Kodak's journey towards bankruptcy.....

[Ben Syverson]

OK, so that's $141M gross profit, $2M net profit, $130M for B.S., so $9M to actually produce Kodak film? Am I getting the gist of that right??

Not quite... It cost them $1.011B during that period to produce film, paper and whatever else the Film, Photofinishing and Entertainment Group sells. They solid it for $1.152B, indicating the profit margin on film is not great, despite the cost of sheet film.

So their gross profit was the leftover 141M, which they spent on overhead (130M) and R&D (9M). What's left is 2M before taxes. Hence the ouch!

[J. Fada]

It is unlikely that anyone will take the risk of rolling the dice on the future of film and take over Kodak's film operation, at least not in the US. One fact that I have heard mentioned before is whomever takes over the infrastructure will also have to assume the environmental risks associated with making chemicals and film for the past 100 years. Who would be willing to gamble on that? Keep in mind too that as soon as Kodak film is unavailable, most of their market will disintegrate because people will move on to other manufacturers. If Kodak goes bankrupt, Kodak film is toast as sad as that is.

[srbphoto]

"On to our traditional business. Film Photofinishing and Entertainment Group, FPEG. Revenues declined at a rate of 10%, and
they delivered $389 million in revenue. FPEG posted another quarter of positive earnings from operations in spite of significantly
higher commodity costs.The higher commodity cost was mitigated by the prices actions taken throughout the year. In addition,
FPEG continued to variabilize cost in line with industry-related volume declines, and when combined, these actions enabled
FPEG to generate $15 million in segment earnings."

Kodak earnings conference call Nov. 3 2011
http://phx.corporate-ir.net/External...F8VHlwZT0z&t=1

[srbphoto]

This is from April 28, 2011, Reuters article

"Kodak’s executives declined to say how much the rise in silver prices hurt earnings during the first quarter. In February, the company said that in 2010, every $1 change in the price of silver per troy ounce affected earnings by $10 million to $15 million."

[Ron Marshall]

I like the #2 comment at the articles site, "you don't lay off half your work force and give the CEO a 20 Million dollar raise."

You do if you are the CEO. Who's going to stop you?

[IanG]

Can you point me to a source on that? I have a big stock of film stashed, but am considering purchasing allot more (though I can'y really afford to right now)-a hedge against the future.

Seem to remember it first being in a Podcast with a senior executive from the Kodak film division, but I know that Ilford have stated film sales are rising.

Now that's a rise in still photography film sales, on the other side with Kodak, the last year saw a drop in motion picture film stock because more films were shot in 3D but most find 3D a big turn-off so that may well change again. It only tales a small no of director/producers to switch one way or the other to have a very significant impact on volumes.

Remember the recent improvements in Tmax 400 were made because of it's use in the film industry, it's used a lot for special effects etc.

We can all knock Eastman Kodak but it has to be said that the film division has remained at the cutting edge despite what goes on elsewhere in the company.

Personally I think the film division has lost sales because of the main boards strategies, they messed up the supplu chain in the UK and elsewhere. Here in the UK they closed Kodak's own distribution system and sub-contracted to another distributor Sangers, they soon collapsed. Ironically it went then to a new company formed by ex Kodak employees and is evidently very efficient but a lot of damage had been done and many customers lost.

I've bought my last Kodak film simply because it's been too difficult finding Kodak B&W films in the past 4 to 5 years (when travelling), yes I can buy online but sometimes I need to be able to buy at very short notice over a counter in countries where I don't speak the language. What's interesting is Ilford films are relatively easy to get anywhere, and so is Foma, but Kodak isn't.

So when I went to Chile & Peru as a 100% Tmax user 4 or 5 years ago I returned as an Ilford user (after a break of 25 years), with Foma as my second choice. I then found it was the same in Turkey - Ilford no 1, Foma no 2, Fuji no 3 and a long way behind 4th and last Kodak, that's in terms of stock on the shelves and ease of getting fresh stock.

My question has to be is Eastman Kodak's own distribution and marketing actually having a very negative impact on the sales of products from the film division ?

Ian

[Brian Ellis]

"On to our traditional business. Film Photofinishing and Entertainment Group, FPEG. Revenues declined at a rate of 10%, and
they delivered $389 million in revenue. FPEG posted another quarter of positive earnings from operations in spite of significantly
higher commodity costs.The higher commodity cost was mitigated by the prices actions taken throughout the year. In addition,
FPEG continued to variabilize cost in line with industry-related volume declines, and when combined, these actions enabled
FPEG to generate $15 million in segment earnings."

Kodak earnings conference call Nov. 3 2011
http://phx.corporate-ir.net/External...F8VHlwZT0z&t=1

That's what their quarterly report shows. $15 million earnings before interest, taxes and other charges for the 3rd quarter of 2011 for the FPE Group, which was down from $28 million for the third quarter of 2010. And only $2 million in earnings for the full three quarters of 2011 which was down 98% from the first three quarters of 2010. Of course we don't know how much was consumer and pro film sales vs movies and other businesses within the FPE Group.

[Greg Blank]

Groups of mad employees with axes to grind.

You do if you are the CEO. Who's going to stop you?

[rdenney]

I ask because I've never seen anything from Kodak saying what its profits or losses are from "film." "Film" is included within Kodak's Film, Photofinishing and Entertainment Group. Within that Group there are four "divisions."

I don't think there's much digital in that group, but what I see is what everyone sees in their SEC filings that lump that group together. They might do as much digital as we do as large-format photographers, at least for their services, such as scanning and other digital conversions, and printing (movie prints, that is).

That group did take a big nose-dive this year, in terms of profit. But it did well enough to convince Kodak that the group would remain profitable for more years than they had projected a few years ago, and thus they put more money into the infrastructure of that group to make sure it would last long enough. I read that in their latest SEC filing. That kind of language is often accounting sleight of hand, so take it for what it's worth.

Yes, that group may not survive the demise of film-based motion-picture production and print-making. That may be where their production model can no longer shrink enough to stay profitable.

It has been consistently profitable, however. Each of their SEC filings for the last many years has shown profitability in that division, as I recall.

The point is: That division is not why they are at their current situation because of its profitability or lack thereof. It's a problem because it's no longer a cash cow. Reading between the lines of their reports (and not really between the lines), they were counting on the top-line revenue stream from the film division to maintain enough cash turnover to keep everything else going long enough to become profitable. If it won't, then they have to fund their business plan some other way. But they are going backwards in that regard--the normal supply of funding for a business plan comes from capitalization (stock sales), and their stock value is declining too fast. So, they are trying to get ahead of their declining capitalization, which is a race to the bottom.

Rick "who did not say that the division was too profitable to let die" Denney

[Roger Cole]

Agfa MCC B&W paper's are still manufactured under the Adox brand name using some of the old Agfa machinery by Adox/Fotoimpex and partners. Their chemistry is still made in the same plant although made in batches to be sold by third parties. The Gevaert plant still makes films and Fotoimpex are also coating film.

Agfa, the parent company never went bankrupt. Kodak's film division is still profitable it's the parent holding company that's in trouble, so that's quite different to Agfa.



There was an article a couple of years ago about how one non executive director influenced the appointing of senior executives including Peres who despite very high salaries failed to tackle the grass roots problems in the company effectively squandering the vast wealth of cash reserves that Kodak sat on.

Ian

But not, unfortunately, APX 100 or Portrait 160. APX 100 was a superb film but there's plenty of great films in that speed range - not missed too much. An undersaturated pastel rendering color film is a gap in color films now. I'd also miss Ultra 50 if Ektar 100 wasn't around, but it is, so I don't anymore.

I do love MCC110 though. I like the brighter base better than the Agfa version.

With Polaroid we were lucky—Lomo was able to buy a few of the key machines and start The Impossible Project.

Ah, this must be a new usage of the word "lucky" with which I was previously unfamiliar.