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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): March 28, 2006
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 2.05 Costs Associated with Exit or Disposal Activities
On March 28, 2006, Eastman Kodak Company committed to consolidating and
reducing capacity at its manufacturing operations in Chalon-sur-Saone,
France. Kodak will stop x-ray film coating operations at the site, and
associated production of film base. The operations will be transferred
to other Kodak plants with available capacity.
In conjunction with these actions, the Company will incur restructuring-
related charges of approximately $85 million. Included in these charges
are employee termination benefits of approximately $41 million,
accelerated depreciation on plant equipment and inventory write-offs of
approximately $37 million, and other exit costs of approximately $7
million. In addition, the Company will record approximately $1 million
in operational charges related to executing this action. The severance,
other exit costs, and the operational charges require the outlay of
cash, while the accelerated depreciation and inventory write-offs
represent non-cash charges. The estimated restructuring related charges
exclude the potential impacts from any pension plan settlement or
curtailment gains or losses that may be incurred, as these amounts are
not currently determinable. These actions are expected to be complete
by March 31, 2007.
This action is a part of the Company's restructuring program that was
originally announced on January 22, 2004 and subsequently expanded on
July 20, 2005. The Company expects that it will continue to consolidate
its worldwide operations in order to eliminate excess capacity.
A copy of the March 29, 2006 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 March 29, 2006
regarding consolidation and capacity reduction actions in
Chalon-sur-Saone, France.
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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: March 29, 2006
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EASTMAN KODAK COMPANY
INDEX TO EXHIBITS
Exhibit No.
(99.1) Eastman Kodak Company press release dated March 29, 2006
regarding consolidation and capacity reduction actions in
Chalon-sur-Saone, France.
Exhibit (99.1)
EASTMAN KODAK COMPANY
Media Contact:
Christopher K. Veronda
585-724-2622
christopher.veronda@kodak.com
Cutbacks part of company's worldwide consolidations
X-RAY COATING OPERATIONS TO CLOSE
AT KODAK INDUSTRIE CHALON PLANT
Chalon-sur-Saone, France, March 29 - Eastman Kodak
Company continues to implement a digital growth strategy
that includes managing the decline of the traditional
photographic business and building a highly competitive
digital business model in consumer, commercial, and health
businesses.
This ongoing strategy reflects the structural and
fundamental changes occurring worldwide in the imaging
industry as digital technology becomes more popular in most
industry segments, especially in developing countries.
In its latest action responding to the overall decline
in traditional film imaging, Kodak will continue to
progressively withdraw manufacturing activities from the
Chalon site by a job reduction program as announced today to
the Chalon Works Council.
Kodak will stop x-ray film coating operations at the
site, and associated production of film base. The closure
will be completed in the coming months, and the operations
will be transferred to other Kodak plants with available
capacity. X-ray product finishing, packaging, technical
customer support, and distribution will continue at Chalon.
"Customers can rely on the same high-quality x-ray film
products they have always received from Kodak," said J.P.
Martel, president of Kodak Industrie.
Martel also noted that Kodak is continuing efforts to
develop an industrial park at the Chalon site, helping
secure continued employment for a significant number of
people through divestitures and by attracting new businesses
to the site.
"We continue to work in close collaboration with the
government authorities to develop an attractive industrial
park and recruit a wide variety of companies. Some are
already in place at the site, and a number of others have
expressed strong interest," he said.
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Recently, Champion Chemtech Limited purchased the
photochemicals manufacturing operation at the site and has
retained the 104 employees who operate the facility. This
follows previous divestiture announcements, including one
for analytical services involving Intertek and another for
molding operations involving Tournaire. Other actions
involving the utilities and logistics operations are
underway and should be completed soon. These and other
divestiture activities are expected to bring the total
number of jobs preserved by the program to more than 500.
At the same time, today's announced production cutbacks
and related actions will affect approximately 330 jobs.
"In order to remain competitive in light of the
changing realities in the imaging industry, Kodak is now
more than halfway through the necessary steps to align
production capacity with demand and to consolidate functions
around the world, while accelerating its digital imaging
strategy," said Daniel T. Meek, director of Global
Manufacturing & Logistics for Kodak. "Our goal is to
balance our capacity with anticipated demand for traditional
products on an on-going basis."
The decline in traditional imaging, especially in the
consumer segment, has impacted all companies serving this
industry, as reflected by recent announcements by other
companies, including two that are exiting the photo
business.
Kodak Industrie said it will fulfill its contractual
commitments to employees and implement a severance program.
This program could include a voluntary retirement and
separation program, other opportunities for employee
relocation within the industrial park and assistance for
employees seeking new jobs. The company said that all
employees would be treated fairly and with respect.
Kodak is committed to strengthening its leading
position in all segments of the worldwide imaging market by
continuing to offer a full array of high-quality products
and reliable services in the traditional and digital imaging
markets. The company will also continue to maintain a
significant presence to serve customers in France, an
important market.
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Although Kodak's traditional businesses are in decline,
its digital imaging strategy is proving successful as the
company transforms itself. For example:
- Kodak has installed nearly 75,000 picture kiosks
worldwide to make it easy for consumers to print
digital pictures.
- The company has the number 3 position in digital
camera sales worldwide, and has taken the lead
position in several major markets.
- In addition, Kodak continues to hold the number 1
position in medical x-ray film worldwide, and it is
a world leader in the growing market for digital
medical imaging/information systems.