Kodak 2005 Annual Report Download - page 61

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related to the purchase of minority interests in China and India, capital expenditures of $497 million, and investments in unconsolidated affi liates of
$89 million. These uses of cash were partially offset by net proceeds from the sale of assets of $24 million. The net cash provided by fi nancing
activities of $270 million was primarily the result of the net increase in borrowings of $588 million and the exercise of employee stock options of
$12 million, which were partially offset by dividend payments of $330 million.
The Company has a dividend policy whereby it makes semi-annual payments which, when declared, will be paid on the Company’s 10th business day
each July and December to shareholders of record on the close of the fi rst business day of the preceding month. On April 15, 2003, the Company’s
Board of Directors declared a semi-annual cash dividend of $.90 per share on the outstanding common stock of the Company. This dividend was
paid on July 16, 2003 to shareholders of record at the close of business on June 2, 2003. On September 24, 2003, the Company’s Board of Directors
approved the reduction of the amount of the annual dividend to $.50 per share. On that same date, the Company’s Board of Directors declared a
semi-annual cash dividend of $.25 per share on the outstanding common stock of the Company. This dividend was paid on December 12, 2003 to the
shareholders of record as of the close of business on November 3, 2003.
Capital additions were $497 million in 2003, with the majority of the spending supporting new products, manufacturing productivity and quality
improvements, infrastructure improvements, and ongoing environmental and safety initiatives.
During 2003, the Company expended $250 million against the related restructuring reserves, primarily for the payment of severance benefi ts.
Employees whose positions were eliminated could elect to receive their severance payments over a period not to exceed two years following their date
of termination.
Other
Refer to Note 11, “Commitments and Contingencies” of the Notes to Financial Statements for discussion regarding the Company’s undiscounted
liabilities for environmental remediation costs relative to December 31, 2005.
New Accounting Pronouncements
FASB Staff Position No. 143-1
In June 2005, the Financial Accounting Standards Board (FASB) issued Staff Position No. 143-1, “Accounting for Electronic Equipment Waste
Obligations” (FSP 143-1). FSP 143-1 addresses the accounting for obligations associated with Directive 2002/96/EC on Waste Electrical and
Electronic Equipment (the “Directive”) adopted by the European Union, and requires application of the provisions of SFAS No. 143 and FIN 47 as those
standards relate to the Directive. This FSP is effective the later of the fi rst reporting period ending after June 8, 2005, or the date of adoption of the
Directive by the individual EU-member countries. There have been no material impacts on the Company’s consolidated fi nancial statements resulting
from the adoption of this FSP in those countries for which the Directive has been adopted, and there are no material impacts expected in the future
from the adoption of the Directive in the remaining EU-member countries.
FASB Interpretation No. 47
In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (FIN 47). FIN 47 clarifi es that
the term “conditional asset retirement obligation” as used in FASB No. 143, “Accounting for Asset Retirement Obligations,” refers to a legal
obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may
not be within the control of the Company. In addition, FIN 47 clarifi es when a company would have suffi cient information to reasonably estimate the
fair value of an asset retirement obligation.
The Company adopted FIN 47 during the fourth quarter of 2005. FIN 47 requires that conditional asset retirement obligations, legal obligations to
perform an asset retirement activity in which the timing and/(or) method of settlement are conditional on a future event, be reported, along with
associated capitalized asset retirement costs, at their fair values. Upon initial application, FIN 47 requires recognition of (1) a liability, adjusted for