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Note 8 - Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 8: GOODWILL AND OTHER INTANGIBLE ASSETS

During the first quarter of 2013, Kodak concluded that the carrying value of goodwill for its Intellectual Property reporting unit exceeded the implied fair value of goodwill. The fair value of the Intellectual Property 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 (income) expenses, net in the Consolidated Statement of Operations.

The carrying value of goodwill by reportable segments is as follows:

(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 September 30, 2013 (Successor):	$	61		$	27	$	88

Prior to the application of fresh start accounting, goodwill represents the excess of the amount Kodak paid to acquire businesses over the fair value of their net assets at the date of the acquisition. Kodak adjusted the carrying value of goodwill upon application of fresh start accounting (see Note 3, “Fresh Start Accounting”). Kodak tests goodwill for impairment annually or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Upon application of fresh start accounting, the annual assessment date for goodwill impairment is changed to October 1.

Goodwill relating to the Personalized and Document Imaging Segment was reported as a component of assets held for sale in the accompanying Consolidated Statement of Financial Position.

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 3, “Fresh Start Accounting.”

The gross carrying amount and accumulated amortization by major intangible asset category as of September 30, 2013 and December 31, 2012 were as follows:

	Successor
	As of September 30, 2013
(in millions)	Gross Carrying	Accumulated			Weighted-Average
	Amount	Amortization		Net	Amortization Period
Technology-based	$ 131	$ 2	$	129	8 years
Trade names	54	-		54	Indefinite life
Customer-related	39	1		38	9 years
In-process research and development	9	-		9	6 years
Other	2	-		2	25 years
Total	$ 235	$ 3	$	232

	Predecessor
	As of December 31, 2012
(in millions)	Gross Carrying	Accumulated			Weighted-Average
	Amount	Amortization		Net	Amortization Period
Technology-based	$ 51	$ 47	$	4	8 years
Customer-related	222	172		50	10 years
Other	16	9		7	18 years
Total	$ 289	$ 228	$	61	10 years

Amortization expense related to intangible assets was $3 million, $2 million, $4 million, $10 million and $21 million for the one month ended September 30, 2013 (Successor), two months ended August 31, 2013 (Predecessor), three months ended September 30, 2012 (Predecessor), eight months ended August 31, 2013 (Predecessor) and nine months ended September 30, 2012 (Predecessor), respectively.

Estimated future amortization expense related to intangible assets as of September 30, 2013 was as follows:

(in millions)
2013	$	7
2014		27
2015		27
2016		26
2017		24
2018		19
2019 and thereafter		48
Total	$	178

- 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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