Note 27 - Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

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 are being transferred at a series of deferred closings in accordance with the Amended SAPA, one of which has yet to close.  Kodak has been and is operating the Business related to the deferred closing jurisdictions, subject to certain covenants, until the applicable deferred closing occurs, and delivers to (or receives from) a KPP subsidiary at each deferred closing a true-up payment reflecting 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 are being reported as Earnings (loss) from discontinued operations, net of income taxes in the Consolidated Statement of Operations and the assets and liabilities of the Business are 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 includes 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 is owed within one year of March 2014) in lieu of working capital adjustments contemplated by the Amended SAPA.

The following table summarizes the major classes of assets and liabilities related to the disposition of the Business which have been segregated and reported as part of Current assets held for sale and Current liabilities held for sale in the Consolidated Statement of Financial Position:

(in millions)	As of  December 31, 2014		As of December 31, 2013
Receivables, net	$	-	$	16
Inventories, net		2		62
Property, plant and equipment, net		4		10
Other assets		6		7
Current assets held for sale	$	12	$	95
Trade payables	$	1	$	24
Miscellaneous payables and accruals		-		14
Current liabilities held for sale	$	1	$	38

Discontinued operations of Kodak include the Business (excluding the consumer film business, for which Kodak has entered into an ongoing supply arrangement with one or more KPP Purchasing Parties), digital capture and devices business (exited in the third quarter of 2012), Kodak Gallery (exited in the third quarter of 2012), and other miscellaneous businesses.

The significant components of revenues and earnings (loss) from discontinued operations, net of income taxes are as follows:

	Successor						Predecessor
	Year Ended December 31, 2014			Four Months Ended December 31, 2013			Eight Months Ended August 31, 2013			Year Ended December 31, 2012
(in millions)
Revenues from Personalized and Document Imaging	$	61		$	77		$	738		$	1,350
Revenues from Digital Capture and Devices operations		-			-			6			36
Revenues from Kodak Gallery operations		-			-			-			29
Revenues from other discontinued operations		-			1			17			50
Total revenues from discontinued operations	$	61		$	78		$	761		$	1,465
Pre-tax earnings (loss) from Personalized and Document Imaging	$	9		$	5		$	(217	)	$	51
Pre-tax earnings (loss) from Digital Capture and Devices operations		-			1			2			(78	)
Pre-tax earnings (loss) from Kodak Gallery operations		-			-			1			4
Pre-tax (loss) earnings from other discontinued operations		-			-			(17	)		(7	)
(Provision) benefit for income taxes related to discontinued operations		(5	)		(2	)		96			(12	)
Earnings (loss) from discontinued operations, net of income taxes	$	4		$	4		$	(135	)	$	(42	)

Kodak was required to use a portion of the proceeds from the divestiture of the Business to repay $200 million of the Junior DIP Credit Agreement. Interest expense on the debt that was required to be repaid as a result of the sale of the Business has therefore been allocated to discontinued operations ($14 million and $19 million for the eight months ended August 31, 2013 and year ended December 31, 2012, respectively).

Depreciation and amortization of long-lived assets of the Business included in discontinued operations ceased as of July 1, 2013.

Direct operating expenses of the discontinued operations are included in the results of discontinued operations. Indirect expenses that were historically allocated to the discontinued operations have been included in the results of continuing operations. Prior period results have been reclassified to conform to the current period presentation.