Note 26 - Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

NOTE 26:  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 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 KSB.  KSB 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. Asset information by segment is not disclosed as this information is not separately identified and reported to the Chief Operating Decision Maker.

Net Revenues from Continuing Operations by Reportable Segment

	Year Ended December 31,
	2021		2020		2019
(in millions)
Traditional Printing	$	659	$	592	$	727
Digital Printing		249		241		293
Advanced Materials and Chemicals		212		172		200
Brand		15		13		12
Total of reportable segments		1,135		1,018		1,232
Other		15		11		10
Consolidated total	$	1,150	$	1,029	$	1,242

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 table below, Operational EBITDA represents the earnings (loss) from continuing operations before income taxes excluding non-service cost components of pension and other postemployment benefits income; depreciation and amortization expense; restructuring costs; stock-based compensation expense; consulting and other costs; idle costs; the former CEO separation agreement compensation; other operating income, net (unless otherwise indicated); interest expense; loss on early extinguishment of debt and other income (charges), net.

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate selling, general and administrative expenses (“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.

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

	Year Ended December 31,
(in millions)	2021			2020			2019
Traditional Printing	$	9		$	21		$	48
Digital Printing		(5	)		(10	)		(9	)
Advanced Materials and Chemicals		(6	)		(23	)		(34	)
Brand		13			11			8
Total of reportable segments		11			(1	)		13
Other		2			1			(1	)
Depreciation and amortization		(31	)		(37	)		(55	)
Restructuring costs and other		(6	)		(17	)		(16	)
Stock-based compensation		(7	)		(15	)		(7	)
Consulting and other costs (1)		(19	)		(9	)		(7	)
Idle costs (2)		(2	)		(3	)		(5	)
Former CEO separation agreement compensation		—			—			(2	)
Other operating income (expense), net, excluding income    from transition services agreement (3)		6			7			(22	)
Interest expense (4)		(33	)		(12	)		(16	)
Pension income excluding service cost component (4)		102			98			104
Loss on early extinguishment of debt (4)		—			(2	)		—
Other income (charges), net (4)		5			(386	)		(46	)
Consolidated earnings (loss) from continuing operations    before income taxes	$	28		$	(376	)	$	(60	)

⁽¹⁾ Consulting and other costs are professional services and internal costs associated with 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) $6 million of income from the transition services agreement with the Purchaser was recognized in both the years ended December 31, 2020 and 2019.  No income was recognized in the year ended December 31, 2021.  The income was reported in Other operating (income) expense, net in the Consolidated Statement of Operations. Other operating (income) expense, 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 $4 million in 2021 driven by changes in discount rates.  The decrease in reserves in 2021 impacted gross profit by approximately $3 million and SG&A by approximately $1 million.  

Kodak increased employee benefit reserves by approximately $4 million in 2020 reflecting an increase in workers’ compensation reserves ($7 million) partially offset by a decrease in postemployment benefit reserves ($3 million).  The increase in reserves in 2020 impacted gross profit and SG&A each by approximately $2 million.

In 2019 workers’ compensation reserves increased by approximately $3 million.  The increase in reserves in 2019 impacted gross profit by approximately $2 million and SG&A by approximately $1 million.

Amortization and depreciation expense by segment are not included in the segment measure of profit and loss but are regularly provided to the Chief Operating Decision Maker. 

(in millions)	Year Ended December 31,
Intangible asset amortization expense from continuing operations:	2021		2020		2019
Traditional Printing	$	—	$	1	$	2
Digital Printing		4		3		4
Brand		1		1		1
Consolidated total	$	5	$	5	$	7

(in millions)	Year Ended December 31,
Depreciation expense from continuing operations:	2021		2020		2019
Traditional Printing	$	14	$	19	$	28
Digital Printing		6		7		10
Advanced Materials and 3D Printing		5		5		6
Other		1		1		4
Consolidated total	$	26	$	32	$	48

(in millions)	Year Ended December 31,
Long-lived assets (1) located in:	2021		2020
The United States	$	81	$	78
Europe, Middle East and Africa		14		22
Asia Pacific		4		5
Canada and Latin America		41		47
Non-U.S. countries total (2)		59		74
Consolidated total	$	140	$	152

^{(1) Long-lived assets are comprised of property, plant and equipment, net.}  

^{(2) Of the total non-U.S. property, plant and equipment in 2021, $39 million are located in Brazil.  Of the total non-U.S. property, plant and equipment in 2020, $43 million was located in Brazil.}

Major Customers

No single customer represented 10% or more of Kodak’s total net revenue in any year presented.