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 incor ...

Part I [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2021, showing improved net income and increased assets due to new financing Financial Performance Overview | Financial Metric | Q1 2021 (in millions) | Q1 2020 (in millions) | | :--- | :--- | :--- | | **Total Revenues** | $265 | $267 | | **Gross Profit** | $40 | $36 | | **Loss from Operations** | ($14) | ($21) | | **Net Income (Loss)** | $6 | ($111) | | **Diluted EPS** | $0.16 | ($2.66) | Balance Sheet Highlights | Balance Sheet Item | March 31, 2021 (in millions) | Dec 31, 2020 (in millions) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $401 | $196 | | **Total Current Assets** | $834 | $627 | | **Total Assets** | $1,489 | $1,248 | | **Long-term debt, net** | $246 | $17 | | **Total Liabilities** | $1,193 | $980 | | **Total Shareholders' Equity** | $104 | $77 | - Net cash used in operating activities was **$16 million**, an improvement from **$41 million** in the prior-year period, while net cash provided by financing activities was **$242 million**, compared to a **$3 million** use of cash in Q1 2020[14](index=14&type=chunk) [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) These notes detail significant accounting policies, major financing transactions, segment performance, and legal contingencies - On February 26, 2021, the company entered into a **$225 million** Term Loan Credit Agreement with a five-year maturity, bearing interest at **8.5% cash** and **4.0% PIK**, yielding net proceeds of **$215 million**[31](index=31&type=chunk) - The company issued **$25 million** in **5.0%** unsecured convertible promissory notes and **1 million shares** of common stock for **$10 million** in a private placement[35](index=35&type=chunk) - The company repurchased **1 million shares** of Series A Preferred Stock for **$100.6 million** and exchanged the remaining **1 million shares** for new Series B Preferred Stock, also issuing **1 million shares** of new Series C Preferred Stock for **$100 million**[56](index=56&type=chunk)[70](index=70&type=chunk) - The company is involved in Securities Class Actions and Fiduciary Matters, cooperating with investigations by the SEC and other bodies, all stemming from the July 2020 DFC loan announcement[87](index=87&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) Revenue by Segment | Revenue by Segment (in millions) | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Traditional Printing | $148 | $154 | | Digital Printing | $64 | $65 | | Advanced Materials and Chemicals | $46 | $42 | | Brand | $3 | $3 | | **Total** | **$265** | **$267** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial results, highlighting revenue trends, profitability improvements, and the impact of new financing on liquidity [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q1 2021 saw a slight revenue decrease, improved gross profit, and a significant swing to net income, primarily due to lower operating costs and a prior-year tax provision - Revenue declined **$2 million** year-over-year, driven by volume and pricing declines in Traditional and Digital Printing, partially offset by growth in Advanced Materials and Chemicals and a **$9 million** favorable currency impact[177](index=177&type=chunk) - Gross profit improved by **$4 million** year-over-year, reflecting cost improvements of **$5 million** and lower depreciation, which offset volume and pricing pressures[178](index=178&type=chunk) - SG&A expenses decreased by **$2 million** due to cost reduction efforts and lower bad debt expense, partially offset by **$5 million** in costs for investigations and a **$2 million** increase in stock-based compensation[179](index=179&type=chunk) - The significant swing from a **$111 million** net loss in Q1 2020 to a **$6 million** net income in Q1 2021 was primarily due to a **$167 million** tax provision recorded in the prior-year quarter and a **$53 million** gain on an embedded derivative in 2020 that did not recur[176](index=176&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Segment Analysis](index=43&type=section&id=Segment%20Analysis) Q1 2021 segment analysis reveals revenue declines in Traditional and Digital Printing with improved EBITDA, while Advanced Materials and Chemicals saw revenue growth and a narrowed EBITDA loss - Traditional Printing: Revenue decreased **$6 million** due to volume/pricing declines, but Operational EBITDA improved **$4 million**, reflecting lower manufacturing and SG&A costs[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Digital Printing: Revenue decreased **$1 million**, while Operational EBITDA improved by **$2 million** to break-even, driven by higher equipment volume and lower SG&A expenses[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - Advanced Materials and Chemicals: Revenue increased **$4 million**, and Operational EBITDA loss improved by **$5 million**, mainly due to volume and pricing gains in Industrial Film and Chemicals[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2021 financing transactions significantly improved liquidity, increasing cash and enabling the company to meet minimum liquidity requirements, with the DFC loan not expected to proceed - Financing transactions in Q1 2021 provided significant liquidity to fund operations, obligations, and growth initiatives[197](index=197&type=chunk) Cash Flow Activities | Cash Flow Activity (in millions) | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($16) | ($41) | | Net cash used in investing activities | ($1) | ($1) | | Net cash provided by (used in) financing activities | $242 | ($3) | - As of March 31, 2021, the company held **$401 million** in cash and cash equivalents, with **$284 million** in the U.S. and **$117 million** held internationally[13](index=13&type=chunk)[204](index=204&type=chunk) - The company is operating on the basis that the potential **$765 million** DFC loan will not proceed and is exploring other options for its pharmaceuticals initiative[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - Management concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective[217](index=217&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[218](index=218&type=chunk) Part II [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company faces multiple legal challenges, including class-action lawsuits and ongoing investigations by regulatory bodies, all stemming from the July 2020 DFC loan announcement - The company is defending against Securities Class Actions alleging violations of federal securities laws related to the DFC loan announcement[220](index=220&type=chunk) - A Fiduciary Class Action and other shareholder demands allege breaches of fiduciary duty by the Board of Directors[221](index=221&type=chunk) - The company is cooperating with ongoing investigations by several congressional committees, the SEC, and the New York Attorney General's office regarding the DFC announcement[222](index=222&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section states that the risk factors disclosed in the 2020 Form 10-K remain applicable, with no new risk factors introduced in this quarterly report - The report references the Risk Factors set forth in the 2020 Form 10-K, indicating they remain applicable[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2021, the company had no unregistered equity sales but purchased shares to satisfy tax withholding for employee equity awards - The company purchased **71,201** of its own shares during the quarter to satisfy tax withholding obligations for employee equity awards[226](index=226&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including corporate governance documents, financing agreements, and CEO/CFO certifications - Lists various agreements filed as exhibits, including the new Credit Agreements, Securities Purchase Agreements, and CEO employment agreement[234](index=234&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)

| --- | --- | --- | |--------------------|-------|-------| | | | | | | | | | | | | | | | | | First Quarter 2021 | | | | Earnings Call | | | | May 12, 2021 | | | Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. Forw ...

Eastman Kodak Company (NYSE:KODK) Q1 2021 Earnings Conference Call May 12, 2021 5:00 PM ET Company Participants Paul Dils - Chief Tax Officer and Director, Investor Relations Jim Continenza - Executive Chairman David Bullwinkle - Chief Financial Officer Conference Call Participants Operator Ladies and gentlemen, thank you for standing by, and welcome to the Eastman Kodak Q1 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be ...

| --- | --- | --- | |---------------------|-------|-------| | | | | | | | | | | | | | | | | | Fourth Quarter 2020 | | | | Earnings Call | | | | March 16, 2021 | | | Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. ...

Eastman Kodak Co. (NYSE:KODK) Q4 2020 Earnings Conference Call March 16, 2021 5:00 PM ET Company Participants Paul Dils - Chief Tax Officer & Director, IR James Continenza - Executive Chairman & CEO David Bullwinkle - CFO, President, Eastman Business Park & SVP Conference Call Participants Operator Ladies and gentlemen, thank you for standing by, and welcome to the Eastman Kodak Q4 2020 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, ...

Part I [Business Overview](index=3&type=section&id=Item%201.%20Business) Eastman Kodak Company is a global technology firm specializing in print, advanced materials, and chemicals across four main segments - Kodak is a global technology company focused on print, advanced materials, and chemicals, providing hardware, software, consumables, and services[18](index=18&type=chunk) - The company's primary raw materials include lithographic aluminum, silver, and electronic components, facing supply risks from **single or limited-source suppliers** and potential U.S. tariffs[39](index=39&type=chunk) - As of the end of 2020, Kodak employed approximately **4,500 people globally**, with around 1,900 in the U.S[47](index=47&type=chunk) Revenue Contribution by Segment (2020 vs. 2019) | Segment | 2020 Revenue % | 2019 Revenue % | | :--- | :--- | :--- | | Traditional Printing | 58% | 59% | | Digital Printing | 23% | 24% | | Advanced Materials and Chemicals | 15% | 14% | [Traditional Printing Segment](index=3&type=section&id=Traditional%20Printing) - This segment is Kodak's largest, accounting for **58% of total net revenue** in 2020, providing digital offset plates and computer-to-plate (CTP) imaging solutions[21](index=21&type=chunk)[26](index=26&type=chunk) - The business model relies on a **recurring revenue stream** from the sale of aluminum digital printing plates, with key competitors being Fuji and Agfa[23](index=23&type=chunk)[24](index=24&type=chunk) - In September 2019, Kodak established a strategic relationship with **Lucky HuaGuang Graphics Co. Ltd** in China, involving a facility sale and supply agreement[27](index=27&type=chunk)[28](index=28&type=chunk) [Digital Printing Segment](index=5&type=section&id=Digital%20Printing) - This segment accounted for **23% of total net revenue** in 2020, including Electrophotographic Printing, Prosper, Versamark, and Software solutions[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - The segment's focus is on developing the next-generation **Ultrastream platform** for packaging and décor applications and expanding its production workflow software solutions[30](index=30&type=chunk)[31](index=31&type=chunk) [Advanced Materials and Chemicals Segment](index=6&type=section&id=Advanced%20Materials%20and%20Chemicals) - This segment contributed **15% of 2020 revenue** and includes industrial film, motion picture film, advanced materials, and functional printing[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - **Kodak Alaris** is a significant customer, representing approximately **30% of the segment's revenue** in 2020[33](index=33&type=chunk) - The company is organically expanding its production of key starting materials (KSMs) for pharmaceuticals[35](index=35&type=chunk) [Brand Segment](index=7&type=section&id=Brand) - The Brand segment generates revenue by **licensing the Kodak brand** to third parties for a range of products[37](index=37&type=chunk) - Kodak aims to grow its portfolio of brand licenses to generate ongoing royalty streams and upfront payments[37](index=37&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, and stock-related risks, including operational challenges, substantial debt, and stock price volatility [Risks Related to Kodak's Business](index=9&type=section&id=Risks%20Related%20to%20Kodak's%20Business) - The company may not successfully implement its business plans or cost reduction strategies, which could negatively affect financial results and liquidity[50](index=50&type=chunk) - Kodak has not generated positive operating cash flows without monetization transactions in recent years, and its largest segment faces **declining revenues**[52](index=52&type=chunk) - The **COVID-19 pandemic** poses a significant risk, potentially impacting the printing industry, demand for products, and business operations[60](index=60&type=chunk) - The announcement of a potential **$765 million DFC loan** has led to congressional and SEC investigations and lawsuits, which could damage Kodak's reputation[128](index=128&type=chunk) [Risks Related to Indebtedness and Capital Markets](index=23&type=section&id=Risks%20Related%20to%20the%20Company's%20Indebtedness%20and%20Access%20to%20Capital%20Markets) - A breach of covenants in its credit agreements could result in an **event of default**, making all outstanding obligations immediately due and payable[132](index=132&type=chunk)[133](index=133&type=chunk) - The company's **non-investment grade credit rating** may adversely impact commercial operations and increase the cost of refinancing[135](index=135&type=chunk)[136](index=136&type=chunk) - Availability under the ABL Credit Agreement is limited by the value of eligible assets, and a decline could require additional cash collateral[138](index=138&type=chunk)[140](index=140&type=chunk) [Risks Related to Common Stock](index=26&type=section&id=Risks%20Related%20to%20the%20Company's%20Common%20Stock) - Conversion of preferred stock and convertible notes may **dilute the value** for current common stockholders, potentially issuing **22% of outstanding common stock**[148](index=148&type=chunk) - The company has a duty to register the resale of a large portion of its outstanding securities, which could adversely affect the stock price[156](index=156&type=chunk) - The company's stock price has been and may continue to be **highly volatile**, particularly following the DFC Announcement and subsequent investigations[158](index=158&type=chunk) [Properties](index=29&type=section&id=Item%202.%20Properties) Kodak owns and leases significant global properties for its operations and is actively monetizing excess capacity - Kodak owns **11 million sq. ft.** and leases **4 million sq. ft.** of facility space globally, with its headquarters in Rochester, NY[161](index=161&type=chunk) - Principal manufacturing facilities are located in the USA, Canada, Germany, Japan, and China[162](index=162&type=chunk) - The company is pursuing monetization of excess capacity by selling or leasing associated properties[165](index=165&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple lawsuits and government investigations stemming from the 2020 DFC loan announcement - Following the DFC loan announcement, Kodak is defending against federal **Securities Class Actions** and a **Fiduciary Class Action lawsuit**[166](index=166&type=chunk)[167](index=167&type=chunk) - The DFC announcement has also prompted investigations by several congressional committees, the SEC, and the New York Attorney General's office[168](index=168&type=chunk) - Kodak's Brazilian operations have accrued approximately **$3 million** for various litigation matters for claims totaling about **$117 million**[169](index=169&type=chunk) [Executive Officers](index=30&type=section&id=Information%20About%20its%20Executive%20Officers) The executive team is led by Executive Chairman and CEO James V. Continenza, supported by key officers in finance and legal roles - James V. Continenza was appointed Executive Chairman in February 2019 and added the role of Chief Executive Officer in July 2020[175](index=175&type=chunk) Key Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | James V. Continenza | 58 | Executive Chairman and Chief Executive Officer | | David E. Bullwinkle | 46 | Chief Financial Officer and Senior Vice President | | Roger W. Byrd | 55 | General Counsel, Secretary and Senior Vice President | | Eric H. Samuels | 53 | Chief Accounting Officer and Corporate Controller | Part II [Market for Common Equity and Related Matters](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kodak's common stock trades on the NYSE under "KODK", with dividend payments currently restricted by credit agreements - The company's common stock is listed on the NYSE under the symbol **"KODK"**[200](index=200&type=chunk) - **No dividends were paid** on common stock in 2020 or 2019, as payments are restricted by various credit agreements and preferred stock terms[201](index=201&type=chunk)[202](index=202&type=chunk) [Management's Discussion and Analysis (MD&A)](index=35&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue declined 17% in 2020 due to COVID-19, leading to a significant net loss driven by non-cash charges and operational challenges - The **COVID-19 pandemic** had a material impact on 2020 revenues and earnings, mitigated by **$25 million in cost reductions** and **$8 million in government assistance**[264](index=264&type=chunk) - The significant increase in loss from continuing operations was primarily driven by a **$386 million charge** for the change in fair value of embedded derivatives[269](index=269&type=chunk)[272](index=272&type=chunk) Consolidated Financial Highlights (2020 vs. 2019) | Metric | 2020 (in millions) | 2019 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Net Revenues | $1,029 | $1,242 | ($213) | | Gross Profit | $135 | $182 | ($47) | | Loss from Continuing Operations | ($544) | ($91) | ($453) | | Net (Loss) Earnings | ($541) | $116 | ($657) | [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Goodwill was tested for impairment multiple times in 2020 due to COVID-19 and market conditions, with **no impairment found**[212](index=212&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - An impairment charge of **$3 million** was recorded for the Kodak trade name in Q1 2020 due to the expected negative impact of COVID-19[228](index=228&type=chunk) - A valuation allowance of **$1.112 billion** was recorded against net deferred tax assets of $1.081 billion as of Dec 31, 2020[236](index=236&type=chunk)[237](index=237&type=chunk) - Embedded conversion features in the Series A Preferred Stock and Convertible Notes were bifurcated and accounted for as derivatives at fair value[232](index=232&type=chunk) [Results of Operations by Segment](index=51&type=section&id=Results%20of%20Operations%20by%20Segment) - Traditional Printing revenue **decreased by $135 million (19%)** due to volume and pricing declines from the COVID-19 pandemic, causing Operational EBITDA to fall by $27 million[281](index=281&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) - Digital Printing revenue **decreased by $52 million (18%)** due to volume declines, though cost reductions mitigated the impact on Operational EBITDA[284](index=284&type=chunk)[285](index=285&type=chunk)[287](index=287&type=chunk) - Advanced Materials and Chemicals revenue **fell by $28 million (14%)**, but Operational EBITDA improved by $11 million due to favorable pricing and cost reductions[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) Segment Operational EBITDA (2020 vs. 2019) | Segment (in millions) | 2020 Op. EBITDA | 2019 Op. EBITDA | | :--- | :--- | :--- | | Traditional Printing | $21 | $48 | | Digital Printing | ($10) | ($9) | | Advanced Materials and Chemicals | ($23) | ($34) | | Brand | $11 | $8 | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) - As of Dec 31, 2020, Kodak held **$196 million in cash and cash equivalents**, with $99 million in the U.S. and $97 million held internationally[301](index=301&type=chunk) - In February 2021, the company completed major financing transactions, raising net proceeds of approximately **$235 million**, which alleviated substantial doubt about its ability to continue as a going concern[315](index=315&type=chunk)[316](index=316&type=chunk)[370](index=370&type=chunk) - The non-binding letter of interest from the DFC for a potential **$765 million loan is on hold** and not expected to proceed as originally envisioned[322](index=322&type=chunk) Cash Flow Summary (2020 vs. 2019) | Cash Flow Activity (in millions) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($35) | $12 | | Net cash (used in) provided by investing activities | ($13) | $311 | | Net cash provided by (used in) financing activities | $10 | ($298) | [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2020 and 2019, including the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=59&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - The auditor, Ernst & Young LLP, issued an opinion that the financial statements present fairly the financial position of the company as of December 31, 2020[328](index=328&type=chunk) - **Critical Audit Matters** identified were the Income Taxes Valuation Allowance and the Accounting for Conversion of Convertible Notes due to their complexity and materiality[332](index=332&type=chunk)[333](index=333&type=chunk)[336](index=336&type=chunk) [Consolidated Financial Statements](index=63&type=section&id=Consolidated%20Financial%20Statements) Consolidated Statement of Operations Summary | (in millions) | 2020 | 2019 | | :--- | :--- | :--- | | Total net revenues | $1,029 | $1,242 | | Gross profit | $135 | $182 | | Loss from continuing operations | ($544) | ($91) | | Earnings from discontinued operations | $3 | $207 | | **NET (LOSS) EARNINGS** | **($541)** | **$116** | Consolidated Statement of Financial Position Summary | (in millions) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total current assets | $627 | $706 | | **TOTAL ASSETS** | **$1,248** | **$1,415** | | Total current liabilities | $296 | $368 | | Total liabilities | $980 | $1,134 | | Total equity | $77 | $99 | | **TOTAL LIABILITIES & EQUITY** | **$1,248** | **$1,415** | [Notes to Financial Statements](index=69&type=section&id=Notes%20to%20Financial%20Statements) - Note 1 (Going Concern): Financing transactions in February 2021 raising **$235 million** alleviated substantial doubt about Kodak's ability to continue as a going concern[366](index=366&type=chunk)[367](index=367&type=chunk)[370](index=370&type=chunk) - Note 9 (Debt): In 2020, all **$100 million** of the 5% Secured Convertible Notes were converted into common stock[446](index=446&type=chunk)[447](index=447&type=chunk)[450](index=450&type=chunk) - Note 27 (Segment Information): Effective January 1, 2020, Kodak changed its organizational and reporting structure to four new segments[628](index=628&type=chunk) - Note 29 (Discontinued Operations): The 2019 sale of the Flexographic Packaging business resulted in **$207 million** in earnings from discontinued operations[644](index=644&type=chunk)[646](index=646&type=chunk)[650](index=650&type=chunk) [Controls and Procedures](index=130&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of year-end 2020, having remediated a previously identified control deficiency - Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were **effective** as of December 31, 2020[654](index=654&type=chunk)[658](index=658&type=chunk) - A control deficiency was identified in Q3 2020 related to the unauthorized exercise of forfeited stock options by former employees[659](index=659&type=chunk) - The company **remediated the control deficiencies** as of December 31, 2020 by strengthening controls for equity grants[660](index=660&type=chunk)

| --- | --- | --- | --- | |--------------------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Third Quarter 2020 | | | | | Earnings Call | | | | | November 10, 2020 | | | | Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes "forward-looking statements" as that term is defined under the Private Securities Li ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a significant revenue decline and a net loss of $561 million for the first nine months of 2020, facing substantial liquidity challenges Consolidated Statement of Operations Highlights (in millions, except per share data) | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Total Revenues | $732 | $913 | | Gross Profit | $88 | $135 | | Loss from Continuing Operations | $(561) | $(28) | | Net (Loss) Income | $(561) | $178 | | Diluted EPS (Total) | $(11.34) | $3.79 | Consolidated Statement of Financial Position Highlights (in millions) | Metric | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $193 | $233 | | Total Current Assets | $622 | $706 | | TOTAL ASSETS | $1,220 | $1,415 | | Total Current Liabilities | $295 | $368 | | Total Liabilities | $943 | $1,134 | | Total Shareholders' Equity | $88 | $99 | Consolidated Statement of Cash Flows Highlights (in millions) | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(48) | $(4) | | Net cash (used in) provided by investing activities | $(9) | $315 | | Net cash provided by (used in) financing activities | $10 | $(295) | - The company's ability to continue as a **going concern is in substantial doubt** due to operating losses, negative cash flow, and upcoming debt maturities[21](index=21&type=chunk)[23](index=23&type=chunk) [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) Key disclosures include a going concern warning, the conversion of all convertible notes, a large deferred tax asset valuation allowance, and significant restructuring charges - All outstanding 5.00% Secured Convertible Notes (**$100 million principal**) were converted into approximately **31.5 million shares** of common stock, resulting in a **$2 million loss** on early extinguishment of debt[55](index=55&type=chunk)[56](index=56&type=chunk)[60](index=60&type=chunk) - A **$167 million provision** was recorded in Q1 2020 to establish a valuation allowance on deferred tax assets in non-U.S. jurisdictions due to reduced profitability estimates[119](index=119&type=chunk)[122](index=122&type=chunk) - Restructuring actions incurred charges of **$9 million** related to eliminating approximately 130 positions and are expected to generate annual cash savings of about **$13 million**[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - The company recognized a significant stock-based compensation expense of approximately **$17 million** in Q3 2020, primarily from **2.4 million stock options** granted on July 27, 2020[147](index=147&type=chunk)[149](index=149&type=chunk) - Effective January 1, 2020, Kodak changed its organizational structure and reportable segments to Traditional Printing, Digital Printing, Advanced Materials and Chemicals, and Brand[158](index=158&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 20% revenue decline due to COVID-19, cost-saving measures, the potential $765 million DFC loan, and ongoing liquidity concerns - The COVID-19 pandemic had a material impact on sales, and mitigation efforts like furloughs and pay cuts resulted in approximately **$20 million in cost savings**[194](index=194&type=chunk) - The company is exploring a potential **$765 million loan** from the U.S. International Development Finance Corporation (DFC) to launch Kodak Pharmaceuticals, but approval is not assured[192](index=192&type=chunk)[196](index=196&type=chunk) - Kodak faces significant liquidity challenges and **substantial doubt about its ability to continue as a going concern** due to operating losses and upcoming debt maturities in 2021[270](index=270&type=chunk)[272](index=272&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Q3 2020 saw a 20% revenue decline and a significant loss from continuing operations, driven by lower volumes and a large derivative liability charge Q3 2020 vs Q3 2019 Performance (in millions) | Metric | Q3 2020 | Q3 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $252 | $315 | $(63) | -20.0% | | Gross Profit | $31 | $53 | $(22) | -41.5% | | SG&A Expenses | $56 | $48 | $8 | +16.7% | | Loss from Continuing Operations | $(445) | $(10) | $(435) | -4350% | - The increase in SG&A for Q3 2020 was primarily driven by a **$17 million increase in stock compensation expense**, partially offset by $12 million in cost reductions[231](index=231&type=chunk) - 'Other charges, net' increased by **$426 million** in Q3 2020, mainly due to the change in fair value of the derivative liability associated with the Convertible Notes[226](index=226&type=chunk)[233](index=233&type=chunk) [Segment Analysis](index=46&type=section&id=Segment%20Analysis) All business segments experienced revenue declines in Q3 2020 due to the pandemic, with Traditional Printing's profitability significantly impacted Segment Performance - Q3 2020 vs Q3 2019 (in millions) | Segment | Revenue Q3 2020 | Revenue Q3 2019 | Operational EBITDA Q3 2020 | Operational EBITDA Q3 2019 | | :--- | :--- | :--- | :--- | :--- | | Traditional Printing | $146 | $187 | $5 | $21 | | Digital Printing | $56 | $70 | $(3) | $(3) | | Advanced Materials and Chemicals | $44 | $53 | $(6) | $(6) | | Brand | $3 | $3 | $3 | $2 | - Traditional Printing's performance was significantly impacted by volume declines and the absence of a **$13 million intellectual property licensing deal** that occurred in the prior-year quarter[238](index=238&type=chunk)[240](index=240&type=chunk) - Despite revenue declines, Digital Printing and Advanced Materials & Chemicals maintained **flat Operational EBITDA losses**, benefiting from cost reduction efforts[246](index=246&type=chunk)[252](index=252&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains challenged with declining cash balances, an upcoming credit facility maturity, and substantial doubt about its going concern status Cash and Liquidity Position (in millions) | Metric | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $241 | $290 | | Cash held in U.S. | $108 | $72 | | Cash held outside U.S. | $85 | $161 | - The ABL Credit Agreement, which matures May 26, 2021, had **$87 million of letters of credit issued** and requires the company to maintain Excess Availability of over **$13.75 million**[270](index=270&type=chunk)[285](index=285&type=chunk) - In July and August 2020, the company received approximately **$29 million in net proceeds** from the exercise of stock options[290](index=290&type=chunk) - The company paid **$11 million** in aggregate for four quarterly dividends that were in arrears on its Series A Preferred Stock in July 2020[288](index=288&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective due to a material weakness in internal controls related to the unauthorized exercise of forfeited stock options - A **material weakness** was identified in internal controls over financial reporting, rendering disclosure controls ineffective as of September 30, 2020[294](index=294&type=chunk) - The weakness was due to control deficiencies that failed to prevent the **unauthorized exercise of forfeited stock options** by five former officers and employees in July 2020[296](index=296&type=chunk) - Remediation efforts are underway, with an expected completion date by **December 31, 2020**[297](index=297&type=chunk) [Part II. Other Information](index=54&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company faces new class-action lawsuits, shareholder demands, and regulatory investigations following the potential DFC loan announcement - **Two securities class-action lawsuits** were filed against the company and executives in August 2020 related to the announcement of the potential DFC loan[300](index=300&type=chunk) - The company is also subject to **investigations by several congressional committees and the SEC** stemming from the DFC loan announcement[302](index=302&type=chunk)[305](index=305&type=chunk) - Ongoing litigation in Brazil related to indirect taxes continues, with accruals of approximately **$2 million** for claims aggregating around **$107 million**[303](index=303&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) Key risks include the uncertainty of the DFC loan, execution challenges of the Pharmaceutical Initiative, and significant stock price volatility - There is no guarantee the potential **$765 million DFC loan** will be consummated, as it is subject to due diligence and investigations[309](index=309&type=chunk) - The Pharmaceutical Initiative, if it proceeds, faces **significant execution risks**, including construction, regulatory approvals, and competition[310](index=310&type=chunk) - The company's stock price has been **extremely volatile** following the DFC loan announcement and may continue to experience significant fluctuations[311](index=311&type=chunk) - Holders of the recently converted notes have sold all **29.9 million shares** received, plus an additional **4 million shares**, which could continue to impact the stock price[312](index=312&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company purchased a small number of its own shares to satisfy employee tax obligations but conducted no unregistered equity sales - The company purchased **23,131 shares** in September 2020 at an average price of **$6.46 per share**[313](index=313&type=chunk) - These purchases were made solely to satisfy tax withholding obligations for employees upon the vesting of restricted stock units and not as part of a formal buyback plan[313](index=313&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including new stock option agreements and required CEO/CFO certifications under the Sarbanes-Oxley Act - The filing includes new forms of nonqualified stock option award agreements for executives and directors, dated July 27, 2020[322](index=322&type=chunk) - Certifications from the CEO and CFO as required by Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[322](index=322&type=chunk)

| --- | --- | --- | |-----------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Second Quarter 2020 Earnings Call | | | | August 11, 2020 | | | Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes "forward-looking statements" as that term is defined under the Private Securities Litigation Refor ...