Discontinued operations of Kodak include the former Flexographic Packaging segment comprised of Kodak’s Flexographic Packaging Business (the “Business”).

Kodak consummated the sale of certain assets of the Business to MIR Bidco, SA (the “Purchaser”) on April 8, 2019 for net cash consideration at closing, in addition to the assumption by Purchaser of certain liabilities of the Business, of $320 million, pursuant to the Stock and Asset Purchase Agreement (“SAPA”) signed in November 2018 and amended in March 2019. Assets and liabilities of the Business in China were not transferred at the initial closing but will be transferred at a deferred closing in accordance with the SAPA. The portion of the purchase price to be paid at the deferred closing is $7.5 million.

Kodak will operate the Business in China, subject to certain covenants, until the deferred closing occurs and will deliver to (or receive from) the Purchaser a true-up payment reflecting the actual economic benefit (or detriment) attributable to the operation of the Business in China from the time of the initial closing through the time of the deferred closing.

Simultaneously with entering into the SAPA, the Company and the Purchaser entered into an Earn-out Agreement, pursuant to which the Company will be entitled to an aggregate of up to $35 million in additional cash consideration if the Business achieves agreed EBITDA targets for 2018 ($10 million earn-out), 2019 ($10 million earn-out) and 2020 ($15 million earn-out). The EBITDA target for 2018 was not achieved.

On April 16, 2019 the Purchaser paid Kodak $15 million as a prepayment for services and products to be provided by Kodak to the Purchaser.

The results of operations of the Business are classified as discontinued operations in the Consolidated Statement of Operations for all periods presented. 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. Additionally, the assets and liabilities associated with the Business are classified as held for sale in the Consolidated Statement of Financial Position as of March 31, 2019 and December 31, 2018.

	Three Months Ended
	March 31,
(in millions)	2019			2018
Revenues	$	39		$	37
Cost of revenues		26			22
Selling, general and administrative expenses		8			4
Research and development costs		2			2
Interest expense		7			7
Income (loss) from continuing operations before taxes		(4	)		2
Provision for income taxes		2			2
Income (loss) from continuing operations	$	(6	)	$	—

After the initial closing, Kodak was required to use a portion of the proceeds from the sale of the Business to repay $312 million of the loans under the Term Credit Agreement. Interest expense on debt that was required to be repaid as a result of the sale was allocated to discontinued operations.

Approximately $4 million of transaction costs are included in Selling, general and administrative expenses in the current year period.

The following table presents the aggregate carrying amount of major assets and liabilities of the Business:

	March 31,		December 31,
(in millions)	2019		2018
ASSETS
Cash and cash equivalents	$	1	$	2
Trade receivables, net		31		28
Inventories, net		29		33
Property, plant and equipment, net		29		28
Goodwill		20		20
Intangible assets		1		1
Operating lease right of use assets		2		—
Other assets		3		1
Assets of business held for sale	$	116	$	113

LIABILITIES
Accounts payable, trade	$	12	$	9
Pension and other postretirement liabilities		5		4
Operating leases		2		—
Other current liabilities		6		7
Liabilities of business held for sale	$	25	$	20

A dedicated entity of the Business had intercompany receivables with Kodak of approximately $5 million as of March 31, 2019 and December 31, 2018 that are part of the proposed transaction but are not reflected in the table above as these amounts have been eliminated in deriving the consolidated financial statements.

The following table presents cash flow information associated with the Business:

	March 31,
(in millions)	2019		2018
Depreciation	$	—	$	1
Amortization		—		—
Capital expenditures		—		2

Depreciation and amortization of long-lived assets of the Business included in discontinued operations ceased as of December 1, 2018.