Kodak 2011 Annual Report Download - page 85

future changes in key assumptions used in the valuation of the Plan, particularly the discount rate and expected rate of return on Plan assets. A funding
valuation and funding plan is required to be submitted to and approved by the United Kingdom Pension Regulator. The 2010 valuation is currently
ongoing. The funded status of the Plan (calculated in accordance with U.S. GAAP) is included in Pension and other postretirement liabilities presented in
the Consolidated Statement of Financial Position.
Indemnifications
The Company issues indemnifications in certain instances when it sells businesses and real estate, and in the ordinary course of business with its
customers, suppliers, service providers and business partners. Further, the Company indemnifies its directors and officers who are, or were, serving at
the Company's request in such capacities. Historically, costs incurred to settle claims related to these indemnifications have not been material to the
Company’s financial position, results of operations or cash flows. Additionally, the fair value of the indemnifications that the Company issued during
the year ended December 31, 2011 was not material to the Company’s financial position, results of operations or cash flows.
Warranty Costs
The Company has warranty obligations in connection with the sale of its products and equipment. The original warranty period is generally one year
or less. The costs incurred to provide for these warranty obligations are estimated and recorded as an accrued liability at the time of sale. The
Company estimates its warranty cost at the point of sale for a given product based on historical failure rates and related costs to repair. The change in
the Company's accrued warranty obligations balance, which is reflected in Other current liabilities in the accompanying Consolidated Statement of
Financial Position, was as follows:
The Company also offers its customers extended warranty arrangements that are generally one year, but may range from three months to three years
after the original warranty period. The Company provides repair services and routine maintenance under these arrangements. The Company has not
separated the extended warranty revenues and costs from the routine maintenance service revenues and costs, as it is not practicable to do
so. Therefore, these revenues and costs have been aggregated in the discussion that follows. The change in the Company's deferred revenue balance
in relation to these extended warranty and maintenance arrangements, which is reflected in Other current liabilities in the accompanying Consolidated
Statement of Financial Position, was as follows:
(in millions)
Accrued warranty obligations as of December 31, 2009
$
61
Actual warranty experience during 2010
(78
)
2010 warranty provisions
60
Accrued warranty obligations as of December 31, 2010
$
43
Actual warranty experience during 2011
(92
)
2011 warranty provisions
95
Accrued warranty obligations as of December 31, 2011
$
46
(in millions)
Deferred revenue as of December 31, 2009
$
130
New extended warranty and maintenance arrangements in 2010
438
Recognition of extended warranty and maintenance arrangement revenue in 2010
(438
)
Deferred revenue as of December 31, 2010
$
130
New extended warranty and maintenance arrangements in 2011
428
Recognition of extended warranty and maintenance arrangement revenue in 2011
(438
)
Deferred revenue as of December 31, 2011
$
120
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