Kodak 2006 Annual Report Download - page 63

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SAB No. 108
In September 2006, the SEC staff issued Staff Accounting Bulletin (SAB) No. 108, “Considering the Effects of Prior Year Misstatements when Quan-
tifying Misstatements in Current Year Financial Statements.” SAB No. 108 was issued in order to eliminate the diversity of practice surrounding how
public companies quantify financial statement misstatements. This SAB establishes a “dual approach” methodology that requires quantification of
financial statement misstatements based on the effects of the misstatements on each of the company’s financial statements (both the statement of
operations and statement of financial position). The SEC has stated that SAB No. 108 should be applied no later than the annual financial statements
for the first fiscal year ending after November 15, 2006, with earlier application encouraged. SAB No. 108 permits a company to elect either retrospec-
tive or prospective application. The Company’s prospective application requires recording a cumulative effect adjustment in the period of adoption, as
well as detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it
arose. The Company’s application of SAB No. 108 in the fourth quarter of 2006 did not have any impact on its Consolidated Financial Statements.
FASB Statement No. 159
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which permits entities to
choose to measure, on an item-by-item basis, specified financial instruments and certain other items at fair value. Unrealized gains and losses on
items for which the fair value option has been elected are required to be reported in earnings at each reporting date. SFAS No. 159 is effective for fis-
cal years beginning after November 15, 2007. The provisions of this statement are required to be applied prospectively. The Company expects to adopt
SFAS No. 159 in the first quarter of 2008.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this report may be forward-looking in nature, or “forward-looking statements” as defined in the United States Private Securities
Litigation Reform Act of 1995. For example, references to expectations for the Company’s growth, new products and product line extensions, seasonal
trends, expected costs for environmental compliance, opportunities for monetization of intellectual property, payments associated with guarantees,
stability of the motion picture film market, cash, cash flow, restructuring plans and charges, accelerated depreciation, cost savings from restructuring,
reduction of SG&A, employment reductions, pension contributions, target cost model and closing of the sale of the Health Group are forward-looking
statements.
Actual results may differ from those expressed or implied in forward-looking statements. In addition, any forward-looking statements represent the
Company’s estimates only as of the date they are made, and should not be relied upon as representing the Company’s estimates as of any subsequent
date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obliga-
tion to do so, even if its estimates change. The forward-looking statements contained in this report are subject to a number of factors and uncertain-
ties, including the successful:
• execution of the digital growth and profitability strategies, business model and cash plan;
• implementation of the cost reduction programs;
• transition of certain financial processes and administrative functions to a global shared services model and the outsourcing of certain func-
tions to third parties;
• implementation of, and performance under, the debt management program, including compliance with the Company’s debt covenants;
• development and implementation of product go-to-market and e-commerce strategies;
• protection, enforcement and defense of the Company’s intellectual property, including defense of our products against the intellectual property
challenges of others;
• implementation of intellectual property licensing and other strategies;
• completion of information systems upgrades, including SAP, the Company’s enterprise system software;
• completion of various portfolio actions;
• reduction of inventories;
• integration of acquired businesses;
• improvement in manufacturing productivity and techniques;
• improvement in receivables performance;
• improvement in supply chain efficiency; and
• implementation of the strategies designed to address the decline in the Company’s traditional businesses.