Note 19 - Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

NOTE 19: SEGMENT INFORMATION

Kodak has four reportable segments: Traditional Printing, Digital Printing, Advanced Materials and Chemicals and Brand.  A description of Kodak’s reportable segments follows.

Traditional Printing: The Traditional Printing segment is comprised of Prepress Solutions.

Digital Printing: The Digital Printing segment is comprised of four lines of business: the Electrophotographic Printing Solutions business, the Prosper business, the Versamark business and the Kodak Software business.

Advanced Materials and Chemicals: The Advanced Materials and Chemicals segment is comprised of four lines of business: Industrial Film and Chemicals, Motion Picture, Advanced Materials and Functional Printing and Kodak Services for Business. Kodak Services for Business was sold to Swiss Post Solutions in December 2020.

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				Six Months Ended
	June 30,				June 30,
(in millions)	2021		2020		2021		2020
Traditional Printing	$	169	$	119	$	317	$	273
Digital Printing		62		52		126		117
Advanced Materials and Chemicals		54		38		100		80
Brand		3		2		6		5
All Other		3		2		7		5
Consolidated total	$	291	$	213	$	556	$	480

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2021			2020			2021			2020
Traditional Printing	$	6		$	1		$	11		$	2
Digital Printing		—			(3	)		—			(5	)
Advanced Materials and Chemicals		1			(7	)		(3	)		(16	)
Brand		3			2			5			4
Total of reportable segments		10			(7	)		13			(15	)
All Other		1			1			1			—
Depreciation and amortization		(8	)		(10	)		(16	)		(20	)
Restructuring costs and other		—			(1	)		(1	)		(8	)
Stock based compensation		(1	)		—			(4	)		(1	)
Consulting and other costs (1)		(4	)		(1	)		(9	)		(1	)
Idle costs (2)		—			(1	)		(1	)		(1	)
Other operating income, net, excluding income from    transition services agreement (3)		6			—			7			6
Interest expense (4)		(10	)		(4	)		(14	)		(8	)
Pension income excluding service cost component (4)		26			27			51			53
Other (charges) income net (4)		(1	)		(8	)		(1	)		45
Consolidated income (loss) from operations before    income taxes	$	19		$	(4	)	$	26		$	50

⁽¹⁾ Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives and investigations.

⁽²⁾ Consists of costs such as security, maintenance and utilities required to maintain land and buildings in certain locations not used in any Kodak operations and the costs, net of any rental income received, of underutilized portions of certain properties.

⁽³⁾ $2 million and $4 million of income from the transition services agreement with the purchaser of Kodak’s Flexographic Packaging Business was recognized in the three and six months ended June 30, 2020, respectively.  No income has been recognized in 2021.  The income was reported in Other operating income, net in the Consolidated Statement of Operations. Other operating income, net is typically excluded from the segment measure. However, the income from the transition services agreement was included in the segment measure.

⁽⁴⁾ As reported in the Consolidated Statement of Operations.

Kodak decreased workers’ compensation reserves by approximately $3 million in the second quarter of 2021 driven by changes in discount rates. The decrease in reserves in the second quarter of 2021 impacted gross profit by approximately $2 million and selling, general and administrative expenses (“SG&A”) 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 (loss) 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; stock-based compensation expense; consulting and other costs; idle costs; other operating income, net (unless otherwise indicated); interest expense and other (charges) 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.