Kodak 2015 Annual Report Download - page 21

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Equipment subject to operating leases and the related accumulated depreciation were as follows:
As of December 31,
(in millions) 2015 2014
Equipment subject to operating leases, net $ 37 $ 25
Accumulated depreciation (14) (10)
Equipment subject to operating leases, net $ 23 $ 15
Minimum future rental revenues on operating leases with original terms of one year or longer are not significant to Kodak.
NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS
The following table presents the changes in the carrying value of goodwill by reportable segment. The Enterprise Inkjet Systems and Eastman Business Park
segments do not have goodwill and are therefore not presented.
(in millions)
Print
Systems
Micro 3D
Printing and
Packaging
Software and
Solutions
Consumer
and Film
Intellectual
Property
Solutions
Consolidated
Total
Balance as of December 31, 2013: $ 51 $ 24 $ 6 $ 6 $ 1 $ 88
Fresh start accounting adjustment 5 2 — — 1 8
Balance as of December 31, 2014: $ 56 $ 26 $ 6 $ 6 $ 2 $ 96
Impairment — (6) — — (2) (8)
Balance as of December 31, 2015: $ 56 $ 20 $ 6 $ 6 $ — $ 88
In the first quarter of 2014, Kodak increased the value of goodwill determined as part of fresh start accounting by $8 million to correct for a liability that should
have been recorded at emergence.
As a result of the change in segments that became effective as of January 1, 2015, Kodak’s goodwill reporting units changed. Refer to Note 23, “Segment
Information” for additional information on the change to Kodak’s organizational structure. The Print Systems segment has two goodwill reporting units: Prepress
Solutions and Electrophotographic Printing Solutions. The Micro 3D Printing and Packaging segment has two goodwill reporting units: Packaging and Micro 3D
Printing. The Software and Solutions segment has two goodwill reporting units: Kodak Technology Solutions and Unified Workflow Solutions. The Consumer and
Film segment has three goodwill reporting units: Consumer Inkjet Solutions, Motion Picture, Industrial Chemicals and Films and Consumer Products. The
Enterprise Inkjet Systems segment has two goodwill reporting units: Commercial Inkjet Printing Solutions and Digital Front-End Controllers. The Intellectual
Property Solutions segment and the Eastman Business Park segment each have one goodwill reporting unit.
As of December 31, 2014, the goodwill balance of $96 million under the prior year segment reporting structure was comprised of $67 million for the Graphics,
Entertainment and Commercial Films segment and $29 million for the Digital Printing and Enterprise segment. The goodwill in the Graphics, Entertainment and
Commercial Films segment was reported in the Graphics and Intellectual Property and Brand Licensing reporting units. The goodwill in the Digital Printing and
Enterprise segment was reported in the Packaging and Functional Printing and Consumer Inkjet Systems reporting units.
Goodwill previously reported in the Graphics goodwill reporting unit was transferred to the Prepress Solutions goodwill reporting unit and the Unified Workflow
Solutions goodwill reporting unit. The goodwill previously reported in the Packaging and Functional Printing goodwill reporting unit was transferred to the
Packaging goodwill reporting unit and the Micro 3D Printing goodwill reporting unit. The goodwill previously reported in the Intellectual Property and Brand
Licensing goodwill reporting unit was transferred to the Intellectual Property Solutions goodwill reporting unit and the Consumer Products goodwill reporting unit.
Goodwill was reassigned to affected reporting units using a relative fair value allocation.
Due to the change in Kodak’s reporting units and the delay in commercializing new technologies in the Micro 3D Printing reporting unit, Kodak concluded that the
carrying value of the Micro 3D Printing reporting unit exceeded its implied fair value. The fair value of the Micro 3D Printing reporting unit was estimated using
the discounted cash flow method 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 $6 million in the first quarter of 2015 that is included in Other operating (income) expense, net in the Consolidated
Statement of Operations representing the entire amount of goodwill for this reporting unit.
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