Kodak 2013 Annual Report Download - page 103

Table of Contents
Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:
As of December 31, 2013, Kodak had available domestic and foreign net operating loss carry-forwards for income tax purposes of
approximately $1,382 million, of which approximately $367 million have an indefinite carry-forward period. The remaining $1,015 million
expire between the years 2014 and 2033. As of December 31, 2013, Kodak had unused foreign tax credits and investment tax credits of $101
million and $125 million, respectively, with various expiration dates through 2028. Utilization of post-emergence net operating losses and tax
credits may be subject to limitations in the event of significant changes in stock ownership of the Company in the future.
Kodak was previously granted a tax holiday in certain jurisdictions in China, which provided eligibility for a 50% reduction of the income tax
rate. During 2013, Kodak has returned to the 25% statutory tax rate in all jurisdictions in China.
During 2011, Kodak concluded that the undistributed earnings of its foreign subsidiaries would no longer be considered permanently
reinvested. After assessing the assets of the subsidiaries relative to specific opportunities for reinvestment, as well as the forecasted uses of cash
for both its domestic and foreign operations, Kodak concluded that it was prudent to change its indefinite reinvestment assertion to allow
greater flexibility in its cash management. Kodak recorded a deferred tax liability (net of related foreign tax credits) of $213 million and $374
million on the foreign subsidiaries’ undistributed earnings for years ended December 31, 2013 and 2012, respectively. This deferred tax
liability was fully offset by Kodak’s U.S. valuation allowance. Kodak also recorded a deferred tax liability of $23 million and $42 million for
the potential foreign withholding taxes on the undistributed earnings for years ended December 31, 2013 and 2012, respectively.
Kodak’s valuation allowance as of December 31, 2013 was $953 million. Of this amount, $373 million was attributable to Kodak’
s net deferred
tax assets outside the U.S. of $470 million, and $580 million related to Kodak’s net deferred tax assets in the U.S. of $538 million, for which
Kodak believes it is not more likely than not that the assets will be realized. The net deferred tax assets in excess of the valuation allowance of
approximately $55 million relate primarily to net operating loss carry-forwards, certain tax credits, and pension related tax benefits for which
Kodak believes it is more likely than not that the assets will be realized.
Kodak’s valuation allowance as of December 31, 2012 was $2,838 million. Of this amount, $403 million was attributable to Kodak’s net
deferred tax assets outside the U.S. of $1,001 million, and $2,435 million related to Kodak’s net deferred tax assets in the U.S. of $2,376
million, for which Kodak believes it is not more likely than not that the assets will be realized. The net deferred tax assets in excess of the
valuation allowance of approximately $539 million relate primarily to net operating loss carry-
forwards, certain tax credits, and pension related
tax benefits for which Kodak believes it is more likely than not that the assets will be realized.
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As of December 31,
(in millions)
Successor
2013
Predecessor
2012
Deferred income taxes (current)
$
48
$
75
Deferred income taxes (non
-
current)
54
470
Other current liabilities
(3
)
(1
)
Other long
-
term liabilities
(44
)
(5
)
Net deferred tax assets
$
55
$
539