Note 16 - Segment Information

6 Months Ended

Jun. 30, 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				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Print	$	186	$	215	$	368	$	424
Advanced Materials and Chemicals		73		72		132		133
Brand		4		4		8		8
All Other		4		4		8		8
Total	$	267	$	295	$	516	$	573

Segment Operational EBITDA and Consolidated Earnings from Operations Before Income Taxes

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2024			2023			2024			2023
Print	$	—		$	8		$	—		$	14
Advanced Materials and Chemicals		8			11			9			11
Brand		4			3			7			6
Total of reportable segments		12			22			16			31
All other		—			1			1			1
Depreciation and amortization		(6	)		(8	)		(13	)		(16	)
Restructuring costs and other		—			(5	)		(5	)		(6	)
Stock based compensation		(1	)		(1	)		(4	)		(5	)
Consulting and other costs (1)		(1	)		1			(1	)		11
Idle costs (2)		(1	)		(1	)		(1	)		(1	)
Other operating (expense) income, net (3)		(1	)		1			16			—
Interest expense (3)		(15	)		(11	)		(30	)		(22	)
Pension income excluding service cost component (3)		41			41			82			81
Other (expense) income, net (3)		(1	)		(3	)		1			4
Consolidated earnings from operations before income taxes	$	27		$	37		$	62		$	78

(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 included $1 million and $11 million of income in the three and six months ended June 30, 2023, respectively, representing insurance reimbursement of legal costs previously paid by the Company associated with investigations and litigation matters.
(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 employee benefit reserves by approximately $1 million in the six months ended June 30, 2024 due to a decrease in workers' compensation reserves driven by changes in discount rates. The decrease in reserves in the six months ended June 30, 2024 impacted gross profit by approximately $1 million.  There was no change to employee benefit reserves in the three months ended June 30, 2024.

Kodak decreased employee benefit reserves by approximately $1 million in the three months ended June 30, 2023, driven by changes in discount rates. The change in employee benefit reserves in the six months ended June 30, 2023 was less than $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; idle costs; interest expense; other operating (expense) income, net and other (expense) 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.