Kodak 2011 Annual Report Download - page 17

We may be required to recognize additional impairments in the value of the Company’s goodwill and/or other long-lived assets, which would
increase expenses and reduce profitability.
Goodwill represents the excess of the amount we paid to acquire businesses over the fair value of their net assets at the date of the acquisition. We test
goodwill for impairment annually or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting
unit below its carrying amount. Additionally, the Company’s other long-lived assets are evaluated for impairments whenever events or changes in
circumstances indicate the carrying value may not be recoverable. Either of these situations may occur for various reasons including changes in actual or
expected income or cash. We continue to evaluate current conditions to assess whether any impairment exists. Impairments could occur in the future if
market or interest rate environments deteriorate, expected future cash flows of the Company’s reporting units decline, silver prices increase significantly, or
if reporting unit carrying values change materially compared with changes in respective fair values. In the event of a sale of the Company’s digital imaging
patent portfolios, licensing revenue related to those portfolios could decline significantly and materially impact the fair value of the CDG segment.
The Company’s future results could be harmed if we are unsuccessful in the Company’s efforts to expand sales in emerging markets.
Because we are seeking to expand the Company’s sales and number of customer relationships outside the United States, and specifically in emerging
markets in Asia, Latin America and Eastern Europe, the Company’s business is subject to risks associated with doing business internationally, such as:
There can be no assurance that we will be able to market and sell the Company’s products in all of the Company’s targeted markets. If the Company’s
efforts are not successful, the Company’s business growth and results of operations could be harmed.
We are subject to environmental laws and regulations and failure to comply with such laws and regulations or liabilities imposed as a result of
such laws and regulations could have an adverse effect on the Company’s business, results of operations and financial condition.
We are subject to environmental laws and regulations in the jurisdictions in which we conduct the Company’s business, including laws regarding the
discharge of pollutants, including greenhouse gases, into the air and water, the need for environmental permits for certain operations, the management and
disposal of hazardous substances and wastes, the cleanup of contaminated sites, the content of the Company’s products and the recycling and treatment and
disposal of the Company’s products. If we do not comply with applicable laws and regulations in connection with the use and management of hazardous
substances, then we could be subject to liability and/or could be prohibited from operating certain facilities, which could have a material adverse effect on
the Company’s business, results of operations and financial condition.
The Company’s inability to effectively complete, integrate and manage acquisitions, divestitures and other significant transactions could adversely
impact the Company’s business performance including the Company’s financial results.
As part of the Company’s business strategy, we frequently engage in discussions with third parties regarding possible investments, acquisitions, strategic
alliances, joint ventures, divestitures, asset sales, and outsourcing transactions and enter into agreements relating to such transactions in order to further the
Company’s business objectives. In order to pursue this strategy successfully, we must identify suitable candidates and successfully complete transactions,
some of which may be large and complex, and manage post closing issues such as the integration of acquired companies or employees and the assessment
of such acquired companies’ internal controls. Integration and other risks of transactions can be more pronounced for larger and more complicated
transactions, or if multiple transactions are pursued simultaneously. If we fail to identify and complete successfully transactions that further the Company’
s
strategic objectives, we may
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supporting multiple languages;
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recruiting sales and technical support personnel with the skills to design, manufacture, sell and supply products;
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complying with governmental regulation of imports and exports, including obtaining required import or export approval for the Company’s products;
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complexity of managing international operations;
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exposure to foreign currency exchange rate fluctuations;
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commercial laws and business practices that may favor local competition;
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multiple, potentially conflicting, and changing governmental laws, regulations and practices, including differing export, import, tax, anti-
corruption,
labor, and employment laws;
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difficulties in collecting accounts receivable;
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limitations or restrictions on the repatriation of cash;
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reduced or limited protection of intellectual property rights;
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managing research and development teams in geographically disparate locations, including Canada, Israel, Japan, China, and Singapore;
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complicated logistics and distribution arrangements; and
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political or economic instability.
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