Note 17 - Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

NOTE 17: 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 three lines of business: Industrial Film and Chemicals, Motion Picture and Advanced Materials and Functional Printing.

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)	2022		2021		2022		2021
Traditional Printing	$	194	$	169	$	366	$	317
Digital Printing		58		62		114		126
Advanced Materials and Chemicals		61		54		115		100
Brand		4		3		8		6
All Other		4		3		8		7
Consolidated total	$	321	$	291	$	611	$	556

Segment Operational EBITDA and Consolidated Earnings from Operations Before Income Taxes

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2022			2021			2022			2021
Traditional Printing	$	10		$	6		$	8		$	11
Digital Printing		(4	)		—			(9	)		—
Advanced Materials and Chemicals		1			1			(2	)		(3	)
Brand		4			3			7			5
Total of reportable segments		11			10			4			13
All other		1			1			1			1
Depreciation and amortization		(7	)		(8	)		(14	)		(16	)
Restructuring costs and other		—			—			—			(1	)
Stock based compensation		(1	)		(1	)		(3	)		(4	)
Consulting and other costs (1)		(3	)		(4	)		(5	)		(9	)
Idle costs (2)		—			—			(1	)		(1	)
Other operating income, net (3)		—			6			—			7
Interest expense (3)		(10	)		(10	)		(19	)		(14	)
Pension income excluding service cost component (3)		27			26			57			51
Other income (charges), net (3)		1			(1	)		(2	)		(1	)
Consolidated earnings from operations before    income taxes	$	19		$	19		$	18		$	26

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

⁽²⁾ 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 and the costs, net of any rental income received, of underutilized portions of certain properties.

⁽³⁾ As reported in the Consolidated Statement of Operations.

Kodak decreased workers’ compensation reserves by approximately $4 million and $8 million in the three and six months ended June 30, 2022, driven by changes in discount rates. The decrease in reserves in the three months ended June 30, 2022 impacted gross profit by approximately $2 million and Selling, general and administrative expenses (“SG&A”) by approximately $2 million. The decrease in reserves in the six months ended June 30, 2022 impacted gross profit by approximately $5 million and Selling, general and administrative expenses by approximately $3 million.

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 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; stock-based compensation expense; consulting and other costs; idle costs; other operating income, net (unless otherwise indicated); interest expense and other income (charges), 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.