Kodak 2011 Annual Report Download - page 69

IMPAIRMENT OF LONG-LIVED ASSETS
The Company reviews the carrying values of its long-lived assets, other than goodwill and purchased intangible assets with indefinite useful lives, for
impairment whenever events or changes in circumstances indicate that the carrying values may not be recoverable. The Company assesses the
recoverability of the carrying values of long-lived assets by first grouping its long-lived assets with other assets and liabilities at the lowest level for
which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the asset group) and, secondly, by estimating the
undiscounted future cash flows that are directly associated with and that are expected to arise from the use of and eventual disposition of such asset
group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the carrying
value of the asset group exceeds the estimated undiscounted cash flows, the Company records an impairment charge to the extent the carrying value of
the long-lived assets exceed their fair value. The Company determines fair value through quoted market prices in active markets or, if quoted market
prices are unavailable, through the performance of internal analyses of discounted cash flows.
In connection with its assessment of recoverability of its long-lived assets and its ongoing strategic review of the business and its operations, the
Company continually reviews the remaining useful lives of its long-lived assets. If this review indicates that the remaining useful life of the long-
lived asset has changed significantly, the Company adjusts the depreciation on that asset to facilitate full cost recovery over its revised estimated
remaining useful life.
INCOME TAXES
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of operating losses, credit carryforwards and
temporary differences between the carrying amounts and tax basis of the Company’s assets and liabilities. The Company records a valuation
allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized. For discussion of the amounts and components
of the valuation allowances as of December 31, 2011 and 2010, see Note 16, “Income Taxes.”
EARNINGS PER SHARE
Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the year. As a result
of the net loss from continuing operations presented for the years ended December 31, 2011, 2010, and 2009, the Company calculated diluted earnings
per share using weighted-average basic shares outstanding for each period, as utilizing diluted shares would be anti-dilutive to loss per
share. Weighted-average basic shares outstanding for the years ended December 31, 2011, 2010, and 2009 were 269.1 million, 268.5 million, and
268.0 million shares, respectively.
If the Company had reported earnings from continuing operations for the years ended December 31, 2011, 2010, and 2009, the following potential
shares of the Company’s common stock would have been dilutive in the computation of diluted earnings per share:
The computation of diluted earnings per share for the years ended December 31, 2011, 2010, and 2009 also excluded the assumed conversion of
outstanding employee stock options and detachable warrants to purchase common shares, because the effects would be anti-dilutive. The following
table sets forth the total amount of outstanding employee stock options and detachable warrants to purchase common shares as of December 31 for
each reporting period:
(in millions of shares) For the Year Ended December 31,
2011
2010
2009
Unvested share
-
based awards
0.4
2.7
0.5
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