Kodak 2010 Annual Report Download - page 96

94
NOTE 22: DISCONTINUED OPERATIONS
The components of earnings from discontinued operations, net of income taxes, are as follows:
For the Year Ended December 31,
(in millions)
2010
2009
2008
(Provision) benefit for income taxes related to discontinued operations
$ (10)
$ 8
$ 288
All other items, net
(2)
9
(3)
(Loss) earnings from discontinued operations, net of income taxes
$ (12)
$ 17
$ 285
In the second quarter of 2008, the Company received a tax refund from the U.S. Internal Revenue Service. The refund was related
to the audit of certain claims filed for tax years 1993-1998. A portion of the refund related to past federal income taxes paid in
relation to the 1994 sale of a subsidiary, Sterling Winthrop Inc., which was reported in discontinued operations. The refund had a
positive impact on the Company’s earnings from discontinued operations, net of income taxes, for the year ended December 31,
2008 of $295 million. See Note 15, “Income Taxes,” in the Notes to Financial Statements for further discussion of the tax refund.
NOTE 23: EXTRAORDINARY ITEM
The terms of the purchase agreement of the 2004 acquisition of NexPress Solutions LLC called for additional consideration to be
paid by the Company if sales of certain products exceeded a stated minimum number of units sold during a five-year period following
the close of the transaction. In May 2009, the earn-out period lapsed with no additional consideration required to be paid by the
Company. Negative goodwill, representing the contingent consideration obligation of $17 million, was therefore reduced to zero. The
reversal of negative goodwill reduced Property, plant and equipment, net by $2 million and Research and development expense by
$7 million and resulted in an extraordinary gain of $6 million, net of tax, during the year ended December 31, 2009.
NOTE 24: SEGMENT INFORMATION
Current Segment Reporting Structure
For 2010, the Company had three reportable segments: Consumer Digital Imaging Group (“CDG”), Graphic Communications Group
(“GCG”), and Film, Photofinishing and Entertainment Group (“FPEG”). 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 still and video cameras, digital devices such as
picture frames, kiosks, APEX drylab systems, and related consumables and services, consumer inkjet printing systems, Kodak
Gallery products and services, and imaging sensors. CDG also includes the licensing activities related to the Company's intellectual
property in digital imaging products.
Graphic Communications Group Segment (“GCG”): GCG encompasses workflow software and digital controllers; digital
printing, which includes commercial inkjet and electrophotographic products, including equipment, consumables and service;
prepress consumables; prepress equipment and packaging solutions; business solutions and consulting services; and document
scanners.
Film, Photofinishing and Entertainment Group Segment (“FPEG”): FPEG encompasses consumer and professional film, one-
time-use cameras, aerial and industrial materials, and entertainment imaging products and services. In addition, this segment also
includes paper and output systems, and photofinishing services.
All Other: This category includes the results of the Company’s display business, up to the date of sale of assets of this business in
the fourth quarter of 2009.
Transactions between segments, which are immaterial, are made on a basis intended to reflect the market value of the products,
recognizing prevailing market prices and distributor discounts. Differences between the reportable segments’ operating results and
assets and the Company’s consolidated financial statements relate primarily to items held at the corporate level, and to other items
excluded from segment operating measurements.