Kodak 2001 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2001 Kodak annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

60
At December 31, 2001 and 2000, the Company’s equity investment in
these unconsolidated affiliates was $360 million and $317 million,
respectively, and is reported within other long-term assets. The Company
records its equity in the income or losses of these investees and reports
such amounts in other income (charges). See Note 12. These investments
do not meet the Regulation S-X significance test requiring the inclusion
of separate investee financial statements.
The Company also has certain investments with less than a 20%
ownership interest in various private companies whereby the Company
does not have the ability to exercise significant influence. Such
investments are accounted for under the cost method. At December 31,
2001 and 2000, the carrying value of these investments aggregated
$51 million and $55 million, respectively, and is reported in other long-
term assets. During 2001, the Company recorded an asset impairment
charge of $15 million on certain strategic and non-strategic investments
which exhibited other-than-temporary declines in their fair value. See
Note 14.
Kodak sells certain of its long-term lease receivables relating to
the sale of photofinishing equipment to ESF without recourse to the
Company. Sales of long-term lease receivables to ESF were approximately
$83 million, $153 million and $397 million in 2001, 2000 and 1999,
respectively. See Note 10.
The Company sells graphics film and other products to its equity
affiliate, KPG. Sales to KPG for the years ended December 31, 2001, 2000
and 1999 amounted to $350 million, $419 million and $540 million,
respectively, and cost of goods sold on these sales amounted to $258
million, $290 million and $359 million for the years ended December 31,
2001, 2000 and 1999, respectively. These sales and cost of goods sold
amounts are reported in the Consolidated Statement of Earnings. The
Company eliminates profits on these sales, to the extent the inventory
has not been sold through to third parties on the basis of its 50%
interest. At December 31, 2001 and 2000, amounts due from KPG on
such sales were $40 million and $52 million, respectively, and are
reported in receivables, net. Additionally, the Company has guaranteed
certain debt obligations of KPG up to $175 million which is included in
the total guarantees amount of $277 million at December 31, 2001, as
discussed in Note 10.
The Company also sells toner products to its 50% owned equity
affiliate, NexPress. However, these sales transactions are not material to
the Company’s results of operations or financial position.
Kodak has no other material activities with its investees.
Note 7: Accounts Payable and Other Current Liabilities
(in millions) 2001 2000
Accounts payable, trade $674 $817
Accrued advertising and
promotional expenses 568 578
Accrued employment-related liabilities 749 780
Accrued restructuring liabilities 318 –
Dividends payable –128
Other 967 1,100
Total payables $3,276 $3,403
The Other component above consists of other miscellaneous current
liabilities which, individually, are less than 5% of the Total current
liabilities component within the Consolidated Statement of Financial
Position, and therefore, have been aggregated in accordance with
Regulation S-X.
Note 8: Short-Term Borrowings and Long-Term Debt
Short-Term Borrowings
The Company’s short-term borrowings at December 31, 2001 and 2000
were as follows:
(in millions) 2001 2000
Commercial paper $1,140 $1,809
Current portion of long-term debt 156 148
Short-term bank borrowings 238 249
Total short-term borrowings $1,534 $2,206
The weighted-average interest rates for commercial paper outstanding
during 2001 and 2000 were 3.6% and 6.6%, respectively. The weighted-
average interest rates for short-term borrowings outstanding during 2001
and 2000 were 6.2% and 5.4%, respectively.
The Company has $2.45 billion in revolving credit facilities
established in 2001, which are available to support the Company’s
commercial paper program and for general corporate purposes. The credit
agreements are comprised of a 364-day commitment at $1.225 billion
expiring in July 2002 and a 5-year commitment at $1.225 billion expiring
in July 2006. If unused, they have a commitment fee of $3 million per
year, at the Company’s current credit rating. Interest on amounts
borrowed under these facilities is calculated at rates based on the
Company’s credit rating and spreads above certain reference rates. There
were no amounts outstanding under these arrangements or the prior year
arrangement at December 31, 2001 and 2000, respectively. The facility
includes a covenant which requires the Company to maintain a certain
EBITDA (earnings before interest, income taxes, depreciation and