Kodak 2002 Annual Report Download - page 31

Financials
31
2001
Net cash provided by operating activities in 2001 was $2,206
million, as net earnings of $76 million, adjusted for depreciation
and amortization, and restructuring costs, asset impairments and
other charges, provided $1,408 million of operating cash. Also
contributing to operating cash was a decrease in receivables of
$254 million and a decrease in inventories of $465 million. This
was partially offset by decreases in liabilities, excluding
borrowings, of $111 million related primarily to severance
payments for restructuring programs and reductions in accounts
payable and accrued benefit costs. Net cash used in investing
activities of $1,188 million in 2001 was utilized primarily for
capital expenditures of $743 million, investments in
unconsolidated affiliates of $141 million, and business acquisitions
of $306 million. Net cash used in financing activities of $808
million in 2001 was primarily the result of stock repurchases and
dividend payments as discussed below.
The Company declared cash dividends per share of $.44 in
each of the first three quarters and $.89 in the fourth quarter of
2001. Total cash dividends of $643 million were paid in 2001. In
October 2001, the Company’s Board of Directors approved a
change in dividend policy from quarterly dividend payments to
semi-annual dividend payments. Dividends, when declared, will be
paid on the 10th business day of July and December to
shareholders of record on the first business day of the preceding
month. These payment dates serve to better align the dividend
disbursements with the seasonal cash flow pattern of the
business, which is more concentrated in the second half of the
year. This action resulted in the Company making five dividend
payments in 2001.
Net working capital, excluding short-term borrowings,
decreased to $797 million from $1,420 million at year-end 2000.
This decrease is mainly attributable to lower receivable and
inventory balances, as discussed above.
Capital additions, excluding equipment purchased for lease,
were $680 million in 2001, with the majority of the spending
supporting new products, manufacturing productivity and quality
improvements, infrastructure improvements, ongoing
environmental and safety initiatives, and renovations due to
relocations associated with restructuring actions taken in 1999.
Under the $2,000 million stock repurchase program
announced on April 15, 1999, the Company repurchased $44
million of its shares in 2001. As of March 2, 2001, the Company
suspended the stock repurchase program in a move designed to
accelerate debt reduction and increase financial flexibility. At the
time of the suspension of the program, the Company had
repurchased approximately $1,800 million of its shares under this
program.
The net cash cost of the restructuring charge recorded in
2001 was approximately $182 million after tax, which was
recovered through cost savings in less than two years. The
severance-related actions associated with this charge will be
completed by the end of the first quarter of 2003.
2000
Net cash provided by operating activities in 2000 was $1,105
million, as net earnings of $1,407 million, adjusted for
depreciation and amortization, provided $2,296 million of
operating cash. This was partially offset by increases in
receivables of $247 million, largely due to the timing of sales late
in the fourth quarter; increases in inventories of $280 million,
reflecting lower than expected sales performance in the second
half of the year, particularly for consumer films, paper and digital
cameras; and decreases in liabilities, excluding borrowings, of
$808 million related primarily to severance payments for
restructuring programs and reductions in accounts payable and
accrued benefit costs. Net cash used in investing activities of
$906 million in 2000 was utilized primarily for capital
expenditures of $945 million, investments in unconsolidated
affiliates of $123 million, and business acquisitions of $130
million, partially offset by proceeds of $277 million from sales of
businesses and assets. Net cash used in financing activities of
$314 million in 2000 was the result of stock repurchases and
dividend payments, largely funded by net increases in borrowings
of $1,313 million.
Cash dividends per share of $1.76, payable quarterly, were
declared in 2000. Total cash dividends of approximately $545
million were paid in 2000.
Net working capital, excluding short-term borrowings and the
current portion of long-term debt, increased to $1,420 million
from $777 million at year-end 1999. This increase is mainly
attributable to lower payable levels and higher receivable and
inventory balances, as discussed above.
Capital additions were $945 million in 2000, with the
majority of the spending supporting manufacturing productivity
and quality improvements, new products including e-commerce
initiatives, digital photofinishing and digital cameras, and ongoing
environmental and safety initiatives.
Under the $2,000 million stock repurchase program
announced on April 15, 1999, the Company repurchased 21.6
million shares for $1,099 million in 2000. On December 7, 2000,
Kodak’s Board of Directors authorized the repurchase of up to an
additional $2,000 million of the Company’s stock over the next
4 years.