Kodak 2013 Annual Report Download - page 50

Table of Contents
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This report on Form 10-K, includes “forward–looking statements” as that term is defined under the Private Securities Litigation Reform Act of
1995.
Forward–looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenue or
performance, capital expenditures, liquidity, investments, financing needs, business trends, and other information that is not historical
information. When used in this document, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,”
“predicts”, “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar
expressions are intended to identify forward–looking statements. All forward–looking statements, including, without limitation, management’s
examination of historical operating trends and data are based upon the Company’s expectations and various assumptions. Future events or
results may differ from those anticipated or expressed in these forward-looking statements. Important factors that could cause actual events or
results to differ materially from these forward-looking statements include, among others, the risks and uncertainties described in more detail in
this report on Form 10–K under the headings “Business,” “Risk Factors,” and/or “Management’s Discussion and Analysis of Financial
Condition and Results of Operations–Liquidity and Capital Resources,” and those described in filings made by the Company with the U.S.
Bankruptcy Court for the Southern District of New York and in other filings the Company makes with the SEC from time to time, as well as
the following: the Company’s ability to improve and sustain its operating structure, financial results and profitability; the ability of the
Company to achieve cash forecasts, financial projections, and projected growth; our ability to achieve the financial and operational results
contained in our business plans; the ability of the Company to discontinue or sell certain non-core businesses or operations; the Company’s
ability to comply with the covenants in its credit facilities; our ability to obtain additional financing if and as needed; the potential adverse
effects of the concluded Chapter 11 proceedings on the Company’s brand or business prospects; the Company’s ability to fund continued
investments, capital needs, restructuring payments and service its debt; changes in foreign currency exchange rates, commodity prices and
interest rates; the resolution of claims against the Company; our ability to attract and retain key executives, managers and employees; our
ability to maintain product reliability and quality and growth in relevant markets; our ability to effectively anticipate technology trends and
develop and market new products, solutions and technologies; and the impact of the global economic environment on the Company. There may
be other factors that may cause the Company’s actual results to differ materially from the forward–looking statements. All forward–looking
statements attributable to the Company or persons acting on its behalf apply only as of the date of this report on Form 10-K and are expressly
qualified in their entirety by the cautionary statements included in this document. The Company undertakes no obligation to update or revise
forward–
looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
SUMMARY OF OPERATING DATA
A summary of operating data for 2013 and for the four years prior is shown on page 22.
Kodak, as a result of its global operating and financing activities, is exposed to changes in foreign currency exchange rates, commodity prices,
and interest rates, which may adversely affect its results of operations and financial position. In seeking to minimize the risks associated with
such activities, Kodak may enter into derivative contracts. Kodak does not utilize financial instruments for trading or other speculative
purposes. Foreign currency forward contracts are used to hedge existing foreign currency denominated assets and liabilities, especially those of
Kodak’s International Treasury Center, as well as forecasted foreign currency denominated intercompany sales. Silver forward contracts are
used to mitigate Kodak’s risk to fluctuating silver prices. Kodak’
s exposure to changes in interest rates results from its investing and borrowing
activities used to meet its liquidity needs. Long-term debt is generally used to finance long-term investments, while short-term debt is used to
meet working capital requirements.
Using a sensitivity analysis based on estimated fair value of open foreign currency forward contracts using available forward rates, if the U.S.
dollar had been 10% weaker at December 31, 2013 and 2012, the fair value of open forward contracts would have decreased $13 million and
$21 million, respectively. Such changes in fair value would be substantially offset by the revaluation or settlement of the underlying positions
hedged.
There were no open silver forward contracts as of December 31, 2013 or as of December 31, 2012. Kodak is exposed to interest rate risk
primarily through its borrowing activities. Kodak may utilize borrowings to fund its working capital and investment needs. The majority of
short-term and long-term borrowings are in variable-rate instruments. There is inherent roll-over risk for borrowings and marketable securities
as they mature and are renewed at current market rates. The extent of this risk is not predictable because of the variability of future interest
rates and business financing requirements.
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ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK