Kodak 2013 Annual Report Download - page 10

Table of Contents
Continued investment, capital needs, restructuring payments and servicing the Company’s debt require a significant amount of cash
and we may not be able to generate cash necessary to finance these activities, which could adversely affect our business, operating
results and financial condition.
The Company’s business may not generate cash flow in an amount sufficient to enable it to pay the principal of, or interest on the Company’s
indebtedness, or to fund Kodak’s other liquidity needs, including working capital, capital expenditures, product development efforts, strategic
acquisitions, investments and alliances, restructuring actions and other general corporate requirements.
Kodak’s ability to generate cash is subject to general economic, financial, competitive, litigation, regulatory and other factors that are beyond
our control. We cannot assure you that:
If we cannot fund our liquidity needs, we will have to take actions such as reducing or delaying capital expenditures, product development
efforts, strategic acquisitions, and investments and alliances; selling additional assets; restructuring or refinancing the Company’s debt; or
seeking additional equity capital. Such actions could increase the Company’s debt, negatively impact customer confidence in our ability to
provide products and services, reduce the Company’s ability to raise additional capital and delay sustained profitability. We cannot assure you
that any of these actions could, if necessary, be effected on commercially reasonable terms, or at all, or that they would permit us to meet the
Company’s scheduled debt service obligations. In addition, if we incur additional debt, the risks associated with the Company’s substantial
leverage, including the risk that we will be unable to service the Company’s debt, generate cash flow sufficient to fund our liquidity needs, or
maintain compliance with the covenants in our various credit facilities, could intensify.
If we are unsuccessful with the Company’s strategic investment decisions, our financial performance could be adversely affected.
The Company has focused its investments on commercial businesses in large growth markets that are positioned for technology and business
model transformation, specifically, commercial inkjet, packaging and functional printing solutions, and enterprise services. Each of these
businesses require additional investment and may not be successful strategies when implemented. The introduction of successful innovative
products at market competitive prices and the achievement of scale are necessary for us to grow these businesses, improve margins and achieve
our financial objectives. The introduction of products requires great precision in forecasting demand and understanding commercial business
requirements in a rapidly moving marketplace. Additionally, our strategy is based on a number of factors and assumptions, some of which are
not within our control, such as the actions of third parties. There can be no assurance that we will be able to successfully execute all elements of
our strategy, or that our ability to successfully execute our strategy will be unaffected by external factors. If we are unsuccessful in growing the
Company’s investment businesses as planned, or perceiving the needs of the rapidly changing commercial businesses, our financial
performance could be adversely affected.
If Kodak is not able to successfully implement plans, or experiences implementation delays in cost structure reduction the Company’s
consolidated results of operations, financial position and liquidity could be negatively affected.
We recognize and have communicated the need to rationalize Kodak’s workforce and streamline operations to a leaner and more focused
organization aligned with the emerged businesses and operations. We have implemented such cost rationalization plans including a
restructuring of resources, manufacturing, supply chain, marketing, sales and administrative resources. As a result, our operations, results,
financial position and liquidity could be negatively impacted. There are no assurances that such implementation will be successful or that the
results we achieve through these plans will be consistent with our expectations. Additionally, if restructuring plans are not effectively managed,
we may experience lost customer sales, product delays and other unanticipated effects, causing harm to our business and customer
relationships. The business plans are subject to a number of assumptions, projections, and analysis. If these assumptions prove to be incorrect,
we may be unsuccessful in executing our business plan or achieving the projected results, which could adversely impact our financial results
and liquidity. Finally, the timing and implementation of these plans require compliance with numerous laws and regulations, including local
labor laws, and the failure to comply with such requirements may result in damages, fines and penalties which could adversely affect the
Company’s business.
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ITEM 1A.
RISK FACTORS
•
the Company
’
s businesses will generate sufficient cash flow from operations;
•
the Company will be able to repatriate or move cash to locations where and when it is needed;
•
the Company will meet all the conditions associated with the Emergence Credit Facilities;
• we will realize cost savings, earnings growth and operating improvements resulting from the execution of our business and
restructuring plan; or
•
future sources of funding will be available in amounts sufficient to enable funding of our liquidity needs.