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Note 5 - Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2021
Disclosure Text Block [Abstract]  
Goodwill and Other Intangible Assets

NOTE 5:  GOODWILL AND OTHER INTANGIBLE ASSETS

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

 

(in millions)

 

Traditional

Printing

 

 

Digital

Printing

 

 

Advanced

Materials and

Chemicals

 

 

Brand

 

 

Consolidated

Total

 

As of December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

56

 

 

$

6

 

 

$

14

 

 

$

 

 

$

76

 

Accumulated impairment losses

 

 

(56

)

 

 

 

 

 

(8

)

 

 

 

 

 

(64

)

Balance as of December 31, 2019

 

 

 

 

 

6

 

 

 

6

 

 

 

 

 

 

12

 

Goodwill reallocation

 

 

 

 

 

 

 

 

(6

)

 

 

6

 

 

 

 

Balance as of December 31, 2020

 

 

 

 

 

6

 

 

 

 

 

 

6

 

 

 

12

 

Impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

 

 

 

6

 

 

 

 

 

 

6

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

56

 

 

 

6

 

 

 

8

 

 

 

6

 

 

 

76

 

Accumulated impairment losses

 

 

(56

)

 

 

 

 

 

(8

)

 

 

 

 

 

(64

)

Balance as of December 31, 2021

 

$

 

 

$

6

 

 

$

 

 

$

6

 

 

$

12

 

 

The Digital Printing segment has three goodwill reporting units: Electrophotographic Printing Solutions; Prosper and Versamark; and Software. The Advanced Materials and Chemicals segment has two goodwill reporting units: Motion Picture and Industrial Films and Chemicals; and Advanced Materials and Functional Printing.  The Traditional Printing segment and Brand segment each have one goodwill reporting unit.  As of December 31, 2021, goodwill is only recorded in the Brand and Software reporting units.

 

Kodak performed interim tests of impairment for goodwill as of June 30, 2020 due to the uncertainty regarding the negative impact of the COVID-19 pandemic on its operations, and as of March 31, 2020, due to the decline in market capitalization as of that date since the last goodwill impairment test (December 31, 2019) and the uncertainty regarding the negative impact of the COVID-19 pandemic at that time.

Based on the results of the June 30, 2020 and March 31, 2020 analyses, no impairment of goodwill was indicated.  No interim impairment test for goodwill was performed as of September 30, 2020.  No interim impairment tests for goodwill were required to be performed for any interim periods in the years ended December 31, 2021 or 2019.

 

Based upon the results of Kodak’s December 31, 2021 and 2020 annual impairment tests, no impairment of goodwill is indicated.  As of December 31, 2021 and 2020 the Brand reporting unit had negative carrying values.

 

The gross carrying amount and accumulated amortization by major intangible asset category as of December 31, 2021 and 2020 were as follows:

 

 

 

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

Gross Carrying

 

 

Accumulated

 

 

 

 

 

 

Remaining

(in millions)

 

Amount

 

 

Amortization

 

 

Net

 

 

Amortization Period

Technology-based

 

$

99

 

 

$

84

 

 

$

15

 

 

4 years

Kodak trade name

 

 

18

 

 

 

 

 

 

18

 

 

Indefinite life

Customer-related

 

 

9

 

 

 

8

 

 

 

1

 

 

2 years

Total

 

$

126

 

 

$

92

 

 

$

34

 

 

 

 

 

 

As of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

Gross Carrying

 

 

Accumulated

 

 

 

 

 

 

Remaining

(in millions)

 

Amount

 

 

Amortization

 

 

Net

 

 

Amortization Period

Technology-based

 

$

99

 

 

$

80

 

 

$

19

 

 

5 years

Kodak trade name

 

 

18

 

 

 

 

 

 

18

 

 

Indefinite life

Customer-related

 

 

11

 

 

 

9

 

 

 

2

 

 

3 years

Total

 

$

128

 

 

$

89

 

 

$

39

 

 

 

 

The annual and interim impairment tests of the Kodak trade name use the income approach, specifically the relief from royalty method.  

 

Based upon the results of Kodak’s annual December 31, 2021 and 2020 impairment tests, no impairment of the Kodak trade name was indicated.

 

In the first quarter of 2020, due to the uncertainty regarding the negative impact of the COVID-19 pandemic at that time, Kodak performed an interim test of impairment for the Kodak trade name.  Based on the result of the interim impairment test, Kodak concluded the carrying value of the Kodak trade name exceeded its fair value.  Pre-tax impairment charges of $3 million are included in Other operating (income) expense, net for the year ended December 31, 2020 in the Consolidated Statement of Operations.  Kodak also performed an interim test of impairment for the Kodak trade name as of June 30, 2020 due to the uncertainty regarding the negative impact of the COVID-19 pandemic.   Based on the result of the interim impairment test as of June 30, 2020, Kodak concluded the fair value of the Kodak trade name exceeded its’ carrying value resulting in no additional impairment.  No interim impairment test for the Kodak tradename was performed as of September 30, 2020.   No interim impairment tests for the Kodak tradename were required to be performed for any interim periods in the years ended December 31, 2021 or 2019.   

 

In the fourth quarter of 2019, Kodak concluded the carrying value of the Kodak trade name exceeded its fair value.  Pre-tax impairment charges of $4 million are included in Other operating (income) expense, net in the Consolidated Statement of Operations.

 

Amortization expense related to intangible assets was $5 million for both the years ended December 31, 2021 and 2020 and $7 million for the year ended December 31, 2019. 

 

Estimated future amortization expense related to intangible assets that are currently being amortized as of December 31, 2021 was as follows:

 

(in millions)

 

 

 

 

2022

 

$

5

 

2023

 

 

4

 

2024

 

 

4

 

2025

 

 

3

 

Total

 

$

16