Kodak 2015 Annual Report Download - page 73

NOTE 26: REORGANIZATION ITEMS, NET
A summary of reorganization items, net is presented in the following table:
Successor Predecessor
(in millions)
Year Ended
December 31, 2015
Year Ended
December 31,
2014
Four Months
Ended December 31,
2013
Eight Months
Ended
August 31,
2013
Professional fees $ 1 $ 10 $ 19 $ 114
Provision for expected allowed claims — (1) — 133
Net gain on reorganization adjustments — — — (1,957)
Net gain on fresh start adjustments — — — (302)
Other items, net 4 4 (3) (14)
Reorganization items, net $ 5 $ 13 $ 16 $ (2,026)
Cash payments for reorganization items $ 9 $ 21 $ 85 $ 210
Subsequent to the Effective Date, costs directly attributable to the implementation of the Plan are reported as Reorganization items, net. The cash payments for
reorganization items for the eight months ended August 31, 2013 includes $84 million of claims related to liabilities subject to compromise paid on the Effective
Date. Refer to Note 25, “Fresh Start Accounting” for additional information on the net gain on reorganization and fresh start adjustments.
NOTE 27: DISCONTINUED OPERATIONS
On the Effective Date, as a part of the Global Settlement and pursuant to the Amended SAPA, Kodak consummated the sale of certain assets of the Business to the
KPP Purchasing Parties for net cash consideration, in addition to the assumption by the KPP Purchasing Parties of certain liabilities of the Business, of $325
million. Up to $35 million in aggregate of the purchase price is subject to repayment to KPP if the Business does not achieve certain annual adjusted EBITDA
targets over the four-year period ending December 31, 2018. Certain assets and liabilities of the Business in certain jurisdictions were not transferred at the initial
closing, which took place on the Effective Date, but were transferred at a series of deferred closings in accordance with the Amended SAPA. The final deferred
closing occurred in September 2015. Kodak operated the Business related to the deferred closing jurisdictions, subject to certain covenants, until the applicable
deferred closing occurred, and delivered to (or received from) a KPP subsidiary at each deferred closing a true-up payment that reflected the actual economic
benefit (or detriment) to the Business in the applicable deferred closing jurisdiction(s) from the time of the initial closing through the time of the applicable deferred
closing. Up to the time of the deferred closing, the results of the operations of the Business were being reported as (Loss) earnings from discontinued operations,
net of income taxes in the Consolidated Statement of Operations and the assets and liabilities of the Business were being categorized as Assets held for sale or
Liabilities held for sale in the Consolidated Statement of Financial Position, as appropriate.
Kodak recognized a pre-tax loss on the sale of the Business of approximately $163 million during the third quarter 2013 predecessor period. The pre-tax loss
excluded recognition of $64 million of non-refundable consideration related to the delayed closings, which non-refundable consideration was received on the
Effective Date, and $35 million of contingent consideration, subject to repayment to KPP which was also received by Kodak on the Effective Date. The pre-tax loss
included the recognition of approximately $1.5 billion of unamortized pension losses previously reported in Accumulated other comprehensive income.
On March 17, 2014, the KPP Purchasing Parties agreed to pay Kodak $20 million of incremental consideration ($13 million was paid in March 2014 and the
remainder was paid in March 2015) in lieu of working capital adjustments contemplated by the Amended SAPA.
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