Kodak 2006 Annual Report Download - page 60

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During the year ended December 31, 2005, the Company expended $508 million against the related restructuring reserves, primarily for the payment
of severance benefits. Employees whose positions were eliminated could elect to receive their severance payments over a period not to exceed two
years following their date of termination.
The Company has a dividend policy whereby it makes semi-annual payments of dividends, when declared, on the Company’s 10th business day each
July and December to shareholders of record on the close of the first business day of the preceding month. On May 11, 2005, the Board of Directors
declared a semi-annual cash dividend of $.25 per share payable to shareholders of record at the close of business on June 1, 2005. This dividend was
paid on July 15, 2005. On October 18, 2005, the Board of Directors declared a semi-annual cash dividend of $.25 per share payable to shareholders
of record at the close of business on November 1, 2005. This dividend was paid on December 14, 2005. The total dividends paid for the year ended
December 31, 2005 was $144 million.
2004
The Company’s cash and cash equivalents increased $5 million, from $1,250 million at December 31, 2003 to $1,255 million at December 31, 2004.
The increase resulted primarily from $1,168 million of net cash provided by operating activities. This was offset by $1,066 million of net cash used in
financing activities, and $120 million of net cash used in investing activities.
The net cash provided by operating activities of $1,168 million was mainly attributable to the Company’s net earnings for the year ended December 31,
2004, as adjusted for the earnings from discontinued operations, equity in earnings from unconsolidated affiliates, depreciation, purchased research
and development, restructuring costs, asset impairments and other non-cash charges, a benefit from deferred taxes, and a gain on sales of busi-
nesses/assets. This source of cash was partially offset by $481 million of restructuring payments and an increase in receivables of $43 million. The
increase in receivables is primarily attributable to increased sales of digital products. The net cash used in investing activities from continuing opera-
tions of $828 million was utilized primarily for capital expenditures of $460 million and business acquisitions of $369 million. The net cash used in
financing activities of $1,066 million was the result of net reduction of debt of $928 million as well as dividend payments for the year ended December
31, 2004.
Capital additions were $460 million in the year ended December 31, 2004, with the majority of the spending supporting new products, manufacturing
productivity and quality improvements, infrastructure improvements, and ongoing environmental and safety initiatives.
During the year ended December 31, 2004, the Company expended $481 million against the related restructuring reserves, primarily for the payment
of severance benefits. Employees whose positions were eliminated could elect to receive their severance benefits over a period not to exceed two
years following their date of termination.
The Company has a dividend policy whereby it makes semi-annual payments which, when declared, will be paid on the Company’s 10th business
day each July and December to shareholders of record on the close of the first business day of the preceding month. On May 12, 2004, the Board of
Directors declared a dividend of $.25 per share payable to shareholders of record at the close of business on June 1, 2004. This dividend was paid
on July 15, 2004. On October 19, 2004, the Board of Directors declared a dividend of $.25 per share payable to shareholders of record at the close of
business on November 1, 2004. This dividend was paid on December 14, 2004.
Other
Refer to Note 11, “Commitments and Contingencies” of the Notes to Financial Statements for discussion regarding the Company’s undiscounted
liabilities for environmental remediation costs relative to December 31, 2006.
New Accounting Pronouncements
FASB Staff Position No. 151
In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 151, “Inventory
Costs” that amends the guidance in Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing” (ARB No. 43) to clarify the accounting for
abnormal idle facility expense, freight, handling costs, and wasted material (spoilage). In addition, this Statement requires that an allocation of fixed
production overhead to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory
costs incurred for fiscal years beginning after June 15, 2005 (year ending December 31, 2006 for the Company). The adoption of SFAS No. 151 in
2006 did not have a material impact on the Consolidated Financial Statements of the Company.
FASB Interpretation No. 47
In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (FIN 47). FIN 47 clarifies that
the term “conditional asset retirement obligation” as used in FASB No. 143, “Accounting for Asset Retirement Obligations,” refers to a legal obliga-
tion to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be
within the control of the Company. In addition, FIN 47 clarifies when a company would have sufficient information to reasonably estimate the fair value
of an asset retirement obligation.