Note 14 - Earnings Per Share

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 14: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share computations include any dilutive effect of potential common shares. In periods with a net loss available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2023			2022			2023			2022
Net earnings	$	2		$	2		$	70		$	19
Less: Series B Preferred stock cash dividends		(1	)		(1	)		(3	)		(3	)
Less: Series C Preferred stock in-kind dividends		(1	)		(2	)		(4	)		(4	)
Less: Preferred stock deemed dividends		—			—			(1	)		(1	)
Less: Earnings attributable to Series C Preferred shareholders		—			—			(8	)		(2	)
Net earnings (loss) available to common shareholders - basic	$	—		$	(1	)	$	54		$	9
Effect of dilutive securities:
Add back: Series B preferred stock cash and deemed dividends	$	—		$	—		$	4		$	—
Net earnings (loss) available to common shareholders - diluted	$	—		$	(1	)	$	58		$	9

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions of shares)	2023		2022		2023		2022
Weighted average shares — basic		79.5		79.0		79.3		78.9
Effect of dilutive securities
Employee stock options		—		—		0.9		1.2
Unvested restricted stock units		—		—		0.8		0.6
Series B Preferred Stock		—		—		9.5		—
Weighted average shares — diluted		79.5		79.0		90.5		80.7

The computation of diluted earnings per share for the nine months ended September 30, 2023 excluded the impact of (1) the assumed conversion of 1.1 million shares of Series C Preferred Stock, (2) the assumed vesting of 0.1 restricted stock units and (3) the assumed exercise of 3.9 million outstanding employee stock options because the effects would have been anti-dilutive. 

There was not income available to common shareholders for the three months ended September 30, 2023 and 2022, therefore, Kodak calculated diluted earnings per share using weighted‐average basic shares outstanding. If Kodak reported income available to common shareholders for the three months ended September 30, 2023, the calculation of diluted earnings per share would have included (1) the assumed vesting of 1.2 million unvested restricted stock units and (2) the assumed exercise of 1.1 million outstanding stock options. If Kodak reported income available to common shareholders for the three months ended September 30, 2022, the calculation of diluted earnings per share would have included (1) the assumed vesting of 0.7 million unvested restricted stock units and (2) the assumed exercise of 1.3 million outstanding stock options. 

The computation of diluted earnings per share for the three months ended September 30, 2023 excluded the impact of (1) the assumed exercise of 3.1 million outstanding stock options, (2) the assumed conversion of 1.0 million share of Series B Preferred Stock and (3) the assumed conversion of 1.1 million shares of Series C Preferred Stock because the effects would have been anti‐dilutive.  Also, the computation of diluted earnings per share for the three and nine months ended September 30, 2022 excluded the impact of (1) the assumed conversion of $25 million of Convertible Notes issued in 2021, (2) the assumed conversion of 1.0 million shares of Series B Preferred Stock, (3) the assumed conversion of 1.1 million shares of Series C Preferred Stock and (4) the assumed exercise of 3.3 million and 3.4 million outstanding employee stock options, respectively, because the effects would have been anti‐dilutive.