Kodak 2013 Annual Report Download - page 14

Table of Contents
dependent, in part, upon our ability to provide customer financing on competitive terms and on our customers’ creditworthiness. Tightening of
credit in the global financial markets can adversely affect the ability of Kodak’s customers to obtain financing for significant purchases, which
may result in a decrease in, or cancellation of, orders for our products and services. If we are unable to provide competitive financing solutions
to our customers or if we extend credit to customers whose creditworthiness deteriorates, our revenues, profitability and financial position
could be adversely impacted.
We have outsourced a significant portion of Kodak’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 our 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 Kodak honors its payment and other obligations to its 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 our customer commitments, our costs could be higher than planned, and our cash flows and the reliability of the Company’s
products could be negatively impacted. Kodak 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 our suppliers. Other supplier problems that we could face
include electronic component shortages, excess supply, risks related to the duration of Kodak’s contracts with suppliers for components and
materials and risks related to dependency on single source suppliers on favorable terms or at all. The realization of any of these risks should
alternative third-party relationships not be established, could cause interruptions in supply or increases in costs that might result in Kodak’s
inability to meet customer demand for our products, damage to our relationships with Kodak’s customers, and reduced market share, all of
which could adversely affect our results of operations and financial condition.
Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.
Our worldwide operations could be subject to earthquakes, power shortages, telecommunications failures, cyber attacks, terrorism, water
shortages, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, political or economic instability, and
other natural or manmade disasters or business interruptions, for which we are predominantly self insured. The occurrence of any of these
business disruptions could seriously harm our revenue and financial condition and increase our costs and expenses. In addition, some areas,
including parts of the east and west coasts of the United States, have previously experienced, and may experience in the future, major power
shortages and blackouts. These blackouts could cause disruptions to our operations or the operations of our suppliers, distributors and resellers,
or customers. We have operations including research and development facilities in geographically disparate locations, such as Israel, Japan,
China, Singapore, and Canada. The impact of these risks is greater in areas where products are manufactured at a sole or limited number of
location(s), and where the sourcing of materials is limited to a sole or limited base of suppliers, since any material interruption in operations in
such locations or suppliers could impact our ability to provide a particular product or service for a period of time. These events could seriously
harm our revenue and financial condition, and increase our costs and expenses.
Kodak’s businesses experience seasonality of sales. Therefore, lower demand for the Company’s products or increases in costs during
periods that are expected to be at peak in seasonality may have a pronounced negative effect on our results of operations .
Equipment sales for the DP&E Segment and for Graphics, within the GECF Segment, generally exhibit higher levels in the fourth quarter due
to the seasonal nature of placements, resulting from customer or industry budgeting practices. Sales of entertainment imaging film within the
GECF Segment are typically strongest in the second quarter reflecting increased demand due to the summer motion picture season.
Developments during what are expected to be peak periods in seasonality, such as lower-than-anticipated demand for the Company’s products,
an internal systems failure, increases in materials costs, or failure of or performance problems with one of our key logistics, components
supply, or manufacturing partners, could have a material adverse impact on our financial condition and operating results. Tight credit markets
that limit capital investments or a weak economy that decreases print demand could negatively impact equipment or consumable sales. These
external developments are often unpredictable and may have an adverse impact on our business and results of operations.
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develop manufacturing methods appropriate for the Company
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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
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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.