Kodak 2009 Annual Report Download - page 47

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The 2009 Program was expected to require expenditures from corporate cash in the range of $125 million to $175 million, as most of
the termination benefits for U.S. employees are provided in the form of special retirement benefits (Special Termination Program
(STP) benefits) payable from the Company’s over-funded U.S. pension plan. Including cash expenditures related to rationalization
actions in 2008 and prior, the total expenditures from corporate cash in 2009 for restructuring actions were expected to total $225
million to $275 million. During the year ended December 31, 2009, the Company made actual cash payments of approximately $177
million related to restructuring and rationalization.
The majority of the actions contemplated by the 2009 Program were completed in the first half of 2009. The 2009 Program was
expected to result in employment reductions in the range of 2,000 to 3,000 positions when complete and yield annualized cash
savings of $200 million to $250 million in 2009 and beyond. The future annual cash savings of these actions are now expected to be
approximately $245 million. These savings are expected to reduce future cost of goods sold, SG&A, and R&D expenses by $95
million, $82 million, and $68 million, respectively. The Company began realizing these savings in the first quarter of 2009, and
expects the savings to be fully realized by the end of the second quarter of 2010 as most of the actions and severance payouts are
completed.
When combined with rationalization actions taken in late 2008, the Company expected to reduce its worldwide employment by
between 3,500 and 4,500 positions during 2009, approximately 14% to 18% of its total workforce, which was expected to generate
annual cash savings in the range of $300 million to $350 million. The future annual cash savings of these actions are now expected
to be approximately $373 million.
For the year ended December 31, 2008, the Company incurred restructuring and rationalization charges, net of reversals, of $149
million. The $149 million of restructuring and rationalization charges, net of reversals, included $6 million of costs related to
accelerated depreciation, and $3 million of charges for inventory write-downs, which were reported in Cost of goods sold in the
accompanying Consolidated Statement of Operations. The remaining costs incurred, net of reversals, of $140 million were reported
as Restructuring costs, rationalization and other in the accompanying Consolidated Statement of Operations for the year ended
December 31, 2008.
For the year ended December 31, 2007, the Company incurred restructuring charges, net of reversals, of $685 million, all under the
2004-2007 Restructuring Program, including $23 million related to discontinued operations ($20 million of severance costs and $3
million of exit costs), and $662 million related to continuing operations ($107 million of accelerated depreciation, $12 million of
inventory write-downs, $270 million of asset impairments, $144 million of severance costs, and $129 million of exit costs). The
Company substantially completed its 2004-2007 Restructuring Program as of December 31, 2007.