Kodak 2014 Annual Report Download - page 18

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ITEM 2. PROPERTIES
Kodak's worldwide headquarters is located in Rochester, New York.
Products in the DP&E Segment are manufactured in the United States in Rochester, New York; Dayton, Ohio; and Weatherford, Oklahoma. Manufacturing facilities outside
the United States are located in China , Japan and Canada .
Products in the GECF Segment are manufactured in the United States in Rochester, New York and Columbus, Georgia. Manufacturing facilities outside the United States are
located in Germany, China, Japan, United Kingdom and Canada.
Properties within a country may be shared by all segments operating within that country.
Regional distribution centers are located in various places within and outside of the United States. Kodak owns or leases administrative, research and development,
manufacturing, marketing, and processing facilities in various parts of the world. The leases are for various periods and are generally renewable.
ITEM 3. LEGAL PROCEEDINGS
Subsequent to the Company’s Bankruptcy Filing, between January 27, 2012 and March 22, 2012, several putative class action suits were filed in federal court in the Western
District of New York against the committees of the Company’s Stock Ownership Plan (‘SOP’) and Savings and Investment Plan (“SIP”), and certain former and current
executives of the Company. The suits have been consolidated into a single action brought under the Employee Retirement Income Security Act (“ERISA”), styled as In re
Eastman Kodak ERISA Litigation. The allegations concern the decline in the Company’
s stock price and its alleged impact on SOP and SIP. Plaintiffs seek the recovery of any
losses to the applicable plans, a constructive trust, the appointment of an independent fiduciary, equitable relief, as applicable, and attorneys’ fees and costs. Defendants’
motion to dismiss the litigation was denied on December 17, 2014 and the case is proceeding. On behalf of the defendants in this case, the Company believes that the case is
without merit and will vigorously defend the defendants on their behalf.
Kodak’s Brazilian operations are involved in various litigation matters and have received or been the subject of numerous governmental assessments related to indirect and
other taxes in various stages of litigation, as well as civil litigation and disputes associated with former employees and contract labor. The tax matters, which comprise the
majority of the litigation matters, are primarily related to federal and state value-added taxes and income taxes. Kodak’s Brazilian operations are disputing these matters and
intend to vigorously defend their position. Kodak routinely assesses these matters as to the probability of ultimately incurring a liability in its Brazilian operations and records
its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. As of December 31, 2014, Kodak maintained accruals of approximately
$16 million for claims aggregating approximately $233 million inclusive of interest and penalties where appropriate. In connection with assessments and litigation in Brazil,
local regulations may require Kodak to post security for a portion of the amounts in dispute. Generally, any encumbrances of the Brazilian assets would be removed to the
extent the matter is resolved in Kodak’s favor.
Kodak is involved in various lawsuits, claims, investigations, remediations and proceedings, including, from time to time, commercial, customs, employment, environmental,
and health and safety matters, which are being handled and defended in the ordinary course of business. Kodak is also subject, from time to time, to various assertions, claims,
proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in a broad
spectrum of our products. These matters are in various stages of investigation and litigation, and are being vigorously defended. Based on information currently available, we
do not believe that it is probable that the outcomes in any of these matters, individually or collectively, will have a material adverse effect on Kodak’s financial condition or
results of operations. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered that could adversely affect Kodak’s operating results or
cash flows in a particular period.
ITEM 4. MINE SAFETY DISCLOSURES
None.
17