Eastman Kodak Company today filed its 2012 Form 10-K with the
U.S. Securities and Exchange Commission, reporting an improvement
in earnings for the two reporting segments comprising Commercial
Imaging that it has indicated will be the strategic focus of the
company in the future.
The operating loss for the Commercial Imaging segments (Digital
Printing and Enterprise and Graphics, Entertainment and Commercial
Films) improved by $278 million in 2012. On a GAAP basis, the
consolidated 2012 loss from continuing operations before interest
expense, other income (charges), net, reorganization items, net and
income taxes increased by $33 million.
Selling, general and administrative costs fell by $226 million
as Kodak continued its focus on cost reductions. With other profit
improvement initiatives implemented for 2013, Kodak believes it is
on a path to emerge from Chapter 11 reorganization in mid-2013.
Kodak reported a 2012 consolidated net loss of $1.38 billion.
Excluding reorganization and restructuring costs totaling $1.07
billion, the loss for the year would have been $308 million.
Kodak’s revenue of $4.11 billion in 2012 was a decline of 20%
from the previous year, reflecting strategic decisions to focus on
profitable businesses and accounts, soft industry demand as a
result of the broader economic downturn in some businesses and
regions, lower sales of traditional products, and unfavorable
foreign exchange impact.
“We progressed in 2012 by maintaining absolute focus on our
customers,” said Antonio M. Perez, Chairman and Chief Executive
Officer. “We earned our customers’ continuing loyalty, and look
forward to moving ahead with even deeper business relationships
built around the industry’s most comprehensive and innovative
portfolio of solutions.
“We also optimized our use of the Chapter 11 process, which
offers valuable restructuring advantages despite the many demands
it also imposes.”
The company’s worldwide cash balance was $1.14 billion at the
end of 2012.
“Our momentum continues as we work to file our Plan of
Reorganization and then complete the final actions that will enable
us to emerge from Chapter 11 in mid-2013,” said Perez. "Thanks to
the talent and dedication of our employees, our 2012 performance
was on track or ahead of our adjusted EBITDA and cash projections,
and we have remained in compliance with the covenants of our
debtor-in-possession facility, laying the foundation for emergence
as a profitable, sustainable company.”
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This document 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,
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 the Company’s most recent
Annual Report on Form 10-K for the year ended December 31, 2012,
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2012, June 30, 2012 and September 30, 2012, under the headings
“Business,” “Risk Factors,” and “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
successfully emerge from Chapter 11 as a profitable sustainable
company; the ability of the Company and its subsidiaries to
develop, secure approval of and consummate one or more plans of
reorganization with respect to the Chapter 11 cases; the corporate
governance of the Company prior to and following emergence from
Chapter 11; the Company’s ability to improve its operating
structure, financial results and profitability; the ability of the
Company to achieve cash forecasts, financial projections, and
projected growth; our ability to raise sufficient proceeds from the
sale of businesses and non-core assets; the businesses the Company
expects to emerge from Chapter 11; the ability of the company to
discontinue certain businesses or operations; the ability of the
Company to continue as a going concern; the Company’s ability to
comply with the Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) covenants in its Debtor-in-Possession Credit
Agreement; our ability to obtain additional financing; the
potential adverse effects of the Chapter 11 proceedings on the
Company’s liquidity, results of operations, brand or business
prospects; the outcome of our intellectual property patent
litigation matters; the Company’s ability to generate or raise cash
and maintain a cash balance sufficient to comply with the minimum
liquidity covenants in its Debtor-in-Possession Credit Agreement
and to fund continued investments, capital needs, restructuring
payments and service its debt; our ability to fairly resolve legacy
liabilities; the resolution of claims against the Company; our
ability to 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; the Company’s ability to satisfy any of the
conditions to the closing of the Junior DIP Facility; the risk that
the Offer, while extended, may be terminated by the Company and not
consummated; 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 document, and are expressly qualified
in their entirety by the cautionary statements included in this
report. 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.
Eastman Kodak Company2012 Financial
ResultsNon-GAAP Reconciliation
Within the Company’s 2012 earnings release, reference is made to
the non-GAAP financial measures of commercial imaging segments’
improvement in operating loss and net loss excluding reorganization
items, net and restructuring costs.
The Company believes that these non-GAAP measures represent
important internal measures of performance. Accordingly, they are
provided to give the same financial data management uses with the
belief that this information will assist users of it in properly
assessing the underlying performance of the Company.
The following reconciliations are provided with respect to terms
used in the March 11, 2013, earnings release.
The following table reconciles the commercial imaging segments’
improvement in operating loss to the most directly comparable GAAP
measures of loss from continuing operations before interest
expense, other income (charges), net, reorganization items, net and
income taxes (amounts in millions):
2012 2011 Improvement
(decline) Commercial imaging segments operational loss,
as presented $ (244 ) $ (522 ) $ 278 Personalized and document
imaging businesses operational (loss) earnings
(56 ) 75
(131 ) Segment operating loss (300
) (447 ) 147 Restructuring costs and other (including restructuring
related expenses reported in cost of sales) (245 ) (130 ) (115 )
Corporate component of pension and OPEB expenses (1) (122 ) (28 )
(94 ) Other operating income, net
94
65 29 Loss
from continuing operations before interest expense, other income
(charges), net, reorganization items, net and income taxes (GAAP
basis), as presented
$ (573
) $ (540 )
$ (33 )
(1) Includes interest cost, expected return on plan assets,
amortization of actuarial gains and losses, and special termination
benefits, curtailments and settlement components of pension and
other post-retirement benefit expenses, except for settlements in
connection with the chapter 11 bankruptcy proceedings that are
recorded in Reorganization items, net in the Consolidated Statement
of Operations.
The following table reconciles net loss excluding reorganization
items, net and restructuring costs to the most directly comparable
GAAP measure of net loss (amounts in millions):
2012 Net loss excluding reorganization
items, net and restructuring costs, as presented $ 308
Reorganization items, net 843 Restructuring costs and other
228 Net loss (GAAP basis), as presented
$
1,379