Kodak 2012 Annual Report Download - page 38

Table of Contents
Revenues
Current Year
For the year ended December 31, 2012, net sales decreased approximately 20% compared with the same period in 2011 primarily due to volume
declines across all segments. Also included in the total decline was the $61 million license revenue reduction reflecting sharing, with licensees,
of the withholding tax refund received in the first quarter of 2012 (refer to Note 18, “Income Taxes” for additional information). See segment
discussions below for additional information.
Prior Year
For the year ended December 31, 2011, net sales decreased approximately 14% compared with the same period in 2010 due to a decline in the
P&DI segment primarily driven by lower revenue from non-recurring intellectual property licensing agreements (-13%), as discussed below.
Also contributing to the decrease in net sales were volume declines within the GECF segment (-3%). Partially offsetting these declines were
volume improvements within the DP&E segment (+2%). See segment discussion below for additional information.
Included in revenues were non-recurring intellectual property licensing agreements. These licensing agreements contributed $82 million and
$838 million to revenues in 2011 and 2010, respectively. There were no significant non-recurring intellectual property licensing agreements in
2012.
Gross Profit
Current Year
The decrease in gross profit percent from 2011 to 2012 was driven by an increase in manufacturing and other costs (-2pp) primarily due to an
increase in pension and other postemployment benefit costs in the current year. Also contributing to the decline was unfavorable price mix
within the P&DI segment (-
2pp) primarily attributable to the $61 million licensing revenue reduction as noted above. Favorable price/mix within
the DP&E segment, due to the focus on liquidity within Consumer Inkjet Systems (+3pp), partially offset the negative impacts noted. See
segment discussions below for additional details.
Prior Year
The decrease in gross profit margin from 2010 to 2011 was driven by lower margins within the P&DI segment (-10pp), largely due to the
decrease in revenue from the non-recurring intellectual property agreements as discussed below.
Included in gross profit margin were non-recurring intellectual property licensing agreements. These licensing agreements contributed $82
million and $838 million to revenues in 2011 and 2010, respectively. There were no significant non-recurring intellectual property licensing
agreements in 2012. See revenue discussion above regarding agreements related to the monetization of certain of the Company’s intellectual
property assets, including the sale of its digital imaging patents.
Selling, General and Administrative Expenses
The decreases in consolidated selling, general and administrative expenses (SG&A) from 2011 to 2012 and 2010 to 2011 were primarily the
result of cost reduction actions.
Research and Development Costs
The decrease in consolidated research and development costs (R&D) from 2011 to 2012 and 2010 to 2011 was primarily attributable to cost
reduction actions.
Restructuring Costs and Other
These costs, as well as the restructuring costs reported in Cost of sales, are discussed under the “RESTRUCTURING COSTS AND OTHER”
section in this MD&A.
Other Operating (Income) Expenses, Net
For details, refer to Note 16, “Other Operating (Income) Expenses, Net.”
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