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Kodak Announces Plan to Reposition Commercial Imaging Group

Press release from the issuing company

ROCHESTER, N.Y.--Sept. 20, 2004-- Eastman Kodak Company announced today that it would begin actions that will result in the repositioning of the management and product lines of its Commercial Imaging Group (CIG) into allied businesses. The anticipated repositioning of CIG complements the company's strategy of accelerating growth in commercial, consumer and health markets by deploying CIG's management talent to lead larger organizations. The move is designed to enhance the company's operational performance and to accelerate profitable growth. The changes will be effective Jan. 1, 2005. This move follows the sale by Kodak in August of its Remote Sensing Systems operation to ITT Industries Inc. for $725 million. RSS was among the largest operations within the company's Commercial Imaging Group, accounting for approximately 27 percent of its revenue in 2003. The remaining operations of CIG include high-performance document scanners and services; business process services; optics; and aerial and industrial film. As part of the change, Carl A. Marchetto, President, Commercial Imaging Group, will become the Chief Operating Officer of Kodak's Digital & Film Imaging Systems Group (D&FIS) and remain a Senior Vice President, Eastman Kodak Company. Until Jan. 1, all CIG units will continue to report to Marchetto. In his role as COO of D&FIS, he will report to Bernard Masson, President, D&FIS, and a Senior Vice President, Eastman Kodak Company. "Given the current size of the Commercial Imaging Group and the nature of its remaining product lines, we believe we can manage them more effectively by integrating them into other Kodak businesses," said Antonio Perez, Kodak's President and Chief Operating Officer. "This move will better align the company's operating units and its senior executive talent to execute on our digitally oriented growth strategy." The planning of the redeployment is under way, and the company currently anticipates the redeployment of the following CIG operations in January: Graphic Communications Group will receive from CIG the Document Products & Services (DPS) operation (market-leading high-speed document scanners, microfilm and worldwide service and support), as well as the Business Process Services operations; Graphic Communications also will integrate the service functions of its subsidiaries - Encad, Inc., Kodak Versamark and NexPress Solutions - and those of CIG's Document Products operation into one service operation that will do business under the Kodak name. The change is designed to deliver on the Graphic Communications Group's goal of presenting "one face" to its customers. This DPS scanning and service portfolio - along with business process services - is well aligned with the Graphic Communications Group's current portfolio of output products. A major benefit for GCG and its customers is the creation and expansion of a world-class, highly technical service force that will number more than 1,500. DPS currently services Kodak scanning equipment worldwide and also provides service and support for third-party hardware, such as computer networking equipment. "This is a major step in delivering on our commitment of presenting one face to our customers," said James Langley, President, Graphic Communications Group, and Senior Vice President, Eastman Kodak Company. "With one call, customers will have access to seamless service and support for all products within Graphic Communications. The action will accelerate our ability to integrate common operating systems throughout the group and will enable us to better serve our customers." Other anticipated changes include the redeployment of the Aerial & Industrial Materials operation to Digital & Film Imaging Systems. This organization makes aerial films and other specialized film for industrial use. The repositioning of the operations within CIG also supports Kodak's growth by assigning executives to positions in which they can make bigger contributions on behalf of the company. "As part of this effort, we have asked Carl Marchetto to bring his leadership skills to the excellent team at D&FIS," said Bernard Masson, President, D&FIS. "Carl has a track record of performance excellence at running profitable businesses that generate cash. He will bring his talent and experience to Kodak's largest business, whose success is vital to our future." "Under Carl's leadership, all of the CIG operations are making a significant contribution to generating the profit and cash critical to fueling our growth," Perez said. "As the high-performing CIG units move to their new homes in January, I want to thank all the employees of CIG for what they have accomplished. I am confident that they will continue to make new and innovative contributions as Kodak implements its growth strategy."