Kodak 2004 Annual Report Download - page 32

Financials
30
E A S T M A N฀ K OD A K ฀ C O M PA N Y
฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ ฀ Long-lived฀Asset
฀ ฀ ฀ Exit฀ ฀ Impairments
฀ Number฀of฀ Severance฀ Costs฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ and฀Inventory฀฀฀฀฀฀ Accelerated
(dollars฀in฀millions)฀ Employees฀ Reserve฀ Reserve฀ Total฀ Write-downs฀ Depreciation
Q3,฀2003฀charges฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 1,700฀฀฀฀฀฀฀฀฀฀฀฀฀ $฀123฀ $฀ —฀ $฀123฀ $฀ 1฀ $฀ 14฀฀฀฀฀฀฀฀฀฀฀฀
Q3,฀2003฀utilization฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ (100)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (3)฀ ฀ —฀ ฀ (3)฀฀฀฀฀ ฀ (1)฀ ฀ (14)
Balance฀at฀9/30/03฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 1,600฀ ฀ 120฀ ฀ —฀฀ ฀ 120฀ ฀ —฀ ฀ —
Q4,฀2003฀charges฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 2,150฀ ฀ 103฀ ฀฀ 40฀ ฀ 143฀ ฀ 109฀ ฀ 7฀
Q4,฀2003฀utilization฀฀฀฀฀฀฀฀฀฀฀฀ (2,025)฀ ฀ (48)฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (28)฀฀฀฀฀฀฀฀฀฀ ฀ (76)฀ ฀ (109)฀ ฀ (7)
Q4,฀2003฀other฀adj.
฀฀&฀reclasses฀฀฀฀ —฀ ฀ 5฀ ฀ —฀ ฀ 5฀ ฀ —฀ ฀ —
Balance฀at฀12/31/03฀฀฀฀฀฀฀฀฀฀฀฀฀ 1,725฀ ฀ 180฀ ฀ 12฀ ฀ 192฀ ฀ —฀ ฀ —
Q1,฀2004฀charges฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 2,000฀ ฀ 44฀ ฀ 7฀ ฀ 51฀ ฀ 6฀ ฀ 14
Q1,฀2004฀utilization฀฀฀฀฀฀฀฀฀฀฀฀ (2,075)฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (76)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ ฀(5)฀฀฀฀฀฀฀฀฀฀฀ ฀ (81)฀ ฀ (6)฀ ฀ (14)
Q1,฀2004฀other฀adj.
฀฀&฀reclasses฀ —฀ ฀ 18฀ ฀ —฀ ฀ 18฀ ฀ —฀ ฀ —
Balance฀at฀3/31/04฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 1,650฀ ฀ 166฀ ฀ 14฀ ฀ 180฀ ฀ —฀ ฀ —
Q2,฀2004฀charges฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ —฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ —฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ —฀ ฀ —฀ ฀ —฀ ฀ 6
Q2,฀2004฀reversal฀ —฀ ฀ (2)฀ ฀ (2)฀ ฀ (4)฀ ฀ —฀ ฀ —
Q2,฀2004฀utilization฀฀฀฀฀฀฀฀฀฀฀ ฀(1,375)฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ ฀(62)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (2)฀฀฀฀฀฀฀฀฀฀ ฀ ฀(64)฀ ฀ —฀ ฀ (6)฀
Balance฀at฀6/30/04฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 275฀ ฀ 102฀ ฀ 10฀ ฀ 112฀ ฀ —฀ ฀ —
Q3,฀2004฀charges฀ —฀ ฀ —฀ ฀ —฀ ฀ —฀ ฀ —฀ ฀ 3
Q3,฀2004฀reversal฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ —฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (2)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ —฀ ฀ (2)฀ ฀ —฀ ฀ —
Q3,฀2004฀utilization฀฀฀฀฀฀฀฀฀฀฀฀฀฀ (225)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (42)฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (2)฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (44)฀ ฀ —฀ ฀ (3)฀฀฀฀฀
Balance฀at฀9/30/04฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ 50฀ ฀ 58฀ ฀ 8฀ ฀ 66฀฀ ฀ —฀ ฀ —
Q4,฀2004฀charges฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ —฀ ฀ 1฀ ฀ —฀ ฀ 1฀ ฀ —฀ ฀ 1
Q4,฀2004฀reversal฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ —฀ ฀ —฀ ฀ (1)฀ ฀ (1)฀ ฀ —฀ ฀ —฀฀฀฀
Q4,฀2004฀utilization฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ (25)฀ ฀ (28)฀ ฀ (5)฀฀฀฀฀฀฀฀฀฀฀฀ ฀ (33)฀ ฀ —฀ ฀ (1)฀฀฀฀
Q4,฀2004฀other฀adj.
฀฀&฀reclasses฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ —฀ ฀ (1)฀ ฀ —฀ ฀ (1)฀฀ ฀ —฀ ฀ —
Balance฀at฀12/31/04฀฀ 25฀ $฀ 30฀ $฀ 2฀ $฀ 32฀ $฀ —฀ $฀ —
The฀severance฀charges฀of฀$45฀million฀and฀the฀exit฀costs฀of฀$7฀mil-
lion฀were฀reported฀in฀restructuring฀costs฀and฀other฀in฀the฀accompanying฀
Consolidated฀Statement฀of฀Earnings฀for฀the฀year฀ended฀December฀31,฀
2004.฀Included฀in฀the฀$45฀million฀charge฀taken฀for฀severance฀costs฀was฀a฀
net฀curtailment฀gain฀of฀$17฀million.฀The฀net฀curtailment฀gain฀is฀disclosed฀in฀
Note฀17,฀“Retirement฀Plans”฀and฀Note฀18,฀“Other฀Postretirement฀Benefits.”฀฀
During฀2004,฀the฀Company฀made฀$208฀million฀of฀severance฀payments฀
and฀$14฀million฀of฀exit฀costs฀payments฀related฀to฀the฀Third฀Quarter,฀2003฀
Restructuring฀Program.฀In฀addition,฀the฀Company฀reversed฀$4฀million฀of฀
severance฀reserves฀and฀$3฀million฀of฀exit฀costs฀reserves฀during฀2004.฀The฀
severance฀reserve฀reversals฀were฀recorded,฀as฀severance฀payments฀were฀
less฀than฀originally฀estimated.฀The฀$2฀million฀exit฀costs฀reserve฀reversal฀
recorded฀during฀the฀second฀quarter฀of฀2004฀resulted฀from฀the฀Company฀
settling฀a฀lease฀obligation฀for฀an฀amount฀that฀was฀less฀than฀originally฀
estimated.฀The฀additional฀$1฀million฀of฀exit฀costs฀reserves฀reversed฀in฀the฀
fourth฀quarter฀of฀2004฀resulted฀from฀the฀Company฀settling฀certain฀exit฀
cost฀obligations฀for฀an฀amount฀that฀was฀less฀than฀originally฀estimated.฀The฀
severance฀and฀exit฀costs฀reserve฀reversals฀were฀included฀in฀restructuring฀
costs฀and฀other฀in฀the฀accompanying฀Consolidated฀Statement฀of฀Earnings฀
for฀the฀year฀ended฀December฀31,฀2004.฀The฀remaining฀severance฀payments฀
relating฀to฀initiatives฀already฀implemented฀under฀the฀Third฀Quarter,฀2003฀
Restructuring฀Program฀will฀be฀paid฀during฀2005฀since,฀in฀many฀instances,฀
the฀employees฀whose฀positions฀were฀eliminated฀can฀elect฀or฀are฀required฀
to฀receive฀their฀severance฀payments฀over฀an฀extended฀period฀of฀time.฀Most฀
exit฀costs฀were฀paid฀during฀2004.฀However,฀certain฀costs,฀such฀as฀long-
term฀lease฀payments,฀will฀be฀paid฀over฀periods฀after฀2004.฀฀
As฀a฀result฀of฀initiatives฀implemented฀under฀the฀Third฀Quarter,฀2003฀
Restructuring฀Program,฀the฀Company฀recorded฀$24฀million฀of฀accelerated฀
depreciation฀on฀long-lived฀assets฀in฀cost฀of฀goods฀sold฀in฀the฀accompany-
ing฀Consolidated฀Statement฀of฀Earnings฀for฀the฀year฀ended฀December฀31,฀
2004.฀The฀accelerated฀depreciation฀relates฀to฀long-lived฀assets฀accounted฀
for฀under฀the฀held฀and฀used฀model฀of฀SFAS฀No.฀144.฀The฀year-to-date฀
amount฀of฀$24฀million฀relates฀to฀$17฀million฀of฀manufacturing฀facilities฀and฀
The฀following฀table฀summarizes฀the฀activity฀with฀respect฀to฀the฀charges฀recorded฀in฀connection฀with฀the฀focused฀cost฀reduction฀actions฀that฀the฀Com-
pany฀has฀committed฀to฀under฀the฀Third฀Quarter,฀2003฀Restructuring฀Program฀and฀the฀remaining฀balances฀in฀the฀related฀reserves฀at฀December฀31,฀2004: