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Note 22 - Condensed Combined Debtor-In-Possession Financial Information

6 Months Ended

Jun. 30, 2013

Condensed Combined Debtor In Possession Financial Information [Abstract]

Condensed Combined Debtor In Possession Financial Information [Text Block]

NOTE 22: 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						Six Months Ended
(in millions)	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012

Net sales
Products	$	223		$	279		$	445		$	554
Services		49			53			100			109
Licensing & royalties		1			2			35			(56	)
Total net sales	$	273		$	334		$	580		$	607
Cost of sales
Products	$	191		$	295		$	397		$	592
Services		38			50			81			104
Total cost of sales	$	229		$	345		$	478		$	696
Gross profit	$	44		$	(11	)	$	102		$	(89	)
Selling, general and administrative expenses		59			89			116			186
Research and development costs		21			34			42			74
Restructuring costs and other		6			(1	)		12			61
Other operating (income) expenses, net		2			1			(460	)		(1	)
(Loss) earnings from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes		(44	)		(134	)		392			(409	)
Interest expense (contractual interest for the three and six months ended June 30, 2013 of $63 and $103, respectively, and for the three and six months ended June 30, 2012 of $49 and $95, respectively)		46			33			69			63
Loss on early extinguishment of debt		-			-			6			7
Other income (charges), net		25			(2	)		29			-
Reorganization items, net		72			160			192			248
(Loss) earnings from continuing operations before income taxes		(137	)		(329	)		154			(727	)
Benefit for income taxes		(7	)		(10	)		(17	)		(145	)
(Loss) earnings from continuing operations		(130	)		(319	)		171			(582	)
Loss from discontinued operations, net of income taxes		(23	)		(22	)		(45	)		(84	)
NET (LOSS) EARNINGS ATTRIBUTABLE TO DEBTOR ENTITIES		(153	)		(341	)		126			(666	)
Equity in (loss) earnings of non-filing entities, net of tax		(71	)		42			(67	)		1
NET (LOSS) EARNINGS ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	(224	)	$	(299	)	$	59		$	(665	)

DEBTORS’ STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)	Three Months Ended						Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013		June 30, 2012

NET EARNINGS (LOSS) ATTRIBUTABLE TO DEBTOR ENTITIES	$	(153	)	$	(341	)	$	126	$	(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, 2013, respectively, and $1 and $2 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		(1	)		2			-		3
Pension and other postretirement benefit plan obligation activity, net of tax of $0 and $12 for the three and six months ended June 30, 2013, respectively, and $0 for the three and six months ended June 30, 2012		331			20			352		40
Total comprehensive income (loss), net of tax	$	177		$	(318	)	$	478	$	(619	)

DEBTORS’ STATEMENT OF RETAINED EARNINGS

(in millions)	Three Months Ended						Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012


Retained earnings at beginning of period	$	3,653		$	4,484		$	3,378		$	4,910
Net earnings (loss) and change in equity in earnings (loss) of non-filing entities attributable to Debtor Entities		(84	)		(299	)		222			(665	)
Loss from issuance of treasury stock		-			-			(31	)		(60	)
Retained earnings at end of period	$	3,569		$	4,185		$	3,569		$	4,185

DEBTORS’ STATEMENT OF FINANCIAL POSITION

(in millions)	As of June 30, 2013			As of December 31, 2012
ASSETS
Current Assets
Cash and cash equivalents	$	274		$	337
Receivables, net		133			160
Receivables and advances from non-filing entities, net		169			159
Inventories, net		221			233
Other current assets		48			48
Assets held for sale		179			166
Total current assets		1,024			1,103
Property, plant and equipment, net of accumulated depreciation of $2,944 and $3,068, respectively		341			395
Goodwill		46			123
Investment in non-filing entities		2,060			1,964
Other long-term assets		22			1
TOTAL ASSETS	$	3,493		$	3,586
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Accounts payable, trade	$	158		$	172
Short-term borrowings and current portion of long-term debt		830			659
Other current liabilities		251			427
Liabilities held for sale		120			106
Total current liabilities		1,359			1,364
Long-term debt, net of current portion		370			740
Other long-term liabilities		222			281
Liabilities subject to compromise		2,665			2,901

Total Liabilities		4,616			5,286

Equity (Deficit)
Common stock, $2.50 par value		978			978
Additional paid in capital		1,105			1,105
Retained earnings		3,569			3,378
Accumulated other comprehensive loss		(1,063	)		(1,415	)
		4,589			4,046
Less: Treasury stock, at cost		(5,712	)		(5,746	)
Total Eastman Kodak Company shareholders’ deficit		(1,123	)		(1,700	)
Noncontrolling interests		-			-
Total deficit		(1,123	)		(1,700	)

TOTAL LIABILITIES AND DEFICIT	$	3,493		$	3,586

DEBTORS’ STATEMENT OF CASH FLOWS

	Six Months Ended
(in millions)	June 30, 2013			June 30, 2012

Cash flows from operating activities:
Net earnings (loss) attributable to debtor entities	$	129		$	(666	)
Adjustments to reconcile to net cash used in operating activities:
Loss from discontinued operations, net of income taxes		45			84
Depreciation and amortization		55			66
Gain on sales of businesses/assets		(535	)		(1	)
Loss on early extinguishment of debt		6			7
Non-cash restructuring costs, asset impairments and other charges		80			5
Non-cash reorganization items, net		91			205
Provision for deferred income taxes		3			28
Decrease in receivables		13			28
Decrease in inventories		9			10
(Decrease) increase in liabilities excluding borrowings		(214	)		149
Other items, net		(51	)		(21	)
Total adjustments		(498	)		560
Net cash used in continuing operations		(369	)		(106	)
Net cash used in discontinued operations		(8	)		(75	)
Net cash used in operating activities		(377	)		(181	)
Cash flows from investing activities:
Additions to properties		(7	)		(11	)
Proceeds from sales of businesses/assets		537			4
Marketable securities - sales		18			60
Marketable securities - purchases		(16	)		(58	)
Net cash provided by (used in) continuing operations		532			(5	)
Net cash provided by discontinued operations		-			20
Net cash provided by investing activities		532			15
Cash flows from financing activities:
Proceeds from DIP credit agreements		450			686
Repayment of term loans under Original Senior DIP Credit Agreement		(664	)		(134	)
Repayment of term loans under Junior DIP Credit Agreement		(4	)		-
Reorganization items		-			(40	)
Net cash (used in) provided by financing activities		(218	)		512
Effect of exchange rate changes on cash		-			-
Net (decrease) increase in cash and cash equivalents		(63	)		326
Cash and cash equivalents, beginning of period		337			184
Cash and cash equivalents, end of period	$	274		$	510

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

(in millions)	As of June 30, 2013		As of December 31, 2012

Accounts payable	$	272	$	275
Debt		683		683
Pension and other postemployment obligations		189		568
Settlements		1,049		946
Payables and advances to non-filing entities		193		193
Environmental		103		44
Other liabilities subject to compromise		175		192
Liabilities subject to compromise	$	2,664	$	2,901