Kodak 2012 Annual Report Download - page 16

Table of Contents
Due to the nature of the products we sell and the Company’s worldwide distribution, we are subject to changes in currency exchange
rates, interest rates and commodity costs that may adversely impact the Company’s results of operations and financial position.
As a result of the Company’s global operating and financing activities, we are exposed to changes in currency exchange rates and interest rates,
which may adversely affect the Company’s results of operations and financial position. Exchange rates and interest rates in markets in which we
do business tend to be volatile and at times, the Company’s sales can be negatively impacted across all of the Company’s segments depending
upon the value of the U.S. dollar, the Euro and other major currencies. In addition, the Company’s products contain silver, aluminum, petroleum
based or other commodity-based raw materials, the prices of which have been and may continue to be volatile. If the global economic situation
remains uncertain or worsens, there could be further volatility in changes in currency exchange rates, interest rates and commodity prices, which
could have negative effects on the Company’s revenue and earnings.
If we are unable to provide competitive financing arrangements to Kodak’s customers or if we extend credit to customers whose
creditworthiness deteriorates, this could adversely impact the Company’s revenues, profitability and financial position.
The competitive environment in which we operate may require us to facilitate financing to our customers in order to win a contract. Customer
financing arrangements may cover all or a portion of the purchase price for the Company’s products and services. We may also assist customers
in obtaining financing from banks and other sources. The Company’s success may be dependent, in part, upon the Company’s ability to provide
customer financing on competitive terms and on the Company’s customers’ creditworthiness. The tightening of credit in the global financial
markets can adversely affect the ability of the Company’
s customers to obtain financing for significant purchases, which may result in a decrease
in, or cancellation of, orders for the Company’s products and services. If we are unable to provide competitive financing arrangements to our
customers or if we extend credit to customers whose creditworthiness deteriorates, this could adversely impact the Company’s revenues,
profitability and financial position.
We have outsourced a significant portion of the Company’s overall worldwide manufacturing, logistics and back office operations and
face the risks associated with reliance on third party suppliers.
We have outsourced a significant portion of the Company’s overall worldwide manufacturing, logistics, customer support and administrative
operations to third parties. To the extent that we rely on third party service providers, we face the risk that those third parties may not be able to:
Further, even if the Company honors its payment and other obligations to the Company’s key suppliers of products, components and services,
such suppliers may choose to unilaterally withhold products, components or services, or demand changes in payment terms. As a result of such
risks, we may be unable to meet the Company’s customer commitments, the Company’s costs could be higher than planned, and the Company’s
cash flows and the reliability of the Company’s products could be negatively impacted. The Company will vigorously enforce its contractual
rights under such circumstances, but there is no guarantee we will be successful in preventing or mitigating the effects of unilateral actions by
the Company’s suppliers. Other supplier problems that we could face include electronic component shortages, excess supply, risks related to
favorable terms, the duration of the Company’s contracts with suppliers for components and materials and risks related to dependency on single
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develop manufacturing methods appropriate for the Company
’
s products;
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maintain an adequate control environment;
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quickly respond to changes in customer demand for the Company
’
s products;
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obtain supplies and materials necessary for the manufacturing process; or
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mitigate the impact of labor shortages and/or disruptions.