Kodak 2002 Annual Report Download - page 15

Financials
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management and the elimination of goodwill amortization in 2002,
which was $15 million in 2001, partially offset by a lower gross
profit margin.
All Other Net worldwide sales for All Other were $103 million
for 2002 as compared with $110 million for 2001, representing a
decrease of $7 million, or 6%. Net sales in the U.S. were $53
million in 2002 as compared with $68 million for 2001,
representing a decrease of $15 million, or 22%. Net sales outside
the U.S. were $50 million in the current year as compared with
$42 million in the prior year, representing an increase of $8
million, or 19%.
Loss from continuing operations before interest, other
(charges) income, and income taxes for All Other decreased $32
million from a loss of $60 million in 2001 to a loss of $28
million in 2002. The reduction in the loss from operations was
primarily attributable to cost reductions in certain miscellaneous
businesses and the benefit of current year manufacturing
productivity.
RESULTS OF OPERATIONS —
DISCONTINUED OPERATIONS
In March 2001, the Company acquired Citipix from Groupe Hauts
Monts along with two related subsidiaries involved in mapping
services. Citipix was involved in the aerial photography of large
cities in the United States, scanning of this imagery and hosting
the imagery on the Internet for government, commercial and
private sectors. The acquired companies were formed into Kodak
Global Imaging, Inc. (KGII), a wholly owned subsidiary, which was
reported in the commercial and government products and services
business in the Commercial Imaging segment. Due to a
combination of factors, including the collapse of the
telecommunications market, limitations on flying imposed by the
events of September 11th, delays and losses of key contracts and
the global economic downturn, KGII did not achieve the financial
results expected by management during both 2001 and 2002. In
November 2002, the Company approved a plan to dispose of the
operations of KGII.
Net sales from KGII for the years ended December 31, 2002
and 2001 were $6 million and $5 million, respectively. The
Company incurred operational losses before income taxes from
KGII for the years ended December 31, 2002 and 2001 of $13
million and $7 million, respectively. The Company recognized
losses before income taxes in the fourth quarter of 2002 of
approximately $44 million for costs associated with the disposal
of KGII. The disposal costs were comprised of impairment losses
related to the write-down of the carrying value of goodwill,
intangibles and fixed assets to fair value, losses recognized from
the sale of certain assets, and the accrual of various costs
related to the shutdown of KGII, including severance relating to
approximately 150 positions.
Also during the fourth quarter of 2002, the Company
recognized earnings before income taxes of $19 million as a
result of the favorable outcome of litigation associated with the
1994 sale of Sterling Winthrop Inc.
The loss from discontinued operations before income taxes
for the years ended December 31, 2002 and 2001 was at an
effective tax rate of 38% and 31%, respectively, resulting in the
loss from discontinued operations, net of incomes taxes in the
Consolidated Statement of Earnings of $23 million and $5 million,
respectively.
For additional information, refer to Note 21, “Discontinued
Operations.”
2001 COMPARED WITH 2000
RESULTS OF OPERATIONS —
CONTINUING OPERATIONS
Consolidated Net worldwide sales were $13,229 million for
2001 as compared with $13,994 million for 2000, representing a
decrease of $765 million, or 5% as reported, or 3% excluding the
negative net impact of exchange. The decrease in net worldwide
sales was comprised of declines in Photography sales of $828
million, or 8%, and All Other sales of $16 million, or 13%,
partially offset by increases in Health Imaging sales of $42
million, or 2%, and Commercial Imaging of $37 million or 3%.
The decrease in Photography sales was driven by declines in
consumer, entertainment origination and professional film
products, consumer and professional color paper, photofinishing
revenues and consumer and professional digital cameras. Net
sales in the U.S. were $6,459 million for 2001 as compared with
$6,810 million for 2000, representing a decrease of $351 million,
or 5%. The U.S. economic condition throughout the year and the
events of September 11th adversely impacted the Company’s
sales, particularly in the consumer film product groups within the
Photography segment.
Net sales outside the U.S. were $6,770 million for 2001 as
compared with $7,184 million for 2000, representing a decrease
of $414 million, or 6% as reported, or 1% excluding the negative
impact of exchange. Net sales in the EAMER region for 2001
were $3,333 million as compared with $3,541 million for 2000,
representing a decrease of 6% as reported, or 3% excluding the
negative impact of exchange. Net sales in the Asia Pacific region
for 2001 were $2,231 million as compared with $2,378 million
for 2000, representing a decrease of 6% as reported, or a 1%
increase excluding the negative impact of exchange. Net sales in
the Canada and Latin America region for 2001 were $1,206
million as compared with $1,265 million for 2000, representing a
decrease of 5% as reported, or an increase of 2% excluding the
negative impact of exchange.
Net sales for Emerging Market countries were $2,371 million
for 2001 as compared with $2,481 million for 2000, representing