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Note 5 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents the changes in the carrying value of goodwill by reportable segment:

(in millions)	Graphics, Entertainment and Commercial Films Segment			Digital Printing and Enterprise Segment		Consolidated Total

Balance as of December 31, 2012 (Predecessor):	$	115		$	17	$	132
Impairment		(77	)		-		(77	)
Currency translation adjustments		1			-		1
Balance as of August 31, 2013 (Predecessor):	$	39		$	17	$	56

Impact of fresh start accounting	$	22		$	10	$	32
Balance as of December 31, 2013 (Successor):	$	61		$	27	$	88
Fresh start accounting adjustment		6			2		8
Balance as of December 31, 2014 (Successor):	$	67		$	29	$	96

Gross goodwill and accumulated impairment losses were $1.543 billion and $1.411 billion, respectively, as of December 31, 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 25, “Fresh Start Accounting”).

Due to the sale of Kodak’s 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.

As of October 1, 2014, the Graphics, Entertainment and Commercial Films Segment had three goodwill reporting units: Graphics, Entertainment Imaging and Commercial Films and Intellectual Property and Brand Licensing. The Digital Printing and Enterprise Segment had four goodwill reporting units: Digital Printing, Packaging and Functional Printing, Enterprise Services and Solutions, and Consumer Inkjet Systems. Goodwill recorded as part of fresh start accounting was allocated to the Graphics, Packaging and Functional Printing, Intellectual Property and Brand Licensing and Consumer Inkjet Systems reporting units.

Based upon the results of Kodak’s October 1, 2014 annual impairment test, 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 25, “Fresh Start Accounting.” Due to the change in expected cash flows from the amounts estimated as part of fresh start accounting, Kodak concluded the carrying value of the in-process research and development intangible asset exceeded its fair value based on its October 1, 2014 assessment. In the fourth quarter of 2014, Kodak recorded a pre-tax impairment charge of $9 million that is included in Other operating expense (income), net in the Consolidated Statement of Operations.

Based upon the results of Kodak’s October 1, 2014 annual impairment test, no impairment of the Kodak trade name was indicated. In the fourth quarter of 2013, Kodak concluded that the carrying value of the Kodak trade name, estimated as part of fresh start accounting, exceeded its fair value and 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, 2014 and 2013 were as follows:

	As of December 31, 2014
(in millions)	Gross Carrying		Accumulated				Weighted-Average
(in millions)	Amount		Amortization		Net		Amortization Period

Technology-based	$	131	$	27	$	104	7 years
Kodak trade name		46		-		46	Indefinite life
Customer-related		36		6		30	8 years
Other		2		-		2	21 years
Total	$	215	$	33	$	182

	As of December 31, 2013
(in millions)	Gross Carrying		Accumulated				Weighted-Average
(in millions)	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

Amortization expense related to intangible assets was $25 million, $8 million, $10 million and $26 million for the year ended December 31, 2014, four months ended December 31, 2013, eight months ended August 31, 2013 and year ended December 31, 2012, respectively.

Estimated future amortization expense related to intangible assets as of December 31, 2014 was as follows:

(in millions)

2015	$	25
2016		25
2017		23
2018		18
2019		10
2020 and thereafter		35
Total	$	136

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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