Note 20 - Segment Information

9 Months Ended

Sep. 30, 2017

Disclosure Text Block [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 20: SEGMENT INFORMATION

Effective January 1, 2017, Kodak changed its organizational structure.  Micro 3D Printing, within the Micro 3D Printing and Packaging segment, was moved into the Intellectual Property Solutions segment, which has been renamed the Advanced Materials and 3D Printing Technology segment. The Flexographic Packaging business, formerly part of the Micro 3D Printing and Packaging segment, is now being reported as a dedicated segment.

Effective April 1, 2017, Kodak made another change to its organizational structure.  Digital front-end controllers within the Prosper business in the Enterprise Inkjet Systems segment was moved to the Unified Workflow Solutions business within the Software and Solutions segment.

Prior period segment results have been revised to conform to the current period segment reporting structure.

Financial information is reported for seven reportable segments:  Print Systems, Enterprise Inkjet Systems, Flexographic Packaging, Software and Solutions, Consumer and Film, Advanced Materials and 3D Printing Technology and Eastman Business Park.  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.

Enterprise Inkjet Systems: The Enterprise Inkjet Systems segment is comprised of two lines of business: the Prosper business and the Versamark business.

Flexographic Packaging: The Flexographic Packaging segment is comprised of the Packaging line of business.

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

Consumer and Film: The Consumer and Film segment is comprised of three lines of business:  Industrial Film and Chemicals, Motion Picture and Consumer Products (which includes Consumer Inkjet Solutions).

Advanced Materials and 3D Printing Technology: The Advanced Materials and 3D Printing Technology segment includes the Kodak Research Laboratories and associated new business opportunities and intellectual property licensing not directly related to other business segments.

Eastman Business Park: The Eastman Business Park segment includes 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				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Print Systems	$	232	$	250	$	681	$	739
Enterprise Inkjet Systems		33		47		105		123
Flexographic Packaging		34		34		104		98
Software and Solutions		21		21		64		66
Consumer and Film		55		55		151		174
Advanced Materials and 3D Printing Technology		—		—		—		—
Eastman Business Park		4		4		12		11
Consolidated total	$	379	$	411	$	1,117	$	1,211

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2017			2016			2017			2016
Print Systems	$	13		$	27		$	42		$	67
Enterprise Inkjet Systems		1			(8	)		2			(18	)
Flexographic Packaging		7			7			21			17
Software and Solutions		1			—			—			(1	)
Consumer and Film		(2	)		1			(10	)		18
Advanced Materials and 3D Printing Technology		(6	)		(6	)		(21	)		(21	)
Eastman Business Park		1			1			3			2
Total of reportable segments		15			22			37			64
All Other (1)		—			(2	)		—			2
Corporate components of pension and OPEB income (2)		37			40			108			121
Depreciation and amortization		(21	)		(25	)		(62	)		(82	)
Restructuring costs and other		(5	)		(2	)		(29	)		(13	)
Stock based compensation		(2	)		(3	)		(7	)		(6	)
Consulting and other costs (3)		(2	)		(3	)		(3	)		(6	)
Idle costs (4)		—			—			(2	)		(2	)
Manufacturing costs originally planned to be absorbed by silver    metal mesh touch screen production (5)		—			(1	)		—			(2	)
Other operating (expense) income, net (6)		(20	)		6			(32	)		(2	)
Goodwill impairment loss (6)		(56	)		—			(56	)		—
Interest expense (6)		(8	)		(16	)		(24	)		(48	)
Other income (charges), net (6)		4			(1	)		33			(3	)
Consolidated (loss) earnings from continuing operations before    income taxes	$	(58	)	$	15		$	(37	)	$	23

⁽¹⁾ RED utilities variable interest entity, which was deconsolidated as of December 31, 2016 (interest and depreciation of RED are included in the respective lines below).

⁽²⁾ Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses and curtailment and settlement components of pension and other postretirement benefit expenses.

⁽³⁾ Consulting and other costs are professional services and internal costs associated with certain 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⁾ Consists of manufacturing costs originally planned to be absorbed by silver metal mesh touch screen production that are excluded from the segment measure of profit and loss.

⁽⁶⁾ 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 (loss) earnings from continuing operations excluding the provision for income taxes; corporate components of pension and OPEB income; depreciation and amortization expense; restructuring costs; stock-based compensation expense; consulting and other costs; idle costs; manufacturing costs originally planned to be absorbed by silver metal mesh touch screen production; other operating expense, net (unless otherwise indicated); goodwill impairment losses; interest expense; and other (income) charges, net.  Overhead costs no longer absorbed by the Prosper discontinued operations of $4 million and $12 million in the three and nine months ended September 30, 2016, respectively, were also excluded from segment earnings while the business was reported in discontinued operations.  As the Prosper business is no longer reported in discontinued operations, overhead allocations are included in the Enterprise Inkjet Solutions segment measure for all periods presented.

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 Advanced Materials and 3D Printing Technology segment.

Change in Segment Measure of Profitability

During the first quarter of 2017 the segment measure was changed to exclude internal costs associated with corporate strategic initiatives.  The segment measure already excluded external costs associated with those initiatives.  Additionally, third party costs associated with incremental idle building space has been added to idle costs.