Note 27: Condensed Combined Debtor-In-Possesion Financial Information

12 Months Ended

Dec. 31, 2012

Condensed Combined Debtor In Possession Financial Information [Text Block]

NOTE 27:  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 loss is included as “Equity in 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

(in millions)	For the Year Ended December 31, 2012
Net sales
Products	$	1,558
Services		356
Licensing & royalties		(48	)
Total net sales	$	1,866
Cost of sales
Products	$	1,627
Services		310
Total cost of sales	$	1,937
Gross profit (loss)	$	(71	)
Selling, general and administrative expenses		417
Research and development costs		172
Restructuring costs and other		143
Other operating (income) expenses, net		(38	)
Loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes		(765	)
Interest expense (contractual interest for the year ended December 31, 2012 of $193)		148
Loss on early extinguishment of debt, net		7
Other income (charges), net		34
Reorganization items, net		843
Loss from continuing operations before income taxes		(1,729	)
Benefit for income taxes		(369	)
Loss from continuing operations		(1,360	)
Loss from discontinued operations, net of income taxes		(47	)
NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES		(1,407	)
Equity in earnings of non-filing entities, net of tax		28
NET LOSS ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	(1,379	)

DEBTORS’ STATEMENT OF COMPREHENSIVE (LOSS) INCOME

(in millions)	For the Year Ended Decemeber 31, 2012
NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES	$	(1,407	)
Other comprehensive income (loss), net of tax:
Realized and unrealized losses from hedging activity, net of tax $2		(1	)
Reclassification adjustment for hedging-related gains included in net earnings, net of tax of $1		5
Unrealized gain from investment, net of tax of $0 for the year ended December 31, 2012		-
Currency translation adjustments		1
Pension and other postretirement benefit plan obligation activity, net of tax of $255 for the year ended December 31, 2012		434
Total comprehensive loss, net of tax	$	(968	)

DEBTORS’ STATEMENT OF RETAINED EARNINGS

(in millions)	For the Year Ended December 31, 2012
Retained earnings at beginning of period	$	4,849
Net loss		(1,379	)
Loss from issuance of treasury stock		(92	)
Retained earnings at end of period	$	3,378

DEBTORS’ STATEMENT OF FINANCIAL POSITION

(in millions) ASSETS	As of December 31, 2012
Current Assets
Cash and cash equivalents	$	337
Receivables, net		201
Receivables and advances from non-filing entities, net		159
Inventories, net		285
Deferred income taxes		34
Other current assets		19
Total current assets		1,035
Property, plant and equipment, net of accumulated depreciation of $3,294		426
Goodwill		144
Investment in non-filing entities		1,964
Other long-term assets		17
TOTAL ASSETS	$	3,586
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Accounts payable, trade	$	192
Short-term borrowings and current portion of long-term debt		659
Accrued income and other taxes		5
Other current liabilities		488
Total current liabilities		1,344
Long-term debt, net of current portion		740
Other long-term liabilities		293
Liabilities subject to compromise		2,909
Total Liabilities		5,286
Equity (Deficit)
Common stock, $2.50 par value		978
Additional paid in capital		1,105
Retained earnings		3,378
Accumulated other comprehensive loss		(1,415	)
		4,046
Less: Treasury stock, at cost		(5,746	)
Total Eastman Kodak Company shareholders’ (deficit) equity		(1,700	)
Noncontrolling interests		-
Total (deficit) equity		(1,700	)
TOTAL LIABILITIES AND DEFICIT	$	3,586

DEBTORS’ STATEMENT OF CASH FLOWS

(in millions)	For the Year Ended December 31, 2012
Cash flows from operating activities:
Net loss attributable to debtor entities	$	(1,407	)
Adjustments to reconcile to net cash used in operating activities:
Loss from discontinued operations, net of income taxes		47
Depreciation and amortization		150
Gain on sales of businesses/assets		(1	)
Loss on early extinguishment of debt		7
Non-cash restructuring costs, asset impairments and other charges		16
Non-cash reorganization items, net		717
Benefit for deferred income taxes		(18	)
Increase in receivables		(118	)
Decrease in inventories		12
Increase in liabilities excluding borrowings		120
Other items, net		101
Total adjustments		1,033
Net cash used in continuing operations		(374	)
Net cash provided by discontinued operations		8
Net cash used in operating activities		(366	)
Cash flows from investing activities:
Additions to properties		(27	)
Proceeds from sales of businesses/assets		9
Marketable securities - sales		95
Marketable securities - purchases		(91	)
Net cash used in continuing operations		(14	)
Net cash provided by discontinued operations		24
Net cash provided by investing activities		10
Cash flows from financing activities:
Proceeds from DIP credit agreement		686
Repayment of borrowings		(136	)
Reorganization items		(41	)
Net cash provided by financing activities		509
Net increase in cash and cash equivalents		153
Cash and cash equivalents, beginning of year		184
Cash and cash equivalents, end of year	$	337

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

(in millions)	As of December 31, 2012
Accounts payable	$	283
Debt		683
Pension obligations		785
Settlements		710
Payable and advances to non-filing entities		193
Other liabilities subject to compromise		255
Liabilities subject to compromise	$	2,909