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Table of Contents
NOTE 18: INCOME TAXES
The components of earnings (loss) from continuing operations before income taxes and the related provision (benefit) for U.S. and other income
taxes were as follows:
The differences between income taxes computed using the U.S. federal income tax rate and the provision (benefit) for income taxes for
continuing operations were as follows:
In March 2011, Kodak filed a Request for Competent Authority Assistance with the United States Internal Revenue Service (IRS). The request
related to a potential double taxation issue with respect to certain patent licensing royalty payments received by Kodak in 2012 and 2011. In the
twelve months ended December 31, 2012, Kodak received notification that the IRS had reached agreement with the Korean National Tax
Service (NTS) with regards to Kodak’s March 2011 request. As a result of the agreement reached by the IRS and NTS, Kodak was due a partial
refund of Korean withholding taxes in the amount of $123 million. Kodak had previously agreed with the licensees that made the royalty
payments that any refunds of the related Korean withholding taxes would be shared equally between Kodak and the licensees. The licensees’
share ($61 million) of the Korean withholding tax refund has therefore been reported as a licensing revenue reduction in Licensing & royalties in
the Consolidated Statement of Operations.
During 2012 and 2011, Kodak determined that it was more likely than not that a portion of the deferred tax assets outside the U.S. would not be
realized due to reduced manufacturing volumes negatively impacting profitability in a location outside the U.S. and accordingly,
87
For the Year Ended December 31,
(in millions)
2012
2011
2010
(Loss) earnings from continuing operations before income taxes:
U.S.
$
(1,760
)
$
(703
)
$
(343
)
Outside the U.S.
200
4
(82
)
Total
$
(1,560
)
$
(699
)
$
(425
)
U.S. income taxes:
Current benefit
$
(393
)
$
(378
)
$
(2
)
Deferred provision
13
241
2
Income taxes outside the U.S.:
Current provision
58
54
188
Deferred provision (benefit)
65
106
(76
)
State and other income taxes:
Current benefit
—
(
22
)
(2
)
Deferred provision
—
7
—
Total (benefit) provision
$
(257
)
$
8
$
110
For the Year Ended December 31,
(in millions)
2012
2011
2010
Amount computed using the statutory rate
$
(546
)
$
(245
)
$
(149
)
Increase (reduction) in taxes resulting from:
State and other income taxes, net of federal
1
1
1
Unremitted foreign earnings
35
393
—
Impact of goodwill impairment
—
—
217
Operations outside the U.S.
(129
)
41
131
Legislative rate changes
23
20
10
Valuation allowance
350
(57
)
(98
)
Tax settlements and adjustments, including interest
(11
)
(149
)
3
Other, net
20
4
(5
)
(Benefit) provision for income taxes
$
(257
)
$
8
$
110