Eastman Kodak Company 8-K 2008
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2.02. Results of Operations and Financial Condition
On July 31, 2008, Eastman Kodak Company issued a press release describing its financial results for its second fiscal quarter ended June 30, 2008. A copy of the press release is attached as Exhibit 99.1 to this report.
Within the Company's second quarter 2008 press release, the Company makes reference to certain non-GAAP financial measures including "Digital revenue", "Digital revenue growth outlook", "Earnings from operations outlook", "Cash generation before dividends", "Cash generation before dividends outlook", and "Net cash generation", 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 / Digital revenue growth outlook / Earnings from operations outlook - Due to the Company's ongoing digital transformation, management views the Company’s performance based on digital revenue growth and earnings from operations. These measures form the basis of internal management performance expectations 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 financial data that management uses to assess the Company’s growth on a year-over-year and quarter-sequential basis, as the Company continues this digital transformation.
Cash generation before dividends, cash generation before dividends outlook, and net cash generation - The Company believes that the presentation of net cash generation and cash generation before dividends is useful information to investors as it facilitates the comparison of cash flows between reporting periods. In addition, management utilizes these measures as a tool to assess the Company's ability to repay debt, repurchase its own common stock and fund acquisitions and investments, after it has satisfied its working capital needs (including restructuring-related payments), capital expenditures, and dividends. The cash generation before dividends measure equals net cash provided by continuing operations from operating activities, as determined under Generally Accepted Accounting Principles in the U.S. (U.S. GAAP), minus capital expenditures, plus proceeds from the sale of assets and certain businesses and other settlements / agreements not otherwise included in U.S. GAAP cash flow provided by continuing operations from operating activities, plus net cash flow generated by divested businesses through the date of divestiture to the extent such business divestitures would be categorized as discontinued operations, minus cash flow from the operations of significant acquisitions or strategic alliances completed during the year. Net cash generation is the sum of cash generation before dividends, defined above, minus dividends. Finally, net cash generation forms the basis of internal management performance expectations 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.
9.01. Financial Statements and Exhibits
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.