kodk-10q_20200331.htm

☒Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2020, the registrant had 43,733,599 shares of common stock, par value $0.01 per share, outstanding.

	Three Months Ended
	March 31,
	2020			2019
Revenues
Sales	$	210		$	224
Services		57			67
Total revenues		267			291
Cost of revenues
Sales		191			205
Services		40			46
Total cost of revenues		231			251
Gross profit		36			40
Selling, general and administrative expenses		48			59
Research and development costs		9			11
Restructuring costs and other		7			2
Other operating income, net		(7	)		—
Loss from continuing operations before interest expense, pension income excluding service cost component, other (income) charges, net and income taxes		(21	)		(32	)
Interest expense		4			3
Pension income excluding service cost component		(26	)		(27	)
Other (income) charges, net		(53	)		1
Earnings (loss) from continuing operations before income taxes		54			(9	)
Provision for income taxes		165			3
Loss from continuing operations		(111	)		(12	)
Loss from discontinued operations, net of income taxes		—			(6	)
Net loss	$	(111	)	$	(18	)

Basic and diluted loss per share attributable to Eastman Kodak Company common shareholders:
Continuing operations	$	(2.66	)	$	(0.40	)
Discontinued operations		—			(0.14	)
Total	$	(2.66	)	$	(0.54	)

Number of common shares used in basic and diluted net loss per share:
Basic		43.6			42.9
Diluted		43.6			42.9

The accompanying notes are an integral part of these consolidated financial statements.

	March 31,			December 31,
(in millions)	2020			2019
ASSETS
Cash and cash equivalents	$	209		$	233
Trade receivables, net of allowances of $12 and $8, respectively		183			208
Inventories, net		236			215
Restricted cash - current portion		8			12
Other current assets		31			36
Current assets held for sale		2			2
Total current assets		669			706
Property, plant and equipment, net of accumulated depreciation of $413 and $423, respectively		165			181
Goodwill		12			12
Intangible assets, net		43			47
Operating lease right-of-use assets		49			49
Restricted cash		24			45
Deferred income taxes		—			147
Other long-term assets		258			228
TOTAL ASSETS	$	1,220		$	1,415

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)
Accounts payable, trade	$	152		$	153
Short-term borrowings and current portion of long-term debt		2			2
Current portion of operating leases		11			12
Other current liabilities		175			201
Total current liabilities		340			368
Long-term debt, net of current portion		111			109
Pension and other postretirement liabilities		372			378
Operating leases, net of current portion		48			48
Other long-term liabilities		190			231
Total liabilities		1,061			1,134

Commitments and Contingencies (Note 11)

Redeemable, convertible Series A preferred stock, no par value, $100 per share liquidation preference	184			182

Equity (Deficit)
Common stock, $0.01 par value		—			—
Additional paid in capital		600			604
Treasury stock, at cost		(9	)		(9	)
Accumulated deficit		(190	)		(79	)
Accumulated other comprehensive loss		(426	)		(417	)
Total shareholders’ equity (deficit)		(25	)		99
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)	$	1,220		$	1,415

The accompanying notes are an integral part of these consolidated financial statements.


	March 31,
(in millions)	2020			2019
Cash flows from operating activities:
Net loss	$	(111	)	$	(18	)
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		10			15
Pension income		(22	)		(23	)
Change in fair value of embedded derivatives in the Series A Preferred Stock and Convertible Notes		(53	)		1
Net gain on sales of assets		(8	)		—
Asset impairments		3			—
Stock based compensation		1			3
Provision for deferred income taxes		161			1
Decrease in trade receivables		19			25
Increase in inventories		(26	)		(11	)
Increase in trade payables		1			14
Decrease in liabilities excluding borrowings and trade payables		(27	)		(27	)
Other items, net		11			8
Total adjustments		70			6
Net cash used in operating activities		(41	)		(12	)
Cash flows from investing activities:
Additions to properties		(4	)		(3	)
Net proceeds from return on equity investment		2			—
Net proceeds from sales of assets		1			—
Net cash used in investing activities		(1	)		(3	)
Cash flows from financing activities:
Proceeds from borrowings		—			14
Repayment of finance leases		—			(1	)
Preferred stock dividend payments		(3	)		—
Payment of contingent consideration related to the sale of a business		—			(10	)
Net cash (used in) provided by financing activities		(3	)		3
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(4	)		2
Net decrease in cash, cash equivalents, restricted cash and cash in assets held for sale		(49	)		(10	)
Cash, cash equivalents, restricted cash and cash in assets held for sale, beginning of period		290			267
Cash, cash equivalents, restricted cash and cash in assets held for sale, end of period	$	241		$	257

The accompanying notes are an integral part of these consolidated financial statements.

	Three-Month Period Ending March 31, 2020
	Eastman Kodak Company Common Shareholders
	Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total			Series A Redeemable Convertible Preferred Stock
Equity (deficit) as of December 31, 2019	$	—	$	604		$	(79	)	$	(417	)	$	(9	)	$	99		$	182
Net loss		—		—			(111	)		—			—			(111	)		—
Other comprehensive loss (net of tax):
Currency translation adjustments		—		—			—			(12	)		—			(12	)		—
Pension and other postretirement liability adjustments		—		—			—			3			—			3			—
Series A preferred stock cash dividends		—		(3	)		—			—			—			(3	)		—
Series A preferred stock deemed dividends		—		(2	)		—			—			—			(2	)		2
Stock-based compensation		—		1			—			—			—			1			—
Equity (deficit) as of March 31, 2020	$	—	$	600		$	(190	)	$	(426	)	$	(9	)	$	(25	)	$	184

	Three-Month Period Ending March 31, 2019
	Eastman Kodak Company Common Shareholders
	Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total			Series A Redeemable Convertible Preferred Stock
Equity (deficit) as of December 31, 2018	$	—	$	617		$	(200	)	$	(411	)	$	(9	)	$	(3	)	$	173
Net loss		—		—			(18	)		—			—			(18	)		—
Other comprehensive loss (net of tax):
Currency translation adjustments		—		—			—			3			—			3			—
Pension and other postretirement liability adjustments		—		—			—			(1	)		—			(1	)		—
Series A preferred stock cash dividends		—		(3	)		—			—			—			(3	)		—
Series A preferred stock deemed dividends		—		(2	)		—			—			—			(2	)		2
Stock-based compensation		—		3			—			—			—			3			—
Prior period adjustment due to adoption of ASU 2016-02		—		—			5			—			—			5			—
Equity (deficit) as of March 31, 2019	$	—	$	615		$	(213	)	$	(409	)	$	(9	)	$	(16	)	$	175

The accompanying notes are an integral part of these consolidated financial statements.

The consolidated interim financial statements are unaudited, and certain information and footnote disclosures related thereto normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results of operations, financial position and cash flows of Eastman Kodak Company (“EKC” or the “Company”) and all companies directly or indirectly controlled, either through majority ownership or otherwise (collectively, “Kodak”). The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year. These consolidated interim statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”).

The consolidated interim financial statements have been prepared on the going concern basis of accounting, which assumes Kodak will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

As of March 31, 2020 and December 31, 2019, Kodak had approximately $209 million and $233 million, respectively, of cash and cash equivalents. $62 million and $72 million were held in the United States (“U.S.”) as of March 31, 2020 and December 31, 2019, respectively, and $147 million and $161 million were held outside the U.S. Cash balances held outside the U.S. are generally required to support local country operations and may have high tax costs or other limitations that delay the ability to repatriate, and therefore may not be readily available for transfer to other jurisdictions. Outstanding inter-company loans to the U.S. as of March 31, 2020 and December 31, 2019 were $416 million and $408 million, respectively, which includes short-term intercompany loans from Kodak’s international finance center of $117 million and $110 million as of March 31, 2020 and December 31, 2019, respectively. In China, where approximately $88 million and $89 million of cash and cash equivalents was held as of March 31, 2020 and December 31, 2019, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world. Kodak had a net decrease in cash, cash equivalents, restricted cash and cash in assets held for sale of $49 million and $10 million for the three months ended March 31, 2020 and 2019, respectively, and a net increase in cash, cash equivalents, restricted cash and cash in assets held for sale of $23 million the year ended December 31, 2019. Kodak used cash of $41 million and $12 million in operating activities for the three months ended March 31, 2020 and 2019, respectively, and generated cash from operating activities for the year ended December 31, 2019 of $12 million. On May 12, 2020, a Chinese subsidiary of Kodak transferred approximately $70 million to a U.S. subsidiary of Kodak in anticipation of an inter-company transaction.

U.S. GAAP requires an evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. Initially, this evaluation does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management evaluates the mitigating effect of its plans if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued or prior to the conditions or events that create the going concern risk.

Kodak is facing liquidity challenges due to operating losses, low or negative cash flow from operations, collateral needs and restrictions on the movement of cash from China. Cash flow from operations in 2019 benefited from working capital improvements and individual transactions that occurred during the year. The Company’s 5.00% Secured Convertible Notes due 2021 (the “Convertible Notes”) mature on November 1, 2021 if not converted prior to then and the Company’s 5.50% Series A Convertible Preferred Stock (the “Series A Preferred Stock”) must be redeemed on November 15, 2021 if not converted prior to then. Additionally, Kodak has significant cash requirements to fund ongoing operations, restructuring programs, pension and other postretirement obligations, and other obligations. Kodak’s plans to return to sustainable positive cash flow include growing revenues profitably, reducing operating expenses, continuing to simplify the organizational structure, generating cash from selling and leasing underutilized assets and paring investment in new technology by eliminating or delaying product development programs. Additionally, the Company looks to implement ways to reduce collateral needs in the U.S. while accessing available cash in Chinese subsidiaries.

Kodak’s products are sold and serviced in numerous countries across the globe with more than half of sales generated outside the United States. Current global economic conditions are highly volatile due to the COVID-19 pandemic, resulting in market size contractions in many countries due to economic slowdowns and government restrictions on movement. The economic uncertainties surrounding the COVID-19 pandemic are adding complexity to Kodak’s plans to return to sustainable positive cash flow. To mitigate the economic impacts of the pandemic Kodak is employing temporary furloughs and pay reductions, scaling manufacturing volumes due to expectations of reduced demand and delaying an increased number of product development programs.

The recent trend of negative operating cash flow, maturity and redemption dates in 2021 for the Convertible Notes and Series A Preferred Stock, increased challenges in managing cash during the COVID-19 pandemic and general lack of certainty regarding the return to positive cash flow raise substantial doubt about Kodak’s ability to continue as a going concern.

Certain amounts for prior periods have been reclassified to conform to the current period classification due to Kodak’s new organization structure as of January 2020. Refer to Note 22, “Segment Information” for additional information.

In November 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This guidance amended Topic 808 and Topic 606 to clarify that transactions in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a distinct good or service (i.e., unit of account). The amendments preclude an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The new standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019 (January 1, 2020 for Kodak). The amendments should be applied retrospectively to the date of initial application of Topic 606. Kodak adopted this ASU on January 1, 2020, and it did not have any impact on Kodak’s consolidated financial statements.

In September 2018 the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in Topic 820 by adding, changing, or removing certain disclosures about recurring or nonrecurring fair value measurements. The additional and/or modified disclosures relate primarily to Level 3 fair value measurements while removing certain disclosures related to transfers between Level 1 and Level 2 of the fair value hierarchy. The ASU is effective retrospectively, for fiscal years beginning after December 15, 2019 (January 1, 2020 for Kodak) and interim periods within those fiscal years. Entities are permitted to early adopt any removed or modified disclosures but can delay adoption of the new disclosures until their effective date. Kodak retrospectively early adopted the provisions of the ASU that removed or modified disclosures in the fourth quarter of 2018 and prospectively adopted the provisions related to new disclosures January 1, 2020. The standard addresses disclosures only and did not have an impact on Kodak’s consolidated financial statements.

In September 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends the disclosure requirements in ASC 715-20 by adding, clarifying, or removing certain disclosures. ASU 2018-14 requires all entities to disclose (1) the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The ASU also clarifies certain disclosure requirements for entities with two or more defined benefit pension plans when aggregate disclosures are presented. The ASU removes other disclosures from the existing guidance, such as the requirement to disclose the effects of a one-percentage-point change in the assumed health care cost trend rates. The ASU is effective retrospectively for fiscal years ending after December 15, 2020 (the year ended December 31, 2020 for Kodak). Kodak adopted this ASU on January 1, 2020. The standard addresses disclosures only and did not have an impact on Kodak’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which addresses how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”). Under ASU 2018-15, entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as implementation costs associated with a software license; implementation costs incurred in the application development stage, such as costs for the cloud computing arrangement’s integration with on-premise software, coding, and configuration or customization, should be capitalized and amortized over the term of the cloud computing arrangement, including periods covered by certain renewal options. The ASU is effective in fiscal years beginning after December 15, 2019 (January 1, 2020 for Kodak) including interim periods within those fiscal years. The ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Kodak adopted this ASU prospectively on January 1, 2020, and it did not have any impact on Kodak’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides optional relief through specific exceptions and practical expedients for transitioning away from reference rates that are expected to be discontinued. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. The optional relief is available from March 2020 through December 31, 2022. Kodak is currently evaluating the impact of this ASU.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” which removes certain exceptions related to intra-period tax allocations and deferred tax accounting on outside basis differences in foreign subsidiaries and equity method investments. Additionally, it provides other simplifying measures for the accounting for income taxes. The new standard is effective for fiscal years beginning after December 15, 2021 (January 1, 2022 for Kodak) with early adoption permitted. Kodak is currently evaluating the impact of this ASU.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 (as amended by ASUs 2018-19, 2019-04, 2019-05, 2020-02 and 2020-03) requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. In addition, the ASU requires credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The amendments in this ASU broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The ASU is effective for smaller reporting companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, (January 1, 2023 for Kodak). Early adoption is permitted. Kodak is currently evaluating the impact of this ASU.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Financial Position that sums to the total of such amounts shown in the Statement of Cash Flows:

Restricted cash - current portion on the Consolidated Statement of Financial Position primarily represents amounts that support hedging activities. In addition, as of December 31, 2019, it also contained collateral for a guaranty provided to MIR Bidco, SA (the “Purchaser”) who purchased Kodak’s Flexographic Packaging business (“FPD”). On April 16, 2019 the Purchaser of FPD paid Kodak $15 million in the U.S. as a prepayment for transition services and products and services to be provided by Kodak to the Purchaser. Kodak provided a $15 million guaranty, supported by cash collateral in China, to the Purchaser. The Purchaser had the option to satisfy its payment obligations to Kodak through a reduction of the prepayment balance or in cash. When the Purchaser satisfied its payment obligations to Kodak by utilizing its prepayment balance, Kodak followed a guaranty amendment process to reduce the amount of its guaranty and cash collateral supporting the prepayment balance. As of March 31, 2020 and December 31, 2019, the remaining prepayment balance was $0 million and $3 million, respectively, and the cash collateral supporting Kodak’s guaranty was $0 million and $4 million, respectively.

Restricted cash includes $3 million and $22 million as of March 31, 2020 and December 31, 2019, respectively, supporting compliance with the Excess Availability threshold under the Amended and Restated Credit Agreement (the “ABL Credit Agreement”), as defined therein (Refer to Note 8, “Debt and Finance Leases” for information on the decrease in Restricted cash supporting the Excess Availability threshold). In addition, Restricted cash as of both March 31, 2020 and December 31, 2019 includes an escrow of $14 million in China to secure various ongoing obligations under the agreements for the strategic relationship with Lucky HuaGuang Graphics Co. Ltd. Restricted cash also included $4 million and $5 million of security posted related to Brazilian legal contingencies as of March 31, 2020 and December 31, 2019, respectively.

The Other component above consists of other miscellaneous long-term assets that, individually, were less than 5% of the total assets component within the Consolidated Statement of Financial Position as of the end of the preceding year, and therefore have been aggregated in accordance with Regulation S-X.

The following table presents the carrying value of goodwill by reportable segment.

(in millions)	Traditional Printing			Digital Printing		Advanced Materials and Chemicals			Brand		Total
As of December 31, 2019
Goodwill	$	56		$	6	$	14		$	—	$	76
Accumulated impairment losses		(56	)		—		(8	)		—		(64	)
Balance as of December 31, 2019		—			6		6			—		12
Goodwill reallocation		—			—		(6	)		6		—
Balance as of March 31, 2020	$	—		$	6	$	—		$	6	$	12

As a result of the change in segments that became effective as of January 1, 2020, Kodak’s goodwill reporting units changed. Refer to Note 22, “Segment Information” for additional information on the change to Kodak’s organizational structure. The Digital Printing segment has three goodwill reporting units: Electrophotographic Printing Solutions, Prosper and Versamark and Software. The Advanced Materials and Chemicals segment has three goodwill reporting units: Motion Picture and Industrial Films and Chemicals, Advanced Materials and Functional Printing and Kodak Services for Business. The Traditional Printing segment and Brand segment each have one goodwill reporting unit.

As of December 31, 2019, the goodwill balance of $12 million under the prior year segment reporting structure was comprised of $6 million for the Brand, Film and Imaging segment and $6 million for the Kodak Software segment, which had only one reporting unit (Software). The goodwill in the Brand, Film and Imaging segment was reported in the Consumer Products reporting unit.

The goodwill previously reported in the Consumer Products goodwill reporting unit was transferred to the Brand goodwill reporting unit using a relative fair value allocation to affected reporting units. Goodwill previously reported in the Software reporting unit was transferred to the Digital Printing segment where it continues to remain its own reporting unit.

Kodak performed an interim test of impairment for goodwill as of March 31, 2020 due to the decline in its market capitalization from the last goodwill impairment test (December 31, 2019) and the uncertainty resulting from the COVID-19 pandemic on its operations. Based on the results of the March 31, 2020 analysis, no impairment of goodwill was indicated. As of March 31, 2020, the Brand reporting unit had negative carrying value.

The gross carrying amount and accumulated amortization by major intangible asset category as of March 31, 2020 and December 31, 2019 were as follows:

	March 31, 2020
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Weighted-Average Amortization Period
Technology-based	$	99	$	77	$	22	5 years
Kodak trade name		18		—		18	Indefinite life
Customer-related		11		8		3	4 years
Total	$	128	$	85	$	43

	December 31, 2019
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Weighted-Average Amortization Period
Technology-based	$	99	$	76	$	23	5 years
Kodak trade name		21		—		21	Indefinite life
Customer-related		11		8		3	4 years
Total	$	131	$	84	$	47

Kodak also performed an interim test of impairment for the Kodak trade name as of March 31, 2020. The interim impairment test of the Kodak trade name used the income approach, specifically the relief from royalty method. Based on the result of the interim impairment test, Kodak concluded the carrying value of the Kodak trade name exceeded its fair value. Pre-tax impairment charges of $3 million are included in Other operating income, net in the Consolidated Statement of Operations.

Amortization expense related to intangible assets was $1 million and $2 million for the three months ended March 31, 2020 and 2019, respectively.

Estimated future amortization expense related to intangible assets that are currently being amortized as of March 31, 2020 was as follows:

	March 31,		December 31,
(in millions)	2020		2019
Employee related liabilities	$	38	$	38
Deferred revenue		38		43
Customer rebates		18		23
Deferred consideration on disposed businesses ⁽¹⁾		14		14
Series A Preferred Stock dividends payable		14		14
Workers compensation		10		10
Restructuring liabilities		10		12
Transition services agreement prepayment		—		3
Other		33		44
Total	$	175	$	201

The customer rebate amounts will potentially be settled through customer deductions applied to outstanding trade receivables in lieu of cash payments.

The Other component above consists of other miscellaneous current liabilities that, individually, were less than 5% of the current liabilities component within the Consolidated Statement of Financial Position as of the end of the preceding year, and therefore have been aggregated in accordance with Regulation S-X.

NEW JERSEY		16-0417150
(State of incorporation)		(IRS Employer Identification No.)

343 STATE STREET, ROCHESTER, NEW YORK		14650
(Address of principal executive offices)		(Zip Code)

		Page
Part I.—Financial Information

Item 1.	Financial Statements	3
	Consolidated Statement of Operations (Unaudited)	3
	Consolidated Statement of Comprehensive (Loss) Income (Unaudited)	4
	Consolidated Statement of Financial Position (Unaudited)	5
	Consolidated Statement of Cash Flows (Unaudited)	6
	Notes to Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Liquidity and Capital Resources	38
Item 4.	Controls and Procedures	40

Part II. —Other Information

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42

	Index to Exhibits	43
	Signatures	44

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

(in millions)
Q2 - Q4 2020	$	4
2021		5
2022		5
2023		4
2024		4
2025 and thereafter		3
Total	$	25