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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 1, 2005
Eastman Kodak Company
(Exact name of registrant as specified in its charter)
New Jersey 1-87 16-0417150
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
343 State Street,
Rochester, New York 14650
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (585) 724-4000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Securities
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
On April 1, 2005, Eastman Kodak Company ("Kodak") and its subsidiary,
Kodak Graphics Holdings, Inc., completed its acquisition of Kodak
Polychrome Graphics ("KPG") through a redemption of Sun Chemical
Corporation's 50 percent interest in the joint venture.
Kodak and its affiliates purchased KPG for $817 million, of which $317
million was paid on the closing date, $200 million will be paid in
September 2006 and $50 million in each of September 2008 through 2013.
The agreement includes a non-compete covenant, pursuant to which Sun has
agreed not to engage in the lithographic plate business or the proofing
business for a period of three years following the closing date, with
certain exceptions. Sun has also agreed not to solicit, recruit or hire
any officer, director or employee of KPG for a period of two years
following the closing date, with certain exceptions.
A copy of the April 1, 2005 press release related to this action is
attached as Exhibit (99.1).
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibit
(99.1) Eastman Kodak Company press release dated April 1, 2005
regarding this action.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
EASTMAN KODAK COMPANY
By: /s/ Richard G. Brown,Jr.
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Richard G. Brown, Jr.
Controller
Date: April 4, 2005
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EASTMAN KODAK COMPANY
INDEX TO EXHIBIT
Exhibit No.
(99.1) Eastman Kodak Company press release dated April 1, 2005.
Exhibit (99.1)
EASTMAN KODAK COMPANY
Kodak Completes Acquisition of Kodak Polychrome Graphics
Kodak now offers graphic communications industry's broadest
portfolio
ROCHESTER, N.Y., - April 1 - Eastman Kodak Company (NYSE:EK)
today announced that it has completed its acquisition of Kodak
Polychrome Graphics (KPG) through redemption of Sun Chemical
Corporation's 50 percent interest in the joint venture. KPG is
now part of Kodak's Graphic Communications Group (GCG).
The acquisition further establishes Kodak as a leading
company in the graphic communications industry and complements
Kodak's existing businesses in this market.
"The addition of the people, products and distribution
capabilities of KPG makes Kodak the company to turn to for the
broadest solutions portfolio in the industry," said James
Langley, President, Graphic Communications Group, and Senior
Vice President, Eastman Kodak Company. "We are uniquely
positioned to be the preferred partner for our customers and
help them improve efficiency and expand their business
offerings."
As planned, with the completion of the KPG acquisition,
Kodak will implement a new GCG organization structure,
consisting of two operating units, a strong regional structure
and integrated sales and service forces. The GCG organization
includes the following two operating units:
- Graphic Solutions & Services (GS&S), led by Jeff Jacobson,
President, consists of the following strategic product groups
(SPGs):
- Workflow & Prepress includes computer-to-plate equipment,
workflow solutions, color, storage, professional services, inkjet
proofing and digital halftone proofing.
- Digital Printing includes Kodak's electrophotographic (EP)
and direct imaging portfolio, professional services, device
controls and publishing services.
- Consumables includes printing plates, film, flexographic
plates and digital halftone media.
Once Kodak's planned acquisition of Creo, Inc., which was
announced on January 31, 2005, is completed, Kodak intends to
include Creo's operations in the GS&S portfolio.
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As President of GS&S, Jacobson is responsible for R&D,
commercialization, manufacturing, product marketing and
administrative functions, including finance, information
technology and human resources.
Jacobson also will serve as the Graphic Communications
Group's Chief Operating Officer, with responsibility for key
strategic functions, including global services and global
customer operations that will support the regions (Americas,
EAMER, Greater Asia and Japan) and their integrated sales
forces.
- Transaction & Industrial Solutions (T&IS), led by Nachum
"Homi" Shamir, President, consists of the following strategic
product groups:
- Continuous inkjet (CIJ) includes Kodak's high-speed, high-
volume CIJ portfolio.
- Industrial inkjet includes CIJ technology and drop-on-demand
inkjet solutions designed for industrial and packaging
applications.
- Wide-format inkjet includes wide-format printers, inks and
media.
- Document scanners includes Kodak's market-leading document
scanning technology.
- Business process services operations.
Shamir is responsible for the R&D, manufacturing and
commercialization of advanced inkjet and scanning technologies
for GCG, and administrative functions, including finance,
information technology and human resources for T&IS; he also
manages product and sales specialists within the regions for
the T&IS portfolio.
Key Functional Units
Functional units within GCG will operate as shared service
organizations. These functional units report to Langley and
include: Chief Technology Office, Finance, Human Resources,
Marketing, Operations, Special Projects and Strategy &
Business Planning.
"Kodak has assembled the right businesses, technologies and
people to enable customers to become leaders in the
transformation of the industry," said Langley. "We are
committed to a seamless transition and to providing
uninterrupted customer service throughout the integration
process."
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Kodak purchased KPG for $817 million, with $317 million paid
in cash at closing; $200 million in cash in the third quarter
2006 and $50 million in cash annually from 2008 through 2013.
Kodak will fund the transaction through internally generated
cash flow.
KPG revenues for 2004 were approximately $1.7 billion. Kodak
expects this transaction to add approximately $1.1 billion to
Kodak's revenue in 2005, reflecting approximately nine months
of Kodak ownership, and the elimination of inter-company sales
from Kodak to KPG. In 2006, Kodak expects approximately $1.4
billion of incremental revenue, reflecting a full year of
ownership and the elimination of inter-company sales.
Kodak also expects the transaction will add approximately
eight cents to the company's 2005 operational earnings and
approximately 14 cents to its 2006 operational earnings. These
figures are included in Kodak's stated goal of achieving
operational earnings of $3 per share in 2006. On a Generally
Accepted Accounting Principles (GAAP) basis, Kodak expects the
transaction will add approximately five cents to the company's
2005 EPS and approximately 14 cents to its 2006 EPS.
About Eastman Kodak Company
Kodak is the leader in helping people take, share, print
and view images - for memories, for information, for
entertainment, for business. With sales of $13.5 billion in
2004, the company is committed to a digitally oriented growth
strategy focused on the following businesses: Health -
supplying the industry with traditional and digital imaging
information products and services, as well as healthcare IT
solutions and services; Graphic Communications - offering
contract, monitor and remote proofing solutions; on-demand
color and monochrome printing systems; a leading computer-to-
plate portfolio; wide-format inkjet printing and proofing;
high-speed, high-volume continuous inkjet printing; leading
color management products; and document scanning, archiving
and multi-vendor IT services; Digital & Film Imaging Systems -
providing consumers, professionals and cinematographers with
digital and traditional products and services; and Display &
Components - which designs and manufactures state-of-the-art
organic light-emitting diode displays as well as other
specialty materials, and delivers imaging sensors to original
equipment manufacturers. More information about Kodak (NYSE:
EK) is available at www.kodak.com.
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2005
Certain statements in this press release 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 KPG's projected revenues
and the impact on Kodak's revenues and earnings and Kodak's
cash generation plans are forward looking statements.
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Actual results may differ materially from those expressed or
implied in forward-looking statements. In addition, any
forward-looking statements represent our estimates only as of
the date they are made, and should not be relied upon as
representing Kodak's estimates as of any subsequent date.
While Kodak may elect to update forward-looking statements at
some point in the future, it specifically disclaims any
obligation to do so, even if its estimates change.
Kodak's results may be adversely affected if it is unable to
realize the expected benefits of the acquisition of KPG,
including because of:
- Difficulty in combining the operations of KPG with those of
Kodak, resulting in failure to achieve the projected cost
savings, synergies, efficiencies and revenue growth; and
- Any loss of employees, customers or suppliers that KPG or
Kodak may suffer as a result of the acquisition.
The forward-looking statements contained in this news
release are subject to a number of factors and uncertainties,
including Kodak's successful:
- Implementation of its digitally oriented growth strategy;
- Implementation of product strategies (including category
expansion, digitization, organic light emitting diode (OLED)
displays, and digital products);
- Implementation of intellectual property licensing
strategies;
- Development and implementation of e-commerce strategies;
- Completion of information systems upgrades, including SAP,
our enterprise system software;
- Integration of newly acquired businesses;
- Completion of various portfolio actions;
- Transition from analog to digital imaging;
- Implementation of our three-year cost reduction program;
- Reduction of inventories;
- Implementation of its debt management program;
- Improvement in manufacturing productivity and techniques;
- Improvement in receivables performance;
- Reduction in capital expenditures;
- Improvement in supply chain efficiency;
- Implementation of future focused cost reductions, including
personnel reductions; and
- Development of its business in emerging markets like China,
India, Brazil, Mexico and Russia;
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Forward-looking statements contained in this new release are
subject to the following additional Kodak risk factors and
uncertainties:
- Inherent unpredictability of currency fluctuations and raw
material costs;
- Competitive actions, including pricing;
- The nature and pace of technology evolution, including the
analog-to-digital transition;
- Continuing customer consolidation and buying power;
- Current and future proposed changes to tax laws, as well as
other factors which could adversely impact Kodak's effective tax
rate in the future;
- General economic, business, geopolitical, regulatory and
public health conditions;
- Market growth predictions; and
- Other factors and uncertainties disclosed from time to time
in Kodak's filings with the Securities and Exchange Commission.
- The results of Kodak's ongoing investigation regarding the
income tax accounting errors recently announced.
Any forward-looking statements in this press release should
be evaluated in light of these important factors and
uncertainties.