors and uncertainties disclosed from time-
to-time in the Company's filings with the Securities and
Exchange Commission.
Any forward-looking statements in this press release should
be evaluated in light of these important factors and
uncertainties.
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