Note 18: Condensed Combined Debtor-In-Possession Financial Information

6 Months Ended

Jun. 30, 2012

Condensed Combined Debtor In Possession Financial Information [Text Block]

NOTE 18:  CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

The financial statements below represent the condensed combined financial statements of the Debtors.  Effective January 1, 2012, the Company’s Non-Filing Entities are accounted for as non-consolidated subsidiaries in these financial statements and, as such, their net loss is included as “Equity in earnings of non-filing entities, net of tax” in the Debtors’ Statement of Operations and their net assets are included as “Investment in non-filing entities” in the Debtors’ Statement of Financial Position.

Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein.  Intercompany transactions among the Debtors and the Non-Filing Entities have not been eliminated in the Debtors’ financial statements.

DEBTORS’ STATEMENT OF OPERATIONS

(in millions)

	Three Months Ended
	June 30, 2012			June 30, 2012
Net sales
Products	$	417		$	803
Services		89			182
Licensing & royalties		3			(55	)
Total net sales	$	509		$	930
Cost of sales
Products	$	440		$	871
Services		80			162
Total cost of sales	$	520		$	1,033
Gross profit	$	(11	)	$	(103	)
Selling, general and administrative expenses		107			222
Research and development costs		44			98
Restructuring costs and other		9			81
Other operating (income) expenses, net		(20	)		(21	)
Loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes		(151	)		(483	)
Interest expense (contractual interest of $98 million)		37			73
Loss on early extinguishment of debt, net		-			7
Other income (charges), net		(3	)		-
Reorganization items, net		160			248
Loss from continuing operations before income taxes		(351	)		(811	)
Benefit for income taxes		(10	)		(145	)
Net loss		(341	)		(666	)
Equity in earnings of non-filing entities, net of tax		42			1
NET LOSS ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	(299	)	$	(665	)

DEBTORS’ STATEMENT OF COMPREHENSIVE (LOSS) INCOME

(in millions)

	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012
NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES	$	(341	)	$	(666	)
Other comprehensive income (loss), net of tax:
Realized and unrealized gains from hedging activity, net of tax of $0 for the three and six months ended June 30, 2012		2			4
Unrealized gain from investment, net of tax of $0 for the three months ended June 30, 2012		(1	)		-
Currency translation adjustments		2			3
Pension and other postretirement benefit plan obligation activity, net of tax of $0 for the three and six months ended June 30, 2012		20			40
Total comprehensive loss, net of tax	$	(318	)	$	(619	)

DEBTORS’ STATEMENT OF RETAINED EARNINGS

(in millions)

	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Retained earnings at beginning of period	$	4,484		$	4,910
Net loss		(299	)		(665	)
Loss from issuance of treasury stock		-			(60	)
Retained earnings at end of period	$	4,185		$	4,185

DEBTORS’ STATEMENT OF FINANCIAL POSITION

(in millions)

	As of
ASSETS	June 30, 2012
Current Assets
Cash and cash equivalents	$	510
Receivables, net		246
Receivables and advances from non-filing entities, net		255
Inventories, net		320
Deferred income taxes		12
Other current assets		43
Total current assets		1,386
Property, plant and equipment, net of accumulated depreciation of $3,471		491
Goodwill		144
Investment in non-filing entities		2,009
Other long-term assets		50
TOTAL ASSETS	$	4,080
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Accounts payable, trade	$	181
Accrued income and other taxes		8
Other current liabilities		411
Total current liabilities		600
Long-term debt, net of current portion		1,397
Other long-term liabilities		243
Liabilities subject to compromise		3,162
Total Liabilities		5,402
Equity (Deficit)
Common stock, $2.50 par value		978
Additional paid in capital		1,106
Retained earnings		4,185
Accumulated other comprehensive loss		(1,809	)
		4,460
Less: Treasury stock, at cost		(5,782	)
Total Eastman Kodak Company shareholders’ (deficit) equity		(1,322	)
Noncontrolling interests		-
Total (deficit) equity		(1,322	)
TOTAL LIABILITIES AND DEFICIT	$	4,080

DEBTORS’ STATEMENT OF CASH FLOWS

(in millions)

	Six Months Ended June 30, 2012
Cash flows from operating activities:
Net loss	$	(666	)
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		71
Gain on sales of businesses/assets		(20	)
Loss on early extinguishment of debt		7
Non-cash restructuring costs, asset impairments and other charges		5
Non-cash and financing related reorganization items, net		205
Provision for deferred income taxes		4
Decrease in receivables		47
Increase in liabilities excluding borrowings		328
Other items, net		(182	)
Total adjustments		465
Net cash used in operating activities		(201	)
Cash flows from investing activities:
Additions to properties		(13	)
Proceeds from sales of business/assets		26
Marketable securities - sales		60
Marketable securities - purchases		(58	)
Net cash provided by investing activities		15
Cash flows from financing activities:
Proceeds from DIP credit agreement		686
Repayment of borrowings		(134	)
Reorganization items		(40	)
Net cash provided by financing activities		512
Effect of exchange rate changes on cash		-
Net increase in cash and cash equivalents		326
Cash and cash equivalents, beginning of period		184
Cash and cash equivalents, end of period	$	510

The following table reflects pre-petition liabilities that are subject to compromise for the Debtors:

(in millions)	As of June 30, 2012
Accounts payable	$	299
Debt		683
Pension and postretirement obligations		1,733
Payable and advances to non-filing entities		194
Other liabilities subject to compromise		253
Liabilities subject to compromise	$	3,162