UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended    June 30, 2021

or

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

For the transition period from            to            

Commission File Number
1-00087
EASTMAN KODAK COMPANY (Exact name of registrant as specified in its charter)
New Jersey	16-0417150
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
343 STATE STREET, ROCHESTER, New York	14650
(Address of principal executive offices)	(Zip Code)
(585) 724-4000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12-(b) of the Act:

Title of each class Common	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	KODK	New York Stock Exchange

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.

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

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 August 6, 2021, the registrant had 78,573,655 shares of common stock, par value $0.01 per share, outstanding.

[1]

EASTMAN KODAK COMPANY

Form 10-Q

June 30, 2021

Table of Contents

		Page
Part I.—Financial Information
Item 1.	Financial Statements	3
	Consolidated Statement of Operations (Unaudited)	3
	Consolidated Statement of Comprehensive Income (Loss) (Unaudited)	4
	Consolidated Statement of Financial Position (Unaudited)	5
	Consolidated Statement of Cash Flows (Unaudited)	6
	Consolidated Statement of Equity (Deficit) (Unaudited)	7
	Notes to Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
	Liquidity and Capital Resources	42
Item 4.	Controls and Procedures	45
Part II. —Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	48
	Index to Exhibits	48
	Signatures	49

[2]

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

EASTMAN KODAK COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(in millions, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Revenues
Sales	$	234		$	163		$	443		$	373
Services		57			50			113			107
Total revenues		291			213			556			480
Cost of revenues
Sales		204			159			389			350
Services		39			33			79			73
Total cost of revenues		243			192			468			423
Gross profit		48			21			88			57
Selling, general and administrative expenses		42			34			88			82
Research and development costs		8			8			16			17
Restructuring costs and other		—			1			1			8
Other operating income, net		(6	)		(3	)		(7	)		(10	)
Earnings (loss) from operations before interest expense,    pension income excluding service cost component,    other charges (income), net and income taxes		4			(19	)		(10	)		(40	)
Interest expense		10			4			14			8
Pension income excluding service cost component		(26	)		(27	)		(51	)		(53	)
Other charges (income), net		1			8			1			(45	)
Earnings (loss) from operations before income taxes		19			(4	)		26			50
Provision for income taxes		3			1			4			166
Net income (loss)	$	16		$	(5	)	$	22		$	(116	)
Basic net income (loss) per share attributable to    Eastman Kodak Company common shareholders	$	0.17		$	(0.23	)	$	0.33		$	(2.88	)
Diluted net income (loss) per share attributable to    Eastman Kodak Company common shareholders	$	0.16		$	(0.23	)	$	0.32		$	(2.88	)
Number of common shares used in basic and diluted     net income (loss) per share
Basic		78.5			43.7			78.2			43.7
Diluted		100.6			43.7			93.9			43.7

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

[3]

EASTMAN KODAK COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2021		2020			2021		2020
NET INCOME (LOSS)	$	16	$	(5	)	$	22	$	(116	)
Other comprehensive income (loss), net of tax:
Currency translation adjustments		4		(4	)		3		(16	)
Pension and other postretirement benefit plan obligation activity,    net of tax		8		9			14		12
Other comprehensive income (loss), net of tax		12		5			17		(4	)
COMPREHENSIVE INCOME (LOSS), NET OF TAX	$	28	$	—		$	39	$	(120	)

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

[4]

EASTMAN KODAK COMPANY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited)

	June 30,			December 31,
(in millions)	2021			2020
ASSETS
Cash and cash equivalents	$	395		$	196
Trade receivables, net of allowances of $9 and $10, respectively		174			177
Inventories, net		234			206
Other current assets		43			46
Current assets held for sale		2			2
Total current assets		848			627
Property, plant and equipment, net of accumulated depreciation of $438 and $430,    respectively		148			152
Goodwill		12			12
Intangible assets, net		36			39
Operating lease right-of-use assets		49			48
Restricted cash		66			53
Other long-term assets		375			317
TOTAL ASSETS	$	1,534		$	1,248
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY
Accounts payable, trade	$	145		$	118
Short-term borrowings and current portion of long-term debt		2			2
Current portion of operating leases		18			12
Other current liabilities		144			164
Total current liabilities		309			296
Long-term debt, net of current portion		249			17
Pension and other postretirement liabilities		391			406
Operating leases, net of current portion		43			49
Other long-term liabilities		219			212
Total liabilities		1,211			980
Commitments and Contingencies (Note 8)
Redeemable, convertible preferred stock, no par value, $100 per share    liquidation preference	193			191
Equity
Common stock, $0.01 par value		—			—
Additional paid in capital		1,167			1,152
Treasury stock, at cost		(10	)		(9	)
Accumulated deficit		(598	)		(620	)
Accumulated other comprehensive loss		(429	)		(446	)
Total shareholders’ equity		130			77
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY	$	1,534		$	1,248

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

[5]

EASTMAN KODAK COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

	Six Months Ended
	June 30,
(in millions)	2021			2020
Cash flows from operating activities:
Net income (loss)	$	22		$	(116	)
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		16			20
Pension income		(42	)		(43	)
Change in fair value of embedded derivatives in the Series A, Series B and Series C    Preferred Stock and Convertible Notes		—			(49	)
Net gain on sales of assets		—			(9	)
Asset impairments		—			3
Stock based compensation		4			1
Non-cash changes in workers' compensation reserves		(3	)		—
Provision for deferred income taxes		—			160
Decrease in trade receivables		1			64
Increase in inventories		(30	)		(17	)
Increase in trade payables		27			(50	)
Decrease in liabilities excluding borrowings and trade payables		(20	)		(31	)
Other items, net		4			3
Total adjustments		(43	)		52
Net cash used in operating activities		(21	)		(64	)
Cash flows from investing activities:
Additions to properties		(5	)		(9	)
Net proceeds from sales of assets/businesses		—			2
Net proceeds from return on equity investment		—			2
Net cash used in investing activities		(5	)		(5	)
Cash flows from financing activities:
Net proceeds from Term Loan Credit Agreement		215			—
Net proceeds from Convertible Notes		25			—
Net proceeds from Series C Preferred Stock		99			—
Proceeds from sale of common stock		10			—
Repurchase of Series A Preferred Stock		(100	)		—
Debt issuance costs		(2	)		—
Preferred stock cash dividend payments		(5	)		(6	)
Treasury stock purchases		(1	)		—
Net cash provided by (used in) financing activities		241			(6	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2	)		(3	)
Net increase (decrease) in cash, cash equivalents and restricted cash		213			(78	)
Cash, cash equivalents and restricted cash, beginning of period		256			290
Cash, cash equivalents and restricted cash, end of period