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Transition to Digital Going Well, Kodak Reports

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September 28, 2005 - Eastman Kodak's annual revenue from digital imaging will exceed its revenue from conventional imaging for the first time ever in 2005, the company predicts in a report to investors slated for release today.

Digital imaging revenue growth is ahead of the 36 percent planned for the year, the company said, but earnings from digital revenue won't hit the target of $275 million to $325 million. In its initial plan for 2005, Kodak had predicted net cash from both asset sales and operations to range between $1.0 billion and $1.2 billion. The final result is likely to be at the low end of that range, the company reports.

Kodak indicates that its consumer digital products will form a separate "portfolio" from film systems, starting January 1, 2006. In a plan that extends to the end of 2007, the company plans to complete its transition, and have what CEO and President Antonio M. Perez called "the cost model necessary for sustained success in digital markets." Perez predicted that the path would be "uneven."

Kodak is the top brand for digital cameras in the United States and third worldwide, but losses in old media have bogged down the company.

Kodak has been cutting manufacturing capacity for consumer film and film cameras, and cutting employment in "traditional" operations and administration. In a strong indicator that Kodak has been through a difficult stretch, one major goal for the company remains to raise its credit rating back to "investment grade."

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