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KODAK CEO ANNOUNCES AGGRESSIVE STEPS

 ROCHESTER, N.Y., Jan. 19 /PRNewswire/ -- Eastman Kodak Company (NYSE: EK) chief executive officer Kay R. Whitmore announced today a series of aggressive actions to improve the company's operating performance.
 In a letter to shareowners, Whitmore said he expects Kodak's 1992 earnings per share to show a moderate increase over those reported for 1991, with restructuring charges from both years removed, and that cash flow for the year would be strongly positive. Long-term debt will have been reduced by about $1 billion.
 But Whitmore also pointed out that the reported earnings will benefit from "one-time gains from the sale of certain assets and securities," and that "on an operating basis, our performance in 1992 was not satisfactory."
 Whitmore said he and the presidents of Kodak's three business groups -- Imaging, Health, and Chemicals -- have put into place an operating plan for 1993 "that will deliver positive cash flow and a solid increase in operating income."
 The most urgent actions will be in the Imaging Group, Whitmore said, where operating earnings will fall short of the 1992 plan. Key elements of the plan for Imaging include:
 --A reallocation of reseach and development resources on the basis of highest priority, with cancellation of a number of projects.
 --A substantial reduction of infrastructure costs, particularly administrative expense.
 --Continued scrutiny of capital spending in the Imaging Group, where such spending was about $100 million under the 1992 plan without the sacrifice of key projects.
 --A consolidation of equipment manufacturing operations in Germany and possibly Mexico, as well as a study of the several Rochester sites.
 --As a result of the above steps, employment will be reduced by approximately 2,000, mostly in Rochester and largely involuntarily.
 "Costs associated with staff departures will be more than made up by year-end 1993," Whitmore said, adding that "consequent savings along with reductions in other elements of expense will lower our net costs by more than $200 million this year, and by an even more substantial sum in 1994 and beyond."
 Whitmore also emphasized other strong steps that the company will take -- or has recently taken -- to benefit shareowner interests and shareowner value:
 --In the next few weeks, Kodak will announce 20 new photographic products, reflecting renewed emphasis on research in core areas of the business.
 --Whitmore will propose to the board a new Corporate Directions Committee, made up of independent directors who will work more closely with him and others in senior management "as we drive to increase shareholder value."
 --The company last week named Christopher J. Steffen, a highly regarded financial strategist, as its chief financial officer. Steffen played a major role in turnarounds at Chrysler and Honeywell.
 --Senior managers will be required to take a much higher equity position in Kodak, and their compensation will be related more directly to the creation of shareholder value.
 --Programs to recover and protect market share in flagship products will be funded by cost efficiencies elsewhere.
 --Divestures of businesses with no clear fit to the company will continue. In 1992, Kodak sold its Atex, Estek, Videk, Interactive Systems units and the Eastman Kodak Credit Corporation. The company recently announced the sale of its Center for Creative Imaging in Camden, Maine.
 "The business of increasing the value of this company is not business as usual," Whitmore said. "It is our top priority. We are in good businesses that demand good management. We intend to provide it."
 -0- 1/19/93
 /CONTACT: Ronald C. Roberts of Eastman Kodak Company, 716-724-4513/
 (EK)


CO: Eastman Kodak Company ST: New York IN: SU:

KK -- CL002 -- 6135 01/19/93 08:31 EST
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Publication:PR Newswire
Date:Jan 19, 1993
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