Kodak 2014 Annual Report Download - page 116

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The following table reconciles the enterprise value to the estimated fair value of Successor common stock as of the Effective Date:
The fair value of debt and capitalized lease obligations represents $44 million of short term borrowings, $14 million of capitalized lease obligations and $676 million of long-
term debt. The fair value of long-term debt was determined based on a market approach utilizing market yields and was estimated to be approximately 97% of par value. The
fair value of capitalized lease obligations was determined based on market rents while the fair value of short term debt approximated its carrying value.
The fair value of pension and other post retirement obligations was determined based on a discounted cash flow method of expected cash contributions/benefit payments for
the period of September 1, 2013 to December 31, 2099. The expected cash contributions were discounted to present value using a discount rate of 3.5%.
The fair value of the warrants was estimated using a Black-Scholes pricing model with the following assumptions: implied stock price of $14.11; strike price of $14.93 for
125% warrants and $16.12 for 135% warrants; expected volatility of 47% for 125% warrants and 48% for 135% warrants; expected dividend rate of 0.0%; risk free interest
rate of 1.67%; expiration date of five years.
The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date:
The fair value of non-debt liabilities represents total liabilities of the Successor Company on the Effective Date less Short term borrowings and current portion of long-term
debt, Long-term debt, net of current portion, $14 million in capital lease obligations and $18 million in other non-operating liabilities.
Consolidated Statement of Financial Position
The adjustments set forth in the following consolidated Statement of Financial Position reflect the effect of the consummation of the transactions contemplated by the Plan
(reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh
Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or
inputs.
(in millions, except share and per share value)
Enterprise value
$
1,000
Plus: Cash and cash equivalents
898
Less: Other non
-
operating liabilities
18
Less: Fair value of debt and capitalized lease obligations
734
Less: Fair value of pension and other postretirement obligations
533
Less: Fair value of warrants
24
Fair value of Successor common stock
$
589
Shares outstanding at September 3, 2013
41,753,211
Per share value
$
14.11
(in millions)
Enterprise value
$
1,000
Plus: Cash and cash equivalents
898
Plus: Fair value of noncontrolling interests
10
Plus: Fair value of non
-
debt liabilities
2,088
Less: Fair value of pension and other postretirement obligations
533
Reorganization value of Successor assets
$
3,463
113