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Note 5 - Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2018
Disclosure Text Block [Abstract]  
Goodwill and Other 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.  The Enterprise Inkjet Systems, Advanced Materials and 3D Printing Technology, and Eastman Business Park segments do not have goodwill and are therefore not presented.

 

(in millions)

 

Print

Systems

 

 

Software and

Solutions

 

 

Consumer

and Film

 

 

Consolidated Total

 

Balance as of December 31, 2016

 

$

56

 

 

$

6

 

 

$

6

 

 

$

68

 

Impairment

 

 

(56

)

 

 

 

 

 

 

 

 

(56

)

Balance as of December 31, 2017

 

 

 

 

 

6

 

 

 

6

 

 

 

12

 

Impairment

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

$

 

 

$

6

 

 

$

6

 

 

$

12

 

 

Gross goodwill and accumulated impairment losses were $76 million and $64 million as of December 31, 2018 and 2017, respectively.

 

The Print Systems segment has two goodwill reporting units: Prepress Solutions and Electrophotographic Printing Solutions. The Software and Solutions segment has two goodwill reporting units: Kodak Technology Solutions and Unified Workflow Solutions.  The Consumer and Film segment has two goodwill reporting units: Consumer Products and Motion Picture, Industrial Chemicals and Films.  The Enterprise Inkjet Systems segment, Advanced Materials and 3D Printing segment and the Eastman Business Park segment each have one goodwill reporting unit.

 

Based upon the results of Kodak’s December 31, 2018 annual impairment test, no impairment of goodwill is indicated.

 

Given the decline in Kodak’s financial projections in 2017 and in its market capitalization from the 2016 goodwill impairment test, Kodak performed an interim goodwill impairment test as of September 30, 2017.  Kodak utilized the discounted cash flow method and guideline public company method for the reporting units with goodwill.  For these reporting units, Kodak selected equal weighting of the guideline public company method and the discounted cash flow method as the valuation approaches produced comparable ranges of fair value.  Fair values for the other reporting units were estimated using the discounted cash flow method only.

 

Based upon the results of Kodak’s September 30, 2017 analysis, Kodak concluded that the Prepress Solutions reporting unit’s carrying value exceeded its fair value and recorded a pre-tax goodwill impairment loss of $56 million in the Consolidated Statement of Operations.  No impairment of goodwill was indicated for the other reporting units.

 

The gross carrying amount and accumulated amortization by major intangible asset category as of December 31, 2018 and 2017 were as follows:

 

 

 

As of December 31, 2018

 

 

Gross Carrying

 

 

Accumulated

 

 

 

 

 

 

Weighted-Average

(in millions)

 

Amount

 

 

Amortization

 

 

Net

 

 

Amortization Period

Technology-based

 

$

99

 

 

$

70

 

 

$

29

 

 

6 years

Kodak trade name

 

 

25

 

 

 

 

 

 

25

 

 

Indefinite life

Customer-related

 

 

11

 

 

 

7

 

 

 

4

 

 

5 years

Other

 

 

3

 

 

 

1

 

 

 

2

 

 

20 years

Total

 

$

138

 

 

$

78

 

 

$

60

 

 

 

 

 

 

As of December 31, 2017

 

 

Gross Carrying

 

 

Accumulated

 

 

 

 

 

 

Weighted-Average

(in millions)

 

Amount

 

 

Amortization

 

 

Net

 

 

Amortization Period

Technology-based

 

$

99

 

 

$

60

 

 

$

39

 

 

6 years

Kodak trade name

 

 

38

 

 

 

 

 

 

38

 

 

Indefinite life

Customer-related

 

 

11

 

 

 

6

 

 

 

5

 

 

6 years

Other

 

 

3

 

 

 

1

 

 

 

2

 

 

21 years

Total

 

$

151

 

 

$

67

 

 

$

84

 

 

 

 

In the fourth quarter of 2018 and 2017, Kodak concluded the carrying value of the Kodak trade name exceeded its fair value.  Pre-tax impairment charges of $13 million and $2 million, respectively, are included in Other operating expense (income), net in the Consolidated Statement of Operations.

 

In the third quarter of 2017, due to canceling its copper mesh touch screen program, Kodak wrote off related intangible assets with a gross carrying amount of $33 million and accumulated amortization of $21 million and recorded an impairment charge of $12 million.

 

During the first quarter of 2017, Kodak recorded a pre-tax charge of $4 million to adjust the Prosper intangible asset carrying value to the amount that would have been recorded had the Prosper intangible assets been continuously classified as held and used. Refer to Note 15, “Other Operating Expense (Income), net” and Note 27, “Discontinued Operations”.

 

Amortization expense related to intangible assets was $11 million and $17 million for the years ended December 31, 2018 and 2017, respectively. 

Estimated future amortization expense related to intangible assets that are currently being amortized as of December 31, 2018 was as follows:

 

(in millions)

 

 

 

 

2019

 

$

7

 

2020

 

 

6

 

2021

 

 

5

 

2022

 

 

5

 

2023

 

 

4

 

2024 and thereafter

 

 

8

 

Total

 

$

35