Kodak 2013 Annual Report Download - page 42

Table of Contents
RESTRUCTURING COSTS AND OTHER
2013
Restructuring actions taken in 2013 were initiated to reduce Kodak’s cost structure as part of its commitment to drive sustainable profitability.
Actions included manufacturing capacity reductions in the U.S. and the U.K., the continued wind down of the consumer inkjet printer business,
a workforce reduction in France, and various targeted reductions in service, sales, and other administrative functions.
As a result of these actions, for the four months ended December 31, 2013 Kodak recorded $17 million of charges reported as Restructuring
costs and other in the accompanying Consolidated Statement of Operations. For the eight months ended August 31, 2013, Kodak recorded $52
million of charges, including $4 million for accelerated depreciation and $2 million for inventory write-downs which were reported in Cost of
sales, $43 million reported as Restructuring costs and other and $3 million which were reported as Discontinued operations in the
accompanying Consolidated Statement of Operations, The severance and exit costs reserves require the outlay of cash, while long-lived asset
impairments, accelerated depreciation and inventory write-downs represent non-cash items.
The Company made cash payments related to restructuring of approximately $18 million and $80 million for the four months ended
December 31, 2013 and the eight months ended August 31, 2013, respectively.
The charges of $17 million recorded for the four months ended December 31, 2013 included $1 million applicable to the Digital Printing and
Enterprise Segment, $8 million applicable to the Graphics, Entertainment and Commercial Films Segment, and $8 million applicable to
manufacturing, research and development, and administrative functions, The charges of $52 million recorded for the eight months ended
August 31, 2013 included $5 million applicable to the Digital Printing and Enterprise Segment, $22 million applicable to the Graphics,
Entertainment and Commercial Films Segment, $22 million applicable to manufacturing, research and development, and administrative
functions and $3 million applicable to discontinued operations.
The restructuring actions implemented in 2013 are expected to generate future annual cash savings of approximately $69 million. These
savings are expected to reduce future annual Cost of sales and SG&A by $37 million and $32 million, respectively. Kodak began realizing a
portion of these savings in 2013, and expects the majority of the annual savings to be in effect by the second half of 2014 as actions are
completed.
2012
For the year ended December 31, 2013, Kodak recorded $271 million of charges during 2012, including $13 million of charges for accelerated
depreciation and $4 million of charges for inventory write-downs, which were reported in Cost of sales in the accompanying Consolidated
Statement of Operations for the year ended December 31, 2012, and $39 million that was reported as discontinued operations. The remaining
$215 million of charges were reported as Restructuring costs and other in the accompanying Consolidated Statement of Operations for the year
ended December 31, 2012.
2011
For the year ended December 31, 2011, Kodak incurred restructuring charges of $133 million. The $133 million of restructuring charges
included $10 million of costs related to accelerated depreciation and $2 million of charges for inventory write-downs, which were reported in
Cost of sales in the accompanying Consolidated Statement of Operations, and $13 million which was reported as discontinued operations. The
remaining charges of $108 million were reported as Restructuring costs and other in the accompanying Consolidated Statement of Operations
for the year ended December 31, 2011.
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