Kodak 2003 Annual Report Download - page 62
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Financials
62
Restructuring Programs Summary
The activity in the accrued restructuring balances and the non-cash charges incurred in relation to all of the restructuring programs described below
was as follows for fiscal 2003:
Balance Balance
Dec. 31, Costs Non-cash Dec. 31,
(in millions) 2002 Incurred Adjustments Cash Payments Settlements 2003
Q3 2003 Program:
Severance reserve $ — $ 231 $ — $ (51) $ — $ 180
Exit costs reserve — 40 — (28) — 12
Total reserve $ — $ 271 $ — $ (79) $ — $ 192
Long-lived asset
impairments $ — $ 109 $ — $ — $ (109) $ —
Accelerated depreciation
and inventory write-downs — 22 — — (22) —
Q1 2003 Program:
Severance reserve $ — $ 67 $ — $ (44) $ — $ 23
Exit costs reserve — 8 — (4) — 4
Total reserve $ — $ 75 $ — $ (48) $ — $ 27
Long-lived asset
impairments $ — $ 5 $ — $ — $ (5) $ —
Accelerated depreciation
and inventory write-downs — 25 — — (25) —
Phogenix:
Exit costs reserve $ — $9 $— $— $— $9
Long-lived asset impairments — 6 — — (6) —
Inventory write-downs — 2 — — (2) —
Q4 2002 Program:
Severance reserve $ 53 $ 21 $ — $ (62) $ — $ 12
Exit costs reserve 17 — — (9) — 8
Total reserve $ 70 $ 21 $ — $ (71) $ — $ 20
Accelerated depreciation
and inventory write-downs $ — $ 24 $ — $ — $ (24) $ —
2001 Programs:
Severance reserve $ 67 $ — $ (12) $ (49) $ — $ 6
Exit costs reserve 18 — — (5) — 13
Total reserve $ 85 $ — $ (12) $ (54) $ — $ 19
Total of all
restructuring programs $ 155 $ 569 $ (12) $ (252) $ (193) $ 267
The costs incurred and adjustments, which total $557 million for the
year ended December 31, 2003, include $73 million of charges related to
accelerated depreciation and inventory write-downs, which were reported
in cost of goods sold in the accompanying Consolidated Statement of
Earnings for the year ended December 31, 2003. The remaining costs
incurred and adjustments of $484 million were reported as restructuring
costs and other in the accompanying Consolidated Statement of Earnings
for the year ended December 31, 2003.
2004-2006 Restructuring Program
In addition to completing the remaining initiatives under the Third Quarter,
2003 Restructuring Program, the Company announced on January 22,
2004 that it plans to develop and execute a new cost reduction program
throughout the 2004 to 2006 timeframe. The objective of these actions is
to achieve a business model appropriate for the Company’s traditional
businesses, and to sharpen the Company’s competitiveness in digital mar-
kets.
The Program is expected to result in total charges of $1.3 billion to
$1.7 billion over the three-year period, of which $700 million to $900 mil-