Kodak 2011 Annual Report Download - page 83

various forms of chemicals in the Passaic River. The total costs (for all parties involved) to clean up the Passaic River could potentially be as high as
several billions of dollars. Based on currently available information, the Company is unable to reasonably estimate a range of loss pertaining to this
matter at this time.
Estimates of the amount and timing of future costs of environmental remediation requirements are by their nature imprecise because of the continuing
evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown
remediation sites and the allocation of costs among the potentially responsible parties. Based on information presently available, the Company does
not believe it is reasonably possible that losses for known exposures could exceed current accruals by material amounts, although costs could be
material to a particular quarter or year, with the possible exception of matters related to the Passaic River which are described above.
Asset Retirement Obligations
As of December 31, 2011 and 2010, the Company has recorded approximately $66 million and $57 million, respectively, of asset retirement
obligations within Other long-term liabilities in the accompanying Consolidated Statement of Financial Position. The Company’s asset retirement
obligations primarily relate to asbestos contained in buildings that the Company owns. 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. Otherwise, the Company is not required to remove the asbestos from its buildings. 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. The Company does not have a liability recorded related to every building that
contains asbestos because the Company cannot estimate the fair value of its obligation for certain buildings due to a lack of sufficient information about
the range of time over which the obligation may be settled through demolition, renovation or sale of the building.
The following table provides asset retirement obligation activity:
Other Commitments and Contingencies
The Company has entered into noncancelable agreements with several companies, which provide Kodak with products and services to be used in its
normal operations. These agreements are related to raw materials, supplies, production and administrative services, as well as marketing and
advertising. The terms of these agreements cover the next one to eleven years. The minimum payments for obligations under these agreements are
approximately $109 million in 2012, $69 million in 2013, $47 million in 2014, $41 million in 2015, $18 million in 2016 and $26 million in 2017 and
thereafter.
Rental expense, net of minor sublease income, amounted to $87 million, $96 million, and $108 million in 2011, 2010, and 2009, respectively. The
amounts of noncancelable lease commitments with terms of more than one year, principally for the rental of real property, reduced by minor sublease
income, are $68 million in 2012, $51 million in 2013, $33 million in 2014, $25 million in 2015, $21 million in 2016 and $43 million in 2017 and
thereafter.
In December 2003, the Company sold a property in France for approximately $65 million, net of direct selling costs, and then leased back a portion of this
property for a nine-year term. The entire gain on the property sale of approximately $57 million was deferred and no gain was recognizable upon the
closing of the sale as the Company's continuing involvement in the property is deemed to be significant. As a result, the Company is accounting for the
transaction as a financing transaction. Minimum lease payments under this noncancelable lease commitment are approximately $5 million through the end
of 2012.
For the Year Ended December 31,
(in millions)
2011
2010
2009
Asset retirement obligations as of January 1
$
57
$
62
$
67
Liabilities incurred in the current period
15
-
4
Liabilities settled in the current period
(9
)
(8
)
(13
)
Accretion expense
4
3
3
Other
(1
)
-
1
Asset retirement obligations as of December 31
$
66
$
57
$
62
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