Note 21 - Condensed Combined Debtor-In-Possession Financial Information

3 Months Ended

Mar. 31, 2013

Condensed Combined Debtor In Possession Financial Information [Text Block]

NOTE 21:  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 Non-Filing Entities are accounted for as non-consolidated subsidiaries in these financial statements and, as such, their net earnings (loss) are included as “Equity in earnings (loss) 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

	Three Months Ended
(in millions)	March 31, 2013			March 31, 2012
Net sales
Products	$	308		$	369
Services		85			93
Licensing & royalties		34			(58	)
Total net sales	$	427		$	404
Cost of sales
Products	$	301		$	397
Services		63			83
Total cost of sales	$	364		$	480
Gross profit	$	63		$	(76	)
Selling, general and administrative expenses		70			107
Research and development costs		31			49
Restructuring costs and other		7			62
Other operating (income) expenses, net		(463	)		(2	)
Earnings (loss) from continuing operations before interest expense, other income   (charges), net, reorganization items, net and income taxes		418			(292	)
Interest expense (contractual interest for the three months ended March 31, 2013 and 2012 of $40 and $46, respectively)		28			36
Loss on early extinguishment of debt		6			7
Other income (charges), net		6			2
Reorganization items, net		120			88
Earnings (loss) from continuing operations before income taxes		270			(421	)
Benefit for income taxes		(9	)		(135	)
Earnings (loss) from continuing operations		279			(286	)
Loss from discontinued operations, net of income taxes		-			(41	)
NET EARNINGS (LOSS) ATTRIBUTABLE TO DEBTOR ENTITIES		279			(327	)
Equity in earnings (loss) of non-filing entities, net of tax		4			(39	)
NET EARNINGS (LOSS) ATTRIBUTABLE TO EASTMAN KODAK   COMPANY	$	283		$	(366	)

DEBTORS’ STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)	Three Months Ended
	March 31, 2013		March 31, 2012
NET EARNINGS (LOSS) ATTRIBUTABLE TO DEBTOR ENTITIES	$	279	$	(327	)
Other comprehensive income (loss), net of tax:
Realized and unrealized gains from hedging activity, net of tax of $0 and $1  for the three months ended March 31, 2013, and 2012, respectively		-		2
Unrealized gain from investment, net of tax of $0 for the three months ended March 31, 2013 and 2012		-		1
Currency translation adjustments		1		1
Pension and other postretirement benefit plan obligation activity, net of tax of $0 and $12 for the three months ended March 31, 2013 and 2012, respectively		22		20
Total comprehensive income (loss), net of tax	$	302	$	(303	)

DEBTORS’ STATEMENT OF RETAINED EARNINGS

(in millions)	Three Months Ended
	March 31, 2013			March 31, 2012
Retained earnings at beginning of period	$	3,378		$	4,845
Net earnings (loss) and change in equity in earnings (loss) of non-filing entities attributable to Debtor Entities		306			(335	)
Loss from issuance of treasury stock		(31	)		(60	)
Retained earnings at end of period	$	3,653		$	4,450

DEBTORS’ STATEMENT OF FINANCIAL POSITION

(in millions)	As of			As of
ASSETS	March 31, 2013			December 31, 2012
Current Assets
Cash and cash equivalents	$	407		$	337
Receivables, net		197			201
Receivables and advances from non-filing entities, net		163			159
Inventories, net		283			285
Other current assets		56			53
Total current assets		1,106			1,035
Property, plant and equipment, net of accumulated depreciation of $3,275 and $3,294, respectively		391			426
Goodwill		67			144
Investment in non-filing entities		1,989			1,964
Other long-term assets		36			17
TOTAL ASSETS	$	3,589		$	3,586
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Accounts payable, trade	$	184		$	192
Short-term borrowings and current portion of long-term debt		822			659
Other current liabilities		371			493
Total current liabilities		1,377			1,344
Long-term debt, net of current portion		370			740
Other long-term liabilities		273			293
Liabilities subject to compromise		2,940			2,909
Total Liabilities		4,960			5,286
Equity (Deficit)
Common stock, $2.50 par value		978			978
Additional paid in capital		1,104			1,105
Retained earnings		3,653			3,378
Accumulated other comprehensive loss		(1,393	)		(1,415	)
		4,342			4,046
Less: Treasury stock, at cost		(5,713	)		(5,746	)
Total Eastman Kodak Company shareholders’ deficit		(1,371	)		(1,700	)
Noncontrolling interests		-			-
Total deficit		(1,371	)		(1,700	)
TOTAL LIABILITIES AND DEFICIT	$	3,589		$	3,586

DEBTORS’ STATEMENT OF CASH FLOWS

	Three Months Ended
(in millions)	March 31, 2013			March 31, 2012
Cash flows from operating activities:
Net earnings (loss) attributable to debtor entities	$	279		$	(327	)
Adjustments to reconcile to net cash used in operating activities:
Loss from discontinued operations, net of income taxes		-			41
Depreciation and amortization		32			42
Gain on sales of businesses/assets		(535	)		-
Loss on early extinguishment of debt		6			7
Non-cash restructuring costs, asset impairments and other charges		79			-
Non-cash reorganization items, net		62			39
(Benefit) provision for deferred income taxes		(4	)		6
Increase in receivables		(3	)		(126	)
Decrease (increase) in inventories		2			(28	)
(Decrease) increase in liabilities excluding borrowings		(149	)		494
Other items, net		(6	)		(217	)
Total adjustments		(516	)		258
Net cash used in continuing operations		(237	)		(69	)
Net cash (used in) provided by discontinued operations		(9	)		9
Net cash used in operating activities		(246	)		(60	)
Cash flows from investing activities:
Additions to properties		(2	)		(6)
Proceeds from sales of businesses/assets		534			-
Marketable securities - sales		15			28
Marketable securities - purchases		(17	)		(28	)
Net cash provided by investing activities		530			(6)
Cash flows from financing activities:
Proceeds from DIP credit agreements		450			686
Repayment of term loans under Original Senior DIP Credit Agreement		(664	)		(110	)
Reorganization items		-			(33	)
Net cash (used in) provided by financing activities		(214	)		543
Effect of exchange rate changes on cash		-			-
Net increase in cash and cash equivalents		70			477
Cash and cash equivalents, beginning of period		337			184
Cash and cash equivalents, end of period	$	407		$	661

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

	As of		As of
(in millions)	March 31,		December 31,
	2013		2012
Accounts payable	$	281	$	283
Debt		683		683
Pension obligations		749		785
Settlements		802		710
Payables and advances to non-filing entities		194		193
Other liabilities subject to compromise		231		255
Liabilities subject to compromise	$	2,940	$	2,909