Kodak 2004 Annual Report Download - page 27

Financials
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2 0 0 4 ฀ S U M M A R Y ฀ A N N U A L ฀ R E P O R T
SUMMARY
฀ 2004฀฀฀฀฀฀฀฀ Change฀ 2003฀ Change฀฀฀฀฀฀฀฀฀฀฀ 2002
(in฀millions,฀except฀per฀share฀data)฀ ฀฀฀฀฀฀฀฀฀฀ ฀ (Restated)฀฀฀฀฀฀฀฀
Net฀sales฀from฀continuing฀operations฀฀฀ $฀13,517฀฀฀฀฀฀฀฀฀฀฀ +5%฀฀฀฀฀฀ $฀12,909฀฀฀฀฀฀฀฀ +3%฀฀฀฀฀฀฀฀฀฀ $฀12,549฀฀฀฀฀฀฀
(Loss)฀earnings฀from฀continuing฀operations฀
฀ before฀interest,฀other฀income฀(charges),฀net฀
฀ and฀income฀taxes฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (87)฀฀฀฀฀฀฀฀฀ -129฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 302฀฀฀฀฀฀฀฀฀ -74฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 1,168
Earnings฀from฀continuing฀operations฀฀฀฀฀฀ ฀ 81฀฀฀฀฀฀฀฀฀฀฀ -57฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 189฀฀฀฀฀฀฀฀฀฀ -75฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 761฀฀฀฀฀฀
Earnings฀from฀discontinued฀operations฀฀฀฀฀฀฀ ฀ 475฀฀฀฀฀฀฀฀฀ +642฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 64฀฀฀฀฀฀฀฀฀ +611฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 9฀฀฀฀฀฀฀
Net฀earnings฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 556฀฀฀฀฀฀฀฀฀ +120฀ ฀ 253฀ -67฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 770฀฀฀฀฀฀฀
Basic฀earnings฀per฀share:
฀฀฀ ฀ Continuing฀operations฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .28฀฀฀฀฀฀฀฀฀฀฀ -58฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀฀ .66฀฀฀฀฀฀฀฀฀ -75฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 2.61฀
฀฀฀ ฀ Discontinued฀operations฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 1.66฀฀฀฀฀฀฀฀฀ +655฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .22฀฀฀฀฀฀฀฀฀ +633฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .03฀฀฀฀฀
฀฀฀ ฀ Total฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 1.94฀฀฀฀฀฀฀฀฀ +120฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀฀ .88฀฀฀฀฀฀฀฀฀ -67฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 2.64฀฀฀฀฀
Diluted฀earnings฀per฀share:
฀฀฀ ฀ Continuing฀operations฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .28฀฀฀฀฀฀฀฀฀฀ -58฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .66฀฀฀฀฀฀฀฀฀ -75฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 2.61฀
฀฀฀ ฀ Discontinued฀operations฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ 1.66฀฀฀฀฀฀฀฀฀ +655฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .22฀฀฀฀฀฀฀฀฀ +633฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ .03฀฀฀฀฀
฀฀฀ ฀ Total฀ $฀ 1.94฀ +120%฀ $฀ .88฀ -67%฀ $฀ 2.64
The฀Company’s฀results฀as฀noted฀above฀include฀certain฀one-time฀items,฀
such฀as฀charges฀associated฀with฀focused฀cost฀reductions฀and฀other฀special฀
charges.฀These฀one-time฀items,฀which฀are฀described฀below,฀should฀be฀
considered฀to฀better฀understand฀the฀Company’s฀results฀of฀operations฀that฀
were฀generated฀from฀normal฀operational฀activities.
2004
The฀Company’s฀results฀from฀continuing฀operations฀for฀the฀year฀included฀the฀
following:
Charges฀of฀$889฀million฀($620฀million฀after฀tax)฀related฀to฀focused฀
cost฀reductions฀implemented฀primarily฀under฀the฀Third฀Quarter,฀2003฀
Restructuring฀Program฀and฀2004-2006฀Restructuring฀Program.฀See฀further฀
discussion฀in฀the฀Restructuring฀Costs฀and฀Other฀section฀of฀Management’s฀
Discussion฀and฀Analysis฀of฀Financial฀Condition฀and฀Results฀of฀Operations฀
(MD&A)฀and฀Note฀16,฀“Restructuring฀Costs฀and฀Other.”
Charges฀of฀$12฀million฀($7฀million฀after฀tax),฀including฀$2฀million฀($1฀
million฀after฀tax)฀for฀inventory฀write-downs฀and฀$10฀million฀($6฀million฀after฀
tax)฀for฀the฀write-off฀of฀fixed฀assets฀related฀to฀Kodak’s฀historical฀ownership฀
interest฀in฀the฀NexPress฀joint฀venture฀in฀connection฀with฀the฀acquisition฀of฀
the฀NexPress-related฀entities฀incurred฀in฀the฀second฀and฀fourth฀quarters.฀฀
Charges฀of฀$15฀million฀($10฀million฀after฀tax)฀related฀to฀purchased฀
in-process฀R&D฀incurred฀in฀the฀first฀and฀third฀quarters.฀฀
Charges฀of฀$6฀million฀($4฀million฀after฀tax)฀related฀to฀a฀legal฀settle-
ment.฀฀
Other฀income฀of฀$101฀million฀($63฀million฀after฀tax)฀related฀to฀two฀
favorable฀legal฀settlements.
Income฀tax฀charges฀of฀$31฀million฀related฀to฀valuation฀allowances฀for฀
restructuring฀related฀deferred฀tax฀assets.
2003
The฀Company’s฀results฀from฀continuing฀operations฀for฀the฀year฀included฀the฀
following:
Charges฀of฀$552฀million฀($396฀million฀after฀tax)฀related฀to฀focused฀
cost฀reductions฀implemented฀primarily฀under฀the฀First฀Quarter,฀2003฀
Restructuring฀Program฀and฀the฀Third฀Quarter,฀2003฀Restructuring฀Program.฀
See฀further฀discussion฀in฀the฀Restructuring฀Costs฀and฀Other฀section฀of฀
Management’s฀Discussion฀and฀Analysis฀of฀Financial฀Condition฀and฀Results฀
of฀Operations฀(MD&A)฀and฀Note฀16,฀“Restructuring฀Costs฀and฀Other.”
Charges฀of฀$16฀million฀($10฀million฀after฀tax)฀related฀to฀venture฀invest-
ment฀impairments฀and฀other฀asset฀write-offs฀incurred฀in฀the฀second฀and฀
fourth฀quarters.฀See฀MD&A฀and฀Note฀7,฀“Investments,”฀for฀further฀discus-
sion฀of฀venture฀investment฀impairments.
฀Charges฀of฀$31฀million฀($19฀million฀after฀tax),฀including฀$21฀million฀
($13฀million฀after฀tax)฀in฀the฀first฀quarter฀and฀$10฀million฀($6฀million฀after฀
tax)฀in฀the฀fourth฀quarter,฀related฀to฀purchased฀in-process฀R&D.฀฀
Charges฀of฀$14฀million฀($9฀million฀after฀tax)฀connected฀with฀the฀
settlement฀of฀a฀patent฀infringement฀claim.
Charges฀of฀$12฀million฀($7฀million฀after฀tax)฀related฀to฀an฀intellectual฀
property฀settlement.
Charges฀of฀$14฀million฀($9฀million฀after฀tax)฀connected฀with฀the฀
settlement฀of฀certain฀issues฀relating฀to฀a฀prior-year฀acquisition.฀
Charges฀of฀$8฀million฀($5฀million฀after฀tax)฀for฀a฀donation฀to฀a฀technol-
ogy฀enterprise.฀
Charges฀of฀$8฀million฀($5฀million฀after฀tax)฀for฀legal฀settlements.฀
Reversal฀of฀$9฀million฀($6฀million฀after฀tax)฀for฀an฀environmental฀
reserve.฀
Income฀tax฀benefits฀of฀$13฀million,฀which฀included฀tax฀benefits฀related฀
to฀the฀donation฀of฀patents฀in฀the฀first฀and฀fourth฀quarters,฀amounting฀to฀$8฀
million฀and฀$5฀million,฀respectively.฀
2002
The฀Company’s฀results฀from฀continuing฀operations฀for฀the฀year฀included฀the฀
following:
Charges฀of฀$114฀million฀($80฀million฀after฀tax)฀related฀to฀focused฀
cost฀reductions฀implemented฀in฀the฀third฀and฀fourth฀quarters.฀See฀further฀