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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 31, 2005
Eastman Kodak Company
(Exact name of registrant as specified in charter)
New Jersey 1-87 16-0417150
- --------------------------------------------------------------------------------
(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
-------------
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 Exchange 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))
Item 2.02. Results of Operations and Financial Condition
- ---------------------------------------------------------
On May 31, 2005, Eastman Kodak Company issued a press release announcing the
filing of revised quarterly reports for 2004. A copy of the press release is
attached as Exhibit 99.1 to this report.
Within the Company's press release, the Company presents certain non-GAAP
financial measures including "Operational net earnings," "Earnings on an
operational basis," "Earnings from continuing operations, excluding
non-operational items" (and the line items comprising earnings from continuing
operations on an operational basis), which have a directly comparable GAAP
financial measure. The Company believes that these measures represent important
internal measures of performance. Accordingly, where these non-GAAP measures are
provided, it is done so that investors have the same financial data that
management uses with the belief that it will assist the investment community in
properly assessing the underlying performance of the Company on a year-over-year
and quarter-sequential basis. Whenever such information is presented, the
Company has complied with the provisions of the rules under Regulation G and
Item 2.02 of Form 8-K. The specific reasons, in addition to the reasons
described above, why the Company's management believes that the presentation of
the non-GAAP financial measures provides useful information to investors
regarding Kodak's results of operations are as follows:
Earnings from continuing operations, excluding non-operational items - The
Company's management believes that presenting earnings from continuing
operations, excluding non-operational items/focused cost reductions, is an
important additional measure of performance that can be used for comparing
results between reporting periods. These operating measures represent the
principle internal measures of performance, and form the basis of internal
management performance expectations and incentive compensation.
Item 9.01. Financial Statements and Exhibits
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(c) Exhibits
--------
Exhibit 99.1 Press release issued May 31, 2005 Furnished with
regarding revised quarterly financial this document
reports for 2004
SIGNATURES
----------
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.
-----------------------------
Name: Richard G. Brown, Jr.
Title: Controller
Date: May 31, 2005
EXHIBIT INDEX
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Exhibit No. Description
- ---------- ------------
99.1 Press release issued May 31, 2005 regarding revised quarterly
financial reports for 2004.
Exhibit 99.1
Kodak Files Amended Form 10-Qs for 2004;
Filings are in Conjunction with the Company's Previously-Concluded Restatement
ROCHESTER, N.Y.--(BUSINESS WIRE)--May 31, 2005--Eastman Kodak Company
(NYSE:EK) today filed revised quarterly reports for 2004 on Form 10-Q/A with the
U.S. Securities and Exchange Commission. These filings are in connection with
the company's previously announced restatement of quarterly consolidated
financial statements for each of the quarterly periods in 2003 and for the first
three quarters of 2004.
The following tables, one for each quarter as well as full year, provide
P&L detail on a Generally Accepted Accounting Principles (GAAP) and Operational
basis.
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
1Q 04 as Excluded 1Q 04
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $2,920 $2,920
COGS 2,113 (24) A 2,089
------------ ---------- ------------
Gross Profit 807 24 831
SG&A 549 0 549
R&D 197 (9) B 188
Restructuring costs and other 54 (54) C 0
------------ ---------- ------------
Earnings From Operations 7 87 94
Interest Expense 44 44
Other Inc./(Charges) (2) - -2
------------ ------------
Below EFO -46 - -46
(Loss)/Earnings before Taxes (39) 87 48
Tax (Benefit) Provision (47) 25 D (22)
------------ ---------- ------------
Earnings: Cont. Ops. 8 62 70
Earnings: Disc. Ops. 13 (13) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $21 $49 $70
Diluted EPS: Cont. Ops. 0.03 $0.21 0.24
Total Diluted EPS 0.07
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
1Q 03 as Excluded 1Q 03
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $2,639 $2,639
COGS 1,839 (14) E 1,825
------------ ---------- ------------
Gross Profit 800 14 814
SG&A 559 (12) F 547
R&D 192 (21) G 171
Restructuring costs and other 35 (35) H 0
------------ ---------- ------------
Earnings From Operations 14 82 96
Interest Expense 37 37
Other Inc./(Charges) (21) - -21
------------ ------------
Below EFO -58 -58
(Loss)/Earnings before Taxes (44) 82 38
Tax (Benefit) Provision (26) 35 I 9
------------ ---------- ------------
Earnings: Cont. Ops. -18 47 29
Earnings: Disc. Ops. 23 (23) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $5 $24 $29
Diluted EPS: Cont. Ops. -0.06 $0.16 0.10
Total Diluted EPS 0.02
- ----------------------------------------------------------------------
Items excluded from Earnings on an operational basis:
A - Charges for accelerated depreciation and inventory writedowns of
$22 million and $2 million, respectively, in connection with the
focused cost reduction actions.
B - Charge for in-process research and development of $9 million in
connection with the acquisition of Scitex Digital Printing
(renamed Kodak Versamark).
C - Charges for focused cost reduction actions of $54 million.
D - Tax impacts of the above-mentioned excluded items.
E - Charges for accelerated depreciation in connection with the
focused cost reduction actions.
F - Charge in connection with an intellectual property settlement of
$12 million.
G - Charge for in-process research and development of $21 million in
connection with the acquisition of technology.
H - Charges for focused cost reduction actions of $35 million.
I - Tax impacts of the above-mentioned excluded items.
- ----------------------------------------------------------------------
As Percent of 1Q 04 as 1Q 04 1Q 03 as 1Q 03
Sales: Reported Operational Reported Operational
------------ ------------ ------------ ------------
(Restated) (Restated) (Restated) (Restated)
Gross Profit 27.6% 28.5% 30.3% 30.8%
SG&A 18.8% 18.8% 21.2% 20.7%
SG&A w/o
Advertising 16.1% 16.1% 17.2% 16.8%
R&D 6.7% 6.4% 7.3% 6.5%
EFO 0.2% 3.2% 0.5% 3.6%
Net Earnings -
Cont. Ops 0.3% 2.4% -0.7% 1.1%
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
2Q 04 as Excluded 2Q 04
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $3,464 $3,464
COGS 2,363 (34) A 2,329
------------ ---------- ------------
Gross Profit 1,101 34 1,135
SG&A 615 0 615
R&D 213 0 213
Restructuring costs and other 134 (134) B 0
------------ ---------- ------------
Earnings From Operations 139 168 307
Interest Expense 43 43
Other Inc./(Charges) 8 - 8
------------ ------------
Below EFO -35 - -35
(Loss)/Earnings before Taxes 104 168 272
Tax (Benefit) Provision (15) 60 C 45
------------ ---------- ------------
Earnings: Cont. Ops. 119 108 227
Earnings: Disc. Ops. 17 (17) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $136 $91 $227
Diluted EPS: Cont. Ops. 0.42 $0.37 0.79
Total Diluted EPS 0.48
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
2Q 03 as Excluded 2Q 03
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $3,258 $3,258
COGS 2,164 (10) D 2,154
------------ ---------- ------------
Gross Profit 1,094 10 1,104
SG&A 708 (37) E 671
R&D 177 0 177
Restructuring costs and other 41 (41) F 0
------------ ---------- ------------
Earnings From Operations 168 88 256
Interest Expense 34 34
Other Inc./(Charges) (9) - -9
------------ ------------
Below EFO -43 -43
(Loss)/Earnings before Taxes 125 88 213
Tax (Benefit) Provision 11 31 G 42
------------ ---------- ------------
Earnings: Cont. Ops. 114 57 171
Earnings: Disc. Ops. 4 (4) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $118 $53 $171
Diluted EPS: Cont. Ops. 0.40 $0.20 0.60
Total Diluted EPS 0.41
- ----------------------------------------------------------------------
Items excluded from Earnings on an operational basis:
A - Charges for (1) accelerated depreciation and inventory writedowns
in connection with the focused cost reduction actions of $30
million and $2 million, respectively, and (2) inventory writedowns
of $2 million in connection with the acquisition of the NexPress-
related entities.
B - Charges for (1) focused cost reduction actions of $131 million and
(2) the writeoff of fixed assets of $3 million relating to Kodak's
historical ownership interest in the NexPress joint venture that
will be disposed of in connection with the acquisition of the
NexPress- related entities.
C - Tax impacts of the above-mentioned excluded items.
D - Charges for accelerated depreciation and inventory writedowns of
$7 million and $3 million, respectively, in connection with the
focused cost reduction actions.
E - Charges for the Burrell Companies' net assets held for sale
impairment of $9 million, patent infringement claim settlement of
$14 million, and prior year acquisition settlement of $14 million.
F - Charges for focused cost reduction actions of $41 million.
G - Tax impacts of the above-mentioned excluded items.
- ----------------------------------------------------------------------
As Percent of 2Q 04 as 2Q 04 2Q 03 as 2Q 03
Sales: Reported Operational Reported Operational
------------ ------------ ------------ ------------
(Restated) (Restated) (Restated) (Restated)
Gross Profit 31.8% 32.8% 33.6% 33.9%
SG&A 17.8% 17.8% 21.7% 20.6%
SG&A w/o
Advertising 13.9% 13.9% 16.4% 15.3%
R&D 6.1% 6.1% 5.4% 5.4%
EFO 4.0% 8.9% 5.2% 7.9%
Net Earnings -
Cont. Ops 3.4% 6.6% 3.5% 5.2%
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
3Q 04 as Excluded 3Q 04
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $3,374 $3,374
COGS 2,296 (37) A 2,259
------------ ---------- ------------
Gross Profit 1,078 37 1,115
SG&A 629 0 629
R&D 219 (6) B 213
Restructuring costs and other 227 (227) C 0
------------ ---------- ------------
Earnings From Operations 3 270 273
Interest Expense 43 43
Other Inc./(Charges) 24 - 24
------------ ------------
Below EFO -19 - -19
(Loss)/Earnings before Taxes (16) 270 254
Tax (Benefit) Provision (28) 64 D 36
------------ ---------- ------------
Earnings: Cont. Ops. 12 206 218
Earnings: Disc. Ops. 446 (446) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $458 ($240) $218
Diluted EPS: Cont. Ops. 0.04 $0.72 0.76
Total Diluted EPS 1.60
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
3Q 03 as Excluded 3Q 03
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $3,367 $3,367
COGS 2,239 (33) E 2,206
------------ ---------- ------------
Gross Profit 1,128 33 1,161
SG&A 628 (8) F 620
R&D 190 0 190
Restructuring costs and other 152 (152) G 0
------------ ---------- ------------
Earnings From Operations 158 193 351
Interest Expense 33 33
Other Inc./(Charges) (9) - -9
------------ ------------
Below EFO -42 -42
(Loss)/Earnings before Taxes 116 193 309
Tax (Benefit) Provision (23) 67 H 44
------------ ---------- ------------
Earnings: Cont. Ops. 139 126 265
Earnings: Disc. Ops. 7 (7) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $146 $119 $265
Diluted EPS: Cont. Ops. 0.48 $0.45 0.93
Total Diluted EPS 0.51
- ----------------------------------------------------------------------
Items excluded from Earnings on an operational basis:
A - Charges for accelerated depreciation and inventory writedowns of
$34 million and $3 million, respectively, in connection with the
focused cost reduction actions.
B - Charge for in-process research and development of $6 million.
C - Charges for focused cost reduction actions of $227 million.
D - Tax impacts of the above-mentioned excluded items.
E - Charges for accelerated depreciation of $33 million in connection
with the focused cost reduction actions.
F - Charge for charitable contributions to Infotonics.
G - Charges for focused cost reduction actions of $152 million.
H - Tax impacts of the above-mentioned excluded items.
- ----------------------------------------------------------------------
As Percent of 3Q 04 as 3Q 04 3Q 03 as 3Q 03
Sales: Reported Operational Reported Operational
------------ ------------ ------------ ------------
(Restated) (Restated) (Restated) (Restated)
Gross Profit 32.0% 33.0% 33.5% 34.5%
SG&A 18.6% 18.6% 18.7% 18.4%
SG&A w/o
Advertising 14.5% 14.5% 14.2% 14.0%
R&D 6.5% 6.3% 5.6% 5.6%
EFO 0.1% 8.1% 4.7% 10.4%
Net Earnings -
Cont. Ops 0.4% 6.5% 4.1% 7.9%
- -------------------------------------------- -------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
4Q 04 as Excluded 4Q 04
Reported Items Operational
------------ ---------- ------------
Sales $3,759 $3,759
COGS 2,776 (111) A 2,665
------------ ---------- ------------
Gross Profit 983 111 1,094
SG&A 714 (6) B 708
R&D 225 0 225
Restructuring costs and other 280 (280) C 0
------------ ---------- ------------
Earnings From Operations -236 397 161
Interest Expense 38 38
Other Inc./(Charges) 131 (101) D 30
------------ ------------
Below EFO 93 - -8
(Loss)/Earnings before Taxes (143) 296 153
Tax (Benefit) Provision (85) 63 E (22)
------------ ---------- ------------
Earnings: Cont. Ops. -58 233 175
Earnings: Disc. Ops. -1 1 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings ($59) $234 $175
Diluted EPS: Cont. Ops. -0.20 $0.78 0.58
Total Diluted EPS -0.20
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
4Q 03 as Excluded 4Q 03
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $3,645 $3,645
COGS 2,492 (16) F 2,476
------------ ---------- ------------
Gross Profit 1,153 16 1,169
SG&A 723 (2) G 721
R&D 217 (10) H 207
Restructuring costs and other 251 (251) I 0
------------ ---------- ------------
Earnings From Operations -38 279 241
Interest Expense 43 43
Other Inc./(Charges) (12) 4 J -8
------------ ------------
Below EFO -55 -51
(Loss)/Earnings before Taxes (93) 283 190
Tax (Benefit) Provision (47) 71 K 24
------------ ---------- ------------
Earnings: Cont. Ops. -46 212 166
Earnings: Disc. Ops. 30 (30) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings ($16) $182 $166
Diluted EPS: Cont. Ops. -0.16 $0.72 0.56
Total Diluted EPS -0.06
- ----------------------------------------------------------------------
Items excluded from Earnings on an operational basis:
A - Charges for accelerated depreciation and inventory writedowns in
connection with the focused cost reduction actions of $97 million
and $14 million, respectively.
B - Charge for an unfavorable legal settlement of $6 million.
C - Charges for (1) focused cost reduction actions of $273 million and
(2) the writeoff of fixed assets of $7 million relating to Kodak's
historical ownership interest in the NexPress joint venture.
D - Exclusion of favorable legal settlements of $101 million.
E - Tax impacts of the above-mentioned excluded items.
F - Charges for accelerated depreciation and inventory writedowns in
connection with the focused cost reduction actions of $15 million
and $1 million, respectively.
G - Charges for legal settlements of $8 million and strategic asset
writedowns of $3 million partially offset by the reversal of an
environmental reserve of $9 million.
H - Charge for in-process research and development of $10 million in
connection with the acquisition of PracticeWorks, Inc.
I - Charges for focused cost reduction actions of $251 million.
J - Charge for non-strategic venture asset write-downs of $4 million.
K - Tax impacts of the above-mentioned excluded items.
As Percent of 4Q 04 as 4Q 04 4Q 03 as 4Q 03
Sales: Reported Operational Reported Operational
------------ ------------ ------------ ------------
(Restated) (Restated)
Gross Profit 26.2% 29.1% 31.6% 32.1%
SG&A 19.0% 18.8% 19.8% 19.8%
SG&A w/o
Advertising 14.8% 14.6% 15.2% 15.2%
R&D 6.0% 6.0% 6.0% 5.7%
EFO -6.3% 4.3% -1.0% 6.6%
Net Earnings -
Cont. Ops -1.5% 4.7% -1.3% 4.6%
- -------------------------------------------- -------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
FY 04 as Excluded FY 04
Reported Items Operational
------------ ---------- ------------
Sales $13,517 $13,517
COGS 9,548 (206) A 9,342
------------ ---------- ------------
Gross Profit 3,969 206 4,175
SG&A 2,507 (6) B 2,501
R&D 854 (15) C 839
Restructuring costs and other 695 (695) D 0
------------ ---------- ------------
Earnings From Operations -87 922 835
Interest Expense 168 168
Other Inc./(Charges) 161 (101) E 60
------------ ------------
Below EFO -7 -108
(Loss)/Earnings before Taxes (94) 821 727
Tax (Benefit) Provision (175) 212 F 37
------------ ---------- ------------
Earnings: Cont. Ops. 81 609 690
Earnings: Disc. Ops. 475 (475) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $556 $134 $690
Diluted EPS: Cont. Ops. 0.28 $2.02 2.30
Total Diluted EPS 1.94
- ----------------------------------------------------------------------
Year-over-Year Comparison of Reported and Operational Earnings
(Amounts in millions of dollars)
- ----------------------------------------------------------------------
FY 03 as Excluded FY 03
Reported Items Operational
------------ ---------- ------------
(Restated) (Restated)
------------ ------------
Sales $12,909 $12,909
COGS 8,734 (73) G 8,661
------------ ---------- ------------
Gross Profit 4,175 73 4,248
SG&A 2,618 (59) H 2,559
R&D 776 (31) I 745
Restructuring costs and other 479 (479) J 0
------------ ---------- ------------
Earnings From Operations 302 642 944
Interest Expense 147 147
Other Inc./(Charges) (51) 4 K (47)
------------ ------------
Below EFO -198 -194
(Loss)/Earnings before Taxes 104 646 750
Tax (Benefit) Provision (85) 204 L 119
------------ ---------- ------------
Earnings: Cont. Ops. 189 442 631
Earnings: Disc. Ops. 64 (64) 0
------------ ---------- ------------
------------ ---------- ------------
Net Earnings $253 $378 $631
Diluted EPS: Cont. Ops. 0.66 $1.52 2.18
Total Diluted EPS 0.88
- ----------------------------------------------------------------------
Items excluded from Earnings on an operational basis:
A - Charges for (1) accelerated depreciation and inventory writedowns
in connection with the focused cost reduction actions of $183
million and $21 million, respectively and (2) inventory writedowns
of $2 million in connection with the acquisition of the NexPress-
related entities.
B - Charge for an unfavorable legal settlement of $6 million.
C - Charge for in-process research and development of $15 million.
D - Charges for (1) focused cost reduction actions of $685 million and
(2) the writeoff of fixed assets of $10 million relating to
Kodak's historical ownership interest in the NexPress joint
venture.
E - Exclusion of favorable legal settlements of $101 million.
F - Tax impacts of the above-mentioned excluded items.
G - Charges for accelerated depreciation and inventory writedowns in
connection with the focused cost reduction actions of $69 million
and $4 million, respectively.
H - Charges for legal settlements of $48 million, strategic asset
writedowns of $3 million, charitable contribution to Infotonics of
$8 million, and Burrell Companies' net assets held for sale
impairment of $9 million partially offset by the reversal of an
environmental reserve of $9 million.
I - Charge for in-process research and development of $10 million in
connection with the acquisition of PracticeWorks, Inc. and $21
million in connection with the acquisition of technology.
J - Charges for focused cost reduction actions of $479 million.
K - Charge for non-strategic venture asset write-downs of $4 million.
L - Tax impacts of the above-mentioned excluded items.
As Percent of FY 04 as FY 04 FY 03 as FY 03
Sales: Reported Operational Reported Operational
------------ ------------ ------------ ------------
(Restated) (Restated)
Gross Profit 29.4% 30.9% 32.3% 32.9%
SG&A 18.5% 18.5% 20.3% 19.8%
SG&A w/o
Advertising 14.8% 14.7% 15.7% 15.2%
R&D 6.3% 6.2% 6.0% 5.8%
EFO -0.6% 6.2% 2.3% 7.3%
Net Earnings -
Cont. Ops 0.6% 5.1% 1.5% 4.9%
- -------------------------------------------- -------------------------
Editor's Note: For additional information about Kodak, visit our web site
at www.kodak.com
CONTACT: Eastman Kodak Company
Media:
David Lanzillo, 585-781-5481
david.lanzillo@kodak.com
or
Gerard Meuchner, 585-724-4513
gerard.meuchner@kodak.com
or
Investor Relations:
Don Flick, 585-724-4352
donald.flick@kodak.com
or
Patty Yahn-Urlaub, 585-724-4683
patty.yahn-urlaub@kodak.com
or
Carol Wilke, 585-724-6791
carol.wilke@kodak.com