SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): January 31, 2007
Eastman Kodak Company
(Exact name of registrant as specified in 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 Exchange 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))
Item 2.02. Results of Operations and Financial Condition
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On January 31, 2007, Eastman Kodak Company issued a press release describing its
financial results for its fourth fiscal quarter ended December 31, 2006. Copies
of the press release and financial discussion document are attached as Exhibits
99.1 and 99.2, respectively, to this report.
Within the Company's fourth quarter 2006 press release and financial discussion
document, the Company makes reference to certain non-GAAP financial measures
including "Digital revenue", "Traditional revenue", "New Technologies revenue",
"Digital earnings", "Digital EFO growth", "Digital earnings growth",
"Traditional earnings decline", "Free cash flow", "Operating cash flow", "Net
cash generation (formerly investable cash)", and "Earnings before interest,
taxes, depreciation and amortization (EBITDA)", which have directly comparable
GAAP financial measures. The Company believes that these measures represent
important internal measures of performance. Accordingly, where these non-GAAP
measures are provided, it is done so that investors have the same financial data
that management uses with the belief that it will assist the investment
community in properly assessing the underlying performance of the Company on a
year-over-year basis. Whenever such information is presented, the Company has
complied with the provisions of the rules under Regulation G and Item 2.02 of
Form 8-K. The specific reasons, in addition to the reasons described above, why
the Company's management believes that the presentation of the non-GAAP
financial measures provides useful information to investors regarding Kodak's
financial condition, results of operations and cash flows are as follows:
Digital revenue / Traditional revenue / New Technologies revenue / Digital
earnings / Digital EFO growth / Digital earnings growth / Traditional earnings
decline - Due to the Company's ongoing digital transformation, management views
the Company's performance based on the following three key metrics: digital
revenue growth, digital earnings growth and the generation of cash. These three
key metrics are emphasized in the Company's attached earnings release for the
fourth quarter of 2006. These digital measures form the basis of internal
management performance expectations and certain incentive compensation.
Accordingly, these digital measures are presented so that investors have the
same financial data that management uses with the belief that it will assist the
investment community in properly assessing the underlying performance of the
Company against its key metrics on a year-over-year and quarter-sequential
basis, as the Company undergoes this digital transformation.
Free cash flow / Operating cash flow / Net cash generation (formerly investable
cash) - The Company believes that the presentation of free cash flow, operating
cash flow and net cash generation is useful information to investors as it
facilitates the comparison of cash flows between reporting periods. In addition,
management utilizes these measures as tools to assess the Company's ability to
repay debt and repurchase its own common stock, after it has satisfied its
working capital needs (including restructuring-related payments), dividends,
capital expenditures, acquisitions and investments. The free cash flow measure
equals net cash provided by operating activities from continuing operations, as
determined under Generally Accepted Accounting Principles in the U.S. (U.S.
GAAP) minus capital expenditures. The operating cash flow measure equals free
cash flow plus proceeds from the sale of assets, minus acquisitions, debt
assumed in acquisitions, investments in unconsolidated affiliates, and
dividends. The net cash generation measure equals operating cash flow excluding
the impact of acquisitions and debt assumed in acquisitions, and forms the basis
of internal management performance expectations (it is one of the Company's
three key metrics) and certain incentive compensation. Accordingly, the Company
believes that the presentation of this information is useful to investors as it
provides them with the same data as management uses to facilitate their
assessment of the Company's cash position.
EBITDA / Interest Expense - Under the Company's senior secured credit
facilities, there are two financial debt covenants that the Company must be in
compliance with on a quarterly basis: (1) debt to EBITDA and (2) EBITDA to
interest expense. Accordingly, the Company believes the presentation of the debt
to EBITDA and EBITDA to interest expense financial measures is useful
information to investors, as it provides information as to how the Company
actually performed against the financial covenant restrictions and requirements,
and how much headroom the Company has within the covenants.
Item 9.01. Financial Statements and Exhibits
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(c) Exhibits
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Exhibit 99.1 Press release issued January 31, Furnished with
2007 regarding financial results this document
for the fourth quarter of 2006
Exhibit 99.2 Financial discussion document issued Furnished with
January 31, 2007 regarding financial this document
results for the fourth quarter of
2006
SIGNATURES
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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/ Diane E. Wilfong
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Name: Diane E. Wilfong
Title: Controller
Date: January 31, 2007
EXHIBIT INDEX
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Exhibit No. Description
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99.1 Press release issued January 31, 2007 regarding financial results for
the fourth quarter of 2006
99.2 Financial discussion document issued January 31, 2007 regarding
financial results for the fourth quarter of 2006