Note 16 - Segment Information

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 16: SEGMENT INFORMATION

Kodak has three reportable segments: Print, Advanced Materials and Chemicals and Brand. A description of Kodak’s reportable segments follows.

Print: The Print segment is comprised of five lines of business: the Prepress Solutions business, the PROSPER business, the Software business, the Electrophotographic Printing Solutions business and the VERSAMARK business.

Advanced Materials and Chemicals: The Advanced Materials and Chemicals segment is comprised of four lines of business: the Industrial Film and Chemicals business, the Motion Picture business, the Advanced Materials and Functional Printing business and the IP Licensing and Analytical Services business.

Brand: The Brand segment contains the brand licensing business.

All Other: All Other is comprised of the operations of the Eastman Business Park, a more than 1,200-acre technology center and industrial complex.

Segment financial information is shown below:

Segment Revenues

	Three Months Ended
	March 31,
(in millions)	2024		2023
Print	$	182	$	209
Advanced Materials and Chemicals		59		61
Brand		4		4
All Other		4		4
Total	$	249	$	278

Segment Operational EBITDA and Consolidated Earnings from Operations Before Income Taxes

	Three Months Ended
	March 31,
(in millions)	2024			2023
Print	$	—		$	6
Advanced Materials and Chemicals		1			—
Brand		3			3
Total of reportable segments		4			9
All other		1			—
Depreciation and amortization		(7	)		(8	)
Restructuring costs and other (2)		(5	)		(1	)
Stock based compensation		(3	)		(4	)
Consulting and other costs (1)		—			10
Other operating income (expense), net (2)		17			(1	)
Interest expense (2)		(15	)		(11	)
Pension income excluding service cost component (2)		41			40
Other income, net (2)		2			7
Consolidated earnings from operations before income taxes	$	35		$	41

(1)

Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation.  Consulting and other costs in the three months ended March 31, 2023 included $10 million of income in representing insurance reimbursement of legal costs previously paid by the Company associated with investigations and litigation matters.

(2)

As reported in the Consolidated Statement of Operations.

Kodak decreased employee benefit reserves by approximately $1 million in the three months ended March 31, 2024 due to a decrease in workers' compensation reserves driven by changes in discount rates. The decrease in reserves in the three months ended March 31, 2024 impacted gross profit by approximately $1 million.

Kodak increased employee benefit reserves by approximately $1 million in the three months ended March 31, 2023 composed of an increase in workers' compensation reserves ($2 million) driven by changes in discount rates and a decrease in other employee benefit reserves ($1 million), primarily driven by a reduction in bonus accruals. The increase in reserves in the three months ended March 31, 2023 impacted gross profit by approximately $1 million.

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 earnings from operations excluding the provision for income taxes; non-service cost components of pension and other postemployment benefits (“OPEB”) income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; interest expense; other operating income (expense), net and other income, net.

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate 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 Advanced Materials and Chemicals segment.