EASTMAN KODAK NYSE-EK

TIMELINESS
SAFETY
TECHNICAL

5
3
4

High:
Low:

Lowered 8/15/08

94.8
53.3

RECENT
PRICE
88.9
57.9

80.4
56.6

66.6
35.3

46.2 RELATIVE
DIV’D
Median: 15.0) P/E RATIO 2.32 YLD 3.2%
15.72 P/ERATIO 35.7(Trailing:
49.9
24.4

38.5
25.6

41.1
20.4

34.7
24.3

35.2
20.8

30.9
18.9

30.2
21.4

22.0
12.2

Target Price Range
2011 2012 2013

LEGENDS
5.0 x ″Cash Flow″ p sh
. . . . Relative Price Strength
Options: Yes
Shaded area indicates recession

Lowered 12/7/01
Lowered 8/1/08

BETA 1.10 (1.00 = Market)

VALUE
LINE

80
60
50
40
30
25
20
15

2011-13 PROJECTIONS

Ann’l Total
Price
Gain
Return
High
35 (+125%) 23%
Low
25 (+60%) 14%
Insider Decisions
to Buy
Options
to Sell

O
0
0
0

N
1
0
0

D
0
8
0

J
0
0
0

F
0
0
0

M
1
0
0

A
0
0
0

M
2
0
0

J
0
0
0

% TOT. RETURN 7/08

Institutional Decisions
3Q2007
4Q2007
1Q2008
134
162
158
to Buy
to Sell
159
155
153
Hld’s(000) 315908 311043 292873

Percent
shares
traded

24
16
8

1 yr.
3 yr.
5 yr.

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

THIS
STOCK

VL ARITH.
INDEX

-40.6
-41.4
-41.2

-12.2
7.2
58.6

© VALUE LINE PUB., INC.

10
7.5

11-13

46.17 35.77 38.45 43.75
5.14
3.64
2.10
3.40
.51
.91
.25
1.05
.50
.50
.50
.50
1.32
.90
.95
1.00
4.83 10.52 10.00
9.40
287.51 288.00 270.00 240.00
48.2
28.1 Bold figures are
Value Line
2.60
1.49
estimates
2.0%
2.0%

Sales per sh A
‘‘Cash Flow’’ per sh
Earnings per sh B
Div’ds Decl’d per sh C ■
Cap’l Spending per sh
Book Value per sh D
Common Shs Outst’g E
Avg Ann’l P/E Ratio
Relative P/E Ratio
Avg Ann’l Div’d Yield

47.25
5.10
2.00
.60
1.25
12.75
235.00
15.0
1.00
1.8%

13406 14089 13994 13234 12835 13317 13517 14268
20.4% 23.1% 22.5% 15.9% 16.6% 13.9% 13.3% 14.0%
853.0 918.0 889.0 919.0 818.0 830.0 1030.0 1402.0
1419.0 1617.0 1441.0 669.0 793.0 662.0 690.0 365.6
34.0% 34.0% 34.0% 29.6% 16.2% 19.6%
9.0% 15.0%
10.6% 11.5% 10.3%
5.1%
6.2%
5.0%
5.1%
2.6%
d579.0 d325.0 d724.0 d671.0 d843.0 148.0 658.0 292.0
504.0 936.0 1166.0 1666.0 1164.0 2302.0 1852.0 2764.0
3988.0 3912.0 3428.0 2894.0 2777.0 3264.0 3811.0 1967.0
32.0% 33.9% 32.4% 15.9% 21.2% 12.6% 12.9%
9.5%
35.6% 41.3% 42.0% 23.1% 28.6% 20.3% 18.1% 18.6%
21.3% 26.9% 26.1%
5.4%
9.7% 10.2% 14.4% 11.3%
40%
35%
38%
77%
66%
50%
21%
39%

13274 10301
14.8% 10.7%
1331.0 785.0
148.0 262.0
69.5%
8.7%
1.1%
2.5%
586.0 1607.0
2714.0 1289.0
1388.0 3029.0
6.7%
7.3%
10.7%
8.6%
.3%
3.9%
97%
55%

Sales ($mill) A
Operating Margin
Depreciation ($mill)
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Cap’l ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill)
Return on Total Cap’l
Return on Shr. Equity
Retained to Com Eq
All Div’ds to Net Prof

11100
13.0%
725
475
30.0%
4.3%
3175
800
3000
13.5%
16.0%
11.0%
30%

BUSINESS: Eastman Kodak Company is the world’s largest producer of photographic products. It now operates three business
segments: Consumer Digital Imaging, (45% of 2007 sales); Graphic
Communications Group, (35%); Film Products, (19%); All Other
(roughly 1%,). 68% of sales are foreign. R&D: 5.2% of sales in
2007 vs. 5.3% in 2006. 2007 depreciation rate: 9.3%. 2007

worldwide employees: 41,000. Officers & directors own less than
one percent of common stock; Legg Mason Cap. Mgmt., 20.3%;
Brandes Investment Partners, 10.4%; Three other investment firms
own more than 25% (3/08 Proxy). Chairman & CEO: Antonio M.
Perez. Inc.: NJ. Address: 343 State St., Rochester, NY 146500205. Telephone: 585-724-4000. Internet: www.kodak.com.

Eastman Kodak’s recovery has gotten
even blurrier. The company posted a
ANNUAL RATES Past
Past Est’d ’05-’07 second-quarter loss of $0.13 a share, $0.53
of change (per sh)
10 Yrs.
5 Yrs.
to ’11-’13
lower than last year and well below conSales
-0.5%
-1.0%
1.0%
sensus. Sales increased only 1%, to $2.49
‘‘Cash Flow’’
-3.0%
-5.0%
1.0%
Earnings
-13.5% -22.5% 15.0%
billion, while profit margins were squeezed
Dividends
-11.5% -22.5%
3.0%
by surging commodity prices and the ongoBook Value
-5.5%
-6.5%
9.5%
ing investment in the digital franchise.
QUARTERLY SALES ($ mill.)
CalFull There is a lot riding on the development of
endar Mar.Per Jun.Per Sep.Per Dec.Per Year the digital business, but recent results
2005 2832 3686 3553 4197 14268 show there is still much to do. Indeed, the
2006 2889 3360 3204 3821 13274 consumer digital imaging group lost
2007 2080 2468 2533 3220 10301 roughly $50 million in the quarter due to
2008 2093 2485 2550 3247 10375
2009 2110 2505 2585 3300 10500 an unfavorable price mix and aggressive
spending associated with its inkjet printer
EARNINGS PER SHARE B
CalFull campaign. Management has announced
endar Mar.Per Jun.Per Sep.Per Dec.Per Year
that it is upping its investment there,
2005
.03
.51
.22
.51
1.27 again, which along with expectations of
2006
d.34
d.19
.45
.59
.51 persistingly high aluminum and silver
2007
d.35
.40
.46
.40
.91
2008
d.39
d.13
.34
.43
.25 prices, has prompted us to slash our 2008
2009
d.20
.15
.48
.62
1.05 and 2009 profit estimates considerably.
The company has announced a major
QUARTERLY DIVIDENDS PAID C ■
CalFull share-repurchase initiative, however.
endar Mar.31 Jun.30 Sep.30 Dec.31 Year
Its board has authorized a $1 billion
2004 - -.25
.25
.50 buyback plan, that, at the current price,
2005 - -.25
.25
.50 would reduce shares outstanding by about
2006 - -.25
.25
.50 20%. It plans to use the $581 million IRS
2007 - -.25
.25
.50
tax refund it was recently granted to help
2008 - -.25

support the initiative. Although bold, we
like the decision, as the lower share count
will not only prop up earnings growth
while the digital business is remedied, but
demonstrates management’s confidence in
its ongoing endeavors. Still, we’ve trimmed
our 2008 and 2009 share-net figures to
$0.25 and $1.05, respectively.
The stock will likely remain a market
laggard for the coming six to 12
months. We suspect that the company is
still a ways from making its digital business profitable and that its troubles will
continue to repress stock price expansion.
EK is ranked 5 (Lowest) for Timeliness.
Investors considering this recovery
candidate are advised to be extremely
cautious. Although Eastman stock is
trading near its 40-plus-year low, and may
look appealing to bargain hunters, we are
concerned about the company’s ability to
sustain the earnings momentum we forecast for 2009. EK is playing catch-up in a
rapidly evolving market, thus putting it a
distinct disadvantage if a new trend
emerges. We sense that management is
being reactive rather than proactive.
Andre J. Costanza
August 29, 2008

61.93 49.50 39.90 43.31 48.12 45.00 41.53 45.39 48.17 45.49 44.89 46.47 47.15 49.68
7.96
5.90
5.47
6.27
7.30
6.18
7.04
8.17
8.02
5.46
5.63
5.21
6.00
6.15
3.26
2.56
2.91
3.67
4.50
3.52
4.33
5.03
4.70
2.30
2.72
2.31
2.30
1.27
2.00
2.00
1.60
1.60
1.60
1.76
1.76
1.76
1.76
1.77
1.80
1.15
.50
.50
6.42
3.27
3.39
2.99
4.04
4.60
3.43
3.63
3.25
2.55
2.02
1.77
1.60
1.64
20.12 10.15 11.82 14.81 14.27
9.78 12.35 12.60 11.80
9.95
9.71 11.39 13.29
6.85
325.92 330.57 339.76 345.89 331.84 323.07 322.80 310.42 290.48 290.93 285.93 286.58 286.70 287.22
13.1
21.5
16.0
15.9
16.8
20.9
16.9
13.8
11.6
17.6
11.5
12.2
12.4
21.6
.79
1.27
1.05
1.06
1.05
1.20
.88
.79
.75
.90
.63
.70
.66
1.15
4.7%
3.6%
3.4%
2.7%
2.1%
2.4%
2.4%
2.5%
3.2%
4.4%
5.7%
4.1%
1.8%
1.8%
CAPITAL STRUCTURE as of 6/30/08
Total Debt $1355 mill. Due in 5 Yrs $950 mill.
LT Debt $1296 mill.
LT Interest $100 mill.
(LT interest earned: 3.9x; total interest
coverage: 3.8x)
(27% of Cap’l)
Leases, Uncapitalized Annual rentals $178.0 mill.
Pension Assets-12/07 $7.1 bill. Oblig. $5.0 bill.
Pfd Stock None
Common Stock 288,193,433 shs.
MARKET CAP: $4.5 billion (Large Cap)
CURRENT POSITION 2006
2007
($MILL.)
Cash Assets
1469.0 2947.0
Receivables
2670.0 1939.0
Inventory (LIFO)
1202.0
943.0
Other
216.0
224.0
Current Assets
5557.0 6053.0
Accts Payable
1003.0 3794.0
Debt Due
47.0
308.0
Other
3921.0
344.0
Current Liab.
4971.0 4446.0

6/30/08
2308.0
1892.0
1087.0
222.0
5509.0
3137.0
59.0
242.0
3438.0

(A) All ’07 and later figures excl. Health GroupDivision (Pro Forma). (B) Primary earnings
through 1996, diluted thereafter. Excl. nonrec.
losses: ’93, $7.78; ’94, $1.12; ’96, $0.68; ’97,

$3.51; ’98, $0.09; ’99, $0.70; ’00, $0.11; ’01,
$2.04; ’02, $0.08; ’03, $1.39; ’04, $1.97; ’05,
$6.00; ’06, $2.60; ’07, $1.62. Excl. nonrec.
gains: ’92, $0.27; ’93, $0.60; ’08, $1.74. Next

10375
6.5%
505
65.0
NMF
.6%
1770
1280
2700
3.0%
2.5%
NMF
NMF

egs. rpt. due early November. (C) Dividend
pay’t dates: mid-July, mid-Dec. ■Div’d reinvest.
avail. (D) Incl. intang. In ’07: $1.657 bill.,
$5.86/sh. (E) In mill.

© 2008, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

10500
9.0%
550
265
20.0%
2.5%
1615
1295
2250
9.0%
12.0%
6.5%
45%

Company’s Financial Strength
Stock’s Price Stability
Price Growth Persistence
Earnings Predictability

B
55
5
NMF

To subscribe call 1-800-833-0046.