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Note 9 - Leases (Tables)

9 Months Ended

Sep. 30, 2019

The table below presents the lease-related assets and liabilities on the balance sheet:

	Classification in the	September 30,
(in millions)	Consolidated Statement of Financial Position	2019
Assets
Operating lease assets	Operating lease right-of-use assets	$	49
Finance lease assets	Property, plant and equipment, net		5
Total lease assets		$	54

Liabilities
Current
Operating	Current portion of operating leases	$	26
Finance	Short-term borrowings and current portion of long-term debt		1
Noncurrent
Operating	Operating leases, net of current portion		34
Finance	Long-term debt, net of current portion		3
Total lease liabilities		$	64

Weighted-average remaining lease term
Operating		6 years
Finance⁽¹⁾		319 years
Weighted-average discount rate
Operating ⁽²⁾			16.50	%
Finance			6.75	%

⁽¹⁾

One finance lease has a remaining term of 968 years. The weighted-average lease term excluding the lease with a remaining term of 968 years is 4 years.

⁽²⁾

Upon adoption of ASC 842, Kodak’s incremental borrowing rate used for existing operating leases was established at January 1, 2019.

The table below presents certain information related to the lease costs for finance and operating leases. Lease costs are presented gross of sublease income. See “Kodak as Lessor” section below for income from subleases.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2019		2019
Finance lease cost
Amortization of leased assets	$	1	$	3
Interest on lease liabilities		—		—
Operating lease cost		6		19
Variable lease cost		2		5
Total lease cost	$	9	$	27

Schedule of Supplemental Cash Flow Information Related to Leases

The table below presents supplemental cash flow information related to leases.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2019		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	6	$	19
Operating cash flow for finance leases		—		—
Financing cash flow for finance leases		1		2
	$	7	$	21

Summary of Undiscounted Cash Flows for Next Five Years and Thereafter to Finance Lease Liabilities and Operating Lease Liabilities Recorded on Balance Sheet

The table below reconciles the undiscounted cash flows for the next five years and thereafter to the finance lease liabilities and operating lease liabilities recorded on the balance sheet.

(in millions)	Operating Leases			Finance Leases
Q4 2019	$	6		$	—
2020		27			1
2021		11			1
2022		8			1
2023		7			—
Thereafter		34			110
Total minimum lease payments		93			113
Less: amount of lease payments representing interest		33			(110	)
Present value of future minimum lease payments		60			3
Less: current obligations under leases		(26	)		—
Long-term lease obligations	$	34		$	3

Summary of Future Minimum Contractual Lease Payments For Operating Leases

Future minimum contractual lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year as of December 31, 2018 were as follows:

(in millions)	At December 31, 2018
2019	$	20
2020		21
2021		13
2022		3
2023		3
Thereafter		7
	$	67

Summary of Undiscounted Cash Flows to Be Received for Net Investment in Sales-type Leases

The table below reconciles the undiscounted cash flows to be received for the next five years and thereafter to the net investment in sales-type leases recorded on the balance sheet:

(in millions)
Q4 2019	$	1
2020		2
2021		1
2022 and thereafter		1
Total minimum lease payments		5
Less: unearned interest		(1	)
Less: allowance for doubtful accounts		—
Net investment in sales-type leases	$	4

Summary of Undiscounted Cash Flows to Be Received for Operating Leases

Undiscounted cash flows to be received for the next five years and thereafter for operating leases and subleases are:

(in millions)
Q4 2019	$	4
2020		9
2021		7
2022		6
2023		4
Thereafter		17
Total minimum lease payments	$	47

Equipment Subject to Operating Leases and Related Accumulated Depreciation

Equipment subject to operating leases and the related accumulated depreciation were as follows:

	September 30,			December 31,
(in millions)	2019			2018
Equipment subject to operating leases	$	33		$	34
Accumulated depreciation		(22	)		(19	)
Equipment subject to operating leases, net	$	11		$	15

Summary of Income Recognized on Lease Arrangements

Income recognized on operating lease arrangements for the quarter and nine months ended September 30, 2019 is presented below (income recognized for sales-type lease arrangements is $0 million):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(in millions)	2019		2019
Lease income - operating leases:
Lease income	$	3	$	7
Sublease income		1		5
Variable lease income		1		3
Total lease income	$	5	$	15