Kodak 2013 Annual Report Download - page 84

Table of Contents
Gross goodwill and accumulated impairment losses were $1.543 billion and $1.411 billion, respectively, as of December 31, 2011 and 2012
and $1.544 billion and $1.488 billion, respectively, as of August 31, 2013. As part of fresh start accounting, Kodak adjusted the carrying value
of goodwill (see Note 3, “Fresh Start Accounting”).
Effective in the first quarter of 2013, the Intellectual Property and Brand Licensing reporting unit was reported in the Graphics, Entertainment
and Commercial Films Segment. Goodwill assigned to the Intellectual Property and Brand Licensing reporting unit of approximately $113
million as of December 31, 2012 was previously reported in the Personalized and Document Imaging Segment. Due to the sale of its digital
imaging patents during the first quarter of 2013, Kodak concluded that the carrying value of goodwill for its Intellectual Property and Brand
Licensing reporting unit exceeded the implied fair value of goodwill. The fair value of the Intellectual Property and Brand Licensing reporting
unit was estimated using an income approach in which the future cash flows, including a terminal value at the end of the projection period,
were discounted to present value. Kodak recorded a pre-tax impairment charge of $77 million that is included in Other operating expense
(income), net in the Consolidated Statement of Operations.
Effective in the second quarter of 2013, due to the Personalized and Document Imaging disposal group being reported as assets held for sale,
Kodak has two reportable segments: the Graphics, Entertainment and Commercial Films Segment and the Digital Printing and Enterprise
Segment. The Graphics, Entertainment and Commercial Films Segment has three goodwill reporting units: Graphics, Entertainment Imaging
and Commercial Films and Intellectual Property and Brand Licensing. The Digital Printing and Enterprise Segment has four goodwill reporting
units: Digital Printing, Packaging and Functional Printing, Enterprise Services and Solutions, and Consumer Inkjet Systems. The remaining
goodwill in the Personalized and Document Imaging Segment was reported as a component of assets held for sale as of June 30, 2013 and
subsequently written-off as part of the loss on sale of the Personalized and Document Imaging Businesses.
Based upon the results of Kodak’s October 1, 2013 annual impairment test analysis, no impairment of goodwill was indicated.
As part of fresh start accounting, Kodak wrote-off existing intangibles and accumulated amortization and recorded an adjustment of $235
million to reflect the fair value of intangibles. Refer to Note 3, “Fresh Start Accounting.” Due to Kodak revising its projected 2014 revenue
estimates, Kodak concluded that the carrying value of the Kodak trade name, estimated as part of fresh start accounting, exceeded its fair value.
In the fourth quarter of 2013 Kodak recorded a pre-tax impairment charge of $8 million that is included in Other operating expense (income),
net in the Consolidated Statement of Operations.
The gross carrying amount and accumulated amortization by major intangible asset category as of December 31, 2013 and 2012 were as
follows:
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Successor
As of December 31, 2013
(in millions)
Gross Carrying
Accumulated
Weighted
-
Average
Amount
Amortization
Net
Amortization Period
Technology-based
$
131
$
6
$
125
8 years
Kodak trade name
46
—
46
Indefinite life
Customer
-
related
39
2
37
9 years
In
-
process research and development
9
—
9
Indefinite life
Other
2
—
2
25 years
Total
$
227
$
8
$
219
Predecessor
As of December 31, 2012
(in millions)
Gross Carrying
Accumulated
Weighted
-
Average
Amount
Amortization
Net
Amortization Period
Technology-based
$
51
$
47
$
4
8 years
Customer
-
related
222
172
50
10 years
Other
16
9
7
18 years
Total
$
289
$
228
$
61
10 years