Kodak 2012 Annual Report Download - page 9

Table of Contents
RESEARCH AND DEVELOPMENT
Through the years, Kodak has engaged in extensive and productive efforts in research and development.
Research and development expenditures for Kodak’s three reportable segments were as follows:
Research and development is headquartered in Rochester, New York. Other U.S. groups are located in Stamford, Connecticut; Dayton, Ohio;
Oakdale, Minnesota; and Columbus, Georgia. Outside the U.S., groups are located in Canada, England, Israel, Germany, Japan, and China.
These groups work in close cooperation with manufacturing units and marketing organizations to develop new products and applications to serve
both existing and new markets.
It has been Kodak’s general practice to protect its investment in research and development and its freedom to use its inventions by obtaining
patents. The ownership of these patents contributes to Kodak’s ability to provide leadership products. Kodak holds portfolios of patents in
several areas important to its business, including flexographic and lithographic printing plates and systems; digital printing workflow and color
management proofing systems; color and black-and-white electrophotographic printing systems; commercial and consumer inkjet writing
systems, printers, and presses; inkjet inks and media; functional printing materials, formulations, and deposition modalities; dye sublimation
(thermal transfer) printing systems; and color negative films, processing and papers. Each of these areas is important to existing and emerging
business opportunities that bear directly on Kodak’s overall business performance.
Kodak’s major products are not dependent upon one single, material patent. Rather, the technologies that underlie Kodak’s products are
supported by an aggregation of patents having various remaining lives and expiration dates. There is no individual patent, or group of patents,
whose expiration are expected to have a material impact on Kodak’s results of operations.
ENVIRONMENTAL PROTECTION
Kodak is subject to various laws and governmental regulations concerning environmental matters. The U.S. federal environmental legislation
and state regulatory programs having an impact on Kodak include the Toxic Substances Control Act, the Resource Conservation and Recovery
Act, the Clean Air Act, the Clean Water Act, the NY State Chemical Bulk Storage Regulations and the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (the “Superfund Law”).
It is Kodak’
s policy to carry out its business activities in a manner consistent with sound health, safety and environmental management practices,
and to comply with applicable health, safety and environmental laws and regulations. Kodak continues to engage in programs for environmental,
health and safety protection and control.
Based upon information presently available, future costs associated with environmental compliance are not expected to have a material effect on
Kodak’s capital expenditures, results of operations or competitive position, although costs could be material to a particular quarter or year.
8
For the Year Ended December 31,
(in millions)
2012
2011
2010
Graphics, Entertainment and Commercial Films
$
44
$
68
$
91
Digital Printing and Enterprise
102
120
118
Personalized and Document Imaging
58
65
77
All Other
—
—
2
Impact of exclusion of certain components of pension and OPEB income
(expenses) from the segment measure of profitability (1)
3
(18
)
(39
)
Total
$
207
$
235
$
249
(1) Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses, and special termination benefits,
curtailments and settlement components of pension and other postretirement benefit expenses, except for settlements in connection with
the chapter 11 bankruptcy proceedings that are recorded in Reorganization items, net in the Consolidated Statement of Operations.