Kodak 2004 Annual Report Download - page 64

Financials
62
E A S T M A N฀ K OD A K ฀ C O M PA N Y
periods฀affected฀by฀the฀Act฀are฀presented.฀Subsequently,฀the฀total฀effect฀
on฀income฀tax฀expense฀(or฀benefit)฀for฀amounts฀that฀have฀been฀recognized฀
under฀the฀repatriation฀provision฀must฀be฀provided฀in฀a฀company’s฀finan-
cial฀statements฀for฀the฀period฀in฀which฀it฀completes฀its฀evaluation฀of฀the฀
repatriation฀provision.฀The฀provisions฀of฀FSP฀109-2฀are฀effective฀immedi-
ately.฀As฀of฀and฀for฀the฀year฀ended฀December฀31,฀2004,฀the฀Company฀has฀
not฀yet฀completed฀its฀evaluation;฀consequently,฀the฀required฀information฀is฀
disclosed฀in฀Note฀15,฀“Income฀Taxes.”฀฀
NOTE฀2:฀RECEIVABLES,฀NET
฀2004฀2003
(in฀millions)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (Restated)
Trade฀receivables฀ $฀ 2,137฀ $฀ 2,002฀฀฀฀
Miscellaneous฀receivables฀ ฀ 407฀฀฀฀฀฀฀฀฀฀฀฀ 325฀฀
Total฀(net฀of฀allowances฀of฀$127฀and฀$112)฀ $฀2,544฀ $฀ 2,327฀฀฀
Of฀the฀total฀trade฀receivable฀amounts฀of฀$2,137฀million฀and฀$2,002฀million฀
as฀of฀December฀31,฀2004฀and฀2003,฀respectively,฀approximately฀$492฀
million฀and฀$536฀million,฀respectively,฀are฀expected฀to฀be฀settled฀through฀
customer฀deductions฀in฀lieu฀of฀cash฀payments.฀Such฀deductions฀represent฀
rebates฀owed฀to฀the฀customer฀and฀are฀included฀in฀accounts฀payable฀and฀
other฀current฀liabilities฀in฀the฀accompanying฀Consolidated฀Statement฀of฀
Financial฀Position฀at฀each฀respective฀balance฀sheet฀date.
NOTE฀3:฀INVENTORIES,฀NET
฀2004฀2003
(in฀millions)฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (Restated)
At฀FIFO฀or฀average฀cost฀
(approximates฀current฀cost)฀฀฀
฀ Finished฀goods฀ $฀ 822฀ $฀ 818฀฀฀฀฀
฀฀฀ Work฀in฀process฀ ฀฀ 275฀ ฀ 300฀฀฀
฀ Raw฀materials฀฀฀฀฀฀฀ ฀ 391฀฀฀฀฀฀฀฀฀฀฀฀ 328฀฀฀฀฀
฀ ฀ ฀ 1,488฀฀฀฀฀฀฀฀฀ ฀ 1,446฀฀฀
฀฀ LIFO฀reserve฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (330)฀ ฀ (368)฀
฀ Total฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ $฀ 1,158฀฀฀฀฀฀฀ $฀ 1,078฀฀
Inventories฀valued฀on฀the฀LIFO฀method฀are฀approximately฀35%฀and฀
42%฀of฀total฀inventories฀in฀2004฀and฀2003,฀respectively.฀During฀2004฀and฀
2003,฀inventory฀usage฀resulted฀in฀liquidations฀of฀LIFO฀inventory฀quantities.฀฀
In฀the฀aggregate,฀these฀inventories฀were฀carried฀at฀the฀lower฀costs฀prevail-
ing฀in฀prior฀years฀as฀compared฀with฀the฀cost฀of฀current฀purchases.฀The฀
effect฀of฀these฀LIFO฀liquidations฀was฀to฀reduce฀cost฀of฀goods฀sold฀by฀$69฀
million฀and฀$45฀million฀in฀2004฀and฀2003,฀respectively.฀฀
The฀Company฀reduces฀the฀carrying฀value฀of฀inventories฀to฀a฀lower฀of฀
cost฀or฀market฀basis฀for฀those฀items฀that฀are฀potentially฀excess,฀obsolete฀
or฀slow-moving฀based฀on฀management’s฀analysis฀of฀inventory฀levels฀and฀
future฀sales฀forecasts.฀The฀Company฀also฀reduces฀the฀carrying฀value฀of฀
inventories฀whose฀net฀book฀value฀is฀in฀excess฀of฀market.฀Aggregate฀reduc-
tions฀in฀the฀carrying฀value฀with฀respect฀to฀inventories฀that฀were฀still฀on฀hand฀
at฀December฀31,฀2004฀and฀2003,฀and฀that฀were฀deemed฀to฀be฀excess,฀
obsolete,฀slow-moving฀or฀that฀had฀a฀carrying฀value฀in฀excess฀of฀market,฀
were฀$100฀million฀and฀$75฀million,฀respectively.
NOTE฀4:฀PROPERTY,฀PLANT฀AND฀
EQUIPMENT,฀NET
(in฀millions)฀฀฀ 2004฀ 2003
Land฀฀ $฀ 118฀฀฀฀฀฀฀฀ $฀ 116
Buildings฀and฀building฀improvements฀ ฀ 2,619฀฀฀฀฀฀฀฀฀฀฀฀ 2,652
Machinery฀and฀equipment฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 9,722฀ ฀ 10,144
Construction฀in฀progress฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 235฀ ฀ 264
฀ ฀ ฀ 12,694฀ ฀ 13,176
Accumulated฀depreciation฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (8,182)฀ ฀ (8,125)
฀ Net฀properties฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ $฀ 4,512฀ $฀ 5,051
Depreciation฀expense฀was฀$964฀million,฀$839฀million฀and฀$813฀mil-
lion฀for฀the฀years฀2004,฀2003฀and฀2002,฀respectively,฀of฀which฀approxi-
mately฀$183฀million,฀$70฀million฀and฀$19฀million,฀respectively,฀represented฀
accelerated฀depreciation฀in฀connection฀with฀restructuring฀actions.฀