Kodak 2006 Annual Report Download - page 130

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NOTE 25: SUBSEQUENT EVENT - PENDING SALE OF THE COMPANY’S
HEALTH GROUP
On January 8, 2007, the Company’s Board of Directors authorized management to enter into a definitive agreement to sell all of the assets and
business operations of the Health Group to Onex Healthcare Holdings, Inc. (“Onex”), a subsidiary of Onex Corporation, for up to $2.55 billion. This
definitive agreement was signed on January 9, 2007. The price is composed of $2.35 billion in cash at closing and $200 million in additional future
payments if Onex achieves certain returns with respect to its investment. If Onex investors realize an internal rate of return in excess of 25% on their
investment, the Company will receive payment equal to 25% of the excess return, up to $200 million.
About 8,100 employees of the Company associated with the Health Group will transition to Onex as part of the transaction. Also included in the
sale are manufacturing operations focused on the production of health imaging products, as well as an office building in Rochester, NY. The sale is
expected to close in the first half of 2007.
The following table summarizes the major classes of assets and liabilities to be sold as of December 31, 2006:
(in millions)
Receivables, net $ 598
Inventories, net 201
Other current assets 13
Total current assets 812
Property, plant and equipment, net 268
Goodwill 596
Other long-term assets 217
Total assets $ 1,893
Accounts payable and other current liabilities $ 483
Total current liabilities 483
Pension and other postretirement liabilities 30
Other long-term liabilities 14
Total liabilities $ 527
These assets and liabilities are classified as held and used in the Company’s Consolidated Statement of Financial Position. The Company will reflect
the operations associated with this transaction as discontinued operations beginning in the first quarter of 2007 and will report the assets and liabili-
ties as held for sale.