Kodak 2013 Annual Report Download - page 8

Table of Contents
SEASONALITY OF BUSINESS
Equipment sales for the DP&E Segment and Graphics, within the GECF Segment, generally exhibit higher levels in the fourth quarter due to
the seasonal nature of placements, resulting from customer or industry budgeting practices. Sales of entertainment imaging film within the
GECF Segment are typically strongest in the second quarter reflecting increased demand due to the summer motion picture season.
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 two 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 industry-leading products. Kodak holds portfolios of patents
in several areas important to its business, including the specific technologies previously discussed, such as 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 is 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”).
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(in millions)
Successor
Predecessor
Four Months
Ended
December 31,
2013
Eight Months
Ended August 31,
2013
Year Ended
December 31,
2012
Year Ended
December 31,
2011
Graphics, Entertainment and Commercial Films
$
7
$
13
$
40
$
54
Digital Printing and Enterprise
33
55
132
159
Impact of exclusion of certain components of
pension and OPEB income from the segment
measure of profitability (1)
(7
)
(2
)
(4
)
(18
)
Total
$
33
$
66
$
168
$
195
(1) Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses, amortization of prior service credits
related to the U.S. Postretirement Benefit Plan 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 and curtailments and settlements included in Earnings (loss) from discontinued operations, net of income
taxes in the Consolidated Statement of Operations.