CHICAGO, May 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
reaffirmed the 'AA-' (Double-A-Minus) senior debt rating and 'D-1+'
(D-One-Plus) commercial paper rating for the Eastman Kodak Company (Kodak).
Kodak continues to maintain a strong financial profile, with cost savings
from ongoing restructuring activities and improvements in select businesses
contributing to earnings growth and cash flow generation. At the end of 1999,
the company completed major restructuring programs initiated at the end of
1996 and 1997. These programs have materially reduced the company operating
cost structure and improved its competitive position. Additional
restructuring measures were initiated in the third quarter of 1999, which are
expected to yield additional cost savings through worldwide workforce
reductions of 3400, asset write-downs and plant closures.
Earnings improvement has been bolstered by renewed volume growth,
following a period of weak sales and some loss of market share over the
1997-98 time period. Sales increased 5 percent in 1999 and were level in the
first quarter of 2000 (up 5 percent excluding the effect of currency and
divestitures). Worldwide market share, although somewhat lower in the first
quarter of 2000, appears to have stabilized.
The company is expected to maintain strong double-digit EBIT and EBITDA
coverage of interest, cash flow from operations in line with or exceeding
funded debt and debt-to-EBITDA well below 1 times, despite ongoing share
repurchases. Share repurchases of more than $850 million in 1999 were
partially funded with proceeds from divestitures, including the sale of the
remaining portion of the company's copier business. Share repurchases are
expected to continue at somewhat lower levels in 2000 and to be significantly
funded from free cash flow. No large acquisitions are anticipated. The
company has focused primarily on small acquisitions and partnering to develop
digital product lines.
The ratings recognize that the company faces significant challenges in the
transition from silver-halide to electronic imaging technologies.
Nevertheless, the company's core photographic business remains a strong
franchise despite intense competitive pressures in key markets. Even with
rapid growth in digital imaging markets, conventional photography and other
forms of silver-halide imaging should continue to represent a significant
market over the long term.
SOURCE Duff & Phelps Credit Rating Co.
 back to top
Related links:
http://www.dcrco.com
CONTACT:
Albert E. Turner, CFA, of Duff & Phelps
Credit Rating Co., 312-368-3208, or turner@dcrco.com
|
