Kodak 2007 Annual Report Download - page 21

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Environmental Commitments
Environmental liabilities are accrued based on estimates of known environmental remediation responsibilities. The liabilities include accruals for sites
owned or leased by Kodak, sites formerly owned or leased by Kodak, and other third party sites where Kodak was designated as a potentially responsible
party (PRP). The amounts accrued for such sites are based on these estimates, which are determined using the ASTM Standard E 2137-01, “Stan-
dard Guide for Estimating Monetary Costs and Liabilities for Environmental Matters.” The overall method includes the use of a probabilistic model that
forecasts a range of cost estimates for the remediation required at individual sites. The Company’s estimate includes equipment and operating costs for
investigations, remediation and long-term monitoring of the sites. Such estimates may be affected by changing determinations of what constitutes an
environmental liability or an acceptable level of remediation. Kodak’s estimate of its environmental liabilities may also change if the proposals to regula-
tory agencies for desired methods and outcomes of remediation are viewed as not acceptable, or additional exposures are identified. The Company has
an ongoing monitoring and identification process to assess how activities, with respect to the known exposures, are progressing against the accrued cost
estimates, as well as to identify other potential remediation issues that are presently unknown.
Additionally, in many of the countries in which the Company operates, environmental regulations exist that require the Company to handle and dispose
of asbestos in a special manner if a building undergoes major renovations or is demolished. The Company records a liability equal to the estimated fair
value of its obligation to perform asset retirement activities related to the asbestos, computed using an expected present value technique, when sufficient
information exists to calculate the fair value.
Recently Issued Accounting Standards
For discussion of the adoption and potential impacts of recently issued accounting standards, refer to the “Recently Issued Accounting Standards” section
of Note 1, “Significant Accounting Policies,” in the Notes to Financial Statements.
Kodak Operating Model and Reporting Structure
For 2007, the Company had three reportable segments: Consumer Digital Imaging Group (CDG), Film Products Group (FPG), and Graphic Communi-
cations Group (GCG). Within each of the Company’s reportable segments are various components, or Strategic Product Groups (SPGs). Throughout
the remainder of this document, references to the segments’ SPGs are indicated in italics. The balance of the Company’s continuing operations, which
individually and in the aggregate do not meet the criteria of a reportable segment, are reported in All Other. A description of the segments is as follows:
Consumer Digital Imaging Group Segment (CDG): CDG encompasses digital capture, kiosks, snapshot printing, digital picture frames, consumer imag-
ing services, photographic paper and chemicals, photofinishing services, consumer inkjet printing and imaging sensors. This segment provides consumers
and professionals with a full range of products and services for capturing, storing, printing and sharing images. CDG also includes the licensing activities
related to intellectual property associated with products included in this segment.
Film Products Group Segment (FPG): FPG encompasses consumer and professional film, one-time-use cameras, aerial and industrial film, and enter-
tainment imaging products and services. This segment provides consumers, professionals, cinematographers, and other entertainment imaging customers
with film-related products and services.
Graphic Communications Group Segment (GCG): GCG serves a variety of customers in the creative, in-plant, data center, commercial printing, pack-
aging, newspaper and digital service bureau market segments with a range of software, media and hardware products that provide customers with a vari-
ety of solutions for prepress equipment, workflow software, digital and traditional printing, document scanning and multi-vendor IT services. Products and
related services include workflow software and digital controller development; continuous inkjet and electrophotographic products, including equipment,
consumables and service; prepress equipment and consumables; and document scanners. GCG also provides maintenance and professional services for
Kodak and other manufacturers’ products, as well as providing imaging services to customers.
All Other: All Other is composed of Kodak’s display business and other small, miscellaneous businesses.
Prior period segment results have been revised to conform to the current period segment reporting structure.