Note 16 - Segment Information

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 16: SEGMENT INFORMATION

Kodak has seven reportable segments:  Print Systems, Enterprise Inkjet Systems, Micro 3D Printing and Packaging, Software and Solutions, Consumer and Film, Intellectual Property Solutions and Eastman Business Park.

The balance of Kodak’s continuing operations, which do not meet the criteria of a reportable segment, are reported in All Other.  A description of the reportable segments follows.

Print Systems

: The Print Systems segment is comprised of two lines of business:  Prepress Solutions and Electrophotographic Printing Solutions.

Micro 3D Printing and Packaging

: The Micro 3D Printing and Packaging segment is comprised of two lines of business:  Packaging and Functional Printing.

Software and Solutions

: The Software and Solutions segment is comprised of two lines of business:  Kodak Technology Solutions and Unified Workflow Solutions.

Consumer and Film

: The Consumer and Film segment is comprised of three lines of business:  Consumer Inkjet Solutions; Motion Picture, Industrial Chemicals and Films; and Consumer Products.

Enterprise Inkjet Systems

: The Enterprise Inkjet Systems segment is comprised of the KODAK VERSAMARK business.

Intellectual Property Solutions

: The Intellectual Property Solutions segment includes licensing and research and development activities not directly related to the other segments.

Eastman Business Park

: The Eastman Business Park segment includes the operations of the Eastman Business Park, a 1,200 acre technology center and industrial complex.

All Other:

All Other is composed of the RED utilities variable interest entity.

Segment financial information is shown below:

Net Revenues from Continuing Operations by Reportable Segment

	Three Months Ended March 31,
(in millions)	2016		2015
Print Systems	$	231	$	254
Micro 3D Printing and Packaging		29		31
Software and Solutions		22		28
Consumer and Film		56		72
Enterprise Inkjet Systems		20		23
Intellectual Property Solutions		-		-
Eastman Business Park		4		3
Consolidated total	$	362	$	411

Segment Operational EBITDA and Consolidated Earnings (Loss) from Continuing Operations Before Income Taxes

	Three Months Ended March 31,
(in millions)	2016			2015
Print Systems	$	18		$	13
Micro 3D Printing and Packaging		1			-
Software and Solutions		2			2
Consumer and Film		7			18
Enterprise Inkjet Systems		5			7
Intellectual Property Solutions		(4	)		(8	)
Eastman Business Park		-			(1	)
Total of reportable segments		29			31
All Other		3			4
Corporate components of pension and OPEB income (1)		41			33
Depreciation and amortization		(27	)		(36	)
Restructuring costs and other		(5	)		(17	)
Overhead supporting, but not directly absorbed by discontinued operations (2)		(4	)		(5	)
Stock-based compensation		(2	)		(6	)
Consulting and other costs (3)		(1	)		(2	)
Idle costs (4)		(1	)		(1	)
Other operating expense, net (5)		(14	)		(3	)
Interest expense (5)		(16	)		(15	)
Other charges, net (5)		(1	)		(10	)
Reorganization items, net (5)		-			(5	)
Consolidated earnings (loss) from continuing operations before income taxes	$	2		$	(32	)

(1) Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses and curtailments and settlement components of pension and other postretirement benefit expenses.

(2) Primarily consists of costs for shared resources allocated to the Prosper Enterprise Inkjet business discontinued operation in the prior year period which are now included in the results of continuing operations and an estimate of costs for shared resources which would have been allocated to the Prosper Enterprise Inkjet business discontinued operation in the current year period had the business remained in continuing operations.

(3) Consulting and other costs are primarily related to professional services provided for corporate strategic initiatives.

(4) Consists of third party costs such as security, maintenance, and utilities required to maintain land and buildings in certain locations not used in any Kodak operations.

(5) As reported in the Consolidated Statement of Operations.

Segment Measure of Profit and Loss

Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”).  As demonstrated in the above table, Operational EBITDA represents the income (loss) from continuing operations excluding the provision (benefit) for income taxes; corporate components of pension and OPEB income; depreciation and amortization expense; restructuring costs; overhead costs no longer absorbed by discontinued operations; stock-based compensation expense; consulting and other costs; idle costs; other operating expense, net (unless otherwise indicated); interest expense; other charges, net and reorganization items, net.

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate selling, general and administrative expenses (“SG&A”).  The segment earnings measure reported is after allocation of corporate SG&A as this most closely aligns with U.S. GAAP.  Research and development activities not directly related to the other segments are reported within the Intellectual Property Solutions segment.

Change in Segment Measure of Profit and Loss

During the first quarter of 2016, Kodak changed its segment measure of profit and loss.  The segment measure excludes overhead costs no longer absorbed by discontinued operations (see description above).  In addition, manufacturing costs originally planned to be absorbed by silver halide touch screen production are now excluded from the segment measure of profit and loss.  There were no manufacturing costs originally planned to be absorbed by silver halide touch screen production in the three months ended March 31, 2016 or 2015.